|
Delaware
(State or other jurisdiction of incorporation or organization) |
| |
83-0221517
(I.R.S. Employer Identification No.) |
|
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1330 Avenue of the Americas, 33
rd
Floor, New York, NY
(Address of principal executive offices) |
| |
10019
(Zip Code) |
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Large accelerated filer
☐
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Accelerated filer
☒
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Non-accelerated filer
☐
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Smaller reporting company
☒
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| | | |
Emerging growth company
☐
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Page
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Part I | | | |||||
| | | | 1 | | | |
| | | | 26 | | | |
| | | | 52 | | | |
| | | | 52 | | | |
| | | | 52 | | | |
| | | | 53 | | | |
Part II | | | |||||
| | | | 54 | | | |
| | | | 56 | | | |
| | | | 57 | | | |
| | | | 64 | | | |
| | | | 64 | | | |
| | | | 64 | | | |
| | | | 65 | | | |
| | | | 68 | | | |
Part III | | | |||||
| | | | 69 | | | |
| | | | 69 | | | |
| | | | 69 | | | |
| | | | 69 | | | |
| | | | 69 | | | |
| | | | 70 | | | |
| | | | 71 | | | |
| | | | 72 | | |
| | |
December 31,
2013 |
| |
December 31,
2014 |
| |
December 31,
2015 |
| |
December 31,
2016 |
| |
December 31,
2017 |
| |
December 31,
2018 |
| ||||||||||||||||||
Abeona Therapeutics Inc.
|
| | | $ | 100.00 | | | | | $ | 27.60 | | | | | $ | 26.88 | | | | | $ | 38.80 | | | | | $ | 126.80 | | | | | $ | 57.12 | | |
Nasdaq Composite Index
|
| | | | 100.00 | | | | | | 114.62 | | | | | | 122.81 | | | | | | 133.19 | | | | | | 172.11 | | | | | | 165.84 | | |
Nasdaq Biotechnology Index
|
| | | | 100.00 | | | | | | 131.71 | | | | | | 140.56 | | | | | | 112.25 | | | | | | 133.67 | | | | | | 121.24 | | |
Plan Category
|
| |
Number of securities to
be issued upon exercise of outstanding options, warrants and rights |
| |
Weighted-average
exercise price of outstanding options, warrants and rights |
| |
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| |||||||||
| | |
(a)
|
| |
(b)
|
| |
(c)
|
| |||||||||
Equity compensation plans approved by security holders:
|
| | | | | | | | | | | | | | | | | | |
2015 Equity Incentive Plan
|
| | | | 5,525,405 | | | | | $ | 8.08 | | | | | | 2,333,346 | | |
2005 Equity Incentive Plan
|
| | | | 316,400 | | | | | | 14.15 | | | | | | — | | |
Equity compensation plans not approved by
security holders |
| | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | | 5,841,805 | | | | | $ | 8.41 | | | | | | 2,333,346 | | |
|
| | |
For the years ended December 31,
|
| |||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||
Statement of Operations Data: | | | | | | | |||||||||||||||||||||||||
Foundation revenues
(1)
|
| | | $ | 2,796,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
License revenues
(1)
|
| | | | — | | | | | | 602,000 | | | | | | 602,000 | | | | | | 602,000 | | | | | | 598,000 | | |
Royalties (1) | | | | | 202,000 | | | | | | 235,000 | | | | | | 287,000 | | | | | | 438,000 | | | | | | 327,000 | | |
Research and development
|
| | | | 38,698,000 | | | | | | 16,989,000 | | | | | | 10,655,000 | | | | | | 4,715,000 | | | | | | 333,000 | | |
General and administrative
|
| | | | 20,106,000 | | | | | | 10,943,000 | | | | | | 13,290,000 | | | | | | 14,320,000 | | | | | | 3,712,000 | | |
Loss from operations
|
| | | | (58,166,000 ) | | | | | | (27,836,000 ) | | | | | | (23,881,000 ) | | | | | | (18,546,000 ) | | | | | | (3,131,000 ) | | |
Net loss
|
| | | | (56,671,000 ) | | | | | | (27,319,000 ) | | | | | | (21,873,000 ) | | | | | | (14,526,000 ) | | | | | | (26,778,000 ) | | |
Basic and diluted loss per common share
|
| | | | (1.19 ) | | | | | | (0.66 ) | | | | | | (0.64 ) | | | | | | (0.53 ) | | | | | | (15.26 ) | | |
Weighted average number of
common shares outstanding – basic and diluted |
| | | | 47,528,248 | | | | | | 41,636,752 | | | | | | 34,180,253 | | | | | | 27,597,434 | | | | | | 1,942,905 | | |
| | |
As of December 31,
|
| |||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||
Balance Sheet Data: | | | | | | | |||||||||||||||||||||||||
Current assets
|
| | | $ | 88,851,000 | | | | | $ | 140,592,000 | | | | | $ | 69,421,000 | | | | | $ | 40,568,000 | | | | | $ | 11,555,000 | | |
Current liabilities
(1)
|
| | | | 20,354,000 | | | | | | 5,607,000 | | | | | | 8,296,000 | | | | | | 1,477,000 | | | | | | 2,898,000 | | |
Working capital
(1)
|
| | | | 68,497,000 | | | | | | 134,985,000 | | | | | | 61,125,000 | | | | | | 39,091,000 | | | | | | 8,657,000 | | |
Property and equipment, net
|
| | | | 9,443,000 | | | | | | 1,374,000 | | | | | | 721,000 | | | | | | 350,000 | | | | | | 4,000 | | |
Licensed technology, net
|
| | | | 43,042,000 | | | | | | 3,977,000 | | | | | | 8,384,000 | | | | | | 6,609,000 | | | | | | 4,991,000 | | |
Total assets
|
| | | | 174,399,000 | | | | | | 178,766,000 | | | | | | 111,058,000 | | | | | | 80,055,000 | | | | | | 16,582,000 | | |
Total stockholders’ equity
(1)
|
| | | | 134,045,000 | | | | | | 170,098,000 | | | | | | 99,098,000 | | | | | | 67,721,000 | | | | | | 4,816,000 | | |
Project
|
| |
Years ended December 31,
|
| |
Inception
Date (1) |
| ||||||||||||||||||
|
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||
Gene therapy
|
| | | $ | 38,593,000 | | | | | $ | 15,789,000 | | | | | $ | 8,846,000 | | | | | $ | 65,560,000 | | |
Plasma therapy
|
| | | | 105,000 | | | | | | 546,000 | | | | | | 1,714,000 | | | | | | 4,697,000 | | |
MuGard
|
| | | | — | | | | | | 22,000 | | | | | | 45,000 | | | | | | 5,434,000 | | |
Others (2) | | | | | — | | | | | | 632,000 | | | | | | 50,000 | | | | | | 40,702,000 | | |
Total
|
| | | $ | 38,698,000 | | | | | $ | 16,989,000 | | | | | $ | 10,655,000 | | | | | $ | 116,393,000 | | |
|
| | |
Payments Due by Period
|
| |||||||||||||||||||||||||||
| | |
Less than
1 year |
| |
1 to 3 years
|
| |
4 to 5 years
|
| |
After 5 years
|
| |
Total
|
| |||||||||||||||
Operating leases
|
| | | $ | 1,735,000 | | | | | $ | 3,430,000 | | | | | $ | 3,487,000 | | | | | $ | 3,546,000 | | | | | $ | 12,198,000 | | |
Payable to licensor
|
| | | | 10,000,000 | | | | | | 20,000,000 | | | | | | — | | | | | | — | | | | | | 30,000,000 | | |
Purchase and other commitments
|
| | | | 10,100,000 | | | | | | 4,900,000 | | | | | | — | | | | | | — | | | | | | 15,000,000 | | |
| | |
Page
|
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a.
Financial Statements
. The following financial statements are submitted as part of this report:
|
| ||||||
| | | | F-1 | | | |
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
b.
Exhibits
|
|
| | | | ABEONA THERAPEUTICS INC. | |
| Date: March 18, 2019 | | |
By:
/s/ Steven H. Rouhandeh
Steven H. Rouhandeh
Executive Chairman Principal Executive Officer |
|
| Date: March 18, 2019 | | |
By:
/s/ Christine Silverstein
Christine Silverstein
Chief Financial Officer Principal Financial Officer |
|
| Date: March 18, 2019 | | |
By:
/s/ Steven H. Rouhandeh
Steven H. Rouhandeh
Executive Chairman Principal Executive Officer Chairman of the Board |
|
| Date: March 18, 2019 | | |
By:
/s/ Christine Silverstein
Christine Silverstein
Chief Financial Officer Principal Financial Officer |
|
| Date: March 18, 2019 | | |
By:
/s/ Edward G. Carr
Edward G. Carr
Chief Accounting Officer Principal Accounting Officer |
|
| Date: March 18, 2019 | | |
By:
/s/ Mark J. Alvino
Mark J. Alvino, Director
|
|
| Date: March 18, 2019 | | |
By:
/s/ Stefano Buono
Stefano Buono, Director
|
|
| Date: March 18, 2019 | | |
By:
/s/ Stephen B. Howell
Stephen B. Howell, Director
|
|
| Date: March 18, 2019 | | |
By:
/s/ João Siffert
João Siffert, Director
|
|
| Date: March 18, 2019 | | |
By:
/s/ Richard Van Duyne
Richard Van Duyne, Director
|
|
| Date: March 18, 2019 | | |
By:
/s/ Todd Wider
Todd Wider, Director
|
|
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
ASSETS
|
| | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 18,750,000 | | | | | $ | 137,750,000 | | |
Short-term investments
|
| | | | 66,218,000 | | | | | | — | | |
Receivables
|
| | | | 81,000 | | | | | | 107,000 | | |
Prepaid expenses and other current assets
|
| | | | 3,802,000 | | | | | | 2,735,000 | | |
Total current assets
|
| | | | 88,851,000 | | | | | | 140,592,000 | | |
Property and equipment, net
|
| | | | 9,443,000 | | | | | | 1,374,000 | | |
Licensed technology, net
|
| | | | 43,042,000 | | | | | | 3,977,000 | | |
Goodwill
|
| | | | 32,466,000 | | | | | | 32,466,000 | | |
Other assets and restricted cash
|
| | | | 597,000 | | | | | | 357,000 | | |
Total assets
|
| | | $ | 174,399,000 | | | | | $ | 178,766,000 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 6,122,000 | | | | | $ | 1,881,000 | | |
Accrued expenses
|
| | | | 3,936,000 | | | | | | 512,000 | | |
Current portion of payable to licensor
|
| | | | 10,000,000 | | | | | | — | | |
Current portion of deferred revenue
|
| | | | 296,000 | | | | | | 3,214,000 | | |
Total current liabilities
|
| | | | 20,354,000 | | | | | | 5,607,000 | | |
Payable to licensor, net of current portion
|
| | | | 20,000,000 | | | | | | — | | |
Deferred revenue, net of current portion
|
| | | | — | | | | | | 3,061,000 | | |
Total liabilities
|
| | | | 40,354,000 | | | | | | 8,668,000 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | |
Common stock – $0.01 par value; authorized 200,000,000 shares;
issued and outstanding 47,944,486 at December 31, 2018; issued and outstanding 46,888,108 at December 31, 2017 |
| | | | 479,000 | | | | | | 469,000 | | |
Additional paid-in capital
|
| | | | 543,754,000 | | | | | | 529,421,000 | | |
Accumulated deficit
|
| | | | (410,188,000 ) | | | | | | (359,792,000 ) | | |
Total stockholders’ equity
|
| | | | 134,045,000 | | | | | | 170,098,000 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 174,399,000 | | | | | $ | 178,766,000 | | |
|
| | |
For the years ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Revenues: | | | | | | | | | | | | | | | | | | | |
Foundation revenues
|
| | | $ | 2,796,000 | | | | | $ | — | | | | | $ | — | | |
License revenues
|
| | | | — | | | | | | 602,000 | | | | | | 602,000 | | |
Royalties
|
| | | | 202,000 | | | | | | 235,000 | | | | | | 287,000 | | |
Total revenues
|
| | | | 2,998,000 | | | | | | 837,000 | | | | | | 889,000 | | |
Expenses: | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 38,698,000 | | | | | | 16,989,000 | | | | | | 10,655,000 | | |
General and administrative
|
| | | | 20,106,000 | | | | | | 10,943,000 | | | | | | 13,290,000 | | |
Depreciation and amortization
|
| | | | 2,360,000 | | | | | | 741,000 | | | | | | 825,000 | | |
Total expenses
|
| | | | 61,164,000 | | | | | | 28,673,000 | | | | | | 24,770,000 | | |
Loss from operations
|
| | | | (58,166,000 ) | | | | | | (27,836,000 ) | | | | | | (23,881,000 ) | | |
Interest and miscellaneous income
|
| | | | 1,506,000 | | | | | | 525,000 | | | | | | 2,014,000 | | |
Interest and other expense
|
| | | | (11,000 ) | | | | | | (8,000 ) | | | | | | (6,000 ) | | |
Net loss
|
| | | $ | (56,671,000 ) | | | | | $ | (27,319,000 ) | | | | | $ | (21,873,000 ) | | |
Basic and diluted loss per common share
|
| | | $ | (1.19 ) | | | | | $ | (0.66 ) | | | | | $ | (0.64 ) | | |
Weighted average number of common shares outstanding – basic and diluted
|
| | | | 47,528,248 | | | | | | 41,636,752 | | | | | | 34,180,253 | | |
|
| | |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Equity |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance, December 31, 2015
|
| | | | 32,743,013 | | | | | $ | 328,000 | | | | | $ | 377,993,000 | | | | | $ | (310,600,000 ) | | | | | $ | 67,721,000 | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | 4,829,000 | | | | | | — | | | | | | 4,829,000 | | |
Restricted stock-based compensation
expense |
| | | | 100,000 | | | | | | 1,000 | | | | | | 3,431,000 | | | | | | — | | | | | | 3,432,000 | | |
Restricted common stock issued for $2.85 share
|
| | | | 52,690 | | | | | | — | | | | | | 150,000 | | | | | | — | | | | | | 150,000 | | |
Common stock issued for: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
– $3.27 per share for licenses
|
| | | | 750,000 | | | | | | 8,000 | | | | | | 2,444,000 | | | | | | — | | | | | | 2,452,000 | | |
– $6.44 per share net of costs
|
| | | | 158,029 | | | | | | 2,000 | | | | | | 967,000 | | | | | | — | | | | | | 969,000 | | |
– $7.00 per share net of costs
|
| | | | 6,293,889 | | | | | | 63,000 | | | | | | 41,005,000 | | | | | | — | | | | | | 41,068,000 | | |
– cash exercise of options
|
| | | | 151,000 | | | | | | 1,000 | | | | | | 349,000 | | | | | | — | | | | | | 350,000 | | |
– exercise of $5.00 warrants
|
| | | | 5,836 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (21,873,000 ) | | | | | | (21,873,000 ) | | |
Balance, December 31, 2016
|
| | | | 40,254,457 | | | | | $ | 403,000 | | | | | $ | 431,168,000 | | | | | $ | (332,473,000 ) | | | | | $ | 99,098,000 | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | 4,644,000 | | | | | | — | | | | | | 4,644,000 | | |
Restricted stock-based compensation
expense |
| | | | — | | | | | | — | | | | | | 1,272,000 | | | | | | — | | | | | | 1,272,000 | | |
Common stock issued for: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
– $16.00 per share net of costs
|
| | | | 5,750,000 | | | | | | 58,000 | | | | | | 86,116,000 | | | | | | — | | | | | | 86,174,000 | | |
– cash exercise of options
|
| | | | 81,719 | | | | | | — | | | | | | 344,000 | | | | | | — | | | | | | 344,000 | | |
– exercise of $8.00 warrants
|
| | | | 625,000 | | | | | | 6,000 | | | | | | 4,994,000 | | | | | | — | | | | | | 5,000,000 | | |
– exercise of $5.00 warrants
|
| | | | 176,932 | | | | | | 2,000 | | | | | | 883,000 | | | | | | — | | | | | | 885,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (27,319,000 ) | | | | | | (27,319,000 ) | | |
Balance, December 31, 2017
|
| | | | 46,888,108 | | | | | $ | 469,000 | | | | | $ | 529,421,000 | | | | | $ | (359,792,000 ) | | | | | $ | 170,098,000 | | |
Cumulative effect adjustment of ASC 606 on January 1, 2018
|
| | | | — | | | | | | — | | | | | | — | | | | | | 6,275,000 | | | | | | 6,275,000 | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | 8,178,000 | | | | | | — | | | | | | 8,178,000 | | |
Restricted stock-based compensation
expense |
| | | | — | | | | | | — | | | | | | 688,000 | | | | | | — | | | | | | 688,000 | | |
Common stock issued for: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
– cash exercise of options
|
| | | | 360,853 | | | | | | 4,000 | | | | | | 2,240,000 | | | | | | — | | | | | | 2,244,000 | | |
– exercise of $5.00 warrants
|
| | | | 646,763 | | | | | | 6,000 | | | | | | 3,227,000 | | | | | | — | | | | | | 3,233,000 | | |
– cashless warrant exercises
|
| | | | 48,762 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (56,671,000 ) | | | | | | (56,671,000 ) | | |
Balance, December 31, 2018
|
| | | | 47,944,486 | | | | | $ | 479,000 | | | | | $ | 543,754,000 | | | | | $ | (410,188,000 ) | | | | | $ | 134,045,000 | | |
|
| | |
For the years ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | |
Net loss
|
| | | $ | (56,671,000 ) | | | | | $ | (27,319,000 ) | | | | | $ | (21,873,000 ) | | |
Adjustments to reconcile net loss to cash used in operating activities:
|
| | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 2,360,000 | | | | | | 741,000 | | | | | | 825,000 | | |
Stock-based compensation expense
|
| | | | 8,178,000 | | | | | | 4,644,000 | | | | | | 4,829,000 | | |
Restricted stock-based compensation expense
|
| | | | 688,000 | | | | | | 1,272,000 | | | | | | 3,432,000 | | |
Non-cash earnings on investments
|
| | | | (626,000 ) | | | | | | — | | | | | | — | | |
Net gain on write-off of licensed technology
|
| | | | — | | | | | | (127,000 ) | | | | | | — | | |
Change in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | |
Receivables
|
| | | | 26,000 | | | | | | 17,000 | | | | | | (9,000 ) | | |
Prepaid expenses and other current assets
|
| | | | (1,067,000 ) | | | | | | (2,580,000 ) | | | | | | 160,000 | | |
Other assets
|
| | | | 40,000 | | | | | | (11,000 ) | | | | | | (4,000 ) | | |
Accounts payable and accrued expenses
|
| | | | 7,665,000 | | | | | | (1,301,000 ) | | | | | | 2,819,000 | | |
Contingent consideration milestone
|
| | | | — | | | | | | — | | | | | | (2,591,000 ) | | |
Deferred revenue
|
| | | | 296,000 | | | | | | 2,009,000 | | | | | | (602,000 ) | | |
Net cash used in operating activities
|
| | | | (39,111,000 ) | | | | | | (22,655,000 ) | | | | | | (13,014,000 ) | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | |
Capital expenditures
|
| | | | (9,243,000 ) | | | | | | (860,000 ) | | | | | | (519,000 ) | | |
Acquisition of licensed technology
|
| | | | (10,251,000 ) | | | | | | — | | | | | | — | | |
Purchases of short-term investments
|
| | | | (136,092,000 ) | | | | | | — | | | | | | — | | |
Proceeds from maturities of short-term investments
|
| | | | 70,500,000 | | | | | | — | | | | | | — | | |
Net cash used in investing activities
|
| | | | (85,086,000 ) | | | | | | (860,000 ) | | | | | | (519,000 ) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | |
Proceeds from exercise of $5.00 warrants
|
| | | | 3,233,000 | | | | | | 885,000 | | | | | | — | | |
Proceeds from exercise of stock options
|
| | | | 2,244,000 | | | | | | 344,000 | | | | | | 350,000 | | |
Proceeds from $16.00 common stock offering, net of costs
|
| | | | — | | | | | | 86,174,000 | | | | | | — | | |
Proceeds from exercise of $8.00 warrants
|
| | | | — | | | | | | 5,000,000 | | | | | | — | | |
Proceeds from $7.00 common stock offering, net of costs
|
| | | | — | | | | | | — | | | | | | 41,068,000 | | |
Proceeds from $6.44 per share common stock offering, net of costs
|
| | | | — | | | | | | — | | | | | | 969,000 | | |
Proceeds from $2.85 restricted common stock issuance
|
| | | | — | | | | | | — | | | | | | 150,000 | | |
Net cash provided by financing activities
|
| | | | 5,477,000 | | | | | | 92,403,000 | | | | | | 42,537,000 | | |
Net (decrease)/increase in cash, cash equivalents and restricted cash
|
| | | | (118,720,000 ) | | | | | | 68,888,000 | | | | | | 29,004,000 | | |
Cash, cash equivalents and restricted cash at beginning of year
|
| | | | 138,030,000 | | | | | | 69,142,000 | | | | | | 40,138,000 | | |
Cash, cash equivalents and restricted cash at end of year
|
| | | $ | 19,310,000 | | | | | $ | 138,030,000 | | | | | $ | 69,142,000 | | |
Supplemental cash flow information: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 18,750,000 | | | | | $ | 137,750,000 | | | | | $ | 69,142,000 | | |
Restricted cash
|
| | | | 560,000 | | | | | | 280,000 | | | | | | — | | |
Total cash, cash equivalents and restricted cash
|
| | | $ | 19,310,000 | | | | | $ | 138,030,000 | | | | | $ | 69,142,000 | | |
Payable for acquistion of licensed technology
|
| | | $ | 30,000,000 | | | | | $ | — | | | | | $ | — | | |
Write off of licensed asset and corresponding liability
|
| | | $ | — | | | | | $ | 4,000,000 | | | | | $ | — | | |
Shares issued to EB Research Partnership and Epidermolysis
Bullosa Medical Research Foundation for licenses |
| | | $ | — | | | | | $ | — | | | | | $ | 2,452,000 | | |
Cash paid for interest
|
| | | $ | 11,000 | | | | | $ | 8,000 | | | | | $ | 6,000 | | |
| | |
For the years ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Warrants
|
| | | | 1,820,686 | | | | | | 2,934,685 | | | | | | 3,736,617 | | |
Stock options
|
| | | | 5,841,805 | | | | | | 5,429,727 | | | | | | 4,771,560 | | |
Total
|
| | | | 7,662,491 | | | | | | 8,364,412 | | | | | | 8,508,177 | | |
|
| | |
For the years ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Research and development
|
| | | $ | 3,913,000 | | | | | $ | 1,668,000 | | | | | $ | 1,219,000 | | |
General and administrative
|
| | | | 4,265,000 | | | | | | 2,976,000 | | | | | | 3,610,000 | | |
Stock-based compensation expense included in operating expense
|
| | | | 8,178,000 | | | | | | 4,644,000 | | | | | | 4,829,000 | | |
Total stock-based compensation expense
|
| | | | 8,178,000 | | | | | | 4,644,000 | | | | | | 4,829,000 | | |
Tax benefit
|
| | | | — | | | | | | — | | | | | | — | | |
Stock-based compensation expense, net of tax
|
| | | $ | 8,178,000 | | | | | $ | 4,644,000 | | | | | $ | 4,829,000 | | |
|
| | |
For the years ended December 31,
|
| |||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Research and development
|
| | | $ | — | | | | | $ | — | | | | | $ | 200,000 | | |
General and administrative
|
| | | | 688,000 | | | | | | 1,272,000 | | | | | | 3,232,000 | | |
Stock-based compensation expense included in operating expense
|
| | | | 688,000 | | | | | | 1,272,000 | | | | | | 3,432,000 | | |
Total stock-based compensation expense
|
| | | | 688,000 | | | | | | 1,272,000 | | | | | | 3,432,000 | | |
Tax benefit
|
| | | | — | | | | | | — | | | | | | — | | |
Stock-based compensation expense, net of tax
|
| | | $ | 688,000 | | | | | $ | 1,272,000 | | | | | $ | 3,432,000 | | |
|
| | |
December 31, 2017,
As Reported Under ASC 605 |
| |
ASC 606
Adjustments |
| |
January 1, 2018,
As Adjusted Under ASC 606 |
| |||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Current portion of deferred revenue
|
| | | $ | 3,214,000 | | | | | $ | (3,214,000 ) | | | | | $ | — | | |
Total current liabilities
|
| | | | 5,607,000 | | | | | | (3,214,000 ) | | | | | | 2,393,000 | | |
Deferred revenue, net of current portion
|
| | | | 3,061,000 | | | | | | (3,061,000 ) | | | | | | — | | |
Total liabilities
|
| | | | 8,668,000 | | | | | | (6,275,000 ) | | | | | | 2,393,000 | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (359,792,000 ) | | | | | | 6,275,000 | | | | | | (353,517,000 ) | | |
Total stockholders’ equity
|
| | | | 170,098,000 | | | | | | 6,275,000 | | | | | | 176,373,000 | | |
| | |
For the year ended December 31, 2018
|
| |||||||||||||||
| | |
Under
ASC 605 |
| |
Effect of
ASC 606 |
| |
As Reported
Under ASC 606 |
| |||||||||
Revenues | | | | | |||||||||||||||
Foundation revenues
|
| | | $ | — | | | | | $ | 2,796,000 | | | | | $ | 2,796,000 | | |
License revenues
|
| | | | 602,000 | | | | | | (602,000 ) | | | | | | — | | |
Total revenues
|
| | | | 804,000 | | | | | | 2,194,000 | | | | | | 2,998,000 | | |
Loss from operations
|
| | | | (60,360,000 ) | | | | | | 2,194,000 | | | | | | (58,166,000 ) | | |
Net loss
|
| | | | (58,865,000 ) | | | | | | 2,194,000 | | | | | | (56,671,000 ) | | |
Basic and diluted loss per common share
|
| | | | (1.24 ) | | | | | | 0.05 | | | | | | (1.19 ) | | |
| | |
December 31, 2018
|
| |||||||||||||||
| | |
Under
ASC 605 |
| |
Effect of
ASC 606 |
| |
As Reported
Under ASC 606 |
| |||||||||
| | | | | |||||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Current portion of deferred revenue
|
| | | $ | 6,308,000 | | | | | $ | (6,012,000 ) | | | | | $ | 296,000 | | |
Total current liabilities
|
| | | | 26,366,000 | | | | | | (6,012,000 ) | | | | | | 20,354,000 | | |
Deferred revenue, net of current portion
|
| | | | 2,460,000 | | | | | | (2,460,000 ) | | | | | | — | | |
Total liabilities
|
| | | | 48,826,000 | | | | | | (8,472,000 ) | | | | | | 40,354,000 | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (412,382,000 ) | | | | | | 2,194,000 | | | | | | (410,188,000 ) | | |
Total stockholders’ equity
|
| | | | 131,851,000 | | | | | | 2,194,000 | | | | | | 134,045,000 | | |
Description
|
| |
Fair value
|
|
U.S. government and agency securities and treasuries
|
| |
$66,218,000
|
|
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
Laboratory equipment
|
| | | $ | 4,366,000 | | | | | $ | 627,000 | | |
Furniture and office equipment
|
| | | | 1,454,000 | | | | | | 449,000 | | |
Leasehold improvements
|
| | | | 4,774,000 | | | | | | 229,000 | | |
Construction work-in-progress
|
| | | | 409,000 | | | | | | 455,000 | | |
| | | | | 11,003,000 | | | | | | 1,760,000 | | |
Less: accumulated depreciation and amortization
|
| | | | 1,560,000 | | | | | | 386,000 | | |
Property and equipment, net
|
| | | $ | 9,443,000 | | | | | $ | 1,374,000 | | |
|
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
Licensed technology
|
| | | $ | 44,859,000 | | | | | $ | 4,608,000 | | |
Less accumulated amortization
|
| | | | 1,817,000 | | | | | | 631,000 | | |
Licensed technology, net
|
| | | $ | 43,042,000 | | | | | $ | 3,977,000 | | |
|
|
2019
|
| | | $ | 5,378,000 | | |
|
2020
|
| | | | 5,378,000 | | |
|
2021
|
| | | | 5,378,000 | | |
|
2022
|
| | | | 5,378,000 | | |
|
2023
|
| | | | 5,378,000 | | |
|
Thereafter
|
| | | | 16,152,000 | | |
|
Total
|
| | | $ | 43,042,000 | | |
|
|
2019
|
| | | $ | 1,735,000 | | |
|
2020
|
| | | | 1,708,000 | | |
|
2021
|
| | | | 1,722,000 | | |
|
2022
|
| | | | 1,736,000 | | |
|
2023
|
| | | | 1,751,000 | | |
|
Thereafter
|
| | | | 3,546,000 | | |
|
Total
|
| | | $ | 12,198,000 | | |
|
Description
|
| |
December 31,
2018 |
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
Gains/(Losses) |
| |||||||||||||||
Recurring | | | | | | | |||||||||||||||||||||||||
Assets: | | | | | | | |||||||||||||||||||||||||
Short-term investments
|
| | | $ | 66,218,000 | | | | | $ | — | | | | | $ | 66,218,000 | | | | | $ | — | | | | | $ | — | | |
Non-recurring | | | | | | | |||||||||||||||||||||||||
Assets: | | | | | | | |||||||||||||||||||||||||
Licensed technology, net
|
| | | $ | 43,042,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 43,042,000 | | | | | $ | — | | |
Goodwill
|
| | | | 32,466,000 | | | | | | — | | | | | | — | | | | | | 32,466,000 | | | | | | — | | |
Description
|
| |
December 31,
2017 |
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
Gains/(Losses) |
| |||||||||||||||
Non-recurring | | | | | | | |||||||||||||||||||||||||
Assets: | | | | | | | |||||||||||||||||||||||||
Licensed technology, net
|
| | | $ | 3,977,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 3,977,000 | | | | | $ | 127,000 | | |
Goodwill
|
| | | | 32,466,000 | | | | | | — | | | | | | — | | | | | | 32,466,000 | | | | | | — | | |
Summary of Warrants
|
| |
Warrants
Outstanding |
| |
Exercise
Price |
| |
Expiration
Date |
| ||||||
2015 Financing
(a)
|
| | | | 20,000 | | | | | $ | 6.05 | | | |
July 31, 2020
|
|
2015 Financing
(b)
|
| | | | 50,000 | | | | | | 11.00 | | | |
May 11, 2020
|
|
2014 Financing
(c)
|
| | | | 1,749,186 | | | | | | 5.00 | | | |
December 24, 2019
|
|
2014 Financing
(c)
|
| | | | 1,500 | | | | | | 5.00 | | | |
December 18, 2019
|
|
2012 Series B private placement
(d)
|
| | | | — | | | | | | 25.00 | | | |
October 24, 2018
|
|
Total
|
| | | | 1,820,686 | | | | | | | | | | | |
|
| | |
2018
|
| |
2017
|
| |
2016
|
|
Expected volatility
|
| |
109%
|
| |
111%
|
| |
109%
|
|
Expected term
|
| |
5 years
|
| |
5 years
|
| |
5 years
|
|
Risk-free interest rate
|
| |
2.62%
|
| |
1.81%
|
| |
1.10%
|
|
Expected dividend yield
|
| |
0.00
|
| |
0.00%
|
| |
0.00%
|
|
| | |
Options
|
| |
Weighted-
average exercise price |
| ||||||
Outstanding options at January 1, 2016
|
| | | | 1,994,000 | | | | | $ | 6.90 | | |
Granted, fair value of $2.59 per share
|
| | | | 2,622,500 | | | | | | 3.29 | | |
Exercised
|
| | | | (151,000 ) | | | | | | 2.32 | | |
Expired/forfeited
|
| | | | (22,500 ) | | | | | | 3.23 | | |
Outstanding options at December 31, 2016
|
| | | | 4,443,000 | | | | | $ | 4.94 | | |
Granted, fair value of $11.35 per share
|
| | | | 1,077,000 | | | | | $ | 14.31 | | |
Exercised
|
| | | | (81,719 ) | | | | | | 4.22 | | |
Expired/forfeited
|
| | | | (325,314 ) | | | | | | 5.52 | | |
Outstanding options at December 31, 2017
|
| | | | 5,112,967 | | | | | $ | 9.07 | | |
Granted, fair value of $10.23 per share
|
| | | | 1,497,300 | | | | | $ | 12.95 | | |
Exercised
|
| | | | (360,853 ) | | | | | | 6.22 | | |
Expired/forfeited
|
| | | | (724,009 ) | | | | | | 10.65 | | |
Outstanding options at December 31, 2018
|
| | | | 5,525,405 | | | | | $ | 8.08 | | |
Non-vested options at December 31, 2016
|
| | | | 3,115,313 | | | | | $ | 4.24 | | |
Non-vested options at December 31, 2017
|
| | | | 2,641,832 | | | | | | 8.21 | | |
Non-vested options at December 31, 2018
|
| | | | 2,355,719 | | | | | | 10.41 | | |
| | | | | | | | |
Number of
options outstanding |
| |
Weighted-average
|
| |
Number of
options exercisable |
| |
Weighted-average
|
|||||||||||||||||||||||
Range of exercise
prices |
| |
Remaining
life in years |
| |
Exercise
price |
| |
Remaining
life in years |
| |
Exercise
price |
|||||||||||||||||||||||||||||
$ 2.31
|
| | | $ | 4.45 | | | | | | 2,252,855 | | | | | | 6.7 | | | | | $ | 3.51 | | | | | | 1,593,792 | | | | | | 6.3 | | | | | $ | 3.42 |
5.90
|
| | | | 9.23 | | | | | | 1,645,800 | | | | | | 6.5 | | | | | | 7.46 | | | | | | 1,191,561 | | | | | | 5.4 | | | | | | 7.25 |
11.43
|
| | | | 14.45 | | | | | | 591,700 | | | | | | 9.5 | | | | | | 13.20 | | | | | | 50,000 | | | | | | 9.2 | | | | | | 13.65 |
15.25
|
| | | | 17.30 | | | | | | 1,035,050 | | | | | | 9.0 | | | | | | 16.09 | | | | | | 334,333 | | | | | | 8.9 | | | | | | 16.04 |
| | | | | | | | | | | 5,525,405 | | | | | | | | | | | | | | | | | | 3,169,686 | | | | | | | | | | | | |
|
| | |
Options
|
| |
Weighted-
average exercise price |
| ||||||
Outstanding options at January 1, 2016
|
| | | | 330,084 | | | | | $ | 13.49 | | |
Expired/forfeited
|
| | | | (1,524 ) | | | | | | 36.93 | | |
Outstanding options at December 31, 2016
|
| | | | 328,560 | | | | | $ | 14.57 | | |
Expired/forfeited
|
| | | | (11,800 ) | | | | | | 21.53 | | |
Outstanding options at December 31, 2017
|
| | | | 316,760 | | | | | $ | 14.31 | | |
Expired/forfeited
|
| | | | (360 ) | | | | | | 150.00 | | |
Outstanding options at December 31, 2018
|
| | | | 316,400 | | | | | $ | 14.15 | | |
|
| | | | | | | | |
Number of
options outstanding |
| |
Weighted-average
|
| |
Number of
options exercisable |
| |
Weighted-average
|
|||||||||||||||||||||||
Range of exercise
prices |
| |
Remaining
life in years |
| |
Exercise
price |
| |
Remaining
life in years |
| |
Exercise
price |
|||||||||||||||||||||||||||||
$ 3.25
|
| | | $ | 3.25 | | | | | | 120,000 | | | | | | 1.1 | | | | | $ | 3.25 | | | | | | 120,000 | | | | | | 1.1 | | | | | $ | 3.25 |
11.50
|
| | | | 18.50 | | | | | | 189,000 | | | | | | 3.9 | | | | | | 18.35 | | | | | | 189,000 | | | | | | 3.9 | | | | | | 18.35 |
30.50
|
| | | | 122.50 | | | | | | 7,400 | | | | | | 2.1 | | | | | | 83.72 | | | | | | 7,400 | | | | | | 2.1 | | | | | | 83.72 |
| | | | | | | | | | | 316,400 | | | | | | | | | | | | | | | | | | 316,400 | | | | | | | | | | | | |
|
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||
Income taxes at U.S. statutory rate
|
| | | $ | (11,901,000 ) | | | | | $ | (9,289,000 ) | | | | | $ | (7,437,000 ) | | |
Current year reserve
|
| | | | 11,877,000 | | | | | | (25,175,000 ) | | | | | | 7,423,000 | | |
Expenses not deductible
|
| | | | 24,000 | | | | | | 46,000 | | | | | | 14,000 | | |
Rate change
|
| | | | — | | | | | | 34,418,000 | | | | | | — | | |
Total tax expense
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | |
|
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
Deferred tax assets (liabilities): | | | | | | | | | | | | | |
Net operating loss carryforwards
|
| | | $ | 38,761,000 | | | | | $ | 50,029,000 | | |
General business credit carryforwards
|
| | | | 3,214,000 | | | | | | 3,227,000 | | |
State credits
|
| | | | 3,012,000 | | | | | | 3,089,000 | | |
Property, equipment and goodwill
|
| | | | (72,000 ) | | | | | | (28,000 ) | | |
Stock options
|
| | | | 6,316,000 | | | | | | 5,122,000 | | |
Derivatives
|
| | | | (57,000 ) | | | | | | (57,000 ) | | |
Deferred revenue
|
| | | | 62,000 | | | | | | 778,000 | | |
Intangible assets
|
| | | | 399,000 | | | | | | 379,000 | | |
Accrued interest
|
| | | | 0 | | | | | | 156,000 | | |
Other
|
| | | | 80,000 | | | | | | 143,000 | | |
Gross deferred tax assets
|
| | | | 51,715,000 | | | | | | 62,838,000 | | |
Valuation allowance
|
| | | | (51,715,000 ) | | | | | | (62,838,000 ) | | |
Net deferred taxes
|
| | | $ | — | | | | | $ | — | | |
|
| | |
Net operating
loss carryforwards |
| |
General business
credit carryforwards |
| ||||||
2019
|
| | | $ | 3,306,000 | | | | | $ | 95,000 | | |
2020
|
| | | | 5,125,000 | | | | | | 226,000 | | |
2021
|
| | | | 5,378,000 | | | | | | 56,000 | | |
2022
|
| | | | 8,230,000 | | | | | | 431,000 | | |
Thereafter
|
| | | | 162,537,000 | | | | | | 2,406,000 | | |
| | | | $ | 184,576,000 | | | | | $ | 3,214,000 | | |
|
| | |
Quarters Ended
|
| |||||||||||||||||||||
| | |
December 31,
2018 |
| |
September 30,
2018 |
| |
June 30,
2018 |
| |
March 31,
2018 |
| ||||||||||||
Foundation revenues
(1)(2)
|
| | | $ | 369,000 | | | | | $ | 1,687,000 | | | | | $ | 259,000 | | | | | $ | 481,000 | | |
License revenues
(1)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Royalties (1) | | | | | 113,000 | | | | | | 22,000 | | | | | | 17,000 | | | | | | 50,000 | | |
Research and development
|
| | | | 9,470,000 | | | | | | 13,150,000 | | | | | | 7,916,000 | | | | | | 8,162,000 | | |
General and administrative
|
| | | | 7,631,000 | | | | | | 4,970,000 | | | | | | 4,627,000 | | | | | | 2,878,000 | | |
Loss from operations
(2)
|
| | | | (18,010,000 ) | | | | | | (16,916,000 ) | | | | | | (12,557,000 ) | | | | | | (10,683,000 ) | | |
Net loss
(2)
|
| | | | (17,479,000 ) | | | | | | (16,419,000 ) | | | | | | (12,243,000 ) | | | | | | (10,530,000 ) | | |
Basic and diluted loss per common share
|
| | | | (0.36 ) | | | | | | (0.34 ) | | | | | | (0.26 ) | | | | | | (0.22 ) | | |
Weighted average number of common shares
outstanding – basic and diluted |
| | | | 47,944,486 | | | | | | 47,794,394 | | | | | | 47,303,518 | | | | | | 47,060,523 | | |
| | |
Quarters Ended
|
| |||||||||||||||||||||
| | |
December 31,
2017 |
| |
September 30,
2017 |
| |
June 30,
2017 |
| |
March 31,
2017 |
| ||||||||||||
Foundation revenues
(1)
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
License revenues
(1)
|
| | | | 150,000 | | | | | | 151,000 | | | | | | 150,000 | | | | | | 151,000 | | |
Royalties (1) | | | | | 65,000 | | | | | | 68,000 | | | | | | 67,000 | | | | | | 35,000 | | |
Research and development
|
| | | | 5,706,000 | | | | | | 3,277,000 | | | | | | 5,808,000 | | | | | | 2,198,000 | | |
General and administrative
|
| | | | 3,113,000 | | | | | | 2,166,000 | | | | | | 2,642,000 | | | | | | 3,022,000 | | |
Loss from operations
|
| | | | (8,750,000 ) | | | | | | (5,362,000 ) | | | | | | (8,440,000 ) | | | | | | (5,284,000 ) | | |
Net loss
|
| | | | (8,450,000 ) | | | | | | (5,343,000 ) | | | | | | (8,279,000 ) | | | | | | (5,247,000 ) | | |
Basic and diluted loss per common share
|
| | | | (0.19 ) | | | | | | (0.13 ) | | | | | | (0.21 ) | | | | | | (0.13 ) | | |
Weighted average number of common shares outstanding – basic and diluted
|
| | | | 45,598,667 | | | | | | 40,377,890 | | | | | | 40,270,879 | | | | | | 40,254,679 | | |
Exhibit 3.2
AMENDED RESTATED BYLAWS
OF
ABEONA THERAPEUTICS INC.
(As amended and restated as of March 14, 2019)
Article I.
Offices and Agents
1. Principal Office . The principal office of the Corporation may be located within or without the State of Delaware, as designated by the board of directors. The Corporation may have other offices and places of business at such places within or without the State of Delaware as shall be determined by the directors.
2. Registered Office . The registered office of the Corporation required by the General Corporation Law of Delaware must be maintained in the State of Delaware, and it may be, but need not be, identical with the principal office, if located in the state of Delaware. The address of the registered office of the Corporation may be changed from time to time as provided by the General Corporation Law of Delaware.
3. Registered Agent . The Corporation shall maintain a registered agent in the State of Delaware as required by the General Corporation Law of Delaware. Such registered agent may be changed from time to time as provided by the General Corporation Law of Delaware.
Article II.
Stockholders Meetings
1. Annual Meetings . Unless otherwise determined by the board of directors, the annual meeting of the stockholders of the Corporation shall be held at a reasonable hour on the second Wednesday of May unless that day be a holiday, in which case said meeting shall be held on the next business day following that day. The annual meeting of the stockholders shall be held for the purpose of electing directors and transacting such other corporate business as may come before the meeting.
2. Special Meetings . Special meetings of the stockholders of the Corporation may be called at any time by the chairman of the board of directors, if any, by the president or by resolution of the board of directors. The notice or call of a special meeting shall state the purpose or purposes for which the meeting is called.
3. Place of Meeting . The annual meeting of the stockholders of the Corporation may be held at any place, either within or without the State of Delaware, as may be designated by the board of directors. Except as limited by the following sentence, the person or persons calling any special meeting of the stockholders may designate any place, within or without the State of Delaware, as the place for the meeting. If no designation is made or if a special meeting shall be called other than by the board of directors, the chairman of the board of directors or the president, the place of meeting shall be the principal office of the Corporation. A waiver of notice signed by all stockholders entitled to vote at a meeting may designate any place for such meeting.
4. Notice of Meeting . Except as otherwise provided in these Bylaws or by the laws of the State of Delaware, written or printed notice stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered either personally or by mail to each stockholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the Corporation. An affidavit of the secretary, assistant secretary, if any, or transfer agent of the Corporation that notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
5. Waiver of Notice . Any stockholder, either before, at, or after any stockholders' meeting, may waive notice of the meeting, and his waiver shall be deemed the equivalent of giving notice. Attendance at a stockholders' meeting, either in person or by proxy, by a person entitled to notice thereof shall constitute a waiver of notice of the meeting unless he attends for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened.
6. Fixing of Record Date . For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors of the Corporation may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of the meeting; not more than ten (10) days after the record date for determining shareholders entitled to express consent is fixed; and not more than sixty (60) days prior to the date of any other action. If no record date is fixed: (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting was held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the board of directors is necessary, shall be the day on which the first written consent is delivered to the Corporation at its principal place of business or such other place as designated by the boards of directors; (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the board of directors may fix a new record date for the adjourned meeting.
7. Voting List . The officer or agent who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, or any adjournment thereof, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the books of the Corporation or to vote in person or by proxy at any meeting of stockholders.
8. Polls . The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise.
9. Proxies . Any stockholder entitled to vote at a meeting of the stockholders, or to express consent or dissent to corporate action in writing without meeting may authorize another person or persons to act for him by proxy. No proxy shall be voted or acted upon after three (3) years from the date of its execution unless the proxy expressly provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally.
Without limiting the manner in which a stockholder may authorize another person or persons to act for him by proxy, the following shall constitute a valid means by which a stockholder may grant such authority.
A stockholder may execute a writing authorizing another person or persons to act for him as proxy. Execution may be accomplished by the stockholder or his authorized officer, director, employee or agent signing such writing or causing his signature to be affixed to such writing by any reasonable means including but not limited to, by facsimile signature.
A stockholder may authorize another person or persons to act for him as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or other electronic transmission are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information upon which they relied.
Any copy facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this Paragraph 9 may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
10. Voting Rights . Each outstanding share, regardless of class, shall be entitled to one vote, and each fractional share shall be entitled to a corresponding fractional vote on each matter submitted to a vote at a meeting of stockholders except to the extent that the voting rights of the shares of any class or classes are limited or denied by the Certificate of Incorporation.
At each election for directors every stockholder entitled to vote at such election shall have the right to vote in person or by proxy the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote, and cumulative voting in the election of such directors shall be permitted.
Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he has expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon.
The Corporation’s own capital stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election or directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Nothing in this section shall be construed as limiting the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
Shares which have been called for redemption shall not be deemed to be outstanding shares for the purpose of voting or determining the total number of shares entitled to vote on any matter on and after the date on which written notice of redemption has been sent to holders thereof and a sum sufficient to redeem such shares has been irrevocably deposited or set aside to pay the redemption price to the holders of the shares upon surrender of certificates there for.
If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the secretary of the Corporation is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (i) if only one (1) votes, his act binds all; (ii) if more than one (1) votes, the act of the majority so voting binds all; (iii) if more than one (1) votes, but the vote is evenly split on any particular matter each faction may vote the securities in question proportionally, or any person voting the shares, or a beneficiary, if any, may apply to the Court of Chancery or such other court as may have jurisdiction to appoint an additional person to act with the persons so voting the shares, which shall then be voted as determined by a majority of such persons and the person appointed by the Court. If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or even split for the purpose of this subsection shall be a majority or even split in interest.
11. Inspectors or Election . Prior to holding any meeting of stockholders, the Corporation shall appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability.
The inspectors shall (i) ascertain the number of shares outstanding and the voting power of each; (ii) determine the shares represented at a meeting and the validity of proxies and ballots; (iii) count all votes and ballots: (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.
In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Article II, Paragraph 9 of these Bylaws, any records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors' belief that such information is accurate and reliable.
12. Quorum . Except as otherwise provided in the Certificate of Incorporation, the presence, in person or by proxy, of the holders of a majority of the shares outstanding and entitled to vote shall constitute a quorum at meetings of the stockholders. In all matters, other than the election of directors, the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and actually voting on the subject matter shall be the act of the stockholders. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. In the event any stockholders withdraw from a duly organized meeting at which a quorum was initially present, the remaining shares represented shall constitute a quorum for the purpose of continuing to do business, and the affirmative vote of the majority of the remaining shares represented at the meeting and entitled to vote on the subject matter shall be the act of the stockholders unless the vote of a greater number or voting by classes is required by the General Corporation Law of Delaware or the Certificate of Incorporation.
13. Adjournments . If less than a quorum of the outstanding shares entitled to vote is represented at any meeting of the stockholders, a majority of the shares so represented may adjourn the meeting from time to time for a period not to exceed thirty (30) days at any one adjournment, without further notice, provided the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. Any meeting of the stockholders may adjourn from time to time until its business is completed. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
14. Informal Act by Shareholders . Any action required to be taken at a meeting of shareholders, or any action which may be taken at a meeting of shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted shall be delivered to the Corporation by said consent or consents delivered at its principal place of business or such other place as designated by the board of directors. Delivery made to the Corporation shall be by hand or by certified or registered mail, return receipt requested.
Article III.
Board of Directors
1. Number, Qualifications and Term of Office . Except as otherwise provided in the Certificate of Incorporation or the General Corporation Law of Delaware, the business and affairs of the Corporation shall be managed under the direction of a board of directors consisting of from three to fifteen members. Each director shall be a natural person of the age of fifteen years or older, but does not need to be a resident of the state of Delaware or a stockholder of the Corporation. The board of directors, by resolution, may increase or decrease the number of directors from time to time. Except as otherwise provided in these Bylaws or in the Certificate of Incorporation, the board of directors shall be divided into three (3) classes as nearly equal in number as possible. Each director in each class shall be elected at the appropriate annual meeting of stockholders, as determined by the Certificate of Incorporation, and shall hold office for a term of three (3) years and until his successor is elected and qualified or until his earlier resignation or removal. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director.
2. Vacancies and Newly Created Directorships . Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class shall be filled solely by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Any directors so chosen shall hold office until the next election of the class for which such director shall have been chosen, and until their successors shall be elected and qualified. No decrease in the number of directors constituting the board of directors shall shorten the term of any incumbent director.
If at any time of filling any vacancy or newly created directorship, the directors then in office shall constitute less than a majority of the whole board, the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent (10%) of the total number of shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by Section 211 of the General Corporation Law of Delaware.
Any director may resign at any time by giving written notice to the president or to the secretary of the Corporation. Such resignation shall take effect at the future time specified therein; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any vacancy occurring on the board of directors created by the resignation of a director, may be filled by the affirmative vote of a majority of directors then in office, including those who have so resigned. The vote thereon shall take effect when such resignation or resignations shall become effective. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office.
3. Removal . Any director or the entire board of directors may be removed in accordance with the provisions of Article VII Subparagraph D of the Certificate of Incorporation.
4. Compensation . Any director may be paid any one or more of the following: his expenses, if any, of attendance at meetings; a fixed sum for attendance at each meeting; or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. A director shall also be entitled to receive options for the acquisition of shares of stock of the corporation.
Article IV.
Meetings of the Board
1. Place of Meetings . The regular or special meetings of the board of directors or any committee designated by the board may be held at the principal office of the Corporation or at any other place within or without the State of Delaware that a majority of the board of directors or any such committee, as the case may be, may designate from time to time by resolution.
2. Regular Meetings . The board of directors shall meet each year immediately after the annual meeting of the stockholders for the purpose of electing officers and transacting such other business as may come before the meeting. The board of directors or any committee designated by the board may provide, by resolution, for the holding of additional regular meetings without other notice than such resolution.
3. Special Meetings . Special meetings of the board of directors or any committee designated by the board may be called at any time by the chairman of the board, if any, by the president or by a majority of the members of the board of directors or any such committee, as the case may be.
4. Notice of Meetings . Notice of the regular meetings of the board of directors or any committee designated by the board need not be given. Except as otherwise provided by these Bylaws or the laws of the State of Delaware, written notice of each special meeting of the board of directors or any such committee setting forth the time and the place of the meeting shall be given to each director not less than two (2) days prior to the time fixed for the meeting. Notice of special meetings may be either given personally, personally by telephone, or by sending a copy of the notice through the United States mail or by telegram, telex or telecopy, charges prepaid, to the address of each director appearing on the books of the Corporation. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage prepaid thereon. If notice is given by telegram, telex or telecopy, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph, telex or telecopy operator. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.
5. Waiver of Notice . A director may in writing waive notice of any special meeting of the board of directors or any committee, either before, at, or after the meeting; and his waiver shall be deemed the equivalent of giving notice. Attendance of a director at a meeting shall constitute waiver of notice of that meeting unless he attends for the express purpose of objecting to the transaction of business because the meeting has not been lawfully called or convened.
6. Quorum . At meetings of the board of directors or any committee designated by the board a majority of the number of directors fixed by these Bylaws or a majority of the members of any such committee, as the case may be, shall be necessary to constitute a quorum for the transaction of business. If a quorum is present, the act of the majority of directors in attendance shall be the act of the board of directors or any such committee, as the case may be, unless the act of a greater number is required by these Bylaws, the Certificate of Incorporation or the General Corporation Law of Delaware. One or more directors may participate in meetings of the board of directors as authorized by Subparagraph 11 of this Article IV by conference telephone, while the remaining director or directors are physically present at the meeting.
7. Presumption of Assent . A director who is present at a meeting of the board or committee designated by the board when corporate action is taken is deemed to have assented to the action taken unless: (i) he objects at the beginning of such meeting to the holding of the meeting or the transacting of business at the meeting; (ii) he contemporaneously requests that his dissent from the action taken be entered in the minutes of such meeting; or (iii) he gives written notice of his dissent to the presiding officer of such meeting before its adjournment or to the secretary of the Corporation immediately after adjournment of such meeting. The right of dissent as to a specific action taken in a meeting of a board or committee thereof is not available to a director who votes in favor of such action.
8. Reliance on Books of Account or Reports . Any member of the board of directors or any committee designated by the board of directors shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers, or employees, or committees of the board of directors, or by any other person as to matters the members reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, or in relying in good faith upon other records of the Corporation.
9. Committees . The board of directors may, by a resolution passed by a majority of the whole board designate one (1) or more committees, each committee to consist of one (1) or more directors of the corporation. The board may designate one or more directors as alternate members of any committee who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.
Any such committee to the extent provided in the resolution of the board of directors shall have and may exercise all of the powers and authority of the board of directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which it may acquire. No such committee shall have the power or authority of the board of directors to: (i) amend the Certificate of Incorporation; (ii) adopt an agreement of merger or consolidation; (iii) recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets; (iv) recommend to the stockholders a dissolution of the Corporation or a revocation of a dissolution; (v) amend the Bylaws of the Corporation; (vi) or unless expressly provided for by resolution, or in the Certificate of Incorporation, declare a dividend, authorize the issuance of stock or to adopt a certificate of ownership and merger. To the extent authorized by resolution or resolutions providing for the issuance of shares of stock, adopted by the board, a committee may: (i) fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation; or (ii) fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series. If any such delegation of the authority of the board of directors is made as provided herein, all references to the board of directors contained in these Bylaws, the Certificate of Incorporation, the General Corporation Law of Delaware or any other applicable law or regulation relating to the authority so delegated shall be deemed to refer to such committee.
10. Informal Action by Directors . Any action required or permitted to be taken at a meeting of the board of directors or any committee thereof, may be taken without a meeting if all the members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. Such consent shall have the same force and effect as a unanimous vote of the directors and may be stated as such in any articles or documents filed with the Secretary of State of Delaware under the General Corporation Law of Delaware.
11. Telephonic Meetings . Members of the board of directors or any committee designated by the board may participate in meeting of such board or committee by means of a conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other at the same time. Participation in such a meeting shall constitute presence in person at the meeting.
Article V.
Officers and Agents
1. General . The executive officers of the Corporation shall be elected annually by the board of directors at the first meeting of the board held after each annual meeting of the stockholders. If the election of such officers shall not be held at such meeting, such election shall take place as soon thereafter as a meeting may conveniently be held. The officers of the Corporation shall consist of a president, a secretary and a treasurer, or a secretary/treasurer; in addition, one or more vice presidents, a chairman of the board of directors and such other officers, assistant officers, agents and employees that the board of directors may from time to time deem necessary may be elected by the board of directors or be appointed in a manner prescribed by the board.
Two or more offices may be held by the same person. Officers shall hold office until their successors are elected and qualified, unless they are sooner removed from office as provided in these Bylaws. All officers of the Corporation shall be natural persons of the age of eighteen years or older. Officers of the Corporation need not be residents of the State of Delaware or directors or stockholders of the Corporation.
2. General Duties . All officers and agents of the Corporation, as between themselves and the Corporation, shall have such authority and shall perform such duties in the management of the Corporation as may be provided in these Bylaws or as may be determined by resolution of the board of directors not inconsistent with these Bylaws. In all cases where the duties of any officer, agent or employee are not prescribed by the Bylaws or by the board of directors, such officer, agent or employee shall follow the orders and instructions of the president.
Any officer shall have the power to execute and deliver on behalf of and in the name of the Corporation any instrument requiring the signature of an officer of the Corporation, except as otherwise provided in these Bylaws or where the execution and delivery thereof shall be expressly delegated by the board of directors to some other officer or agent of the Corporation. Unless authorized to do so by these Bylaws or by the board of directors, no officer, agent or employee shall have any power or authority to bind the Corporation in any way, to pledge its credit or to render it liable pecuniarily for any purpose or in any amount.
3. Vacancies . When a vacancy occurs in one of the executive offices by reason of death, resignation or otherwise, it shall be filled by a resolution of the board of directors. The officer so selected shall hold office until his successor is chosen and qualified.
4. Salaries . The board of directors shall fix the salaries of the officers of the Corporation. The salaries of other agents and employees of the Corporation may be fixed by the board of directors, or by any committee designated by the board or by an officer to whom that function has been delegated by the board. No officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the Corporation.
5. Removal . Any officer or agent of this Corporation may be removed by the board of directors whenever in its judgment the best interests of the Corporation may be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or an agent shall not of itself create contract rights.
6. Chairman of the Board . The chairman of the board, if any, shall preside as chairman at meetings of the stockholders and the board of directors. He shall, in addition, have such other duties as the board may prescribe that he perform. At the request of the president, the chairman of the board may, in the case of the president's absence or inability to act, temporarily act in his place. In the case of death of the president or in the case of his absence or inability to act without having designated the chairman of the board to act temporarily in his place, the chairman of the board shall perform the duties of the president, unless the board of directors, by resolution, provides otherwise. If the chairman of the board shall be unable to act in place of the president, any vice president may exercise such powers and perform such duties as provided in section 8 below.
6a. Executive Chairman . The board of directors may from time to time elect or appoint the chairman of the board, if any, to serve as executive chairman. To the extent such position is filled, all other executive officers shall report to the executive chairman, unless delegated otherwise by the executive chairman. The executive chairman shall have general and active management and supervision of the business and affairs of the Corporation.
7. President . The president shall be the chief executive officer of the Corporation (unless the board of directors appoints another executive to be the chief executive officer of the Corporation with such duties and responsibilities as the board of directors shall delegate from time to time), and, subject to the control of the board of directors, shall have general supervision of the business and affairs of the Corporation. In the event the position of chairman of the board shall not be occupied or the chairman shall be absent or otherwise unable to act, the president shall preside at meetings of the stockholders and directors and shall discharge the duties of the presiding officer. At each annual meeting of the stockholders the president shall give a report of the business of the Corporation for the preceding fiscal year and shall perform whatever other duties the board of directors may from time to time prescribe. The president may sign, with the secretary or any other proper officer of the Corporation thereunto authorized by the board of directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts, or other instruments which the board of directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed.
8. Vice Presidents . Each vice president shall have such powers and perform such duties as the board of directors may from time to time prescribe or as the president may from time to time delegate to him. At the request of the president, in the case of the president's absence or inability to act, any vice president may temporarily act in his place. In the case of the death of the president, or in the case of his absence or inability to act without having designated a vice president or vice presidents to act temporarily in his place, the board of directors, by resolution, may designate a vice president or vice presidents, to perform the duties of the president. If no such designation shall be made, the chairman of the board of directors, if any, shall exercise such powers and perform such duties, as provided in Section 6 above, but if the Corporation has no chairman of the board of directors, or if the chairman is unable to act in place of the president, all the vice presidents may exercise such powers and perform such duties.
9. Secretary . The secretary shall keep or cause to be kept in books provided for that purpose the minutes of the meetings of the stockholders, executive committee, if any, and any other committees, and of the board of directors; shall see that all notices are duly given in accordance with the provisions of these Bylaws and as required by law; shall be custodian of the records and of the seal of the Corporation and see that the seal is affixed to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized and in accordance with the provisions of these Bylaws; keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder, sign with the president certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the board of directors; have a general charge of the stock transfer books of the Corporation; and, in general, shall perform all duties incident to the office of secretary and such other duties as may, from time to time, be assigned to him by the board of directors or by the president. In the absence of the secretary or his inability to act, the assistant secretaries, if any, shall act with the same powers and shall be subject to the same restrictions as are applicable to the secretary.
10. Treasurer . The treasurer shall have custody of corporate funds and securities. He shall keep full and accurate accounts of receipts and disbursements and shall deposit all corporate monies and other valuable effects in the name and to the credit of the Corporation in the depository or depositories of the Corporation selected by the board of directors, and shall render an account of his transactions as treasurer and of the financial condition of the Corporation to the president and/or the board of directors upon request. Such power given to the treasurer to deposit and disburse funds shall not, however, preclude any other officer or employee of the Corporation from also depositing and disbursing funds when authorized to do so by the board of directors. The treasurer shall, if required by the board of directors, give the Corporation a bond in such amount and with such surety or sureties as may be ordered by the board of directors for the faithful performance of duties of his office. The treasurer shall have such other duties as may be from time to time prescribed by the board of directors or the president. In the absence of the treasurer or his inability to act, the assistant treasurers, if any, shall act with the same authority and shall be subject to the same restrictions as are applicable to the treasurer.
11. Delegation of Duties . Whenever an officer is absent, or whenever, for any reason, the board of directors may deem it desirable, the board may delegate the powers and duties of an officer to any other officer or officers or to any director or directors.
12. Bond of Officers . The board of directors may require any officer to give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the board of directors for such terms and conditions as the board of directors may specify, including without limitation for the faithful performance of his duties and for the restoration to the Corporation of all property in his possession or under his control belong to the Corporation.
13. Loans to Director, Officers, Employees . The Corporation may lend money to, guarantee the obligations of and otherwise assist directors, officers and employees of the Corporation, or directors of another corporation of which the Corporation owns a majority of the voting stock to the extent of and in compliance with the General Corporation Laws of Delaware.
Article VI.
Stock Certificates and the Transfer of Shares
1. Stock Certificates; Uncertificated Shares . The shares of the Corporation shall be represented by certificates, provided that the board of directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the board of directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation by the chairman or vice-chairman of the board of directors, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation representing the number of shares registered in certificate form. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
2. Consideration for Shares . Shares shall be issued for such consideration as shall be fixed from time to time by the board of directors. Consideration for shares shall be expressed in dollars, and shall not be less than the par value or stated value therefor, as the case may be. The par value for shares, if any, shall be stated in the Certificate of Incorporation, and the stated value for shares, if any, shall be fixed from time to time by the board of directors. Treasury shares may be disposed of by the Corporation for such consideration expressed in dollars as may be fixed from time to time by the board. Consideration for shares may consist, in whole or in part, of money, other property whether tangible, intangible or both, or in labor or services actually performed for the Corporation, but the promise of future services of a subscriber or direct purchaser of shares from the Corporation shall not constitute payment or part payment for shares.
3. Lost Certificates . The board of directors may direct a new certificate of stock or uncertificated share in place of any certificate issued by it, alleged to have been lost, stolen or destroyed if the owner makes an affidavit or affirmation of that fact and produces such evidence of loss or destruction as the board may require. The board, in its discretion, may as a condition precedent to the issuance of a new certificate require the owner to give the Corporation a bond sufficient to indemnify it against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of the certificate or the issuance of such new certificate.
4. Transfer of Shares . Shares of the Corporation shall only be transferred on its books upon the surrender to the Corporation of the share certificates duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer and such documentary stamps as may be required by law. In that event, the surrendered certificates shall be cancelled, new certificates issued to the persons entitled to them, and the transaction recorded on the books or the Corporation.
5. Registered Stockholders . The Corporation shall be entitled to treat the holder of record of shares as the holder in fact and, except as otherwise provided by the laws of Delaware, shall not be bound to recognize any equitable or other claim to or interest in the shares.
The board of directors may adopt by resolution a procedure whereby a stockholder may certify in writing to the Corporation that all or a portion of the shares registered in the name of such stockholder are held for the account of a specified person or persons. Such resolution shall set forth: (i) the classification of stockholder who may certify; (ii) the purpose or purposes for which the certification may be made; (iii) the form of certification and information to be contained therein; (iv) if the certification is with respect to a record date or closing of the stock transfer books within which the certification must be received by the Corporation; and (v) such other provisions with respect to the procedure as are deemed necessary or desirable.
Upon receipt by the Corporation of a certification complying with the procedure, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the holders of record of the number of shares specified in place of the stockholder making the certification.
6. Stock Ledger . An appropriate stock journal and ledger shall be kept by the secretary or such registrars or transfer agents as the directors by resolution may appoint in which all transactions in the shares of stock of the Corporation shall be recorded.
7. Location . The books, accounts and records of the Corporation may be kept at such place or places within or outside the State of Delaware as the board of directors may from time to time determine.
8. Inspection . The books, accounts and records of the Corporation shall be open for inspection by any member of the board of directors at all times, and open to inspection by the stockholders at such times, and subject to such regulations as the board of directors may prescribe, except as otherwise provided by statute.
Article VII.
Seal and Fiscal Year
1. Seal . The Corporation shall have a seal in the form impressed to the left of this paragraph of the Bylaws.
2. Fiscal Year . The fiscal year of the Corporation shall be determined by the board of directors and set forth in the minutes of the directors. Said fiscal year may be changed from time to time by the board of directors in its discretion.
Article VIII.
Dividends
Dividends shall be declared and paid out of the surplus or net profits for the fiscal year in which the dividend is declared, and/or the preceding fiscal year as often and at such times as the board of directors may determine. If the capital of the Corporation, computed in accordance with the General Corporation Law of Delaware, shall have been diminished by depreciation in the value of its property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock; the board of directors shall not declare and pay out of net profits any dividends upon any shares of its capital stock until the deficiency in the amount of capital represented by issued and outstanding stock shall have been repaired. No unclaimed dividend shall bear interest against the Corporation.
Article IX.
Amendments
Subject to repeal or change by action of the stockholders in accordance with the Certificate of Incorporation, the board of directors may amend, supplement or repeal these Bylaws or adopt new Bylaws, and all such changes shall affect and be binding upon the holders of all shares heretofore as well as hereafter authorized, subscribed for or offered.
Article X.
Miscellaneous
1. Gender . Whenever required by the context, the singular shall include the plural, the plural the singular, and one gender shall include all genders.
2. Invalid Provision . The invalidity or unenforceability of any particular provision of these Bylaws shall not affect the other provisions herein, and these Bylaws shall be construed in all respects as if such invalid or unenforceable provision was omitted.
3. Governing Law . These Bylaws shall be governed by and construed in accordance with the laws of the State of Delaware.
4. Severability . If any provision (or any part thereof) or provisions of these Bylaws shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of these Bylaws (including, without limitation, each portion of any section of these Bylaws containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of these Bylaws (including, without limitation, each such portion containing any such provision held to be invalid, illegal or unenforceable) shall be construed for the benefit of the Corporation to the fullest extent permitted by law so as to (a) give effect to the intent manifested by the provision held invalid, illegal or unenforceable, and (b) permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service. Reference herein to laws, regulations or agencies shall be deemed to include all amendments thereof, substitutions therefor and successors thereto, as the case may be.
Article XI.
Exclusive Jurisdiction for Certain Actions
1. Forum for Adjudication of Disputes. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of fiduciary duty owed by, or other wrongdoing by, any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, creditors or other constituents, (c) any action asserting a claim arising pursuant to any provision of the General Corporation Law of Delaware or the Certificate of Incorporation or these Bylaws of the Corporation, (d) any action to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or these Bylaws of the Corporation or (e) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery of the State of Delaware having personal jurisdiction over the indispensable parties named as defendants therein; provided that if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. To the fullest extent permitted by applicable law, any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XI of these Bylaws.
Article XII.
Litigation Costs
Except to the extent prohibited by the General Corporation Law of Delaware, and unless the board of directors or one of its committees otherwise approves in accordance with Section 141 of the General Corporation Law of Delaware, the Certificate of Incorporation and these Bylaws, in the event that any current or prior stockholder or anyone on their behalf (a “ Claiming Party ”) (a) initiates, asserts, joins, offers substantial assistance to or has a direct financial interest in (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation arising pursuant to any provision of the General Corporation Law of Delaware or the Corporation’s Certificate of Incorporation or Bylaws, (iv) any action to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or these Bylaws or (v) any action asserting a claim against the Corporation governed by the internal affairs doctrine (each, a “ Covered Proceeding ”), and (b) such Claiming Party does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought by such Claiming Party, then each such Claiming Party shall be obligated to reimburse the Corporation and any such director, officer or other employee for all fees, costs and expenses of every kind and description (including, but not limited to, all attorneys’ fees and other litigation expenses) that the Corporation or any such director, officer or other employee actually incurs in connection with the Covered Proceeding. Any person or entity purchasing or otherwise acquiring any interest in the shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XII.
Exhibit 10.18
Confidential Treatment Requested
EXECUTION COPY
License Agreement
This LICENSE AGREEMENT (“ Agreement ”) is entered into as of November 4, 2018 (“ Effective Date ”) by and between REGENXBIO Inc., a corporation organized under the laws of the State of Delaware, with offices at 9600 Blackwell Road, Suite 210, Rockville, MD 20850 (“ Licensor ”), and Abeona Therapeutics Inc., a corporation organized under the laws of the State of Delaware, with offices at 1330 Avenue of the Americas, 33rd Floor, New York, NY 10019 (“ Licensee ”). Licensor and Licensee are hereinafter referred to individually as a “ Party ” and collectively as the “ Parties .”
WHEREAS, Licensor has rights under certain Licensed Patents (as defined herein) pertaining to adeno-associated virus serotype 9;
WHEREAS, Licensee desires to obtain from Licensor an exclusive license under the Licensed Patents under the terms set forth herein; and
WHEREAS, the Licensee has determined, and the Licensor has relied upon such determination, that the Agreement does not require regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
NOW, THEREFORE, in consideration of the promises and covenants contained in this Agreement, and intending to be legally bound, the Parties hereby agree as follows:
Article 1 : Definitions
1.1 “ AAV9 ” means (a) the recombinant adeno-associated virus serotype 9 vector with the specified sequence set forth in GenBank **** and (b) any recombinant adeno-associated virus derivatives of such serotype 9 vector that are covered by the claims of the Licensed Patents.
1.2 “ Affiliate ” means any legal entity directly or indirectly, during the term of this Agreement, controlling, controlled by, or under common control with another entity. For purposes of this Agreement, “control” means the direct or indirect ownership of more than 50% of the outstanding voting securities of a legal entity, or the right to receive more than 50% of the profits or earnings of a legal entity, or the right to control the policy decisions of a legal entity. An entity may be or become an Affiliate of an entity and may cease to be an Affiliate of an entity, in each case, during the term of this Agreement.
1.3 “ Calendar Quarter ” means each three-month period or any portion thereof, beginning on January 1, April 1, July 1, and October 1.
****Certain information has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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1.4 “ Change of Control ” means (i) any transaction or series of related transactions following which the holders of Licensee’s capital stock or membership or equity interests immediately prior to such transaction or series of related transactions collectively are the owners of less than 50% of the outstanding equity interests of Licensee entitled to (a) vote with respect to the election of directors (or positions having a similar function) or (b) receive the proceeds upon any sale, liquidation or dissolution of Licensee; (ii) a sale, transfer, or other disposition, in a single transaction or series of related transactions, of all or a material portion of Licensee’s interest in the Licensed Products; (iii) a sale, transfer, or other disposition, in a single transaction or series of related transactions, of all or a material portion of Licensee’s right title, or interest in its assets taken as a whole; or (iv) the merger of Licensee with a Third Party by operation of law or otherwise.
1.5 “ CLN1 Field ” means the treatment of Neuronal Ceroid Lipfuscinosis-1, also known as infantile Batten disease, in humans by in vivo gene therapy using AAV9 to deliver the PPT1 gene.
1.6 “ CLN3 Field ” means the treatment of Neuronal Ceroid Lipfuscinosis-3, also known as juvenile Batten disease, in humans by in vivo gene therapy using AAV9 to deliver the CLN3 gene.
1.7 “ Confidential Information ” means and includes all technical information, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, animate and inanimate materials, data, processes, finances, business operations or affairs, and other proprietary ideas, whether or not patentable or copyrightable, of either Party that are (a) marked or otherwise identified as confidential or proprietary at the time of disclosure in writing; or (b) if disclosed orally, visually, or in another non-written form, identified as confidential at the time of disclosure and summarized in reasonable detail in writing as to its general content within 30 days after original disclosure. The Parties acknowledge that (i) the terms and conditions of this Agreement and (ii) the records and reports referred to in Section 3.6 will be deemed the Confidential Information of both Parties, regardless of whether such information is marked or identified as confidential. In addition, information provided to Licensee pursuant to the provisions of Section 7.1 will be deemed the Confidential Information of Licensor, regardless of whether such information is marked or identified as confidential. Notwithstanding the foregoing, Confidential Information will not include the following, in each case, to the extent evidenced by competent written proof of the Receiving Party:
1.7.1 information that was already known to the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party;
1.7.2 information that was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;
1.7.3 information that became generally available to the public or otherwise part of the public domain after its disclosure, other than through any act or omission of the Receiving Party in breach of this Agreement;
1.7.4 information that is independently discovered or developed by the Receiving Party without the use of Confidential Information of the Disclosing Party; or
1.7.5 information that was disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others.
****Certain information has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 2
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Confidential Treatment Requested
1.8 “ Conflicting License ” means the license agreement **** that licenses rights under the Licensed Technology on a non-exclusive, sublicensable basis for the treatment of MPSIII Type A in human beings by in vivo administration.
1.9 “ Disclosing Party ” has the meaning set forth in Section 5.1.
1.10 “ Domain Antibody ” ****.
1.11 “ FDA ” means the United States Food and Drug Administration, or a successor agency in the United States with responsibilities comparable to those of the United States Food and Drug Administration.
1.12 “ Fields ” means the CLN1 Field, the CLN3 Field, the MPS IIIA Field and the MPS IIIB Field (individually, the CLN1 Field, the CLN3 Field, the MPS IIIA Field and the MPS IIIB Field are hereinafter referred to as a “ Field ”).
1.13 “ GSK Agreement ” means that certain License Agreement entered into between Licensor and SmithKline Beecham Corporation, effective on March 6, 2009, as amended by that certain Amendment to License Agreement dated April 15, 2009, and as further amended from time to time.
1.14 “ First Commercial Sale ” of a Licensed Product means the first transfer by Licensee, its Affiliates or Sublicensees for value in an arms’-length transaction to an independent third party distributor, agent or end user in a country after obtaining all approvals from Regulatory Authorities necessary for such transfer in such country. For clarity, sales or transfers of a product for clinical trial purposes, compassionate or similar use or indigent programs shall not constitute a “First Commercial Sale” hereunder.
1.15 “ Know-How ” means any and all ideas, information, know-how, data, research results, writings, inventions, discoveries, and other technology (including any proprietary materials), whether or not patentable or copyrightable.
1.16 Licensed Back Improvements ” has the meaning ascribed to it in Section 2.5.2.
1.17 “ Licensed Know-How ” means any Know-How Licensor provides to Licensee pursuant to Section 2.6.
1.18 “ Licensed Patents ” means, to the extent they cover AAV9, (a) all United States patents and patent applications listed in Exhibit A , including patents arising from such patent applications; (b) any re-examination certificates thereof; (c) the foreign counterparts of the patents and patent applications in subsections (a) and (b); (d) extensions, continuations, divisionals, and re-issue applications of the patents and patent applications in subsections (a) through (c); and (e) continuations-in-part to the extent that the continuations-in-part contain one or more claims directed to the invention or inventions disclosed in the patent and patent applications in subsections (a) through (c); provided that “Licensed Patents” will not include any claim of a patent or patent application covering any Manufacturing Technology.
****Certain information has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 3
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1.19 “ Licensed Product ” means (a) any AAV9 product that is made, made for, used, sold, offered for sale, or imported by Licensee, its Affiliates, and any of its or their Sublicensees, (i) the manufacture, use, sale, offer for sale, or import of which product, in the absence of the license granted pursuant to this Agreement, would infringe or is covered by at least one Valid Claim in the country of manufacture, use, sale, offer for sale, or import, including products manufactured by a process that would infringe or is covered by at least one Valid Claim in the country of manufacture, use, sale, offer for sale, or import or (ii) that incorporates, was developed using, or is produced or manufactured through the use of Licensed Know-How (it being understood that Licensee shall be deemed to be using Licensed Know-How based upon the license it receives under this Agreement); or (b) any service sold by Licensee, its Affiliates, and any of its or their Sublicensees with respect to the administration of any AAV9 product to patients that (i) in the absence of the license granted pursuant to this Agreement, would infringe or is covered by at least one Valid Claim in the country of sale or (ii) that incorporates, was developed using, or is produced or manufactured through the use of Licensed Know-How (it being understood that Licensee shall be deemed to be using Licensed Know-How based upon the license it receives under this Agreement).
1.20 “ Licensed Technology ” means, collectively, the Licensed Patents and Licensed Know-How.
1.21 “ Manufacturing Technology ” means any and all patents, patent applications, Know-How, and all intellectual property rights associated therewith that are owned or controlled by Licensor, and including all tangible embodiments thereof, that claim, cover or relate to the manufacture of adeno-associated viruses, adeno-associated virus vectors, research or commercial reagents related thereto, Licensed Products, or other products, including manufacturing processes, technical information relating to the methods of manufacture, protocols, standard operating procedures, batch records, assays, formulations, quality control data, specifications, scale up methods, any and all improvements, modifications, and changes thereto, and any and all activities associated with such manufacture. Any and all chemistry, manufacturing, and controls (CMC), drug master files (DMFs), or similar materials provided to Regulatory Authorities and the information contained therein are deemed Manufacturing Technology.
1.22 “ MPS IIIA Field ” means the treatment of Mucopolysaccharidosis type IIIA, also known as Sanfilippo Syndrome Type A, in humans by in vivo gene therapy using AAV9 to deliver the SGSH gene.
1.23 “ MPS IIIB Field ” means the treatment of Mucopolysaccharidosis type IIIB, also known as Sanfilippo Syndrome Type B, in humans by in vivo gene therapy using AAV9 to deliver the NAGLU gene.
1.24 “ Net Sales ” means the gross receipts from sales or other disposition of a Licensed Product (including fees for services within the definition of “Licensed Product”) by Licensee and/or its Affiliates and/or any Sublicensees to Third Parties less the following deductions that are directly attributable to a sale, specifically and separately identified on an invoice or other documentation and actually borne by Licensee, its Affiliates, or any Sublicensees: ****. In the event consideration other than cash is paid to Licensee, its Affiliates, or any Sublicensees, for purposes of determining Net Sales, the Parties shall use the cash consideration that Licensee, its Affiliates, or any Sublicensees would realize from an unrelated buyer in an arm’s length sale of an identical item sold in the same quantity and at the time and place of the transaction, as determined jointly by Licensor and Licensee based on transactions of a similar type and standard industry practice, if any.
****Certain information has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 4
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1.25 “ Penn Agreement ” means that certain License Agreement entered into between Licensor and The Trustees of the University of Pennsylvania, effective on February 24, 2009, as amended by that letter agreement dated March 6, 2009, by that certain Second Amendment to License Agreement effective on September 9, 2014, and by that certain Third Amendment to License Agreement effective on April 29, 2016, and as further amended from time to time.
1.26 “ Prosecute ” means preparation, filing, and prosecuting patent applications and maintaining patents, including any reexaminations, reissues, oppositions, inter partes review, and interferences.
1.27 “ Receiving Party ” has the meaning set forth in Section 5.1.
1.28 “ REGENXBIO Licensors ” means SmithKline Beecham Corporation (or any successor thereto under the GSK Agreement) and The Trustees of the University of Pennsylvania (or any successor thereto under the Penn Agreement), if any Licensed Technology is sublicensed from the Penn Agreement.
1.29 “ Regulatory Authority ” means any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity with authority over (a) the distribution, importation, exportation, manufacture, production, use, storage, transport, clinical testing or sale of a Licensed Product, including the FDA, or (b) setting the price and/or reimbursement for a Licensed Product.
1.30 “ Retained Rights ” has the meaning set forth in Section 2.2.
1.31 “ Sublicensee ” means (i) any Third Party or Affiliate to whom Licensee grants a sublicense of some or all of the rights granted to Licensee under this Agreement as permitted by this Agreement; and (ii) any other Third Party or Affiliate to whom a sublicensee described in clause (i) has granted a further sublicense as permitted by this Agreement.
1.32 “ Third Party ” means any person or entity other than a Party to this Agreement or Affiliates of a Party to this Agreement.
1.33 “ Valid Claim ” means a claim of an issued and unexpired patent (including any patent claim the term of which is extended by any extension, supplementary protection certificate, patent term restoration, or the like) included within the Licensed Patents or a claim of a pending patent application included within the Licensed Patents, that has not lapsed, been abandoned, been held revoked, or been deemed unenforceable or invalid by a non-appealable decision or an appealable decision from which no appeal was taken within the time allowed for such appeal of a court or other governmental agency of competent jurisdiction.
****Certain information has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 5
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Article 2 : License Grants
2.1 License Grant . Subject to the terms and conditions of this Agreement, including the Retained Rights, Licensor hereby grants to Licensee an exclusive, sublicensable (as provided in Section 2.4 only), non-transferable (except as provided in Section 10.2), royalty-bearing, worldwide license under the Licensed Technology to make, have made, use, import, sell, and offer for sale Licensed Products using AAV9 solely in the Fields, including, for the avoidance of doubt, the right to conduct research and development; provided that with respect to the MPSIIIA Field, the license granted under this Section 2.1 shall be exclusive with the exception of those rights Licensor has granted under the Conflicting License.
2.2 Retained Rights . Except for the rights and licenses specified in Section 2.1, no license or other rights are granted to Licensee under any intellectual property of Licensor, whether by implication, estoppel, or otherwise and whether such intellectual property is subordinate, dominant, or otherwise useful for the practice of the Licensed Technology. Notwithstanding anything to the contrary in this Agreement, Licensor may use and permit others to use the Licensed Technology for any research, development, commercial, or other purposes outside of the Fields. Without limiting the foregoing, and notwithstanding anything in this Agreement to the contrary, Licensee acknowledges and agrees that the following rights are retained by Licensor and the REGENXBIO Licensors (individually and collectively, the “ Retained Rights ”), whether inside or outside the Fields:
2.2.1 The rights and licenses granted in Section 2.1 shall not include any right (and Licensor and the REGENXBIO Licensors retain the exclusive (even as to Licensee), fully sublicensable right) under the Licensed Technology to make, have made, use, sell, offer to sell, and import Domain Antibodies that are expressed by an adeno-associated vector, including AAV9.
2.2.2 Licensor and the REGENXBIO Licensors retain the following rights with respect to the Licensed Technology:
(a) | A non-exclusive, sublicensable right under the Licensed Technology to make, have made, use, sell, offer to sell, and import products that deliver RNA interference and antisense drugs using an adeno-associated vector, including AAV9; and |
(b) | A non-exclusive right for the REGENXBIO Licensors (which right is sublicensable by the REGENXBIO Licensors) to use the Licensed Technology for non-commercial research purposes and to use the Licensed Technology for such REGENXBIO Licensors’ discovery research efforts with non-profit organizations and collaborators. |
2.2.3 The rights and licenses granted in Section 2.1 shall not include any right (and Licensor retains the exclusive (even as to Licensee), fully sublicensable right) under the Licensed Technology:
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(a) | to conduct commercial reagent and services businesses, which includes the right to make, have made, use, sell, offer to sell, and import research reagents, including any viral vector construct; provided that, for clarity, such rights retained by Licensor shall not include the right to conduct clinical trials in humans in the Fields; or |
(b) | to use the Licensed Technology to provide services to any Third Parties; provided that Licensee’s license under Section 2.1 does include the right to provide the service of the administration of Licensed Products to patients. |
2.2.4 Licensor retains the fully sublicensable right under the Licensed Technology to grant non-exclusive research and development licenses to Affiliates and Third Parties; provided that such research and development rights granted by Licensor shall not include the right to conduct clinical trials in humans in the Fields or any rights to sell products in the Fields.
2.2.5 The Trustees of the University of Pennsylvania may use and permit other non-profit organizations or other non-commercial entities to use the Licensed Technology for educational and research purposes.
2.3 Government Rights . Licensee acknowledges that the United States government retains certain rights in intellectual property funded in whole or part under any contract, grant, or similar agreement with a federal agency. The license grants hereunder are expressly subject to all applicable United States government rights, including any applicable requirement that products resulting from such intellectual property sold in the United States must be substantially manufactured in the United States.
2.4 Sublicensing .
2.4.1 The license granted pursuant to Section 2.1 is sublicensable by Licensee to any Affiliates or Third Parties; provided that any such sublicense must comply with the provisions of this Section 2.4 (including Section 2.4.2).
2.4.2 The right to sublicense granted to Licensee under this Agreement is subject to the following conditions:
(a) | Licensee may only grant sublicenses pursuant to a written sublicense agreement with the Sublicensee. Licensor must receive written notice as soon as practicable following execution of any such sublicenses. Any further sublicenses granted by any Sublicensees (to the extent permitted hereunder) must comply with the provisions of this Section 2.4 (including Section 2.4.2) to the same extent as if Licensee granted such sublicense directly. |
(b) | In each sublicense agreement, the Sublicensee must be required to comply with the terms and conditions of this Agreement to the same extent as Licensee has agreed and must acknowledge that Licensor is an express third party beneficiary of such terms and conditions under such sublicense agreement. |
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(c) | The official language of any sublicense agreement shall be English. |
(d) | Within **** after entering into a sublicense, Licensor must receive a copy of the sublicense written in the English language for Licensor’s records and to share with the REGENXBIO Licensors. The copy of the sublicense may be redacted to exclude confidential information of the applicable Sublicensee, but such copy shall not be redacted to the extent that it impairs Licensor’s (or the REGENXBIO Licensors’) ability to ensure compliance with this Agreement; provided that, if either of the REGENXBIO Licensors requires a complete, unredacted copy of the sublicense, Licensee shall provide such complete, unredacted copy. |
(e) | Licensee’s execution of a sublicense agreement will not relieve Licensee of any of its obligations under this Agreement. Licensee is and shall remain **** to Licensor for all of Licensee’s duties and obligations contained in this Agreement and for any act or omission of an Affiliate or Sublicensee that would be a breach of this Agreement if performed or omitted by Licensee, and Licensee will be deemed to be in breach of this Agreement as a result of such act or omission. |
2.5 Improvements .
2.5.1 Licensee hereby grants to Licensor a non-exclusive, worldwide, royalty-free, transferable, sublicensable, irrevocable, perpetual license:
(a) | to use any Licensed Back Improvements (and any intellectual property rights with respect thereto) consummate in scope to the Retained Rights, and |
(b) | to practice the Licensed Back Improvements (and any intellectual property rights with respect thereto) in connection with AAV9, including the right to research, develop, make, have made, use, offer for sale, and sell products and services; provided that Licensor shall have no right, under the license in this Section 2.5.1(b), to practice the Licensed Back Improvements in the Fields. |
2.5.2 For purposes of this Agreement, “ Licensed Back Improvements ” means any patentable modifications or improvements developed by Licensee, any Affiliates, or any Sublicensees to any vector that is the subject of a claim within the Licensed Patents.
2.5.3 Licensee agrees to provide prompt notice to Licensor upon the filing of any patent application covering any Licensee Invention and/or any Licensed Back Improvement, together with a reasonably detailed description of, or access to, such Licensee Inventions and/or Licensed Back Improvement to permit the practice of any such invention or improvement.
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2.6 Transfer of Licensed Know-How . During the **** following the Effective Date, at Licensee’s sole expense, to the extent not previously disclosed or provided to Licensee, (a) Licensor will deliver to Licensee copies of Licensed Know-How set forth in Exhibit B in the form that such Licensed Know-How then exists; and (b) Licensor will disclose to Licensee any development Know-How, including through in-person or telephonic meetings at such times and places as agreed to by the Parties, relating to the Licensed Products that Licensor agrees to provide to Licensee following a written request from Licensee. Licensee acknowledges and agrees that all Licensed Know-How disclosed pursuant to this Section 2.6 will be deemed “ Confidential Information ” of Licensor, regardless of whether such information is marked or identified as confidential and without an obligation to summarize oral information.
2.7 Regulatory Rights . Upon request, Licensee shall grant Licensor a “right of reference” for the FDA or any equivalent foreign regulatory body to any submissions containing ****. Upon request, Licensor shall grant Licensee a “right of reference” for the FDA or any equivalent foreign regulatory body to any submissions containing ****.
2.8 Collaboration Activities . Solely upon the written request of Licensee, Licensor may, in its sole discretion after receipt of such request, engage in collaboration activities with Licensee related to ****.
2.9 Section 365(n) of the Bankruptcy Code . All rights and licenses granted to Licensee or Licensor under or pursuant to this Agreement are and will otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (Title 11, U.S. Code), as amended (the “ Bankruptcy Code ”) or any comparable law outside the United States, licenses of rights to “intellectual property” as defined in Section 101(35A) of the Bankruptcy Code. The Parties will retain and may fully exercise all of their respective rights and elections under the Bankruptcy Code and any comparable law outside the United States.
Article 3 : Consideration
3.1 Initial Fee . In partial consideration of the rights and licenses granted to Licensee under this Agreement, Licensee shall pay Licensor an initial fee of $20,000,000, which shall be payable as follows: (a) $10,000,000 within **** after the Effective Date; and (b) $10,000,000 within twelve (12) months of the Effective Date; provided that any unpaid portion of the initial fee shall be immediately payable upon termination of this Agreement or a Change of Control.
3.2 Annual Fees . In partial consideration of the rights and licenses granted to Licensee under this Agreement, Licensee shall pay Licensor annual fees of $100,000,000, which shall be payable as follows: (i) $20,000,000 on the second anniversary of the Effective Date; (ii) $20,000,000 on the third anniversary of the Effective Date; (iii) $20,000,000 on the fourth anniversary of the Effective Date; (iv) $20,000,000 on the fifth anniversary of the Effective Date; and (v) $20,000,000 on the sixth anniversary of the Effective Date. In the event of termination of the Agreement prior to the second anniversary of the Effective Date, Licensee shall pay Licensor any unpaid amounts recited in (i) within **** of such termination. In the event of a Change of Control and to the extent that payments (i), (ii), (iii), (iv) and/or (v) above have not been received by Licensor from Licensee, Licensee shall pay Licensor any such unpaid amounts recited in (i), (ii), (iii), (iv) or (v) (subject to adjustments in amounts due for any terminated Fields in accordance with Section 6.6.6, provided such termination is effective prior to the Change of Control) within **** of the Change of Control.
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3.3 Milestone Fees . In partial consideration of the rights and licenses granted to Licensee under this Agreement, Licensee shall pay Licensor the following milestone payments:
Milestone | Milestone Payment |
1. Cumulative Net Sales of Licensed Products first reaching **** | **** |
2. Cumulative Net Sales of Licensed Products first reaching **** | **** |
Total: | $60,000,000 |
3.3.1 For clarity, each milestone payment set forth in Section 3.3 is payable only once.
3.4 Royalties . In further consideration of the rights and licenses granted to Licensee under this Agreement, Licensee shall pay to Licensor a royalty of **** on Net Sales of Licensed Products, subject to the reductions in royalty rates set forth in Section 3.4.1.
3.4.1 Third Party Royalties Stacking Provision . If Licensee must obtain a license from a Third Party to avoid infringement of such Third Party’s rights in order to manufacture, use, or commercialize a given Licensed Product and if the royalties required to be paid to such Third Party for such license, together with those royalties payable to Licensor, in the aggregate, exceed **** of Net Sales for any Licensed Product, then the royalty owed to Licensor for that Licensed Product will be reduced by an amount calculated as follows:
STACKING ROYALTY CALCULATIONS
R = (C * (A / (A+B)))
Where
R = reduction of Licensor royalty,
A = unreduced Licensor royalty,
B = sum of all Third Party royalties,
C = increment of projected total royalty above ****.
Example Calculation:
Assume: | i) all Third Party royalties = **** |
ii) unreduced Licensor royalty = **** | |
iii) projected total royalty = **** |
R = (**** - ****) * (**** / (**** + ****))
R = (**** * ****)
R = ****
Licensor Stacked Royalty = **** – **** = **** (but subject to the cap described below which limits the reduction to **** in the aggregate)
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Notwithstanding the foregoing, Licensee will pay to Licensor no less than **** of the royalties that Licensee would otherwise pay to Licensor with respect to Net Sales of Licensee if there were no royalties due to Third Parties.
3.4.2 Adjustment of Royalties For Licenses . On a Licensed Product-by-Licensed Product, country-by-country basis, upon the date on which the manufacture, use, sale, offer for sale, or import of a Licensed Product does not infringe or is not covered by a Valid Claim in such country, then the royalty percentage applicable to Net Sales of such Licensed Product under this Section 3.4 in such country shall be reduced by ****.
3.4.3 Royalty Payment Period . Licensee’s obligation hereunder for payment of a royalty under this Section 3.4 on the Net Sales of Licensed Products in a given country will end on a country-by-country, Licensed Product-by-Licensed Product basis on the later of: (i) expiration, lapse, abandonment, or invalidation of the last Valid Claim of the Licensed Patents to expire, lapse, become abandoned or become unenforceable for the applicable Licensed Product in the applicable country, or (ii) **** from the First Commercial Sale of the applicable Licensed Product in the applicable country.
3.5 Sublicense Fees .
3.5.1 In further consideration of the rights and licenses granted to Licensee under this Agreement, Licensee will pay Licensor **** of any sublicense fees (****) received by Licensee or its Affiliates from a Third Party for the Licensed Technology from any Sublicensee or from any person or entity granted any option to obtain a sublicense (“ Sublicensing Revenue ”).
3.5.2 With respect to the obligations under this Section 3.5, Licensee shall not be required to submit any amounts received from a Third Party for the following:
(a) | Reimbursement or payment of Licensee’s actual costs or on an arm’s length cost plus arrangement for research, development, and/or manufacturing activities performed by Licensee or its Affiliates corresponding directly to the research, development and/or manufacturing of Licensed Products pursuant to a specific agreement; |
(b) | Any and all amounts paid to Licensee or its Affiliates by a Sublicensee as royalties on sales of Licensed Product sold by the Sublicensee under a sublicense agreement; and |
(c) | Consideration received for the purchase of an equity interest in Licensee or its Affiliates at fair market value or in the form of loans at arm’s length rates of interest. |
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3.5.3 If Licensee or its Affiliates receives sublicense fees from Sublicensees or from any person or entity granted any option to obtain a sublicense under this Agreement in the form of non-cash consideration, then Licensee shall pay Licensor a cash payment as required under Section 3.5 determined based on the fair market value of such non-cash consideration. If Licensee or its Affiliate enters into any sublicense that is not an arm’s length transaction, fees due under this Section 3.5 will be calculated based on the fair market value of such transaction, at the time of the transaction, assuming an arm’s length transaction made in the ordinary course of business, as determined jointly by Licensor and Licensee based on transactions of a similar type and standard industry practice, if any.
3.5.4 To the extent Licensee or its Affiliates receives payment from a Third Party relating to one or more of the milestone events set forth in the table in Section 3.3, then the amount of the payment made to Licensor under such Section 3.3 with respect to such milestone event shall not be deemed sublicense fees under this Section 3.5; instead, the amounts due under this Section 3.5 shall be calculated by applying the applicable sublicense fee rate set forth in Section 3.5 above to the sublicense fees received by Licensee or its Affiliates from such Third Party after deducting the amount of the payment under Section 3.3.
3.6 Reports and Records .
3.6.1 Licensee must deliver to Licensor within **** after the end of each Calendar Quarter after the First Commercial Sale of a Licensed Product a report setting forth the calculation of the royalties due to Licensor for such Calendar Quarter on a Licensed Product by Licensed Product basis, including:
(a) | Number of Licensed Products included within Net Sales, listed by country; |
(b) | Gross consideration for Net Sales of Licensed Product, including all amounts invoiced, billed, or received, listed by country; |
(c) | Qualifying costs to be excluded from the gross consideration, as described in Section 1.24, listed by category of cost and by country; |
(d) | Net Sales of Licensed Products listed by country; |
(e) | A detailed accounting of any royalty reductions applied pursuant to Section 3.4.1; |
(f) | Royalties owed to Licensor; and |
(g) | The computations for any applicable currency conversions. |
3.6.2 Licensee shall pay the royalties due under Section 3.4 within **** following the last day of the Calendar Quarter in which the royalties accrue. Licensee shall send the royalty payments along with the report described in Section 3.6.1.
3.6.3 Within **** after the occurrence of a milestone event described in Section 3.3, Licensee must deliver to Licensor a report describing the milestone event that occurred, together with a payment of the applicable amount due to Licensor pursuant to Section 3.3.
3.6.4 Within **** after the receipt of any fees from any Third Party as described in Section 3.5, Licensee must deliver to Licensor a report describing the fees received, together with a payment of the applicable amount due to Licensor pursuant to Section 3.5.
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3.6.5 All financial reports under this Section 3.6 will be certified by the chief financial officer of Licensee or Licensee’s qualified financial representative.
3.6.6 Licensee shall maintain and require its Affiliates and all Sublicensees to maintain, complete, and accurate books and records that enable the royalties, fees, and payments payable under this Agreement to be verified. The records must be maintained for **** after the submission of each report under Article 3. Upon reasonable prior written notice to Licensee, Licensee and its Affiliates and all Sublicensees will provide Licensor and/or the REGENXBIO Licensors (and their respective accountants) with access to all of the relevant books, records, and related background information required to conduct a review or audit of the royalties, fees, and payments payable to Licensor under this Agreement to be verified. Access will be made available: (a) during normal business hours; (b) in a manner reasonably designed to facilitate the auditing party’s review or audit without unreasonable disruption to Licensee’s business; and (c) no more than once each calendar year during the term of this Agreement and for a period of **** thereafter. Licensee will promptly pay to Licensor the amount of any underpayment determined by the review or audit, plus accrued interest. If the review or audit determines that Licensee has underpaid any payment by **** or more, then Licensee will also promptly pay the costs and expenses of Licensor and the REGENXBIO Licensors and their respective accountants in connection with the review or audit. If the review or audit determines that Licensee has overpaid any payment, then Licensor shall refund the overpayment to Licensee.
3.7 Currency, Interest .
3.7.1 All dollar amounts referred to in this Agreement are expressed in United States dollars. All payments to Licensor under this Agreement must be made in United States dollars.
3.7.2 If Licensee receives payment in a currency other than United States dollars for which a royalty or fee or other payment is owed under this Agreement, then (a) the payment will be converted into United States dollars at the conversion rate for the foreign currency as published in the eastern edition of the Wall Street Journal , N.Y. edition or other equivalent publication as mutually agreed upon by the Parties, as of the last business day of the Calendar Quarter in which the payment was received by Licensee; and (b) the conversion computation will be documented by Licensee in the applicable report delivered to Licensor under Section 3.6.
3.7.3 All amounts that are not paid by Licensee when due will accrue interest from the date due until paid at a rate equal to 1.5% per month (or the maximum allowed by law, if less).
3.8 Taxes and Withholding .
3.8.1 All payments hereunder will be made free and clear of, and without deduction or deferment in respect of, and Licensee shall pay and be responsible for, and shall hold Licensor harmless from and against, any taxes, duties, levies, fees, or charges, including sales, use, transfer, excise, import, and value added taxes (including any interest, penalties, or additional amounts imposed with respect thereto) but excluding withholding taxes to the extent provided in Section 3.8.2. At the request of Licensee, Licensor will give Licensee such reasonable assistance, which will include the provision of documentation as may be required by the relevant tax authority, to enable Licensee to pay and report and, as applicable, claim exemption from or reduction of, such tax, duty, levy, fee, or charge.
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3.8.2 If any payment made by Licensee hereunder becomes subject to withholding taxes with respect to Licensor’s gross or net income under the laws of any jurisdiction, then Licensee will deduct and withhold the amount of such taxes for the account of Licensor to the extent required by law and will pay the amounts of such taxes to the proper governmental authority in a timely manner and promptly transmit to Licensor appropriate proof of payment of such withholding taxes. At the request of Licensor, Licensee will give Licensor such reasonable assistance, which will include the provision of appropriate certificates of such deductions made together with other supporting documentation as may be required by the relevant tax authority, to enable Licensor to claim exemption from or reduction of, or otherwise obtain repayment of, such withholding taxes, and will upon request provide such additional documentation from time to time as is reasonably required to confirm the payment of withholding tax.
Article 4 : Diligence
4.1 Diligence Obligations . Licensee will use commercially reasonable efforts to develop, commercialize, market, promote, and sell Licensed Products in the Field. Commercially reasonable efforts means efforts equivalent to those utilized by ****. Without limiting the foregoing, Licensee will meet the following: acceptance by the FDA or foreign equivalent of an investigational new drug application for a Licensed Product in the CLN1 Field and CLN3 Field by no later than****; provided, however, that, if Licensee expects not to achieve the milestone on or before the specified deadline in either the CLN1 Field or the CLN3 Field, Licensee may extend any deadline in either or both Field(s) for an additional **** per extension by paying Licensor an extension fee of **** per Field on or before such deadline and the deadline shall then be extended by an additional ****. Licensee will only be****.
4.2 Development Plans.
4.2.1 For each Licensed Product in the Field, Licensee will prepare and deliver to Licensor a development plan and budget (each a “Development Plan”). The initial Development Plans for the Licensed Product in the Field will be delivered within **** after the Effective Date.
4.2.2 Each Development Plan will cover the next 2 years, and will include future development activities to be undertaken by Licensee, its Affiliates, or any Sublicensees during the next reporting period under Section 4.3 relating directly to the Licensed Product, Licensee’s strategy to bring the Licensed Product to commercialization, and projected timeline for completing the necessary tasks to accomplish the goals of the strategy.
4.2.3 Following receipt by Licensor of each Development Plan, Licensor will promptly notify Licensee of any comments or requested revisions, and the Parties will thereupon negotiate any appropriate revisions in good faith. With respect to development milestones to be set forth in the initial Development Plans for the Field, the Parties will agree upon reasonable milestones and completion dates to be set forth in the Development Plan (and any amendments thereto).
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4.3 Reporting . Within **** after the Effective Date and within **** of each December 1 thereafter, Licensee shall provide Licensor with written progress reports, setting forth in such detail as Licensor may reasonably request, the progress of the development, evaluation, testing, and commercialization of each Licensed Product. Licensee will also notify Licensor within **** of the First Commercial Sale by Licensee, its Affiliates, or any Sublicensees of each Licensed Product. Such a report (“ Development Progress Report ”), setting forth the current stage of development of Licensed Products, shall include:
4.3.1 Date of Development Progress Report and time covered by such report;
4.3.2 Major activities and accomplishments completed by Licensee, its Affiliates, and any Sublicensees relating directly to the Licensed Products since the last Development Progress Report;
4.3.3 Significant research and development projects relating directly to the Licensed Products currently being performed by Licensee, its Affiliates, and any Sublicensees and good faith, but non-binding, projected dates of completion;
4.3.4 A development plan covering the next two years at least, which will include future development activities to be undertaken by Licensee, its Affiliates, or any Sublicensees during the next reporting period relating directly to the Licensed Products, Licensee’s strategy to bring the Licensed Products to commercialization, and projected timeline for completing the necessary tasks to accomplish the goals of the strategy;
4.3.5 Projected total development remaining before product launch of each Licensed Product; and
4.3.6 Summary of significant development efforts using the Licensed Technology being performed by Third Parties, including the nature of the relationship between Licensee and such Third Parties.
4.4 Confidential Information . The Parties agree that Development Progress Reports shall be deemed Licensee’s Confidential Information; provided that Licensor may share a copy of such reports with the REGENXBIO Licensors.
4.5 Improvements . Simultaneously with the Development Progress Report, Licensee shall deliver a detailed description of any Licensed Back Improvements, if not previously provided pursuant to Section 2.5.3.
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Article 5 : Confidentiality
5.1 Treatment of Confidential Information . Each Party, as a receiving party (a “ Receiving Party ”), agrees that it will (a) treat Confidential Information of the other Party (the “ Disclosing Party ”) as strictly confidential; (b) protect the Confidential Information of the Disclosing Party with at least the same degree of care as it protects its own confidential and proprietary information, and in any event with not less than a reasonable degree of care; (c) not disclose such Confidential Information to Third Parties without the prior written consent of the Disclosing Party, except as may be permitted in this Agreement; provided that any disclosure permitted hereunder shall be under confidentiality agreements with provisions at least as stringent as those contained in this Agreement; and (d) not use such Confidential Information for purposes other than those authorized expressly in this Agreement. The Receiving Party agrees to ensure that its employees who have access to Confidential Information are obligated in writing to abide by confidentiality obligations at least as stringent as those contained under this Agreement.
5.2 Public Announcements .
5.2.1 The Parties agree they will issue a joint press release in the form attached hereto as Exhibit C . Except as provided in Section 5.2.2, any press releases by either Party with respect to the other Party or any other public disclosures concerning the existence of or terms of this Agreement shall be subject to review and approval by the other Party. Once the joint press release or any other written statement is approved for disclosure by both Parties, either Party may make subsequent public disclosure of the contents of such statement without the further approval of the other Party.
5.2.2 Notwithstanding Section 5.2.1, Licensor has the right to publish (through press releases, scientific journals, or otherwise) and refer to any clinical, regulatory, or research results related to Licensee’s Licensed Product or AAV9 program that have been publicly disclosed by Licensee, including referring to Licensee by name as a licensee of Licensor, which publication or referral by Licensor shall not require the prior consent of Licensee.
5.3 Authorized Disclosure . Notwithstanding the provisions of Section 5.1 or 5.2, either Party may disclose the other’s Confidential Information or make such a disclosure of the existence of and/or terms of this Agreement to any ****; provided that, in each case, such recipient of Confidential Information is obligated to keep such information confidential on terms no less stringent than those set forth in this Agreement. Furthermore, Licensee agrees that Licensor may share a copy of this Agreement, reports and notices provided by Licensee to Licensor pursuant to the terms of this Agreement, and copies of sublicense agreements provided to Licensor hereunder, with the REGENXBIO Licensors to the extent required by the GSK Agreement and the Penn Agreement, under confidentiality. In the event that the Receiving Party receives service of legal process that purports to compel disclosure of the Disclosing Party’s Confidential Information or becomes obligated by law, rule, regulation or rules of a security exchange, to disclose the Confidential Information of the Disclosing Party or the existence of or terms of this Agreement to any governmental authority, then, to the extent legally permitted, the Receiving Party shall promptly notify the Disclosing Party, so that the Disclosing Party may seek an appropriate protective order or other remedy with respect to narrowing the scope of such requirement and/or waive compliance by the Receiving Party with the provisions of this Agreement. The Receiving Party will, at the Disclosing Party’s request and expense, provide the Disclosing Party with reasonable assistance in obtaining such protective order or other remedy. If, in the absence of such protective order or other remedy, the Receiving Party is nonetheless required by law, rule, regulation or rules of a security exchange, to disclose the existence of or terms of this Agreement or other Confidential Information of the Disclosing Party, then the Receiving Party may disclose such Confidential Information without liability hereunder; provided that the Receiving Party shall furnish only such portion of the Confidential Information that is legally required to be disclosed and only to the extent required by law.
5.4 Term of Confidentiality . The obligations of this Article 5 shall continue for a period of **** following the expiration or termination of this Agreement.
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Article 6 : TERM AND Termination
6.1 Term of Agreement . This Agreement will commence on the Effective Date and continue in effect on a country-by-country, Licensed Product-by-Licensed Product basis until the later of: (i) the expiration, lapse, abandonment, or invalidation of the last Valid Claim of the Licensed Patents to expire, lapse, become abandoned, become unenforceable for the applicable Licensed Product in the applicable country, or (ii) 10 years from the First Commercial Sale of the applicable Licensed Product in the applicable country, unless sooner terminated in accordance with Section 6.2, Section 6.3, Section 6.4 or Section 6.5 of this Agreement. Upon expiration of the Agreement with respect to a Licensed Product in a country, the license grant to Licensee pursuant to Section 2.1 shall become irrevocable, perpetual, fully paid-up and royalty-free with respect such Licensed Product and such country.
6.2 Licensee’s Right to Terminate . Licensee may, upon six months’ prior written notice to Licensor, terminate this Agreement for any reason, with or without cause. In exercising such termination right, Licensee may terminate the Agreement in its entirety or, if desired, Licensee may specify in the written notice that this Agreement is terminating only with respect to one or more Field.
6.3 Termination for Breach .
6.3.1 Licensor may terminate this Agreement, if Licensee is late in paying to Licensor royalties, fees, or any other monies due under this Agreement, and if Licensee does not pay Licensor in full within 15 days upon written demand from Licensor, which termination shall be effective immediately upon the expiration of such 15-day cure period.
6.3.2 Either Party may terminate this Agreement, if the other Party materially breaches this Agreement and does not cure such material breach within 30 days after written notice of the breach, which termination shall be effective immediately upon the expiration of such 30-day cure period. Notwithstanding the above, if Licensee disputes in good faith that such material breach exists, and gives Licensor written notice of such dispute within 30 days following Licensee’s receipt of Licensor’s notice of default, then, Licensor may not terminate this agreement until the dispute is resolved in accordance with Section 10.6; provided that Licensor shall be entitled to terminate this Agreement at the end of the original 30-day cure period, without waiting for resolution of the dispute in accordance with Section 10.6, if the breach by Licensee of this Agreement would cause Licensor to be in breach of the GSK Agreement or the Penn Agreement.
6.4 Termination for Insolvency . Licensor shall have the right to terminate this Agreement, upon notice to the Licensee, in the event that:
(a) Licensee shall have: (i) voluntarily commenced any proceeding or filed any petition seeking relief under the bankruptcy, insolvency or other similar laws of any jurisdiction, (ii) applied for, or consented to, the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (iii) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (iv) made a general assignment for the benefit of creditors of all or substantially all of its assets, (v) admitted in writing its inability to pay all or substantially all of its debts as they become due, or (vi) taken corporate action for the purpose of effecting any of the foregoing; or
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(b) An involuntary proceeding shall have been commenced, or any involuntary petition shall have been filed, in a court of competent jurisdiction seeking: (i) relief in respect of Licensee, or of its property, under the bankruptcy, insolvency or similar laws of any jurisdiction, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for the Licensee or for all or substantially all of its property, or (iii) the winding-up or liquidation of the Licensee; and, in each case, such proceeding or petition shall have continued undismissed for 60 days, or an order or decree approving or ordering any of the foregoing shall have continued unstayed, unappealed and in effect for 30 days.
6.5 Patent Challenge .
6.5.1 Licensor may terminate this Agreement, effective immediately upon written notice to Licensee, upon the commencement by Licensee or any of its Affiliates of a Patent Challenge.
6.5.2 Licensee shall include in each sublicense agreement entered into with a Sublicensee a right of Licensee to terminate such sublicense agreement if such Sublicensee commences a Patent Challenge; and Licensee shall terminate the sublicense agreement, effective immediately upon written notice to the Sublicensee, if the Sublicensee commences a Patent Challenge. If a Sublicensee commences a Patent Challenge and Licensee fails to terminate the applicable sublicense agreement, then Licensor may terminate this Agreement, effective immediately upon written notice to the Licensee.
6.5.3 For purposes of this Section 6.5, “ Patent Challenge ” means any action against Licensor or the REGENXBIO Licensors, including an action for declaratory judgment, to declare or render invalid or unenforceable the Licensed Patents, or any claim thereof.
6.6 Effects of Termination . The effects of termination by Licensee pursuant to Section 6.2, by either Party, as applicable, under Section 6.3, or by Licensor pursuant to Section 6.4 or 6.5 shall be as follows:
6.6.1 The applicable licenses granted by Licensor hereunder shall terminate, and Licensee, its Affiliates, and (unless the sublicense agreement is assigned pursuant to Section 6.6.2) all Sublicensees shall cease to make, have made, use, import, sell, and offer for sale all Licensed Products and shall cease to otherwise practice the Licensed Technology under the terminated licenses; provided that Licensee, its Affiliates, and its Sublicensees shall have the right to continue to sell their existing inventories of Licensed Products under the terminated licenses for a period not to exceed **** after the effective date of such termination;
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6.6.2 If termination is by Licensor pursuant to Sections 6.3, 6.4 or 6.5, then, at Licensor’s request, Licensee shall assign to Licensor any or all sublicenses granted to Third Parties to the extent of the rights licensed to Licensee hereunder and sublicensed to the Sublicensee; provided that (i) prior to such assignment, Licensee shall advise Licensor whether such Sublicensee is then in full compliance with all terms and conditions of its sublicense and continues to perform thereunder, and, if such Sublicensee is not in full compliance or is not continuing to perform, Licensor may elect not to have such sublicense assigned; and (ii) following such assignment, Licensor shall not be liable to such Sublicensee with respect to any obligations of Licensee to the Sublicensee that are not consistent with, or not required by, Licensor’s obligations to Licensee under this Agreement; and all sublicenses not requested to be assigned to Licensor shall terminate. If termination is for any other reason, then all sublicenses shall terminate;
6.6.3 If termination is by Licensee pursuant to Section 6.2 or by Licensor pursuant to Section 6.3, 6.4, or 6.5, then Licensee shall grant, and hereby grants, to Licensor a non-exclusive, perpetual, irrevocable, worldwide, royalty-free, transferable, sublicensable license under any patentable modifications or improvements (and any intellectual property rights with respect thereto) developed by Licensee, any Affiliates, or any Sublicensees to any vector that is the subject of a claim within any of the Licensed Patents, for use by Licensor for the research, development, and commercialization of products in any therapeutic indication;
6.6.4 Licensee shall pay all monies then-owed to Licensor under this Agreement;
6.6.5 Each Receiving Party shall, at the Disclosing Party’s request, return all Confidential Information of the Disclosing Party. Notwithstanding the foregoing, one copy may be kept by either Party for a record of that Party’s obligations; and
6.6.6 If termination is with respect to one or more Field, but not all Fields, then the provisions of this Section 6.6 shall only apply with respect to the terminated Field(s), and this Agreement shall continue with respect to the non-terminated Field(s); provided that if termination is by Licensee pursuant to Section 6.2 with respect to one or more Fields, but not all Fields at any time, then the amount of any unpaid annual fee(s) due under Section 3.2 shall be reduced by **** for each terminated Field; provided further that such reduction shall not apply to the amount due under Section 3.2(i) .
6.7 Survival . Licensee’s obligation to pay all monies due and owed to Licensor under this Agreement that have matured as of the effective date of termination or expiration shall survive the termination or expiration of this Agreement. In addition, the provisions of Section 2.2, (Retained Rights), Section 2.3 (Government Rights), Section 2.5 (Improvements), Article 3 (Consideration) (with respect to any final reports or to the extent any amounts are due but unpaid), Section 3.6 (Reports and Records), Section 4.4 (Confidential Information), Article 5 (Confidentiality), Article 6 (Term and Termination), Section 8.4 (Disclaimer of Warranties, Damages), Section 8.5 (Indemnification), Section 8.6 (Insurance), Article 9 (Use of Name), and Article 10 (Additional Provisions) shall survive such termination or expiration of this Agreement in accordance with their respective terms.
Article 7 : Patent Maintenance; Patent Infringement
7.1 Prosecution of Licensed Patents . As between Licensor and Licensee, the Parties agree as follows:
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7.1.1 Licensor shall have the sole right, but not the obligation, to Prosecute patent applications and issued patents within Licensed Patents, in Licensor’s sole discretion. Subject to Section 7.1.3, Licensor shall provide Licensee with a reasonable opportunity to review and provide comments in connection with the Prosecution of the Licensed Patents; and Licensor shall keep Licensee reasonably informed as to all material developments with respect to such Licensed Patents and shall supply to Licensee copies of material communications received and filed in connection with the Prosecution of such Licensed Patents.
7.1.2 Nothing in this Agreement obligates Licensor to continue to Prosecute any patent applications or issued patents, and Licensee acknowledges that Licensor shall have no obligation to undertake any inter-party proceedings, such as oppositions, inter partes review, or interferences, or to undertake any re-examination or re-issue proceedings, in either case, with respect to the Licensed Patents.
7.1.3 Licensee acknowledges that The Trustees of the University of Pennsylvania control Prosecution of the Licensed Patents, with Licensor having certain rights to review. Licensee acknowledges and agrees that (a) the rights and obligations under this Section 7.1 are subject to the rights of the REGENXBIO Licensors set forth in the GSK Agreement and Penn Agreement with respect to the Licensed Patents, and (b) Licensor’s obligations under this Agreement only apply to the extent of Licensor’s rights with respect to participation in Prosecuting the Licensed Patents under the GSK Agreement and the Penn Agreement. Licensor shall have the sole right, but not the obligation, to Prosecute patent applications and issued patents within Licensed Patents, in Licensor’s sole discretion.
7.2 Infringement Actions Against Third Parties .
7.2.1 Licensee is responsible for notifying Licensor promptly of any infringement of Licensed Patents (other than Retained Rights) that may come to Licensee’s attention, including any “patent certification” filed in the United States under 21 U.S.C. § 355(b)(2) or 21 U.S.C. § 355(j)(2) or similar provisions in other jurisdictions alleging the invalidity, unenforceability or non-infringement of any Licensed Patents, and any notification received pursuant to subsection (k) of 42 U.S.C. § 262 for any Licensed Product that becomes a “reference product.” However, Licensee is under no obligation to search for potential infringers.
7.2.2 As between Licensor and Licensee, but subject to any obligations of Licensor to the REGENXBIO Licensors, Licensor shall have the sole right, but not the obligation, to prosecute any such infringement ****. In any action to enforce any of the Licensed Patents, Licensee, at the request and expense of Licensor, shall cooperate to the fullest extent reasonably possible, including in the event that, if Licensor is unable to initiate or prosecute such action solely in its own name, Licensee shall join such action voluntarily and shall execute all documents necessary to initiate litigation to prosecute, maintain, and settle such action. Nothing in this Agreement obligates Licensor to bring or prosecute lawsuits against Third Parties for infringement of any Licensed Patents.
7.2.3 Licensee shall have no right to undertake prosecution of any such infringement.
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7.3 Defense of Infringement Claims . In the event Licensee or Licensor becomes aware that Licensee’s or any of its Affiliates’ or any Sublicensees’ practice of the Licensed Patents is the subject of a claim for patent infringement by a Third Party, that Party shall promptly notify the other, and the Parties shall consider the claim and the most appropriate action to take. Licensee shall cause each of its Affiliates and each Sublicensee to notify Licensee promptly in the event such entity becomes aware that its practice of the Licensed Patents is the subject of a claim of patent infringement by another. To the extent Licensor takes any action, Licensor (or the REGENXBIO Licensors) shall have the right to require Licensee’s reasonable cooperation in any such suit, upon written notice to Licensee; and Licensee shall have the obligation to participate upon Licensor’s request, in which event, Licensor shall bear the cost of Licensee’s participation. Without Licensor’s prior written permission, which shall not be unreasonably withheld or denied, Licensee must not settle or compromise any such suit in a manner that imposes any material obligations or restrictions on Licensor or the REGENXBIO Licensors or grants any rights to the Licensed Patents other than rights that Licensee has the right to grant under this Agreement.
Article 8 : COVENANTS, Warranties; Indemnification
8.1 Covenant not to Sue . Licensor agrees that it shall not commence any action against Licensee or any Third Party solely for the work that Third Party is performing on behalf of Licensee for **** prior to the Effective Date.
8.2 Representations and Warranties by Licensor . Licensor represents and warrants to Licensee as of the Effective Date:
8.2.1 Licensor has the right, power, and authority to enter into this Agreement and to grant to Licensee the rights specified in this Agreement;
8.2.2 This Agreement when executed shall become the legal, valid, and binding obligation of it, enforceable against it, in accordance with its terms;
8.2.3 There are no actions, suits, proceedings, or arbitrations pending or, to Licensor’s knowledge, threatened against Licensor relating to the Licensed Patents that would be inconsistent with the rights granted to Licensee under this Agreement;
8.2.4 To Licensor’s knowledge, (a) the Licensed Patents are solely owned by The Trustees of the University of Pennsylvania, and (b) no Third Party (other than the REGENXBIO Licensors) has any right, interest, or claim in or to such Licensed Patents in the Fields that are inconsistent with those granted to Licensee in the Fields under this Agreement (it being understood that the rights previously granted in the Conflicting License shall not be deemed to conflict with the licenses granted under this Agreement);
8.2.5 Licensor has not received any written notice from any Third Party patentee alleging infringement of such Third Party’s patents by the practice of the Licensed Patents in the Fields; and
8.2.6 Licensor shall not, without the prior written consent of Licensee (such consent not to be unreasonably withheld or delayed), amend the Conflicting License in a manner that would materially and adversely affect Licensee’s rights and benefits under this Agreement during the term of this Agreement.
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8.3 Representations and Warranties by Licensee . Licensee represents and warrants to Licensor as of the Effective Date that:
8.3.1 Licensee has the right, power, and authority to enter into this Agreement and to grant the rights granted by it hereunder;
8.3.2 This Agreement when executed shall become the legal, valid, and binding obligation of it, enforceable against it, in accordance with its terms;
8.3.3 Licensee has the ability and the resources, including financial resources, necessary to carry out its obligations under this Agreement; and
8.3.4 There are no actions, suits, proceedings, or arbitrations pending or, to Licensee’s knowledge, threatened against Licensee that would impact Licensee’s activities under this Agreement.
8.4 Disclaimer of Warranties, Damages . EXCEPT AS SET FORTH IN SECTION 8.2, THE LICENSED TECHNOLOGY, LICENSED PRODUCTS, AND ALL RIGHTS LICENSED UNDER THIS AGREEMENT ARE PROVIDED ON AN “AS IS” BASIS, AND LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT THERETO. BY WAY OF EXAMPLE BUT NOT OF LIMITATION, EXCEPT AS SET FORTH IN SECTION 8.2, LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES, AND HEREBY DISCLAIMS ALL EXPRESS AND IMPLIED REPRESENTATIONS AND WARRANTIES, (i) OF COMMERCIAL UTILITY, ACCURACY, COMPLETENESS, PERFORMANCE, TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OR ENFORCEABILITY OF THE LICENSED TECHNOLOGY, AND PROFITABILITY; OR (ii) THAT THE USE OF THE LICENSED TECHNOLOGY, OR LICENSED PRODUCTS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY RIGHTS OF THIRD PARTIES. EXCEPT AS SET FORTH HEREIN, NONE OF LICENSOR AND THE REGENXBIO LICENSORS SHALL BE LIABLE TO LICENSEE, LICENSEE’S SUCCESSORS OR ASSIGNS, ANY SUBLICENSEES, OR ANY THIRD PARTY WITH RESPECT TO: (a) ANY CLAIM ARISING FROM USE OF THE LICENSED TECHNOLOGY, LICENSED PRODUCTS, AND ANY OR ALL RIGHTS LICENSED UNDER THIS AGREEMENT OR FROM THE DEVELOPMENT, TESTING, MANUFACTURE, USE, OR SALE OF LICENSED PRODUCTS; OR (b) ANY CLAIM FOR LOSS OF PROFITS, LOSS OR INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ANY ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT OR THE EXERCISE OF RIGHTS HEREUNDER, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 8.4 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER SECTION 8.5 OR TO LIMIT A PARTY’S LIABILITY FOR BREACHES OF ITS OBLIGATION REGARDING CONFIDENTIALITY UNDER ARTICLE 5.
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8.5 Indemnification .
8.5.1 By Licensee . Licensee shall defend, indemnify, and hold harmless Licensor, the REGENXBIO Licensors, and their respective shareholders, members, officers, trustees, faculty, students, contractors, agents, and employees (individually, a “ Licensor Indemnified Party ” and, collectively, the “ Licensor Indemnified Parties ”) from and against any and all Third Party liability, loss, damage, action, claim, fee, cost, or expense (including attorneys’ fees) (individually, a “ Third Party Liability ” and, collectively, the “ Third Party Liabilities ”) suffered or incurred by the Licensor Indemnified Parties from claims of such Third Parties that result from or arise out of: ****; provided, however, that Licensee shall not be liable for claims to the extent based on any breach by Licensor of the representations, warranties, or obligations of this Agreement or the gross negligence or intentional misconduct of any of the Licensor Indemnified Parties. Without limiting the foregoing, Licensee must defend, indemnify, and hold harmless the Licensor Indemnified Parties from and against any Third Party Liabilities resulting from:
(a) any **** or other claim of any kind related to the **** by a Third Party of a Licensed Product that **** by Licensee, its Affiliates, any Sublicensees, their respective assignees, or vendors;
(b) any claim by a Third Party that the ****; and
(c) **** conducted by or on behalf of Licensee, its Affiliates, any Sublicensees, their respective assignees, or vendors relating to the Licensed Technology or Licensed Products, including any claim by or on behalf of a ****.
8.5.2 Indemnification Procedure . Licensee, as an indemnifying party (an “ Indemnifying Party ”), shall not be permitted to settle or compromise any claim or action giving rise to Third Party Liabilities in a manner that imposes any restrictions or obligations on Licensor, the REGENXBIO Licensors or any indemnified party (an “ Indemnified Party ”) without Licensor’s prior written consent that grants any rights to the Licensed Technology or Licensed Products other than those Licensee has the right to grant under this Agreement without Licensor’s prior written consent. The Indemnifying Party shall be permitted to control any litigation or potential litigation involving the defense of any claim subject to indemnification pursuant to this Section 8.5, including the selection of counsel, with the reasonable approval of the Indemnified Party. If an Indemnifying Party fails or declines to assume the defense of any such claim or action within **** after notice thereof, then the Indemnified Party may assume the defense of such claim or action at the cost and risk of the Indemnifying Party, and any Third Party Liabilities related thereto shall be conclusively deemed a Third Party Liability of the Indemnifying Party. The indemnification rights of an Indemnified Party contained in this Agreement are in addition to all other rights that such Indemnified Party may have at law or in equity or otherwise. The Indemnifying Party will pay directly all Third Party Liabilities incurred for defense or negotiation of any claim hereunder or will reimburse the Indemnified Party for all documented Third Party Liabilities incident to the defense or negotiation of any such claim within **** after the Indemnifying Party’s receipt of invoices for such fees, expenses, and charges.
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8.6 Insurance . Licensee will procure and maintain insurance policies for the following coverages with respect to product liability, personal injury, bodily injury, and property damage arising out of Licensee’s (and its Affiliates’ and any Sublicensees’) performance under this Agreement: (a) during the term of this Agreement, comprehensive general liability, including broad form and contractual liability, in a minimum amount of **** combined single limit per occurrence (or claim) and **** in the aggregate annually; (b) prior to the commencement of clinical trials involving Licensed Products and thereafter for a period of not less than **** (or such longer period as Licensee is required by applicable law to continue to monitor the participants in the clinical trial), clinical trials coverage in amounts that are reasonable and customary in the U.S. pharmaceutical industry, subject always to a minimum limit of **** combined single limit per occurrence (or claim) and **** in the aggregate annually; and (c) from prior to the First Commercial Sale of a Licensed Product until **** after the last sale of a Licensed Product, product liability coverage, in amounts that are reasonable and customary in the U.S. pharmaceutical industry, subject always to a minimum limit of **** combined single limit per occurrence (or claim) and **** in the aggregate annually. Licensor may review periodically the adequacy of the minimum amounts of insurance for each coverage required by this Section 8.6, and Licensor reserves the right to require Licensee to adjust the limits accordingly. The required minimum amounts of insurance do not constitute a limitation on Licensee’s liability or indemnification obligations to the Licensor Indemnified Parties under this Agreement. The policies of insurance required by this Section 8.6 will be issued by an insurance carrier with an A.M. best rating of **** or better and will name Licensor as an additional insured with respect to Licensee’s performance (and its Affiliates’ and any Sublicensees’) under this Agreement. Licensee will provide Licensor with insurance certificates evidencing the required coverage within **** after the Effective Date and the commencement of each policy period and any renewal periods. Each certificate will provide that the insurance carrier will notify Licensor in writing at least **** prior to the cancellation or material change in coverage. Licensee will cause all Sublicensees to comply with the terms of this Section 8.6 to the same extent as Licensee.
Article 9 : Use of Name
9.1 Licensee, its Affiliates, any Sublicensees, and all of its and their employees and agents must not use Licensor’s, the University of Pennsylvania’s, or SmithKline Beecham Corporation’s name, seal, logo, trademark, or service mark (or any adaptation thereof) or the name, seal, logo, trademark, or service mark (or any adaptation thereof) of any of such entities’ representative, school, organization, employee, or student in any way without the prior written consent of Licensor or such entity, as applicable, unless required to do so pursuant to applicable law, rule, regulation or rules of a securities exchange; provided, however that Licensee may acknowledge the existence and general nature of this Agreement, subject to Section 5.2 or 5.3, as applicable.
9.2 Licensor and all of its employees and agents must not use Licensee’s name, seal, logo, trademark, or service mark (or any adaptation thereof) in any way without the prior written consent of Licensee; provided, however that Licensor may acknowledge the existence and general nature of this Agreement, subject to Section 5.2 or 5.3, as applicable, and refer to Licensee as a licensee of Licensor.
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Article 10 : Additional Provisions
10.1 Relationship . Nothing in this Agreement shall be deemed to establish a relationship of principal and agent between Licensee and Licensor, nor any of their agents or employees for any purpose whatsoever, nor shall this Agreement be construed as creating any other form of legal association or arrangement which would impose liability upon one Party for the act or failure to act of the other Party.
10.2 Assignment . The rights and obligations of Licensee and Licensor hereunder shall inure to the benefit of, and shall be binding upon, their respective permitted successors and assigns. Licensee may not assign or otherwise transfer (by operation of law or otherwise) this Agreement or any of its rights or obligations under this Agreement without the prior written consent of Licensor, which consent is in the absolute discretion of Licensor (except Licensee shall have the right to assign this Agreement without Licensor’s consent to a wholly owned Affiliate, in which case Licensee shall remain responsible for the performance of this Agreement by such Affiliate); provided, however, Licensee shall be permitted to transfer (by operation of law or otherwise) this Agreement without Licensor’s consent in connection with a Change of Control; provided that, Licensee: (i) requires any transferee or successor to agree in writing to be legally bound by this Agreement to the same extent as Licensee and provides Licensor with a copy of such undertaking; (ii) provides Licensor with written notice of the Change of Control to Licensor within five days of the consummation of the transaction resulting in a Change of Control of Licensee; (iii) provides Licensor with a copy of the definitive agreement for the Change of Control of Licensee with five days of the consummation of the transaction (provided, that Licensee shall be entitled to include customary redactions in such copy provided to Licensor, to the extent such redacted information is not necessary to verify compliance with the terms of this Agreement or otherwise required by the Penn Agreement and/or GSK Agreement); and (iv) makes all payments required as a result of a Change of Control under Article 3. Notwithstanding anything to the contrary in this Agreement, for clarity, in case of a Licensee Change of Control, in no event shall any intellectual property rights owned or controlled by the acquirer or its Affiliates immediately prior to such Licensee Change of Control be included in any of the licenses granted to Licensor under this Agreement. Licensor may assign this Agreement and its rights and obligations without the consent of Licensee. No assignment shall relieve the assigning Party of responsibility for the performance of any accrued obligations that it has prior to such assignment. Any attempted assignment by Licensee in violation of this Section 10.2 shall be null and void and of no legal effect.
10.3 Waiver . A waiver by either Party of a breach of any provision of this Agreement will not constitute a waiver of any subsequent breach of that provision or a waiver of any breach of any other provision of this Agreement.
10.4 Notices . Notices, payments, statements, reports, and other communications under this Agreement shall be in writing and shall be deemed to have been received as of the date received if sent by public courier ( e.g. , Federal Express), by Express Mail, receipt requested, by facsimile, or by electronic mail (with a copy of such facsimile or electronic mail also sent by one of the other methods of delivery) and addressed as follows:
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If for Licensor: | with a copy to: |
REGENXBIO Inc.
9600 Blackwell Road Suite 210 Rockville, MD 20850 USA Attn: Chief Executive Officer Telephone: 240-552-8181 Facsimile: 240-652-9692 |
REGENXBIO Inc.
9600 Blackwell Road Suite 210 Rockville, MD 20850 USA Attn: General Counsel Telephone: 240-552-8181 Facsimile: 240-652-9692 |
If for Licensee: | with a copy to: |
Abeona Therapeutics Inc. 1330 Avenue of the Americas, 33rd Floor New York, NY 10019 USA Attention: Chief Executive Officer Telephone: 646-813-4713 Facsimile: |
Morgan, Lewis & Bockius LLP One Federal Street Boston, MA 02210 USA Attention: Jack Concannon, Esq. Telephone: 617-951-8000 Facsimile: 617-951-7326 |
Either Party may change its official address upon written notice to the other Party in accordance with this Section 10.4.
10.5 Applicable Law . This Agreement shall be construed and governed in accordance with the laws of the State of New York, without giving effect to conflict of law provisions that may require the application of the laws of another jurisdiction. Subject to Section 10.6, the Parties hereby submit to the exclusive jurisdiction of and venue in the courts located in the State of Delaware with respect to any and all disputes concerning the subject of this Agreement.
10.6 Dispute Resolution . In the event of any controversy or claim arising out of or relating to this Agreement, the Parties shall first attempt to resolve such controversy or claim through good faith negotiations for a period of not less than **** following notification of such controversy or claim to the other Party. If such controversy or claim cannot be resolved by means of such negotiations during such period, then such controversy or claim shall be resolved by binding arbitration administered by the American Arbitration Association (“ AAA ”) in accordance with the Commercial Arbitration Rules of the AAA in effect on the date of commencement of the arbitration, subject to the provisions of this Section 10.6. The arbitration shall be conducted as follows:
10.6.1 The arbitration shall be conducted by three arbitrators, each of whom by training, education, or experience has knowledge of the research, development, and commercialization of biological therapeutic products in the United States. The arbitration shall be conducted in English and held in New York, New York.
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10.6.2 In its demand for arbitration, the Party initiating the arbitration shall provide a statement setting forth the nature of the dispute, the names and addresses of all other parties, an estimate of the amount involved (if any), the remedy sought, otherwise specifying the issue to be resolved, and appointing one neutral arbitrator. In an answering statement to be filed by the responding Party within **** after confirmation of the notice of filing of the demand is sent by the AAA, the responding Party shall appoint one neutral arbitrator. Within **** from the date on which the responding Party appoints its neutral arbitrator, the first two arbitrators shall appoint a chairperson.
10.6.3 If a Party fails to make the appointment of an arbitrator as provided in Section 10.6.2, the AAA shall make the appointment. If the appointed arbitrators fail to appoint a chairperson within the time specified in Section 10.6.2 and there is no agreed extension of time, the AAA shall appoint the chairperson.
10.6.4 The arbitrators will render their award in writing and, unless all Parties agree otherwise, will include an explanation in reasonable detail of the reasons for their award. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof, including in the courts described in Section 10.5. The arbitrators will have the authority to grant injunctive relief and other specific performance; provided that the arbitrators will have no authority to award damages in contravention of this Agreement, and each Party irrevocably waives any claim to such damages in contravention of this Agreement. The arbitrators will, in rendering their decision, apply the substantive law of the State of Delaware, without giving effect to conflict of law provisions that may require the application of the laws of another jurisdiction. The decision and award rendered by the arbitrators will be final and non-appealable (except for an alleged act of corruption or fraud on the part of the arbitrator).
10.6.5 The Parties shall use their reasonable efforts to conduct all dispute resolution procedures under this Agreement as expeditiously, efficiently, and cost-effectively as possible.
10.6.6 All expenses and fees of the arbitrators and expenses for hearing facilities and other expenses of the arbitration will be borne equally by the Parties unless the Parties agree otherwise or unless the arbitrators in the award assess such expenses against one of the Parties or allocate such expenses other than equally between the Parties. Each of the Parties will bear its own counsel fees and the expenses of its witnesses except to the extent otherwise provided in this Agreement or by applicable law.
10.6.7 Compliance with this Section 10.6 is a condition precedent to seeking relief in any court or tribunal in respect of a dispute, but nothing in this Section 10.6 will prevent a Party from seeking equitable or other interlocutory relief in the courts of appropriate jurisdiction, pending the arbitrators’ determination of the merits of the controversy, if applicable to protect the confidential information, property, or other rights of that Party or to otherwise prevent irreparable harm that may be caused by the other Party’s actual or threatened breach of this Agreement.
10.7 No Discrimination . Licensee, its Affiliates, and Licensee shall use reasonable efforts to require that any Sublicensees, in their respective activities under this Agreement, shall not discriminate against any employee or applicant for employment because of race, color, sex, sexual, or affectional preference, age, religion, national, or ethnic origin, handicap, or because he or she is a disabled veteran or a veteran (including a veteran of the Vietnam Era).
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10.8 Compliance with Law . Licensee (and its Affiliates’ and any Sublicensees’) must comply with all prevailing laws, rules, and regulations that apply to its activities or obligations under this Agreement. Without limiting the foregoing, it is understood that this Agreement may be subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes, and other commodities, articles, and information, including the Arms Export Control Act as amended in the Export Administration Act of 1979 and that Licensee’s obligations are contingent upon compliance with applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by Licensee that Licensee shall not export data or commodities to certain foreign countries without prior approval of such agency. Licensor neither represents that a license is not required nor that, if required, it will issue.
10.9 Entire Agreement . This Agreement embodies the entire understanding between the Parties relating to the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral, including that certain Mutual Non-Disclosure Agreement dated May 16, 2018 between the Parties. All “Confidential Information” (as defined in such Mutual Non-Disclosure Agreement) disclosed by one Party to the other Party pursuant to such Mutual Non-Disclosure Agreement shall be deemed “Confidential Information” of such disclosing Party under this Agreement (unless and until it falls within one of the exclusions set forth in Section 1.7). This Agreement may not be varied except by a written document signed by duly authorized representatives of both Parties.
10.10 Marking . Licensee, its Affiliates, and any Sublicensees shall mark any Licensed Product (or their containers or labels) made, sold, or otherwise distributed by it or them with any notice of patent rights necessary or desirable under applicable law to enable the Licensed Patents to be enforced to their full extent in any country where Licensed Products are made, used, sold, offered for sale, or imported.
10.11 Severability and Reformation . If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, then such invalid or unenforceable provision will be automatically revised to be a valid or enforceable provision that comes as close as permitted by law to the Parties’ original intent; provided that, if the Parties cannot agree upon such valid or enforceable provision, then the remaining provisions of this Agreement will remain in full force and effect, unless the invalid or unenforceable provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid or unenforceable provisions.
10.12 Further Assurances . Each Party hereto agrees to execute, acknowledge, and deliver such further instruments, and to do all other reasonable acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
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10.13 Interpretation; Construction . The captions to the several Articles and Sections of this Agreement are included only for convenience of reference and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement. In this Agreement, unless the context requires otherwise, (a) the word “including” shall be deemed to be followed by the phrase “without limitation” or like expression; (b) references to the singular shall include the plural and vice versa; (c) references to masculine, feminine, and neuter pronouns and expressions shall be interchangeable; (d) the words “herein” or “hereunder” relate to this Agreement; (e) “or” is disjunctive but not necessarily exclusive; (f) the word “will” shall be construed to have the same meaning and effect as the word “shall”; (g) all references to “dollars” or “$” herein shall mean U.S. Dollars; (h) unless otherwise provided, all reference to Sections, Articles, and exhibits in this Agreement are to Sections, Articles, and exhibits of and in this Agreement; and (i) whenever this Agreement refers to a number of days, such number shall refer to calendar days unless business days are specified. Business days shall mean a day on which banking institutions in Washington, D.C. are open for business. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions.
10.14 Cumulative Rights and Remedies . The rights and remedies provided in this Agreement and all other rights and remedies available to either Party at law or in equity are, to the extent permitted by law, cumulative and not exclusive of any other right or remedy now or hereafter available at law or in equity. Neither asserting a right nor employing a remedy shall preclude the concurrent assertion of any other right or employment of any other remedy, nor shall the failure to assert any right or remedy constitute a waiver of that right or remedy.
10.15 Counterparts . This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties, intending to be legally bound, have caused this License Agreement to be executed by their duly authorized representatives.
REGENXBIO INC. | ABEONA THERAPEUTICS INC. | |||
By: | /s/ Kenneth Mills | By: | /s/ Frank Carsten Thiel | |
Name: | Kenneth Mills | Name: | Frank Carsten Thiel | |
Title: | President & CEO | Title: | Chief Executive Officer |
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Exhibit A
Licensed Patents (****)
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Exhibit B
Licensed Know-How
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Exhibit C
Press Release
REGENXBIO and Abeona Therapeutics Announce Worldwide Exclusive Licenses for the Treatment of Four Rare Lysosomal Storage Disorders Using NAV AAV9 Vector
· | REGENXBIO grants Abeona new licenses to NAV AAV9 for the development and commercialization of treatments for MPS IIIA, MPS IIIB, CLN1 and CLN3 Batten Disease |
· | REGENXBIO could receive up to $180 million, including $40 million in guaranteed payments |
ROCKVILLE, Md., Nov. 5, 2018 (PRNEWSWIRE) — REGENXBIO Inc. (Nasdaq:RGNX), a leading clinical-stage biotechnology company seeking to improve lives through the curative potential of gene therapy based on its proprietary NAV ® Technology Platform, and Abeona Therapeutics Inc. (Nasdaq: ABEO), a leading clinical-stage biopharmaceutical company focused on developing novel cell and gene therapies for life-threatening rare genetic diseases, today announced a license agreement to REGENXBIO’s NAV AAV9 vector for the treatment of four diseases: Sanfilippo syndrome type A (MPS IIIA), Sanfilippo syndrome type B (MPS IIIB), Infantile Batten Disease, also known as neuronal ceroid lipofuscinosis type 1 (CLN1 Disease), and Juvenile Batten Disease, also known as neuronal ceroid lipofuscinosis type 3 (CLN3 Disease).
Under the terms of the agreement, REGENXBIO has granted Abeona an exclusive worldwide license (subject to certain non-exclusive rights previously granted for MPS IIIA), with rights to sublicense, to REGENXBIO’s NAV AAV9 vector for the development and commercialization of gene therapies for the treatment of MPS IIIA, MPS IIIB, CLN1 Disease and CLN3 Disease. In return for these rights, REGENXBIO will receive a guaranteed $20 million upfront payment, $10 million of which will be paid upon signing and $10 million of which will be paid within 12 months of the effective date. In addition, REGENXBIO will receive a total of $100 million in annual fees, payable upon the second through sixth anniversaries of the agreement, $20 million of which is guaranteed. REGENXBIO is also eligible to receive potential commercial milestone payments of up to $60 million. REGENXBIO will also receive low double-digit royalties on net sales of products incorporating the licensed intellectual property.
“This license agreement further validates the potential of NAV AAV9 for the treatment of systemic and CNS manifestations of lysosomal storage diseases, as well as the strength of our intellectual property portfolio,” said Kenneth T. Mills, President and Chief Executive Officer of REGENXBIO. “We are pleased to initiate our partnership with Abeona as they continue to advance multiple programs using NAV AAV9 through and towards clinical trials in indications with significant unmet medical need.”
“This agreement is an important milestone that underpins the therapeutic potential we see in our Sanfilippo syndrome and Batten disease programs featuring the NAV AAV9 vector, which have the potential to transform the lives of patients,” said Carsten Thiel, Ph.D., Chief Executive Officer of Abeona. “Data from our clinical and preclinical programs and the success of the NAV AAV9 vector observed in other indications strongly positions the platform as a leading technology for investigational gene therapies for the systemic and CNS manifestations of lysosomal storage diseases.”
About Sanfilippo Syndrome
Sanfilippo syndrome, or MPS type III, is a group of rare genetic lysosomal storage diseases with no approved treatments. MPS III is characterized by aggressive behavior, seizures, loss of speech or vision, an inability to sleep, and premature death. An estimated 70% of children with MPS III do not reach age 18. The underlying cause of the syndrome is a missing enzyme that is essential to breaking down heparan sulfate. As a result, partially synthesized heparan sulfate accumulates in the central nervous system, including the brain and spinal cord, causing progressive damage. MPS III is categorized by the single gene defects associated with each type of the syndrome - A, B, C or D. The hallmark feature of MPS IIIA is a deficiency in the SGSH enzyme, while MPS IIIB is distinguished by a marked decrease in NAGLU enzyme activity.
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About Batten Disease
Infantile and juvenile forms of Batten disease, known as CLN1 and CLN3, are rare autosomal recessive genetic disorders with no approved treatments. Batten disease is fatal, and most do not live past their twenties or thirties. The underlying cause of the disorder is a deficiency in proteins critical to lysosomal function that lead to abnormal buildup of lipopigments, and result in neuroinflammation and neurodegeneration. CLN1 and CLN3 are differentiated by mutations of their respective genes, yet the first noticeable sign of all forms of Batten disease is often vision impairment that can progress to blindness. Developmental regression is another hallmark of the disease, as children lose the ability to speak in complete sentences and to walk or sit, among other manifestations. Later in life, affected children may have recurrent seizures, heart problems, behavioral problems, and difficulty sleeping.
About REGENXBIO Inc.
REGENXBIO is a leading clinical-stage biotechnology company seeking to improve lives through the curative potential of gene therapy. REGENXBIO's NAV Technology Platform, a proprietary adeno-associated virus (AAV) gene delivery platform, consists of exclusive rights to more than 100 novel AAV vectors, including AAV7, AAV8, AAV9 and AAVrh10. REGENXBIO and its third-party NAV Technology Platform Licensees are applying the NAV Technology Platform in the development of a broad pipeline of candidates in multiple therapeutic areas.
About Abeona Therapeutics Inc.
Abeona Therapeutics Inc. is a clinical-stage biopharmaceutical company developing cell and gene therapies for life-threatening rare genetic diseases. Abeona's lead programs include EB-101 (gene-corrected skin grafts) for recessive dystrophic epidermolysis bullosa (RDEB), ABO-102 (AAV-SGSH), an adeno-associated virus (AAV) based gene therapy for Sanfilippo syndrome type A (MPS IIIA) and ABO-101 (AAV-NAGLU), an adeno-associated virus (AAV) based gene therapy for Sanfilippo syndrome type B (MPS IIIB). Abeona is also developing ABO-201 (AAV-CLN3) gene therapy for CLN3 disease, ABO-202 (AAV-CLN1) for treatment of CLN1 disease, EB-201 for epidermolysis bullosa (EB), ABO-301 (AAV-FANCC) for Fanconi anemia (FA) disorder and ABO-302 using a novel CRISPR/Cas9-based gene editing approach to gene therapy for rare blood diseases. In addition, Abeona is developing a proprietary vector platform, AIM™, for next generation product candidates. For more information, visit www.abeonatherapeutics.com.
REGENXBIO Forward-Looking Statements
This press release includes "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes such as "believe," "may," "will," "estimate," "continue," "anticipate," "design," "intend," "expect," "could," "plan," "potential," "predict," "seek," "should," "would" or by variations of such words or by similar expressions. The forward-looking statements include statements relating to, among other things, REGENXBIO's future operations and cash flow. REGENXBIO has based these forward-looking statements on its current expectations and assumptions and analyses made by REGENXBIO in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors REGENXBIO believes are appropriate under the circumstances. However, whether actual results and developments will conform with REGENXBIO's expectations and predictions is subject to a number of risks and uncertainties, including the timing of enrollment, commencement and completion and the success of clinical trials conducted by REGENXBIO, its licensees and its partners, the timing of commencement and completion and the success of preclinical studies conducted by REGENXBIO and its development partners, the timely development and launch of new products, the ability to obtain and maintain regulatory approval of product candidates, the ability to obtain and maintain intellectual property protection for product candidates and technology, trends and challenges in the business and markets in which REGENXBIO operates, the size and growth of potential markets for product candidates and the ability to serve those markets, the rate and degree of acceptance of product candidates, and other factors, many of which are beyond the control of REGENXBIO. Refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of REGENXBIO's Annual Report on Form 10-K for the year ended December 31, 2017 and comparable "risk factors" sections of REGENXBIO's Quarterly Reports on Form 10-Q and other filings, which have been filed with the U.S. Securities and Exchange Commission (SEC) and are available on the SEC's website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on REGENXBIO or its businesses or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Readers are cautioned not to rely too heavily on the forward-looking statements contained in this press release. These forward-looking statements speak only as of the date of this press release. REGENXBIO does not undertake any obligation, and specifically declines any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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REGENXBIO CONTACT:
Investors
Natalie Wildenradt, 646-681-8192
natalie@argotpartners.com
Media
Adam Pawluk, 202-591-4063
apawluk@jpa.com
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| Dated: March 18, 2019 | | |
/s/ Steven H. Rouhandeh
Steven H. Rouhandeh
Executive Chairman Principal Executive Officer |
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| Dated: March 18, 2019 | | |
/s/ Christine Silverstein
Christine Silverstein
Chief Financial Officer Principal Financial Officer |
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/s/ Steven H. Rouhandeh
Steven H. Rouhandeh
Executive Chairman Principal Executive Officer |
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/s/ Christine Silverstein
Christine Silverstein
Chief Financial Officer Principal Financial Officer |
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| Dated: March 18, 2019 | | | Dated: March 18, 2019 | |