Millendo Therapeutics, Inc. (Form: 10-Q, Received: 08/12/2019 06:13:30)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2019

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

For the transition period from to

Commission File No. 001‑35890

Millendo Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		45‑1472564
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

110 Miller Avenue, Suite 100 Ann Arbor, Michigan		48104
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (734) 845‑9000

301 North Main Street, Suite 100, Ann Arbor, Michigan 48104

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	MLND	The Nasdaq Capital Market, LLC

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

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

The number of shares of Registrant’s Common Stock, $0.001 par value per share, outstanding as of August 9, 2019 was 13,412,058.

Table of Contents

INDEX TO FORM 10‑Q


		Page
	PART I — FINANCIAL INFORMATION	4

Item 1.	Financial Statements (unaudited) 	4
	Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	4
	Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2019 and 2018	5
	Consolidated Statements of Convertible Preferred Stock, Redeemable Noncontrolling Interest and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2019 and 2018	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018	8
	Notes to Interim Unaudited Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

	PART II — OTHER INFORMATION	29

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	72
Item 4.	Mine Safety Disclosures	72
Item 5.	Other Information	72
Item 6.	Exhibits	73

Signatures		75

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Unless the context suggests otherwise, references in this Quarterly Report on Form 10‑Q, or Quarterly Report, to “Millendo,” “the Company,” “we,” “us,” and “our” refer to Millendo Therapeutics, Inc. and, where appropriate, its subsidiaries.

This Quarterly Report on Form 10‑Q contains 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 forward-looking statements reflect our plans, estimates and beliefs and include, but are not limited to, statements about our plans to develop and commercialize our product candidates; the progress and timing of our ongoing and planned clinical trials for our product candidates, including the timing of topline results from the Phase 2b portion of our Phase 2b/3 clinical trial of livoletide in Prader Willi syndrome (“PWS”) patients and the timeline for our Phase 2b clinical study of nevanimibe in congenital adrenal hyperplasia, the potential and timing for a neurokinin 3 receptor antagonist (MLE-301) as a potential treatment of vasomotor symptoms to enter clinical trials; the potential advantages of our discontinuation of our Phase 2 clinical study of nevanimibe in Cushing's syndrome; the timing of and our ability to obtain and maintain regulatory approvals for our product candidates; and our estimates regarding future revenue, if any, future expenses, the funding of our operations, including whether our existing cash, cash equivalents, marketable securities, and restricted cash will be sufficient to fund our current operating plans into the fourth quarter of 2020 and through the topline results of the Phase 2b portion of our Phase 2b/3 clinical trial of livoletide in PWS patients, as well as our future capital requirements and needs for additional financing. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Because of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not transpire. These risks and uncertainties include, but are not limited to, the risks included in this Quarterly Report on Form 10‑Q under Part II, Item 1A, “Risk Factors.”

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this document. You should read this document with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we do not undertake any obligation to update or revise any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.

Table of Contents

PART I – Financial Information

Item 1 – Financial Statements

MILLENDO THERAPEUTICS, INC.

Consolidated Balance Sheets

(Unaudited)

(in thousands except share and per share amounts)


	June 30,		December 31,
	2019		2018
Assets
Current assets:
Cash and cash equivalents	$	55,274	$	73,286
Short-term restricted cash		699		45
Marketable securities		—		4,385
Prepaid expenses and other current assets		6,416		3,373
Refundable tax credit		2,123		2,333
Total current assets		64,512		83,422
Long-term restricted cash		658		439
Operating lease right of use assets		2,349		—
Other assets		805		213
Total assets	$	68,324	$	84,074
Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt	$	199	$	189
Accounts payable		3,091		1,998
Accrued expenses		6,147		7,630
Operating lease liabilities — current		1,492		—
Total current liabilities		10,929		9,817
Debt, net of current portion		278		383
Operating lease liabilities		1,865		—
Other liabilities		227		752
Total liabilities		13,299		10,952
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.001 par value: 5,000,000 shares authorized; no shares issued and outstanding		—		—
Common stock, $0.001 par value: 100,000,000 shares authorized; 13,412,058 and 13,357,999 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		13		13
Additional paid-in capital		237,136		234,876
Accumulated deficit		(184,323)		(164,086)
Accumulated other comprehensive income		140		148
Total stockholders’ equity attributable to Millendo Therapeutics, Inc.		52,966		70,951
Equity attributable to noncontrolling interests		2,059		2,171
Total stockholders’ equity		55,025		73,122
Total liabilities and stockholders’ equity	$	68,324	$	84,074

See accompanying notes to unaudited interim consolidated financial statements

Table of Contents

MILLENDO THERAPEUTICS, INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands except share and per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Operating expenses:
Research and development	$	5,981	$	3,200	$	12,185	$	5,969
General and administrative		4,179		1,786		8,632		3,405
Loss from operations		10,160		4,986		20,817		9,374
Other expenses:
Interest expense (income), net	$	(313)	$	(6)	$	(628)	$	(15)
Other loss		24		62		48		69
Net loss	$	(9,871)	$	(5,042)	$	(20,237)	$	(9,428)
Net loss attributable to noncontrolling interest		—		196		—		321
Net loss attributable to common stockholders	$	(9,871)	$	(4,846)	$	(20,237)	$	(9,107)
Net loss per share of common stock, basic and diluted	$	(0.74)	$	(6.82)	$	(1.51)	$	(12.82)
Weighted‑average shares of common stock outstanding, basic and diluted		13,379,842		710,390		13,368,981		710,390
Other comprehensive income (loss):
Foreign currency translation adjustment	$	1	$	28	$	(8)	$	47
Comprehensive loss	$	(9,870)	$	(4,818)	$	(20,245)	$	(9,060)
Comprehensive income attributable to noncontrolling interest	$	—	$	4	$	—	$	7
Comprehensive loss attributable to Millendo Therapeutics, Inc.	$	(9,870)	$	(4,822)	$	(20,245)	$	(9,067)

See accompanying notes to unaudited interim consolidated financial statements

Table of Contents

MILLENDO THERAPEUTICS, INC.

Consolidated statements of convertible preferred stock, redeemable noncontrolling interests and stockholders’

(deficit) equity

(Unaudited)

(in thousands except share amounts)


	Three Months Ended June 30, 2019
										Total
										Stockholders’
										(Deficit)
										Equity
								Accumulated		attributable		Total Equity		Total
				Additional				Other		to Millendo		Attributable to		Stockholders’
	Common Stock			Paid-in		Accumulated		Comprehensive		Therapeutics,		Noncontrolling		(Deficit)
	Shares	Amount		Capital		Deficit		Income		Inc.		Interests		Equity
Balance at April 1, 2019	13,357,999	$	13	$	235,815	$	(174,452)	$	139	$	61,515	$	2,171	$	63,686
Exercise of stock options	45,947		—		166		—		—		166		—		166
Exercise of BSPCE warrants	8,112		—		160		—		—		160		(112)		48
Stock-based compensation expense	—		—		995		—		—		995		—		995
Foreign currency translation adjustment	—		—		—		—		1		1		—		1
Net income (loss)	—		—		—		(9,871)		—		(9,871)		—		(9,871)
Balance at June 30, 2019	13,412,058	$	13	$	237,136	$	(184,323)	$	140	$	52,966	$	2,059	$	55,025


	Six Months Ended June 30, 2019
										Total
										Stockholders’
										(Deficit)
										Equity
								Accumulated		attributable		Total Equity		Total
				Additional				Other		to Millendo		Attributable to		Stockholders’
	Common Stock			Paid-in		Accumulated		Comprehensive		Therapeutics,		Noncontrolling		(Deficit)
	Shares	Amount		Capital		Deficit		Income		Inc.		Interests		Equity
Balance at January 1, 2019	13,357,999	$	13	$	234,876	$	(164,086)	$	148	$	70,951	$	2,171	$	73,122
Exercise of stock options	45,947		—		166		—		—		166		—		166
Exercise of BSPCE warrants	8,112		—		160		—		—		160		(112)		48
Stock-based compensation expense	—		—		1,934		—		—		1,934		—		1,934
Foreign currency translation adjustment	—		—		—		—		(8)		(8)		—		(8)
Net income (loss)	—		—		—		(20,237)		—		(20,237)		—		(20,237)
Balance at June 30, 2019	13,412,058	$	13	$	237,136	$	(184,323)	$	140	$	52,966	$	2,059	$	55,025

Table of Contents

MILLENDO THERAPEUTICS, INC.

Consolidated statements of convertible preferred stock, redeemable noncontrolling interests and stockholders’

(deficit) equity (continued)

(Unaudited)

(in thousands except share amounts)


	Three Months Ended June 30, 2018
						Stockholders’ Equity (Deficit)
																		Total
																		Stockholders’
																		(Deficit)
																		Equity
																Accumulated		attributable		Total Equity		Total
	Convertible			Redeemable								Additional				Other		to Millendo		Attributable to		Stockholders’
	Preferred Stock			Noncontrolling		Common Stock			Common-1 Stock			Paid-in		Accumulated		Comprehensive		Therapeutics,		Noncontrolling		(Deficit)
	Shares	Amount		Interests		Shares	Amount		Shares	Amount		Capital		Deficit		Income		Inc.		Interests		Equity
Balance at April 1, 2018	90,848,515	$	132,922	$	10,462	246,347	$	—	464,043	$	—	$	6,369	$	(141,155)	$	24	$	(134,762)	$	2,171	$	(132,591)
Stock-based compensation expense	—		—		—	—		—	—		—		159		—		—		159		—		159
Foreign currency translation adjustment	—		—		4	—		—	—		—		—		—		24		24		—		24
Net income (loss)	—		—		(196)	—		—	—		—		—		(4,846)		—		(4,846)		—		(4,846)
Balance at June 30, 2018	90,848,515	$	132,922	$	10,270	246,347	$	—	464,043	$	—	$	6,528	$	(146,001)	$	48	$	(139,425)	$	2,171	$	(137,254)


	Six Months Ended June 30, 2018
						Stockholders’ Equity (Deficit)
																		Total
																		Stockholders’
																		(Deficit)
																		Equity
																Accumulated		attributable		Total Equity		Total
	Convertible			Redeemable								Additional				Other		to Millendo		Attributable to		Stockholders’
	Preferred Stock			Noncontrolling		Common Stock			Common-1 Stock			Paid-in		Accumulated		Comprehensive		Therapeutics,		Noncontrolling		(Deficit)
	Shares	Amount		Interests		Shares	Amount		Shares	Amount		Capital		Deficit		Income		Inc.		Interests		Equity
Balance at January 1, 2018	90,848,515	$	132,922	$	10,584	246,347	$	—	464,043	$	—	$	6,192	$	(136,894)	$	8	$	(130,694)	$	2,171	$	(128,523)
Stock-based compensation expense	—		—		—	—		—	—		—		336		—		—		336		—		336
Foreign currency translation adjustment	—		—		7	—		—	—		—		—		—		40		40		—		40
Net income (loss)	—		—		(321)	—		—	—		—		—		(9,107)		—		(9,107)		—		(9,107)
Balance at June 30, 2018	90,848,515	$	132,922	$	10,270	246,347	$	—	464,043	$	—	$	6,528	$	(146,001)	$	48	$	(139,425)	$	2,171	$	(137,254)

See accompanying notes to unaudited interim consolidated financial statements

Table of Contents

MILLENDO THERAPEUTICS, INC.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Six Months Ended
	June 30,
	2019		2018
Operating activities:
Net loss	$	(20,237)	$	(9,428)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		19		15
Stock‑based compensation expense		1,934		336
Amortization of operating lease right of use assets		(206)		—
Unrealized foreign currency loss		—		61
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(2,910)		(761)
Other assets		62		—
Accounts payable		1,056		(367)
Accrued expenses and other liabilities		(892)		446
Cash used in operating activities		(21,174)		(9,698)
Investing activities:
Purchase of property and equipment		(277)		(7)
Proceeds from sale of marketable securities		4,385		—
Net cash paid in Alizé asset purchase		—		(524)
Cash provided by (used in) investing activities		4,108		(531)
Financing activities:
Repayment of debt		(90)		(84)
Payment of financing costs		(162)		(482)
Proceeds from option and BSPCE warrant exercises		214		—
Cash used in financing activities		(38)		(566)
Effect of foreign currency exchange rate changes on cash		(35)		(4)
Net decrease in cash, cash equivalents and restricted cash		(17,139)		(10,799)
Cash, cash equivalents and restricted cash at beginning of period		73,770		17,623
Cash, cash equivalents and restricted cash at end of period	$	56,631	$	6,824
Supplemental schedule of non‑cash investing and financing activities:
Right of use assets acquired under operating leases	$	1,840	$	—
Financing costs in accounts payable and accrued expenses	$	83	$	159

See accompanying notes to unaudited interim consolidated financial statements

Table of Contents

MILLENDO THERAPEUTICS, INC.

Notes to Unaudited Interim Consolidated Financial Statements

1. Organization and description of business

Description of Business

Millendo Therapeutics, Inc., a Delaware corporation, together with its subsidiaries, is a late‑stage biopharmaceutical company primarily focused on developing novel treatments for orphan endocrine diseases where current therapies do not exist or are insufficient. The Company is currently advancing three product candidates. The Company’s most advanced product candidate, livoletide (AZP‑531), is a potential treatment for Prader‑Willi syndrome (“PWS”), a rare and complex genetic endocrine disease characterized by hyperphagia, or insatiable hunger. The Company is also developing nevanimibe (ATR‑101) as a potential treatment for patients with classic congenital adrenal hyperplasia (“CAH”), a rare, monogenic adrenal disease that requires lifelong treatment with exogenous cortisol, often at high doses. The Company has added a new product candidate to its research and development pipeline: a neurokinin 3 receptor (NK3R) antagonist (MLE-301), as a potential treatment of vasomotor symptoms (“VMS”), defined as hot flashes and night sweats in menopausal women.

The Company has been investigating nevanimibe (ATR-101) as a potential treatment for patients with endogenous Cushing’s syndrome (“CS”), a rare endocrine disease characterized by excessive cortisol production from the adrenal glands. As a result of slower than anticipated enrollment in its CS Phase 2 clinical trial, the Company elected to discontinue this trial in August 2019, suspend development of nevanimibe for the treatment of CS, and focus its resources on other programs in its research and development pipeline.

The Company’s operations to date have focused on acquiring technology and assets, conducting preclinical studies and clinical trials, organization and staffing, business planning, and raising capital. The Company does not have any products approved for sale and has not generated any revenue from product sales. The Company’s product candidates are subject to long development cycles and the Company may be unsuccessful in its efforts to develop, obtain regulatory approval for or market its product candidates.

The Company is subject to a number of risks including, but not limited to, the need to obtain adequate additional funding for the ongoing and planned clinical development of its product candidates. Because of the numerous risks and uncertainties associated with pharmaceutical products and development, the Company is unable to accurately predict the timing or amount of funds required to complete development of its product candidates, and costs could exceed the Company’s expectations for a number of reasons, including reasons beyond the Company’s control.

Merger with OvaScience

In December 2018, OvaScience, Inc., a Delaware corporation (“OvaScience”), now known as Millendo Therapeutics, Inc. (the “Company”), completed its merger (the “Merger”) with privately-held Millendo Therapeutics, Inc. (“Private Millendo”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated August 8, 2018, as amended on September 25, 2018 and November 1, 2018 (the “Merger Agreement”), whereby Orion Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of OvaScience (the “Merger Sub”), merged with and into Private Millendo, with Private Millendo continuing as a wholly owned subsidiary of OvaScience.

Under the terms of the Merger Agreement, OvaScience issued shares of its common stock to Private Millendo’s stockholders, at an exchange ratio of 0.0744 shares of OvaScience common stock, for each share of Private Millendo common stock outstanding immediately prior to the Merger. OvaScience also assumed all of the stock options outstanding under the Private Millendo 2012 Equity Incentive Plan, as amended (the “Private Millendo Plan”), with such stock options henceforth representing the right to purchase a number of shares of OvaScience’s common stock equal to 0.0744 multiplied by the number of shares of Private Millendo common stock previously represented by such options.

Table of Contents

The Company’s shares of common stock listed on The Nasdaq Capital Market, previously trading through the close of business on Friday, December 7, 2018 (the “Merger Date”) under the ticker symbol “OVAS,” commenced trading on The Nasdaq Capital Market, under the ticker symbol “MLND,” on Monday, December 10, 2018.

The Merger was accounted for as a reverse acquisition and recapitalization, with Private Millendo being treated as the accounting acquirer. As such, the results of operations and cash flows prior to the Merger Date, relate to Private Millendo and its subsidiaries. Subsequent to the Merger Date the information relates to the consolidated entities of Millendo Therapeutics, Inc. All share and per share amounts in the unaudited interim consolidated financial statements and related notes have been retroactively adjusted, where applicable, for all periods presented to give effect to the exchange ratio applied in connection with the Merger.

Liquidity

The Company has incurred net losses since inception and it expects to generate losses from operations for the foreseeable future primarily due to research and development costs for its potential product candidates. As of June 30, 2019, the Company had cash, cash equivalents, marketable securities and restricted cash of $56.6 million and an accumulated deficit of $184.3 million.

In April 2019, the Company entered into an “at-the-market” (“ATM”) equity distribution agreement with Citigroup Global Markets Inc. acting as sole agent with an aggregate offering value of up to $50.0 million, which allows the Company to sell its common shares through the facilities of the Nasdaq Capital Market . Subject to the terms of the equity distribution agreement, the Company is able to determine, at its sole discretion, the timing and number of shares to be sold under this ATM facility. No common shares have been issued to date under the Company’s ATM equity distribution agreement.

The Company will likely require additional capital in the future through equity or debt financings, partnerships, collaborations, or other sources to carry out the Company’s planned development activities. If additional capital is not secured when required, the Company may need to delay or curtail its operations until such funding is received. Various internal and external factors will affect whether and when the Company’s product candidates become approved drugs. The regulatory approval and market acceptance of the Company’s proposed future products (if any), length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations. The Company believes its cash, cash equivalents, marketable securities and restricted cash at June 30, 2019 are sufficient to fund operations into the fourth quarter of 2020.

2. Basis of presentation and summary of significant accounting policies

Basis of presentation and consolidation principles

The accompanying unaudited interim consolidated financial statements include the accounts of Millendo Therapeutics, Inc. and its subsidiaries, and all intercompany amounts have been eliminated. The unaudited interim consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The unaudited interim consolidated financial statements include the accounts of the Company’s subsidiaries in which the Company holds a controlling financial interest as of the financial statement date.

Unaudited interim financial statements

The Company has prepared the accompanying unaudited interim consolidated financial statements based on Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. These unaudited interim consolidated financial statements include, in the Company’s opinion, all adjustments, consisting only of normal recurring adjustments that the Company considers necessary for a fair presentation of its consolidated financial position and results of operations for these periods. The Company’s historical results are not necessarily indicative of the results

Table of Contents

to be expected in the future and the Company’s operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.

The accompanying unaudited interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10‑K filed with the SEC on April 1, 2019. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies except as follows:

Leases

In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842), which requires the Company as the lessee to recognize most leases on the balance sheet thereby resulting in the recognition of right of use assets and lease obligations for those leases currently classified as operating leases. ASU 2016‑02 became effective for the Company on January 1, 2019.

The Company adopted ASU 2016‑02 using a modified retrospective transition approach as of January 1, 2019 and will not restate its comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption. The Company has elected to adopt the package of transition practical expedients and, therefore, have not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. As a result of the adoption of ASC 842, the Company recognized an operating lease liability of $2.0 million based on the present value of the minimum rental payments of the leases and a corresponding operating lease right of use (“ROU”) asset of $0.9 million within the Company’s consolidated balance sheet. The Company’s ROU asset is exclusive of any early lease termination obligations whereby future contractual lease payments exceed estimated sublease income.

Under ASC 842, the Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the customer has the right to control the use of the identified asset.

The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. When readily determinable, the Company uses the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, including the lease term.

The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has noncancelable operating leases for office and laboratory space which have remaining lease terms between two and seven years. In connection with the Merger, the Company assumed a sublease agreement for office and laboratory space located in Waltham, Massachusetts. The term of the sublease expires in November 2020. In February 2019 and October 2018, the Company entered into two additional noncancelable operating leases for office space in Ann Arbor, Michigan for the Company’s headquarters; one that the Company took possession of in April 2019, and the other that the Company took possession of in July 2019, respectively. In April 2019, the Company entered into a lease agreement for office space in Lexington, Massachusetts to expand its operations.

As of June 30, 2019, the operating lease ROU asset and the operating lease liabilities were $2.3 million and $3.4 million, respectively. The discount rate used to account for the Company's operating leases under ASC 842 is the Company’s estimated incremental borrowing rate of 7.0%. The Company has options to extend certain of its leases for another five to nine years. These options to extend were not recognized as part of the Company’s measurement of the ROU assets

Table of Contents

and operating lease liabilities for the three and six months ended June 30, 2019 nor were the future payments related to the lease the Company entered into in October 2018.

Rent expense related to the Company's operating leases was approximately $156,000 and $46,000 for the three months ended June 30, 2019 and 2018, respectively, and approximately $223,000 and $94,000 for the six months ended June 30, 2019 and 2018, respectively. Cash paid for amounts included in the measurement of the lease liabilities was approximately $0.4 million and $0.5 million and the Company received approximately $85,000 and $0.2 million in sublease payments related to its Waltham, Massachusetts lease during the three and six months ended June 30, 2019, respectively. The weighted average remaining term of the Company’s noncancelable operating leases is 3.49 years. Future minimum rental payments under the Company’s noncancelable operating leases at June 30, 2019 is as follows (amounts in thousands):


2019	$	759
2020		1,448
2021		440
2022		451
2023		463
Thereafter		196
Total		3,757
Present Value Adjustment		(400)
Lease liability at June 30, 2019	$	3,357

Use of estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary.

Restricted cash

Restricted cash relates to amounts used to secure the Company’s credit card facility balances held on deposit with major financial institutions, to collateralize a letter of credit in the name of the Company’s landlord pursuant to a certain operating lease agreement, and to fund an escrow arrangement in connection with a sublease agreement also pursuant to that same operating lease agreement.

Deferred offering costs

The Company capitalizes costs that are directly associated with in-process equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds from the applicable financing. If a financing is abandoned, deferred offering costs are expensed. As of June 30, 2019, deferred offering costs were $0.2 million.

Net loss per share

Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted‑average number of shares of common stock (including shares of common‑1 stock during the three and six months ended June 30, 2018) outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, preferred stock warrants, restricted stock, and stock options, which would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share, the weighted‑average number of shares of common stock remains

Table of Contents

the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti‑dilutive.

The following potentially dilutive securities have been excluded from the computation of diluted weighted‑average shares of common stock outstanding, as they would be anti‑dilutive:


	June 30,
	2019	2018
Stock options	2,640,077	661,490
Convertible preferred stock	—	6,759,109
Common stock warrants	17,125	—
Preferred stock warrants	—	17,125
BSA and BSPCE warrants	148,607	156,719
	2,805,809	7,594,443

Recent accounting pronouncements

In August 2018, the FASB issued ASU No. 2018‑13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) . ASU 2018‑13 resulted in certain modifications to fair value measurement disclosures, primarily related to level 3 fair value measurements. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its disclosures.

In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This standard was effective January 1, 2019 and required adoption on a retrospective basis unless it was impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company adopted this standard which did not have a material impact on its consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments – Credit Losses (Topic 326) , which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Additionally, ASU 2016‑13 requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected through the use of an allowance of expected credit losses. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief , which amends ASU 2016-13 by providing entities with an option to irrevocably elect the fair value option to be applied on an instrument-by-instrument basis for eligible financial instruments that are within the scope of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. ASU 2016‑13, as amended, is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and requires a modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements and disclosures.

3. Fair value measurements

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis (amounts in thousands):


	June 30, 2019
	(Level 1)		(Level 2)		(Level 3)
Assets
Money market funds (included in cash and cash equivalents)	$	52,079	$	—	$	—
Marketable securities - U.S. government agency	$	—	$	—	$	—
Marketable securities - Corporate debt securities	$	—	$	—	$	—

Table of Contents


	December 31, 2018
	(Level 1)		(Level 2)		(Level 3)
Assets
Money market funds (included in cash and cash equivalents)	$	25,145	$	—	$	—
Marketable securities - U.S. government agency	$	—	$	2,994	$	—
Marketable securities - Corporate debt securities	$	—	$	1,391	$	—

Prior to the Merger in December 2018, the Company’s preferred stock warrants were liability classified and remeasured at each reporting period using level 3 inputs. There were no changes in the fair value of the preferred stock warrant liability during the three or six months ended June 30, 2018.

4. Accrued expenses

Accrued expenses consist of (amounts in thousands):


		June 30,	December 31,
		2019	2018
Compensation and related benefits	$	2,028	$	3,537
Professional fees		1,751		1,140
Preclinical and clinical costs		2,002		1,811
Lease termination		—		630
Other		366		512
Total	$	6,147	$	7,630

In connection with the adoption of ASC 842 on January 1, 2019, the lease termination balance as of December 31, 2018 was reclassified into the Company’s operating lease liability.

5. Debt

Bpifrance Reimbursable Advance

In December 2017, in connection with its acquisition of Alizé Pharma SAS (“Alizé”), the Company assumed €0.7 million of debt that Alizé had outstanding with Bpifrance Financing (“Bpifrance”). The original advance amount of €0.8 million (“the Bpifrance Advance”) was provided to Alizé as an innovation aid that required Alizé to carry out certain activities related to its livoletide clinical development program and incur a certain level of program expenditures. No interest is charged or accrued under the advance.

The Company is required to make quarterly principal payments, which began in December 2016 and continue through September 2021. The quarterly principal payments escalate over the repayment period beginning with €17,500 per quarter and increasing to €50,000 through maturity. In addition to the quarterly payments, beginning January 1, 2016, Bpifrance may require the Company to pay, by no later than March 31st of each year, a reimbursement annuity equal to 20% of the proceeds generated by the Company from license, assignment or use of livoletide. Under no circumstance, however, would the Company be required to reimburse to Bpifrance principal amounts greater than the original advance it received.

The Company is permitted to repay the Bpifrance Advance at any time, at which point it would be released from all commitments and obligations under the Bpifrance Advance agreement. The Bpifrance Advance Agreement does not contain any ongoing financial covenants.

During the three months ended June 30, 2019 and 2018, the Company made principal payments of $45,000 and $41,000, respectively. During the six months ended June 30, 2019 and 2018, the Company made principal payments of $90,000 and $84,000, respectively. At June 30, 2019, the balance outstanding was $0.5 million (or €0.4 million).

Table of Contents

6. Litigation

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

On November 9, 2016, a purported shareholder derivative action was filed in the Business Litigation Session of the Suffolk County Superior Court in the Commonwealth of Massachusetts ( Cima v. Dipp , No. 16‑3443‑BLS1 (Mass. Sup. Ct.)) against certain former officers and directors of OvaScience and one current director of the Company (a former director of OvaScience) and OvaScience as a nominal defendant alleging breaches of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and corporate waste for purported actions related to OvaScience’s January 2015 follow-on public offering. On February 22, 2017, the court approved the parties’ joint stipulation to stay all proceedings in the action until further notice. Following a status conference in December 2017, the stay was lifted. On January 25, 2018, at the parties’ request, the court entered a second order staying all proceedings in the action until further order of the court. The Company believes that the complaint is without merit and intends to defend against the litigation. There can be no assurance, however, that the Company will be successful. At present, the Company is unable to estimate potential losses, if any, related to the lawsuit .

On March 24, 2017, a purported shareholder class action lawsuit was filed in the U.S. District Court for the District of Massachusetts ( Dahhan v. OvaScience, Inc. , No. 1:17‑cv‑10511‑IT (D. Mass.)) against OvaScience and certain former officers and directors of OvaScience alleging violations of Sections 10(b) and 20(a) of the Exchange Act (the "Dahhan Action"). On July 5, 2017, the court entered an order approving the appointment of Freedman Family Investments LLC as lead plaintiff, the firm of Robins Geller Rudman & Dowd LLP as lead counsel and the Law Office of Alan L. Kovacs as local counsel. Plaintiff filed an amended complaint on August 25, 2017. The Company filed a motion to dismiss the amended complaint, which the court denied on July 31, 2018. On August 14, 2018, the Company answered the amended complaint. The parties presently are engaged in discovery. The Company believes that the amended complaint is without merit and intends to defend against the litigation. There can be no assurance, however, that the Company will be successful. A resolution of this lawsuit adverse to the Company or the other defendants could have a material effect on the Company’s consolidated financial position and results of operations. At present, the Company is unable to estimate potential losses, if any, related to the lawsuit .

On July 27, 2017, a purported shareholder derivative complaint was filed in the U.S. District Court for the District of Massachusetts ( Chiu v. Dipp , No. 1:17‑cv‑11382‑IT (D. Mass.)) against OvaScience, as a nominal defendant, certain former officers and directors of OvaScience and one current director of the Company (a former director of OvaScience) alleging breach of fiduciary duty, unjust enrichment and violations of Section 14(a) of the Exchange Act alleging that compensation awarded to the director defendants was excessive and seeking redress for purported actions related to OvaScience’s January 2015 follow-on public offering and other public statements. On September 26, 2017, the plaintiff filed an amended complaint which eliminated all claims regarding allegedly excessive director pay and additionally alleged claims of abuse of control and corporate waste. On October 27, 2017, the defendants filed a motion to dismiss the amended complaint. The court heard oral argument on the motion to dismiss on April 5, 2018. On April 13, 2018, the court granted the defendants’ motion to dismiss the amended complaint for failure to state a claim for relief under Section 14(a). The court also dismissed the plaintiffs’ pendent state law claims without prejudice, based on lack of subject matter jurisdiction. On April 25, 2018, the plaintiffs moved for leave to amend the complaint, and to stay this case pending the outcome of the Dahhan Action. The Company does not believe that the proposed amended complaint cures the defects in the current complaint, but informed plaintiffs’ counsel that, in the interest of judicial economy, defendants would not oppose the proposed amendment if the court would consider staying the case pending the resolution of the Dahhan Action. On April 27, 2018, the court granted the plaintiffs’ motion for leave to amend the complaint and for a stay. On April 30, 2018, the plaintiffs filed their second amended complaint. On May 23, 2018, the court entered an order staying this case pending the resolution of the Dahhan Action. The Company believes that the complaint is without merit and intends to defend against the litigation. There can be no assurance, however, that the Company will be successful. At present, the Company is unable to estimate potential losses, if any, related to the lawsuit .

Between October 16, 2018 and November 21, 2018, five putative class action lawsuits were filed in various federal District Courts against OvaScience, Inc. and the OvaScience Board of Directors related to OvaScience’s proposed merger with Millendo Therapeutics, Inc.: Cunningham v. Kroeger, et al. , No. 1:18‑cv‑01595 (D. Del. filed Oct. 16, 2018); Adlard v. OvaScience, Inc., et al. , No. 1:18‑cv‑12332 (D. Mass. filed Nov. 6, 2018); Wheby v. OvaScience, Inc.,

Table of Contents

et al. , No. 1:18‑cv‑1811 (D. Del. filed Nov. 16, 2018); Cuenca Aubets v. OvaScience, Inc., et al. , No. 1:18‑cv‑10882 (S.D.N.Y. filed Nov. 20, 2018); and Kim v. OvaScience, Inc., et al. , No. 1:18‑cv‑10939 (S.D.N.Y. filed Nov. 21, 2018). The Complaints each alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a‑9 promulgated thereunder, and as against the individual defendants, violations of Section 20(a) of the Securities Exchange Act of 1934. The Cunningham plaintiff alleged that OvaScience’s Form S‑4 Registration Statement filed on September 26, 2018 omitted or misrepresented material information regarding OvaScience’s proposed merger with Millendo Therapeutics, Inc. The Adlard, Wheby, Cuenca Aubets and Kim plaintiffs alleged that OvaScience’s Definitive Proxy Statement on Schedule 14A filed on November 6, 2018, omitted or misrepresented material information regarding OvaScience’s proposed merger with Millendo Therapeutics, Inc. OvaScience subsequently supplemented its disclosures to moot plaintiffs’ claims. The Cunningham plaintiff voluntarily dismissed his complaint on December 10, 2018, the Wheby plaintiff voluntarily dismissed his complaint on February 28, 2019, and the Adlard plaintiff voluntarily dismissed his complaint on July 30, 2019. On March 18, 2019, the court dismissed the Cuenca Aubets and Kim actions for failure to serve. In May 2019, the Company entered into a settlement agreement pursuant to which the Company made payments to counsel for plaintiffs in full satisfaction of any claims for fees or costs by any of the plaintiffs or plaintiffs’ counsel in connection with these actions.

In addition to the matters described above, the Company may be a party to litigation and subject to claims incident to the ordinary course of business from time to time. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

7. Stock‑based compensation

On June 11, 2019, the Company held its 2019 Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) and the Company’s 2019 Employee Stock Purchase Plan (the “2019 ESPP,” and together with the 2019 Plan, the “Plans”). The 2019 Plan is the successor to the Private Millendo 2012 Stock Plan and the OvaScience 2012 Stock Incentive Plan (each, as amended, the “Prior Plans”) and allows the Company to grant stock options, restricted stock unit awards and other awards at levels determined appropriate by the Company’s board of directors (the “Board”) or the compensation committee of the Board. No additional awards will be granted under either of the Prior Plans. The 2019 ESPP enables employees to purchase shares of the Company’s common stock through offerings of rights to purchase the Company’s common stock to all eligible employees. The Plans were adopted by the Company’s Board on April 29, 2019, subject to approval by the Company’s stockholders, and became effective with such stockholder approval on June 11, 2019. Outstanding awards under the Prior Plans continue to be subject to the terms and conditions of the Prior Plans.

The aggregate number of shares of our common stock that may be issued under the 2019 Plan will not exceed 2,919,872. The number of shares of our common stock reserved for issuance under the 2019 Plan will automatically increase on January 1 of each year, for a period of ten years, from January 1, 2020 continuing through January 1, 2029, by 4% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board.

The aggregate number of shares of our common stock that may be issued under the 2019 ESPP is 133,580 shares, plus the number of shares of our common stock that are automatically added on January 1st of each year for a period of up to ten years from January 1, 2020 continuing through January 1, 2029, by 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board.

The Company measures employee and nonemployee stock‑based awards at grant‑date fair value and records compensation expense on a straight‑line basis over the vesting period of the award.

Table of Contents

The Company recorded stock‑based compensation expense in the following expense categories of its accompanying consolidated statements of operations and comprehensive loss for the three months ended June 30, 2019 and 2018 and six months ended June 30, 2019 and 2018, respectively (amounts in thousands):


	Three months				Six months
	ended				ended
	June 30,				June 30,
	2019		2018		2019		2018
Research and development	$	378	$	67	$	801	$	138
General and administrative		616		92		1,133		198
Total	$	994	$	159	$	1,934	$	336

Stock options

Options issued under the 2019 Plan may have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Board. Vesting generally occurs over a period of not greater than four years.

The following table summarizes the activity related to stock option grants to employees and nonemployees for the six months ended June 30, 2019:


		Weighted		Weighted-average
		average		remaining
		exercise price		contractual
	Shares	per share		life (years)
Outstanding at December 31, 2018	1,764,287	$	26.81	8.0
Granted	1,028,701		10.23
Exercised	(45,947)		3.63
Forfeited	(106,964)		86.07
Outstanding at June 30, 2019	2,640,077	$	18.36	7.9
Vested and exercisable at June 30, 2019	893,208	$	30.71	5.1
Vested and expected to vest at June 30, 2019	2,640,077	$	18.36	7.9

As of June 30, 2019, the unrecognized compensation cost related to 1,746,869 unvested stock options expected to vest was $12.1 million. This unrecognized compensation will be recognized over an estimated weighted‑average amortization period of 3.1 years. The aggregate intrinsic value of options outstanding and options exercisable as of June 30, 2019 was $5.8 million and $3.6 million, respectively. The options granted during the three and six months ended June 30, 2019 had an estimated weighted average grant date fair value of $8.50 and $7.09, respectively. There were no options granted during the three or six months ended June 30, 2018. The grant date fair value of each option grant was estimated during the three and six months ended June 30, 2019 using the following assumptions within the Black‑Scholes option‑pricing model:


	Three months ended			Six months ended
	June 30,			June 30,
	2019			2019
Expected term (in years)		5.93			6.01
Expected volatility		79	%		80	%
Risk-free interest rate		1.91	%		2.35	%
Expected dividend yield		0	%		0	%

At the time of the Alizé acquisition in December 2017, Alizé had 6,219 non‑employee (BSA) warrants and 5,360 employee (BSPCE) warrants outstanding, which have weighted‑average exercise prices of €80.06 and €83.40, respectively. As of June 30, 2019, all BSAs and BSPCEs were vested. In June 2019, a total of 600 BSPCE warrants were exercised resulting in the issuance of 8,112 shares of the Company’s common stock. As of June 30, 2019, there were an aggregate of 148,607 shares of common stock issuable upon the exercise of the warrants with a weighted‑average exercise price of $6.90 per share. These instruments are included in the equity attributable to noncontrolling interests.

Table of Contents

8. Subsequent events

Subsequent events were evaluated through the filing date of this Quarterly Report.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation s

You should read the following discussion of our financial condition and results of operations in conjunction with our interim unaudited consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10‑Q and with our annual audited consolidated financial statements included in our Annual Report on Form 10‑K for the year ended December 31, 2018 as filed with the Securities and Exchange Commission on April 1, 2019. In addition to historical financial information, the following discussion contains forward‑looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those discussed in these forward‑looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report and in our Annual Report on Form 10‑K, particularly in Item 1A. “Risk Factors” and “Special Note Regarding Forward‑Looking Statements.”

Overview

We are a late-stage biopharmaceutical company primarily focused on developing novel treatments for orphan endocrine diseases where current therapies do not exist or are insufficient. We are currently advancing three product candidates. Our most advanced product candidate, livoletide (AZP‑531), is a potential treatment for Prader-Willi syndrome (“PWS”), a rare and complex genetic endocrine disease characterized by hyperphagia, or insatiable hunger, that contributes to serious complications, a significant burden on patients and caregivers and early mortality. In a randomized, double-blind, placebo-controlled Phase 2 clinical trial in 47 patients with PWS, we observed that administration of livoletide once daily was associated with a clinically meaningful improvement in hyperphagia, as well as a reduction in appetite. In a pre-specified analysis of 38 home-resident PWS patients from the Phase 2 trial, we observed a larger and statistically significant decrease in hyperphagia following administration of livoletide as compared to placebo. In March 2019, we announced that we initiated a pivotal Phase 2b/3 clinical trial of livoletide in PWS patients, with topline results from the Phase 2b portion of the study expected in the first half of 2020.

We are developing nevanimibe (ATR-101) for the treatment of patients with classic congenital adrenal hyperplasia (“CAH”), a rare, monogenic adrenal disease that requires lifelong treatment with exogenous cortisol, often at high doses. These chronic high doses of cortisol can result in side effects that include diabetes, obesity, hypertension and psychological problems. When on suboptimal doses of cortisol, female CAH patients can experience hirsutism, infertility and menstrual irregularity, and male CAH patients can experience testicular atrophy, infertility and testicular tumors, making it difficult for physicians to appropriately treat CAH without causing adverse consequences. We reported results from our Phase 2 clinical trial of nevanimibe in patients with CAH in March 2018 and initiated a Phase 2b trial in the third quarter of 2018.

We have also added a new product candidate to our research and development pipeline: a neurokinin 3 receptor (NK3R) antagonist (MLE-301), as a potential treatment of vasomotor symptoms (“VMS”), defined as hot flashes and night sweats in menopausal women. MLE-301 currently is in preclinical studies designed to enable first-in-human clinical studies, which we expect to initiate in 2020.

Since inception, we have incurred significant operating losses and negative operating cash flows and there is no assurance that we will ever achieve or sustain profitability. Our net losses were $9.9 million and $5.0 million for the three months ended June 30, 2019 and 2018, respectively, and $20.2 million and $9.4 million for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019, we had an accumulated deficit of $184.3 million. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.

Recent Developments

Livoletide (AZP-531) for the potential treatment for Prader-Willi syndrome (PWS)

In March 2019, we announced that we initiated a pivotal Phase 2b/3 clinical trial of livoletide in PWS patients, with topline results from the Phase 2b portion of the study expected in the first half of 2020. As of August 8, 2019, we had 26 clinical sites recruiting patients in the U.S., Europe and Australia. We also plan to submit a protocol amendment, allowing 4 to 7 year-olds to participate in the Phase 2b/3 clinical study. The planned protocol amendment will include

Table of Contents

supporting juvenile toxicity data to allow dosing down to 4 years of age to cover the entire PWS population. We have also initiated pre-clinical activities in support of the development of a multi-dose pen device to improve patient and caregiver convenience, patient compliance, and further simplify administration of livoletide. On July 29, 2019, the U.S. Food and Drug Administration, or FDA, designated as a Fast Track development program the investigation of livoletide for PWS.

Neurokinin 3 receptor (NK3R) antagonist for the treatment of vasomotor symptoms (VMS)

We have added a new product candidate to our research and development pipeline: MLE-301, an NK3R antagonist, as a potential treatment of VMS. MLE-301 is a second generation NK3R antagonist, a target that Millendo and others have previously shown plays a key role in regulating the activity of KNDy (kisspeptin/NKB/dynorphin) neurons, which are overactive in menopausal women and play an important role in the generation of VMS. MLE-301 currently is in preclinical studies designed to enable first-in-human clinical studies, which we expect to initiate in 2020. We have a worldwide, exclusive license from F. Hoffmann-La Roche Ltd (“Roche Basel”) and Hoffman-La Roche Inc. (“Roche US”, and together with Roche Basel, “Roche” ), pursuant to a license agreement with Roche with an effective date of October 16, 2018 (the “Roche License Agreement”). As consideration for the rights granted to us under the Roche License Agreement, we have agreed to pay Roche an up-front payment, as well as additional milestone payments and royalties on sales of any MLE-301 products that we commercialize. Roche is affiliated with Roche Finance Ltd., which is a holder of more than 5% of our outstanding capital stock and which also employs Carole L. Nuechterlein, J.D., a member of our board of directors.

Nevanimibe for the treatment of classic congenital adrenal hyperplasia (CAH)

The nevanimibe Phase 2b CAH study began in the third quarter of 2018 and is ongoing. Preliminary data with a starting dose of 1000 mg BID (twice per day) has demonstrated lower tolerability than expected based on prior clinical experience with nevanimibe. Three of six subjects in the Phase 2b CAH study discontinued the study after beginning treatment as a result of non-serious adverse events, primarily of rash, dysuria, or diarrhea. Patients treated at 500 mg BID in previously completed studies tolerated nevanimibe well. We believe that dose escalation from a starting dose of 500 mg BID to higher planned doses over a longer period (16 weeks versus 12 weeks) may allow patients to better tolerate the therapy. We have submitted a protocol amendment to the appropriate regulatory authorities in all countries with active clinical trial sites to reflect this change in dosing and length of study treatment period. The study has resumed recruitment under the amended protocol.

Previous experience with nevanimibe includes a Phase 2 CAH study where patients started at 125 mg BID and dose escalated to 1000 mg BID, and a healthy volunteer drug-drug interaction study with nevanimibe at 500 mg BID for 11 days. In addition, the Phase 1 adrenocortical carcinoma (ACC) study dosed subjects over 2.5 times above the highest dose being explored in the Phase 2b CAH study.

We expect to provide an update on CAH study timelines in the second half of 2019.

Nevanimibe for the treatment of endogenous Cushing’s syndrome (CS)

We have been investigating nevanimibe (ATR-101) in a Phase 2 clinical trial as a potential treatment for patients with endogenous Cushing’s syndrome (“CS”), a rare endocrine disease characterized by excessive cortisol production from the adrenal glands. As a result of slower than anticipated enrollment in this Phase 2 clinical trial, we elected to discontinue this trial in August 2019, suspend development of nevanimibe for the treatment of CS, and focus our resources on other programs in our research and development pipeline. The costs associated with discontinuing our CS trial are not expected to be material.

Merger

On December 7, 2018, OvaScience, Inc., or OvaScience, now known as Millendo Therapeutics, Inc., completed its reverse merger or, the Merger, with what was then known as “Millendo Therapeutics, Inc.,” or Private Millendo, in accordance with the terms of the Agreement and Plan of Merger and Reorganization dated as of August 8, 2018, as amended on September 25, 2018 and November 1, 2018, or the Merger Agreement. OvaScience’s shares of common

Table of Contents

stock listed on The Nasdaq Capital Market, previously trading through the close of business on Friday, December 7, 2018 under the ticker symbol “OVAS,” commenced trading on The Nasdaq Capital Market, under the ticker symbol “MLND,” on Monday, December 10, 2018.

Immediately following the Merger, Private Millendo became a wholly-owned subsidiary of OvaScience. Upon consummation of the Merger, or the Closing, OvaScience adopted the business plan of Private Millendo and discontinued the pursuit of OvaScience’s business plan pre-Closing. The Merger was accounted for as a reverse recapitalization with Private Millendo as the accounting acquirer. On the Merger date, the primary pre-combination assets of OvaScience was cash, cash equivalents and marketable securities. At the time of the Merger, OvaScience had net assets of $38.0 million, which were comprised primarily of cash, cash equivalents and marketable securities.

Components of Our Results of Operations

Research and development expense

Research and development expense consists primarily of costs incurred in connection with the development of our product candidates. We expense research and development costs as incurred. These expenses include:

personnel expenses, including salaries, benefits and stock-based compensation expense;

costs of funding research performed by third parties, including pursuant to agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials;

expenses incurred under agreements with contract manufacturing organizations, or CMOs, including manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical study and clinical trial materials;

payments made under our third-party licensing agreements, other than amounts classified as acquired in-process research and development expenses;

consultant fees and expenses associated with outsourced professional scientific development services;

expenses for regulatory activities, including filing fees paid to regulatory agencies; and

allocated expenses for facility costs, including rent, utilities, depreciation and maintenance.

Milestone payment obligations incurred prior to regulatory approval of a product candidate, which are accrued when the event requiring payment of the milestone occurs are included in research and development expense.

We typically use our employee, consultant and infrastructure resources across our development programs. We track certain outsourced development costs by product candidate, but do not allocate all personnel costs or other internal costs to specific product candidates.

Table of Contents

The following table summarizes our research and development expenses by product candidate, personnel expense and other expenses for the three and six months ended June 30, 2019 and 2018, respectively:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(dollars in thousands)				(dollars in thousands)
Nevanimibe expenses	$	910	$	1,117	$	1,728	$	2,385
Livoletide expenses		3,028		954		6,031		1,392
MLE-301 expenses		172		—		444		—
Personnel expenses		1,646		997		3,525		1,926
Other expenses		225		132		457		266
Total	$	5,981	$	3,200	$	12,185	$	5,969

We expect our research and development expense will increase for the foreseeable future as we seek to advance development of our product candidates. The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of livoletide, nevanimibe, or MLE-301. We are also unable to predict when, if ever, material net cash inflows may commence from sales of livoletide, nevanimibe or any future product candidates that we may develop due to the numerous risks and uncertainties associated with clinical development, including risks and uncertainties related to:

the number of clinical sites included in the trials;

the length of time required to enroll suitable patients;

the number of patients that ultimately participate in the trials;

the number of doses patients receive;

the duration of patient follow-up and number of patient visits;

the results of our clinical trials;

the establishment of commercial manufacturing capabilities;

the receipt of marketing approvals; and

the commercialization of product candidates.

We may never succeed in obtaining regulatory approval for livoletide, nevanimibe or any future product candidates we may develop. Product candidates in later stages of clinical development, like livoletide, generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

General and administrative expense

General and administrative expense consists primarily of personnel expenses, including salaries, benefits and stock-based compensation expense, for employees in executive, finance, accounting, business development, legal and human resource functions. General and administrative expense also includes corporate facility costs, including rent, utilities, depreciation and maintenance, not otherwise included in research and development expense, as well as legal fees related to intellectual property and corporate matters and fees for accounting, recruiting and consulting services.

We anticipate that our general and administrative expense will increase as a result of increased headcount, expanded infrastructure and higher accounting, legal, consulting and investor relations fees, as well as increased director and

Table of Contents

officer insurance premiums, associated with being a public company. We also anticipate that our general and administrative expense will increase as we support additional clinical trials for livoletide and nevanimibe. In addition, if and when we believe that regulatory approval of livoletide or nevanimibe appears likely, we anticipate an increase in headcount and expense as a result of our preparation for commercial operations.

Interest expense (income), net

Interest income represents amounts earned on our cash, cash equivalents, marketable securities and restricted cash balances .

Results of operations

Comparison of the three months ended June 30, 2019 and 2018

The following table summarizes our operating results for the periods indicated:


	Three Months Ended
	June 30,
	2019		2018		Change
	(dollars in thousands)
Operating expenses:
Research and development	$	5,981	$	3,200	$	2,781	86.9	%
General and administrative		4,179		1,786		2,393	134.0
Loss from operations		10,160		4,986		5,174	103.8
Other expenses:
Interest expense (income), net		(313)		(6)		(307)	*
Other loss		24		62		(38)	(61.3)
Net loss	$	(9,871)	$	(5,042)	$	(4,829)	95.8	%

* Not Meaningful

Research and development expense

Research and development expense increased by $2.8 million to $6.0 million for the three months ended June 30, 2019 from $3.2 million for the three months ended June 30, 2018. The following table summarizes our research and development expenses for the three months ended June 30, 2019 and 2018:


	Three Months Ended
	June 30,
	2019		2018		Change
	(dollars in thousands)
Preclinical and clinical development expense	$	4,112	$	2,094	$	2,018	96.4	%
Compensation expense, other than stock-based compensation		1,268		930		338	36.3
Stock-based compensation expense		378		67		311	464.2
Other expenses		223		109		114	104.6
Total research and development expense	$	5,981	$	3,200	$	2,781	86.9	%

The increase in total research and development expense is attributable to:

a $2.0 million increase in preclinical and clinical development expense mainly related to the development of livoletide;

a $0.6 million increase in compensation and stock-based compensation expenses as a result of our increase in research and development headcount and additional options granted; and

Table of Contents

a $0.1 million increase in other expenses due to facility and other overhead expenses.

General and administrative expense

General and administrative expense increased by $2.4 million to $4.2 million for the three months ended June 30, 2019 from $1.8 million for the three months ended June 30, 2018. The increase was primarily due to a $1.4 million increase in compensation and stock-based compensation expense as a result of our increase in general and administrative headcount and changes to compensation arrangements, a $0.6 million increase in professional fees incurred primarily as a result of operating as a public company, and a $0.4 million increase in insurance, rent and facility related expenses. The increase in insurance is due to operating as a public company and the increase in rent and facility related expenses is due to increased headcount and additional leased office space.

Interest expense (income), net

Interest expense (income), net increased by $0.3 million to $0.3 million net interest income for the three months ended June 30, 2019 from net interest income of $6,000 for the three months ended June 30, 2018. The change was primarily due to higher interest income received as a result of larger cash, cash equivalent and marketable securities balances we had immediately following the Merger.

Other loss

Other loss decreased by $38,000 to $24,000 for the three months ended June 30, 2019 from $62,000 for the three months ended June 30, 2018 due to lower foreign currency losses as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.

Comparison of the six months ended June 30, 2019 and 2018

The following table summarizes our operating results for the periods indicated:


	Six Months Ended
	June 30,
	2019		2018		Change
	(dollars in thousands)
Operating expenses:
Research and development	$	12,185	$	5,969	$	6,216	104.1	%
General and administrative		8,632		3,405		5,227	153.5
Loss from operations		20,817		9,374		11,443	122.1
Other expenses:
Interest expense (income), net		(628)		(15)		(613)	*
Other loss		48		69		(21)	(30.4)
Net loss	$	(20,237)	$	(9,428)	$	(10,809)	114.6	%

*Not Meaningful

Research and development expense

Research and development expense increased by $6.2 million to $12.2 million for the six months ended June 30, 2019 from $6.0 million for the six months ended June 30, 2018. The following table summarizes our research and development expenses for the six months ended June 30, 2019 and 2018:


	Six Months Ended
	June 30,
	2019		2018		Change
	(dollars in thousands)
Preclinical and clinical development expense	$	8,205	$	3,800	$	4,405	115.9	%
Compensation expense, other than stock-based compensation		2,724		1,788		936	52.3
Stock-based compensation expense		801		138		663	480.4

Table of Contents

Other expenses

455

243

212

87.2

Total research and development expense

12,185

5,969

6,216

104.1

The increase in total research and development expense is attributable to:

a $4.4 million increase in preclinical and clinical development expense mainly related to the development of livoletide;

a $1.6 million increase in compensation and stock-based compensation expenses as a result of our increase in research and development headcount and additional options granted; and

a $0.2 million increase in other expense due to an increase in facility and other overhead expenses.

General and administrative expense

General and administrative expense increased by $5.2 million to $8.6 million for the six months ended June 30, 2019 from $3.4 million for the six months ended June 30, 2018. The increase was primarily due to a $2.2 million increase in compensation and stock-based compensation expense as a result of our increase in general and administrative headcount and changes to compensation arrangements, a $2.0 million increase in professional fees incurred mainly related to being a publicly traded company, and a $1.0 million increase in insurance, rent and facility related expenses due to increased headcount and operating as a public company.

Interest expense (income), net

Interest expense (income), net increased by $0.6 million to $0.6 million net interest income for the six months ended June 30, 2019 from $15,000 net interest income for the six months ended June 30, 2018. The change was primarily due to higher interest income received as a result of larger cash, cash equivalent and marketable securities balances we had immediately following the Merger.

Other loss

Other loss decreased by $21,000 to $48,000 for the six months ended June 30, 2019 from $69,000 for the six months ended June 30, 2018 due to lower foreign currency losses as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.

Liquidity and Capital Resources

The following table sets forth the primary uses of cash and cash equivalents for the six months ended June 30, 2019 and 2018:


	Six Months Ended
	June 30,
	2019		2018
	(in thousands)
Net cash used in operating activities	$	(21,174)	$	(9,698)
Net cash provided by (used in) investing activities		4,108		(531)
Net cash used in financing activities		(38)		(566)
Effect of foreign currency exchange rate changes on cash		(35)		(4)
Net decrease in cash, cash equivalents and restricted cash	$	(17,139)	$	(10,799)

Table of Contents

Uses of funds

Operating activities

During the six months ended June 30, 2019, we used $21.2 million of cash to fund operating activities. During the six months ended June 30, 2019, cash used in operating activities reflected our net loss of $20.2 million and a net increase in operating assets and liabilities of $2.7 million, offset by non-cash charges of $1.7 million, principally related to stock-based compensation.

During the six months ended June 30, 2018, we used $9.7 million of cash to fund operating activities. Cash used in operating activities reflected our net loss of $9.4 million and a net increase in operating assets and liabilities of $0.7 million, offset by non-cash charges of $0.4 million, principally related to stock-based compensation.

Investing activities

During the six months ended June 30, 2019, we received $4.4 million in net proceeds from the sale of marketable securities and paid $0.3 million in purchases of property and equipment. During the six months ended June 30, 2018, we made remaining payments of $0.5 million in connection with the asset acquisition of Alizé.

Financing activities

During the six months ended June 30, 2019, we used cash of $0.1 million in principal loan repayments and $0.2 million in the payment of financing costs, offset by $0.2 million in proceeds from the exercise of options and warrants. During the six months ended June 30, 2018, we used cash of $0.1 million in principal loan repayments and $0.5 million in the payment of financing costs.

Funding requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, continue or initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to program sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we may would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

In April 2019, we entered into an "at-the-market", or ATM, equity distribution agreement with Citigroup Global Markets Inc. acting as sole agent with an aggregate offering value of up to $50.0 million, which allows us to sell our common shares through the facilities of the Nasdaq Capital Market . Subject to the terms of the equity distribution agreement, we are able to determine, at our sole discretion, the timing and number of shares to be sold under this ATM facility. No common shares have been issued to date under our ATM equity distribution agreement.

As of June 30, 2019, we had cash, cash equivalents, marketable securities and restricted cash of $56.6 million, which we believe are sufficient to fund our planned operations into the fourth quarter of 2020. Our existing cash, cash equivalents, marketable securities and restricted cash are currently expected to be sufficient to fund our current operating plans through the topline results of the Phase 2b portion of our livoletide pivotal Phase 2b/3 PWS study.

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

the outcome of our Phase 2b CAH protocol amendment submissions to appropriate regulatory authorities and ethics committees, and the timing of responses to these submissions;

the scope, progress, results and costs of preclinical studies and clinical trials;

Table of Contents

the scope, prioritization and number of our research and development programs;

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

our ability to establish and maintain collaborations on favorable terms, if at all;

the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under collaboration agreements, if any;

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

the extent to which we acquire or in-license other product candidates and technologies;

the costs of securing manufacturing arrangements for commercial production; and

the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market our product candidates.

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

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

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

Contractual Obligations and Commitments

In February 2019, we entered into a five-year lease agreement for office space in Ann Arbor, Michigan commencing April 1, 2019 for our corporate headquarters. Annual rent payments range from $374,000 in the first year and escalate to $421,000 in the fifth year.

In April 2019, we entered into a lease agreement for office space in Lexington, Massachusetts to expand our operations. Monthly rental payments commenced in May 2019 and continue through the lease term, which is scheduled to end in September 2020. We have the right to terminate the lease at any time and upon prior written notice. We will make future rental payments of $74,000 and $96,000 in fiscal 2019 and 2020, respectively.

In May 2019, we funded an escrow arrangement totaling approximately $1.0 million in connection with a sublease agreement for office space located in Waltham, Massachusetts assumed in connection with the Merger. The escrowed amount represents the difference in the annual base rent payable under the sublease agreement and the annual base rent

Table of Contents

payable under the overlease for the remaining term of the sublease agreement. The escrowed amount will be released on a monthly basis over the remaining lease term as the annual base rent payments are made by us.

As of June 30, 2019, there were no other material changes in commitments under contractual obligations, compared to the contractual obligations disclosed in our Annual Report.

Off-Balance Sheet Arrangements

We did not have any off balance sheet arrangements as of June 30, 2019, as defined in Item 303(a)(4)(ii) of Regulation S-K.

Critical Accounting Policies

Other than as described under Note 2 to our unaudited interim consolidated financial statements, the Critical Accounting Policies and Significant Judgments and Estimates included in our Form 10‑K for the year ended December 31, 2018, filed with the SEC on April 1, 2019, have not materially changed.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15, as of June 30, 2019. Based on the evaluation of our disclosure controls and procedures as of June 30, 2019, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

Table of Contents

PART II

Item 1. Legal Proceedings

Table of Contents

merger with Millendo Therapeutics, Inc.: Cunningham v. Kroeger, et al. , No. 1:18‑cv‑01595 (D. Del. filed Oct. 16, 2018); Adlard v. OvaScience, Inc., et al. , No. 1:18‑cv‑12332 (D. Mass. filed Nov. 6, 2018); Wheby v. OvaScience, Inc., et al. , No. 1:18‑cv‑1811 (D. Del. filed Nov. 16, 2018); Cuenca Aubets v. OvaScience, Inc., et al. , No. 1:18‑cv‑10882 (S.D.N.Y. filed Nov. 20, 2018); and Kim v. OvaScience, Inc., et al. , No. 1:18‑cv‑10939 (S.D.N.Y. filed Nov. 21, 2018). The Complaints each alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a‑9 promulgated thereunder, and as against the individual defendants, violations of Section 20(a) of the Securities Exchange Act of 1934. The Cunningham plaintiff alleged that OvaScience’s Form S‑4 Registration Statement filed on September 26, 2018 omitted or misrepresented material information regarding OvaScience’s proposed merger with Millendo Therapeutics, Inc. The Adlard, Wheby, Cuenca Aubets and Kim plaintiffs alleged that OvaScience’s Definitive Proxy Statement on Schedule 14A filed on November 6, 2018, omitted or misrepresented material information regarding OvaScience’s proposed merger with Millendo Therapeutics, Inc. OvaScience subsequently supplemented its disclosures to moot plaintiffs’ claims. The Cunningham plaintiff voluntarily dismissed his complaint on December 10, 2018, the Wheby plaintiff voluntarily dismissed his complaint on February 28, 2019, and the Adlard plaintiff voluntarily dismissed his complaint on July 30, 2019. On March 18, 2019, the court dismissed the Cuenca Aubets and Kim actions for failure to serve. In May 2019, the Company entered into a settlement agreement pursuant to which the Company made payments to counsel for plaintiffs in full satisfaction of any claims for fees or costs by any of the plaintiffs or plaintiffs’ counsel in connection with these actions.

Item 1A. Risk Factors

You should carefully consider the risks described below, as well as general economic and business risks and the other information in this Quarterly Report on Form 10‑Q and in our Annual Report on Form 10-K for the year ended December 31, 2018. The occurrence of any of the events or circumstances described below or other adverse events could have a material adverse effect on our business, results of operations and financial condition and could cause the trading price of our common stock to decline. Additional risks or uncertainties not presently known to us or that we currently deem immaterial may also harm our business.

Risks Related to the Reverse Merger

The risks arising with respect to the historic OvaScience business and operations may be different from what we anticipate, which could lead to significant, unexpected costs and liabilities and could materially and adversely affect our business going forward.

It is possible that we may not have fully anticipated the extent of the risks associated with the recent Reverse Merger we completed with OvaScience. After the Reverse Merger, OvaScience’s historic business was discontinued, but prior to the transaction OvaScience had a significant operating history. As a consequence, we may be subject to claims, demands for payment, regulatory issues, costs and liabilities that were not and are not currently expected or anticipated. Notwithstanding our exercise of due diligence pre-transaction and winding down of the OvaScience business post-transaction, the risks involved with taking over a business with a significant operating history and the costs and liabilities associated with these risks may be greater than we anticipate. We may not be able to contain or control the costs or liabilities associated with OvaScience’s historic business, which could materially and adversely affect our business, liquidity, capital resources or results of operation.

Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant operating losses since inception and anticipate that we will continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability.

Table of Contents

months ended June 30, 2019, respectively. As of June 30, 2019, we had an accumulated deficit of $184.3 million. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We have devoted substantially all of our efforts to the acquisition of and preclinical and clinical development of two of our product candidates, livoletide and nevanimibe, as well as to building our management team and infrastructure. It could be several years, if ever, before we have a commercialized product and our commercialized products, if any, may not be profitable. The net losses we incur may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase significantly in connection with our ongoing activities such as:

continuing the ongoing and planned clinical development of livoletide and nevanimibe;

continuing the preclinical development and potential clinical development of MLE-301;

initiating preclinical studies and clinical trials for any additional diseases for our current product candidates and any future product candidates that we may pursue;

building a portfolio of product candidates through the acquisition or in-license of drugs or product candidates and technologies;

developing, maintaining, expanding and protecting our intellectual property portfolio;

manufacturing, or having manufactured, clinical and commercial supplies of our product candidates;

seeking marketing approvals for our current and future product candidates that successfully complete clinical trials;

establishing a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval;

hiring additional administrative, clinical, regulatory and scientific personnel; and

incurring additional costs associated with operating as a public company.

In order to become and remain profitable, we will need to develop and eventually commercialize, on our own or with collaborators, one or more product candidates with significant market potential. This will require us to be successful in a range of challenging activities, including completing clinical trials of livoletide, nevanimibe, and MLE-301, developing commercial scale manufacturing processes, obtaining marketing approval, manufacturing, marketing and selling any current and future product candidates for which we may obtain marketing approval, and satisfying any post-marketing requirements. We may never succeed in any or all of these activities and, even if we do, we may never generate revenue from product sales or achieve profitability.

Because of the numerous risks and uncertainties associated with pharmaceutical products and development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. For example, enrollment for our Phase 2b CAH clinical trial remains paused in certain countries while appropriate regulatory authorities and ethics committees review our submissions for a protocol amendment. We are unable to predict the outcome of these submissions or the timing of responses to these submissions. If we are required by the U.S. Food and Drug Administration, or FDA, or other regulatory authorities such as the European Medicines Agency, or EMA, to amend existing studies or trials, to perform studies and trials in addition to those currently expected, or if there are any delays in the development or in the completion of any planned or future preclinical studies or clinical trials of our current or future product candidates, our expenses could increase and profitability could be further delayed.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease our value and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in our value also could cause you to lose all or part of your investment.

Table of Contents

We have a limited operating history and have never generated any revenue from product sales, which may make it difficult to assess our future viability.

We are a clinical stage biopharmaceutical company with a limited operating history. Our operations to date, with respect to the development of our product candidates, have been limited to organizing and staffing the business, business planning, raising capital, acquiring our product candidates and other assets and conducting preclinical and clinical development of our product candidates. We have not yet demonstrated an ability to successfully complete clinical development of a product candidate, obtain marketing approval, manufacture a commercial-scale drug (or arrange for a third-party to do so on our behalf), or conduct sales and marketing activities necessary for successful commercialization. Consequently, our predictions about our future success or viability may not be as accurate as they could be if we had more experience developing product candidates.

Our ability to generate revenue from product sales and achieve profitability depends on our ability, alone or with any future collaborations, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, livoletide, nevanimibe and any additional product candidates that we may pursue in the future. We do not anticipate generating revenue from product sales for the next several years, if ever. Our ability to generate revenue from product sales depends heavily on our or any future collaborators’ success in:

timely and successful completion of development activities of our current product candidates;

obtaining and maintaining regulatory and marketing approvals for livoletide, nevanimibe and any future product candidates for which we successfully complete clinical trials;

launching and commercializing any product candidates for which we obtain regulatory and marketing approval by establishing a sales force, marketing and distribution infrastructure or, alternatively, collaborating with a commercialization partner;

qualifying for coverage and adequate reimbursement by government and third-party payors for our current or any future product candidates, if approved, both in the United States and internationally, and reaching acceptable agreements with such government and third-party payors on pricing terms;

developing, validating and maintaining a commercially viable, sustainable, scalable, reproducible and transferable manufacturing process for livoletide, nevanimibe or any future product candidates that are compliant with current good manufacturing practices, or cGMP;

establishing and maintaining supply and manufacturing relationships with third parties that can provide an adequate amount and quality of drugs and services to support our planned clinical development, as well as the market demand for livoletide, nevanimibe and any future product candidates, if approved;

obtaining market acceptance, if and when approved, of livoletide, nevanimibe or any future product candidates as a viable treatment option by physicians, patients, third-party payors and others in the medical community;

effectively addressing any competing technological and market developments;

implementing additional internal systems and infrastructure, as needed;

negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter, and performing our obligations pursuant to such arrangements;

maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how;

avoiding and defending against third-party interference or infringement claims; and

Table of Contents

attracting, hiring and retaining qualified personnel.

We will require additional capital to finance our operations, which may not be available on acceptable terms, if at all. Failure to obtain capital when needed may force us to delay, limit or terminate certain of our development programs, future commercialization efforts or other operations.

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue to develop, and if approved, commercialize, livoletide, nevanimibe, and MLE-301. Additionally, if we obtain marketing approval for our product candidates, we expect to incur significant expenses related to manufacturing, marketing, sales and distribution. Furthermore, we expect to incur additional costs associated with operating as a public company.

As of June 30, 2019, our cash, cash equivalents, marketable securities and restricted cash were $56.6 million. Our existing cash, cash equivalents, marketable securities and restricted cash are currently expected to be sufficient to fund our current operating plans into the fourth quarter of 2020, which we expect will be sufficient to fund our operating plans through the topline results of the Phase 2b portion of our livoletide pivotal Phase 2b/3 PWS study. However, our operating plans may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, third-party funding, and marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or a combination of these approaches. In any event, we will require additional capital to pursue preclinical and clinical activities, regulatory approval and the commercialization of our current and future product candidates. Even if we believe we have sufficient capital for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations. If we elect to do so, additional capital may not be available to us on acceptable terms, if at all. Our ability to access additional capital, and as a result our operating results and liquidity needs, could be negatively affected by market fluctuations and economic downturn. Any additional capital raising efforts may divert our management from its day-to-day activities, which may adversely affect our ability to develop and commercialize our current and future product candidates.

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

Until such time as we can generate substantial revenue from product sales, if ever, we expect to finance our cash needs through a combination of equity and debt financings, strategic alliances and license and development agreements in connection with any future collaborations. To the extent that we raise additional capital by issuing equity securities, our existing stockholders’ ownership may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Equity and debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as redeeming our shares, making investments, incurring additional debt, making capital expenditures or declaring dividends.

The incurrence of indebtedness could result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants therein, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely affect our ability to conduct our business.

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

Table of Contents

We may be required to make payments under licenses applicable to livoletide, nevanimibe and MLE-301.

We have certain milestone and royalty payments related to livoletide, nevanimibe and MLE-301. We acquired worldwide, exclusive rights to nevanimibe pursuant to our license agreement with the Regents of the University of Michigan, or the University of Michigan, entered into in June 2013, or the UM License Agreement. Under the terms of the UM License Agreement, we are obligated to make significant milestone and royalty payments in connection with the attainment of certain development steps and the sale of resulting products with respect to nevanimibe, as well as other material obligations. In addition, pursuant to an assignment agreement for certain patents and patent applications relating to livoletide, we are also required to pay royalties on commercial sales and licensing of livoletide to the assignors. We acquired worldwide, exclusive rights to MLE-301 pursuant to the Roche License Agreement. Under the terms of the Roche License Agreement, we are obligated to make significant milestone and royalty payments in connection with the attainment of certain development steps and the sale of resulting products with respect to MLE-301, as well as other material obligations. In addition, we are required to share a portion of any net proceeds received in connection with certain agreements that we may enter into with third parties to develop and commercialize MLE-301. If milestone or other non-royalty obligations become due, we may not have sufficient funds available to meet our obligations, which will materially adversely affect our business operations and financial condition. If milestone or other non-royalty obligations become due, we may not have sufficient funds available to meet our obligations, which will materially adversely affect our business operations and financial condition.

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

Because we have limited financial and managerial resources, we focus on research programs and product candidates for specific indications. As a result, we may forego or delay pursuit of opportunities with respect to our own product candidates for additional indications and other product candidates or diseases that later prove to have greater commercial potential. Our resource allocation decisions may ultimately not result in successful clinical development programs and may cause us to fail to capitalize on other viable product candidates, commercial products or profitable market opportunities. In addition, our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. For example, and as previously disclosed in our periodic reports in 2019, in our Phase 2 clinical trial for CS we have experienced slower than anticipated enrollment, which could make impractical further development of nevanimibe for the treatment of CS. As a result of the difficulty in enrolling this trial, we elected to discontinue this Phase 2 clinical trial in August 2019 and will suspend development of nevanimibe for the treatment of CS.

If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through sale, collaboration, licensing or other royalty arrangements in cases in which it would have been advantageous for us to retain sole development and commercialization rights.

Risks Related to Development and Commercialization

Our future success is dependent on the successful clinical development, regulatory approval and subsequent commercialization of livoletide, nevanimibe and any future product candidates. If we are not able to obtain the required regulatory approvals, we will not be able to commercialize our current or future product candidates and our ability to generate revenue will be adversely affected.

We do not have any drugs that have received regulatory approval and may never be able to develop marketable product candidates. We expect that a substantial portion of our efforts and expenses for the foreseeable future will be devoted to the clinical development of livoletide and nevanimibe, and as a result, our business currently depends heavily on the successful development, regulatory approval and commercialization of these product candidates. We cannot be certain that livoletide or nevanimibe will receive regulatory approval or be successfully commercialized even if we receive regulatory approval. The research, testing, manufacturing, safety, efficacy, labeling, approval, sale, marketing and distribution of our product candidates are, and will remain, subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and similar foreign regulatory authorities. Failure to obtain regulatory approval for livoletide or nevanimibe in the United States or other jurisdictions will prevent us from commercializing and marketing livoletide or nevanimibe.

Table of Contents

The Phase 2b portion of our recently initiated Phase 2b/3 PWS trial may or may not be sufficient to support FDA approval depending on the data. Additionally, the FDA may require additional data (for example, in children) in order to support an NDA approval in PWS in the United States.

Even if we were to successfully obtain approval from the FDA and comparable foreign regulatory authorities for our product candidates, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements. If we are unable to obtain regulatory approval for our product candidates, or any approval contains significant limitations, on our own or with any future collaborators, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of any other product candidate that we may in-license, develop or acquire in the future.

Furthermore, even if we obtain regulatory approval for livoletide or nevanimibe, we will still need to develop a commercial infrastructure, or otherwise develop relationships with collaborators to commercialize, establish a commercially viable pricing structure and obtain approval for adequate reimbursement from third-party and government payors. If we, or our collaborators, are unable to successfully commercialize livoletide or nevanimibe, we may not be able to generate sufficient revenue to continue our business.

Preclinical studies or earlier clinical trials are not necessarily predictive of future results and the results of our clinical trials may not support our livoletide or nevanimibe claims.

Our product candidates, livoletide and nevanimibe, are still in development and will require extensive clinical testing before we are prepared to submit an NDA or other similar application for regulatory approval. Enrollment for our Phase 2b CAH clinical trial remains paused in certain countries while appropriate regulatory authorities and ethics committees review our submissions for a protocol amendment. We are unable to predict the outcome of these submissions or the timing of responses to these submissions. We cannot predict with any certainty if or when we might submit an NDA for regulatory approval for livoletide or nevanimibe for the treatment of any indication or whether any such application will be approved by the relevant regulatory authority. Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. For instance, the FDA or foreign regulatory authorities may not agree with our proposed endpoints for any clinical trials of livoletide or nevanimibe, even if validated in prior clinical trials of similar product candidates, which may delay the commencement of our future clinical trials. The FDA or foreign regulatory authorities may also not agree with our proposed trial designs or dosing regimens, which may likewise prevent or delay the commencement of our future clinical trials. The clinical trial process is also time-consuming. We estimate that clinical trials of livoletide and nevanimibe for each of the indications that we are pursuing will take the next several years to complete. Failure can occur at any stage of the trials, and we could encounter problems that cause us to abandon or repeat clinical trials. Further, we may encounter challenges in the clinical development of product candidates for reasons unrelated to the observed safety or efficacy of such product candidates in prior clinical trials. In addition, because we may at times pursue the treatment of multiple indications for a single product candidate, setbacks or failures in, or termination of, clinical development for one indication may have a negative impact on the clinical development for the treatment of other indications. For example, and as previously disclosed in our periodic reports in 2019, in our Phase 2 clinical trial for CS we have experienced slower than anticipated enrollment, which could make impractical further development of nevanimibe for the treatment of CS. As a result of the difficulty in enrolling this trial, we elected to discontinue this Phase 2 clinical trial in August 2019 and will suspend development of nevanimibe for the treatment of CS.

Success in preclinical testing and early clinical trials does not ensure that later and pivotal clinical trials will generate the same results, or otherwise provide adequate data to demonstrate the safety and efficacy of a product candidate. Frequently, product candidates that have shown promising results in early clinical trials have subsequently suffered significant setbacks in later or pivotal clinical trials. For example, we expended substantial time and resources on a previous product candidate, MLE4901, an NK3R antagonist, which we ceased developing in 2017 due to concerns relating to elevated liver enzymes observed in clinical trials. Our approach to targeting orphan endocrine diseases where current therapies do not exist or are insufficient, is novel and unproven, and as such, the cost and time needed to develop livoletide and nevanimibe is difficult to predict and our efforts may not be successful. If we do not observe favorable results in future or planned clinical trials of livoletide and nevanimibe, we may decide to delay or abandon development of livoletide and nevanimibe, which could harm our business, financial condition and results of operations. A number of

Table of Contents

companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials.

We may encounter substantial delays in our clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.

Before obtaining marketing approval from regulatory authorities for the sale of livoletide, nevanimibe and any future product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidate for its intended indications. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. For example, enrollment for our Phase 2b CAH clinical trial remains paused in certain countries while appropriate regulatory authorities and ethics committees review our submissions for a protocol amendment. We are unable to predict the outcome of these submissions or the timing of responses to these submissions. A failure of one or more clinical trials can occur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:

failure to obtain regulatory approval to commence a trial;

unforeseen safety issues;

determination of dosing issues;

lack of effectiveness during clinical trials;

inability to reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites;

slower than expected rates of patient recruitment, failure to recruit adequate numbers of suitable patients to participate in our clinical trials or failure to maintain participation of recruited patients in clinical trials;

failure to manufacture sufficient quantities of a product candidate for use in clinical trials;

inability to monitor patients adequately during or after treatment; and

inability or unwillingness of medical investigators to follow our clinical protocols.

Further, we, the FDA, an institutional review board (“IRB”), or other regulatory authority may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including, for example, the FDA’s good clinical practice (“GCP”), regulations, that we are exposing participants to unacceptable health risks, or if the FDA or other regulatory authority, as the case may be, finds deficiencies in our investigational new drug (“IND”), application or other submissions, or the manner in which the clinical trials are conducted. Therefore, we cannot predict with any certainty the schedule for commencement and completion of future clinical trials. If we experience delays in the commencement or completion of our clinical trials, or if we terminate a clinical trial prior to completion, the commercial prospects of our current and future product candidates could be harmed, and our ability to generate revenue from our current or future product candidates, once approved, may be delayed or eliminated. In addition, any delays in our clinical trials could increase our costs, slow down the approval process and jeopardize our ability to commence product sales and generate revenue. Any of these occurrences may harm our business, financial condition and results of operations. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

Moreover, principal investigators for our clinical trials may serve as our scientific advisors or consultants from time to time and receive compensation in connection with such services. We will be required to report these relationships to the FDA or other regulatory authorities as part of the drug approval process. The FDA or other regulatory authorities may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or

Table of Contents

otherwise affected interpretation of the trial results. They may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA or other regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.

We have never obtained marketing approval for a product candidate and we may be unable to obtain, or may be delayed in obtaining, marketing approval for our current product candidates or any future product candidates that we may develop.

We have never obtained marketing approval for a product candidate. It is possible that the FDA may refuse to accept for substantive review any NDAs that we submit for our product candidates or may conclude after review of our data that our application is insufficient to obtain marketing approval of our product candidates. If the FDA does not accept or approve our NDAs for any of our product candidates, it may require that we conduct additional clinical trials, preclinical studies or manufacturing validation studies and submit that data before it will reconsider our applications. Depending on the extent of these or any other FDA-required trials or studies, approval of any NDA or application that we submit may be delayed by several years, or may require us to expend more resources than it has available. It is also possible that additional trials or studies, if performed and completed, may not be considered sufficient by the FDA to approve our NDAs.

Any delay in obtaining, or an inability to obtain, marketing approvals would prevent us from commercializing our product candidates, generating revenues and achieving and sustaining profitability. If any of these outcomes occurs, we may be forced to abandon our development efforts for our product candidates, which could significantly harm our business, prospects, operating results and financial condition.

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

Identifying and qualifying patients to participate in our clinical trials is critical to our success. We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials, and even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials. Patient enrollment and retention in clinical trials, including our recently initiated Phase 2b/3 clinical trial of livoletide in PWS patients, depends on many factors, including: the size of the patient population, the nature of the trial protocol, our ability to recruit clinical trial investigators with the appropriate competencies and experience, the existing body of safety and efficacy data with respect to the study drug, the number and nature of competing treatments and ongoing clinical trials of competing drugs for the same disease, the proximity of patients to clinical sites and the eligibility criteria for the trials, our ability to obtain and maintain patient consents and the risk that patients enrolled in clinical trials will drop out of the trials before completion.

The competitive nature of clinical trials in the pharmaceutical and biotechnology industries may make it difficult for us to recruit a sufficient number of patients to complete any of our clinical trials, or may increase costs. We may not be able to initiate or continue to support clinical trials of our product candidates for one or more indications, or any future product candidates, if we are unable to locate and enroll a sufficient number of eligible participants in these trials as required by the FDA or other regulatory authorities. For example, and as previously disclosed in our periodic reports in 2019, in our Phase 2 clinical trial for CS we have experienced slower than anticipated enrollment, which could make impractical further development of nevanimibe for the treatment of CS. As a result of the difficulty in enrolling this trial, we elected to discontinue this Phase 2 clinical trial in August 2019 and will suspend development of nevanimibe for the treatment of CS. Even if we are able to enroll a sufficient number of patients in our clinical trials, if the pace of enrollment is slower than we expect, the development costs for our product candidates may increase and the completion of our trials may be delayed or our trials could become too expensive or impractical to complete.

Our ability to enroll and retain patients in clinical trials of livoletide may be adversely impacted by the fact that livoletide is administered by subcutaneous injection. Furthermore, any negative results we may report in clinical trials of our product candidates may make it difficult or impossible to recruit and retain patients in other clinical trials of those product candidates. Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop livoletide and nevanimibe, or could render

Table of Contents

further development impossible. In addition, we may rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will be limited in our ability to compel their actual performance.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following any potential marketing approval.

During the conduct of clinical trials, clinical investigators monitor changes in patients’ health, including illnesses, injuries and discomforts. Often, it is not possible to determine whether or not the product candidate being investigated caused these conditions, and regulatory authorities may draw different conclusions or require additional testing to confirm these determinations if they occur. In addition, it is possible that as we test livoletide, nevanimibe or any other product candidate in larger, longer and more extensive clinical programs, or as use of these product candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be observed or reported by subjects. If clinical testing indicates that livoletide, nevanimibe or any future product candidate has side effects or causes serious or life-threatening side effects, we may need to change the design of ongoing clinical trials or adjust dosing levels in ongoing or future clinical trials, and the development of the product candidate may be delayed or terminated entirely. For example, in recent years clinical trials by other companies evaluating product candidates for treatment of PWS, which employed a different mechanism of action than livoletide, have resulted in serious adverse events, including patient deaths, and the eventual termination of the clinical trial and/or clinical development program. Further, if the product candidate has received regulatory approval, such approval may be revoked, which would materially harm our business, prospects, operating results and financial condition.

Moreover, if we elect or are required to modify, delay, suspend or terminate any clinical trial for our product candidates, the commercial prospects of our product candidates may be harmed and our ability to generate revenue through their sale may be delayed or eliminated. Any of these occurrences may harm our business, financial condition and prospects significantly.

We face substantial competition, and our operating results will suffer if we fail to compete effectively.

The commercialization of new drugs is competitive, and we may face worldwide competition from major pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies and ultimately generic companies. Our competitors may develop or market therapies that are more effective, safer or less costly than any that we are commercializing, or may obtain regulatory or reimbursement approval for their therapies more rapidly than we may obtain approval for ours.

We are aware of a number of companies that are working to develop drugs that would compete, directly or indirectly, against livoletide for the treatment of PWS, nevanimibe for the treatment of classic congenital adrenal hyperplasia or CAH and MLE-301 for the treatment of vasomotor symptoms or VMS.

Soleno Therapeutics, Inc. is currently developing diazoxide choline controlled release, an ATP-sensitive potassium channel agonist, and Levo Therapeutics, Inc. is pursuing development of carbetocin, a long-acting analogue of oxytocin, for the treatment of PWS. Each of Saniona AB, GLWL Research Inc. and Insys Therapeutics, Inc. have also announced or initiated smaller trials in PWS for the treatment of hyperphagia. There are also a number of compounds in preclinical development.

We are aware of three other companies developing treatments for patients with CAH: Diurnal Group PLC is developing an exogenous cortisol treatment with a modified release intended to more closely match the physiological release profile of cortisol but recently announced a failed Phase 3 study and placed their U.S. development activities on hold. They intend to submit a Market Authorization Application to the EMA in the fourth quarter of 2019. Both Spruce Biosciences, Inc and Neurocrine Biosciences, Inc. are developing CRF1 antagonists and have completed Phase 2 studies in adults. Neurocrine has announced the initiation of a Phase 2 study in a pediatric population.

Table of Contents

We are aware of three competing NK3R antagonists currently in clinical development for VMS. Astellas is developing fezolinetant and is preparing for a Phase 3 trial, KaNDy Therapeutics is currently conducting a Phase 2b trial for NT-814 a dual NK1/3 receptor antagonist and Sojournix is currently studying SJX-653 in a Phase 1 trial. Also, Acer Therapeutics is licensing of osenetant, an NK3R antagonist, which has previously been in clinical studies.

Many of our existing or potential competitors may have substantially greater financial, technical and human resources than we do, and significantly greater experience in the discovery and development of product candidates, including in the recruitment of patients for clinical trials, as well as in obtaining regulatory approvals of those product candidates in the United States and in foreign countries. Our current and potential future competitors may also have significantly more experience commercializing drugs that have been approved for marketing. If we are not able to compete effectively against existing and potential competitors, our business and financial condition may be harmed.

Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a small number of our competitors. Competition may reduce the number and types of patients available to us to participate in clinical trials, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.

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

Any inability to successfully complete clinical development of a product candidate could result in additional costs or impair or eliminate our ability to generate revenue from future sales of such product candidate, if approved, or from any regulatory and commercialization milestone with respect to such product candidate. In addition, if we make manufacturing or formulation changes to livoletide or nevanimibe, we may need to conduct additional testing to bridge our modified product candidates to earlier versions. Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize livoletide or nevanimibe, or allow our competitors to bring comparable drugs to market before we do, which could impair our ability to successfully commercialize livoletide or nevanimibe, and may harm our business, financial condition and results of operations.

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

The availability of our competitors’ products could limit the demand and the price we are able to charge for any product candidate we develop. The inability to compete with existing or subsequently introduced drugs would harm our business, prospects, financial condition and results of operations.

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and even if we obtain approval for a product candidate in one country or jurisdiction, we may never obtain approval for, or commercialize, that product candidate in any other jurisdiction, which would limit our ability to realize our full market potential.

Prior to obtaining approval to commercialize a product candidate in any jurisdiction, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or foreign regulatory agencies, that such product candidates are safe and effective for their intended uses. Results from preclinical studies and clinical trials can be interpreted in different ways. Even if our product candidates meet their safety and efficacy endpoints in clinical trials, the FDA or foreign regulatory agencies may believe the clinical trials do not show the appropriate balance of safety and efficacy in the indication being sought or may interpret the data differently than we do, and deem the results insufficient to demonstrate the appropriate balance of safety and efficacy at the level required

Table of Contents

for product approval. Further, the regulatory authorities may not complete their review processes in a timely manner, or we may otherwise not be able to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory authority policy during the period of product development, clinical trials and the review process.

Further, in order to market any products in any particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a country-by-country basis regarding safety and efficacy. Approval by the FDA in the United States does not ensure approval by regulatory authorities in any other country or jurisdiction. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country. Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approval could result in difficulties and costs for us and require additional preclinical studies or clinical trials, which could be costly and time consuming. We do not have any product candidates approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized.

The FDA or any foreign regulatory bodies can delay, limit or deny approval of our product candidates or require us to conduct additional preclinical or clinical testing or abandon a program for many reasons, including:

the FDA or the applicable foreign regulatory agency’s disagreement with the design or implementation of our clinical trials;

negative or ambiguous results from our clinical trials or results that may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval;

serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates;

our inability to demonstrate to the satisfaction of the FDA or the applicable foreign regulatory body that our product candidates are safe and effective for the proposed indication;

the FDA’s or the applicable foreign regulatory agency’s disagreement with the interpretation of data from preclinical studies or clinical trials;

our inability to demonstrate the clinical and other benefits of our product candidates outweigh any safety or other perceived risks;

the FDA’s or the applicable foreign regulatory agency’s requirement for additional preclinical studies or clinical trials;

the FDA’s or the applicable foreign regulatory agency’s disagreement regarding the formulation, labeling or the specifications of our product candidates;

the FDA’s or the applicable foreign regulatory agency’s failure to approve the manufacturing processes or facilities of third-party manufacturers with which we contract, including failure of such manufacturers to pass the required pre-approval inspections; or

the potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.

Table of Contents

Even if we eventually complete clinical testing and receive approval of an NDA or foreign marketing application for our product candidates, the FDA or the applicable foreign regulatory agency may grant approval contingent on the performance of costly additional clinical trials, including Phase 4 clinical trials, or the implementation of a Risk Evaluation and Mitigation Strategy, or REMS, which may be required to ensure safe use of the drug after approval. The FDA or the applicable foreign regulatory agency also may approve a product candidate for a more limited indication or patient population than we originally requested, and the FDA or applicable foreign regulatory agency may not approve the labeling that we believe is necessary or desirable for the successful commercialization of a product candidate. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would negatively impact our business and results of operations.

If we are not able to obtain orphan drug designations or exclusivity for any of our current or future product candidates for which we seek such designation, the potential profitability of any such product candidates could be limited.

Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan drug if the treatment is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States. Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for a disease for which it receives the designation, then the product is entitled to a period of marketing exclusivity that precludes the applicable regulatory authority from approving another marketing application for the same product for the same disease for the exclusivity period except in limited situations. For purposes of small molecule drugs, the FDA defines “same drug” as a drug that contains the same active moiety and is intended for the same use as the drug in question.

We have received orphan drug designation for livoletide from the FDA and EMA for the treatment of PWS. Nevanimibe has received orphan drug designation from the FDA and the EMA for the treatment of CAH. We may also seek orphan drug designation, where applicable, for our current product candidates in additional indications or for our future product candidates. However, obtaining an orphan drug designation can be difficult and we may not be successful in doing so for any of our current or future product candidates, in any applicable indication. Even if we were to obtain orphan drug designation for a product candidate, we may not obtain orphan exclusivity and that exclusivity may not effectively protect the product candidate from the competition of different products or drugs for the same condition, which could be approved during the exclusivity period. Additionally, after an orphan drug is approved, the FDA could subsequently approve another application for the same product for the same disease if the FDA concludes that the later product is shown to be safer, more effective or makes a major contribution to patient care. Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later determines that the request for designation was materially defective, the prevalence of the orphan disease is found to increase such that the qualifying criterion is no longer met or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of patients with the rare disease or condition. The failure to obtain an orphan drug designation for any product candidates we may develop and seek it for, the inability to maintain that designation for the duration of the applicable period, or the inability to obtain or maintain orphan drug exclusivity could reduce our ability to make sufficient sales of the applicable product candidates to balance our expenses incurred to develop it, which would have a negative impact on our operational results and financial condition.

If we are not able to obtain required regulatory approvals, we will not be able to commercialize livoletide or nevanimibe, and our ability to generate revenue will be harmed.

Livoletide and nevanimibe and the activities associated with their development and commercialization, including their design, research, testing, manufacture, safety, efficacy, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by similar regulatory authorities outside the United States. Failure to obtain marketing approval for livoletide and nevanimibe or failure to meet post-marketing requirements will prevent us from commercializing them.

We have not yet received approval from regulatory authorities to market any product candidate in any jurisdiction, and it is possible that none of livoletide, nevanimibe or any future product candidates will ever obtain the appropriate

Table of Contents

regulatory approvals necessary for us to commence product sales. Neither we nor any future collaborator is permitted to market any of our product candidates in the United States until we receive regulatory approval of an NDA from the FDA.

The time required to obtain approval of an NDA by the FDA is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. Prior to submitting an NDA to the FDA or an equivalent application to other foreign regulatory authorities for approval of livoletide for the treatment of PWS and for approval of nevanimibe for the treatment of CAH, we will need to complete its currently planned registration clinical trials for each, and additional trials that the FDA may require us to complete.

Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with livoletide or nevanimibe, we may:

be delayed in obtaining marketing approval for livoletide or nevanimibe, if at all;

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

obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

be subject to additional post-marketing testing requirements;

be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;

have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of REMS;

be subject to the addition of labeling statements, such as warnings or contraindications;

be sued; or

experience damage to our reputation.

Furthermore, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

We may rely on third-party CROs and consultants to assist us in filing and supporting the applications necessary to gain marketing approvals. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each disease to establish the safety and efficacy of livoletide, nevanimibe and any future product candidate for that disease. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities.

Even if we obtain regulatory approval for livoletide, nevanimibe or future product candidates, we will remain subject to ongoing regulatory oversight.

Even if we obtain any regulatory approval for livoletide, nevanimibe or future product candidates, the approved product will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information. For example, we must comply with the FDA’s advertising and promotion requirements, such as those related to direct-to-consumer advertising and the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling. In addition, any regulatory approvals that we receive for livoletide, nevanimibe or future product candidates may also be subject to REMS limitations on the approved indicated uses for which the drug may be marketed

Table of Contents

or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the quality, safety and efficacy of the drug.

In addition, drug manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the NDA or foreign marketing application. If we, or a regulatory authority, discover previously unknown problems with a drug, such as adverse events of unanticipated severity or frequency, or problems with the facility where the drug is manufactured or disagrees with the promotion, marketing or labeling of that drug, a regulatory authority may impose restrictions relative to that drug, the manufacturing facility or us, including requiring recall or withdrawal of the drug from the market or suspension of manufacturing.

If we fail to comply with applicable regulatory requirements following approval of livoletide, nevanimibe or future product candidates, a regulatory authority may, among other things:

issue a warning letter asserting that we are in violation of the law;

seek an injunction or impose administrative, civil or criminal penalties or monetary fines;

suspend or withdraw regulatory approval;

suspend any ongoing clinical trials;

refuse to approve a pending NDA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners;

restrict the marketing or manufacturing of the drug;

seize or detain the drug or otherwise require the withdrawal of the drug from the market;

refuse to permit the import or export of product candidates; or

refuse to allow us to enter into supply contracts, including government contracts.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize livoletide and nevanimibe, and harm our business, financial condition and results of operations.

In addition, the FDA’s policies, and those of equivalent foreign regulatory agencies, may change and additional government regulations may be enacted that could suspend or restrict regulatory approval of livoletide and nevanimibe. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would harm our business, financial condition and results of operations.

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

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

Table of Contents

the efficacy and potential advantages compared to alternative treatments;

the success of our efforts to educate physicians, patients, third-party payors and others in the medical community on the benefits of our products;

effectiveness of sales and marketing efforts;

the cost of treatment in relation to alternative treatments, including any similar generic treatments;

our ability to offer our drugs, once approved, for sale at competitive prices;

the convenience and ease of administration compared to alternative treatments;

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

the strength of marketing and distribution support;

the availability of third-party coverage and adequate reimbursement, and patients’ willingness to pay out-of-pocket in the absence third-party coverage or adequate reimbursement;

the prevalence and severity of any side effects; and

any restrictions on the use of our drugs, once approved, together with other medications

If the market opportunities for our product candidates are smaller than we believe they are, our product revenues may be adversely affected and our business may suffer.

Our efforts to educate physicians, patients, third-party payors and others in the medical community on the benefits of our products, if and when approved, may require significant resources and may never be successful. Further, patient populations suffering from PWS and CAH, and other indications we may target in the future, are small and have not been established with precision. If the actual number of patients is smaller than we estimate for any disease that we are targeting, or if we cannot raise awareness of these diseases and diagnosis is not improved, our revenue and ability to achieve profitability may be adversely affected. For example, since the patient populations for PWS and CAH are small, the per-patient drug pricing must be high in order to recover our development and manufacturing costs, fund adequate patient support programs and achieve profitability. For PWS and CAH, then, we may not maintain or obtain sufficient sales volume at a price high enough to justify our product development efforts and our sales and marketing and manufacturing expenses. Because we expect sales of livoletide and nevanimibe, if approved, to generate substantially all of our product revenue for the foreseeable future, the failure of either of these product candidates to find market acceptance would harm our business.

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

We do not have any infrastructure for the sales, marketing or distribution of our products, and the cost of establishing and maintaining such an organization may exceed the cost-effectiveness of doing so. In order to market any product that may be approved, we must build our sales, distribution, marketing, managerial and other non-technical capabilities, or make arrangements with third parties to perform these services. There can be no assurance we will be able to do so in a cost-effective manner, on terms favorable to us, or at all.

While we may seek the aid of global or regional collaborators to provide additional resources for larger indications or to co-commercialize our product candidates in the European Union and certain other territories, we expect to build a focused sales, distribution and marketing infrastructure to market our product candidates in the United States itself, if approved. There are significant expenses and risks involved with establishing our own sales, marketing and distribution

Table of Contents

capabilities, including our ability to hire, retain and appropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distribution capabilities could delay any product launch, which would adversely impact its commercialization.

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

our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

the inability of sales personnel to obtain access to educate adequate numbers of physicians as to the benefits or our drug products;

the inability of reimbursement professionals to negotiate arrangements, for formulary access, reimbursement, and other acceptance by payors;

restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population;

the lack of complementary medicines to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

unforeseen costs and expenses associated with creating an independent sales and marketing organization.

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

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

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

Even if we obtain and maintain approval for our current and future product candidates from the FDA, we may nevertheless be unable to obtain approval for our product candidates outside of the United States, which would limit our market opportunities and could harm our business.

Approval of a product candidate in the United States by the FDA does not ensure approval of such product candidate by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not

Table of Contents

ensure approval by regulatory authorities in other foreign countries or by the FDA. If approved, sales of livoletide, nevanimibe and any future product candidate outside of the United States will be subject to foreign regulatory requirements governing clinical trials and marketing approval. Even if the FDA grants marketing approval for a product candidate, comparable regulatory authorities of foreign countries also must approve the manufacturing and marketing of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and more onerous than, those in the United States, including additional preclinical studies or clinical trials. In many countries outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that country. In some cases, the price that we intend to charge for any product candidates, if approved, is also subject to approval. Obtaining approval for livoletide, nevanimibe or any future product candidate in the European Union from the European Commission following the opinion of the EMA, if we choose to submit a marketing authorization application there, would be a lengthy and expensive process. Even if a product candidate is approved, the FDA or the European Commission, as the case may be, may limit the indications for which the drug may be marketed, require extensive warnings on the drug labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of livoletide, nevanimibe or any future product candidate in certain countries.

Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Also, regulatory approval for livoletide, nevanimibe or any future product candidate may be withdrawn. If we fail to comply with the regulatory requirements, our target market will be reduced and our ability to realize the full market potential of livoletide, nevanimibe or any future product candidate will be negatively impacted, and our business, prospects, financial condition and results of operations could be harmed.

We are exposed to a variety of risks associated with our international operations.

Since the closing date of the Merger, we have been engaged in the process of winding up various subsidiaries of OvaScience, some or all of which are in foreign jurisdictions. We expect to incur additional costs to complete this process. Moreover, even if we successfully wind up these entities, we may be exposed to liability in these foreign jurisdictions as a result of their historical operations.

In addition, in December 2017, we acquired Alizé, a biopharmaceutical company based in Lyon, France. As of June 30, 2019, we had 30 employees located in the United States and 7 employees located in France. Our global operations expose us to numerous and sometimes conflicting legal, tax and regulatory requirements, and violations or unfavorable interpretation by the respective authorities of these regulations could harm our business. Risks associated with international operations include the following, and these risks may be more pronounced if we seek to commercialize livoletide, nevanimibe or any future product candidates outside of the United States:

different regulatory requirements for approval of therapies in foreign countries;

reduced protection for intellectual property rights;

unexpected changes in tariffs, trade barriers and regulatory requirements;

economic weakness, including inflation, or political instability in particular foreign economies and markets;

compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

foreign reimbursement, pricing and insurance regimes;

workforce uncertainty in countries where labor unrest is more common than in the United States;

Table of Contents

changes in diplomatic and trade relationships;

anti-corruption laws, including the FCPA, and its equivalent in foreign jurisdictions, such as the UK Bribery Act;

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires.

In addition, there are complex regulatory, tax, labor, and other legal requirements imposed by both the European Union and many of the individual countries in and outside of Europe, with which we may need to comply. Many biopharmaceutical companies have found the process of marketing their own products in foreign countries to be very challenging.

Furthermore, in some countries, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product candidate. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after coverage and reimbursement have been obtained. Reference pricing used by various countries and parallel distribution or arbitrage between low-priced and high-priced countries, can further reduce prices. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies, which is time-consuming and costly. If coverage and reimbursement of our product candidates are unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed.

Legal, political and economic uncertainty surrounding the planned exit of the U.K., from the European Union, or EU, may be a source of instability in international markets, create significant currency fluctuations, adversely affect our operations in the U.K. and pose additional risks to our business, revenue, financial condition, and results of operations.

On June 23, 2016, the U.K. held a referendum in which a majority of the eligible members of the electorate voted for the U.K. to leave the EU. The U.K.’s withdrawal from the EU is commonly referred to as Brexit. The lack of clarity over which EU laws and regulations will continue to be implemented in the U.K. after Brexit (including financial laws and regulations, tax and free trade agreements, intellectual property rights, data protection laws, supply chain logistics, environmental, health and safety laws and regulations, immigration laws and employment laws) may negatively impact foreign direct investment in the U.K., increase costs, depress economic activity and restrict access to capital. The uncertainty concerning the U.K.’s legal, political and economic relationship with the EU after Brexit may be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely affect trading agreements or similar cross-border co-operation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise) beyond the date of Brexit.

These developments, or the perception that any of them could occur, have had, and may continue to have, a significant adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and limit the ability of key market participants to operate in certain financial markets. In particular, it could also lead to a period of considerable uncertainty in relation to the U.K. financial and banking markets, as well as on the regulatory process in Europe. Asset valuations, currency exchange rates and credit ratings may also be subject to increased market volatility. The long-term effects of Brexit will depend on any agreements (or lack thereof) between the U.K. and the EU and, in particular, any arrangements for the U.K. to retain access to EU markets either during a transitional period or more permanently.

Such a withdrawal from the EU is unprecedented, and it is unclear how the U.K.’s access to the European single market for goods, capital, services and labor within the EU, or single market, and the wider commercial, legal and regulatory

Table of Contents

environment, will impact us. We may also face new regulatory costs and challenges that could have an adverse effect on our operations. Depending on the terms of the U.K.’s withdrawal from the EU, the U.K. could lose the benefits of global trade agreements negotiated by the EU on behalf of its members, which may result in increased trade barriers that could make our doing business in the U.K. more difficult. Furthermore, there are likely to be changes to the way in which marketing approvals are granted in the U.K., which could add time and expense to the process by which our product candidates receive and maintain regulatory approval in the U.K. and across the EEA in future.

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

We face an inherent risk of product liability exposure related to the testing of our current and future product candidates, and may face an even greater risk if we commercialize any product candidate that it may develop. If we cannot successfully defend ourselves against claims that any such product candidates caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

decreased demand for any product candidate that we may develop;

loss of revenue;

substantial monetary awards to trial participants or patients;

significant time and costs to defend the related litigation;

withdrawal of clinical trial participants;

the inability to commercialize any product candidate that it may develop;

injury to our reputation and significant negative media attention; and

increased marketing costs to attempt to overcome any injury to our reputation or negative media attention.

In addition, we face an inherent risk of product liability exposure related to OvaScience’s prior use of fertility treatments in humans. Product liability claims involving OvaScience’s activities may be brought for significant amounts because OvaScience’s potential fertility treatments involved mothers and children. For example, it is possible that we will be subject to product liability claims that assert that OvaScience’s potential fertility treatments have caused birth defects in children or that such defects are inheritable. These claims could be made many years into the future based on effects that were not observed or observable at the time of birth. If we cannot successfully defend against claims that OvaScience’s potential fertility treatments caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in, among other things, significant costs to defend the related litigation; substantial monetary awards or payments to trial participants or patients; loss of revenue; and the diversion of management’s resources.

Although we maintain product liability insurance coverage, such insurance may not be adequate to cover all liabilities that we may incur. We anticipate that we will need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any product candidate. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

If OvaScience failed to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

OvaScience is subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. OvaScience’s prior operations involved the use of hazardous and flammable materials, including chemicals and

Table of Contents

biological materials. OvaScience’s prior operations also produced hazardous waste products. OvaScience generally contracted with third parties for the disposal of these materials and wastes. In the event of contamination or injury resulting from OvaScience’s use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.

We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with OvaScience’s storage or disposal of biological, hazardous or radioactive materials.

Risks Related to Regulatory Compliance

Our current and future relationships with investigators, health care professionals, consultants, third-party payors and customers may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

Our operations may be directly, or indirectly through our prescribers, customers and purchasers, subject to various federal and state fraud and abuse laws and regulations, including, without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and Physician Payments Sunshine Act and regulations. These laws may constrain our current and future business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our products for which we obtain marketing approval. In addition, we may be subject to patient privacy laws by both the federal government and the states and other countries in which we conduct our business. The laws that will affect our operations include, but are not limited to:

the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving , offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in return for the purchase, recommendation, leasing or furnishing of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers, formulary managers, and others on the other hand. In addition, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively PPACA, amended the intent requirement of the federal Anti-Kickback Statute, establishing that a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation;

federal civil and criminal false claims laws, including the federal civil False Claims Act, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent. PPACA provides, and recent government cases against pharmaceutical and medical device manufacturers support the view, that federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may implicate the federal civil False Claims Act;

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal civil and criminal statutes that prohibit a person from knowingly and willfully executing a scheme or from making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor (e.g., public or private);

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses and certain health care providers, known as covered entities, and their business associates who create, use or disclose individually identifiable health information on their behalf;

Table of Contents

federal transparency laws, including the federal Physician Payments Sunshine Act, that require certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to: (i) payments or other “transfers of value” made to physicians and teaching hospitals and (ii) ownership and investment interests held by physicians and their immediate family members;

state and foreign law equivalents of each of the above federal laws, such as state anti-kickback, self-referral, and false claims laws which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical manufacturers to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers; state laws that require pharmaceutical manufacturers to file reports with states regarding marketing information, such as the tracking and reporting of gifts, compensation and other remuneration and items of value provided to healthcare professionals and entities; state laws that require the reporting of information related to drug pricing; and state and local laws requiring the registration of pharmaceutical sales and medical representatives; and

state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. However, because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to penalties, including significant administrative, civil and criminal penalties, damages, fines, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, exclusion from participation in government health care programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm and the curtailment or restructuring of our operations, any of which could harm our ability to operate our business and our results of operations. Similar sanctions and penalties, as well as individual imprisonment, also can be imposed upon executive officers and employees, including criminal sanctions against executive officers under the so-called “responsible corporate officer” doctrine, even in situations where the executive officer did not intend to violate the law and was unaware of any wrongdoing.

The risk of us being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and its provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. The shifting compliance environment and the need to build and maintain a robust and expandable system to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that a healthcare company such as we may run afoul of one or more of the requirements.

Coverage and adequate reimbursement may not be available for our current or future product candidates, which could make it difficult for us to sell them profitably, if approved.

Market acceptance and sales of any product candidates that we commercialize, if approved, will depend in part on the extent to which coverage and reimbursement for these drugs and related treatments will be available from third-party payors, including government health administration authorities and private health insurers. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop will be made on a plan-by-plan basis. As a result, the coverage determination process is often a time-consuming and costly process that may require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied

Table of Contents

consistently or obtained. One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Each plan determines whether it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed. The position on a formulary generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our drugs unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our drugs.

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

Additionally, there have been a number of legislative and regulatory proposals to change the healthcare system in the United States and in some foreign jurisdictions that could affect our ability to sell any future product candidates profitably. These legislative and regulatory changes may negatively impact the coverage and available reimbursement for livoletide, nevanimibe and any future product candidates we may commercialize, following approval, if obtained.

Healthcare legislative reform measures may have a negative impact on our business and results of operations.

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

In March 2010, PPACA was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry. PPACA, among other things: (i) addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; (ii) increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations; (iii) establishes annual fees and taxes on manufacturers of certain branded prescription drugs; (iv) expands the availability of lower pricing under the 340B drug pricing program by adding new entities to the program; and (v) establishes a new Medicare Part D coverage gap discount program, in which manufacturers must, as of January 1, 2019, agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Since PPACA was enacted, the U.S. federal government also has announced delays in the implementation of key provisions of PPACA. Additionally, there have been judicial and Congressional challenges to certain aspects of PPACA, as well as efforts by the Trump administration to repeal or replace certain aspects of PPACA. Since January 2017, President Trump has signed two Executive Orders and other directives designed to delay the implementation of certain provisions of PPACA or otherwise circumvent some of the requirements for health insurance mandated by PPACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of PPACA. While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under PPACA have been signed into law. The Tax Cuts and Jobs Act of 2017, or Tax Act, included a provision which repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”. Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain PPACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health

Table of Contents

insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Further, the Bipartisan Budget Act of 2018, among other things, amended the PPACA, effective January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”. More recently, in December 2018 CMS published a new final rule permitting further collections and payments to and from certain PPACA qualified health plans and health insurance issuers under the PPACA risk adjustment program. On December 14, 2018, a Texas U.S. District Court Judge ruled that the PPACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. While the Texas U.S. District Court Judge, as well as the Trump administration and CMS, have stated that the ruling will have no immediate effect pending appeal of the decision, it is unclear how this decision, subsequent appeals, and other efforts to repeal and replace the PPACA will impact the PPACA. We continue to evaluate the potential impact of PPACA and its possible repeal or replacement on our business.

We expect that PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we are able to charge for any approved drug in the United States. For example, there have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement methodologies for drugs. At the federal level, the Trump administration’s budget proposal for fiscal year 2019 contains further drug price control measures that could be enacted during the 2019 budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients. Further, the Trump administration released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of drug products paid by consumers. The Department of Health and Human Services, or HHS, has started soliciting feedback on some of these measures and, at the same, is immediately implementing others under its existing authority. For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning on January 1, 2020. The final rule codified a CMS policy change that was effective January 1, 2019. Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, such measures are designed to encourage importation from other countries and bulk purchasing. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

In addition, other legislative changes have been adopted since PPACA was enacted. These changes include aggregate reductions in Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, following passage of the Bipartisan Budget Act of 2018, among other legislative amendments, will remain in effect through 2027 unless additional Congressional action is taken. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on our customers and, accordingly, our financial operations.

Additional changes that may affect our business include those governing enrollment in federal healthcare programs, reimbursement changes, rules regarding prescription drug benefits under the health insurance exchanges and fraud and abuse and enforcement. Continued implementation of PPACA and the passage of additional laws and regulations may result in the expansion of new programs such as Medicare payment for performance initiatives, and may impact existing

Table of Contents

government healthcare programs, such as by improving the physician quality reporting system and feedback program. For each state that does not choose to expand its Medicaid program, there likely will be fewer insured patients overall, which could impact the sales, business and financial condition of manufacturers of branded prescription drugs. Where patients receive insurance coverage under any of the new options made available through PPACA, the possibility exists that manufacturers may be required to pay Medicaid rebates on their resulting drug utilization, a decision that could impact manufacturer revenues.

Regulatory, legislative or self-regulatory/standard developments regarding privacy and data security matters could adversely affect our ability to conduct our business.

We are subject to and affected by laws, rules, regulations and industry standards related to data privacy and security, and restrictions or technological requirements regarding the collection, use, storage, security, retention or transfer of data. In the United States, the rules and regulations to which we may be subject include federal laws and regulations enforced by the Federal Trade Commission, the Department of Health & Human Services, and state privacy, data security, and breach notification laws, as well as regulator enforcement positions and expectations. Internationally, governments and agencies have adopted and could in the future adopt, modify, apply or enforce additional laws, policies, regulations, and standards covering privacy and data security that may apply to our business. New regulation or legislative actions regarding data privacy and security (together with applicable industry standards) may increase our costs of doing business. In addition to privacy and data security regulations currently in force in the jurisdictions where we operate, the European Union General Data Protection Regulation, or GDPR, went into effect in May 2018. The GDPR contains numerous requirements and changes from existing European Union, or EU, law, including more robust obligations on data processors and data controllers and heavier documentation requirements for data protection compliance programs. Specifically, the GDPR will introduce numerous privacy-related changes for companies operating in the EU, including greater control over personal data-by-data subjects (e.g., the “right to be forgotten”), increased data portability for EU consumers, data breach notification requirements, and increased fines. In particular, under the GDPR, fines of up to €20 million or up to 4% of the annual global revenue of the noncompliant company, whichever is greater, could be imposed for violations of certain of the GDPR’s requirements. The GDPR requirements apply not only to third-party transactions, but also to transfers of information between us and our subsidiaries, including employee information. However, despite our ongoing efforts to bring our practices into compliance before the effective date of the GDPR, we may not be successful either due to various factors within our control, such as limited financial or human resources, or other factors outside our control. It is also possible that local data protection authorities may have different interpretations of the GDPR, leading to potential inconsistencies amongst various EU member states. Any failure or alleged failure (including as a result of deficiencies in our policies, procedures, or measures relating to privacy, data security, marketing, or communications) by us to comply with laws, regulations, policies, legal or contractual obligations, industry standards, or regulatory guidance relating to privacy or data security, may result in governmental investigations and enforcement actions, litigation, fines and penalties, additional regulatory oversight and reporting obligations or adverse publicity. We expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy and data protection in the United States, the European Union, and in other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.

Future laws, regulations, standards and other obligations or any changed interpretation of existing laws or regulations could impair our ability to operate our business and negatively impact our results of operations.

Risks Related to Our Intellectual Property

We rely on the availability of licenses for intellectual property from third parties and these licenses may not be available to us on commercially reasonable terms, or at all.

We rely upon the UM License Agreement to certain patent rights and proprietary technology from the University of Michigan that are important or necessary to the development of nevanimibe. We rely upon the Roche License Agreement to certain patent rights and proprietary technology from Roche that are important or necessary to the development of MLE-301. As of June 30, 2019, with respect to nevanimibe patent rights, we owned two issued U.S. patents, two pending U.S. patent applications, and a number of patent applications in other jurisdictions, and we jointly owned, with the University of Michigan, three issued U.S. patents, one pending U.S. patent application, and a number of patent applications in other jurisdictions. In addition, as of June 30, 2019, with respect to livoletide patent rights, we

Table of Contents

owned four issued U.S. patents, one pending U.S. patent application, and a number of patents and pending patent applications in other jurisdictions. Finally, as of June 30, 2019, with respect to MLE-301 patent rights, we exclusively licensed from Roche, one issued U.S. patent and a number of patents and pending patent applications in other jurisdictions. There is no guarantee that any of the foregoing patent applications will result in issued patents, or that any current patents or patent applications, if issued, will include claims that are sufficiently broad to cover our product candidates or future products, or to provide meaningful protection from our competitors in all territories in which we may wish to develop or commercialize our products in the future. We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent they are covered by valid and enforceable patents or are effectively maintained as trade secrets within our organization. If third parties disclose or misappropriate our proprietary rights, it may have a material adverse effect on our business.

The licenses granted under the UM License Agreement and Roche License Agreement, respectively, are revocable under certain circumstances including if we cease to do business, fail to make the payments due thereunder, commit a material breach of the agreement that is not cured within a certain time period after receiving written notice or fail to meet certain specified development and commercial timelines. In such an event, our ability to compete in the market for a particular drug indication may be diminished. Termination of the UM License Agreement or Roche License Agreement may result in us having to negotiate a new or reinstated agreement, which may not be available to us on equally favorable terms, or at all, which may mean we are unable to develop or commercialize nevanimibe or MLE-301, as applicable. Additionally, the UM License Agreement, Roche License Agreement and other licenses we may enter into in the future may not provide exclusive rights to use such intellectual property and technology at all, in all relevant fields of use and/or in all territories in which we may wish to develop or commercialize our product candidates in the future. As a result, we may not be able to prevent competitors from developing and commercializing competitive products, including in territories included in the UM License Agreement and Roche License Agreement.

Licenses to additional third-party patents and materials that may be required for our development programs may not be available in the future or may not be available on commercially reasonable terms, or at all, which could harm our business and financial condition.

Our intellectual property licenses and agreements with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors.

We currently depend, and will continue to depend, on the UM License Agreement. In addition, pursuant to an assignment agreement for certain patents and patent applications relating to livoletide, we are also required to pay royalties on commercial sales and licensing of livoletide to the assignors. Further, the assignors under this assignment agreement have a right to repurchase the assigned intellectual property at a certain price in the event we do not, upon receiving notice, use reasonable efforts to develop, introduce for sale and promote products derived from the assigned intellectual property. Such reasonable efforts involve spending an annual amount of at least CDN$100,000 in research and development related to livoletide, actively pursuing the registration, licenses and permits necessary to market livoletide and actual commercialization of livoletide, if approved. We currently depend, and will continue to depend, on the Roche License Agreement. If Roche terminates the Roche License Agreement due to a breach of any of our material obligations under the Roche License Agreement or due to our insolvency, or if we terminate the Roche License Agreement without cause, the rights and licenses granted by Roche to us under the Roche License Agreement will terminate on the effective date of the termination. In such event, if Roche provides us with timely notice, and to the extent reasonably requested by Roche, we must transfer to Roche all regulatory filings and approvals, all final pre-clinical, non-clinical and clinical study reports and clinical study protocols, trademarks, and all data, including clinical data, materials and information, in our possession and control related to MLE-301 necessary or reasonably useful for Roche to continue to develop and commercialize MLE-301. Further, if the effective date of such a termination is after the first commercial sale of the first MLE-301 product, Roche shall have a worldwide, non-exclusive, sublicensable, transferable license to research, develop, manufacture, and sell MLE-301 compounds and products. In such event, Roche would pay to us royalty fees with respect to the sale of those compounds and products. Further development and commercialization of livoletide, nevanimibe and MLE-301 may, and development of any future product candidates may, require us to enter into additional license, assignment or collaboration agreements. The agreements under which we currently hold or license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation

Table of Contents

disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

If any of our current or future licenses or agreements or material relationships or any in-licenses upon which our current or future licenses and intellectual property are based are terminated or breached, we may:

lose our rights to develop and market our current and any future product candidates;

lose our rights to patent protection for our current or any future product candidates;

experience significant delays in the development or commercialization of our current or any future product candidates;

not be able to obtain any other licenses on acceptable terms, if at all; or

incur liability for damages.

These risks apply to any agreements that we may enter into in the future for livoletide, nevanimibe, MLE-301 or for any future product candidates. If we experience any of the foregoing, it would have a material adverse effect on our business, financial condition and results of operations.

If we fail to comply with our obligations in the agreements under which we hold or license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license and intellectual property rights that are important to our business.

Further, we cannot provide any assurances that third-party patents or other intellectual property rights do not exist, which might be enforced against our current product candidates, resulting in either an injunction prohibiting our manufacture or sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties. Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, prospects, financial condition and results of operations.

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

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

Pursuant to the UM License Agreement, we obtained an exclusive, worldwide license to develop, manufacture and commercialize nevanimibe. However, the UM License Agreement permits the University of Michigan, and other non-profit research institutions which are granted such rights from the University of Michigan, to manufacture and research nevanimibe for internal research, public service and internal educational purposes, all of which could result in new patentable inventions concerning the manufacture or use of nevanimibe. In addition, pursuant to an assignment agreement for certain livoletide patents and patent applications, certain individuals at the Erasmus University Medical Center and the University of Turin were granted non-exclusive rights to use the assigned intellectual property for non-commercial research with our prior written consent, all of which could result in new patentable inventions concerning

Table of Contents

the manufacture or use of livoletide. Pursuant to the Roche License Agreement, we obtained an exclusive, worldwide license to develop, manufacture and commercialize MLE-301. However, the Roche License Agreement permits Roche to use MLE-301 for internal research purposes, which could result in new patentable inventions concerning the manufacture or use of MLE-301.

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

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

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa. For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does. Further, we may not be aware of all third-party intellectual property rights potentially relating to our product candidates. Publications of discoveries in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically published 18 months after filing, or in some cases, not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or product candidates, in whole or in part, or which effectively prevent others from commercializing competitive technologies and drugs. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.

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

Moreover, we may be subject to a third-party pre-issuance submission of prior art to the USPTO or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation

Table of Contents

could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize product candidates without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

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

We jointly own patents and patent applications with third parties. Our ability to exploit or enforce these patent rights, or to prevent the third-party from granting licenses to others with respect to these patent rights, may be limited in some circumstances.

We jointly own certain patents and patent applications with third parties. In the absence of an agreement with each co-owner of jointly owned patent rights, we will be subject to default rules pertaining to joint ownership. Some countries require the consent of all joint owners to exploit, license or assign jointly owned patents, and if we are unable to obtain that consent from the joint owners, we may be unable to exploit the invention or to license or assign our rights under these patents and patent applications in those countries. For example, we secured exclusive rights from the University of Michigan for certain patents and patent applications that they jointly own with us related to nevanimibe. Additionally, in the United States, each co-owner may be required to be joined as a party to any claim or action we may wish to bring to enforce these patent rights, which may limit our ability to pursue third-party infringement claims.

We have in-licensed patents and patent applications from third parties. Our ability to exploit or enforce these patent rights, or to prevent the third-party from granting licenses to others with respect to these patent rights, may be limited in some circumstances.

We have in-licensed certain patents and patent applications from third parties. In the absence of an agreement with each patent rights owner, we will be subject to default rules pertaining to ownership. Some countries require the consent of all owners to exploit, license or assign owned patents, and if we are unable to obtain that consent from the owners, we may be unable to exploit the invention or to license or assign our rights under these patents and patent applications in those countries. For example, we secured exclusive rights from Roche for certain patents and patent applications that they own related to MLE-301. Additionally, in the United States, each owner may be required to be joined as a party to any claim or action we may wish to bring to enforce these patent rights, which may limit our ability to pursue third-party infringement claims.

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

Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and/or applications will be due to be paid to the USPTO and various government patent agencies outside of the United States in several stages over the lifetime of our owned and licensed patents and/or applications and any patent rights it may own or license in the future. We rely on our outside counsel or our licensing partners to pay these fees due to non-U.S. patent agencies. The USPTO and various non-U.S. government patent agencies require compliance with several procedural,

Table of Contents

documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply and we are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules.

There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

In such an event, potential competitors might be able to enter the market and this circumstance would have a material adverse effect on our business.

Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.

Given the amount of time required for the development, testing and regulatory review of new product candidates such as livoletide, nevanimibe and MLE-301, patents protecting such candidates might expire before or shortly after such candidates are commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we are prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits extension of the term of one U.S. patent that includes at least one claim covering the composition of matter of an FDA-approved drug, an FDA-approved method of treatment using the drug. The extended patent term cannot exceed the shorter of five years beyond the non-extended expiration of the patent or 14 years from the date of the FDA approval of the drug. However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. Further, we may not elect to extend the most beneficial patent to us or the claims underlying the patent that we choose to extend could be invalidated. If any of the foregoing occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing its clinical and preclinical data and launch their drug earlier than might otherwise be the case.

Intellectual property rights do not necessarily address all potential threats to our business.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business. The following examples are illustrative:

others may be able to make compounds, or livoletide, nevanimibe or MLE-301 formulations that are similar to our livoletide, nevanimibe or MLE-301 formulations but that are not covered by the claims of the patents that we own or control;

we or any strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or control;

we might not have been the first to file patent applications covering certain of our inventions;

others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

it is possible that our pending patent applications will not lead to issued patents;

issued patents that we own or control may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges;

our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well

Table of Contents

as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive drugs for sale in our major commercial markets;

we may not develop additional proprietary technologies that are patentable; and

the patents of others may have an adverse effect on our business.

We do not have broad composition of matter patent protection with respect to nevanimibe.

We own certain patents and patent applications with claims directed to a form of nevanimibe and to specific methods of using nevanimibe and it expects to have marketing exclusivity from the FDA and EMA for a period of seven and ten years, respectively, because nevanimibe has not been approved in these markets. However, we do not have composition of matter protection in the United States and elsewhere broadly covering nevanimibe. We may be limited in our ability to list our patents in the FDA’s Orange Book if the form of the compound used is materially different from what is claimed in our patents, or if the use of its product, consistent with its FDA-approved label, would not fall within the scope of our patent claims. Also, our competitors may be able to offer and sell products so long as these competitors do not infringe any other patents that we (or third parties) hold, including patents with claims directed to the forms and manufacture of nevanimibe and/or method of use patents. In general, patents covering certain forms of a compound and method of use patents are more difficult to enforce than broad composition of matter patents because, for example, of the risks that the FDA may approve different forms of subject compounds or alternative uses of the subject compounds not covered by the method of use patents, and others may engage in off-label sale or use of the subject compounds. Physicians are permitted to prescribe an approved product for uses that are not described in the product’s labeling. Although off-label prescriptions may infringe its method of use patents, the practice is common across medical specialties and such infringement is difficult to prevent or prosecute. FDA approval of uses that are not covered by our patents would limit our ability to generate revenue from the sale of nevanimibe, if approved for commercial sale. Off-label sales would limit our ability to generate revenue from the sale of nevanimibe, if approved for commercial sale.

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

Our commercial success depends, in part, upon our ability, and the ability of our future collaborators, to develop, manufacture, market and sell livoletide, nevanimibe, MLE-301 and any future product candidates and use our proprietary technologies without infringing the proprietary rights and intellectual property of third parties. The biotechnology and pharmaceutical industries are characterized by extensive and complex litigation regarding patents and other intellectual property rights. We may in the future become party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to livoletide, nevanimibe, MLE-301 and any future product candidates and technology, including interference proceedings, post grant review and inter partes review before the USPTO. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of their merit. There is a risk that third parties may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us. Even if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, which could have a material adverse effect on our ability to commercialize livoletide, nevanimibe, MLE-301 and any future product candidates. In order to successfully challenge the validity of any such U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court of competent jurisdiction would invalidate the claims of any such U.S. patent. If we are found to infringe a third-party’s valid and enforceable intellectual property rights, we could be required to obtain a license from such third-party to continue developing, manufacturing and marketing our product candidate and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product candidate. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. A finding of infringement could prevent us from manufacturing and

Table of Contents

commercializing livoletide, nevanimibe, MLE-301 or any future product candidates or force us to cease some or all of our business operations, which would have a material adverse effect on our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar material adverse effect on our business. Even if we prevail in such infringement claims, patent litigation can be expensive and time consuming, which would harm our business, financial condition and results of operations.

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

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

We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other employees. Even if we prevail in such infringement claims, patent litigation can be expensive and time consuming, which would harm our business, financial condition and results of operations.

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

Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.

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

Table of Contents

obtain in the future. Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.

We may not be able to protect our intellectual property rights throughout the world, which could have a material adverse effect on our business.

Filing, prosecuting and defending patents covering livoletide, nevanimibe, MLE-301 and any future product candidates throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop our own drugs and, further, may export otherwise infringing drugs to territories where we may obtain patent protection, but where patent enforcement is not as strong as that in the United States. These drugs may compete with our drugs in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

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

If we rely on third parties to manufacture and commercialize livoletide, nevanimibe, MLE-301 or any future product candidates, or if we collaborate with third parties for the development of livoletide, nevanimibe or any future product candidates, we must, at times, share trade secrets with them. We may also conduct joint research and development programs that may require us to share trade secrets under the terms of our research and development partnerships or similar agreements. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure could have an adverse effect on our business and results of operations.

In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentially relating to our trade secrets. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any of third-party collaborators. A competitor’s discovery of our trade secrets would harm our business.

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

Certain of our employees, consultants or advisors are currently, or were previously, employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, while it is our approach to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property

Table of Contents

that we regard as our own. The assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.

Risks Related to Our Dependence on Third Parties

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

We have no experience in drug formulation or manufacturing and do not own or operate, and we do not expect to own or operate, facilities for product manufacturing, storage and distribution, or testing. We will rely on a contract manufacturing organization, or CMO, to produce additional livoletide active pharmaceutical ingredient, or API, for us for clinical use. We also currently rely on CMOs to produce nevanimibe for our clinical trials. Additionally, we rely on CMOs with respect to the manufacture of drug product for our clinical trials, including for filing and packaging. Any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replenish the supply or replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our product candidates. If we or our manufacturer are unable to purchase these raw materials after regulatory approval has been obtained for our product candidates, the commercial launch of our product candidates would be delayed or there would be a shortage in supply, which would impair our ability to generate revenue from the sale of our product candidates.

We will need to rely on third-party manufacturers to supply us with sufficient quantities of livoletide and nevanimibe to be used, if approved, for the commercialization of each. The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our NDA to the FDA. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with cGMP requirements for manufacture of drug products. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, they will not be able to secure or maintain regulatory approval for their manufacturing facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. Further, our reliance on third-party manufacturers entails risks, to which we would not be subject if we manufactured product candidates ourselves, including:

inability to meet our product specifications and quality requirements consistently;

delay or inability to procure or expand sufficient manufacturing capacity;

issues related to scale-up of manufacturing;

costs and validation of new equipment and facilities required for scale-up;

failure to comply with cGMP and similar foreign standards;

inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;

termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;

reliance on a limited number of sources, and in some cases, single sources for product components;

Table of Contents

lack of qualified backup suppliers for those materials that are currently purchased from a sole or single source supplier;

operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;

inability to find replacement manufacturers or suppliers, if necessary, on terms favorable to us, in a timely manner, or at all;

carrier disruptions or increased costs that are beyond our control; and

failure to deliver our products under specified storage conditions and in a timely manner.

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

We may in the future enter into collaborations with third parties to develop our product candidates. If these collaborations are not successful, our business could be harmed.

We may enter into collaborations with third parties in the future. We may in the future determine to collaborate with other pharmaceutical and biotechnology companies for development and potential commercialization of our product candidates. These relationships, or those like them, may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business. In addition, we could face significant competition in seeking appropriate collaborators and the negotiation process is time-consuming and complex. Our ability to reach a definitive collaboration agreement will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of several factors. If we license rights to our product candidates, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture.

If any such potential future collaborations do not result in the successful development and commercialization of product candidates, or if one of our future collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration. If we do not receive the funding we expect under these agreements, the development of our product candidates could be delayed and we may need additional resources to develop our product candidates. In addition, if one of our future collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and the perception of us in the business and financial communities could be adversely affected. All of the risks relating to product development, regulatory approval and commercialization apply to the activities of our potential future collaborators.

We may not be successful in finding strategic collaborators for continuing development of livoletide or nevanimibe, or successfully commercializing or competing in the market for certain diseases.

We may seek to develop strategic partnerships for developing and commercializing livoletide or nevanimibe, due to capital costs required to develop the product candidate, manufacturing constraints or anticipated commercialization costs. We may not be successful in our efforts to establish such a strategic partnership or other alternative arrangements for livoletide or nevanimibe because our research and development pipeline may be insufficient or third parties may not view livoletide or nevanimibe as having the requisite potential to demonstrate safety and efficacy. In addition, we may be restricted under an existing collaboration agreement from entering into a future agreement with a potential collaborator. We cannot be certain that, following a strategic transaction or license, we will achieve an economic benefit that justifies such transaction.

If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms or at all, we may have to curtail the development of our product candidates, reduce or delay the development programs, delay potential commercialization, reduce the scope of any sales or marketing activities or increase our expenditures and undertake

Table of Contents

development or commercialization activities at our own expense. If we elect to fund development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all. If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop livoletide or nevanimibe, which could harm our business, financial condition and results of operations.

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

We currently do not have the ability to independently conduct preclinical studies and clinical trials that comply with the regulatory requirements known as good laboratory practice, or GLP, or GCP, respectively. We also do not currently have the ability to independently conduct large clinical trials. We intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and we expect to have limited influence over their actual performance.

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

We and our CROs will be required to comply with GLP and GCP, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of our product candidates that are in preclinical and clinical development, respectively. The regulatory authorities enforce GCP through periodic inspections of trial sponsors, principal investigators and clinical trial sites. Although we rely on CROs to conduct any future GLP-compliant preclinical and preclinical studies and current or planned GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with our investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities. If we or our CROs fail to comply with GCP, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of subjects, we may be required to repeat clinical trials, which would delay the regulatory approval process.

While we will have agreements governing their activities, our CROs are and will not be our employees, and we will not control whether or not they devote sufficient time and resources to our future clinical and preclinical programs. These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm our business. We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret protection and allow our potential competitors to access and exploit our proprietary technology. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to its clinical protocols or regulatory requirements or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that we develop. As a result, our financial results and the commercial prospects for any product candidate that we develop would be harmed, our costs could increase, and our ability to generate revenue could be delayed.

If our relationships with these CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. Switching or adding additional CROs involves substantial cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can negatively impact our ability to meet our desired clinical development timelines. Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a negative impact on our business and financial condition. Further, we currently rely on several CROs to conduct our ongoing clinical trials and may engage one of these same CROs to conduct additional clinical trials on our behalf. To the extent that these CROs fail to comply

Table of Contents

with GLP or their contractual obligations to us for any reason, the negative impact on our business and financial condition could be more profound than if we relied on a greater number of CROs.

Risks Related to Our Business Operations, Employee Matters and Managing Growth

Recent acquisitions and potential future acquisitions could prove difficult to integrate, disrupt our business, dilute stockholder value and strain our resources.

We completed our acquisition of Alizé Pharma SAS, or Alizé, through which we acquired livoletide, our PWS product candidate, in December 2017. In the future, we may acquire additional companies, technologies or product candidates that we believe could complement or expand our business. Integrating the operations of acquired businesses successfully or otherwise realizing any of the anticipated benefits of acquisitions involves a number of potential challenges. The failure to meet these integration challenges could seriously harm our financial condition and results of operations. Realizing the benefits of acquisitions depends in part on the integration of operations and personnel. These integration activities are complex and time-consuming, and we may encounter unexpected difficulties or incur unexpected costs, including with respect to:

diversion of management attention from ongoing business concerns to integration matters;

coordinating clinical and preclinical development plans;

consolidating and rationalizing information technology and accounting platforms and administrative infrastructures;

complexities associated with managing the geographic separation of the combined businesses and consolidating multiple physical locations;

discontinuation of operations of OvaScience and contingent liabilities we assumed in connection with the Merger;

reconciling different corporate cultures; and

retaining scientific and other key employees.

Acquired businesses may have liabilities, adverse operating issues or other matters of concern arise following the acquisition that we fail to discover through due diligence prior to the acquisition. Further, our acquisition targets may not have as robust internal controls over financial reporting as would be expected of a public company. Acquisitions may also result in the recording of goodwill and other intangible assets that are subject to potential impairment in the future that could harm our financial results. We may also become subject to new regulations as a result of an acquisition, including if we acquire operations in a country in which we do not already operate. If we fail to properly evaluate acquisitions or unanticipated issues arise following the acquisition, we may incur costs in excess of what we anticipate and may not otherwise achieve the anticipated benefits of any such acquisitions.

We are highly dependent on the services of our key executives and personnel, including Julia C. Owens, Ph.D., our chief executive officer, Louis Arcudi III, our chief financial officer, and Ryan Zeidan, Ph.D., our senior vice president of development, and if we are not able to retain these members of our management team or recruit and retain additional management, clinical and scientific personnel, our business will be harmed.

We are highly dependent on Drs. Owens and Zeidan and Mr. Arcudi. The employment agreements we have with these officers do not prevent such persons from terminating their employment with us at any time. The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives.

In addition, we are dependent on our continued ability to attract, retain and motivate highly qualified additional management, clinical and scientific personnel. If we are not able to retain our management and to attract, on acceptable

Table of Contents

terms, additional qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or grow.

We may not be able to attract or retain qualified personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses. Many of the other pharmaceutical companies that we compete against for qualified personnel and consultants have greater financial and other resources, different risk profiles, are located in geographies with a larger biotechnology industry presence and a longer history in the industry than we do. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality candidates and consultants than what we have to offer. If we are unable to continue to attract, retain and motivate high-quality personnel and consultants to accomplish our business objectives, the rate and success at which we can discover and develop product candidates and our business will be limited and we may experience constraints on our development objectives.

Our future performance will also depend, in part, on our ability to successfully integrate newly hired executive officers into our management team and our ability to develop an effective working relationship among senior management. Our failure to integrate these individuals and create effective working relationships among them and other members of management could result in inefficiencies in the development and commercialization of our product candidates, harming future regulatory approvals, sales of our product candidates and our results of operations. Additionally, we do not currently maintain “key person” life insurance on the lives of our executives or any of our employees.

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

As of June 30, 2019, we had 37 employees, 35 of whom were full-time and two of whom were part-time employees. As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial, legal and other resources. Our management may need to divert a disproportionate amount of our attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational inefficiencies, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of our current and future product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and grow revenue could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize our product candidates, develop a scalable infrastructure and compete effectively will depend, in part, on our ability to effectively manage any future growth.

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

We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and commercial partners. Misconduct by these parties could include intentional failures to comply with FDA regulations or the regulations applicable in other jurisdictions, provide accurate information to the FDA and other regulatory authorities, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Such misconduct also could involve the improper use of information obtained in the course of clinical trials or interactions with the FDA or other regulatory authorities, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us and we are not successful in

Table of Contents

defending itself or asserting our rights, those actions could have a negative impact on our business, financial condition and results of operations, including the imposition of significant fines or other sanctions.

We may be delayed in our receipt of certain tax benefits that Alizé historically received as a French technology company.

As a French technology company, Alizé historically benefited from certain tax advantages, including the French research tax credit ( credit d’impot recherche ), or CIR. The CIR is a French tax credit aimed at stimulating research and development, and can offset French corporate income tax due. Alizé has historically received CIR reimbursements promptly following filing for such reimbursements with applicable French taxing authorities. During the year ended December 31, 2017, claims were made totaling $1.0 million, which we received in the first quarter of 2019. During the year ended December 31, 2018, claims were made totaling $1.4 million. Following our acquisition of Alizé, the combined business may no longer qualify as a French small or medium size enterprise, and, accordingly, the combined business may be subject to a three-year waiting period for reimbursement of CIRs, which could adversely affect the combined business’s results of operations and cash flows.

Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Our internal computer systems and those of our current and any future collaborators and other contractors or consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we are not aware of any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed.

We may be exposed to significant foreign exchange risk.

We incur portions of our expenses, and may in the future derive revenue, in currencies other than the U.S. dollar, in particular, the euro. As a result, we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. We currently do not engage in hedging transactions to protect against uncertainty in future exchange rates between particular foreign currencies and the euro. Therefore, for example, an increase in the value of the euro against the U.S. dollar could be expected to have a negative impact on our operating expenses as euro denominated expenses, if any, would be translated into U.S. dollars at an increased value. We cannot predict the impact of foreign currency fluctuations, and foreign currency fluctuations in the future may adversely affect our financial condition, results of operations and cash flows.

Risks Related to Ownership of Our Common Stock and Our Status as a Public Company

The trading price of the shares of our common stock may be volatile, and purchasers of our common stock could incur substantial losses.

Our stock price may be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at or above the price paid for the shares. The market price for our common stock may be influenced by many factors, including:

the commencement, enrollment or results of our clinical trials or changes in the development status of our product candidates;

Table of Contents

any delay in our regulatory filings for any product candidate we may develop, and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information;

adverse results from, delays in or termination of clinical trials;

adverse regulatory decisions, including failure to receive regulatory approval of our product candidates;

unanticipated serious safety concerns related to the use of our product candidates;

changes in financial estimates by us or by any securities analysts who might cover our stock;

conditions or trends in our industry;

changes in the structure of healthcare payment systems;

changes in the market valuations of similar companies;

stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the biopharmaceutical industry;

publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts;

announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;

announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;

investors’ general perception of our company and our business;

recruitment or departure of key personnel;

overall performance of the equity markets;

trading volume of our common stock;

disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

significant lawsuits, including patent or stockholder litigation;

general political and economic conditions; and

other events or factors, many of which are beyond our control.

In addition, in the past, stockholders have initiated class action lawsuits against pharmaceutical and biotechnology companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources from our business.

Table of Contents

If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that equity research analysts publish about us and our business. As a newly public company, we have only limited research coverage by equity research analysts. Equity research analysts may elect not to initiate or continue to provide research coverage of our common stock, and such lack of research coverage may adversely affect the market price of our common stock. Even if we continue to have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause our stock price or trading volume to decline.

Future sales of our common stock in the public market could cause our share price to decline.

Sales of a substantial number of shares of our common stock in the public market could occur at any time, subject to the restrictions and limitations described below. If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, the market price of our common stock could decline significantly and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales, particularly sales by our directors, executive officers, and significant stockholders, may have on the prevailing market price of our common stock. As of June 30, 2019, we had 13,412,058 shares of common stock outstanding. All of our outstanding shares of common stock are available for sale in the public market, subject only to the restrictions of Rule 144 under the Securities Act. In addition, the shares of common stock subject to outstanding options under our equity incentive plans and the shares reserved for future issuance under our equity incentive plans will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations. In addition, certain holders of our common stock have the right, subject to various conditions and limitations, to request we include their shares of our common stock in registration statements we may file relating to our securities.

Provisions in our certificate of incorporation and by-laws and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

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

establish a classified board of directors such that not all members of the board are elected at one time;

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

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

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

limit who may call stockholder meetings;

prohibit actions by our stockholders by written consent;

Table of Contents

require that stockholder actions be effected at a duly called stockholders meeting;

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

require the approval of the holders of at least 75 percent of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our certificate of incorporation or by-laws.

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

Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent our other stockholders from influencing significant corporate decisions.

As of June 30, 2019, our executive officers, directors and current beneficial owners of 5% or more of our common stock and their respective affiliates, in the aggregate, beneficially own approximately 52% of our outstanding common stock. As a result, these persons, acting together, can significantly influence all matters requiring stockholder approval, including the election and removal of directors, any merger, consolidation, sale of all or substantially all of our assets, or other significant corporate transactions.

Some of these persons or entities may have interests different than yours. For example, because many of these stockholders purchased their shares at prices substantially below the current market price of our common stock and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other stockholders.

We are at risk of securities class action and similar litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of our securities. This risk is especially relevant for us because biopharmaceutical companies have experienced significant stock price volatility in recent years. We remain the subject of various securities class action lawsuits and shareholder derivative lawsuits that were filed against OvaScience and certain of its officer and directors, as described in more detail in Item 3, Legal Proceedings. These lawsuits, as well as any similar lawsuits initiated in the future, could result in substantial cost and a diversion of management’s attention and resources, which could harm our business.

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Sarbanes-Oxley Act and the rules and regulations of the stock market on which our common stock is listed. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Neither our management nor our auditors have evaluated, assessed or attested to our internal control over financial reporting as is set forth in Item 308 of Regulation S-K promulgated under the Exchange Act, and Section 404 of the Sarbanes-Oxley Act as of December 31, 2018, the end of our last fiscal year. We were unable to conduct the required assessment primarily due to the Merger occurring in the fourth quarter of 2018 and the substantial change in operational focus, management and the internal control environment following the Merger. We intend to do our first internal control assessment as of December 31, 2019.

We may identify weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,

Table of Contents

not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements. If that were to happen, the market price of our stock could decline and we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the Securities and Exchange Commission, or SEC, or other regulatory authorities.

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

As a relatively new public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Capital Market and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel need to devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, compared to when we were a private company, which could make it more difficult for us to attract and retain qualified members of our board of directors. We cannot predict or estimate the amount of additional costs we will continue to incur as a public company or the timing of such costs.

The recently passed comprehensive tax reform bill could adversely affect our business and financial condition.

On December 22, 2017, President Trump signed into law the Tax Act which significantly revises the Internal Revenue Code of 1986, as amended. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses), effective for net operating losses incurred in taxable years beginning after December 31, 2017, limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain and our business and financial condition could be adversely affected. In addition, it is uncertain how various states will respond to the newly enacted federal tax law. The impact of this tax reform on holders of our common stock is also uncertain and could be adverse. We urge you to consult with your legal and tax advisors with respect to this legislation and the potential tax consequences of investing in or holding our common stock.

Our effective tax rate may fluctuate, and we may incur obligations in tax jurisdictions in excess of accrued amounts.

We are subject to taxation in more than one tax jurisdiction. As a result, our effective tax rate is derived from a combination of applicable tax rates in the various places that we operate. In preparing our financial statements, we estimate the amount of tax that will become payable in each of such places. Nevertheless, our effective tax rate may be different than experienced in the past due to numerous factors, including passage of the newly enacted federal income tax law, changes in the mix of our profitability from jurisdiction to jurisdiction, the results of examinations and audits of our tax filings, our inability to secure or sustain acceptable agreements with tax authorities, changes in accounting for income taxes and changes in tax laws. Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations and may result in tax obligations in excess of amounts accrued in our financial statements.

Table of Contents

We might not be able to utilize a significant portion of our net operating loss carryforwards.

As of December 31, 2018, we had federal and state net operating loss carryforwards of $249.6 million and $249.2 million, respectively. The federal and state net operating loss carryforwards will begin to expire, if not utilized, by 2031. These net operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under the newly enacted federal income tax law, federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited. It is uncertain how various states will respond to the newly enacted federal tax law. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. If an ownership change has occurred or occurs in the future and our ability to use our net operating loss carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.

We do not anticipate paying any cash dividends on our common stock in the foreseeable future.

You should not rely on an investment in our common stock to provide dividend income. We have not declared or paid cash dividends on our common stock to date. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the terms of any existing or future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future. Investors seeking cash dividends should not purchase our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

We did not sell any unregistered securities during the three months ended June 30, 2019.

Issuer Purchases of Equity Securities

We did not repurchase any securities during the three months ended June 30, 2019.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Table of Contents

Item 6. Exhibits

The following exhibits are incorporated by reference or filed as part of this report.


Exhibit
Number		Description
3.1		Restated Certificate of Incorporation of the Registrant, as amended (incorporated by reference from Exhibit 3.1 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 15, 2019 File No. 001-35890)

3.2		Third Amended and Restated Bylaws, as Amended, of the Registrant (incorporated by reference from Exhibit 3.1 to the Current Report on Form 8‑K filed with the Securities and Exchange Commission on August 9, 2018 File No. 001‑35890)

10.1* ±		Amended and Restated Employment Agreement, by and between Millendo Therapeutics US, Inc. and Julia C. Owens, Ph.D., dated June 19, 2019

10.2* ±		Amended and Restated Employment Agreement, by and between Millendo Therapeutics US, Inc. and Louis Arcudi III, dated June 19, 2019

10.3*±		Amended and Restated Employment Agreement, by and between Millendo Therapeutics US, Inc. and Jeffery M. Brinza, dated May 23, 2019

10.4*^		License Agreement, by and among F. Hoffmann-La Roche Ltd, Hoffman-La Roche Inc. and Millendo Therapeutics, Inc., dated October 16, 2018

10.5		Flex Space Agreement (incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 17, 2019 File No. 001-35890)

10.6 ±		2019 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 13, 2019 File No. 001-35890)

10.7*±		Form of Option Grant Package under 2019 Equity Incentive Plan

10.8*±		Form of RSU Grant Package under 2019 Equity Incentive Plan

10.9±		2019 Employee Stock Purchase Plan (incorporated by reference from Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 13, 2019 File No. 001-35890)

31.1*		Certification of Chief Executive Officer (Principal Executive Officer) pursuant to Section 302 of Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer (Principal Financial Officer) pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1 +		Certification of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to Section 906 of Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

Table of Contents

^ Portions of this exhibit (indicated by asterisks) have been excluded because such information (i) is not material and (ii) would be competitively harmful if publicly disclosed.

± Indicates management contract or compensatory plan.

+ This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Table of Contents

SIGNATURE

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


	MILLENDO THERAPEUTICS, INC.

	By:	/s/ Julia C. Owens, Ph.D.
		Julia C. Owens, Ph.D.
		President and Chief Executive Officer (Principal Executive Officer)



	By:	/s/ Louis Arcudi III
		Louis Arcudi III
		Chief Financial Officer (Principal Financial and Accounting Officer)

Date: August 12, 2019

Exhibit 10.1

June 7, 2019

Julia C. Owens

7 Jefferson Court

Ann Arbor, MI 48103

Re: Amended and Restated Employment Terms

Dear Julia:

Millendo Therapeutics US, Inc. (the “ Company ”) desires to amend and restate the terms of your employment as the President and Chief Executive Officer of the Company pursuant to the terms of this letter (the “ Agreement ”). Subject to your execution of this Agreement, effective as of January 1, 2019 (the “ Effective Date ”) this Agreement amends, restates and supersedes in its entirety your employment terms with Millendo Therapeutics US, Inc. (formerly known as Atterocor, Inc.) dated July 25, 2012 (the “ Prior Agreement ”).

1. Duties and Responsibilities . As the President and Chief Executive Officer , you will continue to have the duties and responsibilities set forth in the job description for such position, including the duties that you have been performing during your employment to date with the Company. It is anticipated that such duties will include your providing services to Millendo Therapeutics, Inc. (the “ Parent ”) as Parent’s President and Chief Executive Officer, without further or additional compensation or benefits other than as set forth in this Agreement. You will report to the Parent’s Board of Directors (the “ Board ”) .

2. Location . You will continue to be based out of the Company’s Ann Arbor, Michigan office, subject to business travel as necessary.

3. Compensation .

a. Base Salary . Starting on the Effective Date, your annual base salary rate will be $478,900, less payroll deductions and all required withholdings and subject to review and adjustment by the Company in its sole discretion (“ Base Salary ”). You will be paid in accordance with the Company’s standard payroll practices, currently semi-monthly. Because your position is classified as exempt, you will not be eligible for overtime premiums.

b. Bonus . You will continue to be eligible to earn an annual performance bonus targeted at 50% (the “ Target Amount ”) of your then-current base salary (“ Annual Bonus ”). The Annual Bonus will be based upon the assessment by the Board, or any authorized committee thereof, in its sole discretion, of both your performance and the Company’s performance. The Board, or any authorized committee thereof, may, in its sole discretion, approve an Annual Bonus in an amount in excess of the Target Amount. The Annual Bonus, if any, will be subject to applicable payroll deductions and withholdings. Following the close of each calendar year, the Company and the Board (or any authorized committee thereof) will determine whether you have earned the Annual Bonus, and the amount of any Annual Bonus. No amount of the Annual

Bonus is guaranteed, and you must be an employee in good standing on the Annual Bonus payment date to be eligible to receive an Annual Bonus. Your eligibility for an Annual Bonus is subject to change in the discretion of the Company or the Board (or any authorized committee thereof).

c. Expense Reimbursement . The Company shall reimburse you for all customary and appropriate business-related expenses actually incurred and documented in accordance with Company policy, as in effect from time to time. For the avoidance of doubt, to the extent that any reimbursements payable to you are subject to the provisions of Section 409A of the Code: (a) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

4. Benefits . You continue to be eligible to participate on the same basis as similarly situated employees in the Company’s benefit plans in effect from time to time during your employment. All matters of eligibility for coverage or benefits under any benefit plan shall be determined in accordance with the provisions of such plan. The Company reserves the right to change, alter or terminate any benefit plan in its sole discretion.

5. Options. You were previously granted one or more options to purchase shares of the Parent’s common stock as set forth on Exhibit A hereto (collectively the “ Existing Options ”). The Existing Options remain subject to the terms and conditions of the applicable plan pursuant to which such option(s) was granted (either the Millendo Therapeutics, Inc. 2012 Stock Plan, as amended (the “ Original Millendo Plan ”) or the OvaScience, Inc. (now known as Millendo Therapeutics, Inc.) 2012 Stock Incentive Plan, as amended (the “ New Millendo Plan ”, and together with the Original Millendo Plan, the “ Stock Plans ”), and the applicable option agreement(s) between you and the Company entered into pursuant to the applicable Stock Plan, and any applicable early exercise rights granted to you by the Company on March 4, 2016. You understand, acknowledge and agree that, as of the date hereof, you do not hold any stock options or other incentive equity awards of the Parent, other than as set forth on Exhibit A , and that the Existing Options shall only be subject to accelerated vesting in the event of a change in control of or similar transaction involving Parent as set forth on Exhibit A hereto or as expressly provided in the applicable Stock Plan, option agreement or granting resolutions.

6. Company Policies . As a Company employee, you shall continue to abide by all Company policies and procedures and all applicable policies and procedures of Parent as they may be interpreted, adopted, revised or deleted from time to time in the Company’s and Parent’s sole discretion.

7. Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement . As a condition of continued employment and the increased benefits provided herein, you must sign and comply with the enclosed Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement (the “ CIIA ”) which prohibits unauthorized use or disclosure of the Company’s and the Parent’s and their affiliates’ respective proprietary information, and prohibits certain solicitations and competitive activities, among other obligations. The CIIA contains

provisions that are intended by the parties to survive and do survive termination of this Agreement.

8. At-Will Employment . Your employment relationship with the Company continues to be at-will. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company. Likewise, the Company may terminate your employment at any time, with or without cause or advance notice, subject to Sections 9, 10 and 11. Your employment at-will status can only be modified in a written agreement signed by you and the Board.

9. Termination Without Cause or for Good Reason Absent a Change in Control.

a. If the Company terminates your employment, at any time except during the Change in Control Period (as defined below), without “Cause” (as defined below) or you resign for “Good Reason” (as defined below) then you shall be entitled to receive the Accrued Obligations (defined below). Subject to your full compliance with this Section and Section 9(b) and provided that such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “ Separation from Service ”), if you timely execute a separation agreement that includes a general release of claims in favor of the Company and the Parent, in the form presented by the Company (the “ Release ”), and allow it to become effective in accordance with Section 9(b) (the date that the Release becomes effective and may no longer be revoked by you is referred to as the “ Release Effective Date ”), then the Company will provide you with the following “ Severance Benefits :”

i. The Company will pay you an amount equal to twelve (12) months of your then current Base Salary, less applicable withholdings and deductions, paid in twenty-four (24) equal installments beginning on the Company’s first regularly scheduled payroll date which occurs at least five (5) business days following the Release Effective Date, with the remaining twenty-three (23) installments occurring on the Company’s regularly scheduled payroll dates thereafter;

ii. If you timely elect continued coverage under COBRA for yourself and your covered dependents under the Company’s group health plans following such termination, then the Company shall pay 100% of the COBRA premiums necessary to continue your and your covered dependents’ health insurance coverage in effect for yourself (and your covered dependents) on the termination date until the earliest of: (i) twelve (12) months following the termination date; (ii) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; or (iii) the date you cease to be eligible for COBRA continuation coverage for any reason, including plan termination (such period from the termination date through the earlier of (i)-(iii), (the “ COBRA Payment Period ”). Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on your behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay you on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for

such month, subject to applicable tax withholding, for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive you of your rights under COBRA or ERISA for benefits under plans and policies arising under your employment by the Company.

b. You shall not receive the Severance Benefits (pursuant to Section 9(a)) or Change in Control Severance Benefits (pursuant to and as defined in Section 10(a)) unless you execute the Release within the consideration period specified therein, which shall in no event be more than 60 days following your Separation from Service, and until the Release becomes effective and can no longer be revoked by you under its terms. Your ability to receive the Severance Benefits or Change in Control Severance Benefits is further conditioned upon you: returning all Company property and any Parent property; complying with your post-termination obligations under this letter and the CIIA; and complying with the Release including without limitation any non-disparagement and confidentiality provisions contained therein. For the avoidance of doubt, you will only be eligible to receive, at most, either the Severance Benefits or the Change in Control Severance Benefits, but under no circumstance will you be eligible to receive both Severance Benefits and Change in Control Severance Benefits.

c. The Severance Benefits (provided to you pursuant to Section 9(a)) or Change in Control Severance Benefits (provided to you pursuant to Section 10(a)) are in lieu of, and not in addition to, any benefits to which you may otherwise be entitled under any Company and any Parent severance plan, policy or program.

d. The damages caused by your termination of employment without Cause would be difficult to ascertain; therefore, the Severance Benefits or Change in Control Severance Benefits for which you are eligible in exchange for the Release are agreed to by the parties as liquidated damages, to serve as full compensation, and not a penalty.

e. “ Cause ” shall mean the Company (or its designee) has determined in its sole discretion that you have engaged in any of the following: (i) a material breach of any covenant or condition under this Agreement or any other agreement between the parties; (ii) any act constituting dishonesty, fraud, immoral or disreputable conduct; (iii) any conduct which constitutes a felony under applicable law; (iv) material violation of any Company policy or any applicable Parent policy or any act of misconduct; (v) refusal to follow or implement a clear and reasonable directive of Company or, if applicable, Parent; (vi) negligence or incompetence in the performance of your duties or failure to perform such duties in a manner satisfactory to the Company after the expiration of ten (10) days without cure after written notice of such failure; or (vii) breach of fiduciary duty.

Good Reason pursuant to this definition if: (1) you give the Company written notice of your intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that you believe constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “ Cure Period ”); (3) the Company has not, prior to receiving such notice from you, already informed you that your employment with the Company is being terminated and (4) you voluntarily terminate your employment within thirty (30) days following the end of the Cure Period.

g. For purposes of this Agreement, “ Accrued Obligations ” are (i) your accrued but unpaid salary through the date of termination, (ii) any unreimbursed business expenses incurred by you payable in accordance with the Company’s standard expense reimbursement policies, and (iii) benefits owed to you under any qualified retirement plan or health and welfare benefit plan in which you were a participant in accordance with applicable law and the provisions of such plan.

10. Termination Without Cause or for Good Reason Coincident with a Change in Control.

a. If you experience a “ Termination Event ,” which shall mean that your employment by the Company is terminated by the Company or any successor entity without Cause (not including termination by virtue of death or Disability (as defined below)) or by you for Good Reason in either case within twelve (12) months following or three (3) months prior to the effective date of a “Change in Control” (as defined in Section 10(b) below) (such time period referred to herein as the “ Change in Control Period ”), provided that such Termination Event constitutes a Separation from Service, then in addition to providing you with the Accrued Obligations and subject to your compliance with Sections 9(a) and 9(b), the Company will provide you with the following “ Change in Control Severance Benefits :”

i. The Company will pay you an amount equal to eighteen (18) months’ of your then current Base Salary, less applicable withholdings and deductions, paid in thirty-six (36) equal installments beginning on the Company’s first regularly scheduled payroll date which occurs at least five (5) business days following the Release Effective Date, with the remaining thirty-five (35) installments occurring on the Company’s regularly scheduled payroll dates thereafter;

the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay you on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to applicable tax withholding, for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive you of your rights under COBRA or ERISA for benefits under plans and policies arising under your employment by the Company;

iii. The Company will pay an additional amount equivalent to eighteen (18) months of your Annual Bonus, which is calculated using the full Target Amount as defined in Section 3(b) and multiplied by 1.5, for the performance year in which your termination occurs. This amount will be payable subject to standard federal and state payroll withholding requirements and will be paid when bonuses for that year are paid to similarly situated employees;

iv. Notwithstanding anything to the contrary set forth in any applicable equity incentive plans or award agreements, and provided the applicable stock option or other equity award is assumed or continued by the successor or acquiror entity in such Change in Control or such stock option or other equity award is substituted for a similar award of the successor or acquiror entity, then effective as of the later of the effective date of the Change in Control or the date of the Termination Event, the vesting and exercisability of (i) the Existing Options subject to acceleration of vesting upon a Change in Control, as stated on Exhibit A , and (ii) all equity awards granted after the date of this Agreement that are subject to a time-based vesting schedule, shall accelerate such that all such shares become immediately vested and exercisable by you. The applicable Existing Options and all applicable equity awards granted after the date of this Agreement shall remain outstanding following the Termination Event if and to the extent necessary to give effect to this Section 10(a)(iv), subject to the original maximum term of the award (without regard to your termination).

b. “ Change in Control ” means the occurrence of any of the following events: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934), directly or indirectly, of securities of the Parent representing 50% or more of the total voting power represented by the Parent’s then outstanding voting securities; (ii) the consummation of the sale or disposition by the Parent of all or substantially all of the Parent’s assets; or (iii) the consummation of a merger or consolidation of the Parent with any other corporation, other than a merger or consolidation which would result in the voting securities of the Parent outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least 50% of the total voting power represented by the voting securities of the Parent or such surviving entity or its parent outstanding immediately after such merger or consolidation.

11. Other Terminations.

a. For all other types of terminations, including a resignation by you not for Good Reason, a termination for Cause, or a termination on account of your death

or Disability, you will not be eligible to receive the Severance Benefits or Change in Control Severance Benefits and the Company will be required only to provide the Accrued Obligations.

b. Anything in this letter to the contrary notwithstanding, in the event the Company’s business is discontinued because rendered impracticable by substantial financial losses, lack of funding, legal decisions, administrative rulings, declaration of war, dissolution, national or local economic depression or crisis or any reasons beyond the control of the Company, then your employment shall terminate as of the day the Company determines to cease operations. In the event your employment is terminated pursuant to this Section 11(b), you will not receive the Severance Benefits, the Change in Control Severance Benefits, or any other severance compensation or benefit, except that, pursuant to the Company’s standard payroll policies, the Company shall provide the Accrued Obligations.

c. For purposes of this Agreement, termination by the Company based on “ Disability ” shall mean termination because you are unable due to a physical or mental condition to perform the essential functions of your position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law.

12. Section 409A.

a. Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided herein are subject to Section 409A of the Internal Revenue Code (the “ Code ”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “ Section 409A ”). Severance benefits shall not commence until you have a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “separation from service”). Each installment of severance benefits is a separate “payment” for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i), and the severance benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if such exemptions are not available and you are, upon separation from service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after your separation from service, or (ii) your death. The parties acknowledge that the exemptions from application of Section 409A to severance benefits are fact specific, and any later amendment of this Agreement to alter the timing, amount or conditions that will trigger payment of severance benefits may preclude the ability of severance benefits provided under this Agreement to qualify for an exemption.

Notwithstanding the foregoing, the Company shall in no event be obligated to indemnify you for any taxes or interest that may be assessed by the Internal Revenue Service pursuant to Section 409A of the Code to payments made pursuant to this Agreement.

13. Section 280G; Limitations on Payment.

a. If any payment or benefit you will or may receive from the Company or otherwise under Section 10 of this Agreement (a “ 280G Payment ”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”), then any such 280G Payment provided pursuant to this Agreement (a “ Payment ”) shall be equal to the Reduced Amount. The “ Reduced Amount ” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “ Reduction Method ”) that results in the greatest economic benefit for you. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “ Pro Rata Reduction Method ”).

b. Notwithstanding any provision of Section 13(a) to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events ( e.g. , being terminated without Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.

c. Unless you and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the change in control transaction shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change in control transaction, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required by this Section 13. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder.

d. If you receive a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 13(a) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, you agree to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 13(a)) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of Section 13(a), you shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.

14. Obligations to Prior Employers . In your work for the Company and in the context of providing services to the Parent, you will continue to be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to whom you have an obligation of confidentiality. Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company or the Parent. You agree that you will not bring onto Company or Parent premises any unpublished documents or property belonging to any former employer or other person to whom you have an obligation of confidentiality. You specifically warrant that you are not subject to an employment agreement or restrictive covenant preventing full performance of your duties under this Agreement. You also agree to honor all obligations to former employers during your employment with the Company and in the context of providing services to the Parent.

15. Outside Activities during Employment. Except with the prior written consent of the Board, including consent given to you prior to the signing of this Agreement, you will not, while employed by the Company, undertake or engage in any other employment, occupation or business enterprise that would interfere with your responsibilities and the performance of your duties hereunder except for (i) reasonable time devoted to volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as you may wish to serve, (ii) reasonable time devoted to activities in the non-profit and business communities consistent with your duties; and (iii) such other activities as may be specifically approved by the Board. This restriction shall not, however, preclude you (x) from owning less than one percent (1%) of the total outstanding shares of a publicly traded company, or (y) from employment or service in any capacity with Affiliates of the Company. As used in this Agreement, “ Affiliates ” means an entity under common management or control with the Company.

16. Complete Agreement . This letter, together with your CIIA and all policies and procedures of the Company and, as applicable, the Parent, forms the complete and exclusive statement of your continued employment agreement with the Company. It supersedes any other representations or promises made to you by anyone, whether oral or written, including the Prior Agreement. You and the Company and/or the Parent may have entered into agreements relating to your equity in the Parent, which are not affected by this Agreement unless otherwise stated herein. If you and the Company have entered into a prior agreement relating to proprietary information and inventions assignment, that agreement shall be superseded prospectively only. No term or provision of this Agreement may be amended waived, released, discharged or modified except in writing, signed by you and an authorized officer of the Company, except that the Company may,

in its sole discretion, adjust salaries, incentive compensation, stock plans, benefits, job titles, locations, duties, responsibilities, and reporting relationships.

17. Successors and Assigns . This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. The Company may assign this Agreement and its rights and obligations hereunder in whole or in part, to the Parent and to any company or other entity (including an affiliated entity) with or into which the Company may hereafter merge or consolidate, or who becomes a successor, or to which the Company may transfer all or substantially all of its assets, and, in consideration of your employment or continued employment hereunder, you hereby consent to any such assignment. You may not assign or transfer this Agreement or any rights or obligations hereunder, other than to your estate upon your death.

18. Resolution of Disputes . The parties recognize that litigation in federal or state courts or before federal or state administrative agencies of disputes arising out of your employment with the Company or out of this Agreement, or your termination of employment or termination of this Agreement, may not be in the best interests of either you or the Company, and may result in unnecessary costs, delays, complexities, and uncertainty. The parties agree that any dispute between the parties arising out of or relating to the negotiation, execution, performance or termination of this Agreement or your employment, including, but not limited to, any claim arising out of this Agreement, claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Employee Retirement Income Security Act, and any similar federal, state or local law, statute, regulation, or any common law doctrine, whether that dispute arises during or after employment, shall be settled by binding arbitration conducted before a single arbitrator by JAMS, Inc. (“ JAMS ”) or its successor, under the then applicable JAMS rules; provided, however , that this dispute resolution provision shall not apply to any separate agreements between the parties that do not themselves specify arbitration as an exclusive remedy. The location for the arbitration shall be in the Ann Arbor/Detroit, Michigan area. Any award made by such arbitrator shall be final, binding and conclusive on the parties for all purposes, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The arbitrators’ fees and expenses and all administrative fees and expenses associated with the filing of the arbitration shall be borne by the Company; provided, however , that at your option, you may voluntarily pay up to one-half the costs and fees. The parties acknowledge and agree that their obligations to arbitrate under this Section survive the termination of this Agreement and continue after the termination of the employment relationship between you and the Company. The parties each further agree that the arbitration provisions of this Agreement shall provide each party with its exclusive remedy, and each party expressly waives any right it might have to seek redress in any other forum, except as otherwise expressly provided in this Agreement. By electing arbitration as the means for final settlement of all claims, the parties hereby waive their respective rights to, and agree not to, sue each other in any action in a federal, state or local court with respect to such claims, but may seek to enforce in court an arbitration award rendered pursuant to this Agreement. The parties specifically agree to waive their respective rights to a trial by jury, and further agree that no demand, request or motion will be made for trial

by jury . In addition, all claims, disputes, or causes of action under this Section, whether by you or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration.

Please sign and date this letter, and the enclosed CIIA, and return them to me by April 29, 2019 if you wish to accept continued employment at the Company under the terms described above.

We thank you for your service to date and look forward to the opportunity to continue working with you.

Sincerely,


/s/ Louis J. Arcudi III
Name: Louis J. Arcudi III
Title: Chief Financial Officer

Agreed and Accepted:


/s/ Julia C. Owens
Julia C. Owens, Ph.D.
Date: 6/19/2019

Attachment: Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement

Exhibit A

Existing Options

Grant Date

Exercise
Price

Number of
Shares

Stock Plan

Vesting Schedule or Date
Fully vested

Change in Control
Acceleration Terms

08/30/2012

1.08

60,179

2012 Original
Millendo Plan

7/25/2016

Fully vested

1/28/2016

4.44

151,600

2012 Original
Millendo Plan

25% Year 1, shares subject to
option, 1/48th monthly remaining
36 months

See March 4, 2016 Board
Minutes 1

08/24/2018

16.40

174,839

2012 Original
Millendo Plan

25% Year 1, shares subject to
option, 1/48th monthly remaining
36 months

See August 24, 2018 Board
Written Consent 2

01/15/2019

8.80

66,666

2012 New Millendo
Plan

25% Year 1, of remaining shares,
1/36th monthly each month
thereafter

See this letter: Section 10(a)
(iv)

01/15/2019

8.80

107,327

2012 Original
Millendo Plan

25% Year 1, of remaining shares,
1/36th monthly each month
thereafter

See this letter: Section 10(a)
(iv)

1 If within 6 months prior to or within 6 months following a Change in Control, the Optionee will be entitled to accelerated vesting as to 100% of the option.

2 If within 6 months prior to or within 12 months following a Change in Control, (i) the Company (or any parent or subsidiary or successor of the Company) terminates the Optionee’s employment with the Company other than for Cause, death or disability, or (ii) the Optionee Resigns from such employment for Good Reason, then in each such event, to the terms herein, the Optionee will be entitled to accelerated vesting as to 100% of the option.

Exhibit 10.2

June 19, 2019

Louis Arcudi III

4 Whitney Road

Hopedale, MA 01747

Re: Amended and Restated Employment Terms

Dear Lou:

Millendo Therapeutics US, Inc. (the “ Company ”) desires to amend and restate the terms of your employment as the Chief Financial Officer of the Company pursuant to the terms of this letter (the “ Agreement ”). Subject to your execution of this Agreement, effective as of January 1, 2019 (the “ Effective Date ”) this Agreement amends, restates and supersedes in its entirety your Employment Terms with Millendo Therapeutics US, Inc. (formerly known as Millendo Therapeutics, Inc.) dated November 1, 2018 (the “ Prior Agreement ”).

1. Duties and Responsibilities . As the Chief Financial Officer , you will continue to have the duties and responsibilities set forth in the job description for such position, including the duties that you have been performing during your employment to date with the Company, and such other duties as may be assigned to you. It is anticipated that such duties will include your providing services to Millendo Therapeutics, Inc. (the “ Parent ”) as Parent’s Chief Financial Officer, without further or additional compensation or benefits other than as set forth in this Agreement. You will report to the President and Chief Executive Officer.

2. Location . Your primary work location shall be at the Company’s offices in Lexington, Massachusetts. As before, you will continue to be expected to work at the Company’s offices in Ann Arbor, Michigan (the “ Ann Arbor Office ”) at such times as may be requested by the Chief Executive Officer. In accordance with Section 3(c), the Company will continue to pay for all reasonable travel expenses incurred in travelling to and from the Ann Arbor Office, to such extent such expenses were incurred in accordance with the Company’s travel policy including reasonable lodging, coach class air fare, ground transportation and parking (less required withholding and/or deductions required by the applicable law, if any).

3. Compensation .

a. Base Salary . Starting on the Effective Date, your annual base salary rate will be $350,000, less payroll deductions and all required withholdings and subject to review and adjustment by the Company in its sole discretion (“ Base Salary ”). You will be paid in accordance with the Company’s standard payroll practices, currently semi-monthly. Because your position is classified as exempt, you will not be eligible for overtime premiums.

b. Bonus . You will continue to be eligible to earn an annual performance bonus targeted at 40% (the “ Target Amount ”) of your then-current base

salary (“ Annual Bonus ”). The Annual Bonus will be based upon the assessment by the Parent’s Board of Directors (the “ Board ”), or any authorized committee thereof, in its sole discretion, of both your performance and the Company’s performance. The Board, or any authorized committee thereof, may, in its sole discretion, approve an Annual Bonus in an amount in excess of the Target Amount. The Annual Bonus, if any, will be subject to applicable payroll deductions and withholdings. Following the close of each calendar year, the Company and the Board (or any authorized committee thereof) will determine whether you have earned the Annual Bonus, and the amount of any Annual Bonus. No amount of the Annual Bonus is guaranteed, and you must be an employee in good standing on the Annual Bonus payment date to be eligible to receive an Annual Bonus. Your eligibility for an Annual Bonus is subject to change in the discretion of the Company or the Board (or any authorized committee thereof).

5. Options. You were previously granted one or more options to purchase shares of the Parent’s common stock as set forth on Exhibit A hereto (collectively the “ Existing Options ”). The Existing Options remain subject to the terms and conditions of the applicable plan pursuant to which such option(s) was granted (either the Millendo Therapeutics, Inc. 2012 Stock Plan, as amended (the “ Original Millendo Plan ”) or the OvaScience, Inc. (now known as Millendo Therapeutics, Inc.) 2012 Stock Incentive Plan, as amended (the “ New Millendo Plan ”, and together with the Original Millendo Plan, the “ Stock Plans ”), and the applicable option agreement(s) between you and the Company entered into pursuant to the applicable Stock Plan. You understand, acknowledge and agree that, as of the date hereof, you do not hold any stock options or other incentive equity awards of the Parent, other than as set forth on Exhibit A , and that the Existing Options shall only be subject to accelerated vesting in the event of a change in control of or similar transaction involving Parent as set forth on Exhibit A hereto or as expressly provided in the applicable Stock Plan, option agreement or granting resolutions.

9. Termination Without Cause or for Good Reason Absent a Change in Control.

a. If the Company terminates your employment, at any time except during the Change in Control Period (as defined below), without “Cause” (as defined below) or you resign for “Good Reason” (as defined below) then you shall be entitled to receive the Accrued Obligations (defined below). Subject to your full compliance with this Section and Section 9(b) and provided that such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “ Separation from Service ”), if you timely execute a Separation Agreement that includes a general release of claims in favor of the Company and the Parent, in the form presented by the Company (the “ Release ”), and allow it to become effective in accordance with Section 9(b) (the date that the Release becomes effective and may no longer be revoked by you is referred to as the “ Release Effective Date ”), then the Company will provide you with the following “ Severance Benefits :”

or self-employment; or (iii) the date you cease to be eligible for COBRA continuation coverage for any reason, including plan termination (such period from the termination date through the earlier of (i)-(iii), (the “ COBRA Payment Period ”). Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on your behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay you on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to applicable tax withholding, for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive you of your rights under COBRA or ERISA for benefits under plans and policies arising under your employment by the Company.

f. For purposes of this Agreement, “ Good Reason ” shall mean the occurrence of any of the following events without your consent: (i) a material reduction in your Base Salary of at least 10%; (ii) a material reduction in your duties, authority and responsibilities relative to your duties, authority, and responsibilities in effect immediately prior to such reduction, provided, however, that the acquisition of the Company and subsequent conversion of the Company to a division or unit of the acquiring company will not by itself result in a diminution of your position; or (iii) the relocation of your principal place of employment, without your consent, in a manner that lengthens your one-way commute distance by fifty (50) or more miles from your then-current principal place of employment immediately prior to such relocation; provided, however, that, any such termination by you shall only be deemed for Good Reason pursuant to this definition if: (1) you give the Company written notice of your intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that you believe constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “ Cure Period ”); (3) the Company has not, prior to receiving such notice from you, already informed you that your employment with the Company is being terminated and (4) you voluntarily terminate your employment within thirty (30) days following the end of the Cure Period.

10. Termination Without Cause or for Good Reason Coincident with a Change in Control.

iii. The Company will pay an additional amount equivalent to twelve (12) months of your Annual Bonus, which is calculated using the full Target Amount as defined in Section 3(b) and multiplied by 1.0, for the performance year in which your termination occurs. This amount will be payable subject to standard federal and state payroll withholding requirements and will be paid when bonuses for that year are paid to similarly situated employees;

of all or substantially all of the Parent’s assets; or (iii) the consummation of a merger or consolidation of the Parent with any other corporation, other than a merger or consolidation which would result in the voting securities of the Parent outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least 50% of the total voting power represented by the voting securities of the Parent or such surviving entity or its parent outstanding immediately after such merger or consolidation.

11. Other Terminations.

a. For all other types of terminations, including a resignation by you not for Good Reason, a termination for Cause, or a termination on account of your death or Disability, you will not be eligible to receive the Severance Benefits or Change in Control Severance Benefits and the Company will be required only to provide the Accrued Obligations.

12. Section 409A.

separation from service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after your separation from service, or (ii) your death. The parties acknowledge that the exemptions from application of Section 409A to severance benefits are fact specific, and any later amendment of this Agreement to alter the timing, amount or conditions that will trigger payment of severance benefits may preclude the ability of severance benefits provided under this Agreement to qualify for an exemption.

b. It is intended that this Agreement shall comply with the requirements of Section 409A, and any ambiguity contained herein shall be interpreted in such manner so as to avoid adverse personal tax consequences under Section 409A. Notwithstanding the foregoing, the Company shall in no event be obligated to indemnify you for any taxes or interest that may be assessed by the Internal Revenue Service pursuant to Section 409A of the Code to payments made pursuant to this Agreement.

13. Section 280G; Limitations on Payment.

reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.

service in any capacity with Affiliates of the Company. As used in this Agreement, “ Affiliates ” means an entity under common management or control with the Company.

and all administrative fees and expenses associated with the filing of the arbitration shall be borne by the Company; provided, however , that at your option, you may voluntarily pay up to one-half the costs and fees. The parties acknowledge and agree that their obligations to arbitrate under this Section survive the termination of this Agreement and continue after the termination of the employment relationship between you and the Company. The parties each further agree that the arbitration provisions of this Agreement shall provide each party with its exclusive remedy, and each party expressly waives any right it might have to seek redress in any other forum, except as otherwise expressly provided in this Agreement. By electing arbitration as the means for final settlement of all claims, the parties hereby waive their respective rights to, and agree not to, sue each other in any action in a federal, state or local court with respect to such claims, but may seek to enforce in court an arbitration award rendered pursuant to this Agreement. The parties specifically agree to waive their respective rights to a trial by jury, and further agree that no demand, request or motion will be made for trial by jury . In addition, all claims, disputes, or causes of action under this Section, whether by you or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration.

Please sign and date this letter, and the enclosed CIIA, and return them to me by May 13, 2019 if you wish to accept continued employment at the Company under the terms described above.

We thank you for your service to date and look forward to the opportunity to continue working with you.

Sincerely,



/s/ Julia C. Owens
Name: Julia C. Owens, Ph. D.
Title: President and Chief Executive Officer

Agreed and Accepted:


/s/ Louis Arcudi III
Louis Arcudi III
Date: 6/19/19

Attachment: Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement

Exhibit A

Existing Options

Grant Date

Exercise
Price

Number of
Shares

Stock Plan

Vesting Schedule

Change in Control
Acceleration Terms

12/07/2018

10.395

74,400

2012 New Millendo
Plan

25% Year 1 anniversary,
1/36th monthly remaining
36 months

See footnote 1

1/15/2019

8.80

50,000

2012 New Millendo
Plan

25% Year 1 anniversary,
1/36th monthly remaining
36 months

See this letter: Section 10(a)(iv)

1 If your employment by the Company is terminated by the Company or any successor entity without Cause (not including terminated by virtue of death or Disability) or by you for Good Reason within twelve (12) months following or three (3) months prior to the effective date of a Change in Control, then this option will immediately accelerate such that all shares subject to the option become immediately vested and exercisable by you upon such termination.

Exhibit 10.3

May 21, 2019

Jeffery M. Brinza

7958 Branch Dr

Brighton, MI 48116

Re: Amended and Restated Employment Terms

Dear Jeffery:

Millendo Therapeutics US, Inc. (the “ Company ”) desires to amend and restate the terms of your employment as the Chief Administrative Officer and General Counsel of the Company pursuant to the terms of this letter (the “ Agreement ”). Subject to your execution of this Agreement, effective as of January 1, 2019 (the “ Effective Date ”) this Agreement amends, restates and supersedes in its entirety your Employment Terms with Millendo Therapeutics US, Inc. (formerly known as Atterocor, Inc.) dated July 28, 2015 (the “ Prior Agreement ”).

1. Duties and Responsibilities . As the Chief Administrative Officer and General Counsel , you will continue to have the duties and responsibilities set forth in the job description for such position, including the duties that you have been performing during your employment to date with the Company, and such other duties as may be assigned to you. It is anticipated that such duties will include your providing services to Millendo Therapeutics, Inc. (the “ Parent ”) as Parent’s Chief Administrative Officer and General Counsel , without further or additional compensation or benefits other than as set forth in this Agreement. You will report to the President and Chief Executive Officer.

2. Location . You will continue to be based out of the Company’s Ann Arbor, Michigan office, subject to business travel as necessary.

3. Compensation .

a. Base Salary . Starting on the Effective Date, your annual base salary rate will be $346,300, less payroll deductions and all required withholdings and subject to review and adjustment by the Company in its sole discretion (“ Base Salary ”). You will be paid in accordance with the Company’s standard payroll practices, currently semi-monthly. Because your position is classified as exempt, you will not be eligible for overtime premiums.

b. Bonus . You will continue to be eligible to earn an annual performance bonus targeted at 40% (the “ Target Amount ”) of your then-current base salary (“ Annual Bonus ”). The Annual Bonus will be based upon the assessment by the Parent’s Board of Directors (the “ Board ”), or any authorized committee thereof, in its sole discretion, of both your performance and the Company’s performance. The Board, or any authorized committee thereof, may, in its sole discretion, approve an Annual Bonus in an amount in excess of the Target Amount. The Annual Bonus, if any, will be subject to applicable payroll deductions and withholdings. Following the close of each calendar year, the Company and the Board (or any authorized committee thereof) will determine whether

you have earned the Annual Bonus, and the amount of any Annual Bonus. No amount of the Annual Bonus is guaranteed, and you must be an employee in good standing on the Annual Bonus payment date to be eligible to receive an Annual Bonus. Your eligibility for an Annual Bonus is subject to change in the discretion of the Company or the Board (or any authorized committee thereof).

5. Options. You were previously granted one or more options to purchase shares of the Parent’s common stock as set forth on Exhibit A hereto (collectively the “ Existing Options ”). The Existing Options remain subject to the terms and conditions of the applicable plan pursuant to which such option(s) was granted (either the Millendo Therapeutics, Inc. 2012 Stock Plan, as amended (the “ Original Millendo Plan ”) or the OvaScience, Inc. (now known as Millendo Therapeutics, Inc.) 2012 Stock Incentive Plan, as amended (the “ New Millendo Plan ”, and together with the Original Millendo Plan, the “ Stock Plans ”), and the applicable option agreement(s) between you and the Company entered into pursuant to the applicable Stock Plan. You understand, acknowledge and agree that, as of the date hereof, you do not hold any stock options or other incentive equity awards of the Parent, other than as set forth on Exhibit A , and that the Existing Options shall only be subject to accelerated vesting in the event of a change in control of or similar transaction involving Parent as set forth on Exhibit A hereto or as expressly provided in the applicable Stock Plan, option agreement or granting resolutions.

provisions that are intended by the parties to survive and do survive termination of this Agreement.

9. Termination Without Cause or for Good Reason Absent a Change in Control.

a. If the Company terminates your employment, at any time except during the Change in Control Period (as defined below), without “Cause” (as defined below) or you resign for “Good Reason” (as defined below) then you shall be entitled to receive the Accrued Obligations (defined below). Subject to your full compliance with this Section and Section 9(b) and provided that such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “ Separation from Service ”), if you timely execute a Separation Agreement that includes a general release of claims in favor of the Company and the Parent, in the form presented by the Company (the “ Release ”), and allow it to become effective in accordance with Section 9(b) (the date that the Release becomes effective and may no longer be revoked by you is referred to as the “ Release Effective Date ”), then the Company will provide you with the following “ Severance Benefits :”

COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to applicable tax withholding, for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive you of your rights under COBRA or ERISA for benefits under plans and policies arising under your employment by the Company.

place of employment, without your consent, in a manner that lengthens your one-way commute distance by fifty (50) or more miles from your then-current principal place of employment immediately prior to such relocation; provided, however, that, any such termination by you shall only be deemed for Good Reason pursuant to this definition if: (1) you give the Company written notice of your intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that you believe constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “ Cure Period ”); (3) the Company has not, prior to receiving such notice from you, already informed you that your employment with the Company is being terminated and (4) you voluntarily terminate your employment within thirty (30) days following the end of the Cure Period.

10. Termination Without Cause or for Good Reason Coincident with a Change in Control.

coverage for any reason, including plan termination (such period from the termination date through the earlier of (i)-(iii), (the “ COBRA Payment Period ”). Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on your behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay you on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to applicable tax withholding, for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive you of your rights under COBRA or ERISA for benefits under plans and policies arising under your employment by the Company;

11. Other Terminations.

12. Section 409A.

13. Section 280G; Limitations on Payment.

firm to make the determinations required by this Section 13. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder.

into a prior agreement relating to proprietary information and inventions assignment, that agreement shall be superseded prospectively only. No term or provision of this Agreement may be amended waived, released, discharged or modified except in writing, signed by you and an authorized officer of the Company, except that the Company may, in its sole discretion, adjust salaries, incentive compensation, stock plans, benefits, job titles, locations, duties, responsibilities, and reporting relationships.

other in any action in a federal, state or local court with respect to such claims, but may seek to enforce in court an arbitration award rendered pursuant to this Agreement. The parties specifically agree to waive their respective rights to a trial by jury, and further agree that no demand, request or motion will be made for trial by jury . In addition, all claims, disputes, or causes of action under this Section, whether by you or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration.

Please sign and date this letter, and the enclosed CIIA, and return them to me by May 28, 2019 if you wish to accept continued employment at the Company under the terms described above.

We thank you for your service to date and look forward to the opportunity to continue working with you.

Sincerely,


/s/ Julia C. Owens
Name: Julia C. Owens, Ph. D.
Title: President and Chief Executive Officer

Agreed and Accepted:


/s/ Jeffery M. Brinza
Jeffery M. Brinza
Date: 5/23/2019

Attachment: Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement

Exhibit A

Existing Options

Grant Date

Exercise
Price

Number of
Shares

Stock Plan

Vesting Schedule

Change in Control
Acceleration Terms

1/28/2016

4.44

49,609

2012 Original
Millendo Plan

25% Year 1 anniversary,
shares subject to option,
1/36th monthly remaining 36
months

See March 4, 2016 Board Minutes 1

8/24/2018

16.40

44,639

2012 Original
Millendo Plan

25% Year 1 anniversary,
shares subject to option,
1/36th monthly remaining 36
months

See footnote 2

1/15/2019

8.80

56,000

2012 New Millendo
Plan

25% Year 1 anniversary, of
remaining shares, 1/36th
monthly each month
thereafter

See this letter: Section 10(a)(iv)

1 If within 6 months prior to or within 6 months following a Change in Control, you will be entitled to accelerated vesting as to 100% of the option.

2 If within 6 months prior to or within 12 months following a Change in Control, (i) the Company (or any parent or subsidiary or successor of the Company) terminates your employment with the Company other than for Cause, death or Disability, or (ii) you resign from such employment for Good Reason, then in each such event, subject to the terms in such Plan, you will be entitled to accelerated vesting as to 100% of the option.

Exhibit 10.4

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO MILLENDO THERAPEUTICS, INC. IF PUBLICLY DISCLOSED.

License Agreement

This Agreement is entered into with effect as of the Effective Date (as defined below)

by and between

F. Hoffmann-La Roche Ltd

with an office and place of business at Grenzacherstrasse 124, 4070 Basel, Switzerland (“Roche Basel”)

and

Hoffmann-La Roche Inc.

with an office and place of business at 150 Clove Road, Suite 8, Little Falls, New Jersey 07424, U.S.A. (“Roche US”; Roche Basel and Roche US together referred to as “Roche”)

on the one hand

and

Millendo Therapeutics, Inc.

with an office and place of business at 301 N. Main St., Suite 100 Ann Arbor, MI 48104, USA (“Millendo”),

on the other hand.

Table of Contents


1.	Definitions		1
	1.1	Affiliate	1
	1.2	Agreement	1
	1.3	Agreement Term	1
	1.4	Applicable Law	1
	1.5	Business Day	2
	1.6	Calendar Quarter	2
	1.7	Calendar Year	2
	1.8	Change of Control	2
	1.9	Clinical Study	2
	1.10	Combination Product	2
	1.11	Commercially Reasonable Efforts	2
	1.12	Completion	3
	1.13	Compound(s)	3
	1.14	Confidentiality Agreement	3
	1.15	Confidential Information	3
	1.16	Continuation Election Notice	3
	1.17	Control	3
	1.18	Cover	4
	1.19	Development Plan	4
	1.20	Effective Date	4
	1.21	EU	4
	1.22	Expert	4
	1.23	FDA	4
	1.24	FDCA	4
	1.25	Field	4
	1.26	Filing	4
	1.27	First Commercial Sale	5
	1.28	Handle	5
	1.29	HSR	5
	1.30	Housemark	5
	1.31	IFRS	5
	1.32	IMS	5
	1.33	IND	5
	1.34	Initiation	5
	1.35	Insolvency Event	5
	1.36	Invention	6
	1.37	IPO	6
	1.38	Know-How	6
	1.39	Millendo Know-How	6
	1.40	Millendo Patent Rights	6
	1.41	Net Proceeds	6
	1.42	Net Sales	6
	1.43	Partner	7
	1.44	Partner Agreement	7
	1.45	Party	7
	1.46	Patent Rights	7
	1.47	Phase I Study	7
	1.48	Phase II Study	7
	1.49	Phase III Study	7

	1.50	Product	7
	1.51	Regulatory Approval	8
	1.52	Regulatory Authority	8
	1.53	Regulatory Exclusivity	8
	1.54	Roche Know-How	8
	1.55	Roche Patent Rights	8
	1.56	Royalty Term	8
	1.57	Sublicensee	8
	1.58	Territory	8
	1.59	Third Party	8
	1.60	Transaction Costs	9
	1.61	US	9
	1.62	US$	9
	1.63	Valid Claim	9
	1.64	Additional Definitions	9
2.	Grant of License		10
	2.1	Exclusive License	10
	2.2	Right to Sublicense to its Affiliates	10
	2.3	Right to enter into Partner Agreements	10
	2.4	Sub-Contractors	11
	2.5	Retained Rights	11
3.	Alliance Managers and Technology Transfer		11
	3.1	Alliance Managers	11
	3.2	Additional Roche Know-How Transfer	11
	3.3	Transfer of Compound	11
	3.4	No Further Obligations	11
4.	Diligence		11
5.	Development		12
	5.1	Responsibility	12
	5.2	Conduct of the Development Plan	12
	5.3	Reporting	12
6.	Supply		12
	6.1	Clinical and Non-Clinical Supply of Product	12
	6.2	Commercial Supply of Product	12
7.	Regulatory		12
	7.1	Responsibility	12
8.	Commercialization		12
	8.1	Responsibility	12
	8.2	Reporting and Updates	13
9.	Payment		13
	9.1	Upfront Payment	13
	9.2	Development Event Payments	13
	9.3	Sales Based Events	13
	9.4	Royalty Payments	14
	9.5	Combination Product	14
	9.6	Expert Committee	15
	9.7	Partner Agreements	15
10.	Accounting and reporting		16
	10.1	Timing of Payments	16
	10.2	Late Payment	16
	10.3	Method of Payment	16
	10.4	Currency Conversion	16


	10.5	Reporting	17
11.	Taxes		17
12.	Auditing		17
	12.1	Roche Right to Audit	17
	12.2	Audit Reports	18
	12.3	Over-or Underpayment	18
13.	Intellectual Property		18
	13.1	Ownership of Inventions and Know-How	18
	13.2	Trademarks and INN	18
	13.3	Prosecution of Roche Patent Rights	19
	13.4	Prosecution of Millendo Patent Rights	19
	13.5	Abandonment of Patent Rights	19
	13.6	Infringement	19
	13.7	Defense	20
	13.8	Common Interest Disclosures	21
	13.9	Hatch-Waxman	21
	13.10	Patent Term Extensions	21
14.	Representations and Warranties (Zugesicherte Eigenschaften)		22
	14.1	Mutual representations and warranties	22
	14.2	Roche Representations and Warranties	22
	14.3	Millendo Representations and Warranties	22
	14.4	Limitations	23
	14.5	Disclaimer	23
15.	Indemnification		23
	15.1	Roche indemnification	23
	15.2	Millendo indemnification	23
	15.3	Procedure	23
16.	Liability		24
	16.1	Disclaimer	24
	16.2	Limitation of Liability	24
17.	Obligation Not to Disclose Confidential Information		24
	17.1	Non-Use and Non-Disclosure	24
	17.2	Permitted Disclosure	24
	17.3	Press Releases	24
	17.4	Publications	25
	17.5	Commercial Considerations	25
	17.6	Prior Confidentiality Agreement.	26
18.	Term and Termination		26
	18.1	Commencement and Term	26
	18.2	Termination	26
	18.3	Consequences of Termination	27
	18.4	Obligations Related to Ongoing Activities	28
	18.5	Obligations Related to Manufacturing	28
	18.6	Ancillary Agreements	29
	18.7	Direct License	29
	18.8	Royalty and Payment Obligations	29
	18.9	Survival	29
19.	Bankruptcy		29
20.	Miscellaneous		29
	20.1	Governing Law	29
	20.2	Disputes	29
	20.3	Arbitration	30


20.4	Arbitrators	30
20.5	Decisions; Timing of Decisions	30
20.6	Insurance	31
20.7	Assignment	31
20.8	Independent Contractor	31
20.9	Unenforceable Provisions and Severability	32
20.10	Waiver	32
20.11	Appendices	32
20.12	Amendments	32
20.13	Invoices	32
20.14	Notice	32

License Agreement

WHEREAS, Roche has discovered and has conducted certain research and development related to, and possesses certain proprietary intellectual property with respect to Neurokinin 3 (NK 3) Receptor Antagonist [***] and other compounds Covered by the Roche Patent Rights (“ Compound ” as further defined below); and

WHEREAS, Millendo has the resources and expertise in the development, manufacturing and commercialization of pharmaceutical products; and

WHEREAS, Millendo desires to obtain, and Roche is willing to grant to Millendo an exclusive, royalty-bearing license to develop, manufacture and commercialize Compounds and Products in the Field in the Territory (terms as defined below), subject to the terms and conditions hereof; and

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

1. Definitions

As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

1.1 Affiliate

The term “Affiliate” shall mean any individual, corporation, association or other business entity that directly or indirectly controls, is controlled by, or is under common control with the Party in question. As used in this definition of “Affiliate,” the term “control” shall mean the direct or indirect ownership of more than fifty percent (>50%) of the stock having the right to vote for directors thereof or the ability to otherwise control the management of the corporation or other business entity whether through the ownership of voting securities, by contract, resolution, regulation or otherwise. Anything to the contrary in this paragraph notwithstanding, neither Chugai Pharmaceutical Co., Ltd, a Japanese corporation (“ Chugai ”) and/or its subsidiaries (if any) nor Foundation Medicine, Inc., a Delaware corporation (“ FMI ”) and/or its subsidiaries (if any) shall be deemed as Affiliates of Roche unless Roche provides written notice to Millendo of its desire to include Chugai, FMI and/or their respective subsidiaries (as applicable) as Affiliate(s) of Roche.

1.2 Agreement

The term “Agreement” shall mean this document including any and all appendices and amendments to it as may be added and/or amended from time to time in accordance with the provisions of this Agreement.

1.3 Agreement Term

The term “Agreement Term” shall mean the period of time commencing on the Effective Date and, unless this Agreement is terminated sooner as provided in Article 18, expiring on the date when no royalty or other payment obligations under this Agreement are or will become due.

1.4 Applicable Law

The term “Applicable Law” shall mean any law, statute, ordinance, code, rule or regulation that has been enacted by a government authority (including without limitation, any Regulatory Authority) and is in force as of the Effective Date or comes into force during the Agreement Term, in each case to the extent that the same are applicable to the performance by the Parties of their

- 1 -

respective obligations under this Agreement.

1.5 Business Day

The term “Business Day” shall mean 9.00am to 5.00pm local time on a day other than a Saturday, Sunday or bank or other public or federal holiday in Switzerland and U.S.A.

1.6 Calendar Quarter

The term “Calendar Quarter” shall mean each period of three (3) consecutive calendar months, ending March 31, June 30, September 30, and December 31.

1.7 Calendar Year

The term “Calendar Year” shall mean the period of time beginning on January 1 and ending December 31, except for the first year which shall begin on the Effective Date and end on December 31.

1.8 Change of Control

The term “Change of Control” shall mean, with respect to a Party: (a) the acquisition by any Third Party of beneficial ownership of fifty percent (50%) or more of the then outstanding common shares or voting power of such Party, other than acquisitions by employee benefit plans sponsored or maintained by such Party; (b) the consummation of a business combination involving such Party, unless, following such business combination, the stockholders of such Party that owned directly or indirectly more than fifty percent (50%) of the then outstanding common shares or voting power of the entity immediately prior to such business combination beneficially own directly or indirectly more than fifty percent (50%) of the then outstanding common shares or voting power of the entity resulting from such business combination; or (c) the sale of all or substantially all of such Party’s assets or business relating to the subject matter of the Agreement. Notwithstanding the foregoing, the consummation of an IPO by Millendo shall not be deemed a Change of Control of Millendo. For the avoidance of doubt, the transaction between OvaScience and Millendo signed on August 8, 2018 regarding the definitive agreement under which OvaScience will merge with Millendo in an all-stock transaction shall not be deemed a Change of Control of Millendo.

1.9 Clinical Study

The term “Clinical Study” shall mean a Phase I Study or Phase II Study or Phase III Study, as applicable.

1.10 Combination Product

The term “Combination Product” shall mean

a) a single pharmaceutical formulation containing as its active pharmaceutical ingredients both a Compound and one or more other therapeutically or prophylactically active pharmaceutical ingredients, or

b) a combination therapy comprised of a Compound and one or more other therapeutically or prophylactically active products, priced and sold in a single package containing such multiple products or packaged separately but sold together for a single price,

in each case, including all dosage forms, formulations, presentations, line extensions, and package configurations. All references to Product in this Agreement shall be deemed to include Combination Product.

1.11 Commercially Reasonable Efforts

The term “Commercially Reasonable Efforts” shall mean, with respect to Millendo’s obligation under this Agreement to develop or commercialize Product, the level of efforts required to carry

- 2 -

out such obligation in a sustained manner consistent with the efforts a similarly situated biopharmaceutical company or pharmaceutical company, as the case may be, devotes to products of similar stage of development, product life, market potential, profit potential, safety and efficacy, scientific potential and subsequent value resulting from its own research efforts, based on conditions then prevailing, taking into consideration the market, exclusivity and other conditions in particular markets of the Territory.

1.12 Completion

The term “Completion” shall mean the date after which all study subjects are no longer examined or treated under a Clinical Study on which the final data for all such study subjects in such Clinical Study were collected.

1.13 Compound(s)

The term “Compound” shall mean (i) Neurokinin 3 (NK 3) receptor antagonist [***] and any other compound Covered by the Roche US Patent No. 8.507.535 and its foreign equivalents and all continuations and divisionals relating to such patents, and (ii) prodrugs, analogues, derivatives, active fragments and salts thereof and such other compounds. The chemical structure of NK3R antagonist [***] is specified in Appendix 1.12.

1.14 Confidentiality Agreement

The term “Confidentiality Agreeement” shall mean the confidentiality agreement between the parties, effective as of April 12, 2017 and as amended on July 25, 2017 and on February 5, 2018.

1.15 Confidential Information

The term “Confidential Information” shall mean any and all information, data or know-how (including Know-How), whether technical or non-technical, oral or written, that is disclosed by one Party or its Affiliates (“ Disclosing Party ”) to the other Party or its Affiliates (“ Receiving Party ”). Confidential Information shall not include any information, data or know-how that:

(i) was generally available to the public at the time of disclosure, or information that becomes available to the public after disclosure by the Disclosing Party other than through fault (whether by action or inaction) of the Receiving Party or its Affiliates,

(ii) can be evidenced by written records to have been already known to the Receiving Party or its Affiliates prior to its receipt from the Disclosing Party,

(iii) is obtained at any time lawfully from a Third Party under circumstances permitting its use or disclosure,

(iv) is developed independently by the Receiving Party or its Affiliates as evidenced by written records other than through knowledge of Confidential Information,

(v) is approved in writing by the Disclosing Party for release by the Receiving Party.

The terms of this Agreement shall be considered Confidential Information of the Parties.

1.16 Continuation Election Notice

The term “Continuation Election Notice” shall mean the notice Roche provides to Millendo under Section 18.3.2 describing (i) Roche’s intention to continue ongoing development and commercialization of Product(s) and (ii) Roche’s request for Millendo’s continuation of activities during the termination notice period and/or transfer of the data, material and information relating to the Product(s) in accordance with Section 18.3.2.

1.17 Control

The term “Control” shall mean (as an adjective or as a verb including conjugations and variations such as “Controls” “Controlled” or “Controlling”) (a) with respect to Patent Rights and/or Know-How, the possession by a Party of the ability to grant a license or sublicense of such Patent Rights

- 3 -

and/or Know-How without (i) violating the terms of any agreement or arrangement between such Party and any other party or, (ii) requiring the payment of any additional consideration from such Party to any other party, and (b) with respect to proprietary materials, the possession by a Party of the ability to supply such proprietary materials to the other Party as provided herein without violating the terms of any agreement or arrangement between such Party and any other party.

1.18 Cover

The term “Cover” shall mean (as an adjective or as a verb including conjugations and variations such as “Covered,” “Coverage” or “Covering”) that the developing, making, using, offering for sale, promoting, selling, exporting or importing of a given compound, formulation or product would infringe a Valid Claim in the absence of a license under the Patent Rights to which such Valid Claim pertains. The determination of whether a compound, formulation, process or product is Covered by a particular Valid Claim shall be made on a country-by-country basis.

1.19 Development Plan

The term “Development Plan” shall mean the plan for the development of the Products as set forth in Section 5.2.

1.20 Effective Date

The term “Effective Date” shall mean October 16, 2018.

1.21 EU

The term “EU” shall mean the organization of member states known as the European Union, as its membership may be altered from time to time, and any successor thereto, and all of its then current member countries.

1.22 Expert

The term “Expert” shall mean a person with no less than fifteen (15) years of pharmaceutical industry experience and expertise having occupied at least one senior position within a large pharmaceutical company relating to product commercialization and/or licensing but excluding any current or former employee or consultant of either Party. Such person shall be fluent in the English language.

1.23 FDA

The term “FDA” shall mean the Food and Drug Administration of the United States of America or any successor agency thereto.

1.24 FDCA

The term “FDCA” shall mean the Food, Drug and Cosmetics Act, as amended, and the rules and regulations promulgated thereunder.

1.25 Field

The term “Field” shall mean all uses, except for diagnostic uses.

1.26 Filing

The term “Filing” shall mean the filing of an application to the FDA as defined in the FDCA and applicable regulations, or the equivalent application to the equivalent agency in any other country or group of countries, the official approval of which is required before any lawful commercial sale or marketing of Products.

- 4 -

1.27 First Commercial Sale

The term “First Commercial Sale” shall mean, with respect to a Product in any county, the first invoiced sale of such Product to a Third Party by Millendo, its Affiliates or Sublicensees in such country following the receipt of all Regulatory Approvals required for the sale of such Product (excluding pricing approval), or if no such Regulatory Approval is required, the date of the first invoiced sale of a Product to a Third Party by Millendo, its Affiliates or Sublicensees in such country. For clarity, compassionate use sales and “named patient” sales will not be considered for the purpose of determining the First Commercial Sale.

1.28 Handle

The term “Handle” shall mean with respect to Patent Rights preparing, filing, prosecuting (including interference and opposition proceedings) and maintaining (including payment of maintenance fees and annuities and overseeing interferences, proceedings, reissue applications and proceedings, re-examination applications and proceedings, post-grant reviews, inter-parties reviews, derivation proceedings and opposition proceedings).

1.29 HSR

The term “HSR” shall mean the Hart Scott Rodino Antitrust Improvement Act.

1.30 Housemark

The term “Housemark” shall mean the names of Roche or its Affiliates, or variations of the names, and all related logotypes and symbols used by Roche or its Affiliates in connection with its products and/or services.

1.31 IFRS

The term “IFRS” shall mean International Financial Reporting Standards.

1.32 IMS

The term “IMS” shall mean IMS Health Incorporated.

1.33 IND

The term “IND” shall mean an Investigational New Drug application as defined in the FDCA and applicable regulations promulgated by the FDA, or the equivalent application to the equivalent agency in any other country or group of countries, the filing of which is necessary to commence clinical testing of a Product in humans.

1.34 Initiation

The term “Initiation” shall mean the date the first human is dosed with the Product in a Clinical Study approved by the respective Regulatory Authority.

1.35 Insolvency Event

The term “Insolvency Event” shall mean circumstances under which a Party (i) has a receiver or similar officer appointed by a court of competent jurisdiction or governmental authority over all or a material part of its assets or undertaking; (ii) passes a resolution for winding-up (other than a winding-up for the purpose of, or in connection with, any solvent amalgamation or reconstruction) or a court makes an order to that effect or a court makes an order for administration (or any equivalent order in any jurisdiction); (iii) enters into any composition or arrangement with its creditors (other than relating to a solvent restructuring); (iv) ceases to carry on business; or (v) is unable to pay its debts as they become due in the ordinary course of business.

- 5 -

1.36 Invention

The term “Invention” shall mean an invention that is conceived or reduced to practice in connection with any activity carried out pursuant to this Agreement. Under this definition, an Invention may be made by employees of Millendo, its Affiliates or Sublicensees solely or jointly with a Third Party (a “ Millendo Invention ”), by employees of Roche, its Affiliates or sublicensees solely or jointly with a Third Party (a “ Roche Invention ”), or jointly by employees of Millendo and Roche or their respective Affiliates or sublicensees with or without a Third Party (a “ Joint Invention ”).

1.37 IPO

The term “IPO” shall mean, with respect to Millendo, Millendo’s first underwritten public offering of its common stock under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, or, with respect to any non-US public offering, under any foreign equivalent. The transaction between OvaScience and Millendo signed on August 8, 2018 regarding the definitive agreement under which OvaScience will merge with Millendo in an all-stock transaction shall be deemed an IPO.

1.38 Know-How

The term “Know-How” shall mean data, knowledge and information, including materials, samples, chemical manufacturing data, toxicological data, pharmacological data, preclinical data, proprietary assays related to the Compounds, platforms, formulations, specifications, quality control testing data, that are necessary for the research, manufacture, development or commercialization of Compounds or Products.

1.39 Millendo Know-How

The term “Millendo Know-How” shall mean the Know-How that Millendo Controls at the Effective Date and during the Agreement Term but solely to the extent such Know-How was generated by or on behalf of Millendo or otherwise used by Millendo in connection with the development, manufacture or commercialization of Compounds or Products.

1.40 Millendo Patent Rights

The term “Millendo Patent Rights” shall mean the Patent Rights (other than the Joint Patent Rights) that Millendo Controls that cover a Product.

1.41 Net Proceeds

The term “Net Proceeds” shall mean the portion of the aggregate proceeds from any Partner Agreement that is attributable to the value of the Compounds or Products rights being conveyed in such Partner Agreement to Millendo or its Affiliates, including any upfront payments, event based milestone payments, royalty payments and all other monetary and non-monetary consideration paid or made to Millendo or its Affiliates, directly or indirectly from any party to a Partner Agreement (with non-monetary consideration being valued at the fair market value thereof), excluding any Transaction Costs.

1.42 Net Sales

The term “Net Sales” shall mean, with respect to any Product, in a particular period the gross sales price of such Product sold by Millendo, its Affiliates or Sublicensee(s) (the “Selling Party”) to Third Parties during such period, less the following deductions: [***].

Net Sales will be determined from books and records maintained in accordance with GAAP, consistently applied throughout the organization and across all products of the entity whose sales of Products are giving rise to Net Sales. Net Sales shall mean [***].

- 6 -

[***] shall be excluded from the computation of Net Sales [***]. For purposes of determining Net Sales, a Product shall be deemed sold when invoiced and a “sale” shall not include [***].

1.43 Partner

The term “Partner” shall mean a Third Party with which Millendo will enter or has entered a Partner Agreement.

1.44 Partner Agreement

The term “Partner Agreement” shall mean any agreement (including any and all amendments thereto) between Millendo and a Third Party pursuant to Section 2.3 granting rights to develop and commercialize the Compounds and Products in the Field in any part of the Territory (including but not limited to a (i) sub-license agreement with a Third Party, other than a sub-contract pursuant to Section 2.4, (ii) the sale of some (but not all or substantially all) of such Party’s assets or business relating to the subject matter of the Agreement or (iii) an assignment of this Agreement to a Third Party that is not a Change of Control).

1.45 Party

The term “Party” shall mean Millendo or Roche, as the case may be, and “Parties” shall mean Millendo and Roche collectively.

1.46 Patent Rights

The term “Patent Rights” shall mean all rights under any patent or patent application, certificate of inventions, application for certificate of invention or priority patent filing in any country of the Territory or under any international convention or treaty, including any patents issuing on such patent application, and further including any substitution, extension or supplementary protection certificate, reissue, reexamination, renewal, division, continuation or continuation-in-part of any of the foregoing.

1.47 Phase I Study

The term “Phase I Study” shall mean a human clinical trial in any country that would satisfy the requirements of 21 C.F.R. § 312.21(a) (FDCA), as amended from time to time, and the foreign equivalent thereof.

1.48 Phase II Study

The term “Phase II Study” shall mean a human clinical trial, for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients being studied as described in 21 C.F.R. § 312.21(b) (FDCA), as amended from time to time, and the foreign equivalent thereof.

1.49 Phase III Study

The term “Phase III Study” shall mean a human clinical trial that is prospectively designed to demonstrate statistically whether a product is safe and effective for use in humans in a manner sufficient to obtain regulatory approval to market such product in patients having the disease or condition being studied as described in 21 C.F.R. § 312.21(c) (FDCA), as amended from time to time, and the foreign equivalent thereof.

1.50 Product

The term “Product” shall mean any product, including without limitation any Combination Product, containing a Compound as pharmaceutically active agent, regardless of their finished forms, presentations, formulations or dosages.

- 7 -

1.51 Regulatory Approval

The term “Regulatory Approval” shall mean any approvals, licenses, registrations or authorizations by Regulatory Authority, necessary for the manufacture and sale of a Product in the Field in a regulatory jurisdiction in the Territory.

1.52 Regulatory Authority

The term “Regulatory Authority” shall mean any national, supranational (e.g., the European Commission, the Council of the European Union, the European Medicines Agency), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity including the FDA, in each country involved in the granting of Regulatory Approval for the Product.

1.53 Regulatory Exclusivity

The term “Regulatory Exclusivity” shall mean any exclusive marketing rights or data exclusivity rights conferred by any governmental authority under applicable law with respect to a Product in a country or jurisdiction in the Territory to prevent Third Parties from selling such Product in such country or jurisdiction, other than a Patent Right, including orphan drug exclusivity, pediatric exclusivity, rights conferred in the U.S. under the FD&C Act, in the EU under Directive 2001/83/EC, or rights similar thereto in other countries or regulatory jurisdictions in the Territory.

1.54 Roche Know-How

The term “Roche Know-How” shall mean the Know-How Controlled by Roche as of the Effective Date and as described in the patent applications for Roche Patent Rights (synthesis scheme and procedures to prepare compounds in a small scale as well as in vitro potency).

1.55 Roche Patent Rights

The term “Roche Patent Rights” shall mean the Patent Rights that Roche Controls as of the Effective Date as listed in Appendix 1.55 (or as otherwise included pursuant to Section 2.5).

1.56 Royalty Term

The term “Royalty Term” shall mean, with respect to a Product and for a given country, the period of time commencing on the date of First Commercial Sale of the Product in such country and ending on the later of the date that is (a) ten (10) years after the date of the First Commercial Sale of the Product in such country, or (b) the expiration of the last to expire Valid Claim within the Roche Patent Rights in such country Covering the use, manufacture, import, offering for sale, or sale of the Product.

1.57 Sublicensee

The term “Sublicensee” shall mean a person or entity to which Millendo has licensed rights pursuant to this Agreement.

1.58 Territory

The term “Territory” shall mean all countries of the world.

1.59 Third Party

The term “Third Party” shall mean a person or entity other than (i) Millendo or any of its Affiliates or (ii) Roche or any of its Affiliates.

- 8 -

1.60 Transaction Costs

The term “Transaction Costs” shall mean the third party costs up to a maximum of US Dollars [***] (US$ [***]) incurred by or on behalf of Millendo for any activities directly related to a Partner Agreement, e.g. bankers fees and lawyer fees, as reasonably documented.

1.61 US

The term “US” shall mean the United States of America and its territories and possessions.

1.62 US$

The term “US$” shall mean US dollars.

1.63 Valid Claim

The term “Valid Claim” shall mean a claim contained in any (i) unexpired, in force and issued Roche Patent Right that has not been disclaimed, revoked or held invalid by a final non-appealable decision of a court of competent jurisdiction or government agency or (ii) pending Roche Patent application in any country of the Territory that is on file with the applicable patent office and has shown evidence of reasonably consistent activity to advance to issuance of a patent; provided, however, that if a claim of a pending patent application within the Roche Patent Rights shall not have issued within [***] years after the earliest filing date from which such claim takes priority, such claim shall not constitute a Valid Claim for the purposes of this Agreement unless and until a Patent Right issues with such claim (from and after which time the same would be deemed a Valid Claim).

1.64 Additional Definitions

Each of the following definitions is set forth in the Section of this Agreement indicated below:


Definition	Section
Accounting Period	10.1
Alliance Manager	3.1
Bankruptcy Code	19
Breaching Party	18.2.1
Decision Period	13.6
Disclosing Party	1.15
Expert Committee	9.6
Governing Law	20.1
H-W Suit Notice	13.9
Indemnified Losses	15.1
Indemnifying Party	15.3
Initiating Party	13.6
INN	13.2
Joint Invention	1.36
Joint Know-How	13.1
Joint-Patent Rights	13.1
Millendo Indemnitees	15.1
Millendo Invention	1.36
Non-Breaching Party	18.2.1
Notification Period	3.2
Patent Term Extensions	13.10
Payment Currency	10.3
Peremptory Notice Period	18.2.1
Publishing Notice	17.4

- 9 -


Definition	Section
Receiving Party	1.15
Relative Commercial Value	9.5
Roche Indemnitees	15.2
Roche Invention	1.36
Settlement	13.6
SPCs	13.10
Suit Notice	13.6
Transition Period	18.7
USAN	13.2
Valuation Firm	9.7.3

Where this Agreement in parenthesis refers to a legal expression in German it is the relevant Swiss nomenclature. In case of a dispute solely such Swiss nomenclature shall be relevant and shall prevail over the English expression.

2. Grant of License

2.1 Exclusive License

Roche hereby grants to Millendo an exclusive (subject to Section 2.5 below even as to Roche), worldwide right and license under Roche Patent Rights, Roche Know-How, Roche’s interest in Joint Patent Rights and Joint Know-How, to research, have researched, develop, have developed, register, have registered, use, have used, make, have made, import, have imported, export, have exported, market, have marketed, distribute, have distributed, sell and have sold Compounds and Products in the Field in the Territory. This license shall include the right to sublicense in accordance with Section 2.2 and 2.3 below.

2.2 Right to Sublicense to its Affiliates

Millendo shall have the right to grant written sublicenses to its Affiliates under its rights granted under Section 2.1. If Millendo grants such a sublicense, Millendo shall ensure that all of the applicable terms and conditions of this Agreement shall apply to all such Affiliates to the same extent as they apply to Millendo for all purposes. Millendo assumes full responsibility for the performance of all obligations and observance of all terms so imposed on such Affiliates and shall itself account to Roche for all payments due under this Agreement by reason of such sublicense.

2.3 Right to enter into Partner Agreements

Millendo shall have the right to enter into Partner Agreements with one or more Partners under its rights granted under Section 2.1, in each case with Roche’s prior written consent (such consent not to be unreasonably withheld); provided, however, that such consent shall only apply with respect to any Partner Agreement entered into prior to the Initiation of a Phase I Study.

For Partner Agreements entered into prior to the Initiation of a Phase I Study, Millendo shall pay to Roche any amounts as provided in Section 9.7 .

As a general principle, a Partner Agreement entered into prior to the Initiation of a Phase I Study shall not be structured in a way to avoid payments to Roche otherwise due to Roche under such Partner Agreement.

For example, under any Partner Agreement entered into prior to the Initiation of a Phase I Study, neither Millendo nor its Affiliates shall (a) accept any non-monetary consideration from a Partner or a Partner’s Affiliates under a Partner Agreement or (b) grant rights to a Partner or a Partner’s

- 10 -

Affiliates under a Partner Agreement with respect to any products or services other than the Compound or Product and services relating thereto, in each case, without Roche’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed.

2.4 Sub-Contractors

Millendo has the right to sub-contract the work performed under this Agreement. Any sub-contract agreement shall include the right to disclose (i) a copy of the Agreement and confidential information to Roche and (ii) the right to assign the agreement to Roche pursuant to Section 18.3.2, in the event that Roche issues a Continuation Election Notice, including the right to transfer of the ownership of data, information and results arising therefrom to Roche to the same extent as to Millendo.

2.5 Retained Rights

Notwithstanding anything in this Agreement, Roche shall retain the right to use the Compounds for internal research purposes (e.g. as a reference model). If any research is conducted by Roche, any Know-How or Patent Rights related to Compounds resulting from such research by Roche shall become part of the Roche Know-How and Roche Patent Rights and shall be added to the Appendix 1.55.

3. Alliance Managers and Technology Transfer

3.1 Alliance Managers

Each Party shall designate an “ Alliance Manager ” within thirty (30) days after the Effective Date. The Alliance Managers shall facilitate the transfer of Roche Know-How and communication between the Parties and are the primary points of contact between the Parties with respect to all matters arising under this Agreement, including inter alia informational requests from Millendo to Roche during the Notification Period as set forth in Section 3.2. Each Party may change its Alliance Manager from time to time in its sole discretion.

3.2 Additional Roche Know-How Transfer

If Millendo identifies a need for additional Know-How of Roche during a period of ten (10) Business Days from the Effective Date (“ Notification Period ”), Millendo shall notify Roche within the Notification Period, and Roche will provide verbal answers to reasonable questions related to the Compound through no more than two (2) phone calls with Roche chemistry and other subject matter experts.

3.3 Transfer of Compound

Within thirty (30) days after the Effective Date, Roche will deliver to Millendo 5 mg as is of the Compound FCA (courier of Roche’s choosing near location where Materials are stored, Incoterms® 2010) for non-human use only. Roche shall have no obligation to perform any additional activities (e.g. retesting, analysis, certifying) concerning the Compound.

Millendo shall not use the Compound provided by Roche under this Section 3.3 in humans.

3.4 No Further Obligations

Roche shall have no obligation to transfer any Know-How or to provide technical support other than expressly stated in this Article 3.

4. Diligence

Millendo shall use Commercially Reasonable Efforts to develop and commercialize at least one (1) Product in the Field in [***].

- 11 -

5. Development

5.1 Responsibility

Millendo shall be solely and exclusively responsible, at its own expense, for the non-clinical and clinical development of Products in the Field in the Territory.

5.2 Conduct of the Development Plan

Millendo will conduct the development of the Compounds and Products in the Field in the Territory in accordance with the Development Plan. The initial version of the Development Plan is attached in Appendix 5.2. Millendo shall send to Roche the Development Plan promptly after its finalization and thereafter, Millendo shall, until payment of the last milestone payment set forth in Section 9.2 has been made, send to Roche a then current version of the Development Plan at the end of December of each year. Millendo shall have the right to modify the Development Plan in its sole discretion.

5.3 Reporting

During the Agreement Term and until payment of the last milestone payment set forth in Section 9.2, Millendo shall have the obligation to submit annual reports to Roche describing in sufficient detail the development progress of the Compounds and Products by Millendo, its Affiliates and Sublicensees. Millendo shall send such annual report at the end of December of each year (concurrently with the latest version of the Development Plan).

6. Supply

6.1 Clinical and Non-Clinical Supply of Product

Millendo shall be solely and exclusively responsible at its own expense for the manufacturing and supply of clinical and non-clinical supplies of the Product. Millendo shall supply at its own cost all clinical and non-clinical supply of the Product during the Agreement Term, either by itself, or through a Third Party.

6.2 Commercial Supply of Product

Millendo shall be solely and exclusively responsible at its own expense for the commercial manufacture and commercial supply of Product for sale in the Territory, either by itself or through a Third Party.

7. Regulatory

7.1 Responsibility

Millendo shall be solely and exclusively responsible at its own expense for all regulatory affairs related to Products in the Field in the Territory including the preparation, filing and maintaining of applications for Regulatory Approval, as well as any or all governmental approvals required to develop, have developed, make, have made, use, have used, import, have imported sell and have sold Compounds and Products. Millendo shall be solely and exclusively responsible for pursuing, compiling and submitting all regulatory filing documentation, and for interacting with regulatory agencies, for Compounds and Products in all countries in the Territory. Millendo shall own and file in its own discretion all regulatory filings and Regulatory Approvals for the Compound and Product in all countries of the Territory.

8. Commercialization

8.1 Responsibility

Millendo shall be solely and exclusively responsible at its own expense, for the marketing, promotion, sale and distribution of Products in the Territory.

- 12 -

8.2 Reporting and Updates

After the First Commercial Sale of the Product and until the expiry of the Agreement Term, Millendo shall inform Roche in a detailed annual report regarding the commercialization of Products in the Field in the Territory by Millendo, its Affiliates and Sublicensee. The first such annual report shall be provided on the first anniversary of the First Commercial Sale. Each subsequent annual report shall be provided on subsequent anniversaries of the First Commercial Sale. Each annual report shall include forecasted sales, quarterly for the forthcoming Calendar Year and annually for the next five (5) Calendar Years.

9. Payment

9.1 Upfront Payment

Within thirty (30) days after the Effective Date and receipt of an invoice from Roche, Millendo shall pay to Roche US$ [***] (US$ [***]). This payment is non-refundable and non-creditable.

9.2 Development Event Payments

Millendo shall pay to Roche up to a total of US$ [***] (US$ [***]) in relation to the achievements of development events with respect to the first Product achieving such events. The development event payments under this Section shall be paid by Millendo according to the following schedule of development events and shall be non-refundable.


Development Event	US $ (in millions)
Phase II Study Initiation	[***]
Phase III Study Initiation	[***]
Regulatory Approval in US	[***]
Regulatory Approval in any of France, Germany, Italy, Spain or the UK	[***]
Total	[***]

Each development event payment shall be paid only once the first time the first Product reaches the applicable Development event, regardless of the number of times such events are reached by the same or another Product.

If for a Product, a development event does not occur or is not required, then Millendo shall pay such development event payment with the next development event payment triggered by such Product.

For example, if a given Product does not undergo a Phase III Study but instead reaches First Regulatory Approval, then the Initiation of Phase IIb/III Study event payment shall be paid when such Product reaches Regulatory Approval.

Upon reaching development events, Millendo shall timely notify Roche. Roche shall timely submit an invoice to Millendo for each development event payment. Development event payments shall be paid by Millendo to Roche within thirty (30) days from receipt of an invoice from Roche.

9.3 Sales Based Events

Millendo shall pay to Roche up to a total of US$ [***] (US$ [***]) based on aggregate Calendar Year Net Sales of a Product in the Territory:

- 13 -


Net Sales Threshold in million US$	US $ (in millions)
Total Calendar Year Net Sales in the Territory of a Product exceed US$ [***]	[***]
Total Calendar Year Net Sales in the Territory of a Product exceed US$ [***]	[***]
TOTAL	[***]

Each of the sales based event payments shall be paid no more than once during the Agreement Term, at first occurrence of the event for the first Product in the Territory first reaching the respective Net Sales Threshold, irrespective of whether or not the previous sales based event payment was triggered by the same or by a different Product, and shall be non-refundable. Upon reaching sales based events, Millendo shall notify Roche timely (but in no event later than thirty (30) days after the occurrence of the event). Roche shall timely submit an invoice to Millendo for each sales based event payment. Sales based event payments shall be paid by Millendo to Roche within sixty (60) days from receipt of an invoice from Roche.

9.4 Royalty Payments

9.4.1 Royalty Term

Royalties shall be payable by Millendo on Net Sales of Products on a Product-by-Product and country-by-country basis until the expiry of the applicable Royalty Term for such Product. Thereafter, the licenses for such Product shall be fully paid up and non-exclusive.

9.4.2 Royalty Rates

The following royalty rates shall apply to the respective tiers of aggregate Calendar Year Net Sales of a Product, on an incremental basis, as follows:


Tier of Calendar Year Net Sales in million US$	Percent (%) of Net Sales
0 – [***]	[***]
> [*] – [*]	[***]
> [***]	[***]

For example, if Net Sales of a Product in the Territory, for a given Calendar Year, are [***]US$ (US$ [***]), then the royalty payable on such Net Sales of such Product for given Calendar Year shall be calculated as follows:

[([***]*[***])+([***]*[***])+([***]*[***])] = [***] US$ (US$ [***]) royalty payment.

9.5 Combination Product

If Millendo or its Affiliates intend to sell a Combination Product, then the Parties shall meet approximately one (1) year prior to the anticipated First Commercial Sale of such Combination Product in the Territory to negotiate in good faith and agree to an appropriate adjustment to Net Sales to reflect the relative commercial value contributed by the components of the Combination Product (the “ Relative Commercial Value ”). If, after such good faith negotiations not to exceed ninety (90) days, the Parties cannot agree to an appropriate adjustment, the dispute shall be initially referred to the executive officers of the Parties in accordance with Section 20.2. Should the Parties fail to agree within sixty (60) days of such referral, then the Relative Commercial Value shall be determined by an Expert Committee under the procedures of Section 9.6.

- 14 -

9.6 Expert Committee

If the Parties are unable to agree on the Relative Commercial Value under Section 9.5, then Roche will select one (1) individual who would qualify as an Expert, Millendo will select (1) individual who would qualify as an Expert, and those two (2) individuals shall select one (1) individual who would qualify as an Expert and who shall be chairman of a committee of the three Experts (the “ Expert Committee ”), each with a single deciding vote. The Expert Committee will promptly hold a meeting to review the issue under review, at which it will consider memoranda submitted by each Party at least fifteen (15) days before the meeting, as well as reasonable presentations that each Party may present at the meeting. The determination of the Expert Committee as to the issue under review will be binding on both Parties. The Parties will share equally in the costs of the Expert Committee. Unless otherwise agreed to by the Parties, the Expert Committee may not decide on issues outside the scope mandated under terms of this Agreement.

9.7 Partner Agreements

9.7.1 Payments under Net Proceeds

If Millendo executes one or more Partner Agreements prior to the Initiation of a Phase I Study, Licensee shall pay to Roche for such Partner Agreements the amount equal to

(a) [***] percent ([***]%) of the Net Proceeds up to the first US Dollars [***] (US$ [***]) in Net Proceeds, and

(b) [***] percent ([***]%) of the Net Proceeds in excess of US Dollars [***] (US$ [***]) in Net Proceeds and up to US$ [***] (US$ [***]) Net Proceeds, and

(c) [***] percent ([***]%) of the Net Proceeds in excess of US$ [***] (US$ [***]) Net Proceeds ((a), (b) and (c) together “Partner Agreement Revenues”).

For clarity, the foregoing payments shall not be owed in the event of a grant of a sublicense by a Sublicensee of Millendo.

The following examples shall illustrate the principle:

For example, if Licensee enters into a Partner Agreement and receives US$ [***] as Net Proceeds, then Partner Agreement Revenues owed to Roche on such Partner Agreement shall equal US$ [***] calculated as follows:

[([***]*[***]) + ([***]*[***]) + ([***]*[***])] = US$ [***] Partner Agreement Revenues

For example, if Licensee enters into a (a) first Partner Agreement and receives US$ [***] as Net Proceeds and (b) subsequently enters into a second Partner Agreement and receives US$ [***] as Net Proceeds, then Partner Agreement Revenues owed to Roche on both Partner Agreements together shall equal US$ [***] calculated as follows:

[([***]*[***]) + ([***]*[***]) + [***]*[***])] = US$ [***] Partner Agreement Revenue.

Consideration that Roche receives pursuant to this Section 9.7 is in addition to Upfront, Milestone Payments and Royalty Payments pursuant to Section 9.1 to 9.4.

9.7.2 Timing

Millendo shall calculate the shared amount of the Net Proceeds payments owed under this Section 9.7 for each Calendar Quarter and shall make such payments within sixty-five (65) days

- 15 -

after the end of each Calendar Quarter in which such Net Proceeds occur according to the terms and conditions of the Partner Agreement.

9.7.3 Value of Net Proceeds

If at the time of the completion of a Partner Agreement Millendo owns or controls (whether through a license or otherwise) other assets or rights in addition to the Compound or Product rights that are subject of the Partner Agreement, then the Parties shall negotiate and agree in good faith the value of the Net Proceeds, exclusive of the value attributed to Millendo’s other assets. If after good faith negotiations, the Parties cannot agree on an allocation of value among Millendo’s assets within sixty (60) days after the completion of a Partner Agreement, then the dispute shall be initially referred to the executive officers of the Parties in accordance with Section 20.2. Should the Parties fail to agree within sixty (60) days of such referral, then Millendo shall select a nationally recognized investment banking, accounting or valuation firm having expertise in the pharmaceutical industry and reasonably acceptable to Roche (“ Valuation Firm ”) to perform an independent valuation of the relevant assets of Millendo, which determination shall be final and binding on the Parties. The Valuation Firm shall be requested to determine the allocation of the value between Millendo’s assets within ninety (90) Business Days of its appointment and to notify the Parties in writing of its determination. The fees and expenses of such Valuation Firm shall be paid by Roche, however, if such determination of the value of the Net Proceeds by the Valuation Firm is [***] percent ([***]%) more than Millendo’s last written offer pursuant to the good faith negotiations under this Section 9.7.3, the fees and expenses of such Valuation Firm shall be paid by Millendo.

This Section 9.7.3 shall not apply if Millendo closes the Partner Agreement and the Compounds and Products are the only assets Controlled by Millendo at the time of the Partner Agreement or are the only assets that are the subject of the Partner Agreement. In such case, the value associated with the Compounds and Products is hundred percent (100%).

10. Accounting and reporting

10.1 Timing of Payments

Millendo shall calculate royalties on Net Sales quarterly as of March 31, June 30, September 30 and December 31 (each being the last day of an “ Accounting Period ”) and shall pay royalties on Net Sales within sixty (60) days after the end of each Accounting Period in which such Net Sales occur.

10.2 Late Payment

Any payment under this Agreement that is not paid on or before the date such payment is due shall bear interest, to the extent permitted by Applicable Law, at an annual rate of [***] ([***]) percentage points above the average one-month Euro Interbank Offered Rate (EURIBOR), as reported by Reuters from time to time, calculated on the number of days such payment is overdue.

10.3 Method of Payment

Royalties on Net Sales and all other amounts payable by Millendo hereunder shall be paid by Millendo in US$ (the “ Payment Currency ”) to account(s) designated by Roche.

10.4 Currency Conversion

When calculating the Sales of any royalty-bearing Product that occur in currencies other than the Payment Currency, Millendo shall convert the amount of such sales into the Payment Currency using Millendo’s then-current internal foreign currency translation actually used on a consistent basis in preparing its audited financial statements.

- 16 -

10.5 Reporting

With each payment Millendo shall provide Roche in writing for the relevant Calendar Quarter on a Product-by-Product basis the following information:

a) Invoice sales in local currency on a country-by-country basis;

b) Net Sales in local currency on a country-by-country basis;

c) Net Sales in Payment Currency on a country-by-country basis;

d) adjustments made pursuant to Section 9.5 on a country-by-country basis;

e) total Net Sales in the Territory after adjustments made pursuant to Sections 9.5 in Payment Currency;

f) exchange rate used for the conversion of Net Sales from Reporting Currency to the Payment Currency pursuant to Section 10.4;

g) royalty rate pursuant to Section 9.4.2; and

h) total royalty payable in the Payment Currency.

11. Taxes

Roche shall pay all sales, turnover, income, revenue, value added, and other taxes levied on account of any payments accruing or made to Roche under this Agreement.

If provision is made in law or regulation of any country for withholding of taxes of any type, levies or other charges with respect to any royalty or other amounts payable under this Agreement to Roche, then Millendo shall promptly pay such tax, levy or charge for and on behalf of Roche to the proper governmental authority, and shall promptly furnish Roche with receipt of payment. Millendo shall be entitled to deduct any such tax, levy or charge actually paid from royalty or other payment due to Roche or be promptly reimbursed by Roche if no further payments are due to Roche. Each Party agrees to reasonably assist the other Party in claiming exemption from such deductions or withholdings under double taxation or similar agreement or treaty from time to time in force and in minimizing the amount required to be so withheld or deducted.

12. Auditing

12.1 Roche Right to Audit

Millendo shall keep, and shall require its Affiliates and Sublicensees to keep, full, true and accurate books of account containing all particulars that may be necessary for the purpose of calculating all (i) Net Sales and royalties payable under this Agreement and (ii) Net Proceeds. Such books of accounts shall be kept at their principal place of business. At the expense of Roche, Roche has the right to appoint one of the major public accountant firms to perform, on behalf of Roche an audit of such books and records of Millendo and its Affiliates and Sublicensees, that are deemed necessary by the major public accountant firm to report on (i) Net Sales of Product, royalty calculations and royalty payments, payments under the Net Proceeds for the period(s) requested by Roche and the (ii) the correctness of any financial report or payments made under this Agreement.

Upon timely request and at least twenty (20) Business Days prior written notice from Roche, such audit shall be conducted at the principal place of business of Millendo, its Affiliate or its applicable Sublicensee, during regular business hours in such a manner as to not unnecessarily interfere with Millendo’s, its Affiliate’s or its Sublicensee’s normal business activities, and shall be limited to results in the three (3) full Calendar Years prior to audit notification.

Such audit shall not be performed more frequently than once per Calendar Year nor more frequently than once with respect to records covering any specific period of time.

All information, data documents and abstracts herein referred to shall be used only for the purpose of calculating all (i) Net Sales and royalties payable under this Agreement and (ii) Net Proceeds,

- 17 -

shall be treated as Millendo’s Confidential Information subject to the obligations of this Agreement and need neither be retained more than one (1) year after completion of an audit hereof, if an audit has been requested; nor more than three (3) years from the end of the Calendar Year to which each shall pertain; nor more than one (1) year after the date of termination of this Agreement.

12.2 Audit Reports

The auditors shall only state factual findings in the audit reports and shall not interpret the agreement. The final audit report shall be shared with Millendo at the same time it is shared with Roche.

12.3 Over-or Underpayment

If the audit reveals an overpayment, Roche shall reimburse Millendo for the amount of the overpayment within thirty (30) days. If the audit reveals an underpayment, Millendo shall make up such underpayment with the next royalty payment or other payment, if no further royalty payments or other payments are owed to Roche, Millendo shall reimburse Roche for the amount of the underpayment within thirty (30) days. Millendo shall pay for the audit costs if the underpayment of Millendo exceeds [***] percent ([***]%) of the aggregate amount of royalty payments owed with regard to the royalty statements or other payments subject of the audit. Section 10.2 (Late Payment) shall apply to this Section 12.3.

13. Intellectual Property

13.1 Ownership of Inventions and Know-How

Millendo shall own all Millendo Inventions. Roche shall own all Roche Inventions. If any, Joint Inventions and the Patent Rights Covering such Joint Inventions (“ Joint Patent Rights ”) shall by owned jointly pursuant to Art. 652 of the Swiss Civil Code in force at the time of the Effective Date.

Millendo and Roche each shall require all of its employees to assign all inventions related to Products made by them to Roche and Millendo, as the case may be.

The determination of inventorship for Inventions shall be in accordance with US inventorship laws.

With respect to Know-How (other than Inventions), Millendo shall own such Know-How made by employees of Millendo, its Affiliates or Sublicensees solely or jointly with a Third Party, Roche shall own such Know-How made by employees of the Roche, its Affiliates or sublicensees solely or jointly with a Third Party. If any, the Parties shall jointly own (in the sense of Art. 652 of the Swiss Civil Code in force at the time or the Effective Date), Know-How that is made jointly by employees of Millendo and Roche or their respective Affiliates and sublicensees, with or without a Third Party (“ Joint Know-How ”).

Except as specifically set forth herein, this Agreement shall not be construed as (i) giving any of the Parties any license, right, title, interest in or ownership to the Confidential Information; (ii) granting any license or right under any intellectual property rights; or (iii) representing any commitment by either Party to enter into any additional agreement, by implication or otherwise.

13.2 Trademarks and INN

Millendo shall have the right to determine the trademark(s) for the Products and shall own all trademarks used on or in connection with Products in the Territory, and shall, at its sole cost, be responsible for procurement, maintenance, enforcement and defense of all trademarks used on or in connection with Products in the Territory.

- 18 -

Millendo shall have the right to obtain the International Nonproprietary Name (“ INN ”) from the World Health Organization and the United States Adopted Name (“ USAN ”) from the US Adopted Names Council as the generic name for the Products.

Millendo shall not use the Housemark(s) of Roche for any purposes.

13.3 Prosecution of Roche Patent Rights

Roche shall (i) Handle all Roche Patent Rights, (ii) consult with Millendo as to the Handling of such Roche Patent Rights, including all Patent Rights claiming any Compounds, and (iii) furnish to Millendo copies of all documents relevant to any such Handling. Roche shall furnish such documents and consult with Millendo in sufficient time before any action by Roche is due to allow Millendo to provide comments thereon, which comments Roche must consider. Millendo shall cooperate, in all reasonable ways with the Handling of all Roche Patent Rights. Millendo shall pay the costs for the Handling of the Roche Patent Rights under this Section 13.

Roche may assign the Handling of the Roche Patent Rights to Millendo, provided however that such Patent Rights shall still be deemed Roche Patent Rights for the purpose of calculating the royalties under this Agreement.

13.4 Prosecution of Millendo Patent Rights

Millendo shall, at its own expense and discretion, Handle all Patent Rights other than Roche Patent Rights.

13.5 Abandonment of Patent Rights

If Roche wishes to abandon any Patent Right that is licensed to Millendo under this Agreement, then, prior to abandonment, Roche must offer to assign such Patent Right to Millendo.

If requested by Millendo in writing, Roche shall, at no cost to Roche, assign such Roche Patent Right in any country or countries in the Territory to Millendo, and Millendo may thereafter Handle the same at Millendo's own cost. Millendo may abandon such Roche Patent Right Right, if Millendo desires to do so.

All Roche Patent Rights assigned to or paid for or abandoned by Millendo shall continue to be treated as Roche Patent Rights for purposes of calculating the royalties under this Agreement.

13.6 Infringement

Each Party shall promptly provide written notice to the other Party during the Agreement Term of any known infringement or suspected infringement by a Third Party of any Roche Patent Rights, Millendo Patent Rights or Joint Patent Rights.

Within ninety (90) days after Millendo provides or receives such written notice (“ Decision Period ”), Millendo, in its sole discretion, shall decide whether or not to initiate such suit or action in the Territory and shall notify Roche in writing of its decision in writing (“ Suit Notice ”).

If Millendo decides to bring a suit or take action, once Millendo provides Suit Notice, Millendo may immediately commence such suit or take such action. In the event that Millendo (i) does not in writing advise Roche within the Decision Period that Millendo will commence suit or take action, or (ii) fails to commence suit or take action within a reasonable time after providing Suit Notice, Roche shall thereafter have the right to commence suit or take action in the Territory with respect to any Roche Patent Right or Joint Patent Right and shall provide written notice to Millendo of any such suit commenced or action taken by Roche.

- 19 -

Upon written request, the Party bringing suit or taking action (“ Initiating Party ”) shall keep the other Party informed of the status of any such suit or action and shall provide the other Party with copies, to the extent the Initiating Party is lawfully permitted to do so, of all substantive documents or communications filed in such suit or action. The Initiating Party shall have the sole and exclusive right to select counsel for any such suit or action.

The Initiating Party shall, except as provided below, pay all expenses of the suit or action, including the Initiating Party’s attorneys’ fees and court costs. Any damages, settlement fees or other consideration received as a result of such suit or action shall be allocated as follows:

(a) First, to reimburse the Initiating Party for its costs and, if any remains, to the other Party for any advisory counsel fees and costs; and

(b) Second, the balance, if any, shall be allocated [***] percent ([***]%) to the Initiating Party, and [***] percent ([***]%) to the other Party.

If the Initiating Party believes it is reasonably necessary or desirable to obtain an effective remedy, upon written request the other Party agrees to be joined as a party to the suit or action but shall be under no obligation to participate except to the extent that such participation is required as the result of its being a named party to the suit or action. At the Initiating Party’s written request, the other Party shall offer reasonable assistance to the Initiating Party in connection therewith at no charge to the Initiating Party except for reimbursement of reasonable out-of-pocket expenses incurred by the other Party in rendering such assistance. The other Party shall have the right to participate and be represented in any such suit or action by its own counsel at its own expense.

The Initiating Party may settle, consent judgment or otherwise voluntarily dispose of the suit or action (“ Settlement ”) without the written consent of the other Party but only if such Settlement can be achieved without adversely affecting the other Party (including any of its Patent Rights). If a Settlement could adversely affect the other Party, then the written consent of the other Party would be required, which consent shall not be unreasonably withheld.

For any Millendo Patent Rights, Millendo, in its sole discretion, shall decide whether or not to initiate such suit or action in the Territory. Millendo shall have full discretion as to how it wishes to handle such suit and may reach Settlement and retain all damages, settlement fees or other consideration under any terms and conditions it desires and retain whatever. Only if a Settlement could adversely affect Roche shall the written consent of Roche be required, which consent shall not be unreasonably withheld.

13.7 Defense

If an action for infringement is commenced against either Party, its licensees or its sublicensees related to the discovery, development, manufacture, use or sale of a Product, then Millendo shall defend such action at its own expense, and Roche shall assist and cooperate with Millendo, at Millendo’s expense, to the extent necessary in the defense of such suit. Millendo shall have the right to settle the suit or consent to an adverse judgment thereto, in its sole discretion, so long as such settlement or adverse judgment does not adversely affect the rights of Roche and its Affiliates (including any Patent Rights Controlled by any of them). Millendo shall assume full responsibility for the payment of any award for damages, or any amount due pursuant to any settlement entered into by it with such Third Party.

If the manufacture, use, importation, offer for sale or sale of any Product pursuant to this Agreement results in any claim, suit or proceeding alleging patent infringement or trade secret misappropriation against Roche, then such Party shall promptly notify the other Party hereto. The Parties shall cooperate with each other in connection with any such claim, suit or proceeding and

- 20 -

shall keep each other reasonably informed of all material developments in connection with any such claim, suit or proceeding.

If a Third Party asserts that Patent Rights owned by or licensed to it are infringed by the development, manufacture, use, importation, offer for sale or sale of Products, or that its trade secrets were misappropriated in connection with such activity, then Millendo shall have the exclusive right and responsibility to resolve any such claim, whether by obtaining a license from such Third Party, by defending against such Third Party’s claims or otherwise, and shall be solely responsible for the defense of any such action, any and all costs incurred in connection with such action (including, without limitation, attorneys’ and expert fees) and all liabilities incurred in connection therewith. Notwithstanding the above, Millendo shall not enter into any settlement of any such claim without the prior written consent of Roche if such settlement would require Roche to be subject to an injunction or to make any monetary payment to Millendo or any Third Party, or admit any wrongful conduct by Roche or its Affiliates, or would limit or restrict the claims of or admit any invalidity and/or unenforceability of any of the Patent Rights Controlled by Roche, or have any impact on activities outside the Field.

13.8 Common Interest Disclosures

With regard to any information or opinions disclosed pursuant to this Agreement by one Party to each other regarding intellectual property and/or technology owned by Third Parties, the Parties agree that they have a common legal interest in determining whether, and to what extent, Third Party intellectual property rights may affect Compounds and/or Products, and have a further common legal interest in defending against any actual or prospective Third Party claims based on allegations of misuse or infringement of intellectual property rights relating to the Compounds and/or Products. Accordingly, the Parties agree that all such information and materials obtained by Millendo and Roche from each other will be used solely for purposes of the Parties’ common legal interests with respect to the conduct of the Agreement. All information and materials will be treated as protected by the attorney-client privilege, the work product privilege, and any other privilege or immunity that may otherwise be applicable. By sharing any such information and materials, neither Party intends to waive or limit any privilege or immunity that may apply to the shared information and materials. Neither Party shall have the authority to waive any privilege or immunity on behalf of the other Party without such other Party’s prior written consent, nor shall the waiver of privilege or immunity resulting from the conduct of one Party be deemed to apply against any other Party.

13.9 Hatch-Waxman

Notwithstanding anything herein to the contrary, should a Party receive a certification for a Product pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984 (Public Law 98-417, known as the Hatch-Waxman Act), as amended, or its equivalent in a country other than the US, then such Party shall immediately provide the other Party with a copy of such certification. Roche shall have thirty (30) days from date on which it receives or provides a copy of such certification to provide written notice to Millendo (“ H-W Suit Notice ”) whether Roche will bring suit, at its expense, within a forty-five (45) day period from the date of such certification. Should such thirty (30) day period expire without Roche bringing suit or providing such H-W Suit Notice, then Millendo shall be free to immediately bring suit.

13.10 Patent Term Extensions

The Parties shall use Commercially Reasonable Efforts to obtain all available patent term extensions, adjustments or restorations, or supplementary protection certificates (“ SPCs ”, and together with patent term extensions, adjustments and restorations, “ Patent Term Extensions ”). Roche shall execute such authorizations and other documents and take such other actions as may be reasonably requested by Millendo to obtain such Patent Term Extensions, including

- 21 -

designating Millendo as its agent for such purpose as provided in 35 U.S.C. Section 156. All filings for such Patent Term Extensions for Patent Rights shall be made by Millendo; provided, that in the event that Millendo elects not to file for a Patent Term Extension, Millendo shall (a) promptly inform Roche of its intention not to file and (b) grant Roche the right to file for such Patent Term Extension. Each Party shall execute such authorizations and other documents and take such other actions as may be reasonably requested by the other Party to obtain such extensions. The Parties shall cooperate with each other in gaining patent term restorations, extensions and/or SPCs wherever applicable to such Roche Patent Rights.

14. Representations and Warranties (Zugesicherte Eigenschaften)

14.1 Mutual representations and warranties

Each Party represents and warrants to the other that, as of the Effective Date: (a) it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof; (b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate or partnership action; and (c) this Agreement is legally binding upon it, enforceable in accordance with its terms, and does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

14.2 Roche Representations and Warranties

Roche represents and warrants to Millendo that, as of the Effective Date: (a) neither Roche nor any of its Affiliates has received written notice from any Third Party claiming that the manufacture, use or sale of Compound or Product infringes any Patent Right of any Third Party; (b) neither Roche nor any of its Affiliates is a party to any legal action, suit or proceeding relating to Compound or Product and no patent application or registration within the Roche Patent Rights is subject of any pending interference, opposition, cancellation or patent protest; (c) the Roche Patent Rights and Roche Know-How are not subject to any liens or encumbrances and neither Roche nor any of its Affiliates has granted to any Third Party any rights or licenses under such Roche Patent Rights or Roche Know-How that would conflict with the licenses granted to Millendo hereunder; (d) none of the Roche Patent Rights are in-licensed by Roche or its Affiliates; (e) Roche has full legal or beneficial title and ownership to of all the Roche Patent Rights and Roche Know-How as is necessary to grant the licenses to Millendo to such Roche Patent Rights and Roche Know-How that Roche grants pursuant to this Agreement; (f) no Third Party has made any claim or allegation to Roche or its Affiliates in writing that a Third Party has any right or interest in or to the Roche Patent Rights; (g) neither Roche nor any of its Affiliates has knowledge of any claim or litigation that has been brought or threatened in writing by any Third Party alleging that (i) the Roche Patent Rights are invalid or unenforceable or (ii) the manufacture, sale, offer for sale, or importation of the Products infringes or misappropriates or would infringe or misappropriate any right of any Third Party; (h) to the knowledge of Roche and its Affiliates, the Roche Patent Rights are valid and enforceable; and (i) the Roche Patent Rights are the only Patent Rights owned by Roche that Cover the Products.

14.3 Millendo Representations and Warranties

Millendo represents and warrants to Roche that, as of the Effective Date, it has never been debarred under 21 U.S.C. §335a, disqualified under 21 C.F.R. §312.70 or §812.119, sanctioned by a Federal Health Care Program (as defined in 42 U.S.C §1320 a-7b(f)), including without limitation the federal Medicare or a state Medicaid program, or debarred, suspended, excluded or otherwise declared ineligible from any other similar Federal or state agency or program. In the

- 22 -

event Millendo receives notice of debarment, suspension, sanction, exclusion, ineligibility or disqualification under the above-referenced statutes, Millendo shall immediately notify Roche in writing.

14.4 Limitations

Except as provided in Section 14.2, Roche makes no representation or warranty that all intellectual property rights necessary for Millendo to make, have made, use, sell, offer for sale and import the Compound or the Product in the Territory have been granted to Millendo under Article 2. Roche did not perform an exhaustive and final search for Third Party Patent Rights or an evaluation thereof for Compound and technologies relevant under this Agreement. Roche will not keep Millendo updated about further searches or analyses of Third Party Patent Rights nor will it keep Millendo updated about any further developments of any Third Party rights or steps taken or intended to be taken by Millendo with regard to such Third Party rights.

14.5 Disclaimer

Except as expressly set forth herein and elsewhere in this Agreement, THE INTELLECTUAL PROPERTY RIGHTS PROVIDED BY EACH PARTY HEREUNDER ARE PROVIDED “AS IS” AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

15. Indemnification

15.1 Roche indemnification

Roche shall indemnify, hold harmless and defend Millendo and Millendo’s Affiliates, its officers, directors, employees, consultants and agents (“ Millendo Indemnitees ”) from and against any and all losses, damages, liabilities, expenses and costs, including reasonable legal expense and attorneys’ fees (“ Indemnified Losses ”), to which any such Millendo Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Indemnified Losses arise out of the breach by Roche of any obligation, representation, warranty, covenant or agreement made by it under this Agreement, except to the extent such Indemnified Losses result from the negligence or willful misconduct of any Millendo Indemnitee or any item subject to indemnification by Millendo under Section 15.2.

15.2 Millendo indemnification

Millendo shall indemnify, hold harmless and defend Roche and Roche’s Affiliates, its officers, directors, employees, consultants and agents (“ Roche Indemnitees ”) from and against any and all Indemnified Losses, to which any such Roche Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Indemnified Losses arise out of (i) the breach by Millendo of any obligation, representation, warranty, covenant or agreement made by it under this Agreement, or (ii) the development, manufacture, use, handling, storage, sale or other disposition of the Compounds and/or any Products by Millendo or any of its Affiliates or Partners (including but not limited to (1) Product liability claims, (2) infringement of Third Party Patent Rights, except to the extent such Indemnified Losses result from the negligence or willful misconduct of any Roche Indemnitee or any item subject to indemnification by Roche under Section 15.1).

15.3 Procedure

In the event Millendo Indemnitee or Roche Indemnitee (as the case may be) seeks indemnification under Section 15.1 or 15.2, it shall inform the other Party (the “ Indemnifying Party ”) of a claim

- 23 -

as soon as reasonably practicable after it receives notice of the claim, shall permit the Indemnifying Party to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration), and shall cooperate as requested (at the expense of the Indemnifying Party) in the defense of the claim, provided that the Indemnifying Party shall not settle any such claim without the prior written consent of any affected Roche Indemnitee or Millendo Indemnitee (as the case may be), if such settlement contains any admission of fault of such Millendo Indemnitee or Roche Indemnitee (as the case may be).

16. Liability

16.1 Disclaimer

THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN. MILLENDO AND ROCHE DISCLAIM ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH OF THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, WHETHER THE PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY, PERFORMANCE, UTILITY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS.

16.2 Limitation of Liability

IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT DAMAGES (INDIREKTE SCHÄDEN/ SCHÄDEN MIT LANGEM KAUSALZUSAMMENHANG), CONSEQUENTIAL DAMAGES (MANGELFOLGESCHÄDEN) INCLUDING LOST REVENUES OR PROFITS (ENTGANGENER GEWINN), IRRESPECTIVE OF THE LEGAL BASIS FOR SUCH CLAIMS. THIS LIMITATION OF LIABILITY SHALL NOT APPLY IN THE EVENT OF DAMAGES CAUSED BY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE DAMAGING PARTY.

17. Obligation Not to Disclose Confidential Information

17.1 Non-Use and Non-Disclosure

During the Agreement Term and for five (5) years thereafter, a Party receiving Confidential Information (“ Receiving Party ”) of the other Party shall (i) treat such Confidential Information provided by Disclosing Party as it would treat its own information of a similar nature, (ii) take all reasonable precautions not to disclose such Confidential Information to Third Parties, without the Disclosing Party’s prior written consent, and (iii) not use such Confidential Information other than for fulfilling its obligations under this Agreement.

17.2 Permitted Disclosure

Notwithstanding the obligation of non-use and non-disclosure set forth in Section 17.1, the Parties recognize the need for certain exceptions to this obligation, specifically set forth below, with respect to press releases, Patent Rights, publications, and certain commercial considerations.

17.3 Press Releases

Millendo may issue a press release announcing the existence and selected key non-financial terms of this Agreement, upon prior approval by Roche.

Millendo shall provide Roche with a copy of any draft press release related to the activities contemplated by this Agreement at least two (2) weeks prior to its intended publication for Roche’s review. Roche may provide Millendo with suggested modification to the draft press release. Millendo shall consider Roche’s suggestions prior to issuing its press release.

- 24 -

Roche may issue press releases consistent with its internal policies.

Except as set forth above, neither Party shall make any public announcements concerning the material terms of this Agreement without the other Party’s prior written consent. If a Party desires to make a public announcement concerning the material terms of this Agreement, such Party shall give reasonable prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval (except as otherwise provided herein), except that in the case of a press release or governmental filing required by law, the disclosing Party shall provide the other Party with such advance notice as it reasonably can and shall not be required to obtain approval therefor. A Party commenting on such a proposed press release shall provide its comments, if any, within five (5) Business Days after receiving the press release for review. Neither Party is required to seek the permission of the other Party to repeat any information that has already been publicly disclosed by such Party, or by the other Party, in accordance with this Section 17.3, provided such information remains accurate as of such time.

17.4 Publications

During the Agreement Term, Roche shall not publish or otherwise make any publication with respect to the Compounds or Products. The following restrictions shall apply with respect to disclosure by Millendo of Confidential Information relating to the Compounds and Products in any publication or presentation:

Millendo shall provide Roche with a copy of any proposed publication or presentation at least thirty (30) days (or at least fifteen (15) days in the case of oral presentations) prior to submission for publication so as to provide Roche with an opportunity to recommend any changes it reasonably believes are necessary to continue to maintain the Confidential Information disclosed by Roche to Millendo in accordance with the requirements of this Agreement. The incorporation of such recommended changes shall not be unreasonably refused; and if Roche notifies (“ Publishing Notice ”) Millendo in writing, within thirty (30) days after receipt of the copy of the proposed publication or presentation (or at least fifteen (15) days in the case of oral presentations), that such publication or presentation in its reasonable judgment contains an invention, solely or jointly conceived and/or reduced to practice by Roche, for which Roche reasonably desires to obtain patent protection, Millendo shall delay such publication for a period reasonably sufficient to permit the timely preparation and filing of a patent application(s) on such invention, and in no event less than ninety (90) days from the date of the Publishing Notice.

17.5 Commercial Considerations

Nothing in this Agreement shall prevent Millendo or its Affiliates from disclosing Confidential Information of Roche to (i) governmental agencies to the extent required or desirable to secure government approval for the development, manufacture or sale of Products in the Territory or in connection with the Handling of the Roche Patent Rights in the event such Handling has been assigned to Millendo, (ii) Third Parties acting on behalf of Millendo, to the extent reasonably necessary for the development, manufacture or sale of Products in the Territory, (iii) Third Parties to the extent reasonably necessary to market any Product in the Territory, (iv) Third Parties to the extent reasonably necessary in connection with a prospective or actual Partner Agreement, (v) Third Parties to the extent reasonably necessary to otherwise carry out its obligations or exercise its rights under this Agreement, (vi) in connection with a prospective or actual financing, investment in or Change of Control of Millendo, provided that any such disclosures are subject to confidentiality obligations at least as onerous as those set forth in this Agreement (other than with respect to the length of the term of such obligations) or (vii) OvaScience in connection with the IPO.

- 25 -

The Receiving Party may disclose Confidential Information of the Disclosing Party to the extent that such Confidential Information is required to be disclosed by the Receiving Party to comply with Applicable Law, to defend or prosecute litigation or to comply with governmental regulations or applicable regulations of a stock exchange, provided that the Receiving Party provides prior written notice of such disclosure to the Disclosing Party and, to the extent practicable, takes reasonable and lawful actions to minimize the degree of such disclosure particularly with regard to the financial terms of this Agreement and to ensure such disclosed Confidential Information is treated confidentially.

17.6 Prior Confidentiality Agreement.

As of the Effective Date, the terms of this Article 17 shall supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) relating to the subject of this Agreement, including the Confidentiality Agreement. Any information disclosed pursuant to any such prior agreement shall be deemed Confidential Information for purposes of this Agreement.

18. Term and Termination

18.1 Commencement and Term

This Agreement shall commence on the Effective Date and continue for the Agreement Term.

18.2 Termination

18.2.1 Termination for Breach

A Party (“ Non-Breaching Party ”) shall have the right to terminate this Agreement in its entirety in the event the other Party (“ Breaching Party ”) is in breach of any of its material obligations under this Agreement. The non-Breaching Party shall provide written notice to the Breaching Party, which notice shall identify the breach. The Breaching Party shall have a period of ninety (90) days after such written notice is provided (“ Peremptory Notice Period ”) to cure such breach. If the Breaching Party has a bona fide dispute as to whether such breach occurred or has been cured, it will so notify the Non-Breaching Party, and the expiration of the Peremptory Notice Period shall be tolled until such dispute is resolved pursuant to Section 20.2. Upon a determination of breach or failure to cure, the Breaching Party may have the remainder of the Peremptory Notice Period to cure such breach. If such breach is not cured within the Peremptory Notice Period, then absent withdrawal of the Non-Breaching Party’s request for termination, this Agreement shall terminate effective as of the expiration of the Peremptory Notice Period.

18.2.2 Termination for Insolvency Event

A Party shall have the right to terminate this Agreement in its entirety, if the other Party incurs an Insolvency Event; provided, however, in the case of any involuntary bankruptcy proceeding, such right to terminate shall only become effective if the Party that incurs the Insolvency Event consents to the involuntary bankruptcy or such proceeding is not dismissed within ninety (90) days after the filing thereof.

18.2.3 Termination by Millendo without a Cause

Millendo shall have the right to terminate this Agreement at any time in its entirety or on a Product-by-Product basis upon three (3) months prior written notice before First Commercial Sale of the Product or upon seven (7) months prior written notice after the First Commercial Sale of the Product. The effective date of termination under this Section 18.2.3 shall be the date three (3)

- 26 -

months (or seven (7) months as the case may be) after Millendo provides such written notice to Roche.

18.3 Consequences of Termination

18.3.1 Termination by Millendo for Breach by Roche or Roche Insolvency

Upon any termination by Millendo under Section 18.2.1 or 18.2.2, the rights and licenses granted by one Party to the other Party under this Agreement shall terminate in their entirety or on a Product-by-Product basis, as applicable, on the effective date of termination.

18.3.2 Termination by Millendo without Cause, Termination by Roche for Breach by Millendo or Millendo Insolvency

Upon any termination by Roche under Section 18.2.1 or 18.2.2 or by Millendo under Section 18.2.3, the rights and licenses granted by Roche to Millendo under this Agreement shall terminate in their entirety, or on a Product-by Product basis, as applicable, on the effective date of termination.

If Roche desires to continue development and/or commercialization of Product(s), Roche shall give a Continuation Election Notice to Millendo within thirty (30) days of receipt of Millendo’s notice of termination without cause or concurrently with its notice of termination. If Millendo receives such a timely Continuation Election Notice, and to the extent reasonably requested by Roche:

a) After the date of notice of termination Millendo shall, to the extent Millendo has the right to do so, transfer to Roche all regulatory filings and approvals, all final pre-clinical, non-clinical and clinical study reports and clinical study protocols, trademarks, and all data, including clinical data, materials and information, in Millendo’s possession and control related to Product(s) necessary or reasonably useful for Roche to continue to develop and commercialize the Product(s), in each case subject to reimbursement by Roche of Millendo’s reasonably incurred external cost.

b) Millendo shall assign all clinical study agreements, pre-clinical and non-clinical study agreements, CMC study agreements, free of charge; provided, that such agreements are solely related to Products and agreements that are not solely related to the Product to the extent permitted.

c) Roche shall, upon transfer, have the right to disclose such filings, approvals and data to (i) governmental agencies to the extent required or desirable to secure government approval for the development, manufacture or sale of Product(s); (ii) Third Parties acting on behalf of Roche, its Affiliates or licensees for the development, manufacture, or sale of Product(s), or (iii) Third Parties to the extent reasonably necessary to market Product(s).

d) If the effective date of termination is prior to the First Commercial Sale of the first Product, Roche shall have a fully-paid up, royalty-free, worldwide, non-exclusive, sublicensable, transferable license under the Millendo Patent Rights, Millendo Know-How and Millendo’s interest in the Joint Patent Rights (including any rights useful or necessary to allow Roche, its Affiliates or licensees to research, develop, manufacture, have manufactured, use, offer to sell, sell, promote, export and import the applicable Compounds and Products.

e) If the effective date of termination is after the First Commercial Sale of the first Product, Roche shall have a worldwide, non-exclusive, sublicensable, transferable license under the Millendo Patent Rights, Millendo Know-How and Millendo’s interest in the Joint Patent Rights (limited

- 27 -

to any rights useful or necessary to allow Roche, its Affiliates or licensees to research, develop, manufacture, have manufactured, use, offer to sell, sell, promote, export and import the applicable Compounds and Products). Roche shall pay to Millendo a royalty of [***] percent ([***]%) for [***] years after the First Comercial Sale of the Product on a country-by-country basis, for example if the Product is transferred to Roche after [***] years following the First Commercial Sale of the Product in the US, then Roche shall pay to Millendo a royalty for the remaining [***] years.

18.4 Obligations Related to Ongoing Activities

If Roche provides timely Continuation Election Notice, then from the date of notice of termination until the effective date of termination, Millendo shall continue activities ongoing as of the date of notice of termination at its own expense.

After the effective date of termination, Millendo shall not have any obligation to perform and/or complete any activities or to make any payments for performing or completing any activities under this Agreement, except as expressly stated herein.

Notwithstanding the foregoing, in case of termination by Roche under Sections 18.2.1 or 18.2.2 or by Millendo under Section 18.2.3, upon the request of Roche, Millendo shall complete any studies related to the Product(s) that are being conducted under its IND for the Product(s) and are ongoing as of the effective date of termination; provided, however, that

(i) both Millendo and Roche in their reasonable judgment have concluded that completing any such clinical studies does not present an unreasonable risk to patient safety;

(ii) Roche agrees to reimburse Millendo for all of its development costs that arise after the effective date of termination in completing such studies.

18.5 Obligations Related to Manufacturing

a) Clinical Supplies

In the case of termination by Roche according to Sections 18.2.1 or 18.2.2 or by Millendo under Section 18.2.3, if Roche elects to develop the Product(s), upon the request of Roche, Millendo shall transfer all existing and available clinical material to Roche and Roche shall reimburse Millendo for this material at Millendo’s fully burdened manufacturing cost, plus [***] percent ([***]%), provided however that Millendo shall procure the supply for the ongoing study(ies) until the transfer of the respective study and/or supply has been completed. Millendo shall, subject to reimbursement by Roche of its reasonably incurred external costs , use Commercially Reasonable Efforts to transfer the manufacturing and supply processes and technologies to Roche or a Third Party defined by Roche as soon as possible after the effective date of termination and provide Roche corresponding support until such processes and technologies have been fully established at Roche or at the Third Party defined by Roche.

b) Commercial Supplies

In the case of termination by Roche according to Sections 18.2.1 or 18.2.2 or by Millendo under Section 18.2.3, if a Product is marketed or filed in any country of Territory on the date of the notice of termination of this Agreement, upon the request of Roche, Millendo shall manufacture and supply such Product to Roche for a period that shall not exceed twenty-four (24) months from the effective date of the termination of this Agreement and Roche shall reimburse Millendo for this material at Millendo’s fully burdened manufacturing cost, plus [***] percent ([***]%). Millendo shall, subject to reimbursement by Roche of its reasonably incurred external costs, use Commercially Reasonable Efforts to transfer the manufacturing and supply processes and technologies to Roche or a Third Party defined by Roche as soon as possible after the effective date of termination and provide Roche corresponding support until such

- 28 -

processes and technologies have been fully established at Roche or at the Third Party defined by Roche (but in no event longer than a period of twenty-four (24) months).

18.6 Ancillary Agreements

Unless otherwise agreed by the Parties, the termination of this Agreement shall cause the automatic termination of all ancillary agreements (to the extent there are any) related hereto.

18.7 Direct License

Irrespective of anything to the contrary in this Agreement, any existing, permitted sublicense granted to a Sublicensee shall, upon the written request of Millendo and Sublicensee within thirty (30) days following the effective date of termination, remain in full force and effect until one hundred and twenty (120) days from the effective date of termination of this Agreement (“ Transition Period ”), provided that (i) such Sublicensee is not then in breach of its sublicense agreement, and in the case of termination by Roche for breach by Millendo, that such Sublicensee did not cause the breach that gave rise to the termination by Roche. During such Transition Period, Roche shall cooperate with such Sublicensee to enter into a direct license agreement, whereby such Sublicensee agrees in writing to be bound to Roche under the same terms and conditions of this Agreement. Notwithstanding the foregoing, any sublicense granted by Millendo under Section 2.2 of this Agreement to its Affiliates shall terminate upon effective date of the termination of this Agreement.

18.8 Royalty and Payment Obligations

Termination of this Agreement by a Party, for any reason, shall not release Millendo from any obligation to pay royalties, share of Net proceeds or make any other payments to Roche that are due and payable or accrued prior to the effective date of termination.

18.9 Survival

Section 15 (Indemnification), Section 17 (Obligation Not to Disclose Confidential Information), Section 18 (Term and Termination) and Sections 13.1 (Ownership of Inventions and Know-How), 20.1 (Governing Law), 20.3 (Arbitration) shall survive any expiration or termination of this Agreement for any reason.

19. Bankruptcy

All licenses (and to the extent applicable rights) granted under or pursuant to this Agreement by Roche to Millendo are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11, US Code (the “ Bankruptcy Code ”) licenses of rights to “intellectual property” as defined under Section 101(60) of the Bankruptcy Code. Unless Millendo elects to terminate this Agreement, the Parties agree that Millendo, as a licensee or sublicensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code, subject to the continued performance of its obligations under this Agreement.

20. Miscellaneous

20.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of Switzerland, without reference to its conflict of laws principles, and shall not be governed by the United Nations Convention of International Contracts on the Sale of Goods (the Vienna Convention) (“ Governing Law ”).

20.2 Disputes

Unless otherwise set forth in this Agreement, in the event of any dispute in connection with this Agreement, such dispute shall be, by written notice referred to the respective executive officers

- 29 -

of the Parties designated below or their designees, for good faith negotiations attempting to resolve the dispute. The designated executive officers are as follows:


For Millendo:		CEO
For Roche:		Head of Roche Partnering

20.3 Arbitration

Should the Parties fail to agree within two (2) months after such dispute has first arisen, it shall be finally settled by arbitration in accordance with the commercial arbitration rules of the World Intellectual Property Organization (WIPO) in force at the time when initiating the arbitration. The tribunal shall consist of three arbitrators. The place of arbitration shall be Basel, Switzerland. The language to be used shall be English.

20.4 Arbitrators

Each Party shall nominate one arbitrator. Should the claimant fail to appoint an arbitrator in the request for arbitration within thirty (30) days of being requested to do so, or if the respondent should fail to appoint an arbitrator in its answer to the request for arbitration within thirty (30) days of being requested to do so, the other Party shall request the WIPO arbitration center to make such appointment.

The arbitrators nominated by the Parties shall, within thirty (30) days from the appointment of the arbitrator nominated in the answer to the request for arbitration, and after consultation with the Parties, agree and appoint a third arbitrator, who will act as a chairman of the Arbitral Tribunal. Should such procedure not result in an appointment within the thirty (30) day time limit, either Party shall be free to request the WIPO arbitration center to appoint the third arbitrator.

Where there is more than one claimant and/or more than one respondent, the multiple claimants or respondents shall jointly appoint one arbitrator.

Any Party-appointed arbitrator or the third arbitrator resigns or ceases to be able to act, a replacement shall be appointed in accordance with the arrangements provided for in this clause.

The arbitrators shall, in rendering any decision hereunder, apply the Governing Law set forth in Section 20.1. The Parties have agreed that English Rules of Evidence, and in particular common law discovery or disclosure, shall not apply to any arbitration under this clause. A request to produce documents by the Parties shall be considered by the Arbitral Tribunal according to Article 3 of the IBA (International Bar Association) Rules of Evidence.

The language of the arbitration shall be English. Documents submitted in the arbitration (the originals of which are not in English) shall be submitted together with an English translation.

20.5 Decisions; Timing of Decisions

The arbitrators shall render a written opinion setting forth findings of fact and conclusions of law with the reason therefor stated, within no later than six (6) months from the date on which the arbitrators were appointed to the dispute. A transcript of the evidence adduced at the arbitration hearing shall be made and, upon request, shall be made available to each Party.

The time periods set forth in the WIPO Arbitration Rules shall be followed; provided however that the arbitrators may modify such time periods as reasonably necessary to render a written opinion in accordance with this Section 20.3.

- 30 -

The arbitrators are empowered to award any remedy allowed by law, including money damages, prejudgment interest and attorneys’ fees, and to grant final, complete, interim, or interlocutory relief, including injunctive relief.

This arbitration agreement does not preclude either Party seeking conservatory or interim measures from any court of competent jurisdiction including, without limitation, the courts having jurisdiction by reason of either Party’s domicile. Conservatory or interim measures sought by either Party in any one or more jurisdictions shall not preclude the Arbitral Tribunal granting conservatory or interim measures. Conservatory or interim measures sought by either Party before the Arbitral Tribunal shall not preclude any court of competent jurisdiction granting conservatory or interim measures.

In the event that any issue shall arise which is not clearly provided for in this Section 20.5, the matter shall be resolved in accordance with the WIPO Arbitration Rules.

Any arbitration proceeding hereunder shall be confidential and the arbitrators shall issue appropriate protective orders to safeguard each Party’s Confidential Information. Except as required by law, neither Party shall make (or instruct the arbitrators to make) any public announcement with respect to the proceedings or decision of the arbitrators without prior written consent of the other Party. The existence of any dispute submitted to arbitration, and the award, shall be kept in confidence by the Parties and the arbitrators, except as required in connection with the enforcement of such award or as otherwise required by Applicable Law.

Notwithstanding anything to the contrary in this Agreement, any and all issues regarding a breach or alleged breach of a Party’s obligations under Article 17 (Obligation Not to Disclose Confidential Information) shall be determined in a court of competent jurisdiction under the Governing Law set forth in Section 20.1.

20.6 Insurance

Millendo shall purchase and maintain throughout the Agreement Term insurance or indemnity protection that is consistent with industry standards. This shall include, but not be limited to broad form commercial general liability insurance (including product liability). The limit of liability for such coverage shall be no less than US Dollars [***] (US$ [***]) per claim/occurrence in the aggregate. Millendo shall also maintain workers’ compensation insurance. Millendo shall provide Roche with written evidence of such insurances after the Effective Date and thereafter on yearly basis.

20.7 Assignment

Neither Party may assign its rights or obligations under this Agreement absent the prior written consent of the other Party, except to any of its Affiliates or, however, subject to the terms and conditions of this Agreement, in the context of a merger, acquisition, sale or other transaction involving all or substantially all of the assets of the Party seeking to assign, in which case such Party in its sole discretion may assign its rights and obligations under this Agreement. Any permitted assignment shall be binding on the successors of the assigning Party.

20.8 Independent Contractor

No employee or representative of either Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever or to create or impose any contractual or other liability on the other Party without said Party’s prior written approval. For all purposes, and notwithstanding any other provision of this Agreement to the contrary, Millendo legal relationship to Roche under this Agreement shall be that of independent contractor.

- 31 -

20.9 Unenforceable Provisions and Severability

If any of the provisions of this Agreement are held to be void or unenforceable, then such void or unenforceable provisions shall be replaced by valid and enforceable provisions that will achieve as far as possible the economic business intentions of the Parties. However the remainder of this Agreement will remain in full force and effect, provided that the material interests of the Parties are not affected, i.e. the Parties would presumably have concluded this Agreement without the unenforceable provisions.

20.10 Waiver

The failure by either Party to require strict performance and/or observance of any obligation, term, provision or condition under this Agreement will neither constitute a waiver thereof nor affect in any way the right of the respective Party to require such performance and/or observance. The waiver by either Party of a breach of any obligation, term, provision or condition hereunder shall not constitute a waiver of any subsequent breach thereof or of any other obligation, term, provision or condition.

20.11 Appendices

All Appendices to this Agreement shall form an integral part to this Agreement.

20.12 Amendments

No amendments of the terms and conditions of this Agreement shall be binding upon either Party hereto unless in writing and signed by both Parties.

20.13 Invoices

All invoices that are required or permitted hereunder shall be in writing and sent by Roche to Millendo at the following e-mail address or other address as Millendo may later provide:

accounting@millendo.com

20.14 Notice

All notices that are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

if to Millendo, to:

Millendo Therapeutics, Inc.

301 N Main St. #100

Ann Arbor, MI 48104

Attn: General Counsel

Facsimile No.: +1 734-332-6198

if to Roche, to:

F. Hoffmann-La Roche Ltd

Grenzacherstrasse 124

4070 Basel

Switzerland

Attn: Legal Department

Facsimile No.: +41 61 688 13 96

- 32 -

and:

Hoffmann-La Roche Inc.

150 Clove Road, Suite 8

Little Falls

New Jersey 07424, U.S.A.

Attn. Corporate Secretary

Facsimile No.: +1 973 890 8433

or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.

[Signature Page Follows]

- 33 -

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



Millendo Therapeutics, Inc.



/s/ Julia Owens

Name: Julia Owens		Name:

Title: President & CEO		Title:



F. Hoffmann-La Roche Ltd



/s/ Vikas Kabra		/s/ Barbara Schroeder

Name: Vikas Kabra		Name: Barbara Schroeder

Title: Head of Transaction Excellence		Title: Legal Counsel



Hoffmann-La Roche Inc.



/s/ John P. Parise

Name: John P. Parise

Title: Authorized Signatory

- 34 -

Appendix 1.12

Chemical Structure of [***]

[***]

- 35 -

Appendix 1.55

Roche Patent Rights

[***]

- 36 -

Appendix 5.2

Initial Development Plan

Stage 1 – Compound Characterization

Assessment of active enantiomer and confirmation of in vitro and in vivo activities

Early synthesis and manufacturing activities

Molecular pharmacology assessments against NK1, NK2, and NK3

In vivo study(ies) to assess pharmacodynamics related to modulation of HPG signaling

Stage 2 - Investigational New Drug (IND) application enabling studies

Initial assessment of metabolite coverage in nonclinical species and humans

28-day toxicology in rodent species

28-day toxicology in non-rodent species

Safety pharmacology profiling

Initial PK-ADME and pharmacology assessments

Other required studies to support IND

Stage 3 - Initial Development

Phase 1 single ascending dose (SAD): Healthy volunteers

Phase 1 multiple ascending dose (MAD) program: Healthy female volunteers experiencing vasomotor symptoms (VMS)

Pharmacokinetics and pharmacodynamics of [***]

Safety and tolerability as measured by vital signs and adverse events

Frequency of vasomotor symptoms

Stage 4 – Full Clinical Development

Phase 2 dose-ranging, parallel group, placebo-controlled study(ies) in post-menopausal women with VMS

Stage 5 – Pivotal studies in support of NDA

Two Phase 3 parallel group, placebo-controlled studies in post-menopausal women with VMS, including one-year safety extensions

- 37 -

Exhibit 10.7

MILLENDO THERAPEUTICS, INC.

STOCK OPTION GRANT NOTICE
(2019 EQUITY INCENTIVE PLAN)

Millendo Therapeutics, Inc. (the “ Company ”), pursuant to its 2019 Equity Incentive Plan (the “ Plan ”), hereby grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set forth below. This option is subject to all of the terms and conditions as set forth in this Stock Option Grant Notice, in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms in this Stock Option Grant Notice and the Plan, the terms of the Plan will control.


Optionholder:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (Per Share):
Total Exercise Price:
Expiration Date:

Type of Grant: ☐ Incentive Stock Option 1 ☐ Nonstatutory Stock Option

Exercise Schedule : Same as Vesting Schedule

Vesting Schedule : [ ______________, subject to Optionholder’s Continuous Service as of each such date ]

Payment: By one or a combination of the following items (described in the Option Agreement):

☒ By cash, check, bank draft or money order payable to the Company

☐ Pursuant to a Regulation T Program if the shares are publicly traded

☐ By delivery of already-owned shares if the shares are publicly traded

☐ If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement

1 If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.

Additional Terms/Acknowledgements: Optionholder acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except as provided in the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of, if applicable, (i) equity awards previously granted and delivered to Optionholder, (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) any written employment agreement, severance agreement, offer letter or other written agreement entered into between the Company and Participant specifying the terms that should govern this specific option. By accepting this option, Optionholder consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.


MILLENDO THERAPEUTICS, INC.			OPTIONHOLDER:

By:
Signature			Signature
Title:			Date:
Date:

ATTACHMENTS : Option Agreement, 2019 Equity Incentive Plan and Notice of Exercise

ATTACHMENT I

MILLENDO THERAPEUTICS, INC.

OPTION AGREEMENT

(2019 EQUITY INCENTIVE PLAN)

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

Pursuant to your Stock Option Grant Notice (“ Grant Notice ”) and this Option Agreement, Millendo Therapeutics, Inc. (the “ Company ”) has granted you an option under its 2019 Equity Incentive Plan (the “ Plan ”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “ Date of Grant ”). If there is any conflict between the terms in this Option Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows:

1. VESTING. Subject to the provisions contained herein, your option will vest as provided in your Grant Notice. Vesting will cease upon the termination of your Continuous Service.

2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price per share in your Grant Notice will be adjusted for Capitalization Adjustments.

3. EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES. If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (that is, a “ Non-Exempt Employee ”), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month anniversary in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your “retirement” (as defined in the Company’s benefit plans).

4. METHOD OF PAYMENT. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted by your Grant Notice, which may include one or more of the following:

(a) Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to cover”.

(b) Provided that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. You may not exercise your option by delivery to the Company of Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.

(c) If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. You must pay any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted form of payment. Shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.

5. WHOLE SHARES. You may exercise your option only for whole shares of Common Stock.

6. SECURITIES LAW COMPLIANCE. In no event may you exercise your option unless the shares of Common Stock issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable).

7. TERM. You may not exercise your option before the Date of Grant or after the expiration of the option’s term. The term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:

(a) immediately upon the termination of your Continuous Service for Cause;

(b) ninety (90) days after the termination of your Continuous Service for any reason other than Cause, your Disability or your death (except as otherwise provided in Section 8(d) below); provided, however, that if during any part of such ninety (90) day period your option is not exercisable solely because of the condition set forth in the section above regarding “Securities Law Compliance,” your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of ninety (90) days after the termination of your Continuous Service; provided further, if during any part of such ninety (90) day period, the sale of any Common Stock received upon exercise of your option would violate the Company’s insider trading policy, then your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of ninety (90) days after the termination of your Continuous Service during which the sale of the Common Stock received upon exercise of your option would not be in violation of the Company’s insider trading policy. Notwithstanding the foregoing, if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six (6) months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until the earlier

of (x) the later of (A) the date that is seven (7) months after the Date of Grant, and (B) the date that is ninety (90) days after the termination of your Continuous Service, and (y) the Expiration Date;

(c) twelve (12) months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 7(d)) below;

(d) eighteen (18) months after your death if you die either during your Continuous Service or within ninety (90) days after your Continuous Service terminates for any reason other than Cause;

(e) the Expiration Date indicated in your Grant Notice; or

(f) the day before the tenth (10th) anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate terminates.

8. EXERCISE.

(a) You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by (i) delivering a Notice of Exercise (in a form designated by the Company) or completing such other documents and/or procedures designated by the Company for exercise and (ii) paying the exercise price and any applicable withholding taxes to the Company’s Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional documents as the Company may then require.

(b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.

(c) If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the Date of Grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option.

9. TRANSFERABILITY. Except as otherwise provided in this Section 9, your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.

(a) Certain Trusts. Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.

(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(c) Beneficiary Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration resulting from such exercise.

10. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

11. WITHHOLDING OBLIGATIONS.

(a) At the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.

(b) If this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the maximum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes). Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any

adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

(c) You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein, if applicable, unless such obligations are satisfied.

12. TAX CONSEQUENCES . You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there is no other impermissible deferral of compensation associated with the option.

13. NOTICES. Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

14. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control. In addition, your option (and any compensation paid or shares issued under your option) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law.

15. OTHER DOCUMENTS. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time.

16. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of this option will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

17. VOTING RIGHTS. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this option until such shares are issued to

you. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this option, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

18. SEVERABILITY. If all or any part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

19. MISCELLANEOUS .

(a) The rights and obligations of the Company under your option will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your option.

(c) You acknowledge and agree that you have reviewed your option in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your option, and fully understand all provisions of your option.

(d) This Option Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Option Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

* * *

This Option Agreement will be deemed to be signed by you upon the signing by you of the Stock Option Grant Notice to which it is attached.

ATTACHMENT II

2019 EQUITY INCENTIVE PLAN

ATTACHMENT III

NOTICE OF EXERCISE


MILLENDO THERAPEUTICS, INC.
	Date of Exercise:

This constitutes notice to Millendo Therapeutics, Inc. (the “ Company ”) under my stock option that I elect to purchase the below number of shares of Common Stock of the Company (the “ Shares ”) for the price set forth below.

Type of option (check one):	Incentive ☐	Nonstatutory ☐
Stock option dated:	_______________	_______________
Number of Shares as to which option is exercised:	_______________	_______________
Certificates to be issued in name of:	_______________	_______________
Total exercise price:	$______________	$______________
Cash payment delivered herewith:	$______________	$______________
[Value of ________ Shares delivered herewith 1 :	$______________	$______________]
[Value of ________ Shares pursuant to net exercise 2 :	$______________	$______________]
[Regulation T Program (cashless exercise 3 ):	$______________	$______________]

1. Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate.

2. The option must be a Nonstatutory Stock Option, and the Company must have established net exercise procedures at the time of exercise, in order to utilize this payment method.

3. Shares must meet the public trading requirements set forth in the option.

By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the Millendo Therapeutics, Inc. 2019 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) year after such Shares are issued upon exercise of this option.

	Very truly yours,

Exhibit 10.8

MILLENDO THERAPEUTICS, INC.

RESTRICTED STOCK UNIT GRANT NOTICE

(2019 EQUITY INCENTIVE PLAN)

Millendo Therapeutics, Inc. (the “ Company ”), pursuant to its 2019 Equity Incentive Plan (the “ Plan ”), hereby awards to Participant a Restricted Stock Unit Award for the number of shares of the Company’s Common Stock (“ Restricted Stock Units ”) set forth below (the “ Award ”). The Award is subject to all of the terms and conditions as set forth in this notice of grant (this “ Restricted Stock Unit Grant Notice ”), and in the Plan and the Restricted Stock Unit Award Agreement (the “ Award Agreement ”), both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein shall have the meanings set forth in the Plan or the Award Agreement. In the event of any conflict between the terms in this Restricted Stock Unit Grant Notice or the Award Agreement and the Plan, the terms of the Plan shall control.


Participant:
Date of Grant:
Vesting Commencement Date:
Number of Restricted Stock Units:

Vesting Schedule: [__________________, subject to Participant’s Continuous Service through each such vesting date.]

Issuance Schedule: Subject to any Capitalization Adjustment, one share of Common Stock (or its cash equivalent, at the discretion of the Company) will be issued for each Restricted Stock Unit that vests at the time set forth in Section 6 of the Award Agreement.

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock Unit Grant Notice, the Award Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Unit Grant Notice, the Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of the Common Stock pursuant to the Award specified above and supersede all prior oral and written agreements on the terms of this Award, with the exception, if applicable, of (i) restricted stock unit awards or options previously granted and delivered to Participant, (ii) the written employment agreement, offer letter or other written agreement entered into between the Company and Participant specifying the terms that should govern this specific Award, and (iii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law.

By accepting this Award, Participant acknowledges having received and read the Restricted Stock Unit Grant Notice, the Award Agreement and the Plan and agrees to all of the terms and conditions set forth in these documents. Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.


MILLENDO THERAPEUTICS, INC.			PARTICIPANT

By:
Signature			Signature

Title:			Date:

Date:

ATTACHMENTS : Award Agreement and 2019 Equity Incentive Plan

ATTACHMENT I

MILLENDO THERAPEUTICS, INC.

2019 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

Pursuant to the Restricted Stock Unit Grant Notice (the “ Grant Notice ”) and this Restricted Stock Unit Award Agreement (the “ Agreement ”), Millendo Therapeutics, Inc. (the “ Company ”) has awarded you (“ Participant ”) a Restricted Stock Unit Award (the “ Award ”) pursuant to the Company’s 2019 Equity Incentive Plan (the “ Plan ”) for the number of Restricted Stock Units/shares indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement or the Grant Notice shall have the same meanings given to them in the Plan. The terms of your Award, in addition to those set forth in the Grant Notice, are as follows.

1. GRANT OF THE AWARD. This Award represents the right to be issued on a future date one (1) share of Common Stock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any adjustment under Section 3 below) as indicated in the Grant Notice. As of the Date of Grant, the Company will credit to a bookkeeping account maintained by the Company for your benefit (the “ Account ”) the number of Restricted Stock Units/shares of Common Stock subject to the Award. Notwithstanding the foregoing, the Company reserves the right to issue you the cash equivalent of Common Stock, in part or in full satisfaction of the delivery of Common Stock in connection with the vesting of the Restricted Stock Units, and, to the extent applicable, references in this Agreement and the Grant Notice to Common Stock issuable in connection with your Restricted Stock Units will include the potential issuance of its cash equivalent pursuant to such right. This Award was granted in consideration of your services to the Company.

2. VESTING. Subject to the limitations contained herein, your Award will vest, if at all, in accordance with the vesting schedule provided in the Grant Notice. Vesting will cease upon the termination of your Continuous Service and the Restricted Stock Units credited to the Account that were not vested on the date of such termination will be forfeited at no cost to the Company and you will have no further right, title or interest in or to such Award or the shares of Common Stock to be issued in respect of such portion of the Award.

3. NUMBER OF SHARES. The number of Restricted Stock Units subject to your Award may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan. Any additional Restricted Stock Units, shares, cash or other property that becomes subject to the Award pursuant to this Section 3, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units and shares covered by your Award. Notwithstanding the provisions of this Section 3, no fractional shares or rights for fractional shares of Common Stock shall be created pursuant to this Section 3. Any fraction of a share will be rounded down to the nearest whole share.

4. SECURITIES LAW COMPLIANCE . You may not be issued any Common Stock under your Award unless the shares of Common Stock underlying the Restricted Stock Units are either (i) then registered under the Securities Act, or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award must also comply with other applicable laws and regulations governing the Award, and you shall not receive such Common Stock if the Company determines that such receipt would not be in material compliance with such laws and regulations.

5. TRANSFER RESTRICTIONS . Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of this Award or the shares issuable in respect of your Award, except as expressly provided in this Section 5. For example, you may not use shares that may be issued in respect of your Restricted Stock Units as security for a loan. The restrictions on transfer set forth herein will lapse upon delivery to you of shares in respect of your vested Restricted Stock Units.

(a) Death . Your Award is transferable by will and by the laws of descent and distribution. At your death, vesting of your Award will cease and your executor or administrator of your estate shall be entitled to receive, on behalf of your estate, any Common Stock or other consideration that vested but was not issued before your death.

(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your right to receive the distribution of Common Stock or other consideration hereunder, pursuant to a domestic relations order, marital settlement agreement or other divorce or separation instrument as permitted by applicable law that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this Award with the Company General Counsel prior to finalizing the domestic relations order or marital settlement agreement to verify that you may make such transfer, and if so, to help ensure the required information is contained within the domestic relations order or marital settlement agreement.

6. DATE OF ISSUANCE.

(a) The issuance of shares in respect of the Restricted Stock Units is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner. Subject to the satisfaction of the Withholding Obligation set forth in Section 11 of this Agreement, in the event one or more Restricted Stock Units vests, the Company shall issue to you one (1) share of Common Stock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any adjustment under Section 3 above, and subject to any different provisions in the Grant Notice). Each issuance date determined by this paragraph is referred to as an “ Original Issuance Date ”.

(b) If the Original Issuance Date falls on a date that is not a business day, delivery shall instead occur on the next following business day. In addition, if:

(i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established written trading plan that meets the requirements of Rule 10b5-1 under the Exchange Act and was entered into in compliance with the Company's policies (a “ 10b5-1 Arrangement ”)), and

(ii) either (1) a Withholding Obligation does not apply, or (2) the Company decides, prior to the Original Issuance Date, (A) not to satisfy the Withholding Obligation by withholding shares of Common Stock from the shares otherwise due, on the Original Issuance Date, to you under this Award, and (B) not to permit you to enter into a “same day sale” commitment with a broker-dealer pursuant to Section 11 of this Agreement (including but not limited to a commitment under a 10b5-1 Arrangement) and (C) not to permit you to pay your Withholding Obligation in cash,

then the shares that would otherwise be issued to you on the Original Issuance Date will not be delivered on such Original Issuance Date and will instead be delivered on the first business day when you are not prohibited from selling shares of the Company’s Common Stock in the open public market, but in no event later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).

(c) The form of delivery ( e.g. , a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.

7. DIVIDENDS. You shall receive no benefit or adjustment to your Award with respect to any cash dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment; provided, however, that this sentence will not apply with respect to any shares of Common Stock that are delivered to you in connection with your Award after such shares have been delivered to you.

8. RESTRICTIVE LEGENDS. The shares of Common Stock issued in respect of your Award shall be endorsed with appropriate legends as determined by the Company.

9. EXECUTION OF DOCUMENTS. You hereby acknowledge and agree that the manner selected by the Company by which you indicate your consent to your Grant Notice is also deemed to be your execution of your Grant Notice and of this Agreement. You further agree that such manner of indicating consent may be relied upon as your signature for establishing your execution of any documents to be executed in the future in connection with your Award.

10. AWARD NOT A SERVICE CONTRACT .

(a) Nothing in this Agreement (including, but not limited to, the vesting of your Award or the issuance of the shares in respect of your Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer upon you any right to continue in the employ or service of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right to terminate you at will and without regard to any future vesting opportunity that you may have.

(b) By accepting this Award, you acknowledge and agree that the right to continue vesting in the Award pursuant to the vesting schedule provided in the Grant Notice may not be earned unless (in addition to any other conditions described in the Grant Notice and this Agreement) you continue as an employee, director or consultant at the will of the Company and affiliate, as applicable (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “ reorganization ”). You acknowledge and agree that such a reorganization could result in the termination of your Continuous Service, or the termination of Affiliate status of your employer and the loss of benefits available to you under this Agreement, including but not limited to, the termination of the right to continue vesting in the Award. You further acknowledge and agree that this Agreement, the Plan, the transactions contemplated

hereunder and the vesting schedule set forth herein or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as an employee or consultant for the term of this Agreement, for any period, or at all, and shall not interfere in any way with the Company’s right to terminate your Continuous Service at any time, with or without your cause or notice, or to conduct a reorganization.

11. WITHHOLDING OBLIGATION.

(a) On each vesting date, and on or before the time you receive a distribution of the shares of Common Stock in respect of your Restricted Stock Units, and at any other time as reasonably requested by the Company in accordance with applicable tax laws, you hereby authorize any required withholding from the Common Stock issuable to you and/or otherwise agree to make adequate provision, including in cash, for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate that arise in connection with your Award (the “ Withholding Obligation ”).

(b) By accepting this Award, you acknowledge and agree that the Company or any Affiliate may, in its sole discretion, satisfy all or any portion of the Withholding Obligation relating to your Restricted Stock Units by any of the following means or by a combination of such means: (i) causing you to pay any portion of the Withholding Obligation in cash; (ii) withholding from any compensation otherwise payable to you by the Company; (iii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured as of the date shares of Common Stock are issued pursuant to Section 6) equal to the amount of such Withholding Obligation; provided, however, that the number of such shares of Common Stock so withheld will not exceed the amount necessary to satisfy the Withholding Obligation using the maximum statutory withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income; and provided , further, that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express prior approval of the Board or the Company’s Compensation Committee; and/or (iv) permitting or requiring you to enter into a “same day sale” commitment, if applicable, with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “ FINRA Dealer ”), pursuant to this authorization and without further consent, whereby you irrevocably elect to sell a portion of the shares to be delivered in connection with your Restricted Stock Units to satisfy the Withholding Obligation and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Withholding Obligation directly to the Company and/or its Affiliates. Unless the Withholding Obligation is satisfied, the Company shall have no obligation to deliver to you any Common Stock or any other consideration pursuant to this Award.

(c) In the event the Withholding Obligation arises prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the Withholding Obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.

12. TAX CONSEQUENCES. The Company has no duty or obligation to minimize the tax consequences to you of this Award and shall not be liable to you for any adverse tax consequences to you arising in connection with this Award. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the tax consequences of this Award and by signing the Grant Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so. You understand that you (and not the Company) shall be responsible for your own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

13. UNSECURED OBLIGATION. Your Award is unfunded, and as a holder of a vested Award, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares or other property pursuant to this Agreement. You shall not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you pursuant to Section 6 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

14. NOTICES . Any notice or request required or permitted hereunder shall be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this Award, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

15. HEADINGS . The headings of the Sections in this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement or to affect the meaning of this Agreement.

16. MISCELLANEOUS .

(a) The rights and obligations of the Company under your Award shall be transferable by the Company to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by, the Company’s successors and assigns.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award .

(c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award .

(d) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

17. GOVERNING PLAN DOCUMENT . Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award , and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Your Award (and any compensation paid or shares issued under your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and

any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law. No recovery of compensation under such a clawback policy will be an event giving rise to a right to voluntarily terminate employment upon a resignation for “good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company.

18. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to this Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating benefits under any employee benefit plan (other than the Plan) sponsored by the Company or any Affiliate except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any or all of the employee benefit plans of the Company or any Affiliate.

19. SEVERABILITY . If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

20. OTHER DOCUMENTS . You hereby acknowledge receipt or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act. In addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain "window" periods and the Company's insider trading policy, in effect from time to time.

21. AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that, except as otherwise expressly provided in the Plan, no such amendment materially adversely affecting your rights hereunder may be made without your written consent. Without limiting the foregoing, the Board reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the Award as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

22. COMPLIANCE WITH SECTION 409A OF THE CODE . This Award is intended to be exempt from the application of Section 409A of the Code, including but not limited to by reason of complying with the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) and any ambiguities herein shall be interpreted accordingly. Notwithstanding the foregoing, if it is determined that the Award fails to satisfy the requirements of the short-term deferral rule and is otherwise not exempt from, and determined to be deferred compensation subject to Section 409A of the Code, this Award shall comply with Section 409A to the extent necessary to avoid adverse personal tax consequences and any ambiguities herein shall be interpreted accordingly. If it is determined that the Award is deferred compensation subject to Section 409A and you are a “Specified Employee” (within the meaning set forth in Section 409A(a)(2)(B)(i) of the Code) as of the date of your “Separation from Service” (as defined in Section 409A), then the issuance of any shares that would otherwise be made upon the date of your Separation from Service or within the first six (6) months thereafter will not be made on the originally scheduled date(s) and will instead be issued in a lump sum on the date that is six (6) months

and one day after the date of the Separation from Service, with the balance of the shares issued thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of adverse taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is intended to constitute a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2).

* * * * *

This Restricted Stock Unit Award Agreement shall be deemed to be signed by the Company and the Participant upon the signing by the Participant of the Restricted Stock Unit Grant Notice to which it is attached.

ATTACHMENT II

2019 EQUITY INCENTIVE PLAN

EXHIBIT 31.1

CERTIFICATION

I, Julia C. Owens, Ph.D., certify that:

1. I have reviewed this Form 10-Q of Millendo Therapeutics, Inc.;

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

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

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

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

b. Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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

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

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

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

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

Date: August 12, 2019

/s/ Julia C. Owens, Ph.D.

Julia C. Owens, Ph.D.

President and Chief Executive Officer

(Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION

I, Louis Arcudi III, certify that:

1. I have reviewed this Form 10-Q of Millendo Therapeutics, Inc.;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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

Date: August 12, 2019

/s/ Louis Arcudi III

Louis Arcudi III

Chief Financial Officer

(Principal Financial Officer)

EXHIBIT 32.1

STATEMENT PURSUANT TO 18 U.S.C. § 1350

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Julia C. Owens, Ph.D., President and Chief Executive Officer (Principal Executive Officer) of Millendo Therapeutics, Inc. (the “Company”) and Louis Arcudi III, Chief Financial Officer (Principal Financial Officer) of the Company, each hereby certifies that, to the best of his or her knowledge:

(1) The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2019, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

		/s/ Julia C. Owens, Ph.D.
Date: August 12, 2019		Julia C. Owens, Ph.D.
		President and Chief Executive Officer (Principal Executive Officer)

		/s/ Louis Arcudi III
Date: August 12, 2019		Louis Arcudi III
		Chief Financial Officer (Principal Financial Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not incorporated by reference into any filing of Millendo Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.