Eidos Therapeutics, Inc. (Form: 10-Q, Received: 10/31/2019 16:38:03)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2019

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

Commission File Number: 001-38533

EIDOS THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		46-3733671
( State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
101 Montgomery Street, Suite 2000 San Francisco, CA		94104
101 Montgomery Street, Suite 2500 San Francisco, CA		94104
(Former address, if changed since last report)		(Former Zip Code)

Registrant’s telephone number, including area code: (415) 887-1471

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	EIDX	The Nasdaq Global Select Market

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period 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, 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.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

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

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

As of October 29, 2019, the registrant had 37,496,571 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations and Comprehensive Loss	2
	Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	3
	Condensed Statements of Cash Flows	5
	Notes to Unaudited Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3.	Defaults Upon Senior Securities	69
Item 4.	Mine Safety Disclosures	69
Item 5.	Other Information	69
Item 6.	Exhibits	70
Signatures		71

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

EIDOS THERAPEUTICS, INC.

Condensed Balance Sheets

(Unaudited)

(In thousands, except share and per share data)

	September 30,			December 31,
	2019			2018
Assets
Current assets:
Cash and cash equivalents	$	165,822		$	157,147
Related party receivable		83			34
Prepaid expenses and other current assets		5,402			1,789
Total current assets		171,307			158,970
Property and equipment, net		1,199			209
Operating lease, right of use asset		4,121			—
Other assets		2,267			933
Total assets	$	178,894		$	160,112
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,567		$	1,956
Related party payable		372			256
Lease liabilities		471			—
Accrued expenses and other current liabilities		5,665			2,577
Total current liabilities		10,075			4,789
Other liabilities		129			316
Lease liabilities, non-current		4,736			—
Total liabilities		14,940			5,105
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.001 par value; 150,000,000 shares authorized as of September 30, 2019 and December 31, 2018, respectively; 37,496,571 and 36,760,536 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		38			37
Additional paid-in-capital		248,041			220,240
Accumulated deficit		(84,125	)		(65,270	)
Total stockholders’ equity		163,954			155,007
Total liabilities and stockholders' equity	$	178,894		$	160,112

The accompanying notes are an integral part of these unaudited condensed financial statements.

EIDOS THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
License revenue	$	26,691	$	—		$	26,691		$	—
Operating costs and expenses:
Cost of license revenue		2,500		—			2,500			—
Research and development (includes related party expense (benefit) of ($76) and ($26) for the three months ended September 30, 2019 and 2018, and ($11) and $1 for the nine months ended September 30, 2019 and 2018, respectively)		11,987		8,369			33,033			20,216
General and administrative (includes related party expense of $297 and $202 for the three months ended September 30, 2019 and 2018, and $450 and $946 for the nine months ended September 30, 2019 and 2018, respectively)		5,953		2,619			12,285			6,858
Total operating expenses		20,440		10,988			47,818			27,074
Income (loss) from operations		6,251		(10,988	)		(21,127	)		(27,074	)
Other income (expense), net		680		374			2,272			(3,797	)
Net and comprehensive income (loss)		6,931		(10,614	)		(18,855	)		(30,871	)
Deemed dividend related to redemption feature embedded in Convertible Promissory Notes payable to stockholders		—		—			—			(6,523	)
Gain on extinguishment of Convertible Promissory Notes payable to stockholders		—		—			—			7,436
Net income (loss) attributable to common stock for basic and diluted net income (loss) per share	$	6,931	$	(10,614	)	$	(18,855	)	$	(29,958	)
Net income (loss) per share attributable to common stockholders, basic	$	0.19	$	(0.30	)	$	(0.52	)	$	(1.83	)
Net income (loss) per share attributable to common stockholders, diluted	$	0.18	$	(0.30	)	$	(0.52	)	$	(1.83	)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic		36,581,786		35,965,790			36,356,675			16,361,349
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted		37,710,734		35,965,790			36,356,675			16,361,349

The accompanying notes are an integral part of these unaudited condensed financial statements.

EIDOS THERAPEUTICS, INC.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

For the Nine months ended September 30, 2019 (Unaudited)

(in thousands, except for share amounts)

	Redeemable
	convertible								Additional					Total
	preferred stock				Common stock				paid-in-		Accumulated			stockholders'
	Share		Amount		Share		Amount		capital		deficit			equity
Balance—December 31, 2018		—	$	—		36,760,536	$	37	$	220,240	$	(65,270	)	$	155,007
Issuance of common stock upon exercise of stock options and restricted stock		—		—		50,533		—		25		—			25
Vesting of restricted stock and early exercised options		—		—		—		—		38		—			38
Stock-based compensation expense		—		—		—		—		964		—			964
Net loss and comprehensive loss		—		—		—		—		—		(11,733	)		(11,733	)
Balance—March 31, 2019		—		—		36,811,069		37		221,267		(77,003	)		144,301
Issuance of common stock upon exercise of stock options and restricted stock		—		—		34,480		—		87		—			87
Issuance of common stock under employee stock plans		—		—		25,626		—		308		—			308
Vesting of restricted stock and early exercised options		—		—		—		—		37		—			37
Stock-based compensation expense		—		—		—		—		1,166		—			1,166
Net loss and comprehensive loss		—		—		—		—		—		(14,053	)		(14,053	)
Balance—June 30, 2019		—		—		36,871,175		37		222,865		(91,056	)		131,846
Issuance of common stock upon exercise of stock options and restricted stock		—		—		69,223		—		236		—			236
Issuance of common stock under Alexion stock purchase agreement						556,173		1		23,308					23,309
Vesting of restricted stock and early exercised options		—		—		—		—		37		—			37
Stock-based compensation expense		—		—		—		—		1,595		—			1,595
Net income and comprehensive income		—		—		—		—		—		6,931			6,931
Balance—September 30, 2019		—	$	—		37,496,571	$	38	$	248,041	$	(84,125	)	$	163,954

The accompanying notes are an integral part of these unaudited condensed financial statements.

EIDOS THERAPEUTICS, INC.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

For the Nine months ended September 30, 2018 (Unaudited)

(in thousands, except for share amounts)

	Redeemable
	convertible											Additional						Total
	preferred stock						Common stock					paid-in-			Accumulated			stockholders'
	Share			Amount			Share			Amount		capital			deficit			equity (deficit)
Balance—December 31, 2017		12,856,325		$	17,028			5,137,771		$	4	$	1,332		$	(14,532	)	$	(13,196	)
Issuance of Series B redeemable convertible preferred stock upon conversion of redeemable convertible promissory notes payable to stockholders		1,324,823			14,354			—			—		—			—			—
Recognition of beneficial conversion feature related to convertible promissory notes payable to stockholders		—			—								9,122						9,122
Deemed dividend related to embedded derivative liability on Convertible Promissory Notes payable to stockholders		—			—			—			—		(6,523	)		—			(6,523	)
Issuance of common stock to Stanford University		—			—			45,889			—		7			—			7
Issuance of common stock upon exercise of stock options and restricted stock		—			—			149,350			—		—			—			—
Issuance of Series B redeemable convertible preferred stock, net of issuance costs of $125 and fair value of redeemable convertible preferred stock tranche liability of $64		1,476,715			15,811			—			—		—			—			—
Reacquisition of beneficial conversion feature related to Convertible Promissory Notes payable to stockholders		—			—			—			—		(4,341	)		(10,013	)		(14,354	)
Gain on extinguishment of Convertible Promissory Notes payable to stockholders		—			—			—			—		7,436			—			7,436
Vesting of restricted stock and early exercised options		—			—			—			—		18			—			18
Stock-based compensation expense		—			—			—			—		385			—			385
Net loss and comprehensive loss		—			—			—			—		—			(8,876	)		(8,876	)
Balance—March 31, 2018		15,657,863			47,193			5,333,010			4		7,436			(33,421	)		(25,981	)
Issuance of Series B redeemable convertible preferred stock, net of issuance costs of $0		4,430,162			48,000			—			—		—			—			—
Settlement of fair value of redeemable convertible preferred stock tranche liability upon exercise of put option to stockholders into Series B redeemable convertible preferred stock		—			694			—			—		—			—			—
Net exercise of redeemable convertible preferred stock warrant liability		—			—			206,247			—		3,506			—			3,506
Conversion of redeemable convertible preferred stock to common stock at closing of initial public offering		(20,088,025	)		(95,887	)		24,025,270			25		95,862			—			95,887
Issuance of common stock upon initial public offering, net of issuance costs		—			—			7,187,500			8		110,962			—			110,970
Vesting of restricted stock and early exercised options		—			—			—			—		22			—			22
Stock-based compensation expense		—			—			—			—		621			—			621
Net loss and comprehensive loss		—			—			—			—		—			(11,381	)		(11,381	)
Balance—June 30, 2018		—			—			36,752,027			37		218,409			(44,802	)		173,644
Repurchase of early exercised stock options		—			—			(40,366	)		—		—			—			—
Vesting of restricted stock and early exercised options		—			—			—			—		94			—			94
Stock-based compensation expense		—			—			—			—		692			—			692
Net loss and comprehensive loss		—			—			—			—		—			(10,612	)		(10,612	)
Balance—September 30, 2018		—		$	—			36,711,661		$	37	$	219,195		$	(55,414	)	$	163,818

The accompanying notes are an integral part of these unaudited condensed financial statements.

EIDOS THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(Unaudited)

(In thousands)

	Nine Months Ended
	September 30,
	2019			2018
Cash Flows From Operating Activities:
Net loss	$	(18,855	)	$	(30,871	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		53			40
Stock-based compensation expense		3,725			1,701
Accrued interest on Convertible Promissory Notes payable		—			48
Change in fair value of derivative liability		—			(100	)
Change in fair value of redeemable convertible preferred stock tranche liabilities		—			630
Change in fair value of redeemable convertible preferred stock warrant liability		—			2,628
Amortization of debt discount on Convertible Promissory Notes payable		—			963
Loss on disposal of property and equipment		63			—
Gain on extinguishment of leasehold liability		(69	)
Changes in assets and liabilities:
Related party receivable		(49	)		38
Prepaid expenses and other current assets		(3,614	)		(2,764	)
Other assets		(5,454	)		18
Accounts payable		1,611			1,852
Accrued expenses and other liabilities		7,330			2,278
Related party payable		116			(166	)
Net cash used in operating activities		(15,143	)		(23,705	)

Cash Flows From Investing Activities:
Purchase of property and equipment		(147	)		(144	)
Net cash used in investing activities		(147	)		(144	)

Cash Flows From Financing Activities:
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs		—			63,875
Proceeds from issuance of Convertible Promissory Notes payable		—			10,000
Proceeds from issuance of common stock under employee stock plan		308			—
Proceeds from issuance of common stock upon exercise of stock options and restricted stock		348			75
Proceeds from issuance of common stock to Alexion		23,309			—
Proceeds from issuance of common stock in initial public offering, net of issuance costs		—			110,970
Net cash provided by financing activities		23,965			184,920
Net increase in cash and cash equivalents		8,675			161,071
Cash and cash equivalents, beginning of period		157,147			5,497
Cash and cash equivalents, end of period	$	165,822		$	166,568

Supplemental disclosure of non-cash activities:
Settlement of redeemable convertible preferred stock tranche liability through issuance of preferred stock	$	—		$	694
Lease liability arising from the right of use asset		5,155			—
Vesting of restricted stock and early exercised options		112			135
Conversion of Convertible Promissory Notes payable and accrued interest into redeemable convertible preferred stock		—			14,354
Conversion of redeemable convertible preferred stock to common stock at closing of initial public offering		—			95,887
Reclassification of redeemable convertible preferred stock warrant liability to common stock at closing of initial public offering		—			3,506
Tenant improvements paid by landlord		959			—

The accompanying notes are an integral part of these unaudited condensed financial statements.

EIDOS THERAPEUTICS, INC.

Notes to Unaudited Condensed Financial Statements (Unaudited)

Note 1. Organization and description of business

Eidos Therapeutics, Inc., or the Company, was incorporated as an S corporation in the state of Delaware on August 6, 2013. The Company was converted into a C corporation on April 4, 2016 in conjunction with its Series Seed redeemable convertible preferred stock financing. The Company is advancing a drug candidate to treat multiple forms of transthyretin, or TTR, amyloidosis, or ATTR, which leads to organ damage, loss of organ function and eventual death from abnormal buildup of protein deposits predominantly in the heart and peripheral nervous system. The Company has been primarily engaged in business planning, research and development, recruiting personnel, and raising capital. The Company is headquartered in San Francisco, California and it operates as one operating segment.

Stock split

In June 2018, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a stock-split of the Company’s issued and outstanding common stock at a 1.196-for-1 ratio, which was effected on June 7, 2018. The par value of common stock and redeemable convertible preferred stock was not adjusted as a result of the stock split. All issued and outstanding common stock, options to purchase common stock and per share amounts contained in the financial statements have been adjusted to reflect the stock split for all periods presented.

Liquidity

The Company has incurred net losses from operations since inception and has an accumulated deficit of $84.1 million as of September 30, 2019. The Company’s ultimate success depends on the outcome of its research and development activities. The Company expects to incur additional losses in the future and it anticipates the need to raise additional capital to fully implement its business plan. Through September 30, 2019, the Company has financed its operations through private placements of redeemable convertible preferred stock, convertible promissory notes, an initial public offering (IPO) of common stock, and a licensing agreement with a third-party.

On June 19, 2018, the Company’s registration statement on Form S-1 (File No. 333-225235) relating to its IPO of common stock became effective. The IPO closed on June 22, 2018, at which time the Company issued 7,187,500 shares of its common stock at a price of $17.00 per share, which included shares issued upon the underwriters’ exercise of their overallotment option to purchase 937,500 additional shares. In addition, upon closing the IPO, all outstanding shares of the redeemable convertible preferred stock and warrants converted into 24,231,517 shares of common stock. As of December 31, 2018, there are no shares of redeemable convertible preferred stock outstanding. Upon completion of the IPO, the Company received an aggregate of $111.0 million in cash, net of underwriting discounts and commissions, and after deducting offering costs paid by the Company.

On September 9, 2019, the Company entered into a license agreement with Alexion Pharma International Operations Unlimited Company, a subsidiary of Alexion Pharmaceuticals, Inc. (together, “Alexion”) to develop and commercialize the Company’s product candidate, AG10 in Japan. Under the terms of the license agreement, the Company has granted Alexion an exclusive license to certain of the Company’s intellectual property rights to develop, manufacture, and commercialize AG10 in Japan. In consideration for the license grant, the Company received an upfront nonrefundable payment of $25.0 million. Under the terms of the license agreement, the Company is entitled to receive an additional one-time nonrefundable payment of $30.0 million subject to the achievement of a regulatory milestone and royalties in the low double-digits on net sales by Alexion of AG10 in Japan. The royalty rate is subject to reduction if Alexion is required to obtain intellectual property rights from third parties to develop, manufacture or commercialize AG10 in Japan, or upon the introduction of generic competition into the market.

Additionally, on September 9, 2019, the Company and Alexion entered into a Stock Purchase Agreement wherein the Company has agreed to sell to Alexion 556,173 shares of the Company’s common stock, par value $0.001 per share, for aggregate cash proceeds of approximately $25.0 million.

The Company will need to obtain additional financing in the future and may seek financing through the issuance of our common stock, through other equity or debt financings or through collaborations or partnerships with other companies. The amount and timing of the Company’s future funding requirements will depend on many factors, including the pace and results of the Company’s clinical development efforts for AG10 and other research and development activities. The Company may not be able to raise additional capital on terms acceptable to the Company, or at all, and any failure to raise capital as and when needed would compromise the Company’s ability to execute on our business plan and the Company may have to significantly delay, scale back, or discontinue the development of AG10 or curtail any efforts to expand the Company’s product pipeline.

Note 2. Summary of significant accounting policies

Basis of preparation

These unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles, or GAAP. These unaudited condensed financial statements include transactions with BridgeBio Pharma LLC and its affiliates (“BBP LLC”), a controlling stockholder in the Company. Upon the closing of the BBP LLC IPO on July 1, 2019, all unitholders of BridgeBio Pharma LLC exchanged their units for shares of common stock of BridgeBio Pharma, Inc.(“BridgeBio” or “BBP, Inc.”), and BridgeBio Pharma LLC became a wholly-owned subsidiary of BBP, Inc. (the “Reorganization”). As the sole managing member, BBP, Inc. will operate and control all of BridgeBio Pharma LLC’s businesses and affairs after the Reorganization.

For the periods presented, BBP LLC has provided consulting and management services to the Company in the ordinary course of business, including certain executive personnel, facility related costs, advisory services, insurance costs, and other general corporate expenses. These allocations were made based on direct usage, when identifiable, with the remainder allocated primarily based on a proportional share of headcount. The Company’s historical financial statements do not purport to reflect what the Company’s results of operations, financial position, or cash flows would have been if the Company had operated as an independent entity during the periods presented. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by the Company during the periods presented. For more information on the allocated costs and related party transactions, see Note 6.

Unaudited interim condensed financial statements

The accompanying unaudited condensed financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information required by GAAP for complete financial statements. These unaudited interim condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future year or interim period.

The accompanying unaudited interim condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K, filed with the SEC on April 15, 2019.

Use of estimates

The preparation of 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 as of the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including, but not limited to, those related to revenue recognition, including deductions from revenues (cost of license revenues), the period of performance, identification of deliverables and evaluation of regulatory and royalty milestones with respect to our license agreement, the fair value of the redemption feature embedded derivative liability, the fair value of the redeemable convertible preferred stock tranche liability, the fair value of the redeemable convertible preferred stock warrant liability, the fair value of the Company’s common stock, stock-based compensation, the useful lives of fixed assets, accruals for research and development activities, and income taxes. Management bases its estimates on historical experience and on other relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Concentrations of credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and short-term investments. All the Company’s funds are held by one financial institution that management believes is of high credit quality. Such deposits may, at times, exceed federally insured limits.

Cash and cash equivalents

All highly-liquid investments with an original maturity date of three months or less when purchased that are readily convertible into cash and have an insignificant interest rate risk are considered to be cash equivalents. As of September 30, 2019, and December 31, 2018, the Company had cash and cash equivalents of $165.8 million and $157.1 million, respectively. The Company’s cash equivalents are invested in highly-rated money market funds.

Fair value of financial instruments

The carrying amount of the Company’s financial instruments, including accounts payable and accrued expenses and other payables approximate fair value due to their short-term maturities. See Note 3 Fair value measurements regarding the fair value of the Company’s embedded derivative liability related to its convertible promissory notes, redeemable convertible preferred stock tranche liability, and redeemable convertible preferred stock warrant liability.

Impairment of long-lived assets

The Company reviews long-lived assets, primarily comprised of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the estimated undiscounted future cash flows which the assets or asset groups are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets or asset groups exceeds the estimated discounted future cash flows arising from the assets or asset groups. There have been no such impairments of long-lived assets for any of the periods presented.

Accrued repurchase liability for common stock

The Company records as a liability, within accrued expenses and other current liabilities, the purchase price of unvested common stock that the Company has a right to repurchase if and when the stockholder ceases to be a service provider to the Company before the end of the requisite service period. The proceeds are recorded as a liability and the proceeds related to the vested common stock are reclassified to additional paid-in-capital as the Company’s repurchase right lapses.

Redeemable convertible preferred stock tranche liability

The Company determined that its obligations to issue additional shares of preferred stock upon the achievement of certain milestones or at the option of the respective holders of such shares represent freestanding financial instruments. These instruments were initially measured at fair value and were subject to remeasurement with changes in fair value recognized in other income (expense), net in the statements of operations. The liability was settled upon the issuance of Series B redeemable convertible preferred stock (“Series B Preferred Stock”) in May 2018.

Embedded derivative liability and deemed dividend

The Company determined that the automatic conversion of the notes payable issued in February 2018 pursuant to the Note and Warrant Purchase Agreement with BBP LLC and the Board of Trustees of the Leland Stanford Junior University, or Stanford, (the Convertible Promissory Notes) into new shares of preferred stock at 70% of the issuance price of such shares upon the closing of a qualified financing was an embedded derivative liability to be measured at fair value. As this instrument was issued to stockholders, the Company treated the initial recognition as a deemed dividend included in additional paid-in-capital at its fair value of $6.5 million. The embedded derivative liability was subject to remeasurement with changes in fair value recognized in other income (expense), net in the statements of operations. The embedded derivative liability balance was settled upon the conversion of the convertible promissory notes into Series B Preferred Stock in March 2018.

The deemed dividend impacted loss available to common stockholders and earnings per share for the nine months ended September 30, 2018.

Gain on extinguishment of convertible promissory notes payable

In March 2018, upon the conversion of the Convertible Promissory Notes into Series B Preferred Stock the Company recognized a $7.4 million gain on debt extinguishment. As the Convertible Promissory Notes were issued to stockholders, we treated the gain on debt extinguishment as a capital contribution included in additional paid-in-capital.

The $7.4 million gain on extinguishment of convertible promissory notes payable impacted loss available to common stockholders and net loss per share for the nine months ended September 30, 2018.

Net income (loss) attributable to common stockholders and net income (loss) per share

Basic net loss per common share is calculated by dividing net loss attributable to common stockholders, taking into account the deemed dividend and gain on extinguishment of Convertible Promissory Notes payable, by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase and without consideration for potentially dilutive securities. Diluted net income per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method, if dilutive. Dilutive potential common shares include outstanding stock options and Employee Stock Purchase Plan (“ESPP”) contributions.

Revenue recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), when the customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine the appropriate revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance obligation. The Company applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and identifies, as a performance obligation, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Contract Revenues from License Agreements

In the normal course of business, the Company conducts research and development programs independently pursuant to which the Company may license certain rights of the Company’s intellectual property to third parties. The terms of these arrangements typically include payment to the Company for a combination of one or more of the following: upfront license fees; development, regulatory and commercial milestone payments; product supply services; and royalties on net sales of licensed products.

Upfront license fees: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenue from upfront license fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company determines whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company uses judgment in determining the appropriate method of measuring progress for purposes of recognizing revenue from the up-front license fees. The Company evaluates the measure of progress at each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Development, regulatory or commercial milestone payments: At the inception of each arrangement that includes payments based on the achievement of certain development, regulatory and commercial or launch events, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until uncertainty associated with the approvals has been resolved.

The transaction price is then allocated to each performance obligation, on a relative standalone selling price basis, for which the Company will recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achieving such development and regulatory milestones and any related constraint, and if necessary, adjust the Company’s estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis and recorded as part of contract revenues from collaborations during the period of adjustment.

Product supply services: Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. The Company will assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations.

Sales-based milestone payments and royalties: For arrangements that include sales-based royalties, including milestone payments based on the volume of sales, the Company will determine whether the license is deemed to be the predominant item to which the royalties or sales-based milestones relate and if such is the case, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Upfront payments and fees are recorded as deferred revenue when due and payable, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.

Cost of license revenue

Cost of license revenue includes sublicensing fees payable to Stanford in the period incurred under the terms of the Stanford Agreement (see Note 11) corresponding to the recognition of license revenue from Alexion. Cost of license revenue does not include any allocated overhead costs.

Recently issued accounting standards adopted

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”) using the required modified retrospective approach. ASU 2016-02 requires lessees to record most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current accounting. Upon transition under ASU 2016-02, the Company elected the suite of practical expedients as a package applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. For new leases, the Company will determine if an arrangement is or contains a lease at inception. Leases are included as right-of-use (“ROU”) assets within other assets and ROU liabilities within accrued expenses and other liabilities and within other long-term liabilities on the Company’s condensed balance sheets. In addition, the Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (short-term leases) and elected to not separate lease components and non-lease components for its long-term real estate leases.

ROU liabilities are recognized at the commencement date based on the present value of lease payments over the lease term and ROU assets are based on the liabilities adjusted for any prepaid or deferred rent. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term and is included in operating expenses on the condensed statements of operations. Variable lease payments include lease operating expenses. The lease term at the commencement date is determined by considering whether renewal options and termination options are reasonably assured of exercise. See discussion below in this Note 2 and in Note 12 for more detail on the Company's accounting policy with respect to lease accounting.

Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The adoption of ASU 2018-07 did not have a material impact on the Company’s condensed financial statements.

In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. Additionally, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, a summary of changes in each caption of stockholders’ equity presented in the consolidated balance sheets must be provided in a note or separate statement. The final rule regarding stockholders’ equity was effective in the fourth quarter of 2018. The SEC provided relief on the effective date until the first quarter of 2019. The Company has provided this disclosure beginning January 1, 2019.

Recently issued accounting standards not yet adopted

In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820, Fair Value Measurement. This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The effective date is the first quarter of fiscal year 2020, with early adoption permitted for the removed disclosures and delayed adoption until fiscal year 2020 permitted for the new disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company is currently evaluating the impact that ASU 2018-07 will have on the Company’s condensed financial statements.

Note 3. Fair value measurements

Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

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

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

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

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

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

Financial assets measured and recognized at fair value are as follows (in thousands):

	September 30, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Money Market Funds	$	165,822	$	165,822	$	—	$	—
Total	$	165,822	$	165,822	$	—	$	—

	December 31, 2018
	Total		Level 1		Level 2		Level 3
Assets:
Money Market Funds	$	157,147	$	157,147	$	—	$	—
Total	$	157,147	$	157,147	$	—	$	—

There were no financial assets outside of cash equivalents in an operating account as of September 30, 2019 and December 31, 2018. There were no transfers between Level 1, Level 2 and Level 3 categories during the periods presented.

There were no financial liabilities measured at fair value as of September 30, 2019 and December 31, 2018. There were no transfers between Level 1, Level 2 and Level 3 categories during the periods presented.

Following is the activity related to Level 3 financial liabilities of the Company.

Embedded derivative liability in the convertible promissory notes payable

The Convertible Promissory Notes payable issued in February 2018 had a redemption feature which was determined to be an embedded derivative requiring bifurcation and separate accounting. The fair value of the derivative was determined based on an income approach that identified the cash flows using a “with-and-without” valuation methodology. The inputs used to determine the estimated fair value of the derivative instrument were based primarily on the probability of an underlying event triggering the embedded derivative occurring and the timing of such event. The following table sets forth a summary of the changes in the fair value of the Company’s embedded derivative liability in the Convertible Promissory Notes payable (in thousands):

	Nine Months Ended September 30,
	2019		2018
Derivative instrument:
Beginning balance	$	—	$	—
Initial fair value of the embedded derivative liability issued with the Convertible Promissory Notes payable		—		6,523
Change in fair value upon revaluation recognized in other income (expense), net		—		(100	)
Settlement of the embedded derivative liability		—		(6,423	)
Ending balance	$	—	$	—

Redeemable convertible preferred stock tranche liability

Series B redeemable convertible preferred stock tranche liability

The fair value of the Series B redeemable convertible preferred stock tranche liability was based on significant inputs not observed in the market and thus represents a Level 3 measurement. The Company estimated the fair value of the redeemable convertible preferred stock warrant liability using a probability-weighted expected return method (PWERM) that included probabilities of three scenarios. The PWERM included probabilities of three scenarios, including a scenario in which an IPO occurs in June 2018. The scenarios were weighted based on the Company’s estimate of each event occurring in deriving the estimated fair value. The redeemable convertible preferred stock warrant liability was remeasured upon the IPO using the value of the underlying share based on the IPO price less the warrant strike price.

The following table sets forth a summary of the changes in the fair value of the Company’s Series B redeemable convertible preferred stock tranche liability as follows (in thousands):

	Nine Months Ended September 30,
	2019		2018
Redeemable convertible preferred stock tranche liability:
Beginning balance	$	—	$	—
Issuance of Series B redeemable convertible preferred stock tranche liability		—		64
Change in fair value upon revaluation recognized in other income (expense), net		—		630
Settlement of redeemable convertible preferred stock tranche liability due to the issuance of redeemable convertible preferred stock		—		(694	)
Ending balance	$	—	$	—

Redeemable convertible preferred stock warrant liability

The fair value of the redeemable convertible preferred stock warrant liability (see Note 5) is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The Company estimated the fair value of the redeemable convertible preferred stock warrant liability using the Black-Scholes option pricing model (see Note 8). The following table sets forth a summary of the changes in the fair value of the Company’s redeemable convertible preferred stock warrant liability (in thousands):

	Nine Months Ended September 30,
	2019		2018
Redeemable convertible preferred stock warrant liability:
Beginning balance	$	—	$	—
Issuance of redeemable convertible preferred stock warrant liability		—		878
Change in fair value upon revaluation recognized in other income (expense), net		—		2,628
Reclassification of redeemable convertible preferred stock warrant liability to common stock at closing of initial public offering		—		(3,506	)
Ending balance	$	—	$	—

Note 4. Condensed balance sheet components

Property and equipment, net

Property and equipment, net consisted of the following (in thousands):

	September 30,			December 31,
	2019			2018
Leasehold improvements	$	1,058		$	86
Computer equipment		123			87
Office furniture and equipment		96			96
Total Property and equipment, cost		1,277			269
Less: Accumulated depreciation and amortization		(78	)		(60	)
Total property and equipment, net	$	1,199		$	209

The Company recognized $20,000 and $53,000 of depreciation and amortization expense during the three and nine months ended September 30, 2019, respectively, and $16,000 and $40,000 of depreciation and amortization expense during the three and nine months ended September 30, 2018, respectively.

Accrued expenses and other current liabilities

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

	September 30,		December 31,
	2019		2018
Accrued research and development costs	$	3,207	$	2,055
Accrued employee related expenses		1,416		78
Liability for unvested stock, short-term		145		142
Accrued other current liabilities		897		302
Total accrued expenses and other current liabilities	$	5,665	$	2,577

As of September 30, 2019, and December 31, 2018, $129,000 and $244,000, respectively, related to the long-term liability for unvested stock were recorded in other liabilities.

Lease liabilities

Lease liabilities consist of the following (in thousands):

	September 30,		December 31,
	2019		2018
Lease liabilities	$	471	$	—
Lease liabilities, non-current		4,736		—
Total lease liabilities	$	5,207	$	—

Note 5. Convertible promissory notes

In February 2018, the Company entered into a Note and Warrant Purchase Agreement with BBP LLC and Stanford (the “Convertible Promissory Notes”). The Company issued two Convertible Promissory Notes in an aggregate principal amount of $10.0 million. The Convertible Promissory Notes had a maturity date of the earliest of a qualified financing, a deemed liquidation event, a qualified initial public offering, or February 2019. The Convertible Promissory Notes had an annual interest rate of 5.0%. The Convertible Promissory Notes were convertible into future preferred stock at a 30% discount to the price paid by investors in the Company’s next preferred equity financing of at least $10.0 million or convertible into common stock at the price per share in an IPO with aggregate proceeds of at least $30.0 million.

In connection with the Convertible Promissory Notes, the Company issued warrants for the purchase of $4.0 million in shares of the Company’s Series Seed redeemable convertible preferred stock or the Company’s preferred stock in the next equity financing. The warrant exercise period commenced upon the earlier of the closing of the next qualified financing and the consummation of a deemed liquidation event. The exercise price of the warrant was the price per share in the next equity financing if the warrant was exercisable for the Company’s redeemable convertible preferred stock in the next qualified financing, or $1.3248 per share if the warrant was exercisable for shares of Series Seed redeemable convertible preferred stock.

Upon issuance of the Convertible Promissory Notes, the Company recorded the fair value of the warrants of $0.9 million as a debt discount and redeemable convertible preferred stock warrant liability.

The Company also determined that a beneficial conversion feature existed at the time the Convertible Promissory Notes were issued because the fair value of the securities into which the Convertible Promissory Notes were convertible at the time of issuance, Series Seed redeemable convertible preferred stock, was greater than the effective conversion price on the borrowing date. Accordingly, the Company recorded a beneficial conversion feature of $9.1 million. The beneficial conversion feature was recorded as a debt discount with an offset to additional paid-in-capital.

The discounts associated with both the warrants and beneficial conversion feature were amortized to interest expense using the effective interest method through February 2019, the contractual maturity date of the Convertible Promissory Notes. During the three and nine months ended September 30, 2018, the Company recognized interest expense of $0.0 million and $1.0 million, respectively.

The Convertible Promissory Notes also contained a redemption feature that was determined to be an embedded derivative requiring bifurcation. The fair value of the embedded derivative liability at issuance was determined to be $6.5 million and was recorded as a deemed dividend as the transaction was with stockholders.

Changes in the fair value of the redeemable convertible preferred stock warrant liability and embedded derivative liability have been recorded within other income (expense), net, in the statement of operations.

Upon completion of the Series B Preferred Stock financing in March 2018, the Convertible Promissory Notes were redeemed under their qualified financing redemption feature whereby the aggregate of the outstanding principal and accrued interest balance of the Convertible Promissory Notes of $10.0 million was converted into 1,324,823 shares of Series B Preferred Stock at a conversion price of $7.5844 per share resulting in issuance of $14.4 million of Series B Preferred Stock. The redemption of the Convertible Promissory Notes was accounted for as a debt extinguishment, which resulted in a gain of $7.4 million. The extinguishment gain was recognized in equity and included the reacquisition of the beneficial conversion feature which was measured using the intrinsic value of the conversion option at the extinguishment date of $14.4 million and the settlement of the embedded derivative liability of $6.5 million. This gain was recorded in additional paid-in-capital since the holders of the Convertible Promissory Notes were stockholders and the arrangement was considered a capital transaction.

The warrants associated with the Convertible Promissory Notes also became warrants to purchase 369,180 shares of the Series B Preferred Stock at an exercise price of $10.8348 per share. These warrants were net exercised upon the completion of the IPO into 206,247 shares of the Company’s common stock. During the three and nine months ended September 30, 2018, the Company recognized expense associated with these warrants of $2.6 million and $2.6 million, respectively.

Note 6. Related party transactions

BridgeBio Pharma LLC

BridgeBio through its ownership of BBP LLC, is a controlling stockholder in the Company, as it owned 65.5% and 61.0% of the Company’s total outstanding shares as of September 30, 2019 and December 31, 2018, respectively. In April 2016, the Company began receiving consulting, management, facility and infrastructure services pursuant to a services agreement with BBP LLC. The initial agreement was entered into on March 1, 2016 and was superseded by the subsequent agreement that was effective as of May 1, 2017.

The Company incurred the following benefits and expenses under the agreement with BBP LLC (in thousands):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019			2018		2019			2018
Rent	$	(5	)	$	14	$	(16	)	$	34
Facility		(11	)		17		64			119
Consulting		237			146		391			794
	$	221		$	177	$	439		$	947

As of September 30, 2019, and December 31, 2018, the Company had outstanding receivables from BBP LLC of $83,000 and $34,000, respectively, related to providing services to other related companies of BBP LLC. As of September 30, 2019, and December 31, 2018, the Company had outstanding liabilities due to BBP LLC of $0.4 million and $0.2 million, respectively.

Dr. Graef Consulting Agreement

In April 2016, the Company entered into a consulting agreement with Dr. Graef, one of the Company’s founders. Pursuant to the consulting agreement, Dr. Graef agreed to provide consulting services in connection with the discovery and development of novel TTR stabilizers. As compensation for these services, Dr. Graef is entitled to an annual fee in the amount of up to $150,000 and reimbursement by the Company for pre-approved expenses. The consulting agreement has a term of four years but may be terminated by either party for any reason with thirty days’ prior notice.

As of June 20, 2018, in connection with the Company’s initial public offering, the ownership percentage of the Company’s stock held by Dr. Graef decreased, whereby the Company no longer considered Dr. Graef a related party.

Dr. Alhamadsheh Consulting Agreement

In August 2016, the Company entered into a consulting agreement with Dr. Alhamadsheh, one of the Company’s founders. Pursuant to the consulting agreement, Dr. Alhamadsheh agreed to provide consulting services in connection with the discovery and development of novel TTR stabilizers. As compensation for these services, Dr. Alhamadsheh is entitled to an annual fee in the amount of up to $115,000 and reimbursement by the Company for pre-approved expenses. The consulting agreement has a term of four years but may be terminated by either party for any reason with thirty days’ prior notice.

As of June 20, 2018, in connection with the Company’s initial public offering, the ownership percentage of the Company’s stock held by Dr. Alhamadsheh decreased, whereby the Company no longer considered Dr. Alhamadsheh a related party.

The Company incurred the following expenses for services under these consulting agreements and stock-based compensation (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Dr. Graef	$	38	$	38	$	114	$	114
Dr. Alhamadsheh		29		29		87		87
	$	67	$	67	$	201	$	201

Option award to Dr. Huh

In May 2018, our board of directors approved a grant to Dr. Huh (a member of our board of directors) of an option to purchase 83,720 shares of our common stock pursuant to the Company’s 2018 Stock Option and Incentive Plan (the “2018 Plan”). The option was subject to vesting in equal annual installments over three years from the grant date, subject to Dr. Huh’s continued service as a director through the applicable vesting dates. The award is subject to full accelerated vesting upon a “sale event,” as defined in the 2018 Plan. Dr. Huh resigned from the Company’s board of directors in December 2018, at which time all options were cancelled. The Company recorded stock-based compensation expense related to these awards of $75,000 and $85,000, for the three and nine months ended September 30, 2018. For the three and nine months ended September 30, 2019 the Company recorded no expense related to these awards.

Note 7. Redeemable convertible preferred stock

In March 2018, the Company sold an aggregate of 1,476,715 shares of Series B redeemable convertible preferred stock financing in an initial closing for total gross proceeds of $16.0 million. An additional 4,430,162 shares of Series B Preferred Stock in an additional closing was contingent upon the release of specified data study either upon the request of the Company for investors to purchase the shares or the investors to call for the purchase of such shares. The Company determined that right to cause the Series B stockholders to purchase additional shares of redeemable convertible preferred stock upon the achievement of the specified milestone represents a freestanding financial instrument that was recorded as a redeemable convertible preferred stock tranche liability.

The Company recorded the redeemable convertible preferred stock tranche liability incurred in connection with its Series B Preferred Stock at fair value of $0.1 million on the date of issuance and remeasured the liability on each subsequent balance sheet date and prior to settlement and issuance of the additional shares. Changes in fair value are recognized as a gain or loss within other income (expense), net in the statements of operations.

In May 2018, the Company issued 4,430,162 shares of Series B Preferred Stock at a purchase price of $10.8348 per share, for total proceeds of $48.0 million. The Company exercised its option to issue the Series B Preferred Stock and at the time the tranche liability was remeasured at $0.7 million and then was reclassified to Series B redeemable convertible preferred stock upon the closing of the sale of additional shares.

Following the closing of the IPO, all outstanding shares of the Series Seed and Series B Preferred Stock converted into 24,025,270 shares of common stock and the related carrying value was reclassified to common stock and additional paid-in-capital. There were no shares of redeemable convertible preferred stock outstanding as of September 30, 2019.

Note 8. Redeemable convertible preferred stock tranche liability

In March 2018, the Company entered into a Series B Preferred Stock Purchase Agreement, or the Series B Agreement, for the issuance of up to 7,231,700 shares of Series B redeemable convertible preferred stock at a price of $10.8348 per share in two closings. Upon the initial closing on March 29, 2018, 1,476,715 shares of Series B redeemable convertible preferred stock were issued for gross proceeds of $16.0 million and 1,324,823 shares were issued upon conversion of the outstanding Convertible Promissory Notes principal balance and accrued interest of $10.0 million into $14.4 million of Series B Preferred Stock.

The Series B Agreement provided that the Company could issue an additional 4,430,162 shares under the same terms as the initial closing, in an additional closing contingent upon the achievement of certain milestone. Either the investors or the Company could provide written notice for the additional closing to occur.

The Company determined that its obligation to issue additional shares of its redeemable convertible preferred stock and the Company’s right to request investors to purchase additional shares of its redeemable convertible preferred stock represents a freestanding financial instrument. The freestanding redeemable convertible preferred stock tranche liability (Series B Tranche Liability) was initially recorded at fair value, with fair value changes recorded within other income (expense), net in the statement of operations.

The Company continued to adjust the Series B Tranche Liability for changes in the fair value until the settlement of the redeemable convertible preferred stock additional closing in May 2018. The Company recorded a Series B Tranche Liability in March 2018 of $0.1 million related to the Series B Preferred Stock. The Company exercised its option to issue the Series B Preferred Stock and at the time the tranche liability was remeasured at $0.7 million in May 2018, and then reclassified to Series B redeemable convertible preferred stock upon the closing of the sale of additional shares.

Note 9. Stockholders’ equity and stock-based compensation

Common stock

The Company has reserved shares of common stock for issuance as follows:

	As of September 30,
	2019		2018
Options issued and outstanding		1,435,668		1,041,334
Options available for future grants		486,915		371,004
Employee Stock Purchase Plan shares available for future grants		104,540		143,520
Total		2,027,123		1,555,858

Stock options

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2019:

							Weighted- Average		Weighted- Average		Aggregate
	Options						Exercise		Remaining		Intrinsic
	Available for			Options			Price Per		Contractual		Value
	Grant			Outstanding			Share		Term (years)		(in thousands)
Outstanding—December 31, 2018		747,057			1,329,762		$	8.55		9.40	$	6,928
Options granted		(313,712	)		313,712		$	30.29
Options exercised		—			(154,236	)	$	2.26
Options cancelled		53,570			(53,570	)	$	7.24
Outstanding—September 30, 2019		486,915			1,435,668		$	14.02		8.92	$	31,513
Options exercisable – September 30, 2019					238,717		$	7.17		8.46	$	6,876
Options vested and expected to vest – September 30, 2019					1,435,668		$	14.02		8.92	$	31,513

Employee stock options valuation

The fair value of employee and non-employee director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

	Three Months						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Expected term in years		6.08			6.09			6.07			6.08
Expected volatility		71.88	%		74.47	%		72.16	%		70.88	%
Risk-free interest rate		1.83	%		2.80	%		2.00	%		2.79	%
Dividend yield					—						—
Weighted average fair value of share-based awards granted	$	23.53		$	11.79		$	20.09		$	8.38

Stock options granted to non-employees

Stock-based compensation related to stock options granted to non-employees is recognized as the stock options are earned. The fair value of the stock options granted to non-employees was calculated at each reporting date using the Black-Scholes option-pricing model with the following assumptions:

	Three Months				Nine Months Ended
	September 30,				September 30,
	2019	2018			2019			2018
Expected term in years	N/A		9.45			6.09			9.45
Expected volatility	N/A		74.42	%		73.67	%		74.42	%
Risk-free interest rate	N/A		3.04	%		2.52	%		3.04	%
Dividend yield	N/A		—			—			—

During the three and nine months ended September 30, 2019, and 2018, the Company granted 0, 18,500, 0 and 35,880 shares, respectively, to non-employee consultants. The Company recognized stock-based compensation expense for non-employee awards during the three and nine months ended September 30, 2019, and 2018 of $35,000, $0.1 million, $(0.1) million, and $0.1 million, respectively.

Accrued repurchase liability for common stock early exercises

Stock awards granted pursuant to the 2016 Equity Incentive Plan, or the 2016 Plan, permitted option holders to elect to exercise unvested options in exchange for unvested common stock. Awards granted under the 2016 Plan that are exercised prior to vesting will continue to vest according to the respective award agreement, and such unvested shares are subject to repurchase by the Company at the optionee’s original exercise price or fair market value in the event the optionee’s service with the Company voluntarily or involuntarily terminates.

As of September 30, 2019, and December 31, 2018, 617,184 and 896,034 shares, respectively, remained subject to a repurchase right by the Company, with a related liability included in accrued expenses and other liabilities in the balance sheet of $274,000 and $386,000, respectively.

Stock-based compensation expense

Total stock-based compensation expense related to all our stock-based awards was recorded in the statements of operations as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Research and development	$	626	$	251	$	1,630	$	872
General and administrative		969		443		2,095		829
Total stock-based compensation expense	$	1,595	$	694	$	3,725	$	1,701

As of September 30, 2019, there was $13.1 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements under the 2016 and 2018 Plans. The unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of 2.7 years.

10. Net income (loss) per share

The basic and diluted net income per share were computed as follows (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income (loss) attributable to common stock for basic and diluted net income (loss) per share	$	6,931		$	(10,614	)	$	(18,855	)	$	(29,958	)

Weighted average common shares outstanding		37,037,880			36,729,210			36,881,063			17,079,678
Weighted average unvested common shares subject to repurchase		(456,094	)		(763,420	)		(524,388	)		(718,329	)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic		36,581,786			35,965,790			36,356,675			16,361,349
Dilutive Securities:
Outstanding stock options		1,128,042			—			—			—
ESPP contributions		906			—			—			—
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted		37,710,734			35,965,790			36,356,675			16,361,349

Net income (loss) per share attributable to common stockholders, basic	$	0.19		$	(0.30	)	$	(0.52	)	$	(1.83	)
Net income (loss) per share attributable to common stockholders, diluted	$	0.18		$	(0.30	)	$	(0.52	)	$	(1.83	)

The following shares of potentially dilutive securities have been excluded from the diluted net loss per share computations for the three and nine months ended September 30, 2019 and 2018 because their inclusion would be anti-dilutive:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Employee Stock Purchase Plan shares		357		13,110		4,859		13,110
Options to purchase common stock		225,364		1,041,334		1,435,666		1,041,334
Common stock subject to vesting or repurchase		—		988,238		421,917		988,238
Total		225,721		2,042,682		1,862,442		2,042,682

11. License agreements

Alexion License Agreement

In September 2019, the Company entered into an exclusive license agreement with Alexion to develop, manufacture and commercialize the compound known as AG10 and any of its various chemical forms and any pharmaceutical products containing AG10 in Japan. Under the agreement, the Company received an upfront nonrefundable payment of $25.0 million.

The Company also entered into a stock purchase agreement with Alexion, under which the Company sold to Alexion 556,173 shares of the Company’s common stock at a price per share of $44.95, for an aggregate purchase price of approximately $25.0 million. The excess of the purchase price over the value of the Company’s shares, determined based on the closing price of a share of the Company’s common stock of $41.91 as reported on The Nasdaq Global Select Market as of the date of execution, was $1.7 million and recognized in revenue as part of the upfront payment as discussed below.

The Company is also eligible to receive $30.0 million in regulatory milestone payments subject to the achievement of regulatory milestones. The Company will also receive low double-digit royalty payments based on net sales of AG10 in Japan. The royalty rate is subject to reduction if Alexion is required to obtain intellectual property rights from third parties to develop, manufacture or commercialize AG10 in Japan, or upon the introduction of generic competition into market. The Company is also in discussions with Alexion on a supply agreement that has not yet been finalized as of the period ending September 30, 2019.

The Company accounted for the license agreement under ASC 606 and identified the exclusive license as a distinct performance obligation since Alexion can benefit from the license on its own by developing and commercializing the underlying product using its own resources. In addition, the Company will enter into clinical and commercial supply agreements for the licensed territory. The Company determined that the optional right to future products under these supply agreements is not considered to represent a material right. The Company recognized the $25.0 million upfront fee and $1.7 million premium paid for the Company’s stock of for a total upfront payment of $26.7 million in license revenue upon the effective date of the license agreement in September 2019. The Company determined that the license was a right to use the Company’s intellectual property and as of the effective date, the Company had provided all necessary information to Alexion to benefit from the license and the license term had begun.

The Company considers the future potential regulatory milestones of up to approximately $30.0 million and the sales-based royalties to be variable consideration. The Company excluded the regulatory milestones from the transaction price as of September 30, 2019 because the Company determined such payments to be fully constrained under ASC 606 due to the inherent uncertainty in the achievement of such milestone payments and are highly susceptible to factors outside of the Company’s control. As the sales-based royalties are all related to the license of the IP, the Company will recognize revenue in the period when subsequent sales are made pursuant to the sales-based royalty exception under ASC 606-10-55-65. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

Additionally, during the three and nine months ended September 30, 2019, the Company recognized $26.7 million and $26.7 million, respectively, in revenues related to the license agreement.

Acquired license

Stanford license agreement

In April 2016, the Company entered into a license agreement with Stanford, relating to the Company’s drug discovery and development initiatives. Under this agreement, the Company has been granted certain worldwide exclusive licenses to use the licensed compounds. In consideration for the license the Company paid an upfront license payment of $25,000 in April 2016 and also issued 56,809 shares of common stock.

In March 2017, the Company paid Stanford an annual license fee of $10,000, which was recorded as research and development expense during the year ended December 31, 2017. The Company may also be required to make future payments of up to approximately $1.0 million to Stanford upon achievement of specific intellectual property, clinical and regulatory milestone events, as well as pay royalties in the low single digits on future net sales, if any. In addition, the Company is obligated to pay Stanford a percentage of non-royalty revenue received by the Company from its sublicensees, with the amount owed decreasing annually for three years based on when the applicable sublicense agreement is executed. In March 2018, the Company recognized $50,000 of research and development expense in connection with the achievement of a development milestone under the Stanford agreement. In February 2019, the Company recognized $200,000 of research and development expense in connection with the achievement of a development milestone under the Stanford agreement.

During the three and nine months ended September 30, 2019, and 2018, the Company recognized milestone related expense of $0.0 million, $0.2 million, $0.0 million, and $0.1 million, respectively, in connection with this agreement.

Under the license agreement with Stanford, the Company will pay Stanford a portion of all nonroyalty sublicensing consideration attributable to the sublicense of the licensed compounds. The license agreement states that if this event occurred in the third year, 10% is payable to Stanford. During the three and nine months ended September 30, 2019, the Company recognized expense of $2.5 million related to the Alexion license agreement recorded as cost of license revenue.

12. Commitments and contingencies

Lease arrangements

In September 2017, the Company entered into a one-year operating lease for laboratory facilities in San Francisco, California. In November 2017, the Company entered into an operating lease for an administrative facility in San Francisco, California, which expires in November 2022. The Company has provided a security deposit of $158,000 as collateral for the lease, which is included in non-current assets on the condensed balance sheet at September 30, 2019.

On March 27, 2019 the Company entered into an amendment to the lease dated November 14, 2017 and the new lease commenced in August 2019. In connection with the amendment the Company leases 10,552 rentable square feet. The amended lease is for 87 months and has $6.4 million of payments under this lease.

Upon the adoption of ASU 2016-02 on January 1, 2019, the Company recognized a lease liability and related ROU asset of $1.2 million and $1.1 million, respectively, based on the present value of lease payments for the remaining term of the Company’s prior lease. Upon the commencement of the amended lease, the Company recognized $56,000 in tenant improvements from the prior lease as expense, a gain on extinguishment of the previous lease liability of $69,000, and wrote-off the total ROU assets and lease liabilities of $1.0 million and $1.0 million, respectively. As of September 30, 2019, total ROU assets and lease liabilities per the amended lease were approximately $4.1 million and $5.2 million, respectively. All operating lease expense is recognized on a straight-line basis over the lease term.

Other information related to the operating lease:

	Nine Months Ended September 30, 2019
Cash payments over lease term (in thousands)	$	6,435,399
Weighted average remaining lease term (months)		85
Weighted average discount rate ⁽¹⁾		6	%

(1)

Because the rate implicit in our lease was not readily determinable, the Company used the Company’s incremental borrowing rate. In determining our incremental borrowing rate for each lease, we considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to our creditworthiness, the impact of collateralization and the term of each of our lease agreements.

Future minimum lease payments as of September 30, 2019 are as follows (in thousands):

	Operating
Year	Lease Commitments
2019 (remaining three months)	$	139
2020		844
2021		869
2022		895
2023		922
Thereafter		2,766
Total		6,435
Less imputed lease interest		(1,228	)
Total lease liabilities	$	5,207

The Company’s rent expense was $0.1 million and $0.3 million for the three and nine months ended September 30, 2019 and $0.1 million and $0.3 million for the three and nine months ended September 30, 2018. The amounts include the amounts incurred pursuant to the service agreement with BridgeBio Services, Inc., an affiliate of BridgeBio Pharma LLC (see Note 6). Variable lease payments for operating expenses were immaterial for the three and nine months ended September 30, 2019.

Indemnification

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, lessors, business partners, board members, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company, negligence or willful misconduct of the Company, violations of law by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the Company’s balance sheets, statements of operations, or statements of cash flows.

13. Income taxes

Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The provision for income taxes for the three and nine months ended September 30, 2019 and 2018 differs from the amount that would be provided by applying the statutory U.S. federal income tax rate of 21%, to pre-tax income primarily due to (i) an increase in uncertain tax positions related to tax credits generated during the quarter and (ii) for the three and nine months ended September 30, 2019 and 2018, a full valuation allowance was in effect, which reduced the Company’s net tax expense to zero.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of the Company’s deferred tax assets will not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of temporary differences, tax-planning strategies and projected future taxable income and results of operations. If the Company concludes that it is more likely than not that some portion, or all, of its deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. At December 31, 2018, the Company maintained a full valuation allowance on its net deferred tax assets. The Company assesses the appropriateness of its valuation allowance on a quarterly basis. As of September 30, 2019, there was no change in the Company’s assessment of the realizability of its deferred tax assets, and the full valuation allowance remains in effect.

In June 2019, the Company entered into a tax sharing agreement with BridgeBio Pharma, Inc. Based on the agreement, in the case that the Company and BridgeBio Pharma, Inc. file a consolidated or combined tax return and BridgeBio Pharma, Inc. utilizes the Company’s tax attributes, BridgeBio Pharma, Inc. will pay the Company the tax benefit it takes on a “with and without” basis. Based on the current ownership structure at September 30, 2019, the Company and BridgeBio Pharma, Inc. may qualify for filing a consolidated or combined tax returns in certain tax jurisdictions.

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

You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year ended December 31, 2018, included in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission (SEC) on April 15, 2019 (the “Annual Report”).

Forward-Looking Statements

This discussion contains certain 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. Forward-looking statements are identified by words such as “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “could,” “potentially” or the negative of these terms or similar expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this report in Part II, Item 1A -“Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments. We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

Overview

We are a clinical stage biopharmaceutical company focused on addressing the large and growing unmet need in diseases caused by transthyretin, or TTR, amyloidosis, or ATTR. We are advancing our product candidate, AG10, to treat ATTR, a progressive and fatal family of diseases.

Our financial information includes allocations of expenses attributable to certain corporate functions that were provided to us by BridgeBio and its affiliates, including expenses attributable to certain executive personnel, facility-related costs, advisory services, insurance costs and other general corporate expenses. These allocations were made based on direct usage or estimates which are considered to be reasonable by our management and in accordance with our services agreement with BridgeBio. We have moved into our own leased facility and expect to reduce the services provided by BridgeBio as we hire additional personnel.

Since the commencement of our operations, we have devoted substantially all of our resources to research and development activities in support of our product development efforts, hiring personnel, raising capital to support and expand such activities and general and administrative support for these operations. We have funded our operations to date primarily from the issuance and sale of shares of common stock, redeemable convertible preferred stock, notes convertible into shares of redeemable convertible preferred stock and licensing arrangements.

In April 2016, we entered into a license agreement with the Board of Trustees of the Leland Stanford Junior University, or Stanford, for rights relating to novel TTR aggregation inhibitors. Under the license agreement, Stanford has granted us an exclusive worldwide license to make, use and sell products that are covered by the licensed patent rights.

In October 2018, the U.S. Food and Drug Administration, or FDA, granted orphan drug designation in the United States to AG10 for the treatment of ATTR, and the Committee for Orphan Medicinal Products of the European Medicines Agency, or EMA, adopted a positive opinion for the designation of AG10 as an orphan medicinal product in the European Union, or EU, for the treatment of ATTR. The EMA also granted a product-specific pediatric investigational plan waiver to us for AG10.

Although we reported net income of $6.9 million for the three months ended September 30, 2019, we may not be able to maintain or increase profitability on a quarterly or annual basis and we are otherwise unable to accurately predict the extent of long-range future profits or losses. Excluding the three months ended September 30, 2019, our research and development expenditures and general and administrative expenses have exceeded our revenues for each fiscal year. We have incurred net losses of $40.7 million during the year ended December 31, 2018, and $18.9 million during the nine months ended September 30, 2019, respectively, and we expect to continue to incur significant losses for the foreseeable future. As of September 30, 2019, we had an accumulated deficit of $84.1 million. We expect these losses to increase as we continue our development of, and seek regulatory approvals for our product candidate, AG10, begin to commercialize AG10, if approved, and engage in any other research and development activities. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

In June 2018, we completed our initial public offering (IPO) of our common stock pursuant to which we issued 7,187,500 shares of our common stock at a price of $17.00 per share and received $111.0 million in cash, net of underwriting discounts and commissions and offering costs.

In September 2019, we entered into a license agreement (the “License Agreement”) with Alexion Pharma International Operations Unlimited Company, a subsidiary of Alexion Pharmaceuticals, Inc. (together, “Alexion”) to develop and commercialize the Company’s product candidate, AG10, in Japan. Additionally, in September 2019, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Alexion, pursuant to which we sold to Alexion 556,173 shares of our common stock, for aggregate cash proceeds of $25.0 million. Under the terms of the License Agreement, we granted Alexion an exclusive license to certain of our intellectual property rights to develop, manufacture and commercialize AG10 in Japan. In consideration for the license grant, we were entitled to receive an upfront payment of $25 million, with the potential for an additional one-time payment of $30.0 million subject to the achievement of a regulatory milestone. In addition, we are entitled to receive royalties in the low double-digits on net sales by Alexion of AG10 in Japan. The royalty rate is subject to reduction if Alexion is required to obtain intellectual property rights from third parties to develop, manufacture or commercialize AG10 in Japan, or upon the introduction of generic competition into the market.

As of September 30, 2019, we had $165.8 million in cash and cash equivalents.

We will need to obtain additional financing in the future and may seek financing through the issuance of our common stock, through other equity or debt financings or through collaborations or partnerships with other companies. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts for AG10 and other research and development activities. We may not be able to raise additional capital on terms acceptable to us, or at all, and any failure to raise capital as and when needed would compromise our ability to execute on our business plan and we may have to significantly delay, scale back, or discontinue the development of AG10 or curtail any efforts to expand our product pipeline. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

Financial operations overview

Revenue

License revenue consists of consideration earned for performance obligations satisfied pursuant to our License Agreement. We have not generated any revenue from the sale of any drugs, and we do not expect to generate any revenue unless or until we obtain regulatory approval of and commercialize our product candidate. On September 9, 2019, we entered into a license agreement with Alexion. In consideration for the license grant, we received an upfront nonrefundable payment of $25.0 million. Additionally, on September 9, 2019, we entered into a Stock Purchase Agreement with Alexion wherein we agreed to sell to Alexion 556,173 shares of the Company’s common stock, par value $0.001 per share, for aggregate cash proceeds of approximately $25.0 million.

Cost of license revenue

Research and development expense

Research and development expense consists primarily of costs incurred for the development of AG10, which include:

•

employee-related expenses, including salaries, benefits and stock-based compensation;

•

laboratory, manufacturing and other vendor expenses related to the execution of preclinical studies and clinical trials;

•

the costs related to the production of clinical supplies and the engagement of consultants and other third-party service providers that conduct research and development activities on our behalf;

•

fees paid under our license agreement with Stanford; and

•

facilities and other allocated expenses, expenses for rent, depreciation and amortization, maintenance of facilities and other supplies.

We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors, collaborators and third-party service providers. Nonrefundable payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed.

The following table summarizes our research and development expenses incurred during the respective periods (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Clinical development	$	4,602	$	3,808	$	12,803	$	8,277
Contract manufacturing		3,231		2,106		10,476		4,534
Preclinical, discovery and other research and development costs		1,342		1,305		2,538		2,823
Compensation and related personnel costs		2,599		1,065		6,785		4,264
Facility and other costs		213		85		431		318
	$	11,987	$	8,369	$	33,033	$	20,216

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to conduct research and development activities related to AG10 and advance AG10 into later stages of clinical development, including our ongoing Phase 2 and Phase 3 clinical trials of AG10 in ATTR cardiomyopathy (ATTR-CM) and our planned Phase 3 clinical trial of AG10 in ATTR polyneuropathy (ATTR-PN) and any subsequent preclinical or clinical development activities. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of AG10 is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization of our product candidate, if at all.

General and administrative expense

Our general and administrative expenses consist primarily of personnel costs, allocated facility costs and other expenses for outside professional services, including legal, human resource, audit and accounting services. Personnel costs consist of salaries, benefits and stock-based compensation. We expect to incur additional expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the Securities and Exchange Commission, or SEC, and listing standards applicable to companies listed on a national securities exchange, additional insurance expenses, investor relations activities and other administrative and professional services. We also expect to increase the size of our administrative function to support the growth of our business.

Other income (expense), net

Other income (expense), net primarily includes interest income during the three and nine months ended September 30, 2019. For the three and nine months ended September 30, 2018, other income (expense), net primarily includes gains and losses from the remeasurement of our liabilities related to our redeemable convertible preferred stock tranche liabilities and our redeemable convertible preferred stock warrant liability. We continued to adjust these liabilities for changes in estimated fair value until the settlement of the related redeemable convertible preferred stock tranche liability and redeemable convertible preferred stock warrant liability. At such time, the related redeemable convertible preferred stock tranche liability was reclassified to redeemable convertible preferred stock and we no longer recorded any related periodic fair value adjustments. We continued to record adjustments to the estimated fair value of the redeemable convertible preferred stock warrants until these were net exercised upon the completion of the IPO.

Deemed dividend

In February 2018, we recognized a deemed dividend of $6.5 million related to the fair value of the redemption feature embedded within the Convertible Promissory Notes payable with stockholders and separately treated as a derivative liability. The dividend was charged to additional paid-in-capital.

Gain on extinguishment of convertible promissory notes

In March 2018, upon the conversion of the Convertible Promissory Notes into Series B redeemable convertible stock, we recognized a $7.4 million gain on debt extinguishment. As the Convertible Promissory Notes were issued to stockholders, we treated the gain on debt extinguishment as a capital contribution included in additional paid-in-capital.

Comparison of the three and nine months ended September 30, 2019 and 2018

License revenue

Three Months Ended

September 30,

Increase (Decrease)

Nine Months Ended

September 30,

Increase (Decrease)

in thousands

2019

2018

2019

2018

License revenue

26,691

—

26,691

100%

26,691

—

26,691

100%

License revenue was $26.7 million for the quarter ended September 30, 2019, and there was no revenue for the quarter ended September 30, 2018. The increase in license revenue was entirely attributable to revenue recognized related to the Alexion License Agreement for which performance obligations were satisfied.

Cost of license revenue

Three Months Ended

September 30,

Increase (Decrease)

Nine Months Ended

September 30,

Increase (Decrease)

in thousands

2019

2018

2019

2018

Cost of license

revenue

2,500

—

2,500

100%

2,500

—

100%

Cost of license revenue was $2.5 million for the quarter ended September 30, 2019, and there was no cost of license revenue for the quarter ended September 30, 2018. The increase in cost of license revenue was related to the obligations under the Stanford license agreement, whereby we are required to pay a portion of license fees received.

Research and development expense

Three Months Ended

September 30,

Increase (Decrease)

Nine Months Ended

September 30,

Increase (Decrease)

in thousands

2019

2018

2019

2018

Research and development

11,987

8,369

3,618

43%

33,033

20,216

12,817

63%

Research and development expense increased by $3.6 million, or 43%, during the three months ended September 30, 2019, compared to the three months ended September 30, 2018. The increase was primarily attributable to an increase of $2.0 million in clinical trial related activities and contract manufacturing activities for our clinical trials and drug supply, an increase in personnel costs of $1.2 million, and an increase in stock-based compensation of $0.4 million.

Research and development expense increased by $12.8 million, or 63%, during the nine months ended September 30, 2019, compared to the nine months ended September 30, 2018. The increase was primarily attributable to an increase of $10.2 million in clinical trial related activities and contract manufacturing activities for our clinical trials and drug supply, an increase in personnel costs of $1.8 million, and an increase in stock-based compensation of $0.8 million.

General and administrative expense

Three Months Ended

September 30,

Increase (Decrease)

Nine Months Ended

September 30,

Increase (Decrease)

in thousands

2019

2018

2019

2018

General and administrative

5,953

2,619

3,334

127%

12,285

6,858

5,427

79%

General and administrative expense increased by $3.3 million, or 127%, during the three months ended September 30, 2019, compared to the three months ended September 30, 2018. The increase was primarily attributable to an increase of $2.3 million in professional service fees and consulting services, primarily from one-time charges of $1.8 million related to financial, legal and accounting fees, an increase of $0.5 million in personnel-related expenses due to an increase in headcount to support the growth of our operations, and an increase in stock-based compensation of $0.5 million.

General and administrative expense increased by $5.4 million, or 79%, during the nine months ended September 30, 2019, compared to the nine months ended September 30, 2018. The increase was primarily attributable to an increase of $3.1 million in professional service fees and consulting services, primarily from one-time charges of $1.8 million related to financial, legal and accounting fees, an increase of $1.4 million in personnel-related expenses due to an increase in headcount to support the growth of our operations, and an increase in stock-based compensation of $1.3 million.

Other income (expense), net

Three Months Ended

September 30,

Increase (Decrease)

Nine Months Ended

September 30,

Increase (Decrease)

in thousands

2019

2018

2019

2018

Other income (expense), net

680

374

306

82%

2,272

(3,797

)

6,069

-160%

Other income (expense), net was an income of $0.7 million during the three months ended September 30, 2019, compared to an income of $0.4 million during the three months ended September 30, 2018. The increase in other income during the three months ended September 30, 2019 was due to the interest income related to our higher balance of money market funds.

Other income (expense), net was an income of $2.3 million during the nine months ended September 30, 2019, compared to an expense of $3.8 million during the nine months ended September 30, 2018. The other income during the nine months ended September 30, 2019 was due to the interest income related to our money market funds. The other expense during the nine months ended September 30, 2018 is primarily from the amortization of the debt discount of $1.0 million related to the Convertible Promissory Notes payable which was converted into Series B redeemable convertible preferred stock in March 2018 and the remeasurement of the warrant liability which was revalued and reclassified to equity upon the completion of the initial public offering in the amount of $2.6 million.

Deemed dividend

In February 2018, we recognized a deemed dividend of $6.5 million related to the fair value of the redemption feature embedded in the Convertible Promissory Notes payable with stockholders and separately treated as a derivative liability. The dividend was charged to additional paid-in-capital.

Gain on extinguishment of convertible promissory notes

In March 2018, upon the conversion of the Convertible Promissory Notes into Series B redeemable convertible stock, we recognized a gain on debt extinguishment. As the Convertible Promissory Notes were issued to stockholders, we treated the gain on debt extinguishment as a capital contribution included in additional paid-in-capital.

Critical accounting policies and estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are fully described in Note 2 of our Annual Report. There were no significant changes to our critical accounting policies disclosed in our audited financial statements as of December 31, 2018 other than the adoption of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) as described in Note 2 of the financial statements included in this report. We believe that the accounting policies discussed are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Liquidity and Capital Resources

Liquidity and Capital Expenditures

Liquidity

As of September 30, 2019, we had $165.8 million of cash and cash equivalents and an accumulated deficit of $84.1 million. In June 2018, we completed our IPO pursuant to which we issued 7,187,500 shares of our common stock at a price of $17.00 per share and received $111.0 million in cash, net of underwriting discounts and commissions and offering costs paid by us. In September 2019, we received $50.0 million in aggregate cash proceeds from Alexion upon the execution of the License Agreement and Stock Purchase Agreement.

Our primary uses of cash are to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

We believe, based on our current operating plan and expected expenditures, that our existing cash and cash equivalents will be sufficient to meet our anticipated operating and capital expenditure requirements for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Our ultimate success depends on the outcome of our research and development activities. We expect to incur additional losses in the future and we anticipate the need to raise additional capital to fully implement our business plan.

We expect to further increase our research and development activities, which will increase the amount of cash used during 2019 and beyond. Specifically, we expect continued spending on clinical trials, continued manufacturing activities and higher payroll expenses as we increase our professional and scientific staff and research and development activities and advance AG10 into later-stage clinical development, including our ongoing and planned Phase 3 clinical trials. We will require additional financing to fund working capital and pay our obligations. We may pursue financing opportunities through the issuance of debt or equity to private investors. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us. Our future funding requirements will depend on many factors, including the following:

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the progress, timing, scope, results and costs of our ongoing and planned clinical trials and other research and development activities related to AG10 and any other product candidates we may identify and pursue, including the ability to enroll patients in a timely manner in our clinical trials;

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the costs of obtaining AG10 in amounts sufficient for our ongoing and planned clinical trials and, if approved, for commercialization;

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the cost, timing and outcomes of any regulatory approvals for AG10;

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our ability to successfully commercialize AG10, if approved;

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

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our ability to attract, hire and retain qualified personnel; and

•

the cost of obtaining, maintaining, preparing, filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights related to AG10 and any other product candidates we may identify and pursue.

If we need to raise additional capital to fund our operations, funding may not be available to us on acceptable terms, or at all. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our preclinical studies, research and development programs or commercialization efforts. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements.

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

Cash flows

The following table summarizes our cash flows for the periods indicated (in thousands):

	Nine Months Ended
	September 30,
	2019			2018
Net cash used in operating activities	$	(15,143	)	$	(23,705	)
Net cash used in investing activities	$	(147	)	$	(144	)
Net cash provided by financing activities	$	23,965		$	184,920

Cash flows from operating activities

During the nine months ended September 30, 2019, cash used in operating activities was $15.1 million and consisted primarily of a net loss of $18.9 million. Our non-cash charges of $3.8 million primarily consisted of stock-based compensation expense. The change in our net operating assets of ($0.1) million was primarily due to a reduction of prepaid expenses and other current and non-current assets of $4.9 million, due to the timing of payments and the timing of activities for which payments were made offset by the increase in accounts payable and accrued expenses of $4.7 million, as a result of an increase in operating expenses and timing of payments.

During the nine months ended September 30, 2018, cash used in operating activities was $23.7 million, which consisted of a net loss of $30.9 million, adjusted by non-cash charges of $5.9 million and a net change of $1.3 million in our net operating assets and liabilities. Our non-cash charges of $5.9 million primarily consisted of a cost of $2.6 million related to the revaluation of the redeemable convertible preferred stock warrant liability, change of $0.6 million in fair value of the redeemable convertible preferred stock tranche liabilities, $1.7 million for stock-based compensation expense, and the amortization of debt discount of $1.0 million. The change in our net operating assets of $1.3 million was primarily due to an increase in accounts payable and accrued expenses of $4.1 million, as a result of an increase in operating expenses and timing of payments, offset by the change in prepaid expenses and other current assets of $2.8 million, due to timing of payments and the timing of activities for which payments were made.

Cash flows from investing activities

During the nine months ended September 30, 2019 and September 30, 2018, cash used in investing activities was $0.1 million and $0.1 million; respectively, which consisted of our purchase of property and equipment for our office and employees.

Cash flows from financing activities

During the nine months ended September 30, 2019, cash provided by financing activities was $24.0 million; which consisted of $23.3 million related to the issuance of common stock to Alexion and $0.7 million due to the issuance of the receipt of funds from our employee stock purchase plan and the exercise of common stock options

During the nine months ended September 30, 2018, cash provided by financing activities was $184.9 million, which consisted of the receipt of funds in connection with our IPO of $111.0 million, the net proceeds from the issuance of Series B redeemable convertible preferred stock of $63.9 million, proceeds from the issuance of convertible promissory notes of $10.0 million, and $0.1 million related to the receipt of funds from the exercise of options.

Contractual Obligations and Other Commitments

There have been no material changes, other than that discussed below, outside the ordinary course of our business to our contractual obligations during the nine months ended September 30, 2019, as compared to those disclosed in our Annual Report.

In March 2019, we entered into a noncancelable operating lease (the “Lease”) for approximately 10,552 square feet of space in San Francisco, California. The commencement date of the Lease was on August 2019. The Lease expires 87 months after the commencement date. Future minimum rental payments under the Lease during the 87 month term are $6.4 million in the aggregate.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as defined under SEC rules, including the use of structured finance, special purpose entities or variable interest entities.

Recent Accounting Pronouncements

For information on Recent Accounting Pronouncements refer to Note 2 of Notes to Unaudited Condensed Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities.

Our exposure to market risk is limited primarily to interest income sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because a significant portion of our investments are in interest bearing cash accounts and a mutual fund consisting of short-term debt securities issued by the U.S. government. The primary objective of our investment activities is to preserve principal. At September 30, 2019, we do not have any marketable securities, and therefore we believe that we are not exposed to any material market risk. We do not have any derivative financial instruments or foreign currency instruments. If interest rates had varied by 10% in the three and nine months ended September 30, 2019, it would not have had a material effect on our results of operations or cash flows for that period.

Item 4. Controls and Procedures.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2019, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of September 30, 2019 due to the fact that management has not fully remediated the material weakness described in our Annual Report on Form 10-K filed with the SEC on April 15, 2019.

However, after giving full consideration to the material weakness, and the additional analyses and other procedures that we performed to ensure that our financial statements included in this Quarterly Report on Form 10-Q were prepared in accordance with U.S. generally accepted accounting principles (GAAP), our management has concluded that our financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with GAAP.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently a party to any material litigation or other material legal proceedings.

Item 1A. Risk Factors.

You should consider carefully the following risk factors, together with all the other information in this report, including our consolidated financial statements and notes thereto, and in our other public filings with the SEC. The occurrence of any of the following risks could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this report and those we may make from time to time. You should consider all of the risk factors described when evaluating our business.

Risk related to our financial position and need for additional capital

Drug development is a highly uncertain undertaking and involves a substantial degree of risk. We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We have only one product candidate in development and have not generated any revenue since our inception, which, together with our limited operating history, may make it difficult for you to assess our future viability.

We are a clinical development-stage biopharmaceutical company with a limited operating history upon which you can evaluate our business and prospects. We have no products approved for commercial sale and have not generated any revenue from product sales. Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. To date, we have focused principally on developing our only product candidate, AG10, which is in clinical development and will require substantial additional development time and resources before we would be able to apply for or receive regulatory approvals and begin generating revenue from product sales.

We are not profitable and have incurred losses in each year since our inception in August 2013. Our net losses for the year ended December 31, 2018, and nine months ended September 30, 2019 were $40.7 million and $18.9 million, respectively. As of September 30, 2019, we had an accumulated deficit of $84.1 million. We have not generated any revenue from product sales since our inception and have financed our operations solely through the sale of equity securities and convertible debt. We continue to incur significant research and development and other expenses related to our ongoing operations and expect to incur losses for the foreseeable future. We anticipate these losses will increase significantly and we will not generate any revenue from product sales until after we have successfully completed clinical development and received regulatory approval for the commercial sale of AG10 or any other product candidate that we may identify and pursue.

Because of the numerous risks and uncertainties associated with drug development, we are unable to predict the timing or amount of our expenses, or when we will be able to generate any meaningful revenue or achieve or maintain profitability, if ever. In addition, our expenses could increase beyond our current expectations if we are required by the U.S. Food and Drug Administration, or FDA, or comparable foreign regulatory authorities, to perform studies in addition to those that we currently anticipate, or if there are any delays in any of our existing or future collaborators’ clinical trials or the development of AG10 or other product candidates that we may identify. Even if AG10 or any future product candidate that we may identify is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate and ongoing compliance efforts.

We may never be able to develop or commercialize a marketable drug or achieve profitability. Revenue from the sale of any product candidate for which regulatory approval is obtained will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to obtain reimbursement at any price and whether we own the commercial rights for that territory. If the number of addressable patients is not as significant as we anticipate, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. Even if we are able to generate revenue from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to achieve sustained profitability would depress the value of our company and could impair our ability to raise capital, expand our business, diversify our research and development pipeline, market AG10 or any other product candidates we may identify and pursue, if approved, or continue our operations. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. In any particular quarter, our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.

We will require substantial additional funding to achieve our business goals. If we are unable to obtain this funding when needed and on acceptable terms, we could be forced to delay, limit or terminate our product development efforts.

We have begun enrolling patients in a Phase 3 clinical trial of AG10, our only clinical development candidate, in ATTR cardiomyopathy (ATTR-CM) and are preparing to advance AG10 into a Phase 3 clinical trial in ATTR polyneuropathy (ATTR-PN). Developing biopharmaceutical products is expensive and time-consuming, and we expect our research and development expenses to increase substantially in connection with our ongoing activities, particularly as we advance AG10 in planned and future clinical trials. We are also responsible for license maintenance fees, milestone payments and royalties to the Board of Trustees of the Leland Stanford Junior University, or Stanford. Because the outcome of any clinical development and regulatory approval process is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of AG10 and any future product candidates we may identify.

Based on current business plans and assuming no financing, we believe that our existing cash and cash equivalents will be sufficient to fund our cash requirements through at least the next twelve months. However, our operating plan 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 or other sources, such as strategic collaborations or license and development agreements. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize AG10 and other product candidates that we may identify and pursue. Moreover, such financing may result in dilution to stockholders, imposition of debt covenants and repayment obligations, our disposition of intellectual property or other rights to our product candidates, or other restrictions that may affect our business. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Our future funding requirements will depend on many factors, including, but not limited to:

•

the time and cost necessary to initiate, conduct and complete our Phase 3 clinical trials of AG10 in ATTR-CM and ATTR-PN, to complete the open-label extension of our Phase 2 clinical trial of AG10 in ATTR-CM and to pursue regulatory approvals for AG10, and the costs of post-marketing studies that could be required by regulatory authorities;

•

the progress, timing and results of our ongoing Phase 2 open-label extension and our ongoing and planned Phase 3 clinical trials of AG10;

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the progress, timing, scope and costs of our nonclinical studies, clinical trials and other related activities, including the ability to enroll patients in a timely manner for our ongoing and planned Phase 3 clinical trials of AG10 and potential future clinical trials;

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the costs of obtaining clinical and commercial supplies of AG10 and any other product candidates we may identify and develop;

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our ability to successfully commercialize AG10 and any other product candidates we may identify and develop;

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the manufacturing, selling and marketing costs associated with AG10 and any other product candidates we may identify and develop, including the cost and timing of expanding our sales and marketing capabilities;

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the amount and timing of sales and other revenues from AG10 and any other product candidates we may identify and develop, including the sales price and the availability of adequate third-party reimbursement;

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the cash requirements of any future acquisitions or discovery of product candidates;

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the time and cost necessary to respond to technological and market developments;

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the costs of acquiring, licensing or investing in intellectual property rights, products, product candidates and businesses;

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our ability to attract, hire and retain qualified personnel; and

•

the costs of maintaining, expanding and protecting our intellectual property portfolio.

Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to delay, limit or terminate one or more of our research or development programs or the commercialization of any product candidates or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, prospects, financial condition and results of operations.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to AG10 or any future product candidates which we develop on unfavorable terms to us.

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. We, and indirectly, our stockholders, will bear the cost of issuing and servicing any such securities and of negotiating, entering into and maintaining any such strategic partnerships or other arrangements. Because any decision to issue debt or equity securities in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future financing transactions or other equity issuances. To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, 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 impact our ability to conduct our business. Additionally, any future collaborations we enter into with third parties may provide capital in the near term but limit our potential cash flow and revenue in the future. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates or grant licenses on terms unfavorable to us.

Risk related to our business and the clinical development, regulatory review and approval of our product candidates

We are heavily dependent on the success of our only product candidate, AG10, and we have not identified any other clinical development candidates through our research activities. If we are unable to successfully complete clinical development, obtain regulatory approval for, or commercialize AG10, or experience delays in doing so, our business will be materially harmed.

To date, we have invested all of our efforts and financial resources to the development of AG10, including conducting preclinical studies and clinical trials and providing general and administrative support for these operations. Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and commercialize AG10. Before we can generate any revenues from sales of AG10, we will be required to complete additional clinical development, including, among other things, longer-term and larger registrational clinical trials of AG10, seek and obtain regulatory approval, secure adequate manufacturing supply to support larger clinical trials and commercial sales and build a commercial organization. Further, the success of AG10 will depend on patent and trade secret protection, obtaining and maintaining regulatory exclusivity, acceptance of AG10 by patients, the medical community and third-party payors, its ability to compete with other therapies, healthcare coverage and reimbursement, and maintenance of an acceptable safety profile following approval, among other factors. If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize AG10, which would materially harm our business.

Currently, AG10 is our only product candidate, and it may be years before we can complete the clinical development activities necessary to apply for regulatory approval of AG10, if at all. We have not yet identified any other product candidates for studies that would enable the filing of an investigational new drug application, or IND, or for clinical evaluation. We cannot be certain that AG10 will be successful in clinical trials or receive regulatory approval. If we do not receive regulatory approval for, or otherwise fail to successfully commercialize, AG10, we may need to discontinue our operations as currently contemplated unless we identify other product candidates, advance them through preclinical and clinical development and apply for regulatory approvals, which could be time-consuming and costly, and may adversely affect our business, prospects, financial condition and results of operations.

If we are unable to obtain regulatory approval in one or more jurisdictions for AG10 or any other product candidates that we may identify and develop, our business will be substantially harmed.

We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product candidate. Approval by the FDA and comparable foreign regulatory authorities is lengthy and unpredictable and depends upon numerous factors. 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, which may cause delays in the approval or the decision not to approve an application. We have not obtained regulatory approval for AG10, and it is possible that neither AG10 nor any other product candidates which we may seek to develop in the future will ever obtain regulatory approval.

Applications for AG10 or any other product candidates we may develop could fail to receive regulatory approval for many reasons, including but not limited to:

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our inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that AG10 or any other product candidate we may develop is safe and effective;

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the FDA or comparable foreign regulatory authorities may disagree with the design, endpoints or implementation of our clinical trials, including those of our ongoing and planned Phase 3 clinical trials;

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the population studied in the clinical program may not be sufficiently broad or representative to assure safety in the full population for which we seek approval;

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the FDA’s or comparable foreign regulatory authorities’ requirement for additional preclinical studies or clinical trials beyond those that we currently anticipate;

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the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials;

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the data collected from clinical trials of AG10 and other product candidates that we may identify and pursue may not be sufficient to support the submission of a new drug application, or NDA, or other submission for regulatory approval in the United States or elsewhere;

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we may be unable to demonstrate to the FDA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;

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the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

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the approval policies or regulations of the FDA or comparable foreign regulatory authorities may change in a manner that renders our clinical trial design or data insufficient for approval.

The lengthy approval process, as well as the unpredictability of the results of clinical trials, may result in our failure to obtain regulatory approval to market AG10 or any other product candidates that we may pursue in the United States or elsewhere, which would significantly harm our business, prospects, financial condition and results of operations.

We may encounter substantial delays in our clinical trials, or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all.

Clinical testing is expensive, time consuming, and subject to uncertainty. We cannot guarantee that any of our ongoing and planned clinical trials will be conducted as planned or completed on schedule, if at all. Moreover, even if these trials are initiated or conducted on a timely basis, issues may arise that could suspend or terminate such clinical trials. A failure of one or more clinical trials can occur at any stage of testing, and our ongoing and future clinical trials may not be successful. Events that may prevent successful or timely initiation or completion of clinical trials include:

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inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials;

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delays in confirming target engagement, patient selection or other relevant biomarkers to be utilized in preclinical and clinical product candidate development;

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delays in reaching a consensus with regulatory agencies on study design;

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delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

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delays in identifying, recruiting and training suitable clinical investigators;

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delays in obtaining required Institutional Review Board, or IRB, approval at each clinical trial site;

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imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND or amendment, clinical trial application, or CTA, or amendment, or equivalent application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; a negative finding from an inspection of our clinical trial operations or study sites;

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developments in marketed drugs for ATTR or in clinical trials conducted by competitors for other drug candidates targeting ATTR that raise regulatory or safety concerns about risk to patients of the treatment, including the approach of TTR stabilization;

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a finding by the FDA or foreign regulatory agency that the investigational protocol or plan is clearly deficient to meet its stated objectives;

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delays in identifying, recruiting and enrolling suitable patients to participate in our clinical trials, and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up;

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difficulty collaborating with patient groups and investigators;

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failure by our CROs, other third parties, or us to adhere to clinical trial requirements;

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failure to perform in accordance with the FDA’s or any other regulatory authority’s current good clinical practices, or cGCP, requirements, or regulatory guidelines in other countries;

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occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits;

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changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

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changes in the standard of care on which a clinical development plan was based, which may require new or additional trials;

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the cost of clinical trials of AG10 or any our product candidates that we may identify and pursue being greater than we anticipate;

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clinical trials of AG10 or any other product candidates that we may identify and pursue producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs;

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transfer of manufacturing processes to larger-scale facilities operated by a contract manufacturing organization, or CMO, or by us, and delays or failure by our CMOs or us to make any necessary changes to such manufacturing process; and

•

delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of AG10 or other product candidates that we may identify for use in clinical trials or the inability to do any of the foregoing.

Any inability to successfully initiate or complete clinical trials on a timely basis, or at all, could result in additional costs to us or impair our ability to generate revenue. In addition, if we make manufacturing or formulation changes to AG10 or other product candidates that we may identify, we may be required to or we may elect to conduct additional studies to bridge our modified product candidates to earlier versions. Clinical trial delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize AG10 or other product candidates that we may identify and may harm our business and results of operations.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the data safety monitoring board, or DSMB, for such trial or by the FDA or other regulatory authority, or if the IRBs of the institutions in which such trials are being conducted suspend or terminate the participation of their clinical investigators and sites subject to their review. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Delays in the initiation, conduct or completion of any clinical trial of AG10 or other product candidates that we may develop will increase our costs, slow down our product candidate development and approval process and delay or potentially jeopardize our ability to commence product sales and generate revenue. 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 AG10 or any future product candidates which we may develop. In the event we identify any additional product candidates to pursue, we cannot be sure that submission of an IND or a CTA will result in the FDA or comparable foreign regulatory authority allowing clinical trials to begin in a timely manner, if at all. Any of these events could have a material adverse effect on our business, prospects, financial condition and results of operations.

We may encounter difficulties enrolling patients in our clinical trials, and our clinical development activities could thereby be delayed or otherwise adversely affected.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including:

•

the size and nature of the patient population;

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the patient eligibility criteria defined in the applicable clinical trial protocols, which may limit the patient populations eligible for our clinical trials to a greater extent than competing clinical trials for the same indication;

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the size of the study population required for analysis of the trial’s primary endpoints;

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the proximity of patients to a trial site;

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the design of the trial;

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our ability to recruit clinical trial investigators with the appropriate competencies and experience;

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the approval of competing products approved for the treatment of ATTR or product candidates currently under development for ATTR, including Vyndamax (tafamidis) and Vyndaqel (tafamidis meglumine), for which Pfizer Inc. has been approved for the treatment of ATTR-CM in the United States and Japan (Vyndaquel only) and is approved in certain countries outside the United States for the treatment of ATTR-PN (Vyndaquel only), or competing clinical trials for similar therapies or targeting patient populations meeting our patient eligibility criteria;

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clinicians’ and patients’ perceptions as to the potential advantages and side effects of the product candidate being studied in relation to other available therapies and product candidates;

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our ability to obtain and maintain patient consents; and

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the risk that patients enrolled in clinical trials will not complete such trials, for any reason.

If we have difficulty enrolling sufficient numbers of patients to conduct our clinical trials as planned, we may need to delay or terminate ongoing or planned clinical trials, either of which would have an adverse effect on our business.

Our clinical trials may fail to demonstrate substantial evidence of the safety and effectiveness of AG10 or any other product candidates that we may identify and pursue, which would prevent, delay or limit the scope of regulatory approval and commercialization.

Before obtaining regulatory approvals for the commercial sale of AG10 or any other product candidate that we may identify and pursue, we must demonstrate through lengthy, complex and expensive preclinical studies and clinical trials that the applicable product candidate is both safe and effective for use in each target indication. Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical development process. Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization. We have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. We cannot be certain that our current clinical trials or any other future clinical trials will be successful. Additionally, any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications, which could have a material adverse effect on our business, financial condition and results of operations. In addition, even if such clinical trials are successfully completed, we cannot guarantee that the FDA or comparable foreign regulatory authorities will interpret the results as we do, and more trials could be required before we

submit our product candidates for approval. To the extent that the results of the trials are not satisfactory to the FDA or comparable foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates. Even if regulatory approval is secured for AG10 or any other product candidate we may identify and pursue, the terms of such approval may limit the scope and use of our product candidate. For example, if AG10 is first approved for ATTR-CM on the basis of efficacy endpoints other than for reduction in mortality or hospitalization, AG10 might be limited to a second-line claim until such data were available. Any of these events could limit the commercial potential of AG10 and have a material adverse effect on our business, prospects, financial condition and results of operations.

Results of earlier studies or clinical trials, including cross-trial comparisons of results that are not derived from head-to-head clinical trials, may not be predictive of future clinical trial results, and initial studies or clinical trials may not establish an adequate safety or efficacy profile for AG10 and other product candidates that we may pursue to justify proceeding to advanced clinical trials or an application for regulatory approval.

The results of nonclinical and preclinical studies and Phase 1 or Phase 2 clinical trials of AG10 or any other product candidates that we may pursue may not be predictive of the results of later-stage clinical trials, and interim results of a clinical trial do not necessarily predict final results. For example, our preclinical and preliminary clinical observations that AG10 potently stabilizes TTR in human serum may not be replicated in later stage clinical trials.

Additionally, some of our preclinical studies in which AG10 demonstrated greater TTR stabilization and inhibition of amyloid fibril formation than tafamidis were conducted using synthesized, research-grade tafamidis and therefore may not be indicative of the comparative efficacy of AG10 to commercially available tafamidis. The results of clinical trials in one set of patients or disease indications may not be predictive of those obtained in another. In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants. In addition, certain of our hypotheses regarding the potential clinical and therapeutic benefit of AG10 compared to other TTR stabilizers are based on cross-trial comparisons of results that were not derived from head-to-head preclinical studies or clinical trials. These observations, which do not reflect robust comparative analyses, may suggest misleading similarities or differences due to differences in study protocols, conditions and patient populations, and may not be reliable predictors of the relative efficacy or other benefits of AG10 compared to other product candidates that may be approved or are in development for the treatment of ATTR.

Further, preclinical and clinical data are often susceptible to various interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through nonclinical studies and initial clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies, and we cannot be certain that we will not face similar setbacks. Even if early stage clinical trials are successful, we may need to conduct additional clinical trials of AG10 or other product candidates that we may pursue in additional patient populations or under different treatment conditions before we are able to seek approvals from the FDA and regulatory authorities outside the United States to market and sell these product candidates. Our failure obtain marketing approval for AG10 or any other product candidate we may choose to develop in our ongoing and any future clinical trials would substantially harm our business, prospects, financial condition and results of operations.

Some of the clinical trials performed to date were generated from open-label studies and were conducted at a limited number of clinical sites on a limited number of patients. An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment. Open-label clinical trials may be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. Moreover, patients selected for early clinical studies often include the most severe sufferers and their symptoms may have been bound to improve notwithstanding the new treatment. In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge. Given that our Phase 2 clinical trial of AG10 includes an open-label clinical trial extension, the results from this clinical trial may not be predictive of future clinical trial results with this or other product candidates for which we include an open-label clinical trial when studied in a controlled environment with a placebo or active control.

If serious adverse events or unacceptable side effects are identified during the development of AG10 or other product candidates that we may develop, we may need to delay, limit or terminate our clinical development activities.

Clinical trials by their nature utilize a sample of the potential patient population. To date, we have only evaluated AG10 in a limited number of subjects at a limited duration of exposure in our Phase 1 and Phase 2 clinical trials and the duration of exposure in our Phase 3 clinical trials is expected to be significantly longer. Accordingly, any rare and severe side effects of AG10 may be uncovered in our ongoing studies or in larger, subsequent trials that we may conduct, such as our ongoing Phase 2 OLE and Phase 3 trials of AG10 in ATTR-CM and our planned Phase 3 clinical trial in ATTR-PN. Additionally, although our animal safety pharmacology studies of AG10 demonstrated a wide safety margin between anticipated therapeutic exposures and doses associated with toxicity and no dose limiting toxicities were established in the 9 month GLP toxicology dog study, in prior toxicology studies of shorter duration, at doses above the no adverse effect level, dogs experienced dose limiting toxicities of gastrointestinal effects including vomiting, dehydration and weight loss. Many product candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented their further development. If AG10 or any product candidates that we may develop are associated with undesirable side effects in clinical trials or have characteristics that are unexpected, we may need to abandon their development or limit their development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which could adversely affect our business, prospects, financial condition and results of operations.

We intend to conduct clinical trials for AG10 or other product candidates that we may identify outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials.

We intend to conduct one or more of our clinical trials outside the United States, including in Europe. For instance, subject to authorization from applicable regulatory authorities, we plan to initiate a Phase 3 clinical trial of AG10 in ATTR-PN in 2019. We do not intend to file an IND with the FDA in connection with this clinical trial as it will be conducted outside of the United States. The acceptance of study data from clinical trials conducted outside the United States or another jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions. In cases where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; and (ii) the trials were performed by clinical investigators of recognized competence and pursuant to cGCP regulations. Additionally, the FDA’s clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met. Many foreign regulatory authorities have similar approval requirements. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction, including our planned Phase 3 clinical trial of AG10 in ATTR-PN. If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in AG10 or other product candidates that we may develop not receiving approval or clearance for commercialization in the applicable jurisdiction.

Even if we obtain FDA approval for AG10 or any other product candidates that we may identify and pursue in the United States, we may never obtain approval to commercialize AG10 or other product candidates that we may develop outside of the United States, which would limit our ability to realize their full market potential.

In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and effectiveness. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained 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 non-clinical studies or clinical trials which could be costly and time-consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of AG10 or any other product candidates that we may identify and pursue in those countries. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We do not have any product candidates approved for sale in any jurisdiction, including 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 our products will be harmed.

Although the FDA and EMA have granted orphan drug designation for AG10 for the treatment of transthyretin amyloidosis, we may not receive orphan drug designation for any other product candidates for which we may submit orphan drug designation requests, and any orphan drug designations that we have received or may receive in the future may not confer marketing exclusivity or other expected commercial benefits for AG10 or any of our other product candidates.

Our business strategy focuses on the development of product candidates for the treatment of transthyretin amyloidosis, or ATTR, that may be eligible for FDA or EU orphan drug designation. Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the EU, the Committee for Orphan Medicinal Products of the EMA grants orphan drug designation to promote the development of medical products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the EU (or where it is unlikely that the development of the medicine would generate sufficient return to justify the investment) and for which no satisfactory method of diagnosis, prevention, or treatment is authorized or, if a method exists, the product would be of significant benefit to those affected by the condition. In October 2018, the FDA granted orphan drug designation to AG10 in the United States for the treatment of ATTR, and in November 2018, the EMA granted the designation of AG10 as an orphan medicinal product in the EU for the treatment of ATTR. Although the diagnosed ATTR patient population in the United States is currently below 200,000, if the size of the population is shown to be greater as a result of increased rates of diagnosis or otherwise, ATTR may not in the future qualify as an orphan indication for any other product candidate we pursue.

Generally, if a drug with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the FDA, the EMA or comparable foreign regulatory authority from approving another marketing application for the same drug for the same indication for that time period. The applicable period is seven years in the United States and 10 years in the EU. The EU exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA, the EMA or comparable foreign regulatory authority determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

Although the FDA and EMA have granted orphan drug designation for AG10 for the treatment of ATTR, we may apply for orphan drug designation for AG10 in other jurisdictions, or for other product candidates we may develop and pursue in the future. Applicable regulatory authorities may not grant us these additional designations. In addition, the exclusivity granted under any orphan drug designation that we have received from the FDA and EMA or may receive from any other regulatory authorities, may not effectively protect AG10 or any other product candidate that we may develop and pursue from competition because different drugs can be approved for the same condition and the same drug can be approved for different conditions but used off-label. Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same condition if the FDA concludes that the later drug is clinically superior, in that it is shown to be safer, more effective or makes a major contribution to patient care. In addition, a designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. Further, orphan drug designation neither shortens the development or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

Any inability to secure or maintain orphan drug designation or the exclusivity benefits of this designation would have an adverse impact on our ability to develop and commercialize our product candidates. In addition, even if any orphan drug designations we receive are maintained, we may be unable to realize significant commercial benefits from these orphan drug designations or exclusivities for AG10 (if approved) or any other product candidate we pursue.

We may not elect or be able to take advantage of any expedited development or regulatory review and approval processes available to product candidates granted breakthrough therapy or fast track designation by the FDA.

We intend to evaluate and continue ongoing discussions with the FDA on regulatory strategies to rapidly advance the development of AG10. For example, potential expedited development pathways include breakthrough therapy or fast track designation. The breakthrough therapy program is designed for product candidates intended to treat a serious or life-threatening condition, and preliminary clinical evidence indicates that the product candidate may demonstrate substantial improvement on a clinically significant endpoint(s) over available therapies. The fast track program is designed for product candidates that treat a serious or life-threatening condition, and nonclinical or clinical data demonstrate the potential to address an unmet medical need. Although we believe AG10 could potentially qualify under either or both of the breakthrough therapy and fast track programs, we may elect not to pursue either of these programs, and the FDA has broad discretion whether or not to grant these designations. Accordingly, even if we believe a particular product candidate

is eligible for breakthrough therapy or fast track designation, we cannot assure you that the FDA would decide to grant it. Even if we do receive breakthrough therapy or fast track designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw breakthrough therapy or fast track designation if it believes that the product no longer meets the qualifying criteria. Our business may be harmed if we are unable to avail ourselves of these or any other expedited development and regulatory pathways.

Even if we obtain regulatory approval for a product candidate, our products will remain subject to extensive regulatory scrutiny.

If AG10 or other product candidates that we may develop are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.

Manufacturers and manufacturers’ facilities are required to comply with extensive requirements imposed by the FDA and comparable foreign regulatory authorities, including ensuring that quality control and manufacturing procedures conform to current good manufacturing practices, or cGMP, regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA or marketing authorization application, or MAA. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

Any regulatory approvals that we receive for AG10 or other product candidates that we may develop will be subject to limitations on the approved indicated uses for which the product may be marketed and promoted or to the conditions of approval, or contain requirements for potentially costly post-marketing testing. We will be required to report certain adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing drug safety issues could result in delays in product development or commercialization, or increased costs to assure compliance. The FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. We will have to comply with requirements concerning advertising and promotion for our products. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. As such, we may not promote our products for indications or uses for which they do not have approval. The holder of an approved NDA or MAA must submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling, or manufacturing process. We could also be asked to conduct post-marketing clinical trials to verify the safety and efficacy of our products in general or in specific patient subsets. If original marketing approval was obtained via the accelerated approval pathway, we could be required to conduct a successful post-marketing clinical trial to confirm clinical benefit for our products. An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of marketing approval.

If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things:

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issue warning letters that would result in adverse publicity;

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impose civil or criminal penalties;

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suspend or withdraw regulatory approvals;

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suspend any of our ongoing clinical trials;

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refuse to approve pending applications or supplements to approved applications submitted by us;

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impose restrictions on our operations, including closing our contract manufacturers’ facilities;

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seize or detain products; or

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require a product recall.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.

The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

If AG10 or other product candidates that we may identify are approved and we are found to have improperly promoted off-label uses of those products, we may become subject to significant liability. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, such as AG10 if approved. In particular, a product may not be promoted for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling. If we are found to have promoted such off-label uses, we may become subject to significant liability. The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we cannot successfully manage the promotion of our product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.

If we engage in acquisitions or strategic partnerships for additional assets or programs, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.

We may engage in various acquisitions and strategic partnerships for additional assets or programs in the future, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses. Any such acquisition or strategic partnership may entail numerous risks, including:

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increased operating expenses and cash requirements;

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the assumption of indebtedness or contingent liabilities;

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the issuance of our equity securities which would result in dilution to our stockholders;

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assimilation of operations, intellectual property, products and product candidates of an acquired company, including difficulties associated with integrating new personnel;

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the diversion of our management’s attention from our existing product programs and initiatives in pursuing such an acquisition or strategic partnership;

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retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;

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risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and

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our inability to generate revenue from acquired intellectual property, technology and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs.

In addition, if we undertake such a transaction, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense.

Risks related to our reliance on third parties

We expect to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, or testing.

We currently rely and expect to continue to rely on third parties, such as CROs, clinical data management organizations, medical institutions, and clinical investigators, to conduct some aspects of our research and preclinical testing and our clinical trials. Any of these third parties may terminate their engagements with us or be unable to fulfill their contractual obligations. If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms, or at all. If we need to enter into alternative arrangements, it would delay our product development activities.

Our reliance on these third parties for research and development activities reduces our control over these activities but does not relieve us of our responsibilities. For example, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA and comparable foreign regulatory authorities require us to comply with cGCPs for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible, reproducible and accurate and that the rights, integrity, and confidentiality of trial participants are protected. For any violations of laws and regulations during the conduct of our clinical trials, we could be subject to untitled and warning letters or enforcement action that may include civil penalties up to and including criminal prosecution. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database within certain timeframes. Failure to do so can result in fines, adverse publicity, and civil and criminal sanctions.

If these third parties do not successfully carry out their contractual duties, meet expected deadlines, or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for any product candidates we may develop and will not be able to, or may be delayed in our efforts to, successfully commercialize our medicines. Our failure or the failure of these third parties to comply applicable regulatory requirements or our stated protocols could also subject us to enforcement action.

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

We rely entirely on third parties for the manufacturing of AG10 or other product candidates that we may develop for preclinical studies and clinical trials and expect to continue to do so for commercialization. Our business could be harmed if those third parties fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or prices.

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture drug supplies for our ongoing and planned Phase 3 clinical trials of AG10 or any other future clinical trials that we may conduct, and we lack the resources to manufacture any product candidates on a commercial scale. We rely, and expect to continue to rely, on third-party manufacturers to produce AG10 or other product candidates that we may identify for our clinical trials, as well as for commercial manufacture if any of our product candidates receives marketing approval. Although we generally do not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the trial, any significant delay or discontinuity in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay the clinical development and potential regulatory approval of our product candidates, which could harm our business and results of operations. We also expect to rely on third parties for the manufacturing of commercial supply of AG10 or any other product candidates, if approved.

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

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

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

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

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the possible termination or non-renewal of the agreement by the third party at a time that is costly or inconvenient for us.

Furthermore, all of our contract manufacturers are engaged with other companies to supply and/or manufacture materials or products for such companies, which exposes our manufacturers to regulatory risks for the production of such materials and products. As a result, failure to meet the regulatory requirements for the production of those materials and products may affect the regulatory clearance of our contract manufacturers’ facilities generally. If the FDA or a comparable foreign regulatory agency does not approve these facilities for the manufacture of our product candidates or if any agency withdraws its approval in the future, we may need to find alternative manufacturing facilities, which would negatively impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved.

AG10 and any future product candidates that we may develop may compete with other product candidates and marketed drugs for access to manufacturing facilities. Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. We are currently manufacturing AG10 through a third party and have adequate supplies to conduct our ongoing Phase 3 clinical trial of AG10 in ATTR-CM and planned Phase 3 clinical trial of AG10 in ATTR-PN. If we are unable to enter into relationships with additional contract manufacturers, or our current or future contract manufacturers cannot perform as agreed, we may experience delays and incur additional costs in our clinical development and commercialization activities. Our current and anticipated future dependence upon others for the manufacturing of AG10 or other product candidates that we may identify, or marketed drugs may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.

If the contract manufacturing facilities on which we rely do not continue to meet regulatory requirements or are unable to meet our supply demands, our business will be harmed.

All entities involved in the preparation of therapeutics for clinical trials or commercial sale, including our existing contract manufacturers for AG10, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in late-stage clinical trials must be manufactured in accordance with cGMP, or similar regulatory requirements outside the United States. These regulations govern manufacturing processes and procedures, including recordkeeping, and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of AG10. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, suspension of production, seizures or recalls of product candidates or marketed drugs, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect clinical or commercial supplies of AG10.

We or our contract manufacturers must supply all necessary documentation in support of an NDA or MAA on a timely basis and must adhere to regulations enforced by the FDA and other regulatory agencies through their facilities inspection program. Some of our contract manufacturers have never produced a commercially approved pharmaceutical product and therefore have not obtained the requisite regulatory authority approvals to do so. The facilities and quality systems of some or all of our third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of AG10 or any of our other potential products. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of AG10 or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted. Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the regulatory requirements. If these facilities do not pass a pre-approval plant inspection, regulatory approval of the products may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority, if ever.

The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturing facilities of our third-party contractors. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time consuming for us or a third party to implement, and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.

Additionally, if supply from one approved manufacturer is interrupted, an alternative manufacturer would need to be qualified through an NDA supplement or MAA variation, or equivalent foreign regulatory filing, which could result in further delay. The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.

These factors could cause us to incur higher costs and could cause the delay or termination of clinical trials, regulatory submissions, required approvals, or commercialization of AG10 or other product candidates that we may identify. Furthermore, if our suppliers fail to meet contractual requirements and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed or we could lose potential revenue.

We are dependent upon our license agreement with Alexion for the development and eventual commercialization of AG10 in Japan. If this collaboration is unsuccessful or is terminated, we may be unable to commercialize AG10 in Japan and we will not receive additional funding from this relationship.

We depend upon our license agreement (the “License Agreement”) with Alexion Pharma International Operations Unlimited Company, a subsidiary of Alexion Pharmaceuticals, Inc. (together, “Alexion”) for the clinical development and commercialization of AG10 in Japan. While Alexion is responsible for various research and development activities under the License Agreement and with respect to the commercialization of AG10 in Japan, our ability to benefit from Alexion’s development and commercialization activities and to receive future payments under the License Agreement will depend upon the ability and willingness of Alexion to successfully meet its responsibilities under the License Agreement and continue the collaboration. We may not receive some or all of the future payments and other benefits that we currently expect to receive under our License Agreement.

Our ability to generate additional funding from the License Agreement may be impaired by several factors including:

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Alexion may shift its priorities and resources away from AG10 or the market in Japan due to a change in business strategies, or a merger, acquisition, sale or downsizing of its company or business unit;

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Alexion may change the success criteria for AG10, thereby delaying or ceasing its development;

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Alexion may exercise its rights to terminate the License Agreement; or

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a dispute may arise between us and Alexion concerning financial obligations or the research, development or commercialization of AG10 in Japan, resulting in a delay in payments or termination of the collaboration and possibly resulting in costly litigation or arbitration which may divert management attention and resources.

Specifically, with respect to termination, unless earlier terminated, the License Agreement will expire upon the later of the expiration of the last-to-expire valid claim under any licensed patents covering AG10 in Japan or the tenth anniversary of the first commercial sale of AG10 in Japan. Either party may terminate the License Agreement in the event of a material breach or insolvency of the other party. Additionally, Alexion may terminate the License Agreement for convenience upon at least 180 days prior written notice, and we may terminate the License Agreement in the event Alexion ceases development or commercialization of AG10 under certain circumstances or challenges the validity or enforceability of our patent rights.

If our License Agreement with Alexion is terminated, then in order to fund further development and commercialization of AG10 in Japan, we may need to seek out and establish alternative strategic collaborations with third-party partners, which may not be possible; or we may not be able to do so on terms which are acceptable to us, in which case it may be necessary for us to limit the size or scope of one or more of our programs or increase our expenditures and seek additional funding by other means.

Any of these events could have a material adverse effect on our results of operations and financial condition.

Risks related to our intellectual property

If we are unable to obtain and maintain sufficient intellectual property protection for AG10 or other product candidates that we may identify, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize product candidates similar or identical to ours, and our ability to successfully commercialize AG10 and other product candidates that we may pursue may be impaired.

As is the case with other biopharmaceutical companies, our success depends in large part on our ability to obtain and maintain protection of the intellectual property we may own solely and jointly with others, particularly patents, in the United States and other countries with respect to our product candidates and technology. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to AG10 or other product candidates that we may identify.

Obtaining and enforcing biopharmaceutical patents is costly, time consuming and complex, and we may not be able to file and prosecute all necessary or desirable patent applications, or maintain, enforce and license any patents that may issue from such patent applications, at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. We may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to patents licensed to third parties. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal, technological 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. Further, we may not be aware of all third-party intellectual property rights potentially relating to our product candidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our 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 that protect our product candidates, in whole or in part, or which effectively prevent others from commercializing competitive product candidates. Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our patents by developing similar or alternative product candidates in a non-infringing manner.

Moreover, we may be subject to a third-party preissuance submission of prior art to the United States Patent and Trademark Office, or 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 could reduce the scope of, or invalidate our patent rights, allow third parties to commercialize our product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize drugs without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our 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 product candidates, or limit the duration of the patent protection of our product candidates. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.

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

We are a party to an exclusive license agreement with Stanford and may need to obtain additional licenses from others to advance our research and development activities or allow the commercialization of AG10 or any other product candidates we may identify and pursue. Our license agreement with Stanford imposes, and we expect that future license agreements will impose, various development, diligence, commercialization, and other obligations on us. For example, under our license agreement with Stanford we are required to use commercially reasonable efforts to engage in various development and commercialization activities with respect to licensed products, and must satisfy specified milestone and royalty payment obligations. In spite of our efforts, our licensors might conclude that we have materially breached our obligations under such license agreements and might therefore terminate the license agreements, thereby removing or limiting our ability to develop and commercialize products and technology covered by these license agreements. If our license agreement with Stanford is terminated, competitors or other third parties would have the freedom to seek regulatory approval of, and to market, products identical to AG10 and we may be required to cease our development and commercialization of AG10. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including:

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the scope of rights granted under the license agreement and other interpretation-related issues;

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the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

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the sublicensing of patent and other rights under our collaborative development relationships;

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our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

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the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and

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the priority of invention of patented technology.

In addition, certain provisions in our license agreement with Stanford may be susceptible to multiple interpretations. The resolution of any contract interpretation 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 agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects. 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, financial conditions, results of operations and prospects.

Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. However, our research, development and commercialization activities may be subject to claims that we infringe or otherwise violate patents or other intellectual property rights owned or controlled by third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions and inter partes reexamination proceedings before the USPTO, and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are pursuing development candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that AG10 or other product candidates that we may identify may be subject to claims of infringement of the patent rights of third parties.

Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of AG10 or other product candidates that we may identify. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that AG10 or other product candidates that we may identify may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of AG10 or other product candidates that we may identify, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.

Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including combination therapy, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires. In either case, such a license may not be available on commercially reasonable terms or at all, or it may be non-exclusive, which could result in our competitors gaining access to the same intellectual property.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize AG10 or other product candidates that we may identify. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.

Parties making claims against us may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or administrative proceedings, there is a risk that some of our confidential information could be compromised by disclosure. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.

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

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products, including generics or biosimilars. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

If we are not able to obtain patent term extension or non-patent exclusivity in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for AG10 or other product candidates that we may identify, our business may be materially harmed.

Depending upon the timing, duration and specifics of FDA marketing approval of AG10 or other product candidates that we may identify, one of the U.S. patents covering each of such product candidates or the use thereof may be eligible for up to five years of patent term extension under the Hatch-Waxman Act. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA approved product as compensation for the patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only those claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended. Patent term extension also may be available in certain foreign countries upon regulatory approval of our product candidates. Nevertheless, we may not be granted patent term extension either in the United States or in any foreign country because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than we request.

If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be reduced, possibly materially.

It is possible that we will not obtain patent term extension under the Hatch-Waxman Act for a U.S. patent covering AG10 or other product candidates that we may identify even where that patent is eligible for patent term extension, or if we obtain such an extension, it may be for a shorter period than we had sought. Further, for our licensed patents, we do not have the right to control prosecution, including filing with the USPTO, a petition for patent term extension under the Hatch-Waxman Act. Thus, if one of our licensed patents is eligible for patent term extension under the Hatch-Waxman Act, we may not be able to control whether a petition to obtain a patent term extension is filed, or obtained, from the USPTO.

Also, there are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book. We may be unable to obtain patents covering our product candidates that contain one or more claims that satisfy the requirements for listing in the Orange Book. Even if we submit a patent for listing in the Orange Book, the FDA may decline to list the patent, or a manufacturer of generic drugs may challenge the listing. If one of our product candidates is approved and a patent covering that product candidate is not listed in the Orange Book, a manufacturer of generic drugs would not have to provide advance notice to us of any abbreviated new drug application filed with the FDA to obtain permission to sell a generic version of such product candidate.

If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.

We seek to protect our confidential proprietary information, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and collaborators. These agreements are designed to protect our proprietary information. However, we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. For example, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. We also seek to preserve the integrity and confidentiality of our confidential proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is possible that these security measures could be breached. If any of our confidential proprietary information were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.

Although we are not currently involved in any litigation, we may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

Competitors may infringe our patents or other intellectual property. Although we are not currently involved in any litigation, if we were to initiate legal proceedings against a third party to enforce a patent covering AG10 or other product candidates that we may identify, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/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, written description or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable. Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms or at all, or if a non-exclusive license is offered and our competitors gain access to the same technology. Our defense of litigation or interference or derivation proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring AG10 or other product candidates that we may identify to market. 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 a material adverse effect on the price of our common stock.

We may be subject to claims challenging the inventorship of our patents and other intellectual property.

We or our licensors may be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents, trade secrets, or other intellectual property as an inventor or co-inventor. For example, we or our licensors may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or our or our licensors’ ownership of our owned or in-licensed patents, trade secrets or other intellectual property. If we or our licensors fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our product candidates. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court.

If we or one of our licensing partners initiated legal proceedings against a third party to enforce a patent covering one of AG10 or other product candidates that we may identify, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/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 or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in the revocation of or amendment to our patents in such a way that they no longer cover AG10 or other product candidates that we may identify. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection would have a material adverse impact on our business.

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

As is common in the biotechnology and pharmaceutical industry, we employ individuals who 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 independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employee’s former employer or other third parties. 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, which could adversely impact our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

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

Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We have systems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees due to non-U.S. patent agencies. The USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

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

Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent. After March 2013, under the Leahy-Smith America Invents Act, or the America Invents Act, enacted in September 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. A third party that files a patent application in the USPTO after March 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. This will require us to be cognizant of the time from invention to filing of a patent application. Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.

The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned or in-licensed patent applications and the enforcement or defense of our owned or in-licensed issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

In addition, the patent positions of companies in the development and commercialization of pharmaceuticals are particularly uncertain. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property in the future.

Risks related to commercialization

Even if AG10 or any other product candidates we may develop receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors, and others in the medical community necessary for commercial success.

The commercial success of AG10 or other product candidates that we may identify will depend upon its degree of market acceptance by physicians, patients, third-party payors, and others in the medical community. Even if any product candidates we may develop receive marketing approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, healthcare payors, and others in the medical community. The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including:

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the efficacy and safety of such product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals;

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the potential and perceived advantages compared to alternative treatments;

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

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the ability to offer appropriate patient access programs, such as co-pay assistance;

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the extent to which physicians recommend our products to their patients;

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convenience and ease of dosing and administration compared to alternative treatments;

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the clinical indications for which the product candidate is approved by FDA or comparable regulatory agencies;

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product labeling or product insert requirements of the FDA or other comparable foreign regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labeling;

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restrictions on how the product is distributed;

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the timing of market introduction of competitive products;

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publicity concerning our products or competing products and treatments;

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the strength of marketing and distribution support;

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favorable third-party coverage and sufficient reimbursement; and

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the prevalence and severity of any side effects.

If AG10 or any other product candidates we may develop do not achieve an adequate level of acceptance, we may not generate significant product revenue, and we may not become profitable.

If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any product candidates we may develop, we may not be successful in commercializing those product candidates if and when they are approved.

We do not have a sales or marketing infrastructure and have little experience in the sale, marketing, or distribution of pharmaceutical products. To achieve commercial success for any approved product for which we retain sales and marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions to third parties. In the future, we may choose to build a focused sales, marketing, and commercial support infrastructure to market and sell AG10 and any other product candidates we may identify, if and when they are approved. We may also elect to enter into collaborations or strategic partnerships with third parties to engage in commercialization activities for AG10 or any future product candidates with respect to selected indications or geographic territories, including territories outside the United States, although there is no guarantee we will be able to enter into these arrangements even if we intend to do so.

There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force or reimbursement specialists is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing and other commercialization capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our commercialization personnel.

Factors that may inhibit our efforts to commercialize any approved product on our own include:

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our inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement, customer service, medical affairs, and other support personnel;

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the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future approved products;

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

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the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability;

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

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

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unforeseen costs and expenses associated with creating an independent commercialization organization.

If we enter into arrangements with third parties to perform sales, marketing, commercial support, and distribution services, our product revenue or the profitability of product revenue may be lower than if we were to market and sell any products we may develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to commercialize AG10 or other product candidates that we may identify or may be unable to do so on terms that are favorable to us. We may have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively or may expose us to legal and regulatory risk by not adhering to their contractual obligations or applicable regulatory requirements and restrictions governing the sale and promotion of prescription of drug products. If we do not establish commercialization capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates if approved.

The insurance coverage and reimbursement status of newly-approved products is uncertain. AG10 and any other product candidates that we may develop may become subject to unfavorable pricing regulations, third-party reimbursement practices, or healthcare reform initiatives, which would harm our business. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.

Our ability to successfully commercialize AG10 or any other products that we may develop also will depend in part on the extent to which reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers, and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford treatments such as AG10. Sales of AG10 or other product candidates that we may identify will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize AG10 or any other product candidates we may identify. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. In general, the prices of medicines under such systems are substantially lower than in the United States. Other countries allow companies to fix their own prices for medicines, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for AG10 or other product candidates that we may identify. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenues and profits.

There is also significant uncertainty related to the insurance coverage and reimbursement of newly approved products and coverage may be more limited than the purposes for which the medicine is approved by the FDA or comparable foreign regulatory authorities. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services. CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree. No uniform policy of coverage and reimbursement for products exists among third-party payors and coverage and reimbursement levels for products can differ significantly from payor to payor. 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 consistently or obtained in the first instance. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may be more conservative than CMS. For example, a number of cancer drugs have been approved for reimbursement in the United States and have not been approved for reimbursement in certain European countries. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale, and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for any approved products we may develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize product candidates, and our overall financial condition.

Government authorities currently impose mandatory discounts for certain patient groups, such as Medicare, Medicaid and Veterans Affairs, or VA, hospitals, and may seek to increase such discounts at any time. Future regulation both domestically and abroad may negatively impact the price of our products, if approved. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement. Reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. In order to obtain reimbursement,

physicians may need to show that patients have superior treatment outcomes with our products compared to standard of care drugs, including lower-priced generic versions of standard of care drugs. We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

The regulations that govern marketing approvals, pricing and reimbursement for new drugs vary widely from country to country. In the United States, recently enacted legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenue we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if any product candidates we may develop obtain marketing approval.

If we fail to comply with healthcare laws, we could face substantial penalties and our business, operations and financial conditions could be adversely affected.

Our ongoing and planned operations, including clinical research, sales, marketing and promotion of AG10 or other product candidates that we may identify and begin commercializing in the United States, may subject us to various federal and state fraud and abuse laws and other healthcare laws. The laws that may impact our operations include:

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the federal Anti-Kickback Statute, which prohibits, among other things, persons 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, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

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federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which impose criminal and civil penalties, including through civil “qui tam” or “whistleblower” actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other federal health care programs that are false or fraudulent; knowingly making or causing a false statement material to a false or fraudulent claim or an obligation to pay money to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing such an obligation. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation;

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the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;

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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization;

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the federal Physician Payments Sunshine Act, created under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, and its implementing regulations, which require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S. Department of Health and Human Services under the Open Payments Program, information related to payments or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

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federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and

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analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical 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 payer, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could, despite our efforts to comply, be subject to challenge under one or more of such laws. Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, integrity and oversight agreements to resolve allegations of non-compliance, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. In addition, the approval and commercialization of any of our product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.

Third-party payors, whether domestic or foreign, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our ability to sell our products profitably. In particular, in 2010 the ACA was enacted, which, among other things increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program, extended the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations, subjected manufacturers to new annual fees and taxes for certain branded prescription drugs, and provided incentives to programs that increase the federal government’s comparative effectiveness research.

There have been a number of significant changes to the ACA and its implementation. The Tax Cuts and Jobs Act of 2017, or Tax Act, includes a provision repealing effective January 1, 2019 the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”. Since January 2017, the Trump administration has signed two Executive Orders designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. One Executive Order directs federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. The second Executive Order terminates the cost-sharing subsidies that reimburse insurers under the ACA. Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017.

Further, on June 14, 2018, U.S. Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay more than $12 billion in ACA risk corridor payments to third-party payors who argued were owed to them. The effects of this gap in reimbursement on third-party payors, the viability of the ACA marketplace, providers, and potentially our business, are not yet known. Moreover, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. The Bipartisan Budget Act of 2018 also amends the ACA, effective January 1, 2019, by increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and closing the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”.

In July 2018, the Centers for Medicare and Medicaid Services, or CMS, published a final rule permitting further collections and payments to and from certain ACA qualified health plans and health insurance issuers under the ACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment. In addition, CMS has recently published a final rule that would give states greater flexibility, starting in 2020, in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.

Since its enactment, some of the provisions of the ACA have yet to be fully implemented, while certain provisions have been subject to judicial, congressional, or executive challenges. As a result, there have been delays in the implementation of, and actions taken to repeal or replace, certain aspects of the ACA. The U.S. Supreme Court has upheld certain key aspects of the legislation, including a tax-based shared responsibility payment imposed on certain individuals who fail to maintain qualifying health coverage for all or part of a year or pay a penalty, which is commonly known as the “individual mandate.” However, as a result of tax reform legislation passed in December 2017, the tax-based shared responsibility payment imposed on certain individuals who fail to maintain qualifying health coverage for all or part of a year or pay a penalty, which is commonly known as the “individual mandate” has been eliminated effective January 1, 2019. On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, or the Texas District Court Judge, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Cuts and Jobs Act of 2017, the remaining provisions of the ACA are invalid as well. The Trump Administration and CMS have both stated that the ruling will have no immediate effect, and on December 30, 2018 the Texas District Court Judge issued an order staying the judgment pending appeal. The implications of the ACA, its possible repeal, replacement, or modification, and the political uncertainty surrounding these matters for our business and financial condition, if any, are not yet clear.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in 2013, and, due to subsequent legislative amendments, will remain in effect through 2027 unless additional Congressional action is taken. The American Taxpayer Relief Act of 2012 further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:

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the demand for AG10 or other product candidates that we may identify, if we obtain regulatory approval;

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our ability to receive or set a price that we believe is fair for our products;

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our ability to generate revenue and achieve or maintain profitability;

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the level of taxes that we are required to pay; and

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the availability of capital.

We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, lower reimbursement, and new payment methodologies. This could lower the price that we receive for any approved product. Any denial in coverage or reduction in reimbursement from Medicare or other government-funded programs may result in a similar denial or reduction in payments from private payors, which may prevent us from being able to generate sufficient revenue, attain profitability or commercialize AG10 or other product candidates that we may identify, if approved.

We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may negatively impact our ability to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.

The development and commercialization of new drug products is highly competitive. We may face competition with respect to any product candidates that we seek to develop or commercialize in the future from major pharmaceutical companies, specialty pharmaceutical companies, and biotechnology companies worldwide. Potential competitors also include academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection, and establish collaborative arrangements for research, development, manufacturing, and commercialization.

There are a number of large pharmaceutical and biotechnology companies that are currently pursuing the development of products for the treatment of ATTR. Companies that we are aware are developing therapeutics for ATTR include large companies with significant financial resources, such as Pfizer Inc., Alnylam Pharmaceuticals Inc., Ionis Pharmaceuticals Inc./Akcea Therapeutics, Inc., Corino Therapeutics Inc./SOM Innovation Biotech, S.L., Intellia Therapeutics Inc., Arcturus Therapeutics Inc., Neurimmune Holding AG and Prothena Therapeutics plc. In particular, Vyndamax (tafamidis) and Vyndaqel (tafamidis meglumine) are approved in the United States and Japan for the treatment of ATTR-CM and which are approved in certain countries outside the United States for the treatment of ATTR-PN. AG10 will not be the first treatment on the market for ATTR-CM, and its market share may be limited. AG10 also will not be the first treatment on the market for ATTR-PN as tafamidis, patisiran, and inotersen are approved for the treatment of ATTR-PN in a variety of countries globally. In addition to competition from other companies targeting ATTR, any products we may develop may also face competition from other types of therapies.

Many of our current or potential competitors, either alone or with their strategic partners, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any products that we may develop. Furthermore, currently approved products could be discovered to have application for treatment of TTR, which could give such products significant regulatory and market timing advantages over AG10 or other product candidates that we may identify. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours and may obtain orphan product exclusivity from the FDA for indications that AG10 or other product candidates that we may identify are targeting, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, products or technologies developed by our competitors may render our potential product candidates uneconomical or obsolete and we may not be successful in marketing any product candidates we may develop against competitors.

In addition, we could face litigation or other proceedings with respect to the scope, ownership, validity and/or enforceability of our patents relating to our competitors’ products and our competitors may allege that our products infringe, misappropriate or otherwise violate their intellectual property. The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any products that we may develop and commercialize. See “Risks related to our intellectual property.”

If the market opportunities for AG10 are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer. Our ability to successfully identify patients and acquire a significant market share will be necessary for us to achieve profitability and growth.

We focus our research and product development on treatments for ATTR. Our projections of both the number of individuals who have a form of ATTR, as well as the subset of individuals with a form of ATTR who have the potential to benefit from treatment with AG10 or other product candidates that we may identify, are based on our beliefs and estimates, including our belief that the availability of minimally invasive diagnostics will result in increased rates of diagnosis for ATTR. These estimates have been derived from a variety of sources, including the scientific literature, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of patients may turn out to be lower than expected. The effort to identify patients with diseases we seek to treat is in early stages, and we cannot accurately predict the number of patients for whom treatment might be possible. Additionally, the potentially addressable patient population for AG10 or other product candidates that we may identify may

be limited or may not be amenable to treatment with AG10 or other product candidates that we may identify, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our results of operations and our business. Further, even if we obtain significant market share for AG10 or other product candidates that we may identify, because the potential target populations are small, we may never achieve profitability despite obtaining such significant market share. In addition, our market share could be limited by the availability and pricing of other treatments for ATTR, including Vyndamaz (tafamidis) and Vyndaqel (tafamidis meglumine), for which Pfizer Inc. has been approved for the treatment of ATTR-CM the United States and Japan (Vyndaqel only). As a result, even if AG10 is approved, it will not be the first treatment on the market for ATTR-CM and will face competition from existing marketed drugs.

Risks related to our business and industry

Certain of our directors and officers may have actual or potential conflicts of interest because of their positions with BridgeBio and may not be able to or may choose not to devote sufficient time and attention to our company.

Neil Kumar, founder and Chief Executive Officer of BridgeBio, Eric Aguiar, a member of the Board of Managers of BridgeBio, and Ali Satvat, a member of the Board of Managers of BridgeBio, serve on our board of directors and retain their positions and affiliations with BridgeBio. Dr. Kumar spends a significant portion of his time on other BridgeBio matters, including involvement with other BridgeBio subsidiaries. Additionally, Christine Siu, our Chief Financial Officer, serves as the Chief Operating Officer for other BridgeBio subsidiaries; Uma Sinha, our Chief Scientific Officer, serves as the Chief Scientific Officer of BridgeBio and other BridgeBio subsidiaries; Jonathan Fox, our Chief Medical Officer, serves as the Therapeutic Area Lead of Cardiovascular and Renal Diseases for BridgeBio and Cameron Turtle, our Chief Business Officer, serves as Senior Vice President, Portfolio Management and Corporate Development of BridgeBio. As a result, these executive officers may not be able to devote their full time and attention to our company, which could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Since joining us, all of our executives, including Dr. Kumar, have each spent a significant portion of their time devoted to us. While none of the executives has a minimum time commitment to us, each retains flexibility to ensure that he or she can re-allocate his or her time based on the needs of each business. The particulars of these executives’ time-allocation strategy may change over time based on these needs or the executives’ individual incentives to provide services to us relative to other businesses. In addition, certain of these individuals own equity interests in BridgeBio, which represent a significant portion of these individuals’ net worth, while Dr. Kumar, in particular, does not currently receive any cash or equity compensation from us and does not hold any direct equity interest in us. These individuals’ respective positions at BridgeBio and the ownership of any BridgeBio equity or equity awards creates, or may create the appearance of, conflicts of interest when we ask these individuals to make decisions that could have different implications for BridgeBio than the decisions have for us.

Our future success depends on our ability to retain key management, employees, consultants and advisors and to attract, retain and motivate qualified personnel.

We are highly dependent on the management, research and development, clinical, financial and business development expertise of our executive officers, as well as the other members of our scientific and clinical teams. However, some of these executive officers and other personnel are not our full-time employees. The risks related to our dependence upon Dr. Kumar are compounded by BridgeBio’s significant ownership percentage and Dr. Kumar’s role in our company, as well as the absence of any contract between us and Dr. Kumar for his services. If we were to lose Dr. Kumar or any of our other executives or key personnel, we may not be able to find appropriate replacements on a timely basis and our financial condition and results of operations could be materially adversely affected. Furthermore, although we have employment offer letters with each of our executive officers other than Dr. Kumar, each of them may terminate their employment with us at any time. We do not maintain “key person” insurance for any of our executives or employees. Recruiting and retaining qualified scientific and clinical personnel and, if we progress the development of our drug pipeline toward scaling up for commercialization, sales and marketing personnel, will also be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, attain regulatory approval for and commercialize AG10 or other product candidates that we may identify. Competition to hire qualified personnel in our industry is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. Furthermore, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

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

As of September 30, 2019, we had 40 full-time employees. As we mature, we expect to expand our full-time employee base and to hire more consultants and contractors. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time toward 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 mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenues could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.

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

Because we have limited financial and personnel resources, we are placing significant focus on the development of our product candidate, AG10. As a result, we may forgo or delay pursuit of opportunities with other future product candidates that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and other future product candidates for specific indications may not yield any commercially viable future product candidates. If we do not accurately evaluate the commercial potential or target market for AG10 or any particular future product candidate, we may relinquish valuable rights to those product candidates through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidates.

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

We face an inherent risk of product liability exposure related to the testing of AG10 or other product candidates that we may identify in human clinical trials and will face an even greater risk if we commercially sell any medicines that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or medicines caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

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

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injury to our reputation and significant negative media attention;

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withdrawal of clinical trial participants;

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significant costs to defend the related litigation;

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substantial monetary awards to trial participants or patients;

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loss of revenue; and

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the inability to commercialize AG10 or any other product candidates that we may develop.

Although we maintain product liability insurance, including coverage for clinical trials that we sponsor, it may not be adequate to cover all liabilities that we may incur. We anticipate that we will need to increase our insurance coverage as we commence additional clinical trials and if we successfully commercialize any product candidates. The market for insurance coverage is increasingly expensive, and the costs of insurance coverage will increase as our clinical programs increase in size. 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 we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.

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

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

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

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

Our ability to invest in and expand our business and meet our financial obligations, to attract and retain third-party contractors and collaboration partners and to raise additional capital depends on our operating and financial performance, which, in turn, is subject to numerous factors, including the prevailing economic and political conditions and financial, business and other factors beyond our control, such as the rate of unemployment, the number of uninsured persons in the United States, political influences and inflationary pressures. For example, an overall decrease in or loss of insurance coverage among individuals in the United States as a result of unemployment, underemployment or the repeal of certain provisions of the ACA, may decrease the demand for healthcare services and pharmaceuticals. If fewer patients are seeking medical care because they do not have insurance coverage, we may experience difficulties in any eventual commercialization of our product candidates and our business, results of operations, financial condition and cash flows could be adversely affected.

In addition, our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets upon which biopharmaceutical companies such as us are dependent for sources of capital. In the past, global financial crises have caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including a reduced ability to raise additional capital when needed on acceptable terms, if at all, and weakened demand for AG10 or other product candidates that we may identify. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Our internal computer systems, or those used by our third-party research institution collaborators, CROs or other contractors or consultants, may fail or suffer security breaches.

Despite the implementation of security measures, our internal computer systems and those of our future CROs and other contractors and consultants may be vulnerable to damage from computer viruses and unauthorized access. Although to our knowledge we have not experienced any such material system failure 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. For example, the loss of clinical trial data from completed, ongoing or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we rely on our third-party research institution collaborators for research and development of AG10 and other third parties for the manufacture of AG10 and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of AG10 could be delayed.

Certain data breaches must also be reported to affected individuals and the government, and in some cases to the media, under provisions of HIPAA, as amended by HITECH, other U.S. federal and state law, and requirements of non-U.S. jurisdictions, including the European Union Data Protection Directive, and financial penalties may also apply.

Our insurance policies may not be adequate to compensate us for the potential losses arising from breaches, failures or disruptions of our infrastructure, catastrophic events and disasters or otherwise. In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made against us and defending a suit, regardless of its merit, could be costly and divert management’s attention.

Furthermore, 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. Likewise, we rely on other third parties for the manufacture of AG10 and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business.

We or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Earthquakes or other natural disasters could severely disrupt our operations, and have a material adverse effect on our business, results of operations, financial condition and prospects. If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.

Our anticipated international operations may expose us to business, regulatory, political, operational, financial, pricing and reimbursement and economic risks associated with doing business outside of the United States.

We currently have no international operations, but our business strategy incorporates potential international expansion to target ATTR patient populations outside the United States. If we receive regulatory approval for and commercialize AG10 in patient populations outside the United States, we may hire sales representatives and conduct physician and patient association outreach activities outside of the United States. Doing business internationally involves a number of risks, including but not limited to:

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multiple, conflicting, and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements, and other governmental approvals, permits, and licenses;

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failure by us to obtain and maintain regulatory approvals for the use of our products in various countries;

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additional potentially relevant third-party patent rights;

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complexities and difficulties in obtaining protection and enforcing our intellectual property;

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difficulties in staffing and managing foreign operations;

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complexities associated with managing multiple payor reimbursement regimes, government payors, or patient self-pay systems;

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limits in our ability to penetrate international markets;

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financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products, and exposure to foreign currency exchange rate fluctuations;

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natural disasters, political and economic instability, including wars, terrorism, and political unrest, outbreak of disease, boycotts, curtailment of trade, and other business restrictions;

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certain expenses including, among others, expenses for travel, translation, and insurance; and

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regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, its books and records provisions, or its anti-bribery provisions.

Any of these factors could significantly harm our potential international expansion and operations and, consequently, our results of operations.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act, requires that we evaluate and determine the effectiveness of our internal control over financial reporting and, provide a management report on internal control over financial reporting. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations, cause us to fail to meet our reporting obligations, result in a restatement of our financial statements for prior periods, or adversely affect the results of management evaluations and independent registered public accounting firm audits of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal controls over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock.

We are in the process of designing and implementing the internal control over financial reporting required to comply with Section 404 of the Sarbanes-Oxley Act. This process will be time consuming, costly, and complicated. If we are unable to assert that our internal control over financial reporting is effective or when required in the future, if our independent registered public accounting firm issues an adverse opinion on the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Risks related to our equity securities

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

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including:

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being permitted to provide only two years of audited financial statements prior to our first filing of our Annual Report on Form 10-K, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s discussion and analysis of financial condition and results of operations” disclosure;

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

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

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reduced disclosure obligations regarding executive compensation; and

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not being required to hold a non-binding advisory vote on executive compensation or obtain stockholder approval of any golden parachute payments not previously approved.

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, or IPO, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior September 30th and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Under Section 107(b) of the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We have identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.

Prior to the IPO, we were a private company and had limited accounting and financial reporting personnel and other resources with which to address our internal controls and procedures. In connection with the audit of our financial statements for the year ended December 31, 2018, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness related to a deficiency in the operation of our internal controls over the accounting for complex debt and equity transactions and ineffective disclosure controls.

Neither we nor our independent registered public accounting firm has performed or was required to perform an evaluation of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. We have taken steps to remediate the material weakness, including increasing the depth and experience within our accounting and finance organization. In addition, we are continuing to work on designing and implementing additional improved processes and internal controls. While we intend to implement a plan to remediate the material weakness, we have not completed the implementation of this plan, and we can give no assurance that our current and planned implementation will remediate this deficiency in internal control or that additional material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements and cause us to fail to meet our reporting obligations.

We have restated our unaudited condensed financial statements previously issued in our quarterly reports on Form 10-Q for the periods ended March 31, June 30 and September 30, 2018.

As further described in Note 15, Restatement of 2018 unaudited condensed financial statements and related financial information, to the audited financial statements included in our Annual Report on Form 10-K filed on with the SEC on April 15, 2019, during the course of the audit of our annual financial statements for the fiscal year ended December 31, 2018, we discovered certain errors related to the accounting for complex debt and equity transactions. As a result, our management concluded, after discussion with our independent registered public accounting firm, Ernst & Young LLP, that we were required to restate our unaudited financial information for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018, which our Audit Committee determined should no longer be relied upon. Our 2018 Annual Report includes the restatement of our unaudited financial statements for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018 in Note 15 described above. If we are required to restate previously issued financial statements for any additional periods, our reputation could be impaired which could cause a loss of investor confidence and adversely materially affect our business, operating results and financial condition.

We are obligated to develop and maintain proper and effective internal controls over financial reporting and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act (Section 404), to furnish a report by management on the effectiveness of our internal control over financial reporting for the year ending December 31, 2019. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Once we are no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) or, if prior to such date, we opt to no longer take advantage of the applicable exemption, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. At such time as we are required to obtain auditor attestation, if we then have a material weakness, we would receive an adverse opinion regarding our internal control over financial reporting from our independent registered accounting firm.

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

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

The market price of our common stock may be highly volatile.

The market price of our common stock is likely to be volatile. Our stock price could be subject to wide fluctuations in response to a variety of factors, including the following:

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adverse results or delays in our preclinical studies or clinical trials;

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reports of adverse events or other negative results in clinical trials of third parties’ product candidates for ATTR or similar indications;

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inability to obtain additional funding;

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any delay in filing an NDA for AG10 or an IND or NDA for other product candidates that we may identify and pursue, and any adverse development or perceived adverse development with respect to the FDA’s review of that IND or NDA;

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failure to develop successfully and commercialize AG10 or other product candidates that we may identify;

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failure to maintain our existing in-license and out-license arrangements or enter into new licensing and collaboration agreements;

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failure by us or our licensors to prosecute, maintain or enforce our intellectual property rights;

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changes in laws or regulations applicable to future products;

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inability to obtain adequate clinical or commercial supply for our product candidates or the inability to do so at acceptable prices;

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adverse regulatory decisions, including failure to reach agreement with applicable regulatory authorities on the design or scope of our planned clinical trials;

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failure to obtain and maintain regulatory exclusivity for our product candidates;

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regulatory approval or commercialization of new products or other methods of treating our target disease indications by our competitors;

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failure to meet or exceed financial projections we may provide to the public or to the investment community;

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the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community;

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announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partner or our competitors;

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

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additions or departures of key scientific or management personnel;

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significant lawsuits, including patent or stockholder litigation;

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changes in the market valuations of similar companies;

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sales of our common stock by us or our stockholders in the future; and

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trading volume of our common stock.

In addition, companies trading in the stock market in general, and Nasdaq, in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.

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

We will need additional capital in the future to continue our planned operations. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

Pursuant to our 2018 Stock Option and Incentive Plan, or the 2018 Plan, which became effective upon the completion of our IPO, we are authorized to grant stock options and other equity-based awards to our employees, directors and consultants. In June 2019, our stockholders approved an increase in the number of shares reserved for future grant under the 2018 Plan. If our board of directors elects to further increase the number of shares available for future grant, and our stockholders approve any additional increases in the number of shares reserved under our equity incentive plans, our stockholders may experience additional dilution, and our stock price may fall.

A significant portion of our total outstanding shares is restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of our common stock to decline significantly.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. In particular, sales following the expiration of market standoff and lock-up agreements entered into by us and certain of our stockholders in connection with our IPO or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. In the past, the representatives of the underwriters in our IPO, in their discretion, released a portion of the shares subject to lock-up agreements, which resulted in sales by certain of our stockholders prior to the expiration of the lock-up period. Shares issued upon the exercise of stock options outstanding under our equity incentive plans or pursuant to future awards granted under those plans will become available for sale in the public market to the extent permitted by the provisions of applicable vesting schedules, any applicable market standoff and lock-up agreements, and Rule 144 and Rule 701 under the Securities Act of 1933, as amended, or the Securities Act. Additionally, in September 2019, we issued 556,173 shares of common stock to Alexion in connection with the License Agreement, which will also become available for public resale as and when permitted under applicable securities laws. If any of these additional shares are sold, or if it is perceived that they will be sold in the public market, the market price of our common stock could decline.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. If no or few analysts commence or continue coverage of us, the trading price of our stock could decrease. Even if we do obtain analyst coverage, if one or more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline. If one or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

Our executive officers, directors, five percent stockholders and their affiliates beneficially own approximately 76.7% of our voting stock as of September 30, 2019. Therefore, these stockholders, and in particular, our controlling stockholder, BridgeBio, will have the ability to influence us through their ownership positions. These stockholders may be able to determine all matters requiring stockholder approval. For example, these stockholders, acting together, or BridgeBio alone, may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may believe are in your best interest as one of our stockholders. For example, in August 2019, we announced the receipt from BridgeBio of a non-binding proposal for BridgeBio to purchase all of our outstanding common stock not already held by BridgeBio. Although discussions between a special committee comprised of our disinterested and independent directors and BridgeBio with respect to the proposed transaction have terminated, BridgeBio continues to exercise significant control over our decisions and may, in the future, engage in similar discussions with us. Additionally, BridgeBio’s ownership of a majority of the voting power of our common stock may enable it to block third-party acquisition proposals or offers for our common stock that our other stockholders may believe are in their best interests.

BridgeBio owns a significant percentage of our common stock, will be able to exert significant control over matters subject to stockholder approval and may have interests that conflict with those of our other stockholders.

BridgeBio is currently our majority stockholder and we will continue to be controlled by BridgeBio. BridgeBio beneficially owns approximately 65.5% of the voting power of our outstanding common stock as of September 30, 2019 and may further increase its ownership position in our common stock through privately negotiated purchases or purchases on the open market. As such, BridgeBio has the ability to substantially influence us and exert significant control through this ownership position. For example, BridgeBio will be able to control elections of directors, amendments of our organizational documents, or approval of any merger, amalgamation, sale of assets or other major corporate transaction. Any transferees or successors of all or a significant portion of BridgeBio’s ownership in us will be able to exert a similar amount of control over us through their ownership position.

Furthermore, certain of our directors and officers may have actual or potential conflicts of interest with us because of their positions or affiliations with BridgeBio or their equity ownership in BridgeBio. For example, Neil Kumar, founder and Chief Executive Officer of BridgeBio, Eric Aguiar, a member of the Board of Managers of BridgeBio, and Ali Satvat, a member of the Board of Managers of BridgeBio, serve on our board of directors and retain their positions and affiliations with BridgeBio. Additionally, Christine Siu, our Chief Financial Officer, Uma Sinha, our Chief Scientific Officer, Jonathan Fox, our Chief Medical Officer and Cameron Turtle, our Chief Business Officer, also have roles within BridgeBio and/or its other subsidiaries. Our other stockholders may not have visibility into the BridgeBio ownership positions or other affiliations of any of our directors or officers with BridgeBio or its other subsidiaries, which may change at any time through acquisition, disposition, dilution, or otherwise. Any change in our directors’ or officers’ ownership in BridgeBio or its other subsidiaries could impact the interests of those holders. BridgeBio’s interests may not always coincide with our corporate interests or the interests of other stockholders, and it may exercise its voting and other rights in a manner with which you may not agree or that may not be in the best interests of our other stockholders. So long as it continues to own a significant amount of our equity, BridgeBio will continue to be able to strongly influence and significantly control our decisions.

Although we do not currently rely on the “controlled company” exemption under the rules and regulations of Nasdaq, we expect to have the right to use such exemption and therefore we could in the future avail ourselves of certain reduced corporate governance requirements.

BridgeBio holds a majority of the voting power of our outstanding capital stock, and therefore we are considered a “controlled company” as that term is set forth in the rules and regulations of Nasdaq. Under these rules, a company of which more than 50% of the voting power is held by a person or group of persons acting together is a “controlled company” and may elect not to comply with certain rules and regulations of Nasdaq regarding corporate governance, including:

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the requirement that a majority of its board of directors consist of independent directors;

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the requirement that its director nominees be selected or recommended for the board’s selection by a majority of the board’s independent directors in a vote in which only independent directors participate or by a nominating committee comprised solely of independent directors, in either case, with board resolutions or a written charter, as applicable, addressing the nominations process and related matters as required under the federal securities laws; and

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the requirement that its compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

These requirements would not apply to us if, in the future, we choose to avail ourselves of the “controlled company” exemption. Although we qualify as a “controlled company,” we do not currently rely on these exemptions and intend to fully comply with all corporate governance requirements under the rules and regulations of Nasdaq. However, if we were to utilize some or all of these exemptions, we would not comply with certain of the corporate governance standards of Nasdaq, which could adversely affect the protections for our other stockholders.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders or remove our current management.

Our restated certificate of incorporation, amended and restated bylaws and Delaware law contain provisions that may have the effect of delaying or preventing a change in control of us or changes in our management. Our restated certificate of incorporation and amended and restated bylaws, which became effective upon the completion of our IPO, include provisions that:

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authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;

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specify that special meetings of our stockholders can be called only by our board of directors or stockholders holding at least 25% of our outstanding voting stock;

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establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

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provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum, or by the holders of a majority of the outstanding shares of capital stock then entitled to vote at an election of directors;

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specify that no stockholder is permitted to cumulate votes at any election of directors; and

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expressly authorize our board of directors to modify, alter or repeal our amended and restated bylaws.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

Furthermore, under our amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any state law claim for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or the certificate of incorporation or bylaws, or (iv) any action asserting a claim against the Company governed by the internal affairs doctrine (the “Delaware Forum Provision”); provided, however, that this Delaware Forum Provision does not apply to any actions arising under the Securities Act or the Exchange Act. The Delaware Forum Provision may impose additional litigation costs on stockholders in pursuing such claims, particularly if the stockholders do not reside in or near the State of Delaware. Additionally, the Delaware Forum Provision may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of such lawsuits. The Court of Chancery of the State of Delaware may also reach different judgment or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us. Any provision of our restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or our guidance.

Our quarterly and annual operating results may fluctuate significantly in the future, which makes it difficult for us to predict our future operating results. Our operating results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following:

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the timing, results and cost of, and level of investment in, our clinical development activities for AG10 and any other product candidates we may identify and pursue, which may change from time to time;

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the cost of manufacturing AG10 or other product candidates that we may identify, which may vary depending on the quantity of production and the terms of our agreements with manufacturers;

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our ability to conduct clinical trials of AG10 in accordance with our plans and to obtain regulatory approval for AG10 or other product candidates that we may identify, and the timing and scope of any such approvals we may receive;

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the timing and success or failure of clinical trials for competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners;

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expenditures that we will or may incur to acquire or develop additional product candidates and technologies;

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our ability to attract, hire and retain qualified personnel;

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the level of demand for AG10 or other product candidates that we may identify, should they receive approval, which may vary significantly;

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future accounting pronouncements or changes in our accounting policies;

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the risk/benefit profile, cost and reimbursement policies with respect to AG10 or other product candidates that we may identify, if approved, and existing and potential future drugs that compete with our product candidates; and

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the changing and volatile U.S., European and global economic environments.

The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.

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

We have incurred substantial losses during our history and do not expect to become profitable in the near future and we may never achieve profitability. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset a portion of future taxable income, if any, subject to expiration of such carryforwards in the case of carryforwards generated prior to 2018. In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited. Our prior equity offerings and other changes in our stock ownership may have resulted in ownership changes. In addition, we may experience ownership changes in the future as a result of future offerings or subsequent shifts in our stock ownership, some of which are outside of our control. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. At the state level, there may also be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. In addition, under the Tax Act, the amount of post 2017 NOLs that we are permitted to deduct in any taxable year is limited to 80% of our taxable income in such year, where taxable income is determined without regard to the NOL deduction itself. The Tax Act generally eliminates the ability to carry back any NOL to prior taxable years, while allowing post 2017 unused NOLs to be carried forward indefinitely. There is a risk that due to changes under the Tax Act, regulatory changes, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities. For these reasons, we may not be able to realize a tax benefit from the use of our NOLs, whether or not we attain profitability.

Comprehensive tax reform legislation could adversely affect our business and financial condition.

On December 22, 2017, the Tax Act was signed into law. The Tax Act, among other things, contains significant changes to corporate taxation, including (i) reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, (ii) limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses), (iii) limitation of the deduction for net operating losses to 80% of current year taxable income in respect of net operating losses generated during or after 2018 and elimination of net operating loss carrybacks, (iv) one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, (v) immediate deductions for certain new investments instead of deductions for depreciation expense over time, and (vi) modifying or repealing many business deductions and credits. Any federal net operating loss incurred in 2018 and in future years may now be carried forward indefinitely pursuant to the Tax Act. It is uncertain if and to what extent various states will conform to the newly enacted federal tax law. We will continue to examine the impact the Tax Act may have on our business.

We do not currently intend to pay dividends on our common stock, and, consequently, our stockholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common stock.

We do not currently intend to pay any cash dividends on our common stock for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future. Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in the market value of our common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.

Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk of fraud, misconduct or other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors. Misconduct by these parties could include intentional, reckless and negligent conduct that fails to: comply with the laws of the FDA and comparable foreign regulatory authorities; provide true, complete and accurate information to the FDA and comparable foreign regulatory authorities; comply with manufacturing standards we have established; comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or report financial information or data accurately or to disclose unauthorized activities to us. If we obtain FDA approval of AG10 or other product candidates that we may identify and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase. In particular, research, sales, marketing, education and other business arrangements in the healthcare industry are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, educating, marketing and promotion, sales and commission, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation. We have adopted a code of business conduct and ethics, but it is not always possible to identify and deter misconduct by employees and third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

We will incur significant costs as a result of operating as a new public company, and our management will devote substantial time to new compliance initiatives.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which require, among other things, that we file with the SEC, annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas such as “say on pay” and proxy access. Recent legislation permits emerging growth companies to implement many of these requirements over a longer period and up to five years from the pricing of an initial public offering. We intend to take advantage of this new legislation, but cannot guarantee that we will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

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

Sale of Unregistered Securities

None.

b) Use of Proceeds

Not applicable.

c)Issuer Purchases of Company Equity Securities

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

The documents listed in the Exhibit Index of this Quarterly Report on Form 10-Q are incorporated by reference or are filed with this Quarterly Report on Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Date	Number

3.1+	Amended and Restated Certificate of Incorporation
3.2+	Amended and Restated Bylaws
4.1	Specimen Common Stock Certificate	S-1/A	6/8/2018	4.1
4.2	Amended and Restated Investors’ Rights Agreement by and among the Registrant and certain of its stockholders dated March 29, 2018	S-1	5/25/2018	4.2
10.1+†	License Agreement, by and between the Registrant and Alexion Pharma International Operations Unlimited Company, dated September 9, 2019
31.1+	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2+	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2+*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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 Labels Linkbase Document
101.PRE+	XBRL Taxonomy Extension Presentation Linkbase Document

The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Eidos 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 this Form 10-Q, irrespective of any general incorporation language contained in such filing.

+	Filed herewith.

†	Portions of this exhibit have been omitted as confidential information.

SIGNATURES

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

	EIDOS THERAPEUTICS, INC.

Date: October 31, 2019	By:	/s/ Neil Kumar
		Neil Kumar
		Chief Executive Officer and Director (Principal Executive Officer)

Date: October 31, 2019	By:	/s/ Christine Siu
		Christine Siu
		Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 10.1

CONFIDENTIAL

Execution Version

LICENSE AGREEMENT

between

Alexion Pharma International Operations Unlimited Company

and

Eidos Therapeutics, Inc.

DATED

September 9, 2019

[***] Certain information in this exhibit has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed.

TABLE OF CONTENTS

Page

Article 1 DEFINITIONS		1
Article 2 LICENSE		14
2.1	License Grants to Alexion	14
2.2	Right to Sublicense	15
2.3	Right to Subcontract	15
2.4	Stanford Agreement	15
2.5	Disclosure of the Eidos IP	16
2.6	No Implied Licenses	17
2.7	Non-Compete	17
2.8	Control of Know-How and Patent Rights by Third Party Licensees	17
2.9	Other Alexion Programs	17
Article 3 GOVERNANCE		18
3.1	Alliance Managers	18
3.2	Committees	18
Article 4 DEVELOPMENT AND REGULATORY MATTERS		19
4.1	Development Diligence	19
4.2	Development Activities	19
4.3	Development Costs	20
4.4	Development Reports	20
4.5	Regulatory Activities	20
4.6	Right of Reference and Use	21
4.7	Data Exchange and Use	21
4.8	Adverse Events Reporting	22
4.9	No Harmful Actions	23
4.10	Notice of Regulatory Action	23
4.11	Eidos Support	23
Article 5 SUPPLY		23
5.1	Clinical Supply Agreement	23
5.2	Commercial Supply Agreement	23
5.3	Third Party Supply	24
5.4	Quality Agreement	24
Article 6 COMMERCIALIZATION		24
6.1	Commercialization Diligence	24
6.2	Commercialization Activities	24
6.3	Licensed Product Trademarks	25
6.4	No other Trademark Rights	26
6.5	Other Consultation	26

6.6	Diversion	26
Article 7 PAYMENTS		26
7.1	Upfront Payment	26
7.2	Equity Investment	26
7.3	[***] Milestone Payment	26
7.4	Royalty Payments to Eidos	27
7.5	Taxes	29
7.6	Financial Audits	30
Article 8 CONFIDENTIALITY; PUBLICATION		31
8.1	Confidential Information	31
8.2	Non-Disclosure and Non-Use Obligation	31
8.3	Return of Confidential Information	32
8.4	Exemption	32
8.5	Permitted Disclosures	32
8.6	Disclosure of Agreement	33
8.7	Publicity; Use of Name and Logo	33
8.8	Publications	34
8.9	Engaging Individuals	34
8.10	Survival	34
Article 9 REPRESENTATIONS, WARRANTIES, AND COVENANTS		34
9.1	Representations, Warranties and Covenants of Each Party	34
9.2	Representations and Warranties of Eidos	35
9.3	Representations, Warranties and Covenants of Eidos Concerning the Stanford Agreement	36
9.4	Covenant of Eidos	37
9.5	Compliance with Law	37
9.6	NO OTHER WARRANTIES	38
Article 10 INDEMNIFICATION		38
10.1	By Alexion	38
10.2	By Eidos	38
10.3	Indemnification Procedure	38
10.4	Mitigation of Loss	39
10.5	Limitation of Liability	39
10.6	Insurance	40
Article 11 INTELLECTUAL PROPERTY		40
11.1	Ownership	40
11.2	Patent Prosecution	40
11.3	Patent Enforcement	41
11.4	Infringement of Third Party Rights	42
11.5	Upstream License	43
11.6	Licensed Product-Specific Trademarks.	43
11.7	Common Interest Agreement	44

11.8	New In-License Agreements	45
Article 12 TERMS AND TERMINATION		46
12.1	Term	46
12.2	Termination	46
12.3	Effect of Termination	47
12.4	Alternative Remedy in Lieu of Termination	48
12.5	Rights in Insolvency	49
12.6	Accrued Rights	50
12.7	Survival	50
12.8	Termination of Stanford or Upstream License Agreements	50
Article 13 MISCELLANEOUS		51
13.1	Force Majeure	51
13.2	Assignment	51
13.3	Severability	51
13.4	Notices	52
13.5	Governing Law	52
13.6	Dispute Resolution; Escalation	52
13.7	Entire Agreement; Amendments	53
13.8	Headings	53
13.9	Independent Contractors	53
13.10	Waiver	53
13.11	Waiver of Rule of Construction	53
13.12	Cumulative Remedies; Recovery of Damages	53
13.13	Business Day Requirements	54
13.14	Further Actions	54
13.15	Construction	54
13.16	Counterparts	54

iii

LICENSE AGREEMENT

This License Agreement (this “Agreement”) is made as of September 9, 2019 (the “Effective Date”), by and between Eidos Therapeutics, Inc., a Delaware corporation (“Eidos”), having a place of business at 101 Montgomery Street, Suite 2550, San Francisco, California 94104, USA, and Alexion Pharma International Operations Unlimited Company, an Irish unlimited company (“Alexion”), having a place of business at College Business & Technology Park, Blanchardstown, Dublin 15, Ireland. Eidos and Alexion are referred to in this Agreement individually as a “Party” and collectively as the “Parties.”

Recitals

Whereas, Alexion is a global pharmaceutical company with experience and expertise in the research, development and commercialization of pharmaceutical products;

Whereas, Eidos is a clinical stage biopharmaceutical company that Controls (as defined below) the intellectual property and other rights related to the pharmaceutical compound known as AG10; and

Whereas, Alexion is interested in obtaining an exclusive license under such intellectual property and other rights to Develop and Commercialize Licensed Product in the Field in the Territory (each capitalized term as defined below), and Eidos is willing to grant such an exclusive license to Alexion, subject to the terms and conditions set forth herein.

Agreement

Now, Therefore, in consideration of the foregoing premises and the covenants contained herein, the Parties hereby agree as follows:

Article 1
DEFINITIONS

Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective meanings set forth below:

1.1“Acquiring Entity” means a Third Party (the “Acquiror”) that acquires a Party (and is therefore deemed to be an Affiliate of such Party) through a Change of Control, together with any Affiliates of such Acquiror existing immediately prior to the consummation of the Change of Control. For purposes of clarity, an “Acquiring Entity” of a Party shall exclude (a) the Party and all of its Affiliates existing immediately prior to the consummation of the Change of Control and (b) any Person that becomes an Affiliate of the Acquiror following the consummation of the Change of Control, and not as a result of the Change of Control.

1.2“Acquiror” has the meaning set forth in Section 1.1.

1.3“Additional Cure Period” has the meaning set forth in Section 12.2(b)(ii).

1.4“Additional Trial” has the meaning set forth in Section 4.2(b).

1.5“Affiliate” means, (a) with respect to Alexion, any Person controlling, controlled by or under common control with Alexion, at the time that the determination of affiliation is made and for as long as such control exists, (b) with respect to Eidos, any entity that is controlled by Eidos at the time that the determination of affiliation is made and for as long as such control exists, and (c) with respect to any other Person, any entity controlling, controlled by or under common control with such first Person, at the time that the determination of affiliation is made and for as long as such control exists. For the purpose of this definition only, “control” (including, with correlative meaning, the terms “controlled by” and “under the common control”) means (a) direct or indirect ownership of fifty percent (50%) or more of the stock or shares having the right to vote for the election of directors of such Person (or if the jurisdiction where such Person is domiciled prohibits foreign ownership of such entity, the maximum foreign ownership interest permitted under such Applicable Laws; provided, however, that such ownership interest provides actual control over such Person), (b) status as a general partner in any partnership, or (c) the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise. For the avoidance of doubt, [***] shall not be deemed to be an Affiliate of [***] and any company in which [***] has a direct or indirect controlling financial interest shall not be deemed to be an Affiliate of [***] solely due to such controlling financial interest.

1.6“Alexion Indemnitees” has the meaning set forth in Section 10.2.

1.7“Alexion Technology” means the Patent Rights and Know-How Controlled by Alexion or its Affiliates as of the Effective Date or any time during the Term that are necessary for the Development, Manufacture, or Commercialization of the Licensed Products in the Territory.

1.8“Alliance Manager” has the meaning set forth in Section 3.1.

1.9“Applicable Laws” means collectively all laws, regulations, ordinances, decrees, judicial and administrative orders, notices and guidelines (and any license, franchise, permit or similar right granted under any of the foregoing) and any policies and other requirements of any applicable Governmental Authority that govern or otherwise apply to a Party’s activities in connection with this Agreement.

1.10“Applicable Territory” means (a) with respect to Alexion, the Territory, and (b) with respect to Eidos, the ROW Territory.

1.11“Arbitration Commencement Date” has the meaning set forth in Exhibit 12.3(b)(i).

1.12“ATTRibute Clinical Trial” means each of the ATTRibute-CM Clinical Trial and ATTRibute-PN Clinical Trial, collectively, the “ATTRibute Clinical Trials”.

1.13“ATTRibute-CM Clinical Trial” means the Clinical Trial with the Protocol No. Eidos AG10-301.

1.14“ATTRibute-PN Clinical Trial” means the Clinical Trial with the Protocol No. Eidos AG10-333.

1.15“Auditor” has the meaning set forth in Section 7.6(a).

1.16“Bankruptcy Code” means Title 11 of the United States Code.

1.17“Business Day” means a day other than a Saturday, Sunday or a day on which banking institutions in New York, New York or San Francisco, CA are required by Applicable Laws to remain closed.

1.18“Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

1.19“Calendar Year” means each twelve (12) month period commencing on January 1.

1.20“cGMP” means all applicable current Good Manufacturing Practices, including, as applicable, (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 210, 211, 601, 610 and 820, (b) European Directive 2003/94/EC and Eudralex 4, (c) the principles detailed in the ICH Q7 of ICH Guidelines, and (d) the equivalent Applicable Laws in the Territory, each as may be amended and applicable from time to time.

1.21“Change of Control” means, with respect to a Party, any of the following: (a) the sale or disposition of all or substantially all of the assets of such Party or its direct or indirect controlling Affiliate to a Third Party, other than to a Person of which more than fifty percent (50%) of the voting capital stock are owned after such sale or disposition by the Persons that were shareholders of such Party or its direct or indirect controlling Affiliate (in either case, whether directly or indirectly through any other Person) immediately prior to such transaction; or (b) (i) the acquisition by a Third Party, alone or together with any of its Affiliates, other than an employee benefit plan (or related trust) sponsored or maintained by such Party or any of its Affiliates, of more than fifty percent (50%) of the outstanding shares of voting capital stock of such Party or its direct or indirect controlling Affiliate, or (ii) the acquisition, merger or consolidation of such Party or its direct or indirect controlling Affiliate with or into another Person, other than, in the case of this clause (b), an acquisition or a merger or consolidation of such Party or its controlling Affiliate in which the holders of shares of voting capital stock of such Party or its controlling Affiliate, as the case may be, immediately prior to such acquisition, merger or consolidation will beneficially own, directly or indirectly, at least fifty percent (50%) of the shares of voting capital stock of the acquiring Third Party or the surviving corporation in such acquisition, merger or consolidation, as the case may be, immediately after such acquisition, merger or consolidation. Notwithstanding the foregoing, any transaction or series of transactions effected for the sole purpose of changing the form or jurisdiction of organization of such Party will not be deemed a “Change of Control” for purposes of this Agreement.

1.22“Clinical Supply Agreement” has the meaning set forth in Section 5.1.

1.23“Clinical Trial” means any clinical trial in humans of a pharmaceutical compound or product.

1.24“CMO” means a contract manufacturing organization.

1.25“Combination Product” has the meaning set forth in Section 1.79.

1.26“Commercial Supply Agreement” has the meaning set forth in Section 5.2.

1.27“Commercialize” or “Commercialization” means to market, promote, advertise, exhibit, distribute (including storage for distribution or inventory), detail, sell (including to offer for sale or contract to sell) or otherwise commercially exploit (including to conduct pricing and reimbursement activities) a pharmaceutical compound or product, or to conduct any activities directed to any of the foregoing (including importing and exporting activities in connection therewith).

1.28“Commercially Reasonable Efforts” means, with respect to a Party and a Licensed Product, that level of efforts and resources commonly devoted by such Party to [***] Commercially Reasonable Efforts shall be determined [***].

1.29“Confidential Information” has the meaning set forth in Section 8.1.

1.30“Control” or “Controlled” means, with respect to a Party and any Patent Rights, Know-How or other intellectual property rights, the possession by such Party or its Affiliates (whether by ownership, license or otherwise) of, (a) with respect to any tangible Know-How, the legal authority or right to physical possession of such tangible Know-How, with the right to provide such tangible Know-How to the other Party on the terms and conditions set forth herein, or (b) with respect to Patent Rights, intangible Know-How or other intellectual property rights, the legal authority or right to grant a license, sublicense, access or right to use (as applicable) under such Patent Rights, intangible Know-How or other intellectual property rights to the other Party on the terms and conditions set forth herein, in each case of (a) and (b), without (i) breaching the terms of any agreement with a Third Party in existence as of the time such Party or its Affiliates would first be required hereunder to grant the other Party such access, right to use or (sub)license or (ii) paying any consideration to any Third Party under an agreement between such Party (or its Affiliates) and such Third Party under which such Patent Rights, Know-How or other intellectual property rights are in-licensed to such Party or its Affiliates, [***]. Notwithstanding the foregoing, a Party will be deemed not to Control any intellectual property (including Patent Rights or Know-How), compounds, physical, biological or chemical materials or Confidential Information that are owned or in-licensed by an Acquiring Entity except (1) with respect to any such intellectual property (including Patent Rights or Know-How) arising as a result of activities of employees or consultants of the Acquiring Entity who participate in activities or have access to Confidential Information of either Party under this Agreement after a Change of Control; (2) to the extent that any such intellectual property (including Patent Rights or Know-How) is included in or used in furtherance of a Party’s activities under this Agreement by the Acquiring Entity or its Affiliates after a Change of Control; or (3) to the extent that any such intellectual property (including Patent Rights or Know-How) is used by the acquired Party or the Acquiring Entity or their respective Affiliates to Exploit the Licensed Compound or Licensed Products. Notwithstanding anything to the contrary herein, if Eidos Controls any Patent Rights or Know-How that constitute Eidos IP through any of its Affiliates as of the Effective Date or at any time during the Term, such Patent Rights or Know-How will be deemed to be Controlled by Eidos (and therefore subject to the License) for the remainder of the Term, notwithstanding any change in the Affiliate status of the applicable Affiliate.

1.31“Cover” means, with respect to a product, technology, process, method or mode of administration that, in the absence of ownership of or a license granted under a particular Patent Right, the Manufacture use, offer for sale, sale or importation of such product or composition of matter or the practice of such technology, process, method or mode of administration would infringe a claim of such Patent Right or, in the case of a claim of a Patent Right that has not yet issued, would infringe such claim if it were to issue without change.

1.32“CRO” means a contract research organization.

1.33“Defaulting Party” has the meaning set forth in Section 12.2(b)(ii).

1.34“Develop” or “Development” means to conduct any non-clinical or clinical drug research or development activities, whether before or after Regulatory Approval, including drug metabolism and pharmacokinetics, translational research, toxicology, pharmacology, test method development and stability testing, process and packaging development and improvement, process validation, process scale-up, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, conduct of Clinical Trials, regulatory affairs, the preparation and submission of regulatory filings, Clinical Trial regulatory activities, or any other activities directed towards obtaining or maintaining Regulatory Approval of any pharmaceutical compound or product. Development includes use and importation of the relevant compound or product to conduct such Development activities. Development does not include Commercialization activities.

1.35“Direct Competitor” means any Third Party that is Exploiting in the Field in the Territory any pharmaceutical compound or product that is intended to treat any Exclusive Indication.

1.36“Disclosing Party” has the meaning set forth in Section 8.1.

1.37“Dollar” or “$” means the U.S. dollar, and “$” shall be interpreted accordingly.

1.38“Eidos Indemnitees” has the meaning set forth in Section 10.1.

1.39“Eidos IP” means the Eidos Know-How and the Eidos Patents.

1.40“Eidos Know-How” means all Know-How Controlled by Eidos or its Affiliates as of the Effective Date or that comes into the Control of Eidos or its Affiliates at any time during the Term that is necessary or useful to Exploit the Licensed Compound or Licensed Products in the Field.

1.41“Eidos Patents” means all Patent Rights Controlled by Eidos or its Affiliates as of the Effective Date or that come into the Control of Eidos or its Affiliates at any time during the Term that Cover the Licensed Compound or any Licensed Product in the Field (including composition of matter and methods of using or making the Licensed Compound or a Licensed Product), or are otherwise necessary or useful to Exploit the Licensed Compound or Licensed Products in the Field. The Eidos Patents as of the Effective Date are set forth in Exhibit 1.41, provided that any Patent Right that satisfies this definition shall constitute an Eidos Patent notwithstanding any failure to list such Patent Right on Exhibit 1.41.

1.42“Exclusive Indication” means (a) transthyretin amyloidosis, (b) any Indication for the treatment of which a Licensed Product has received Regulatory Approval in the Territory or the ROW Territory, or (c) any Indication for the treatment of which a Licensed Product is being Developed in the Territory or the ROW Territory (e.g., for which pre-clinical studies or Clinical Trials of a Licensed Product are being conducted).

1.43“Executive Officers” means the Chief Executive Officer of Eidos and the Chief Executive Officer of Alexion, or their respective designees.

1.44“Existing Confidentiality Agreement” means that certain Confidential Disclosure Agreement, dated May 28, 2019, between Eidos and Alexion.

1.45“Expert” has the meaning set forth in Exhibit 12.3(b)(i).

1.46“Exploit” means, with respect to any pharmaceutical compound or product, to Develop, Manufacture, have Manufactured, use, Commercialize, import, export, obtain and maintain Regulatory Approvals and applicable pricing or reimbursement approvals, and otherwise exploit or have exploited such pharmaceutical compound or product.

1.47“Field” means the treatment, prevention, control or diagnosis of any and all diseases or conditions.

1.48“First Commercial Sale” means, with respect to a given Licensed Product in the Territory, the first sale by Alexion, its Affiliates or Sublicensees in an arm’s length transaction of such Licensed Product to a Third Party other than a Sublicensee in such country in exchange for cash (or some equivalent to which value can be assigned) after Regulatory Approval for such Licensed Product has been granted in the Territory. For the avoidance of doubt, supply of Licensed Product as samples or to patients for compassionate use, named patient use, clinical trials or other similar purposes shall not be considered a First Commercial Sale.

1.49“FTE” means a qualified full time person, or more than one person working the equivalent of a full-time person, where “full time” is based upon a total of [***] working hours per [***] of scientific or technical work carried out by a duly qualified employee of Eidos. Overtime and work on weekends, holidays and the like shall not be counted with any multiplier (e.g., time-and-a-half or double time) toward the number of hours that are used to calculate the FTE contribution.

1.50“FTE Costs” means the product of (a) the number of FTEs (proportionately, on per-FTE basis) used by a Party or its Affiliates in directly performing activities assigned to such Party under this Agreement multiplied by (b) the FTE Rate.

1.51“FTE Rate” means [***] U.S. Dollars ($[***]) per FTE for the [***], subject to annual increases beginning on [***] to reflect any year to year percentage increase in the Consumer Price Index – Urban Wage Earners and Clerical Workers, US City Average, All Items, 1982-84 = 100, published by the United States Department of Labor, Bureau of Labor Statistics (or its successor equivalent index) over the twelve (12)-month period preceding each such January 1.

1.52“GAAP” means generally accepted accounting principles in the United States, consistently applied.

1.53“GCP” means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials, including, as applicable (a) as set forth in the ICH E6 of the ICH Guideline and any other guidelines for good clinical practice for clinical trials on medicinal products in the Territory, (b) the Declaration of Helsinki (2004) as last amended at the 64th World Medical Association in October 2013 and any further amendments or clarifications thereto, (c) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), and (d) the equivalent Applicable Laws in the Territory, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects.

1.54“Generic Competition Percentage” means, on a Licensed Product-by-Licensed Product and Calendar-Quarter-by-Calendar Quarter basis in the Territory, the total aggregate units of the applicable Generic Products sold in a Calendar Quarter in the Territory divided by the sum of: (a) total aggregate units of a Licensed Product sold in such Calendar Quarter in the Territory, and (b) total aggregate units of each Generic Product sold in such Calendar Quarter in the Territory, where, in each case ((a) and (b)), the total aggregate units of a Licensed Product and each Generic Product will be based on the monthly data provided by IMS or another independent source mutually agreed upon by the Parties.

1.55“Generic Product” means, with respect to a Licensed Product in the Territory, a product sold by a Third Party that [***].

1.56“Global Brand Plan” means a global brand plan that sets forth a high-level global marketing and branding strategy for the Licensed Products, including a life cycle plan, brand vision, key messaging, concept and imagery, and supporting market research.

1.57“GLP” means all applicable Good Laboratory Practice standards, including, as applicable, as set forth in the then-current good laboratory practice standards promulgated or endorsed by the U.S. Food and Drug Administration, as defined in 21 C.F.R. Part 58, and the equivalent Applicable Laws in the Territory, each as may be amended and applicable from time to time.

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

1.59“ICH Guidelines” mean the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use Harmonized Tripartite Guideline.

1.60“Indemnification Claim Notice” has the meaning set forth in Section 10.3.

1.61“Indemnified Party” has the meaning set forth in Section 10.3.

1.62“Indemnifying Party” has the meaning set forth in Section 10.3.

1.63“Indication” means a disease, condition, disorder or syndrome.

1.64“Insolvency Event” has the meaning set forth in Section 12.2(e).

1.65“Invoice” means an original invoice sent by Eidos to Alexion with respect to any payment due hereunder meeting the reasonable requirements provided by Alexion to Eidos.

1.66“JAMS” has the meaning set forth in Exhibit 12.3(b)(i).

1.67“Joint Commercialization Committee” has the meaning set forth in Section 3.2(b).

1.68“Joint Development Committee” has the meaning set forth in Section 3.2(a).

1.69“Know-How” means any and all information or materials, including discoveries, improvements, modifications, processes, methods, assays, designs, protocols (including Clinical Trial protocols), formulas, data, inventions, algorithms, forecasts, profiles, strategies, plans, results, know-how and trade secrets (in each case, regardless of whether patentable, copyrightable or otherwise), but excluding any Patent Rights. For the avoidance of doubt, “Know-How” shall include Product Data and Regulatory Documents.

1.70“License” means the licenses granted by Eidos to Alexion pursuant to Section 2.1.

1.71“Licensed Compound” means the compound known by the name AG10, as described on Exhibit 1.71, [***].

1.72“Licensed Product” means any pharmaceutical product that contains the Licensed Compound, either alone or in combination with one or more other active pharmaceutical ingredients, delivery systems or devices.

1.73“Licensed Product Trademarks ” means the Trademark(s) used or anticipated to be used by a Party or its Affiliates or its Third Parties Licensees (in the case of Eidos) or Sublicensees (in the case of Alexion) for the Exploitation of Licensed Products in such Party’s Applicable Territory, and any registrations thereof or any pending applications relating thereto with any Governmental Authority.

1.74“Licensed Product-Specific Trademarks” has the meaning set forth in Section 6.3(b).

1.75“Losses” has the meaning set forth in Section 10.1.

1.76“LP Generic Competition Percentage” means, on a Licensed Product-by-Licensed Product and Calendar-Quarter-by-Calendar Quarter basis in the Territory, the total aggregate units of the applicable LP Generic Products sold in a Calendar Quarter in the Territory divided by the sum of: (a) total aggregate units of a Licensed Product sold in such Calendar Quarter in the Territory, and (b) total aggregate units of each LP Generic Product sold in such Calendar Quarter in the Territory, where, in each case ((a) and (b)), the total aggregate units of a Licensed Product and each LP Generic Product will be based on the monthly data provided by IMS or another independent source mutually agreed upon by the Parties.

1.77“LP Generic Product” means, with respect to a Licensed Product in the Territory, a product sold by a Third Party that [***].

1.78“Manufacture” or “Manufacturing” means to conduct or have conducted any activities directed to producing, manufacturing, scaling up, processing, filling, finishing, packaging, labeling, quality assurance testing and release, shipping, and storage at manufacturing facilities of any pharmaceutical compound or product, or any component thereof (including production of drug substance and drug product, in bulk form, whether for Development or Commercialization).

1.79“Net Sales” means, with respect to a Licensed Product in the Territory in a particular period, the sum of (a) and (b):

(a)net sales amounts recorded by Alexion or its Affiliates for sales of such Licensed Product to Third Parties calculated in a manner consistent with Alexion’s calculations of net product sales in externally published audited financial statements with respect to such Licensed Products for that period ([***]) for Licensed Products sold in the Territory (provided that if for any reason Alexion does not have externally published audited financial statements for such Licensed Product, then net sales amounts for any period that would not be covered by an externally published audited financial statement shall be calculated as specified in this clause (a)), this amount reflecting the [***] at which such Licensed Products were sold [***] by Alexion and its Affiliates ([***]) to Third Parties in that period reduced by [***], taken in accordance with GAAP; and

(b)net sales amounts received by each Sublicensee for sales of such Licensed Product to Third Parties determined in accordance with GAAP.

The calculations described in clauses (a) and (b) above shall exclude [***]. For the avoidance of doubt, the supply of Licensed Product [***].

If a Licensed Product (x) is sold as part of a combination product containing both the Licensed Compound and one or more active pharmaceutical ingredient(s) as separate molecular entity(ies) that are not Licensed Compounds; (y) is sold as part of a combination of a Licensed Product and another pharmaceutical product that contains at least one other active pharmaceutical ingredient that is not a Licensed Compound, where such products are not formulated together but are sold together (i.e., bundled) as a single product and invoiced as one product or (z) is sold in combination with one or more other components or products (such as devices or delivery systems) or services for a single invoice price (in any case ((x), (y) or (z)), a “Combination Product”, and such other active pharmaceutical ingredient(s), component(s), product(s) or services, the “Other Component(s)”), then the Net Sales of such Licensed Product for the purpose of calculating payments owed under this Agreement for sales of such Licensed Product, shall be determined as described below.

In the event a Licensed Product is sold as part of a Combination Product, Net Sales of the Combination Product will be calculated as follows:

(i)If the Licensed Product and the Other Component(s) contained in the Combination Product are sold separately in the same respective dosages in the applicable country in the Territory, Net Sales will be calculated by multiplying the total Net Sales of the Combination Product by the fraction A/(A+B), where A is the average gross selling price in the applicable country in the Territory of the Licensed Product sold separately, and B is the sum of the average gross selling prices in the applicable country in the Territory of the Other Component(s) sold separately, during the applicable Calendar Quarter.

(ii)If the Combination Product and the Licensed Product in the same dosage are sold separately in the applicable country in the Territory, but the average gross selling price of the Other Component(s) in the same dosage(s) in the applicable country in the Territory cannot be determined, Net Sales of the Combination Product shall be equal to the Net Sales of the Combination Product multiplied by the fraction A/C wherein A is the average gross selling price in the applicable country in the Territory of the Licensed Product sold separately and C is the average gross selling price of the Combination Product in the applicable country in the Territory, during the applicable Calendar Quarter.

(iii)If the Combination Product and the Other Component(s) in the same dosage(s) are sold separately, but the average gross selling price of the Licensed Product in the same dosage in the applicable country in the Territory cannot be determined, Net Sales of the Combination Product shall be equal to the Net Sales of the Combination Product multiplied by the following formula: one (1) minus B/C wherein B is the average gross selling price in the applicable country in the Territory of the Other Component(s) sold separately and C is the average gross selling price of the Combination Product in the applicable country in the Territory, during the applicable Calendar Quarter.

(iv)If neither the Licensed Product nor the Other Component(s) contained in the Combination Product are sold separately in the same respective dosages in the applicable country in the Territory, Alexion shall make a good faith reasonable determination of the relative value of the Licensed Product and the Other Component(s) for the purpose of calculating Net Sales of such Combination Product, and shall calculate Net Sales based on such good faith determination; provided, however, that if Eidos disputes that such determination by Alexion represents a reasonable determination of the relative value of the Licensed Product and the Other Component(s) for the purpose of calculating Net Sales of such Combination Product, then such dispute shall be resolved in accordance with Exhibit 12.3(b)(i).

The average gross selling price for the Other Component(s) in the same dosage(s) contained in the Combination Product shall be calculated for a Calendar Quarter by dividing the sales such Other Component(s) in the same dosage(s) in the applicable country in the Territory in such Calendar Quarter by the units of such Other Component(s) in the same dosage(s) in the applicable country in the Territory in such Calendar Quarter, as published by IMS or another mutually agreed independent source.

1.80“New In-License Agreement” has the meaning set forth in Section 11.8(c).

1.81“Non-Defaulting Party” has the meaning set forth in Section 12.2(b)(ii).

1.82“Other Component” has the meaning set forth in Section 1.79.

1.83“Out-of-Pocket Costs” means amounts paid by a Party or any of its Affiliates to a Third Party for goods or services, but shall not include such Party’s, or any of its Affiliates’, internal or general overhead costs or expenses.

1.84“Patent Challenge” has the meaning set forth in Section 12.2(d).

1.85“Patent Prosecution” means activities directed to (a) preparing, filing and prosecuting applications (of all types) for any Patent Right, (b) managing any interference, opposition, re-issue, reexamination, supplemental examination, invalidation proceedings (including inter partes or post-grant review proceedings), revocation, nullification, or cancellation proceeding relating to the foregoing Patent Rights, (c) maintaining issued Patent Right(s), (d) listing in regulatory publications such as the Orange Book and its equivalents (as applicable), (e) obtaining patent term extensions, supplementary protection certificates and the like for issued Patent Right(s), and maintenance thereof, and (f) managing, including settling, any interference, opposition, reexamination, invalidation, revocation, nullification or cancellation proceeding relating to issued Patent Right(s).

1.86“Patent Right” means (a) all patents and patent applications in any country or supranational jurisdiction in the Territory, (b) any substitutions, divisionals, continuations, continuations-in-part, provisional applications, reissues, renewals, registrations, confirmations, re-examinations, extensions, supplementary protection certificates and the like of any such patents or patent applications, (c) foreign counterparts of any of the foregoing, (d) all applications claiming priority to any of the foregoing and (e) any patents issuing on any patent application identified in clauses (a) through (d).

1.87“Person” means any individual, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture, unincorporated organization or association, or Governmental Authority.

1.88“Pharmacovigilance Agreement” has the meaning set forth in Section 4.8.

1.89“PMDA” means the Japanese Pharmaceuticals and Medical Devices Agency, and local counterparts thereto, and any successor agency(ies) or authority thereto having substantially the same function.

1.90“Product Data” means any and all data relating to or arising out of the Development or Manufacture of the Licensed Compound or Licensed Products, or that is otherwise necessary or useful for the Exploitation of the Licensed Compound or Licensed Products in the Field in the Territory, including data collected or resulting from pre-clinical studies or Clinical Trials, CMC data, Manufacturing records and information, and supporting documentation (e.g., protocols, format of case report forms, analysis plans) relating to pre-clinical studies, Clinical Trials or other Development or Manufacturing activities with respect to the Licensed Compound or Licensed Products.

1.91“Product Infringement” has the meaning set forth in Section 11.3(b)(i).

1.92“Publishing Party” has the meaning set forth in Section 8.8.

1.93“Quality Agreement” has the meaning set forth in Section 5.4.

1.94“Rebuttal” has the meaning set forth in Exhibit 12.3(b)(i).

1.95“Receiving Party” has the meaning set forth in Section 8.1.

1.96“Regulatory Approval” means, with respect to a pharmaceutical product in a country, (a) any and all licenses, registrations, authorizations and approvals of the applicable Governmental Authority, including NDAs or any foreign equivalent thereof, as applicable, and (b) if applicable, any and all pricing or reimbursement authorizations and approvals in regulatory jurisdictions where the applicable Governmental Authorities approve or determine the price or reimbursement of pharmaceutical products, in each case ((a) and (b)), that are necessary to Commercialize such pharmaceutical product in such country. Without limiting any of the foregoing, with respect to a Licensed Product, Regulatory Approval for a Licensed Product in the Territory will include pricing approval from the National Health Insurance in the Territory.

1.97“Regulatory Authority” means any Governmental Authority responsible for granting Regulatory Approvals. “Regulatory Authority” includes the USFDA, PMDA and any corresponding national or regional regulatory authorities, and any successor agency of the foregoing.

1.98“Regulatory Documents” means any filing, application or submission with any Regulatory Authority, including authorizations, approvals or clearances arising from the foregoing, including Regulatory Approvals and Investigational New Drug Applications or their equivalents in any jurisdiction, and all written correspondence or written communication with or from the relevant Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with the relevant Regulatory Authority, in each case, with respect to the Licensed Compound or the Licensed Product.

1.99“Reversion License” has the meaning set forth in Section 12.3(b)(i).

1.100“ROW Territory” means all countries of the world outside of the Territory.

1.101“Royalty Term” means, with respect to a given Licensed Product in the Territory, the period commencing on the First Commercial Sale of such Licensed Product in the Territory and ending upon the later to occur of (a) the expiration of the last-to-expire Valid Claim of the Eidos Patents that Covers such Licensed Product in the Territory, or (b) the tenth (10^th) anniversary of such First Commercial Sale.

1.102“Securitization Transaction” has the meaning set forth in Section 13.2(b).

1.103“Selected Agreement” has the meaning set forth in Exhibit 12.3(b)(i).

1.104“Stanford” has the meaning set forth in Section 2.4(a)(i).

1.105“Stanford Agreement” has the meaning set forth in Section 2.4(a)(i).

1.106[***].

1.107“Subcontractor” has the meaning set forth in Section 2.3.

1.108“Sublicensee” means any Third Party, including a co-development, co-promotion or co-marketing partner, to whom Alexion or any of its Affiliates grants a sublicense of the License, or any further sublicensee of such rights (regardless of the number of tiers, layers or levels of sublicenses of such rights), but excluding service providers, CROs, manufacturers, wholesalers, distributors or other Subcontractors.

1.109“Supporting Memorandum” has the meaning set forth in Exhibit 12.3(b)(i).

1.110“Tax” or “Taxes” means all forms of preliminary or finally imposed taxation, domestic and foreign taxes, fees, levies, duties and other assessments or charges of whatever kind (including sales, use, excise, stamp, transfer, property, value added, goods and services, withholding and franchise taxes) together with any interest, penalties or additions payable in connection with such taxes, fees, levies duties and other assessments or charges.

1.111“Technology Transfer” has the meaning set forth in Section 5.3(b).

1.112“Term” has the meaning set forth in Section 12.1.

1.113“Territory” means Japan and its territories and possessions.

1.114“Third Party” means any Person other than a Party or an Affiliate of a Party.

1.115“Third Party Claims” has the meaning set forth in Section 10.1.

1.116“Third Party Licensee” means any Third Party holding a license (whether exclusive or non-exclusive) under the Eidos IP in the Field in the ROW Territory.

1.117“Trademark” means any word, name, symbol, color, designation or device or any combination thereof that functions as a source identifier, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo, business symbol or domain names, whether or not registered.

1.118[***].

1.119[***].

1.120“U.S. Prime Rate” has the meaning set forth in Section 7.4(g).

1.121“United States ” means the United States of America.

1.122“Upstream Licenses” means the Stanford Agreement and any New In-License Agreements.

1.123“Upstream Licensor” means any Third Party licensor that is a party to an Upstream License.

1.124“USFDA” means the United States Food and Drug Administration or any successor agency(ies) or authority thereto having substantially the same function.

1.125“Valid Claim” means either (a) a claim of an issued and unexpired patent or a supplementary protection certificate, which has not been held permanently revoked, unenforceable or invalid by a decision of a court, patent office or other forum of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and that is not admitted to be invalid or unenforceable through reissue, disclaimer or otherwise (i.e., only to the extent the subject matter is disclaimed or is sought to be deleted or amended through reissue), dedicated to the public or abandoned, or (b) a claim of a pending patent application being prosecuted in good faith (i.e., it is reasonably believed that there is a bona fide chance that such pending application will be issued) that has not been abandoned, finally rejected or expired without the possibility of appeal or refiling, provided that “Valid Claim” shall exclude any such claim in such a pending application that has not been granted within [***] following the earliest priority filing date for such claim (unless and until such claim is granted).

Article 2
LICENSE

2.1License Grants to Alexion.

(a)Exclusive License Grant to Alexion. Eidos hereby grants to Alexion an exclusive (even as to Eidos, except as necessary for Eidos to perform its obligations under this Agreement, including the conduct of any ATTRibute Clinical Trial or Additional Clinical Trial in the Territory following a [***] in accordance with Section 4.2(b), or to exercise the retained rights expressly set forth in this Section 2.1(a)), royalty-bearing, non-transferable (except in accordance with Section 13.2) license, with the right to grant sublicenses through multiple tiers (in accordance with Section 2.2), under the Eidos IP to Exploit the Licensed Compound and Licensed Products in the Field in the Territory. For clarity, Eidos retains a right under the Eidos IP, with the right to grant licenses through multiple tiers, to Develop, Manufacture, have Manufactured, use, import, and export Licensed Products anywhere in the world for the purpose of Exploiting the Licensed Products in the ROW Territory, including, notwithstanding the foregoing exclusive license grant, the non-exclusive right to Develop, Manufacture and have Manufactured Licensed Compound and Licensed Product in the Territory (including importing and exporting activities in connection therewith) for Exploiting Licensed Products in the ROW Territory, but excluding, for the avoidance of doubt, any right to Commercialize Licensed Products in the Territory. Notwithstanding anything contained herein to the contrary, except for the ATTRibute-CM Clinical Trial and ATTRibute-PN Clinical Trial in accordance with Section 4.2(b), Eidos may not conduct clinical Development for the Licensed Product in the Territory without the prior written consent of Alexion.

(b)Non-Exclusive License Grant to Alexion. Eidos hereby grants to Alexion a non-exclusive, royalty-free, non-transferable (except in accordance with Section 13.2) license, with the right to grant sublicenses through multiple tiers (in accordance with Section 2.2), under the Eidos IP to Develop, Manufacture, have Manufactured, use, import and export the Licensed Compound and Licensed Products in the Field in the ROW Territory, solely for the purpose of Exploiting the Licensed Compound and Licensed Products in the Field in the Territory. Notwithstanding the foregoing, Alexion may not conduct clinical Development for the Licensed Product in the ROW Territory without Eidos’ prior written consent.

2.2Right to Sublicense.

(a)Alexion shall have the right to grant sublicenses of the License to its Affiliates to fulfill any of its obligations or exercise any of its rights under this Agreement. Each sublicense granted pursuant to this Section 2.2(a) shall be consistent with the terms and conditions of this Agreement. Notwithstanding any such sublicense, Alexion shall remain directly responsible for all of its obligations under this Agreement.

(b)Alexion shall have the right to grant sublicenses of the License to Sublicensees pursuant to this Section 2.2(b). Each sublicense granted pursuant to this Section 2.2(b) shall be subject to a written agreement that is consistent with the terms and conditions of this Agreement. Each such sublicense shall contain a requirement that the Sublicensee comply with all provisions of the applicable Upstream Licenses that are applicable to Alexion and its Sublicensees, and a requirement that the Sublicensee perform and take such actions as may be reasonably required to allow Eidos and Alexion to comply with their obligations thereunder. Further, Alexion shall use commercially reasonable efforts to include in each such sublicense a requirement that the Sublicensee (i) [***] and (ii) provide the following to Alexion if the sublicense agreement terminates: [***]. Alexion shall provide Eidos with a copy of any sublicense it enters into with a Third Party, within [***] after the execution thereof, which copy may be disclosed to the Upstream Licensors, provided that such copy may be subject to redaction as Alexion reasonably believes appropriate to protect confidential business information, including financial provisions and other sensitive information as applicable. Notwithstanding any such sublicense, Alexion will remain directly responsible for all of its obligations under this Agreement.

2.3Right to Subcontract. Alexion shall have the right to engage CROs, contract manufacturing organizations, distributors and other Third Parties to perform its activities under this Agreement (each, a “Subcontractor”), and to grant sublicenses of the License to any such Subcontractor, provided that (i) Alexion shall cause its Subcontractors to be bound by written obligations of confidentiality and non-use at least as restrictive as those set forth in this Agreement, (ii) Alexion shall remain directly responsible for any obligations that have been subcontracted to a Subcontractor as if the Subcontractor were a party hereto, and (iii) for any subcontract entered into after the Effective Date, Alexion will use commercially reasonable efforts to include in such subcontract [***].

2.4Stanford Agreement.

(a)Alexion acknowledges and agrees that:

(i)Eidos obtained the rights to certain Eidos IP from Leland Stanford Junior University (“Stanford”) under that certain Exclusive (Equity) Agreement, dated April 1, 2016, as amended, by and between Stanford and Eidos, as may be amended from time to time (the “Stanford Agreement”);

(ii)the License constitutes a sublicense under the Stanford Agreement and, [***], to the extent required under Section 4.3(A) of the Stanford Agreement, Alexion is subject to and will comply with its obligations under the Stanford Agreement as a sublicensee thereunder;

(iii)[***], Alexion acknowledges and agrees that it shall comply with Sections 4.4 (Litigation by Sublicensee), 8.4 (Accounting), 8.5 (Audit by Stanford), 8.6 (Paying for Audit), and Articles 9 (Exclusions and Negation of Warranties) and 10 (Indemnity) of the Stanford Agreement as such relate to Alexion as a sublicensee under the Stanford Agreement, which, as required by Section 4.3(D) and (E) of the Stanford Agreement, shall be deemed included in this Agreement for the benefit of Stanford, and these Sections and Articles are attached hereto in Exhibit 2.4; and

(iv)notwithstanding any provision of this Agreement to the contrary, (i) Eidos may provide a copy of this Agreement, and any amendment to this Agreement, to Stanford, and (ii) Eidos may provide to Stanford any information required to be provided in accordance with the Stanford Agreement subject to Stanford’s obligations of confidentiality thereunder.

(b)Eidos acknowledges and agrees that:

(i)it has provided Alexion with a true and complete copy of the Stanford Agreement as it exists as of the Effective Date;

(ii)it is solely responsible for making all payments due under the Stanford Agreement; and

(iii)notwithstanding the foregoing, following the Effective Date, Eidos shall use commercially reasonable efforts [***].

2.5Disclosure of the Eidos IP.

(a)Within [***] after the Effective Date, Eidos shall furnish to Alexion, in its then-current format, copies or reasonable access thereto of all documentation or other embodiments of any Eidos Know-How (including Regulatory Documents and Product Data) in the Control of Eidos or any of its Affiliates or Subcontractors as of the Effective Date.

(b)Following the initial transfer described in Section 2.5(a), Eidos shall provide prompt high-level updates to Alexion regarding any newly acquired or generated Eidos Know-How (including Regulatory Documents and Product Data) that comes into the Control of Eidos or any of its Affiliates or Subcontractors during the Term that has not been previously provided or made accessible to Alexion, and, upon Alexion’s reasonable request, promptly transfer to Alexion, in its then-current format, copies, or reasonable access thereto, of such documentation or other embodiments of such Eidos Know-How.

(c)[***] shall be responsible for the cost and expense of the disclosure of Eidos Know-How as set forth in this Section 2.5; provided, however, in the event [***].

2.6No Implied Licenses. Except as expressly set forth herein, neither Party shall acquire any license or other intellectual property interest, by implication or otherwise, under any Patent Rights, Know-How, Trademarks, or other intellectual property rights of the other Party.

2.7Non-Compete.

(a)Except for the rights retained by Eidos as set forth in Section 2.1(a), during the Term, Eidos and its Affiliates shall not, independently or for or with any Third Party, including by grant of any rights to any Third Party, Exploit in the Field in the Territory any pharmaceutical compound or product that is intended to treat any Exclusive Indication.

(b)The restrictions placed on Eidos and its Affiliates in Section 2.7(a) will not apply to the Exploitation by any Acquiring Entity of any pharmaceutical compound or product that is intended to treat any Exclusive Indication, provided that such Exploitation occurs without any access to any Confidential Information of either Party relating to the Licensed Products or any Eidos IP; and provided, further, that a “firewall” of reasonable safeguards is put in place between individuals with access to any such Confidential Information or Eidos IP, on the one hand, and the personnel responsible for the Exploitation of such other pharmaceutical compound or product, on the other hand.

2.8Control of Know-How and Patent Rights by Third Party Licensees. Eidos shall use commercially reasonable efforts to include in each agreement with any Third Party Licensees, CROs, contract manufacturing organizations, distributors and other similar Third Parties that such Third Party will provide the following to Eidos on commercially reasonable terms: (i) the assignment and transfer of ownership and possession of all Regulatory Documents and Regulatory Approvals owned or controlled by such Third Party to the extent such relate solely and exclusively to any Licensed Compound or Licensed Product, (ii) a sublicensable right of reference to all Regulatory Documents and Regulatory Approvals owned or controlled by such Third Party to the extent pertaining to any Licensed Compound or Licensed Product in the Field in the ROW Territory (and not otherwise assigned and transferred to Eidos under clause (i)), (iii) a freely sublicensable non-exclusive license to all Know-How and Patent Rights owned or controlled by such Third Party that are necessary for the Exploitation of Licensed Products in the Field in the Territory and were conceived, discovered, developed or otherwise made by or on behalf of such Third Party Licensee during the exercise of its rights or fulfillment of its obligations pursuant to such agreement, and (iv) the right to disclose to Alexion under this Agreement the Development activities of its Third Party Licensees as contemplated by Section 4.4.

2.9Other Alexion Programs. Eidos understands and acknowledges that Alexion may have present or future initiatives or opportunities, including initiatives or opportunities with its Affiliates or Third Parties, involving products, programs, technologies or processes that are similar to, and in some instances may compete with, the Licensed Compound or Licensed Products, program, technology or process covered by this Agreement. Eidos acknowledges and agrees that nothing in this Agreement will be construed as a representation, warranty or covenant that Alexion will not itself Develop, Manufacture or Commercialize or enter into business relationships with one (1) or more of its Affiliates or Third Parties to Develop, Manufacture or Commercialize, products, programs, technologies or processes that are similar to or that may compete with any product, program, technology or process covered by this Agreement, provided that, for clarity, Alexion will not use Eidos’ Confidential Information or Eidos IP in breach of this Agreement. Nothing set forth in this Section 2.9 shall limit Alexion’s diligence obligations set forth in Section 4.1 and Section 6.1.

Article 3
GOVERNANCE

3.1Alliance Managers. Each Party shall appoint an individual to act as its alliance manager under this Agreement as soon as practicable after the Effective Date (each Party’s appointed individual, its “Alliance Manager”). The Alliance Managers shall: (a) serve as the primary points of contact between the Parties for the purpose of providing the other Party with information on the progress of a Party’s activities under this Agreement; (b) be responsible for facilitating the flow of information and otherwise promoting communication, coordination and collaboration between the Parties; and (c) facilitate the prompt resolution of any disputes. Each Party may replace its Alliance Manager at any time upon [***] prior written notice to the other Party.

3.2Committees.

(a)Joint Development Committee. As soon as practicable but no later than [***] after the Effective Date, the Parties shall establish a joint development committee (the “Joint Development Committee”) to monitor and facilitate the Development of Licensed Products in the Field in the Territory and the ROW Territory.

(b)Joint Commercialization Committee. At either Party’s request, the Parties shall establish a joint commercialization committee (the “Joint Commercialization Committee”) to monitor and facilitate the Commercialization of Licensed Products in the Field in the Territory and the ROW Territory, including the review and discussion of the parameters of a Global Brand Plan for the Licensed Products on an annual basis. The Parties may, in each of their sole discretions, seek to align on aspects of implementation of the Global Brand Plan in their Applicable Territory, including trademarks (names and logos), color and marketing strategy, and promotional campaigns and marketing messages based on the approved labeling of the Licensed Products in each Party’s Applicable Territory, in each case, subject to Applicable Law in each Party’s Applicable Territory.

(c)Role and Purpose. Each such committee (i.e. the Joint Development Committee and Joint Commercialization Committee) shall be composed of an equal number of representatives from each Party with appropriate experience and expertise. Each such committee shall be a forum for information-sharing and discussion between the Parties and shall not have any decision-making authority, and shall meet [***] for [***] and [***] for [***] or at times and frequencies as otherwise mutually agreed by the Parties. Solely to the extent consistent with a Party’s reporting and information sharing obligations elsewhere in this Agreement, each Party will provide such information to the applicable committee as the other Party may reasonably request with respect to Development, Manufacture or Commercialization of Licensed Compounds and Licensed Products in the Field in its Applicable Territory and will keep such committee reasonably informed of such Party’s activities with respect to the Licensed Compounds and Licensed Products in the Applicable Territory.

Article 4
DEVELOPMENT AND REGULATORY MATTERS

4.1Development Diligence. Alexion shall use Commercially Reasonable Efforts to Develop and seek Regulatory Approval for at least [***]. Alexion will have no other diligence obligations under this Agreement with respect to the Development of Licensed Products.

4.2Development Activities.

(a)Alexion shall have the sole right and responsibility to conduct Development activities with respect to the Licensed Compound and the Licensed Products in the Field in the Territory in its sole discretion, except as necessary for Eidos to conduct the ATTRibute-CM Clinical Trial, the ATTRibute-PN Clinical Trial or any Additional Clinical Trial in the Territory following a [***] in accordance with Section 4.2(b).

(b)Except as otherwise expressly set forth herein, Eidos shall have the sole right, and will have sole discretion and control over the Development of the Licensed Compound and Licensed Product for the purpose of obtaining and maintaining Regulatory Approval for the Commercialization of such Licensed Products in the Field in the ROW Territory. Notwithstanding the foregoing, Eidos shall use Commercially Reasonable Efforts to manage, conduct and complete the ATTRibute-CM Clinical Trial and the ATTRibute-PN Clinical Trial through the final dosing of the final subject in such Clinical Trials and completion of the final clinical study report for such Clinical Trials. Eidos shall keep Alexion reasonably informed, on at least [***] basis, as to the status and results of the ATTRibute-CM Clinical Trial and the ATTRibute-PN Clinical Trial. In addition, Eidos shall consider in good faith any comments provided by Alexion with respect to the ATTRibute-CM Clinical Trial and the ATTRibute-PN Clinical Trial, including comments on the design and any potential protocol amendments. Without limiting the foregoing, Alexion shall have the right to (i) require, in its sole discretion, that Eidos [***], or request such [***] at any time thereafter with Eidos’ written consent, not to be unreasonably withheld, conditioned or delayed, (ii) request that Eidos [***] subject to Eidos’ written consent, not to be unreasonably withheld, conditioned or delayed; and (iii) require that Eidos [***]. If Alexion wishes to initiate a [***] pursuant to this Section 4.2(b), Alexion shall provide written notice thereof to Eidos. If Alexion is requesting (rather than requiring) [***], within [***] of Eidos’ receipt of such notice, Eidos shall inform Alexion in writing whether Eidos agrees to the requested [***]. Additionally, if Eidos intends to initiate an additional Clinical Trial in the ROW Territory (each such Clinical Trial, an “Additional Trial”), Eidos shall provide prompt written notice thereof to Alexion. Upon Alexion’s written request [***]. The Parties shall decide by mutual agreement all matters relating to the conduct of the ATTRibute-CM Clinical Trial, ATTRibute-PN Clinical Trial and the Additional Trial in the Territory, including the choice of Clinical Trial sites, and the Parties shall conduct the ATTRibute-CM Clinical Trial, ATTRibute-PN Clinical Trial or the Additional Trial, as applicable, in the Territory in accordance with such decisions.

4.3Development Costs.

(a)As between the Parties, Alexion shall be responsible all costs and expenses of any Development activities conducted by Alexion, its Affiliates, its Sublicensees or its Subcontractors hereunder, and Eidos shall be responsible all costs and expenses of any Development activities conducted by Eidos, its Affiliates or its subcontractors hereunder, except as set forth in this Section 4.3.

(b)If a [***] has been initiated pursuant to Section 4.2(b), [***] shall be responsible for all Out-of-Pocket Costs and FTE Costs, incurred by [***] directly and solely allocable to such [***]. With respect to any [***] to be initiated pursuant to Section 4.2(b), then (i) the Parties will agree upon a reasonably detailed budget for the conduct of the applicable Clinical Trial in the Territory and (ii) [***] shall submit to [***] an Invoice on [***] basis in arrears for all costs, including Out-of-Pocket Costs and FTE Costs, incurred by [***] allocable to such [***] and in accordance with such budget, and [***] shall pay the undisputed amount of any such Invoice within [***] of the receipt of such Invoice.

(c)Upon Alexion’s reasonable request, whether or not a [***] has occurred, Eidos will, [***], cooperate with Alexion to provide Alexion with such reasonable assistance as may be reasonably necessary for Alexion to Develop the Licensed Compound and the Licensed Products in the Field in the Territory, including by making its applicable personnel reasonably available for discussion of such Development.

4.4Development Reports. No less frequently than once per [***] during the Term, each Party shall provide the other Party with a written report summarizing its, its Affiliates’ and its Third Party Licensees’ (with respect to Eidos, and subject to Section 2.8) or Sublicensees’ (with respect to Alexion) Development of Licensed Products, including a summary of the data, timelines and results of such Development, and an overview of future Development activities reasonably contemplated by such Party, the delivery of which shall be provided by the Alliance Managers of each Party; provided that, notwithstanding anything to the contrary in this Agreement, with respect to any Third Party Licensee of Eidos that, despite Eidos’ efforts pursuant to Section 2.8, does not agree to disclose information to Alexion to satisfy the reporting requirements in this Section 4.4, Eidos will ensure that no Confidential Information of Alexion, its Affiliates or Sublicensees is disclosed to such Third Party Licensee, including the information of Alexion, its Affiliates and Sublicensees disclosed to Eidos under this Section 4.4. Each Party shall also establish a secure link that includes adequate encryption safeguards to provide the other Party with electronic access to such information. Such reports shall be the Confidential Information of the Party providing the reports pursuant to Section 8.1.

4.5Regulatory Activities.

(a)Except for the performance of [***] or an Additional Clinical Trial, Alexion shall have the sole right and responsibility, [***], for all regulatory activities leading up to and including the obtaining, holding and maintaining of Regulatory Approvals for Licensed Products from Regulatory Authorities in the Field in the Territory. Notwithstanding the foregoing, Eidos shall have the right to have [***] of Eidos accompany Alexion to each meeting with Regulatory Authorities in the Territory pertaining solely to the Licensed Products in an observational capacity only, and solely to the extent such attendance is permitted by the applicable Regulatory Authorities in the Territory.

(b)At any time following the Effective Date upon Alexion’s request, Eidos shall promptly transfer to Alexion ownership of all Regulatory Approvals and Regulatory Documents in the Field in the Territory in Eidos’ Control. Notwithstanding the foregoing, if [***], Eidos shall obtain, hold and maintain all Regulatory Documents in the Territory [***], and shall thereafter promptly transfer to Alexion ownership of such Regulatory Documents. Notwithstanding anything to the contrary in this Agreement, Alexion or its designee shall own all Regulatory Approvals and, except as expressly set forth in the preceding sentence, all other Regulatory Documents, with respect to the Licensed Products in the Field in the Territory.

(c)Eidos shall in good faith cooperate with Alexion in obtaining, holding and maintaining any Regulatory Approvals, for a Licensed Product in the Field in the Territory by providing, to the extent Controlled by Eidos and not already transferred to Alexion pursuant to Section 2.5 or Section 4.5(b), reasonable access to Regulatory Approvals and Regulatory Documents for the Licensed Compound and Licensed Products in the Field in the Territory or the ROW Territory and reasonable access to and a copy of any and all Product Data (including raw data and records) with respect to the Licensed Compound and Licensed Products.

(d)At Alexion’s reasonable request, Eidos shall, [***], reasonably assist Alexion with the preparation and filing of (i) any regulatory filings and associated documents or (ii) any specific technical documents required for Regulatory Approval.

4.6Right of Reference and Use. Eidos hereby grants to Alexion (and any Affiliate or Sublicensee of Alexion) a right of reference to all Regulatory Documents pertaining to Licensed Products in the Field submitted by or on behalf of Eidos, its Affiliates or, subject to Section 2.8, Third Party Licensees, for the purpose of seeking, obtaining and maintaining Regulatory Approval of Licensed Products in the Field in the Territory (or to seek any approvals from a Regulatory Authority required for the Development or Manufacturing of the Licensed Product in the ROW Territory in accordance with the scope of the license granted to Alexion in Section 2.1(b)). If requested by Alexion, Eidos will, and will cause its Affiliates and, subject to Section 2.8, Third Party Licensees, to provide a signed statement to this effect in accordance with Applicable Laws. Alexion hereby grants to Eidos (and any Affiliate or Third Party Licensee of Eidos) a right of reference to all Regulatory Documents pertaining to Licensed Products submitted by or on behalf of Alexion, its Affiliates or, subject to Section 2.2(b), Sublicensees, for the purpose of seeking, obtaining and maintaining Regulatory Approval as applicable, of Licensed Products in the ROW Territory (or to seek any approvals from a Regulatory Authority required for the Development or Manufacturing of the Licensed Product in the Territory in accordance with Eidos’ retained rights). If requested by Eidos, Alexion will, and will cause its Affiliates and, subject to Section 2.2(b), its Sublicensees, to provide a signed statement to this effect in accordance with Applicable Laws.

4.7Data Exchange and Use.

(a)For the ROW Territory. During the Term, Alexion shall provide prompt high-level updates to Eidos through the Joint Development Committee described in Section 3.2(a) regarding any newly generated Regulatory Document and Product Data that (i) Alexion Controls, (ii) has been generated and finalized by or on behalf of Alexion or its Affiliates or Sublicensees with respect to the Licensed Products in the Field, (iii) is reasonably necessary or useful for Exploitation of the Licensed Product in the Field in the ROW Territory during the Term and (iv)

that has not been previously provided or made accessible to Eidos and, upon Eidos’ reasonable request, Alexion shall promptly provide Eidos with copies of, in its then-current format and language, or reasonable access to, such Regulatory Document and Product Data, in each case solely to support the exercise of the right of reference granted to Eidos under Section 4.6 and the rights granted to Eidos under the following sentence. With respect to any Product Data disclosed by Alexion to Eidos that is not available for use in Eidos’ Regulatory Documents through exercise of the right of reference granted under Section 4.6, Eidos shall have the right, subject in each case to Alexion’s prior written consent, not to be unreasonably withheld, conditioned or delayed, to use such Product Data solely to the extent necessary or useful to obtain or maintain Regulatory Approvals of the Licensed Products in the Field in the ROW Territory.

(b)For the Territory. During the Term, Eidos shall provide prompt high-level updates to Alexion through the Joint Development Committee described in Section 3.2(a) regarding any newly generated Product Data that (i) Eidos Controls (ii) has been generated and finalized by or on behalf of Eidos or its Affiliates or Third Party Licensees with respect to the Licensed Compound or Licensed Products, (iii) is reasonably necessary or useful for Exploitation of the Licensed Product in the Field in the Territory during the Term and (iv) that has not been previously provided or made accessible to Alexion and, upon Alexion’s reasonable request, Eidos shall promptly provide Alexion with copies of, in its then-current format and language, any such Product Data. Upon Alexion’s reasonable request, Eidos shall, subject to Section 2.5 and to the extent not already provided to Alexion under this Agreement, transfer to Alexion copies of, or reasonable access to, records relating to Eidos’ and its Affiliates’ and Third Party Licensees’ Development activities (including access to relevant databases and Product Data and copies of study reports), to the extent that such records are (A) Controlled by Eidos and (B) reasonably necessary or useful to Exploit the Licensed Products in the Field in the Territory.

4.8Adverse Events Reporting . Promptly following the Effective Date, but in no event later than [***] thereafter, Alexion and Eidos shall develop and agree in a written agreement to worldwide safety and pharmacovigilance procedures for the Parties with respect to Licensed Products, such as safety data sharing and exchange, adverse events reporting and prescription events monitoring (the “Pharmacovigilance Agreement”). Such Pharmacovigilance Agreement shall describe the obligations of both Parties with respect to the coordination of collection, investigation, reporting and exchange of information between the Parties concerning adverse events or any other safety issue of any significance and product quality and product complaints involving adverse events, in each case with respect to Licensed Products and sufficient to permit each Party and its Affiliates, Third Party Licensees and Sublicensees to comply with its legal obligations with respect thereto. The Pharmacovigilance Agreement shall be promptly updated if required by changes in Applicable Law. Each Party hereby agrees to comply with its respective obligations under the Pharmacovigilance Agreement and to cause its Affiliates, Third Party Licensees and Sublicensees to comply with such obligations. Without limiting the foregoing, Eidos will be responsible for maintaining a global adverse event database for all Clinical Trials conducted in the Territory and the ROW Territory, [***].

4.9No Harmful Actions. Each Party shall not, and shall use commercially reasonable efforts to cause its Affiliates, Sublicensees (with respect to Alexion), Third Party Licensees (with respect to Eidos) and Subcontractors not to, take any action with respect to the Licensed Compound or a Licensed Product that could reasonably be expected to have an adverse impact upon the other Party’s Regulatory Approval status of the Licensed Compound or any Licensed Product in the other Party’s Applicable Territory. If a Party believes that the other Party is (or any of its Affiliates, Sublicensees (with respect to Alexion), Third Party Licensees (with respect to Eidos) or Subcontractors are) taking or intends to take any action with respect to the Licensed Compound or a Licensed Product that could have an adverse impact upon other Party’s Regulatory Approval status of the Licensed Compound or any Licensed Product in such Party’s Applicable Territory, then the Parties shall discuss in good faith a resolution of such concern.

4.10Notice of Regulatory Action. Each Party shall promptly, but in any event within [***], notify the other Party of any information that it receives regarding any threatened or pending action, inspection or communication by or from a Third Party, including a Regulatory Authority, that would reasonably be expected to materially adversely affect the Exploitation of the Licensed Compound or Licensed Products in the Territory or the ROW Territory.

4.11Eidos Support. In addition to the assistance Eidos has agreed to provide [***] under this Agreement, including under Section 4.3(c) and Section 4.5(d), the Parties understand and agree that it may be necessary for Alexion from time to time to seek additional guidance from Eidos, and Eidos hereby agrees to reasonably provide such additional guidance as a consultant upon the request of Alexion [***]. [***] shall invoice [***], and [***] shall pay [***] all amounts due under this Section 4.11 within [***] following receipt of the applicable Invoice.

Article 5
SUPPLY

5.1Clinical Supply Agreement. Within [***] following the Effective Date, the Parties shall negotiate in good faith a clinical supply agreement containing supply terms and conditions consistent with the principles set forth on Exhibit 5.1 hereto (Supply Agreement Key Terms) and such other terms as are customary for such agreements, including provisions addressing technology transfer of the Eidos Know-How related to the Manufacture of the Licensed Compound and Licensed Products (the “Clinical Supply Agreement”), pursuant to which Eidos will Manufacture and supply to Alexion the Licensed Compound and Licensed Products for the Territory.

5.2Commercial Supply Agreement. At a time specified by Alexion, but in any event as soon as practicable after either (a) [***] or (b) [***], the Parties shall negotiate in good faith a commercial supply agreement on commercially reasonable terms for the commercial supply of Licensed Product in the Territory by Eidos to Alexion (the “Commercial Supply Agreement”).

5.3Third Party Supply.

(a)Eidos CMOs. In the event that (i) the Parties fail to reach agreement on the Clinical Supply Agreement within [***], or such longer period as may be agreed by the Parties, (ii) the Parties fail to reach agreement on the Commercial Supply Agreement within [***], or such longer period as may be agreed by the Parties, or (iii) at any time during the term of the Commercial Supply Agreement, Eidos commits a material breach of the Commercial Supply Agreement, then, in each case ((i) through (iii)), Alexion shall have the right to enter into direct supply agreements with Eidos’ CMOs for the purchase of Licensed Product directly from Eidos’ CMOs at all stages of the manufacturing supply chain and, upon Alexion’s request, Eidos will use commercially reasonable efforts to facilitate Alexion’s entry into such direct supply agreements with such CMOs.

(b)Technology Transfer. If, after using commercially reasonable efforts, Alexion is unable to timely negotiate and enter into direct supply agreements with Eidos’ CMOs to allow for the direct purchase of the Licensed Product pursuant to Section 5.3(a), Alexion may require Eidos to conduct a technology transfer of the manufacturing process (including the transfer of the relevant QC methods) [***] from Eidos, its Affiliates and its CMOs to one or more CMOs of Alexion’s choice, and will provide the assistance reasonably necessary to effectuate such transfer and secure licensure of such CMOs’ facilities, such assistance to include providing to or securing for Alexion, [***], such reasonably sufficient access to data, other information and the personnel of Eidos, its Affiliates and CMOs, as may be necessary or useful for Alexion to enable its CMOs to Manufacture the Licensed Product (such transfer, a “Technology Transfer”); [***].

(c)Eidos’ CMO Agreements. At least [***] prior to execution of any commercial supply agreement with a CMO, Eidos shall provide Alexion with a copy of the proposed terms of such commercial supply agreement. [***].

5.4Quality Agreement. Within [***] following the Effective Date, the Parties shall enter into a separate quality agreement that describes the responsibilities of each Party in the area of technical cooperation and quality assurance with respect to the supply of the Licensed Compound and Licensed Products for the Territory and containing terms and conditions customary for such agreements (the “Quality Agreement”).

Article 6
COMMERCIALIZATION

6.1Commercialization Diligence. Following [***], Alexion shall use Commercially Reasonable Efforts to [***]. Alexion will have no other diligence obligations with respect to the Commercialization of Licensed Products under this Agreement.

6.2Commercialization Activities. Each Party shall have the sole right and responsibility, at its sole cost and expense, to conduct Commercialization activities with respect to the Licensed Compound and the Licensed Products in such Party’s Applicable Territory in its sole discretion. Alexion will provide Eidos with written notice of the First Commercial Sale of each Licensed Product in the Field in the Territory as soon as reasonably practicable after such event; provided, however, that, Alexion will inform Eidos of such event prior to public disclosure of such event by Alexion.

6.3Licensed Product Trademarks.

(a)Each Party shall be solely responsible for developing, selecting, searching, registering and maintaining, and shall be the exclusive owner of, all Licensed Product Trademarks in such Party’s Applicable Territory, except as expressly set forth in Section 6.3(b) and Section 6.3(c).

(b)Eidos hereby grants to Alexion and its Affiliates (i) an exclusive, royalty-free, non-transferable (except in accordance with Section 13.2) license, with the right to grant sublicenses solely in connection with a sublicense of Commercialization rights with respect to a Licensed Product in the Field in the Territory under any Licensed Product Trademarks other than any Trademarks that include any corporate name or logo of Eidos or its Affiliates (such Licensed Product Trademarks, the “Licensed Product-Specific Trademarks”) for all uses in the Field in the Territory and (ii) a non-exclusive, royalty-free, non-transferable (except in accordance with Section 13.2) license, with the right to grant sublicenses solely in connection with a sublicense of Commercialization rights with respect to a Licensed Product in the Field in the Territory under any Licensed Product-Specific Trademarks for use in the Field in the ROW Territory solely in connection with the exercise of Alexion’s rights in the ROW Territory under Section 2.1(b). During the Term, Eidos and its Affiliates shall not use any Licensed Product-Specific Trademark or any other Trademark that is confusingly similar to any Licensed Product-Specific Trademark in the Territory (except the use of the Licensed Product-Specific Trademarks in the Territory solely in connection with the performance of Eidos’ obligations or exercise of its retained rights in the Territory pursuant to Section 2.1(a)), or register or attempt to register any such Licensed Product-Specific Trademark or any other Trademark that is confusingly similar to any Licensed Product-Specific Trademark with any Governmental Authority in the Territory.

(c)Eidos hereby grants to Alexion and its Affiliates a non-exclusive, royalty-free, non-transferable (except in accordance with Section 13.2) license, with the right to grant sublicenses solely in connection with a sublicense of Commercialization rights with respect to a Licensed Product in the Field in the Territory under any Licensed Product Trademarks that include any corporate name or logo of Eidos or its Affiliates, for use solely in connection with the Exploitation of any Licensed Product in the Field in the Territory or, solely in connection with the exercise of Alexion’s rights in the ROW Territory under Section 2.1(b), in the Field in the ROW Territory.

(d)Alexion agrees that any Licensed Product Commercialized in the Field in the Territory under this Agreement in connection with any Licensed Product Trademark shall meet quality standards substantially as high as those maintained by Eidos as of the Effective Date and during the Term with respect to the use of such Licensed Product Trademark. Upon Eidos’ written request, Alexion shall provide samples of Alexion’s use of the Licensed Product Trademark in the Field in the Territory in order for Eidos to confirm compliance with the foregoing quality standards. Notwithstanding anything in this Agreement to the contrary, Alexion shall have no obligation to use any Trademark licensed to Alexion under this Section 6.3 in any manner, including in connection with the Commercialization of any Licensed Products.

6.4No other Trademark Rights. For the avoidance of doubt, except as expressly permitted by this Agreement or as otherwise agreed in writing by the Parties, neither Party will have any right to use the other Party’s or the other Party’s Affiliates’ Trademarks, corporate names or logos in connection with Exploitation of Licensed Products, without first obtaining the other Party’s written consent.

6.5Other Consultation. Solely to the extent permitted by Applicable Law, the Parties may discuss [***].

6.6Diversion. Subject to Applicable Law, each Party covenants and agrees that it shall not, and shall ensure that its Affiliates, Third Party Licensees (with respect to Eidos) and Sublicensees (with respect to Alexion) do not, either directly or indirectly, promote, market, distribute, import, sell or have sold any Licensed Products, including via the Internet or mail order, to any Third Party or to any address or Internet Protocol address or the like in the other Party’s Applicable Territory; provided that each Party shall have the right to attend conferences and meetings of congresses in the other Party’s Applicable Territory and to promote and market, for their Applicable Territory, Licensed Products to Third Party attendees at such conferences and meetings, subject to this Section 6.6. Neither Party shall engage, or shall permit its Affiliates, Third Party Licensees (with respect to Eidos) or Sublicensees (with respect to Alexion) to engage, in any advertising or promotional activities relating to any Licensed Products for use directed primarily to customers or users of Licensed Products located in any country, jurisdiction or region in the other Party’s Applicable Territory, or solicit orders from any prospective purchaser that such Party has reason to believe intends to distribute such Licensed Product in any country, jurisdiction or region in the other Party’s Applicable Territory. If a Party or any of its Affiliates, Third Party Licensees (with respect to Eidos) or Sublicensees (with respect to Alexion) receives any order for Licensed Products for use from a prospective purchaser that intends to distribute such Licensed Product in a country, jurisdiction or region in the other Party’s Applicable Territory, then such Party shall promptly, but in any event within [***], refer that order to such other Party and shall not accept any such orders. Except as otherwise provided herein, neither Party shall, or shall permit its Affiliates, Third Party Licensees (with respect to Eidos) or Sublicensees (with respect to Alexion) to, deliver or tender (or cause or knowingly permit to be delivered or tendered) any Licensed Products for use in the other Party’s Applicable Territory.

Article 7
PAYMENTS

7.1Upfront Payment. Alexion shall pay to Eidos a one-time, non-refundable, non-creditable upfront payment of Twenty-Five Million U.S. Dollars ($25,000,000) within [***] of the Effective Date.

7.2Equity Investment. As of the Effective Date, the Parties have entered into a Stock Purchase Agreement, pursuant to which Alexion will purchase shares of Eidos’ Common Stock.

7.3[***] Milestone Payment. Alexion shall notify Eidos in writing promptly (but in no event later than [***] following achievement thereof) following the [***]. Alexion shall pay to Eidos a one-time, non-refundable, non-creditable milestone payment in the amount of Thirty Million U.S. Dollars ($30,000,000) within [***] after receipt of an Invoice therefor from Eidos. For clarity, the milestone payment set forth in this Section 7.3 shall be [***].

7.4Royalty Payments to Eidos.

(a)Royalty Payments and Rates. Subject to the provisions of Section 7.4(c), Alexion shall, on a Licensed Product-by-Licensed Product basis during the applicable Royalty Term, make royalty payments to Eidos on a [***] basis of [***] percent ([***]%) of the Net Sales of each Licensed Product sold in the Territory.

(b)Royalty Termination Date. Following expiration of the Royalty Term for a given Licensed Product in the Territory: (i) no further royalties shall be payable in respect of sales of such Licensed Product in the Territory and (ii) the License granted to Alexion hereunder with respect to such Licensed Product in the Territory shall automatically become fully paid-up, perpetual, irrevocable and royalty-free.

(c)Royalty Reductions.

(i)Third Party Payments. If Alexion (A) enters into any agreement with a Third Party (including any settlement agreement) to obtain rights under any Know-How or Patent Rights that are [***], (B) agrees pursuant to Section 11.8 to be responsible for payments under any New In-License Agreement pursuant to which Eidos has in-licensed any rights under any Know-How or Patent Rights that are [***], or (C) is subject to a final court or other binding order or ruling that the Exploitation of any Licensed Product by or on behalf of Alexion, its Affiliates or its Sublicensees under this Agreement infringes, misappropriates or otherwise violates any Third Party rights in Know-How or Patent Rights (each of (A), (B) and (C), a “Third Party Obligation”), then Alexion may offset against any royalty payments payable to Eidos under Section 7.4(a) (as reduced under Section 7.4(c)(ii) or Section 7.4(c)(iii)) in a given Calendar Quarter [***] of the amount of any upfront payments, milestone payments, royalties or other amounts paid by Alexion or its Affiliates pursuant to any Third Party Obligations in or prior to such Calendar Quarter, provided that in no event shall any amount payable to Eidos under Section 7.4(a) in a given [***] be reduced by more than [***] as a result of this Section 7.4(c)(i); [***].

(ii)Generic Entry. If (A) a Generic Product is sold by a Third Party in the Territory in any Calendar Quarter during the Royalty Term for a Licensed Product and the Generic Competition Percentage in the Territory for such Calendar Quarter is greater than or equal to [***] or (B) a LP Generic Product is sold by a Third Party in the Territory in any Calendar Quarter during the Royalty Term for a Licensed Product and the LP Generic Competition Percentage in the Territory for such Calendar Quarter is greater than or equal to [***], then the royalty rate under Section 7.4(a) shall be reduced by [***] in such Calendar Quarter.

(iii)Valid Claim Expiration. If, in any Calendar Quarter during the Royalty Term for a Licensed Product, there are no Valid Claims remaining within the Eidos Patents that Cover the composition of matter or method of use of such Licensed Product in the Territory, then the royalty rate under Section 7.4(a) shall be reduced by [***] in such Calendar Quarter and all subsequent Calendar Quarters during the Royalty Term.

(iv)Cumulative Reductions Floor. In no event will the royalty rate under Section 7.4(a) in any given Calendar Quarter during the Royalty Term for any Licensed Product be reduced by more than [***] of the royalty rate that otherwise would have applied in such [***] for such Licensed Product but for the reductions set forth in Section 7.4(c)(i) through Section 7.4(c)(iii). [***].

(d)Payments under Third Party Licenses as of or prior to the Effective Date. Eidos shall be solely responsible for making all payments owed by it to Third Parties (including Stanford under the Stanford Agreement) under any agreement existing as of or prior to the Effective Date pursuant to which Eidos has obtained Control of any of the Eidos IP and Alexion shall not have any obligation to make any such payments on behalf of Eidos or as a sublicensee under any such agreement.

(e)Royalty Reports and Payments. Within [***] after the end of each Calendar Quarter, commencing with the Calendar Quarter of the First Commercial Sale of the first Licensed Product in the Territory, Alexion shall provide Eidos with a report that contains the following information for the applicable Calendar Quarter, on a Licensed Product-by-Licensed Product basis: (i) gross sales and Net Sales (including reasonable detail for deductions from gross sales to Net Sales) on a Licensed Product-by-Licensed Product basis, and (ii) the royalties payable under this Section 7.4 (including reasonable detail for any deductions to such royalties taken pursuant to Section 7.4(c)) for such Calendar Quarter. Concurrently with the delivery of such report, Alexion shall pay to Eidos the royalties payable under this Section 7.4 for such Calendar Quarter .

(f)Payment Method, Currency, and Exchange Rate. All payments to be made by Alexion to Eidos under this Agreement shall be made in Dollars by electronic funds transfer in immediately available funds to a bank account designated in writing by Eidos. For the purposes of calculating any sums due under this Agreement, Alexion shall convert any amount expressed in a foreign currency into Dollar equivalents, calculated using the applicable currency conversion rate as published by Bloomberg, (a) for sales, at the close of business on the date Alexion records net revenue from the applicable sale or (b) for all other payments payable under this Agreement, on the day the payment obligation accrued. In the event that the “applicable currency conversion rate” as published by Bloomberg is discontinued or no longer available, then the Parties shall mutually agree upon an alternate currency conversion index to be used for purposes of this Section 7.4.

(g)Interest. Any undisputed payments not made when due under this Agreement as provided herein will bear interest at the lower of (a) the Prime Rate published in the Wall Street Journal (the “U.S. Prime Rate”) which applied on the first date on which such payment was delinquent plus [***] or (b) the maximum rate permitted by Applicable Law, in each case, compounded quarterly. If the U.S. Prime Rate is no longer published, the Parties will agree upon another nationally recognized rate which has historically been substantially equivalent to the U.S. Prime Rate and utilize such rate retroactively to such time as the U.S. Prime Rate was no longer available.

7.5Taxes.

(a)Responsibility. All payments under or in connection with this Agreement shall be inclusive of any Taxes and each Party shall be responsible for and shall bear, pay or set-off its own Taxes assessed by a tax or other authority except as otherwise set forth in this Agreement.

(b)Withholding Tax. If Applicable Law requires withholding by Alexion or its Affiliates of any Taxes imposed upon Eidos or its Affiliates on account of any royalties and other payments paid under this Agreement for the benefit of Eidos or its Affiliates, such Taxes shall be retained by Alexion or its Affiliates as required by such Applicable Law from such remittable royalty and other payment and shall be timely remitted by Alexion or its Affiliates to the proper Tax authorities on behalf of Eidos or its Affiliates. Official receipts of the remittance by Alexion or its Affiliates of any such withholding Tax shall be reasonably promptly secured and sent by Alexion or its Affiliates to Eidos or its Affiliates as evidence of such payment. The Parties shall cooperate and exercise their reasonable best efforts to ensure that any withholding Taxes imposed on Eidos or its Affiliates are reduced as far as possible under the provisions of any Applicable Law, including that Alexion will cooperate with Eidos to permit the payments made under this Agreement to qualify for the 0% withholding tax rate applicable to “royalties” pursuant to Article 12 of the 1997 Income Tax Treaty between the United States and Ireland to the greatest extent allowable by Applicable Law, such as through the provision of any forms, certifications or other documents that would permit a payment made under this Agreement to so qualify. Notwithstanding the foregoing, the Parties acknowledge and agree that (i) under Applicable Law as of the date hereof, no amounts shall be withheld in respect of royalties or other amounts required to be paid by Alexion or its Affiliates to Eidos or its Affiliates pursuant to this Agreement and (ii) if a Party’s redomiciliation to (or assignment of this Agreement to an entity resident for purposes of an applicable Tax treaty in) a jurisdiction other than the jurisdiction in which such Party is resident for such purposes as of the date of this Agreement (but not, for the avoidance of doubt, a change in Applicable Law) leads to the imposition of withholding Tax liability on the other Party that would not have been imposed in the absence of such action or in an increase in such liability above the liability that would have been imposed in the absence of such action, then such Party will reimburse the other Party for any such additional or increased withholding Tax liability (except to the extent that the other Party can reclaim it, provided that the other Party will be reimbursed for any reasonable out of pocket costs incurred in the reclaim).

(c)Separate Transaction. Eidos and Alexion agree that the transactions contemplated by this Agreement are separate and distinct from the acquisition of Eidos Common Stock pursuant to the Stock Purchase Agreement, and the payments by Alexion to Eidos under Section 7.1, Section 7.3 and Section 7.4 constitute consideration solely for the rights and obligations of this Agreement and not for the Eidos Common Stock acquired pursuant to the Stock Purchase Agreement.

7.6Financial Audits.

(a)By Eidos. Alexion shall keep (and shall cause its Affiliates and Sublicensees to keep) complete and accurate records pertaining to the sale or other disposition of Licensed Products in reasonable detail to permit Eidos to confirm the accuracy of all royalty payments reported, for at least [***] following the end of the Calendar Year to which such records pertain. Eidos shall have the right to cause an independent, certified public accountant of nationally recognized standing and reasonably acceptable to Alexion (the “Auditor”) to audit such records solely to confirm Net Sales and royalty payments for a period covering not more than the preceding [***], provided that such audits may not be performed more than [***]. Such audits shall be performed during normal business hours upon [***] prior written notice to Alexion. The Auditor will execute a written confidentiality agreement that is acceptable to Alexion with Alexion and will disclose to Eidos only such information as is reasonably necessary to provide Eidos and Upstream Licensors with information regarding any actual or potential discrepancies between amounts reported and amounts actually paid or payable under this Agreement. The report of the Auditor will include the methodology and calculations used to determine the results, will be delivered to Eidos and Alexion at the same time, and will be final [***] after delivery to both Parties, it being understood that either Party will have the right during [***] to discuss the report with the Auditor. Any disputes with respect to the findings of such Auditor may be referred by either Party to the dispute resolution procedure set forth in Article 13 within [***]. [***]. [***] Alexion shall pay the amount of any underpayment disclosed in any undisputed Auditor’s report, together with any interest owed thereon within [***] after delivery to the Parties of the final Auditor’s report. If such final Auditor’s report discloses an overpayment by Alexion of the amounts payable hereunder, Alexion shall have the right to offset such overpayment against future payments owed to Eidos under this Agreement following the audit in question. Upon the expiration of [***] the calculation of royalty payments with respect to such [***] shall be binding [***]. Any disclosures or reports disclosed to Eidos under this Section 7.6(a) shall be Alexion’s Confidential Information.

(b)By Alexion. Eidos shall keep (and shall cause its Affiliates and Sublicensees to keep) complete and accurate records pertaining to the FTE Costs and Out-of-Pocket Costs incurred by Eidos and its Affiliates in the conduct of (1) [***] and (2) if a [***] is initiated pursuant to Section 4.2(b), the applicable [***], for at least [***] following the end of the [***] to which such records pertain. Upon [***] prior notice from Alexion, Eidos shall permit an independent certified public accounting firm of nationally recognized standing selected by Alexion and reasonably acceptable to Eidos, to examine, at Alexion’s sole expense, the relevant books and records of Eidos and its Affiliates as may be reasonably necessary to verify Eidos’ and its Affiliates’ FTE Costs and Out-of-Pocket Costs invoiced by Eidos under Section 4.11 or Section 4.3(b). An examination by Alexion under this Section 7.6(b) shall occur not more than once in any Calendar Year and shall be limited to the pertinent books and records for any Calendar Year ending not more than [***]. The accounting firm shall be provided access to such books and records at Eidos’ or its Affiliates’ facility(ies) where such books and records are normally kept and such examination shall be conducted during Eidos’ normal business hours. The auditor will execute a written confidentiality agreement that is acceptable to Eidos with Eidos and will disclose to Alexion only such information as is reasonably necessary to provide Alexion with information regarding any actual or potential discrepancies between amounts invoiced and such costs and expenses actually incurred by Eidos and its Affiliates. Upon completion of the audit, the accounting firm shall provide both Eidos and Alexion with a written report disclosing any

discrepancies in the invoices submitted by Eidos and such costs and expenses actually incurred by Eidos and its Affiliates, and, in each case, the specific details concerning any discrepancies. [***]. Alexion shall pay the amount of any underpayment disclosed in any undisputed Auditor’s report, together with any interest owed thereon within [***] after delivery to the Parties of the final Auditor’s report. If such final Auditor’s report discloses any overpayment by Alexion of the amounts payable hereunder, Alexion shall have the right to offset such overpayment against future payments owed to Eidos under this Agreement following the audit in question. Any disclosures or reports disclosed to Alexion under this Section 7.6(b) shall be Eidos’ Confidential Information.

Article 8
CONFIDENTIALITY; PUBLICATION

8.1Confidential Information. “Confidential Information” means all non-public Know-How or other confidential or proprietary information, including proprietary materials or information, ideas, inventions, discoveries, concepts, compounds, compositions, formulations, formulas, practices, procedures, processes, methods, knowledge, know-how, trade secrets, technology, inventories, machines, techniques, development, designs, drawings, computer programs, skill, experience, documents, apparatus, results, clinical and regulatory strategies, regulatory documentation, information and submissions pertaining to or made in association with Regulatory Documents, data (including pharmacological, toxicological, and clinical data, raw data, analytical and quality control data, manufacturing data and descriptions, patent and legal data, market data, financial data or descriptions), devices, assays, chemical formulations, specifications, material, product samples and other samples, physical, chemical and biological materials and compounds, and the like, transferred, disclosed or otherwise made available by or on behalf of a Party (the “Disclosing Party”) to the other Party or its representatives (the “Receiving Party”) prior to, on or after the Effective Date, whether or not patentable and whether or not disclosed in written, oral graphical, machine-readable, electronic or other form or otherwise observed by the Receiving Party, and whether or not such information is marked as confidential or proprietary. It is understood and agreed by the Parties that the terms and conditions of this Agreement will be considered Confidential Information of both Parties and kept confidential by each of the Parties as set forth in this Article 8. For clarity, the Eidos IP will be Confidential Information of Eidos.

8.2Non-Disclosure and Non-Use Obligation. Except as otherwise expressly set forth herein, the Receiving Party shall keep the Confidential Information of the Disclosing Party confidential using at least the same degree of care with which the Receiving Party holds its own confidential information, but in no event less than a commercially reasonable degree of care, and shall not (i) disclose such Confidential Information to any person or entity without the prior written approval of the Disclosing Party, except, solely to the extent necessary to exercise its rights or perform its obligations under this Agreement, to its employees, Affiliates, Sublicensees (with respect to Alexion), Third Party Licensees (with respect to Eidos) and contractors, consultants or agents who have a need to know such Confidential Information, all of whom will be similarly bound by the provisions of this Article 8 and for whose compliance herewith the Disclosing Party will be responsible, or (ii) use such Confidential Information for any purpose other than for the purposes contemplated by this Agreement. The Receiving Party will use diligent efforts to cause the foregoing Persons to comply with the restrictions on use and disclosure of the Disclosing Party’s Confidential Information set forth in this Section 8.2, and shall be responsible for ensuring that such Persons maintain the Disclosing Party’s Confidential Information in accordance with this Article 8.

8.3Return of Confidential Information. Upon the expiration or termination of this Agreement, the Receiving Party shall return to the Disclosing Party (or, as directed by the Disclosing Party, destroy) all Confidential Information of the Disclosing Party that is in the Receiving Party’s possession or control, except, with respect to Alexion as the Receiving Party, to the extent Alexion has continuing rights to use any such Confidential Information of Eidos pursuant to Section 7.4(b); provided, however, that one (1) copy of any Confidential Information of the Disclosing Party may be retained and stored solely for the purpose of determining its obligations under this Agreement, provided that the non-disclosure and non-use obligation under this Article 8 shall continue to apply to any such copy. In addition, the Receiving Party shall not be required to return or destroy Confidential Information contained in any computer system back-up records made in the ordinary course of business, provided that such Confidential Information may not be accessed without the Disclosing Party’s prior written consent or as required by Applicable Law, and that such Confidential Information remains subject to the non-disclosure and non-use obligations under this Article 8.

8.4Exemption. The foregoing confidentiality and non-use obligations shall not apply to: (i) information already in the possession of the Receiving Party prior to its disclosure by the Disclosing Party as evidenced by contemporaneous written records; (ii) information that is already in the public domain as of the date of disclosure to the Receiving Party or that comes into the public domain thereafter by publication or otherwise through no breach of the obligations of confidentiality and non-use hereunder by the Receiving Party, including with respect to Section 8.8; (iii) information that has been disclosed to the Receiving Party from another source free from any obligation of confidentiality and that was not directly or indirectly obtained from the Disclosing Party; or (iv) information that is developed independently by employees, subcontractors, consultants or agents of the Receiving Party or any of its Affiliates without use of, access to, or reliance upon the Disclosing Party’s Confidential Information, as evidenced by contemporaneous written records.

8.5Permitted Disclosures. In addition to the exceptions contained in Section 8.2 and Section 8.4, the Receiving Party may disclose Confidential Information of the Disclosing Party to the extent (and solely to the extent) that such disclosure is reasonably necessary in the following instances:

(a)to comply with Applicable Law (including any securities law or regulation or the rules of a securities exchange pursuant to Section 8.6 below) or the order of a court of competent jurisdiction, provided that, where legally permissible, the Receiving Party promptly notifies the Disclosing Party of such obligation sufficiently prior to making such disclosure, so as to allow the Disclosing Party adequate time to take whatever action it may deem appropriate to protect the confidentiality of the information to be disclosed, and fully cooperates with the Disclosing Party, if so requested, in maintaining the confidentiality of such information by applying for a protective order or any similar legal instrument. In any event, the Receiving Party shall only disclose such Confidential Information to the extent required under Applicable Law and shall continue to treat such information as Confidential Information for all other purposes under this Agreement;

(b)to prosecute or defend litigation or to otherwise exercise its rights or perform its obligations in Section 11.4, to obtain or maintain Regulatory Approvals and other regulatory filings and communications, to file or prosecute patent applications as contemplated by this Agreement and to enforce Patent Rights in connection with the Receiving Party’s rights and obligations pursuant to this Agreement; and

(c)to allow the Receiving Party to exercise its rights and perform its obligations under this Agreement, provided that such disclosure is covered by terms of confidentiality and non-use at least as restrictive as those set forth herein (but of duration customary in confidentiality agreements entered into for a similar purpose).

8.6Disclosure of Agreement. Either Party may disclose the terms of this Agreement (a) to the extent required or advisable to comply with the rules and regulations promulgated by the United States Securities and Exchange Commission or any equivalent governmental agency in the Territory, [***]; (b) to actual acquirers, permitted assignees, merger partners, existing investment bankers, investors and lenders or financing sources, provided that such Third Party has executed with such Party, and such Party has provided to the other Party, a copy of a confidentiality agreement (redacted for name of party, economic terms or other competitive information) with terms at least as protective with respect to Confidential Information as those contained herein, in a form reasonably acceptable to the other Party (which acceptance shall not be unreasonably withheld, conditioned or delayed) (but of duration customary in confidentiality agreements entered into for similar purpose), (c) for customary discussions and other disclosures with and to bona fide prospective acquirers, permitted assignees or merger candidates or to bona fide potential investment bankers, investors and lenders, or financing sources in a redacted form of this Agreement or its terms which shall be redacted in respect of financial terms, including payment amounts, provided that either Party may disclose an unredacted form of this Agreement (including the foregoing information regarding payments) to such parties, but only at such time as such Third Party has executed with such Party, and such Party has provided to the other Party, a copy of a confidentiality agreement (redacted for name of party, economic terms or other competitive information) with terms at least as protective with respect to Confidential Information as those contained herein, in a form reasonably acceptable to the other Party (which acceptance shall not be unreasonably withheld, conditioned or delayed) (but of duration customary in confidentiality agreements entered into for similar purpose), [***]; and (d) to the extent necessary to perform such Party’s obligations or exercise its rights under this Agreement, to any Upstream Licensor, or any actual or potential licensee, sublicensee or collaborator of such Party with respect to the Licensed Compound or Licensed Products, provided that (1) any such Upstream Licensor or actual or potential, licensee, sublicensee or collaborator agree in writing to be bound by obligations of confidentiality and non-use no less protective of the Disclosing Party than those set forth in this Article 8 [***].

8.7Publicity; Use of Name and Logo. The Parties have agreed on a press release announcing this Agreement, which is attached hereto as Exhibit 8.7, to be issued by the Parties on such date and time as may be agreed by the Parties. Except to the extent expressly permitted under this Agreement or, if executed, the Clinical Supply Agreement, the Commercial Supply Agreement the Quality Agreement or the Pharmacovigilance Agreement, or as required by Applicable Laws, each Party will not use the other Party’s or its Affiliates’ name or logo in any label, press release or product advertising, or for any other promotional purpose, without first obtaining the other Party’s written consent.

8.8Publications. Except for disclosures permitted under this Article 8, neither Party shall have the right to make any publication or presentation that relates to the scientific or technical results of any Development activities with respect to the Licensed Products. If either Party (the “Publishing Party”) wishes to publish or present in a public forum the scientific or technical results of any Development activities with respect to the Licensed Products, the Publishing Party shall provide the other Party the opportunity to review any proposed abstracts, manuscripts or scientific presentations (including verbal presentations) with respect thereto by delivering a copy thereof (if applicable) to the other Party at least [***] prior to their intended submission for publication. The other Party shall have [***] from its receipt of any such copy of the proposed disclosure in which to notify the Publishing Party in writing of approval of the disclosure, such approval not to be unreasonably withheld, conditioned or delayed. Each Party shall comply with (a) the other Party’s internal publication policy as well as its own internal publication policy, if any, (b) the other Party’s request to modify or delay the timing of any publication or presentation for patenting reasons, (c) the guidelines issued by the academic journals or scientific meetings applicable to the publication, and (d) guidelines by International Committee of Medical Journal Editors. Each Party also will have the right to require that its Confidential Information that would be disclosed in a publication of the other Party be deleted prior to such publication. Each Party will acknowledge the other Party’s contributions in any such publication unless otherwise instructed by such other Party. In addition to the foregoing, with respect to any disclosures by Alexion, such disclosures will be subject at all times to any publicity or publication requirements set forth in any Upstream License of which Alexion is aware pursuant to Section 11.8.

8.9Engaging Individuals. Each Party hereby agrees that all Persons engaged to perform any activities under this Agreement shall be contractually bound by confidentiality obligations at least as restrictive as the obligations of confidentiality and non-use set forth in this Article 8 prior to performing such activities.

8.10Survival. This Article 8 shall survive the expiration or termination of this Agreement and shall remain in full force and effect for [***] after such expiration or termination.

Article 9
REPRESENTATIONS, WARRANTIES, AND COVENANTS

9.1Representations, Warranties and Covenants of Each Party. Each Party represents and warrants to the other Party as of the Effective Date, and as applicable, covenants to the other Party, that:

(a)it is validly existing and in good standing under the Applicable Laws of the jurisdiction of its incorporation and has the full right, power and authority to enter into this Agreement, conduct the activities allocated to it under this Agreement, grant the licenses and grant and assign the rights under this Agreement and disclose such information and Know-How that is disclosed in performance of its obligations under this Agreement;

(b)this Agreement has been duly executed by it and 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 Applicable Law of any court, governmental body or administrative or other agency having jurisdiction over it;

(c)neither it, nor any of its Affiliates are party to any agreements, oral or written, that conflict with its obligations under this Agreement; and

(d)neither it, nor any of its Affiliates, have been debarred, and during the Term, neither it, nor any of its Affiliates shall use, in any capacity in connection with the obligations to be performed under this Agreement, any Person who has been debarred. Each Party further covenants that if, during the Term of this Agreement, it becomes aware that it or any of its or its Affiliates’ employees or agents performing under this Agreement is the subject of any investigation or proceeding that could lead to that Party becoming a debarred entity or individual, an excluded entity or individual or a convicted entity or individual, such Party will promptly notify the other Party.

9.2 Representations and Warranties of Eidos. Eidos represents and warrants to Alexion as of the Effective Date, and as applicable, covenants, that:

(a) all Eidos Patents existing as of the Effective Date are set forth on Exhibit 1.41 hereto, and all Eidos Patents included therein are (i) valid and enforceable, (ii) being diligently prosecuted in the respective patent offices in the Territory in accordance with Applicable Law, and (iii) have been filed and maintained properly and correctly and all applicable fees have been paid on or before the due date for such payments ;

(b)except as set forth on Exhibit 9.2(b), Eidos is the sole and exclusive owner of the Eidos IP licensed by Eidos to Alexion under this Agreement except for that Eidos IP in-licensed under the Stanford Agreement, and Eidos exclusively Controls all right, title and interest in the Eidos IP licensed by Eidos and its Affiliates to Alexion under this Agreement;

(c)neither Eidos, nor any of its Affiliates, have previously assigned, transferred, conveyed or otherwise encumbered, and shall not assign, transfer, convey or other encumber during the Term, its right, title or interest in or to the Eidos IP in a manner that would prevent Alexion or its Affiliates, Subcontractors or Sublicensees from researching, Developing, Manufacturing or Commercializing Licensed Products or from otherwise exploiting its rights and licenses granted or assigned by Eidos hereunder;

(d) there are no claims, judgments or settlements against or pending, or amounts with respect thereto, owed by Eidos or any of its Affiliates, with respect to the Eidos IP and Eidos has not received written notice threatening any such claims, judgments or settlements;

(e) all information disclosed to Alexion by Eidos relating to the Eidos IP is, at the time of disclosure, accurate in all material respects;

(f)to Eidos’ knowledge, no person is infringing or threatening to infringe or misappropriate or threatening to misappropriate the Eidos Patents;

(g)each person who has or has had any rights in or to any Eidos IP owned by Eidos or its Affiliates existing as of the Effective Date has assigned and has executed an agreement assigning its entire right, title and interest in and to such Eidos IP to Eidos or its applicable Affiliate, and, to Eidos’ knowledge, each person who has or has had any rights in or to any Eidos IP that Eidos has in-licensed from a Third Party as of the Effective Date has assigned and has executed an agreement assigning its entire right, title and interest in and to such Eidos IP to such Third Party;

(h)it is entitled to grant the licenses and assign the rights according to Article 2 to Alexion, and that it has taken all appropriate measures under all Applicable Laws to grant such licenses and assign such rights; and

(i)to Eidos’ knowledge, other than the Eidos IP, there are no Patent Rights (including any Patent Rights Controlled by a Third Party) that would be infringed, either by Alexion or by Eidos, in the course of Alexion’s Exploitation of the Licensed Compound or any Licensed Product.

9.3Representations, Warranties and Covenants of Eidos Concerning the Stanford Agreement. In addition to Section 9.2, Eidos represents and warrants to Alexion, as of the Effective Date that:

(a)the Stanford Agreement is in full force and effect and has not been materially modified or amended from that provided to Alexion as of the Effective Date;

(b)Eidos is in compliance, in all material respects, with the Stanford Agreement, and no circumstances exist which could reasonably be expected to result in a breach or default of the Stanford Agreement;

(c)Eidos has not waived any of its material rights under the Stanford Agreement, and, to its knowledge, no such material rights have lapsed or otherwise expired or been terminated;

(d)Eidos shall fulfill its obligations under the Stanford Agreement and shall not take any action or make any omission that would reasonably be expected to give rise to a termination right of Stanford under the Stanford Agreement;

(e)Eidos shall not terminate the Stanford Agreement either (i) in its entirety or (ii) in part in a manner that could reasonably be expect to adversely affect the License or any of Alexion’s rights or obligations under this Agreement, in each case without Alexion’s prior written consent;

(f)Eidos shall not modify or amend the Stanford Agreement, or waive any of its rights under the Stanford Agreement, in a manner that could reasonably be expected to adversely affect the License or any of Alexion’s rights or obligations under this Agreement, without Alexion’s prior written consent;

(g)Eidos shall furnish Alexion with copies of any breach notification that Eidos receives from Stanford in connection with the Stanford Agreement;

(h)Eidos shall furnish Alexion with copies of all notices and correspondence that Eidos receives from Stanford in connection with the Stanford Agreement relating to Alexion’s rights or obligations under this Agreement or that could reasonably be expected to adversely affect the License, within a reasonable period following Eidos’ receipt of the same; provided that Eidos may redact financial and confidential portions of any such notices and correspondence and any other information contained in such notices and correspondence that does not relate to or impact the License or any of Alexion’s rights or obligations under this Agreement; and

(i)Alexion may provide to any Affiliate or Sublicensee a copy of the Stanford Agreement and this Agreement; provided that such Affiliate or Sublicensee is subject to confidentiality and non-use obligations no less stringent than those set forth in Article 8.

9.4Covenant of Eidos. Eidos covenants to Alexion that:

(a)during the Term, Eidos will not make any commitment to any Third Party in conflict with the rights granted by it hereunder; and

(b)Neither Eidos, nor any of its Affiliates, shall assign, transfer, convey or otherwise encumber during the Term, its right, title or interest in or to the Eidos IP in a manner that would prevent (i) Eidos from performing the ATTRibute Clinical Trials in accordance with this Agreement or (ii) Alexion or its Affiliates, Subcontractors and Sublicensees from researching, Developing, Manufacturing or Commercializing Products or from otherwise exploiting its rights and licenses granted or assigned by Eidos hereunder.

9.5Compliance with Law.

(a)Each Party hereby covenants to the other Party that, in the course of performing its obligations and exercising its rights under this Agreement, it shall comply with all Applicable Laws, including, as applicable, cGMP, GCP, and GLP standards, and will contractually obligate all Affiliates, permitted collaborators and Sublicensees (in the case of Alexion) to comply with such Applicable Laws in exercising their rights and fulfilling their obligations under this Agreement, and shall not knowingly employ or engage any Person who has been debarred by any Regulatory Authority, or, to its knowledge, is the subject of debarment proceedings by a Regulatory Authority.

(b)Eidos hereby covenants to Alexion that, in the course of Exploiting Licensed Compounds and Licensed Products, it shall comply with all Applicable Laws, including, as applicable, cGMP, GCP, and GLP standards, and will contractually obligate all Affiliates, permitted collaborators and Third Party Licensees to comply with such Applicable Laws in exercising their rights and fulfilling their obligations under this Agreement, and shall not knowingly employ or engage any Person who has been debarred by any Regulatory Authority, or, to its knowledge, is the subject of debarment proceedings by a Regulatory Authority.

(c)Without limiting the generality of Section 9.5(a), each Party will comply with all Applicable Laws concerning bribery, money laundering, or corrupt practices or which in any manner prohibit the giving of anything of value to any official, agent, or employee of any government, political party, or public international organization, candidate for public office, health care professional, or to any officer, director, employee, or representative of any other organization specifically including the U.S. Foreign Corrupt Practices Act, and the UK Bribery Act, in each case, in connection with the activities conducted pursuant to this Agreement. Each Party will contractually obligate any contractors, subcontractors, Sublicensees, Third Party Licensees or other Persons that provide services to such Party in connection with this Agreement to comply with the Parties’ obligations under this Section 9.5(c).

9.6NO OTHER WARRANTIES. EXCEPT AS EXPRESSLY STATED IN THIS ARTICLE 9, (A) NO REPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF EIDOS OR ALEXION; AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE ARE EXPRESSLY DISCLAIMED, INCLUDING ANY CONDITIONS AND WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OR MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY WITH RESPECT TO THE LICENSED COMPOUND OR LICENSED PRODUCT.

Article 10
INDEMNIFICATION

10.1By Alexion. Alexion shall indemnify, defend and hold harmless Eidos, its Affiliates, and their directors, officers, employees and agents, and their respective successors, heirs and assigns (individually and collectively, the “Eidos Indemnitee(s)”) from and against all losses, liabilities, damages, judgments, awards, costs and expenses (including reasonable attorneys’ fees) (individually and collectively, “Losses”) incurred in connection with any claims, demands, actions, suits or other proceedings by any Third Party (individually and collectively, “Third Party Claims”) to the extent arising from: (a) the Exploitation of the Licensed Products by or on behalf of Alexion or any of its Affiliates, Sublicensees or Subcontractors (but excluding (1) [***] and (2) [***] (b) the gross negligence or willful misconduct of Alexion or its Affiliates, Sublicensees or Subcontractors, or any Alexion Indemnitees, (c) Alexion’s breach of any of its representations or warranties made in or pursuant to this Agreement or any Alexion covenants or obligations set forth in or entered into pursuant to this Agreement, or (d) failure of Alexion or its Affiliates, Sublicensees or Subcontractors to abide by any Applicable Laws, in each case of clauses (a) through (d) above, except to the extent such Losses arise out of any matter for which Eidos has obligations of indemnification pursuant to Section 10.2, with respect to which each Party will indemnify the other in proportion to their respective liability for such Losses.

10.2By Eidos. Eidos shall indemnify, defend and hold harmless Alexion, its Affiliates, and their directors, officers, employees and agents, and their respective successors, heirs and assigns (individually and collectively, the “Alexion Indemnitee(s)”) from and against all Losses incurred in connection with any Third Party Claims to the extent arising from (a) the Exploitation of the Licensed Products by or on behalf of Eidos or any of its Affiliates, Third Party Licensees or Subcontractors, (b) the gross negligence or willful misconduct of Eidos or its Affiliates, Third Party Licensees or Subcontractors, or any Eidos Indemnitees, (c) Eidos’ breach of any of its representations or warranties made in or pursuant to this Agreement or any Eidos covenants or obligations set forth in or entered into pursuant to this Agreement, or (d) failure of Eidos or its Affiliates, Third Party Licensees or Subcontractors to abide by any Applicable Laws, in each case of clauses (a) through (d) above, except to the extent such Losses arise out of any matter for which Alexion has obligations of indemnification pursuant to Section 10.1, with respect to which each Party will indemnify the other in proportion to their respective liability for such Losses .

10.3Indemnification Procedure. In the event that a Party seeks indemnification hereunder with respect to a Third Party Claim, the Party seeking indemnification (the “Indemnified Party”) shall promptly notify the other Party (the “Indemnifying Party”) in writing (an “Indemnification Claim Notice”) of any Third Party Claim in respect of which it intends to claim indemnification under this Article 10 upon actual knowledge of any such claim or

proceeding resulting in Losses, but in no event will the Indemnifying Party be liable for any Losses that result from any delay in providing such notice. The Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Losses (to the extent that the nature and amount of such Losses is known at such time). The Indemnifying Party may, at its option, assume exclusive control of the defense and settlement of the Third Party Claim, subject to the limitations on settlement set forth below. If the Indemnifying Party assumes such defense, then such assumption by the Indemnifying Party will not be construed as an acknowledgement that the Indemnifying Party is liable to indemnify the Indemnified Party of any defenses it may assert against the Indemnified Party’s claim for indemnification and the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the Indemnifying Party (the Indemnifying Party will consult with the Indemnified Party with respect to a possible conflict of interest of such counsel retained by the Indemnifying Party). The Indemnified Party will have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying Party. If the Indemnifying Party does not commence actions to assume control of the defense of a Third Party Claim within [***] after the receipt by the Indemnifying Party of the Indemnification Claim Notice required pursuant to this Section 10.3, the Indemnified Party will have the right to defend such claim in such manner as it may deem appropriate at the reasonable cost and expense of the Indemnifying Party. The Indemnified Party shall cooperate as may be reasonably requested by the Indemnifying Party (and at the Indemnifying Party’s expense) in order to ensure the proper and adequate defense of any action, claim or liability covered by this indemnification. The Indemnifying Party may not settle or otherwise dispose of any Third Party Claim without the prior written consent of the Indemnified Party unless such settlement includes only the payment of monetary damages (which are fully paid by the Indemnifying Party), does not impose any injunctive or equitable relief upon the Indemnified Party, does not require any admission or acknowledgment of liability or fault of the Indemnified Party and contains an unconditional release of the Indemnified Party in respect of such Third Party Claim. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party will admit any liability with respect to or settle or otherwise dispose of any Third Party Claim for which the Indemnifying Party may be liable for Losses under this Agreement without the prior written consent of the Indemnifying Party, such consent not to be unreasonably withheld.

10.4Mitigation of Loss. Each Indemnified Party shall take and shall procure that its Affiliates take all such reasonable steps and actions as are reasonably necessary or as the Indemnifying Party may reasonably require in order to mitigate any claims (or potential losses or damages) under this Article 10. Nothing in this Agreement shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.

10.5Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT or the exercise of its rights or the performance of its obligations hereunder, including any lost profits arising out of this agreement, in each case, however caused and on any theory of liability whether in contract, tort, negligence, breach of statutory duty or otherwise, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 10.5 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER SECTION 10.1 OR SECTION 10.2, OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF ITS OBLIGATIONS UNDER Article 8 OR, WITH RESPECT TO EIDOS, SECTION 2.7.

10.6Insurance. Each Party shall procure and maintain insurance, including product liability insurance, with respect to its activities hereunder that is consistent with normal business practices of prudent companies similarly situated at all times during which any Licensed Product is being clinically tested in human subjects or commercially distributed or sold. Each Party shall provide the other Party with evidence of such insurance upon request and shall provide the other Party with written notice at least [***] prior to the cancellation, non-renewal or material changes in such insurance. Notwithstanding the foregoing, either Party may self-insure in whole or in part the insurance requirements described above, provided such Party continues to be investment grade determined by reputable and accepted financial rating agencies. Such insurance shall not be construed to create a limit of each Party’s liability with respect to its indemnification obligations under this Article 10.

Article 11
INTELLECTUAL PROPERTY

11.1Ownership . As between the Parties, each Party shall own and retain ownership of all Know-How and Patent Rights (a) owned by such Party as of the Effective Date or that come into the Control of such Party during the Term outside the scope of this Agreement, or (b) invented by the employees or representatives of such Party in the course of performance of activities pursuant to this Agreement. Inventorship of any inventions conceived or reduced to practice in the course of performance of activities pursuant to this Agreement shall be determined in accordance with U.S. patent laws.

11.2Patent Prosecution.

(a)Eidos Patents.

(i)As between the Parties, Eidos shall have the first right to control, and shall use diligent, good faith efforts to conduct, in consultation with Alexion, the Patent Prosecution of all Eidos Patents in the Territory, [***]. Without limiting the foregoing, Eidos shall file Eidos Patents in the Territory claiming any Eidos Know-How identified by Alexion as suitable for patenting purposes, as reasonably requested by Alexion, provided, however, that if prosecuting such Know-How would materially harm Eidos, Eidos’ Patent Rights strategy or Patents Rights with respect to other products, Eidos will notify Alexion of such circumstance and shall not be required to prosecute Patent Rights claiming such Know-How. If Eidos intends to abandon the Patent Prosecution of any Eidos Patent in the Territory, Eidos shall give Alexion prompt notice thereof (not less than [***] before any action is required to avoid abandonment or lapse), and Alexion shall have the right to continue such Patent Prosecution of such Eidos Patent in the Territory, [***]. To effect Alexion’s right to assume Eidos’ prosecution rights and obligations with respect to any Eidos Patent in the Territory pursuant to this Section 11.2(a)(i), Eidos shall reasonably cooperate with and assist Alexion in connection with its activities under this Section 11.2(a)(i), upon Alexion’s reasonable request, including by making scientists and scientific records reasonably available and the execution of all such documents and instruments and the performance of such acts as may be reasonably necessary in order to permit Alexion to continue any Patent Prosecution of such Eidos Patent.

(ii)Eidos shall have the sole right to control, in its sole discretion, the Patent Prosecution of all Eidos Patents outside the Territory, [***].

(iii)The Party conducting Patent Prosecution of any Patent Right under Section 11.2(a) shall consult with the other Party and keep such other Party reasonably informed of the Patent Prosecution of the Patent Rights in the Territory. The prosecuting Party shall provide the other Party with copies of all material correspondence received from any patent authority in the Territory in connection therewith. In addition, the prosecuting Party shall provide the other Party with drafts of all proposed material filings and correspondence to any patent authority in the Territory in connection with the Patent Prosecution of the Patents Right at least [***] prior (or such shorter period prior if it is not reasonably practicable to provide such copies [***] prior) to filing to allow for review and comment by such other Party, and shall consider in good faith timely comments from such other Party thereon; [***]. The prosecuting Party shall also furnish the other Party with copies of all final filings and responses made to any patent authority in the Territory with respect to the Patent Rights being prosecuted by such Party in a timely manner following submission thereof.

(b)Other Patents. Except as expressly set forth in this Section 11.2, each Party shall have the sole right, in its sole discretion, to conduct Patent Prosecution with respect to any and all Patent Rights owned or Controlled by such Party, [***].

(c)Cooperation. Each Party shall provide the other Party all reasonable assistance and cooperation in the Patent Prosecution efforts under this Section 11.2, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution.

11.3Patent Enforcement.

(a)Notice. Each Party shall notify the other within [***] of becoming aware of any alleged or threatened infringement by a Third Party of any of the Eidos Patents or any related declaratory judgment or equivalent action alleging the invalidity, unenforceability or non-infringement of any Eidos Patents anywhere in the world.

(b)Enforcement Rights.

(i)Alexion shall have the first right, but not the obligation, in its sole discretion, to bring and control any legal action to enforce the Eidos Patents against any Third Party engaged in any infringement of the Eidos Patents related to a compound or product that competes with (or that would compete with if commercialized) a Licensed Compound or a Licensed Product in the Field in the Territory (a “Product Infringement”), [***]. For clarity, Product Infringement excludes any adversarial Patent Prosecution proceedings. Alexion shall give Eidos advance notice of Alexion’s intent to file any such suit or take any such action and the reasons therefor, and shall provide Eidos with an opportunity to make suggestions or comments regarding such suit or action. Thereafter, Alexion shall keep Eidos promptly informed, and shall from time to time consult with Eidos regarding the status of any such suit or action. In the event Alexion does not bring any such legal action within [***] (or settle or otherwise secure the abatement of such Product Infringement action) or ceases to diligently pursue such Product Infringement action, Eidos may bring and control any legal action to enforce the Eidos Patents against such Product Infringement, [***].

(ii)Eidos shall have the sole right, but not the obligation, in its sole discretion, to bring and control any legal action to enforce Eidos Patents against any infringement in the ROW Territory, [***], provided that Eidos notifies Alexion of any such legal action reasonably in advance, and considers in good faith Alexion’s comments with respect thereto.

(c)Other Patents. Except as expressly set forth in this Section 11.3, each Party shall have the sole right, in its sole discretion, to enforce against any infringement any and all Patent Rights owned or Controlled by such Party, [***].

(d)Cooperation. At the request of the Party bringing an action under Section 11.3(b), the other Party shall provide reasonable assistance in connection therewith, including by executing reasonably appropriate documents, cooperating in discovery, facilitating registration of licenses and joining as a party to the action if required by Applicable Law to pursue such action, [***].

(e)Recoveries. Any recoveries resulting from any action under Section 11.3(b)(i) in the Territory shall be first applied against payment of each Party’s costs and expenses in connection therewith. [***].

11.4Infringement of Third Party Rights.

(a)Notice. If (i) any Licensed Compound or Licensed Product used or sold by Alexion, its Affiliates or Sublicensees in the Territory becomes the subject of a Third Party’s claim or assertion of infringement of a Patent Right or other rights in the Territory that are owned or controlled by such Third Party or (ii) any Licensed Compound or Licensed Product used or sold by Eidos, its Affiliates or Third Party Licensees in the ROW Territory becomes the subject of a Third Party’s claim or assertion of infringement of a Patent Right or other rights in the ROW Territory, then the Party becoming aware of such claim or assertion shall promptly notify the other Party within [***] after receipt of such claim or assertion and such notice shall include a copy of any summons or complaint (or the equivalent thereof) received regarding the foregoing. The Parties shall assert and not waive the joint defense privilege with respect to any communications between the Parties in connection with the defense of such claim or assertion.

(b)Defense by Alexion. As between the Parties, Alexion shall be solely responsible for the defense of any such infringement claims in the Field in the Territory with respect to the activities of Alexion, its Affiliates or Sublicensees, [***], and Eidos shall provide reasonable assistance to Alexion [***]; provided that Alexion shall not agree to any settlement, consent to judgment or other voluntary final disposition in connection with such defense action without Eidos’ consent (such consent not to be unreasonably withheld, conditioned or delayed) if such settlement, consent to judgment or other voluntary final disposition would (i) result in the admission of any liability or fault on behalf of Eidos, (ii) result in or impose any payment obligations upon Eidos, or (iii) subject Eidos to an injunction or otherwise limit Eidos’ ability to take any actions or refrain from taking any actions under this Agreement or with respect to any Licensed Compound or Licensed Product. Alexion shall keep Eidos informed on the status of such defense action, and Eidos shall, at its own expense, (A) provide reasonable support to Alexion upon Alexion’s reasonable request; and (B) have the right, but not the obligation, to participate or be separately represented in such defense action at its sole option and expense.

(c)Defense by Eidos. As between the Parties, Eidos shall be solely responsible for the defense of any such infringement claims with respect to Eidos’ activities, including any such infringement claim in the Territory or in the ROW Territory, [***], and Alexion shall provide reasonable assistance to Eidos [***]; provided that Eidos shall not agree to any settlement, consent to judgment or other voluntary final disposition in connection with such defense action without Alexion’s consent (such consent not to be unreasonably withheld, conditioned or delayed) if such

settlement, consent to judgment or other voluntary final disposition would (i) result in the admission of any liability or fault on behalf of Alexion, (ii) result in or impose any payment obligations upon Alexion, or (iii) subject Alexion to an injunction or otherwise limit Alexion’s ability to take any actions or refrain from taking any actions under this Agreement or with respect to any Licensed Compound or Licensed Product. Eidos shall keep Alexion informed on the status of such defense action, and Alexion shall, at its own expense, (A) provide reasonable support to Eidos upon Eidos’ reasonable request; and (B) have the right, but not the obligation, to participate or be separately represented in such defense action at its sole option and expense.

11.5Upstream License. To the extent that an Upstream Licensor of Eidos has retained any right to prosecute or enforce any Eidos Patents or otherwise be involved in such activities pursuant to the Upstream License granting Eidos a license thereto (including pursuant to the Stanford Agreement), [***]. Notwithstanding anything to the contrary in this Agreement, this Section 11.5 shall only be in effect to the extent that Eidos has notified Alexion of the relevant rights and obligations under the Upstream License pursuant to Section 11.8.

11.6Licensed Product-Specific Trademarks.

(a)Ownership and Prosecution of Licensed Product-Specific Trademarks. Eidos shall own all right, title, and interest to the Licensed Product-Specific Trademarks (including relevant registrations and applications) in the ROW Territory and the Territory, and shall be responsible for the registration, prosecution, maintenance and renewal thereof; provided that Alexion shall have the right to provide input on the overall strategy for such registration, prosecution, maintenance and renewal in the Territory, and Eidos shall consider such input in good faith. All costs and expenses of registration, prosecuting, maintaining and renewing the Licensed Product-Specific Trademarks shall be borne solely by [***]. If Eidos intends to abandon the prosecution of (including any decision to not renew) any Licensed Product-Specific Trademark in the Territory, Eidos shall give Alexion prompt notice thereof (not less than [***] before any action is required to avoid abandonment or lapse), and Alexion shall have the right to continue such prosecution of such Licensed Product-Specific Trademark in the Territory, [***].

(b)Enforcement of Licensed Product-Specific Trademarks. Eidos shall have the sole right and responsibility for taking such action as Eidos, after consultation with Alexion, deems necessary against a Third Party based on any alleged, threatened, or actual infringement, dilution, or other violation of, or unfair trade practices or any other like offense relating to, the Licensed Product-Specific Trademarks by a Third Party in the Territory. [***] shall bear the costs and expenses relating to any enforcement action commenced pursuant to this Section 11.6(b) and any settlements and judgments with respect thereof, and shall retain any damages or other amounts collected in connection therewith. Subject to the foregoing, Alexion may elect at its expense to participate in the enforcement of the Licensed Product-Specific Trademarks in the Territory. In the event that Eidos fails to assume responsibility for such enforcement, Alexion shall have the sole right and responsibility for such action, in which case [***] shall bear all costs and expenses and shall retain any damages or other amounts collected in connection therewith.

(c)Third Party Claims.

(i)Defense by Alexion. Alexion shall have the sole right and responsibility for defending against any alleged, threatened, or actual claim by a Third Party that the use or registration of the Licensed Product-Specific Trademarks by Alexion, its Affiliates or Sublicensees in the Territory infringes, dilutes or otherwise violates any Trademark or other right of that Third Party or constitutes unfair trade practices or any other like offense, or any other claims as may be brought by a Third Party against a Party in connection with the use or registration of the Licensed Product-Specific Trademarks by Alexion, its Affiliates or Sublicensees in the Territory. [***] shall bear the costs and expenses relating to any defense commenced pursuant to this Section 11.6(c)(i) and any settlements and judgments with respect thereto, and shall retain any damages or other amounts collected in connection therewith.

(ii)Defense by Eidos. Eidos shall have the sole right and responsibility for defending against any alleged, threatened, or actual claim by a Third Party that Eidos’ use or registration of the Licensed Product-Specific Trademarks in the Territory in accordance with this Agreement infringes, dilutes or otherwise violates any Trademark or other right of that Third Party or constitutes unfair trade practices or any other like offense, or any other claims as may be brought by a Third Party against a Party in connection with Eidos’ use of any Licensed Product-Specific Trademark in the Territory in accordance with this Agreement; provided that Eidos shall not agree to any settlement, consent to judgment or other voluntary final disposition in connection with such defense action without Alexion’s consent (such consent not to be unreasonably withheld, conditioned or delayed) if such settlement, consent to judgment or other voluntary final disposition would (i) result in the admission of any liability or fault on behalf of Alexion, (ii) result in or impose any payment obligations upon Alexion, or (iii) subject Alexion to an injunction or otherwise limit Alexion’s ability to take any actions or refrain from taking any actions under this Agreement or with respect to any Licensed Compound or Licensed Product. [***] shall bear the costs and expenses relating to any defense commenced pursuant to this Section 11.6(c)(ii) and any settlements and judgments with respect thereto, and shall retain any damages or other amounts collected in connection therewith.

(d)Notice and Cooperation. Each Party shall provide to the other Party prompt written notice of any actual or threatened infringement of the Licensed Product-Specific Trademarks in the Territory and of any actual or threatened claim that the use of the Licensed Product-Specific Trademarks in the Territory violates the rights of any Third Party. Each Party agrees to cooperate fully with the other Party with respect to any enforcement action or defense commenced pursuant to this Section 11.6(d), including cooperation required to permit required registration of trademark licenses within the Territory.

11.7Common Interest Agreement. All information exchanged between the Parties regarding the prosecution and maintenance, and enforcement and defense, of Eidos Patents under this Article 11 will be deemed Confidential Information of the disclosing Party. In addition, the Parties acknowledge and agree that, with regard to such prosecution and maintenance, and enforcement and defense, the interests of the Parties as collaborators and licensor and licensee are to obtain the strongest patent protection possible, and as such, are aligned and are legal in nature. The Parties agree and acknowledge that they have not waived, and nothing in this Agreement constitutes a waiver of, any legal privilege concerning the Patent Rights under this Article 11, including privilege under the common interest doctrine and similar or related doctrines.

Notwithstanding anything to the contrary contained herein, to the extent a Party has a good faith belief that any information required to be disclosed by such Party to the other Party under this Article 11 is protected by attorney-client privilege or any other applicable legal privilege or immunity, such Party will not be required to disclose such information, and the Parties will in good faith cooperate to agree upon a procedure (including entering into a specific common interest agreement, disclosing such information on a “for counsel eyes only” basis or similar procedure) under which such information may be disclosed without waiving or breaching such privilege or immunity.

11.8New In-License Agreements.

(a)If Eidos or its Affiliate is planning to enter into an agreement during the Term with a Third Party (other than a Third Party Licensee) under which Eidos or its Affiliate obtains a license or rights to Patent Rights or Know-How that are necessary or useful for the Exploitation of the Licensed Compound or Licensed Product in the Field in the Territory [***].

(b)Subject to Section 11.8(a), if Eidos or its Affiliate enters into an agreement during the Term with a Third Party under which Eidos or its Affiliate obtains a license or rights to Patent Rights or Know-How that are necessary or useful for the Exploitation of the Licensed Compound or Licensed Product in the Field in the Territory, Eidos shall provide Alexion with prompt written notice thereof, as well as (i) [***], and (iii) a copy of such Third Party agreement, including references to the applicable provisions of such Third Party agreement with which Alexion must agree to comply with as a sublicensee of the rights; [***].

(c)If Alexion notifies Eidos in writing that such Patent Rights or Know-How licensed under such agreement should be included within the Eidos IP and agrees that it will comply with all applicable provisions of such New In-License Agreement, then (a) such agreement will be deemed to be a “New In-License Agreement” hereunder, (b) the Patent Rights and Know-How in-licensed under such New In-License Agreement will be deemed “Controlled” by Eidos (or its Affiliate, as applicable) and included within Eidos IP except for the purposes of determining the Royalty Term and whether a Licensed Product is Covered by a Valid Claim under Section 7.4(c)(iii) (i.e. a Patent Right in-licensed under such New In-License Agreement will not be deemed an Eidos Patent for those purposes), (c) any Third Party payments under such New In-License Agreement will be allocated between the Parties as provided above and (d) the provisions of Section 9.3(d) through Section 9.3(i) shall apply, mutatis mutandis, to such New In-License Agreement. If Alexion does not elect to include such Patent Rights or Know-How in-licensed under such agreement as Eidos IP hereunder, then (A) such agreement will not be deemed to be a New In-License Agreement hereunder and (B) the Patent Rights and Know-How in-licensed under such agreement will not be deemed to be “Controlled” by Eidos (or its Affiliate, as applicable) or included within the Eidos IP, and Alexion will have no license or rights to such Patent Rights or Know-How.

Article 12
TERMS AND TERMINATION

12.1Term. This Agreement shall be effective as of the Effective Date, and shall continue, unless terminated earlier in accordance with this Article 12, until expiration of the last Royalty Term for the last Licensed Product in the Field in the Territory (the “Term”).

12.2Termination.

(a)Termination by Alexion for Convenience. At any time, Alexion may terminate this Agreement in its entirety for convenience by providing written notice of termination to Eidos, which notice includes an effective date of termination at least [***] after the date of the notice.

(b)Termination for Material Breach .

(i)If either Party believes in good faith that the other is in material breach of this Agreement, then the non-breaching Party may deliver written notice of such breach to the other Party. For any such alleged material breach, the allegedly breaching Party shall have [***] (or, in the case of a payment breach, [***]) from the receipt of the initial notice to cure such breach. If the Party receiving notice of material breach fails to cure the breach within such [***] (or [***]) day period, then the non-breaching Party may terminate this Agreement in its entirety effective on written notice of termination to the other Party. Notwithstanding the foregoing, if such material breach (other than a payment breach), by its nature, is curable, but is not reasonably curable within the [***] period, then such period shall be extended if the breaching Party provides a written plan for curing such breach to the non-breaching Party and uses commercially reasonable efforts to cure such breach in accordance with such written plan; provided, that no such extension shall exceed an additional [***] without the consent of the non-breaching Party.

(ii)In case the Party alleged under Section 12.2(b)(i) to have committed a material breach of this Agreement (the “Defaulting Party”) by the other Party (the “Non-Defaulting Party”) disputes the existence or materiality of such material breach, then the issue of whether the Non-Defaulting Party may properly terminate this Agreement on expiration of the applicable cure period shall be resolved in accordance with Section 13.6. If, as a result of such dispute resolution proceeding, it is determined that the Defaulting Party committed a material breach and the Defaulting Party does not cure such material breach within [***] after the date of such determination (the “Additional Cure Period”), then such termination shall be effective as of the expiration of the Additional Cure Period. If the Parties dispute whether such material breach was so cured, such dispute shall also be determined in accordance with Section 13.6. This Agreement shall remain in full force and effect while any such dispute resolution proceeding is pending, such proceeding shall not suspend any obligations of either Party hereunder, and each Party shall use reasonable efforts to mitigate any damage. If, as a result of such dispute resolution proceeding, it is determined that (A) the Defaulting Party did not commit such breach, (B) such breach was not material or (C) such breach was cured in accordance with this Section 12.2(b), then no termination shall be effective, and this Agreement shall continue in full force and effect.

(c)Termination by Eidos for [***]. If Alexion, its Affiliates and Sublicensees do not [***], then Eidos may terminate this Agreement in its entirety with [***] written notice to Alexion, unless within such [***] period Alexion provides to Eidos reasonable documentation evidencing [***].

(d)Termination by Eidos for Patent Challenges. Eidos has the right, in its sole discretion, to terminate this Agreement in its entirety upon written notice to Alexion, in the event that Alexion or any of its Affiliates or Sublicensees directly or indirectly commences any interference or opposition proceeding, challenges the validity or enforceability of, or opposes any extension of or the grant of a supplementary protection certificate with respect to, any Eidos Patents (“Patent Challenge”), provided that, Eidos will not have the right to terminate this Agreement under this Section 12.2(d) if (i) Alexion causes such Patent Challenge to be terminated or dismissed (or in the case of ex-parte proceedings, multi-party proceedings, or other Patent Challenges in which the challenging party does not have the power to unilaterally cause the Patent Challenge to be withdrawn, withdraws or causes its Affiliate or Sublicensee to withdraw as a party from such Patent Challenge and to cease actively assisting any other party to such Patent Challenge), (ii) Alexion, with respect to a Sublicensee, terminates such Sublicensee’s sublicense to the Patent Rights being challenged by the Sublicensee (or if Alexion has provided such Sublicensee with written notice of such termination and is enforcing such termination in accordance with the applicable sublicense agreement), in each case (i) and (ii), within [***] of Eidos’ notice to Alexion under this Section 12.2(d), (iii) the Patent Challenge is in defense of any claim first brought by Eidos, its Affiliates or Third Party Licensees or (iv) the activities constituting the Patent Challenge are required under a court order or subpoena.

(e)Termination for Insolvency. Each Party shall have the right to terminate this Agreement upon delivery of written notice to the other Party in the event that (i) such other Party files in any court or agency pursuant to any statute or regulation of any jurisdiction a petition in bankruptcy or insolvency or for reorganization or similar arrangement for the benefit of creditors or for the appointment of a receiver or trustee of such other Party or its assets, (ii) such other Party is served with an involuntary petition against it in any insolvency proceeding and such involuntary petition has not been stayed or dismissed within [***] of its filing, or (iii) such other Party makes an assignment of substantially all of its assets for the benefit of its creditors (each of (i) through (iii), an “Insolvency Event”).

12.3Effect of Termination. In the event of any termination of this Agreement for any reason:

(a)Except as expressly set forth in this Agreement (including Section 12.7), all rights and obligations of the Parties shall immediately terminate, including the License; provided, however, that any Sublicensee will, as of the effective date of termination of this Agreement, automatically and without any additional consideration become a direct licensee of Eidos with respect to the rights sublicensed to the Sublicensee by Alexion under this Agreement, so long as (i) such Sublicensee is not in breach of its sublicense agreement with Alexion, (ii) such Sublicensee agrees in writing to comply with all of the terms of this Agreement to the extent applicable to the rights originally sublicensed to it by Alexion, and (iii) such Sublicensee agrees to pay directly to Eidos such Sublicensee’s payments under this Agreement to the extent applicable to the rights sublicensed to it by Alexion. The foregoing shall not apply if a Sublicensee provides written notice to Eidos that it does not wish to receive and retain the rights afforded to it pursuant to this Section 12.3. At Alexion’s request, Eidos will enter into a standby license with any Sublicensee confirming the benefits conferred on such Sublicensee by this Section 12.3.

(b)Upon Eidos’ written request to Alexion, which notice may only be delivered within [***] following the [***], Alexion will promptly, subject to the terms and conditions of this Agreement (including the rights of a Sublicensee under Section 12.3(a)):

(i)grant, and hereby does grant, and will cause its Affiliates and its Sublicensees (subject to Section 2.2(b)) to grant, subject to the terms of this Section 12.3(b)(i), to Eidos and its Affiliates an [***] (the “Reversion License”); provided that (A) Eidos shall be responsible for (1) making any payments (including royalties, milestones and other amounts) payable by Alexion to Third Parties under any Third Party agreements with respect to the Alexion Technology that is the subject of the Reversion License by making such payments directly to Alexion and, in each case, Eidos shall make the requisite payments to Alexion and provide the necessary reporting information to Alexion in sufficient time to enable Alexion to comply with its obligations under such Third Party agreements, and (2) complying with any other obligations included in any such Third Party agreements that are applicable to the grant to Eidos of such Reversion License or the exercise of such Reversion License by Eidos or any of its Affiliates or Third Party Sublicensees and (B) Alexion can terminate the Reversion License with respect to any Patent Right or Know-How that is in-licensed under a Third Party agreement if Eidos does not comply with the obligations under such Third Party agreement as described in clause (A) of this proviso, provided that Eidos shall not be responsible for such payments, and Alexion may not be able to terminate the Reversion License, if Eidos is not aware of the relevant rights and obligations under such Third Party agreement. The Reversion License will be fully paid-up and royalty-free except in the event this Agreement is terminated by Alexion pursuant to Section 12.2(b) or by Eidos pursuant to Section 12.2(c), in which case, the Reversion License will be royalty-bearing. If such termination is by Alexion pursuant to Section 12.2(b) or by Eidos pursuant to Section 12.2(c), the Parties will negotiate in good faith on a commercially reasonable royalty rate for such Reversion License. If the Parties are unable to agree on the financial terms of such license agreement, the matter shall be resolved in accordance with Exhibit 12.3(b)(i);

(ii)[***]; and

(iii)grant, and hereby does grant, to Eidos and its Affiliates a royalty-free, fully paid-up, perpetual, irrevocable, non-exclusive license, with the right to sublicense through multiple tiers, to use the Trademarks owned by Alexion or its Affiliates solely identifying each Licensed Product for the purpose of Commercializing the Licensed Product in the Territory (for clarity, such Trademarks described in this Section 12.3(b)(iii) shall not include any Trademarks that include any corporate name or logo of Alexion, its Affiliates or Sublicensees or the name (including a common prefix or suffix) of any other product Exploited by Alexion, its Affiliates or Sublicensees).

(c)[***].

12.4Alternative Remedy in Lieu of Termination. If Eidos has breached Section 2.7, Article 5, Article 11 or Section 13.2 and Alexion has the right to terminate this Agreement pursuant to Section 12.2(b) (i.e., such breach constitutes a material breach and is not cured within the applicable cure period) as a result of such breach, then Alexion may, in its sole discretion, in lieu of terminating this Agreement [***] with respect to such breach of Section 2.7, Article 5, Article 11 or Section 13.2, exercise an alternative remedy as follows:

(a)Alexion may retain the License and other rights granted under this Agreement, subject to all of its payment and other obligations; [***]

(b)any Alexion Confidential Information provided to Eidos pursuant to this Agreement will be promptly returned to Alexion or destroyed, and Alexion shall be released from its ongoing disclosure and information exchange obligations with respect to activities following the date of such election, provided that (i) Alexion shall disclose directly to the applicable Upstream Licensors any such information required to be disclosed pursuant to the Upstream Licenses and (ii) Eidos may retain, and Alexion shall continue to disclose, any such information necessary for Eidos to perform its obligations under this Agreement.

12.5Rights in Insolvency. All rights and licenses now or hereafter granted by Eidos to Alexion under or pursuant to this Agreement are, for all purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined in the Bankruptcy Code. Upon an Insolvency Event, Eidos agrees that Alexion, as licensee of such rights under this Agreement, will retain and may fully exercise all of its rights and elections under the Bankruptcy Code. Eidos will, during the Term, create and maintain current copies or, if not amenable to copying, detailed descriptions or other appropriate embodiments, to the extent feasible, of all intellectual property licensed under this Agreement. Each Party acknowledges and agrees that “embodiments” of intellectual property within the meaning of Section 365(n) include laboratory notebooks, cell lines, product samples and inventory, research studies and data, all Regulatory Approvals (and all applications for Regulatory Approval) and rights of reference therein, the Eidos IP and all information related to the Eidos IP.

(a)If (x) a case under the Bankruptcy Code is commenced by or against Eidos, (y) this Agreement is rejected as provided in section 365 of the Bankruptcy Code and (z) Alexion elects to retain its rights hereunder as provided in Section 365(n) of the Bankruptcy Code, Eidos (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) will:

(i)provide Alexion with embodiments of all Eidos IP held by Eidos and such successors and assigns, or otherwise available to them, immediately upon Alexion’s written request, and Alexion will have the right to perform Eidos’ obligations hereunder and exercise all of the rights of a licensee of intellectual property under section 365(n) of the Bankruptcy Code, provided that neither such provision nor such performance by Alexion will release Eidos from liability resulting from rejection of the license or the failure to perform such obligations; and

(ii)not interfere with Alexion’s rights under this Agreement, or any agreement supplemental hereto, to such intellectual property (including such embodiments), including any right to obtain such intellectual property (or such embodiments) from any other Person, to the extent provided in Section 365(n) of the Bankruptcy Code.

(b)All rights, powers and remedies of Alexion provided herein are in addition to and not in substitution for any other rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Code) in the event of the commencement of a case under the Bankruptcy Code with respect to Eidos. The Parties intend the following rights to extend to the maximum extent permitted by Applicable Law, and to be enforceable under Bankruptcy Code Section 365(n):

(i)the right of access to the Eidos IP, or any Third Party with whom Eidos contracts to perform an obligation of Eidos under this Agreement; and

(ii)the right to contract directly with any Third Party to complete the contracted work.

12.6Accrued Rights. Expiration or termination of this Agreement for any reason shall be without prejudice to any right which shall have accrued to the benefit of either Party prior to such termination, including damages arising from any breach under this Agreement.

12.7 Survival. The provisions of Article 1 (Definitions) (to the extent necessary to give effect to the other surviving provisions), Section 2.6 (No Implied Licenses), Section 2.9 (Other Alexion Programs), Section 7.4(e) (Royalty Reports and Payments) through (g) (Interest) and Section 7.5 (Taxes) (each solely with respect to payment obligations accruing prior to the effective date of expiration or termination), Section 7.6 (Financial Audits), Article 8 (Confidentiality; Publication) (for the time period set forth therein), Section 9.6 (No Other Warranties), Article 10 (Indemnification), Section 11.1 (Ownership), Section 12.3 (Effect of Termination), Section 12.6 (Accrued Rights), this Section 12.7 (Survival) and Article 13 (Miscellaneous), together with any other provisions of this Agreement that by their terms are expressly stated to survive, shall survive the expiration or termination of this Agreement.

12.8Termination of Stanford or Upstream License Agreements. Without limiting anything set forth in the [***], upon any termination of the Stanford Agreement or any other agreement pursuant to which Eidos Controls any of the Eidos IP, Eidos shall facilitate Alexion’s negotiations with Stanford or the applicable licensor for a direct license in the Field in the Territory.

Article 13
MISCELLANEOUS

13.1Force Majeure. Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, including embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances (except for a strike, lockout or labor disturbance with respect to the non-performing Party’s respective employees or agents), fire, floods, earthquakes or other acts of God, or any generally applicable action or inaction by any governmental authority (but excluding any government action or inaction that is specific to such Party or its Affiliates, such as revocation or non-renewal of such Party’s or its Affiliate’s license to conduct business), or omissions or delays in acting by the other Party. The affected Party shall notify the other Party in writing of such force majeure circumstances as soon as reasonably practicable (in any event, within [***]), and shall promptly undertake and continue diligently all reasonable efforts necessary to cure such force majeure circumstances or to perform its obligations despite the ongoing circumstances.

13.2Assignment .

(a)This Agreement may not be assigned or otherwise transferred by a Party, nor may any right or obligation hereunder be assigned or transferred by a Party (except as expressly permitted under this Agreement), without the prior written consent of the other Party, such consent not to be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, either Party may, without the consent of the other Party, assign this Agreement (i) in whole or in part to any of its Affiliates or (ii) in whole, but not in part, to a purchaser of all or substantially all of its assets to which this Agreement relates (whether by merger, stock purchase, consolidation, asset purchase, or otherwise) or to any successor resulting from a Change of Control of such Party, provided that (A) the applicable assignee agrees in writing to assume all rights and obligations of the assignor Party under this Agreement, and (B) a copy of such writing is provided to the non-assigning Party within [***] of such assignment. Any attempted assignment not in accordance with this Section 13.2 shall be null and void and of no legal effect. The terms and conditions of this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respected successors and permitted assigns.

(b)[***]

13.3Severability. If any one (1) or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. The Parties shall in such an instance use their commercially reasonable efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) that, insofar as practicable, implement the purposes of this Agreement.

13.4Notices. All notices that are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile or electronic mail (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 Eidos:

Eidos Therapeutics, Inc.
101 Montgomery Street, Suite 2550

San Francisco, CA 94104

Attention: Cameron Turtle

If to Alexion:

Alexion Pharma International Operations Unlimited Company

c/o Alexion Pharmaceuticals, Inc.

121 Seaport Boulevard

Boston, MA 02210

Attention: General Counsel

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. Any such notice shall be deemed to have been given: (i) when delivered if personally delivered or sent by electronic mail or facsimile on a Business Day (or if delivered or sent on a non-Business Day, then on the next Business Day); (ii) on the Business Day after dispatch if sent by nationally-recognized overnight courier; or (iii) on the fifth Business Day following the date of mailing if sent by mail.

13.5Governing Law . This Agreement, and all claims or causes of action (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement or the breach thereof (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), shall be governed by, and enforced in accordance with, the internal laws of the State of Delaware, without reference to its conflicts of law principles.

13.6Dispute Resolution; Escalation. Any dispute arising out of or in connection with this Agreement shall be settled, if possible, through good faith negotiations between the Parties. If the Parties are unable to settle such dispute within [***] of first considering such dispute, such dispute shall be referred to the Alliance Managers for resolution. The Alliance Managers of both Parties shall meet to attempt to resolve such dispute. If the Alliance Managers are unable to settle such dispute within [***] of first considering such dispute, such dispute shall be referred to the Executive Officers for resolution. The Executive Officers of both Parties shall meet to attempt to resolve such dispute. Such resolution, if any, of a referred issue shall be final and binding on the Parties. All negotiations pursuant to this Section 13.6 are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. If the Executive Officers cannot resolve such dispute within [***] after either Party requests such a meeting in writing, then either Party shall have the right to pursue any and all remedies available at law or equity.

13.7Entire Agreement; Amendments. This Agreement, together with the Exhibits hereto, contains the entire understanding of the Parties with respect to the subject matter hereof. Any other express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to such subject matter are superseded by the terms of this Agreement. The Exhibits to this Agreement are incorporated herein by reference and shall be deemed a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representative(s) of both Parties. The Parties agree that, effective as of the Effective Date, that the Existing Confidentiality Agreement shall be superseded by this Agreement, and that disclosures made prior to the Effective Date pursuant to the Confidentiality Agreement shall be subject to the confidentiality and non-use provisions of this Agreement. The foregoing shall not be interpreted as a waiver of any remedies available to either Party or its Affiliates as a result of any breach, prior to the Effective Date, by the other Party or its Affiliates of such Party’s or its Affiliate’s obligations pursuant to the Confidentiality Agreement.

13.8Headings. The captions to the several Articles, Sections, subsections and Exhibits hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles, Sections and Exhibits of this Agreement.

13.9Independent Contractors. It is expressly agreed that Eidos and Alexion shall be independent contractors and that the relationship between the two (2) Parties shall not constitute a partnership, joint venture or agency. Neither Eidos nor Alexion shall have the authority to make any statements, representations or commitments of any kind, or to take any action that is binding on the other Party without the prior written consent of the other Party.

13.10Waiver. Any waiver of any provision of this Agreement shall be effective only if in writing and signed by Eidos and Alexion. No express or implied waiver by a Party of any default under this Agreement will be a waiver of a future or subsequent default. The failure or delay of any Party in exercising any rights under this Agreement will not constitute a waiver of any such right, and any single or partial exercise of any particular right by any Party will not exhaust the same or constitute a waiver of any other right provided in this Agreement.

13.11Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

13.12Cumulative Remedies; Recovery of Damages. Except as expressly set forth in this Agreement, no remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under Applicable Laws. If Alexion seeks direct damages from Eidos arising from any breach of this Agreement, then Alexion shall be entitled to seek damages including, without limitation, any and all amounts paid by Alexion to Eidos under this Agreement, including without limitation any payment described as nonrefundable or non-creditable; provided that, nothing in this Section 13.12 shall be construed to change any legal obligation under Applicable Law for Alexion to prove its damages for such breach.

13.13Business Day Requirements. In the event that any notice or other action or omission is required to be taken by a Party under this Agreement on a day that is not a Business Day then such notice or other action or omission shall be deemed to be required to be taken on the next occurring Business Day.

13.14Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as necessary or appropriate in order to carry out the purposes and intent of this Agreement.

13.15Construction. Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (c) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (d) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (e) any reference herein to any person shall be construed to include the person’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections, Schedules, or Exhibits shall be construed to refer to Sections, Schedules or Exhibits of this Agreement unless otherwise specified, and references to this Agreement include all Schedules and Exhibits hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement, (i) provisions that require that a Party, the Parties or any committee hereunder “agree”, “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding e-mail and instant messaging), (j) references to any specific law, rule or regulation, or Section, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term “or” shall be interpreted in the inclusive sense commonly associated with the term “and/or.”

13.16Counterparts. This Agreement may be executed in two (2) counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. Each Party shall be entitled to rely on the delivery of executed digital (e.g., PDF) copies of counterpart execution pages of this Agreement and such digital copies shall be legally effective to create a valid and binding agreement among the Parties.

{Signature Page Follows}

In Witness Whereof, the Parties intending to be bound have caused this License Agreement to be executed by their duly authorized representatives as of the Effective Date.

EIDOS THERAPEUTICS, INC.

By: /s/ Christine Siu

Name: Christine Siu

Title: Chief Financial Officer

ALEXION PHARMA INTERNATIONAL
OPERATIONS UNLIMITED COMPANY

By: /s/ Shane Doyle

Name: Shane Doyle

Title: Director

[Signature Page to License Agreement]

List of Exhibits

Exhibit 1.41: Eidos Patents

Exhibit 1.71: Licensed Compound

Exhibit 2.4: Certain Provisions of the Stanford Agreement

Exhibit 5.1: Clinical Supply Agreement Key Terms

Exhibit 8.7: Joint Press Release

Exhibit 9.2(b): Disclosure

Exhibit 12.3(b)(i): Select Arbitration Provisions

ACTIVE/101326508.1

Exhibit 1.41

Eidos Patents

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A-1

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A-2

Exhibit 1.71

Licensed Compound

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B-1

Exhibit 2.4

Certain Provisions of the Stanford Agreement

[***]

B-1

Exhibit 5.1

Clinical Supply Agreement Key Terms

[***]

C-1

Exhibit 8.7

Joint Press Release

Alexion and BridgeBio Announce Japanese License Agreement for Eidos’ Transthyretin Amyloidosis (ATTR) Investigational Medicine

- Eidos grants Alexion exclusive license to develop and commercialize AG10 in Japan -

- Phase 3 study of AG10 in ATTR cardiomyopathy underway in U.S. & Europe; Phase 3 trial in ATTR polyneuropathy planned to initiate in second half of 2019 -

- Agreement expands Alexion’s amyloidosis portfolio -

- Eidos to receive upfront payment of $25 million and equity investment of $25 million, with potential for additional Japanese-based milestone- & royalty-dependent payments -

BOSTON & SAN FRANCISCO – SEPTEMBER 9, 2019 - Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) and BridgeBio Pharma, Inc.’s (NASDAQ:BBIO) subsidiary Eidos Therapeutics, Inc. (NASDAQ:EIDX) today announced an agreement that grants Alexion an exclusive license to develop and commercialize AG10 in Japan. AG10 is a small molecule designed to treat the root cause of transthyretin amyloidosis (ATTR) – destabilized and misfolded transthyretin (TTR) protein – by binding and stabilizing TTR in the blood. Eidos is currently evaluating AG10 in a Phase 3 study in the U.S. and Europe for ATTR cardiomyopathy (ATTR-CM) – a progressive, fatal disease caused by the accumulation of misfolded TTR amyloid in the heart – and plans to begin a Phase 3 study in ATTR polyneuropathy (ATTR-PN) – a progressive, fatal disease caused by the accumulation of misfolded TTR amyloid in the peripheral nervous system.

“There is a significant need for new treatments for TTR amyloidosis. We believe AG10 holds promise in its ability to stabilize TTR and halt disease progression,” said John Orloff, M.D., Executive Vice President and Head of Research & Development at Alexion. “We are excited by the potential to grow our amyloidosis portfolio by partnering with Eidos to expand the development of AG10 to Japan. Alexion has more than 10 years of experience operating there, and we look forward to applying our expertise to bring AG10 to Japanese patients.”

“The Phase 2 study in ATTR-CM suggested that AG10 has the potential to become an important treatment option for the underserved ATTR-CM population. The trial showed that AG10 was generally well-tolerated and resulted in near-complete stabilization of TTR, which is known to be correlated with disease severity in ATTR-CM. In the study, AG10 also normalized serum TTR levels, a prognostic indicator of survival in ATTR patients,” said Jonathan Fox, M.D., Ph.D., President and Chief Medical Officer of Eidos. “We have now begun our Phase 3 program to evaluate the safety and efficacy of AG10 in larger studies. This agreement provides the potential opportunity to help even more patients globally by leveraging Alexion’s significant development and commercial experience to expand the AG10 program into Japan.”

Under the terms of the agreement, Alexion will acquire an exclusive license for the clinical development and commercialization of AG10 in Japan. Eidos will receive an upfront payment of $25 million and an equity investment of $25 million at a premium to the market price upon deal execution, with the potential for additional Japanese-based milestone- and royalty-dependent payments.

About AG10

AG10 is an investigational, orally-administered small molecule designed to potently stabilize tetrameric transthyretin, or TTR, thereby halting at its outset the series of molecular events that give rise to TTR amyloidosis, or ATTR. In a Phase 2 clinical trial in patients with symptomatic ATTR-CM, AG10 was generally well tolerated, demonstrated greater than 90 percent average TTR stabilization at Day 28, and increased serum TTR concentrations, a prognostic indicator of survival in a retrospective study of ATTR-CM patients, in a dose-dependent manner.

AG10 was designed to mimic a naturally-occurring variant of the TTR gene (T119M) that is considered a rescue mutation because co-inheritance has been shown to prevent or ameliorate ATTR in individuals also inheriting a pathogenic, or disease-causing, mutation in the TTR gene. To our knowledge, AG10 is the only TTR stabilizer in development that has been observed to mimic the stabilizing structure of this rescue mutation.

The Phase 3 ATTRibute-CM study of AG10 in patients with ATTR-CM is underway in the United States and Europe. Part A of the study will assess the change from baseline in 6-minute walk distance (6MWD) at 12 months. Part B of the study will evaluate reduction in all-cause mortality and frequency of cardiovascular-related hospitalizations will be evaluated at 30 months. In addition, Eidos plans to initiate a Phase 3 study of AG10 in ATTR polyneuropathy (ATTR-PN) in the second half of 2019.

About Transthyretin Amyloidosis (ATTR)

There is significant medical need in transthyretin amyloidosis (ATTR) given the large patient population and an inadequate current standard of care. ATTR is caused by the destabilization of TTR due to inherited mutations or aging and is commonly divided into three distinct categories: wild-type ATTR cardiomyopathy (ATTRwt-CM), mutant ATTR cardiomyopathy (ATTRm-CM), and ATTR polyneuropathy (ATTR-PN). The worldwide prevalence of each disease is approximately 400,000 patients, 40,000 patients and 10,000 patients, respectively.

All three forms of ATTR are progressive and fatal. For patients with untreated ATTRwt-CM and ATTRm-CM, symptoms usually manifest later in life (age 50+), with median survival of three to five years from diagnosis. ATTR-PN either presents in a patient's early 30s or later (age 50+), and results in a median life expectancy of five to ten years from diagnosis for untreated patients. Progression of all forms of ATTR causes significant morbidity, impacts productivity and quality of life, and creates a significant economic burden due to the costs associated with progressively greater patient needs for supportive care.

About Alexion

Alexion is a global biopharmaceutical company focused on serving patients and families affected by rare diseases through the discovery, development and commercialization of life-changing therapies. As the global leader in complement biology and inhibition for more than 20 years, Alexion has developed and commercializes two approved complement inhibitors to treat patients with paroxysmal nocturnal hemoglobinuria (PNH) as well as the first and only approved complement inhibitor to treat atypical hemolytic

uremic syndrome (aHUS), anti-acetylcholine receptor (AchR) antibody-positive generalized myasthenia gravis (gMG) and neuromyelitis optica spectrum disorder (NMOSD). Alexion also has two highly innovative enzyme replacement therapies for patients with life-threatening and ultra-rare metabolic disorders, hypophosphatasia (HPP) and lysosomal acid lipase deficiency (LAL-D). In addition, the company is developing several mid-to-late-stage therapies, including a second complement inhibitor, a copper-binding agent for Wilson disease and an anti-neonatal Fc receptor (FcRn) antibody for rare Immunoglobulin G (IgG)-mediated diseases as well as several early-stage therapies, including one for light chain (AL) amyloidosis and a second anti-FcRn therapy. Alexion focuses its research efforts on novel molecules and targets in the complement cascade and its development efforts on the core therapeutic areas of hematology, nephrology, neurology, and metabolic disorders. Alexion has been named to the Forbes’ list of the World’s Most Innovative Companies seven years in a row and is headquartered in Boston, Massachusetts’ Innovation District. The company also has offices around the globe and serves patients in more than 50 countries. This press release and further information about Alexion can be found at: www.alexion.com.

[ALXN-G]

About BridgeBio and Eidos

BridgeBio is a team of experienced drug discoverers, developers and innovators working to create life-altering medicines that target well-characterized genetic diseases at their source. BridgeBio was founded in 2015 to identify and advance transformative medicines to treat patients who suffer from Mendelian diseases, which are diseases that arise from defects in a single gene, and cancers with clear genetic drivers. BridgeBio’s pipeline of over 15 development programs includes product candidates ranging from early discovery to late-stage development. For more information, please visit www.bridgebio.com.

Eidos is a BridgeBio Pharma subsidiary focused on addressing the large and growing unmet need in diseases caused by transthyretin (TTR) amyloidosis (ATTR). Eidos is developing AG10, a potentially disease-modifying therapy for the treatment of ATTR. For more information, please visit www.eidostx.com.

Forward-Looking Statements

This press release includes forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Examples of forward-looking statements include, among others, statements we make regarding: (i) the therapeutic benefits and commercial potential of AG10 in Japan and elsewhere; (ii) development plans and clinical trial plans related to AG10; (iii) the potential of AG10 for the treatment of ATTR cardiomyopathy, ATTR polyneuropathy and other conditions; (iv) that the rights of Alexion under the license agreement will result in growth of Alexion’s amyloidosis portfolio by partnering with Eidos to expand the development of AG10 to Japan; and (v) the likelihood that AG10 will be approved for commercial sale in Japan. The process by which products such as AG10 could potentially be developed and approved for commercial sale is long and subject to highly significant risks. Applicable risks and uncertainties include: results in early stage clinical trials may not be indicative of full results or results from later stage or larger clinical trials (or in broader patient populations) and do not ensure regulatory approval; the possibility that results of clinical trials are not predictive of safety and efficacy and potency of products (or the failure to adequately operate or manage our clinical trials) which could cause the halt of trials, delays or prevention from making regulatory approval filings or result in denial of regulatory approval of product candidates; unexpected delays in clinical trials; unexpected concerns that may arise from additional data or analysis

obtained during clinical trials; delays or failure of product candidates to obtain regulatory approval due to clinical trial results, issues with clinical trial products, unexpected expense or otherwise; as well as those additional risks relating to product development and approval and other risks identified under the heading "Risk Factors" included in Alexion’s, BridgeBio’s and Eidos’ most recent Form 10-Q filings and in their respective other future filings with the SEC. The forward-looking statements contained in this press release reflect Alexion’s, BridgeBio’s and Eidos’ current views with respect to future events. Alexion, BridgeBio and Eidos do not undertake and each specifically disclaims any obligation to update any forward-looking statements, except as required by law.

Alexion Contacts:

Media

Megan Goulart, 857-338-8634

Senior Director, Corporate Communications

Investors

Susan Altschuller, Ph.D., 857-338-8788

Vice President, Investor Relations

Eidos Contacts:

Media

Carolyn Hawley, Canale Communications

619-849-5382, carolyn@canalecomm.com

Investors

John Grimaldi, Burns McClellan

212-213-0006, jgrimaldi@burnsmc.com

BridgeBio Contact:

Media

Alberto Gestri

AGestri@theoutcastagency.com

Exhibit 9.2(b)

Disclosure

[***]

Exhibit 10.1

Exhibit 12.3(b)(i)

Select Arbitration Provisions

[***]

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

EIDOS THERAPEUTICS, INC.

Eidos Therapeutics, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

1.The name of the Corporation is Eidos Therapeutics, Inc. The date of the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware was August 6, 2013 (the “Original Certificate”).

2.This Amended and Restated Certificate of Incorporation (the “Certificate”) amends, restates and integrates the provisions of the Amended and Restated Certificate of Incorporation that was filed with the Secretary of State of the State of Delaware on March 29, 2018 and subsequently amended on May 29, 2018 (the “Amended and Restated Certificate”), and was duly adopted in accordance with the provisions of Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”).

3.The text of the Amended and Restated Certificate is hereby amended and restated in its entirety to provide as herein set forth in full.

ARTICLE I

The name of the Corporation is Eidos Therapeutics, Inc.

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is c/o The Corporation Trust Company, 1209 Orange Street in the City of Wilmington, County of New Castle, 19801. The name of its registered agent at such address is The Corporation Trust Company.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

ARTICLE IV

CAPITAL STOCK

The total number of shares of capital stock which the Corporation shall have authority to issue is One Hundred Fifty Five Million (155,000,000), of which (i) One Hundred Fifty Million (150,000,000) shares shall be a class designated as common stock, par value $0.001 per share (the “Common Stock”), and (ii) Five Million (5,000,000) shares shall be a class designated as preferred stock, par value $0.001 per share (the “Preferred Stock”).

Except as otherwise provided in any certificate of designations of any series of Preferred Stock, the number of authorized shares of the class of Common Stock or Preferred Stock may from time to time be increased or decreased (but not below the number of shares of such class outstanding) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of the Corporation irrespective of the provisions of Section 242(b)(2) of the DGCL.

The powers, preferences and rights of, and the qualifications, limitations and restrictions upon, each class or series of stock shall be determined in accordance with, or as set forth below in, this Article IV.

A. COMMON STOCK

Subject to all the rights, powers and preferences of the Preferred Stock and except as provided by law or in this Certificate (or in any certificate of designations of any series of Preferred Stock):

(a)the holders of the Common Stock shall have the exclusive right to vote for the election of directors of the Corporation (the “Directors”) and on all other matters requiring stockholder action, each outstanding share entitling the holder thereof to one vote on each matter properly submitted to the stockholders of the Corporation for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate (or on any amendment to a certificate of designations of any series of Preferred Stock) that alters or changes the powers, preferences, rights or other terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock are entitled to vote, either separately or together with the holders of one or more other such series, on such amendment pursuant to this Certificate (or pursuant to a certificate of designations of any series of Preferred Stock) or pursuant to the DGCL;

(b)dividends may be declared and paid or set apart for payment upon the Common Stock out of any assets or funds of the Corporation legally available for the payment of dividends, but only when and as declared by the Board of Directors or any authorized committee thereof; and

(c)upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the net assets of the Corporation shall be distributed pro rata to the holders of the Common Stock.

B. PREFERRED STOCK

The Board of Directors or any authorized committee thereof is expressly authorized, to the fullest extent permitted by law, to provide by resolution or resolutions for, out of the unissued shares of Preferred Stock, the issuance of the shares of Preferred Stock in one or more series of such stock, and by filing a certificate of designations pursuant to applicable law of the State of Delaware, to establish or change from time to time the number of shares of each such series, and to fix the designations, powers, including voting powers, full or limited, or no voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof.

ARTICLE V

STOCKHOLDER ACTION

1.Action without Meeting. Except as otherwise required by statute and subject to the rights, if any, of the holders of any series of Preferred Stock, any action required or permitted to be taken by stockholders of the Corporation may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding capital stock of the Corporation having no less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

2.Special Meetings. Except as otherwise required by statute and subject to the rights, if any, of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation may be called only by (a) the Board of Directors or (b) the holders of at least 25% of the outstanding shares of Common Stock in compliance with the procedures set forth in the Bylaws, and special meetings of stockholders may not be called by any other person or persons. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the Corporation.

ARTICLE VI

DIRECTORS

1.General. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors except as otherwise provided herein or required by law.

2.Election of Directors. Election of Directors need not be by written ballot unless the Bylaws of the Corporation (the “Bylaws”) shall so provide.

3.Number of Directors; Term of Office. The number of Directors of the Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors. In no case shall a decrease in the authorized number of Directors remove or shorten the term of any incumbent Director. Each Director shall be elected to hold office for a one-year term expiring at the next annual meeting of stockholders. Notwithstanding

the foregoing, and subject to the rights, if any, of the holders of any series of Preferred Stock with respect to the election of Directors, each Director shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation, or removal. Whenever, pursuant to the provisions of Article IV of this Certificate, the holders of any one or more series of Preferred Stock shall have the right, voting separately as a series or together with holders of other such series, to elect Directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate and any certificate of designations applicable to such series.

4.Vacancies. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect Directors and to fill vacancies in the Board of Directors relating thereto, any and all vacancies in the Board of Directors, however occurring, including, without limitation, by reason of an increase in the size of the Board of Directors, or the death, resignation, disqualification or removal of a Director, may be filled by either (a) the affirmative vote of a majority of the remaining Directors then in office, even if less than a quorum of the Board of Directors or (b) the holders of a majority of the outstanding shares of capital stock then entitled to vote at an election of Directors. Any Director appointed in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of Directors in which the new directorship was created or the vacancy occurred and until such Director’s successor shall have been duly elected and qualified or until his or her earlier resignation, death or removal. In the event of a vacancy in the Board of Directors, the remaining Directors, except as otherwise provided by law, shall exercise the powers of the full Board of Directors until the vacancy is filled.

5.Removal. Subject to the rights, if any, of any series of Preferred Stock to elect Directors and to remove any Director whom the holders of any such series have the right to elect, any Director (including persons elected by Directors to fill vacancies in the Board of Directors) may be removed from office only by the affirmative vote of the holders of a majority of the outstanding shares of capital stock then entitled to vote at an election of Directors.

ARTICLE VII

LIMITATION OF LIABILITY

A Director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (a) for any breach of the Director’s duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the DGCL or (d) for any transaction from which the Director derived an improper personal benefit. If the DGCL is amended after the effective date of this Certificate to authorize corporate action further eliminating or limiting the personal liability of Directors, then the liability of a Director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

Any amendment, repeal or modification of this Article VII by either of (i) the stockholders of the Corporation or (ii) an amendment to the DGCL, shall not adversely affect any right or protection existing at the time of such amendment, repeal or modification with respect to any acts or omissions occurring before such amendment, repeal or modification of a person serving as a Director at the time of such amendment, repeal or modification.

ARTICLE VIII

AMENDMENT OF BYLAWS

1.Amendment by Directors. Except as otherwise provided by law, the Bylaws of the Corporation may be amended, altered or repealed by the Board of Directors.

2.Amendment by Stockholders. Subject to the rights, if any, of the holders of any series of Preferred Stock, the Bylaws of the Corporation may be amended, altered or repealed at any annual meeting of stockholders, or special meeting of stockholders called for such purpose, by the affirmative vote of a majority of the outstanding shares of capital stock entitled to vote on such amendment, alteration or repeal.

ARTICLE IX

AMENDMENT OF CERTIFICATE OF INCORPORATION

The Corporation reserves the right to amend or repeal this Certificate in the manner now or hereafter prescribed by statute and this Certificate, and all rights conferred upon stockholders herein are granted subject to this reservation. Whenever any vote of the holders of capital stock of the Corporation is required to amend or repeal any provision of this Certificate, and in addition to any other vote of holders of capital stock that is required by this Certificate or by law, such amendment or repeal shall require the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment or repeal, and the affirmative vote of the majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose.

[End of Text]

THIS AMENDED AND RESTATED CERTIFICATE OF INCORPORATION is executed by its duly authorized officer this 22nd day of June, 2018.

EIDOS THERAPEUTICS, INC.


By:		/s/ Neil Kumar
Name:		Neil Kumar
Title:		Chief Executive Officer

[SIGNATURE PAGE TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION]

Exhibit 3.2

AMENDED AND RESTATED

BYLAWS

EIDOS THERAPEUTICS, INC.

(the “Corporation”)

ARTICLE I

Stockholders

SECTION 1.Annual Meeting. The annual meeting of stockholders (any such meeting being referred to in these Bylaws as an “Annual Meeting”) shall be held at the hour, date and place within or without the United States, or if determined solely by the Board of Directors in its sole discretion, by remote communication, fixed by the Corporation’s Board of Directors (the “Board of Directors”), which time, date and place may subsequently be changed at any time by the Board of Directors.

SECTION 2.Notice of Stockholder Business and Nominations.

(a)Annual Meetings of Stockholders.

(1)Nominations of persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be brought before an Annual Meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Bylaw, who is entitled to vote at the meeting, who is present (in person or by proxy) at the meeting and who complies with the notice procedures set forth in this Bylaw as to such nomination or business. For the avoidance of doubt, the foregoing clause (ii) shall be the exclusive means for a stockholder to bring nominations or business properly before an Annual Meeting (other than matters properly brought under Rule 14a-8 (or any successor rule) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), and such stockholder must comply with the notice and other procedures set forth in Article I, Section 2(a)(2) and (3) of this Bylaw to bring such nominations or business properly before an Annual Meeting. In addition to the other requirements set forth in this Bylaw, for any proposal of business to be considered at an Annual Meeting, it must be a proper subject for action by stockholders of the Corporation under Delaware law.

(2)For nominations or other business to be properly brought before an Annual Meeting by a stockholder pursuant to clause (ii) of Article I, Section 2(a)(1) of this Bylaw, the stockholder must (i) have given Timely Notice (as defined below) thereof in writing to the Secretary of the Corporation, (ii) have provided any updates or supplements to such notice at the times and in the forms required by this Bylaw and

(iii) together with the beneficial owner(s), if any, on whose behalf the nomination or business proposal is made, have acted in accordance with the representations set forth in the Solicitation Statement (as defined below) required by this Bylaw. To be timely, a stockholder’s written notice shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the one-year anniversary of the preceding year’s Annual Meeting; provided, however, that in the event the Annual Meeting is first convened more than thirty (30) days before or more than sixty (60) days after such anniversary date, or if no Annual Meeting were held in the preceding year, notice by the stockholder to be timely must be received by the Secretary of the Corporation not later than the close of business on the later of the ninetieth (90th) day prior to the scheduled date of such Annual Meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made (such notice within such time periods shall be referred to as “Timely Notice”). Notwithstanding anything to the contrary provided herein, for the first Annual Meeting following the initial public offering of common stock of the Corporation, a stockholder’s notice shall be timely if received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the ninetieth (90th) day prior to the scheduled date of such Annual Meeting or the tenth (10th) day following the day on which public announcement of the date of such Annual Meeting is first made or sent by the Corporation. Such stockholder’s Timely Notice shall set forth:

(A)as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected);

(B)as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, and any material interest in such business of each Proposing Person (as defined below);

(C)(i) the name and address of the stockholder giving the notice, as they appear on the Corporation’s books, and the names and addresses of the other Proposing Persons (if any) and (ii) as to each Proposing Person, the following information: (a) the class or series and number of all shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially or of record by such Proposing Person or any of its affiliates or associates (as such terms are defined in Rule 12b-2 promulgated under the Exchange Act), including any shares of any class or series of capital stock of the Corporation as to which such Proposing Person or any of its affiliates or associates has a right to acquire beneficial ownership at any time in the future, (b) all Synthetic Equity Interests (as defined below) in which such Proposing Person or any of its affiliates or associates, directly or indirectly, holds an interest including a description of the material terms of each such Synthetic Equity Interest, including without

limitation, identification of the counterparty to each such Synthetic Equity Interest and disclosure, for each such Synthetic Equity Interest, as to (x) whether or not such Synthetic Equity Interest conveys any voting rights, directly or indirectly, in such shares to such Proposing Person, (y) whether or not such Synthetic Equity Interest is required to be, or is capable of being, settled through delivery of such shares and (z) whether or not such Proposing Person and/or, to the extent known, the counterparty to such Synthetic Equity Interest has entered into other transactions that hedge or mitigate the economic effect of such Synthetic Equity Interest, (c) any proxy (other than a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the Exchange Act), agreement, arrangement, understanding or relationship pursuant to which such Proposing Person has or shares a right to, directly or indirectly, vote any shares of any class or series of capital stock of the Corporation, (d) any rights to dividends or other distributions on the shares of any class or series of capital stock of the Corporation, directly or indirectly, owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, and (e) any performance-related fees (other than an asset based fee) that such Proposing Person, directly or indirectly, is entitled to based on any increase or decrease in the value of shares of any class or series of capital stock of the Corporation or any Synthetic Equity Interests (the disclosures to be made pursuant to the foregoing clauses (a) through (e) are referred to, collectively, as “Material Ownership Interests”) and (iii) a description of the material terms of all agreements, arrangements or understandings (whether or not in writing) entered into by any Proposing Person or any of its affiliates or associates with any other person for the purpose of acquiring, holding, disposing or voting of any shares of any class or series of capital stock of the Corporation;

(D)(i) a description of all agreements, arrangements or understandings by and among any of the Proposing Persons, or by and among any Proposing Persons and any other person (including with any proposed nominee(s)), pertaining to the nomination(s) or other business proposed to be brought before the meeting of stockholders (which description shall identify the name of each other person who is party to such an agreement, arrangement or understanding), and (ii) identification of the names and addresses of other stockholders (including beneficial owners) known by any of the Proposing Persons to support such nominations or other business proposal(s), and to the extent known the class and number of all shares of the Corporation’s capital stock owned beneficially or of record by such other stockholder(s) or other beneficial owner(s); and

(E)a statement whether or not the stockholder giving the notice and/or the other Proposing Person(s), if any, will deliver a proxy statement and form of proxy to holders of, in the case of a business proposal, at least the percentage of voting power of all of the shares of capital stock of the Corporation required under applicable law to approve the proposal or, in the case of a nomination or nominations, at least the percentage of voting power of all of the shares of capital stock of the Corporation reasonably believed by such Proposing Person to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder (such statement, the “Solicitation Statement”).

For purposes of this Article I of these Bylaws, the term “Proposing Person” shall mean the following persons: (i) the stockholder of record providing the notice of nominations or business proposed to be brought before a stockholders’ meeting, and (ii) the beneficial owner(s), if different, on whose behalf the nominations or business proposed to be brought before a stockholders’ meeting is made. For purposes of this Section 2 of Article I of these Bylaws, the term “Synthetic Equity Interest” shall mean any transaction, agreement or arrangement (or series of transactions, agreements or arrangements), including, without limitation, any derivative, swap, hedge, repurchase or so-called “stock borrowing” agreement or arrangement, the purpose or effect of which is to, directly or indirectly: (a) give a person or entity economic benefit and/or risk similar to ownership of shares of any class or series of capital stock of the Corporation, in whole or in part, including due to the fact that such transaction, agreement or arrangement provides, directly or indirectly, the opportunity to profit or avoid a loss from any increase or decrease in the value of any shares of any class or series of capital stock of the Corporation, (b) mitigate loss to, reduce the economic risk of or manage the risk of share price changes for, any person or entity with respect to any shares of any class or series of capital stock of the Corporation, (c) otherwise provide in any manner the opportunity to profit or avoid a loss from any decrease in the value of any shares of any class or series of capital stock of the Corporation, or (d) increase or decrease the voting power of any person or entity with respect to any shares of any class or series of capital stock of the Corporation.

(3)A stockholder providing Timely Notice of nominations or business proposed to be brought before an Annual Meeting shall further update and supplement such notice, if necessary, so that the information (including, without limitation, the Material Ownership Interests information) provided or required to be provided in such notice pursuant to this Bylaw shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to such Annual Meeting, and such update and supplement shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the fifth (5th) business day after the record date for the Annual Meeting (in the case of the update and supplement required to be made as of the record date), and not later than the close of business on the eighth (8th) business day prior to the date of the Annual Meeting (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting).

(4)Notwithstanding anything in the second sentence of Article I, Section 2(a)(2) of this Bylaw to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least ten (10) days before the last day a stockholder may deliver a notice of nomination in accordance with the second sentence of Article I, Section 2(a)(2), a stockholder’s notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be received by the Secretary of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(b)General.

(1)Only such persons who are nominated in accordance with the provisions of this Bylaw shall be eligible for election and to serve as directors and only such business shall be conducted at an Annual Meeting as shall have been brought before the meeting in accordance with the provisions of this Bylaw or in accordance with Rule 14a-8 under the Exchange Act. The Board of Directors or a designated committee thereof shall have the power to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the provisions of this Bylaw. If neither the Board of Directors nor such designated committee makes a determination as to whether any stockholder proposal or nomination was made in accordance with the provisions of this Bylaw, the presiding officer of the Annual Meeting shall have the power and duty to determine whether the stockholder proposal or nomination was made in accordance with the provisions of this Bylaw. If the Board of Directors or a designated committee thereof or the presiding officer, as applicable, determines that any stockholder proposal or nomination was not made in accordance with the provisions of this Bylaw, such proposal or nomination shall be disregarded and shall not be presented for action at the Annual Meeting.

(2)Except as otherwise required by law, nothing in this Article I, Section 2 shall obligate the Corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the Corporation or the Board of Directors information with respect to any nominee for director or any other matter of business submitted by a stockholder.

(3)Notwithstanding the foregoing provisions of this Article I, Section 2, if the nominating or proposing stockholder (or a qualified representative of the stockholder) does not appear at the Annual Meeting to present a nomination or any business, such nomination or business shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Article I, Section 2, to be considered a qualified representative of the proposing stockholder, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, to the presiding officer at the meeting of stockholders.

(4)For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(5)Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of (i) stockholders to have proposals included in the Corporation’s proxy statement pursuant to Rule 14a-8 (or any successor rule), as applicable, under the Exchange Act and, to the extent required by such rule, have such proposals considered and voted on at an Annual Meeting or (ii) the holders of any series of Preferred Stock to elect directors under specified circumstances.

SECTION 3.Special Meetings.

(a)Except as otherwise required by statute and subject to the rights, if any, of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation may be called only by (i) the Board of Directors acting pursuant to a resolution approved by the affirmative vote of a majority of the Directors then in office or (ii) the holders of at least 25% of the voting power of all outstanding shares of stock of the Corporation as provided in Section 3(b). The Board of Directors may postpone or reschedule any previously scheduled special meeting of stockholders. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the Corporation.

(b)A special meeting of stockholders shall be called by the Secretary upon written request (a “Special Meeting Request”) of one or more record holders of shares of stock of the Corporation representing not less than 25% of the voting power of all outstanding shares of stock of the Corporation (the “Requisite Percentage”) who have complied in full with the requirements set forth in these Bylaws. For purposes of this Section 3(b) and for determining the Requisite Percentage, a stockholder of record or a beneficial owner, as the case may be, shall be deemed to own the shares of stock of the Corporation that such stockholder or, if such stockholder is a nominee, custodian or other agent that is holding the shares on behalf of another person (the “beneficial owner”), that such beneficial owner would be deemed to own pursuant to Rule 200(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), excluding any shares as to which such stockholder or beneficial owner, as the case may be, does not have the right to vote or direct the vote at the special meeting or as to which such stockholder or beneficial owner, as the case may be, has entered into a derivative or other agreement, arrangement or understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares.

(i)A Special Meeting Request must be delivered by hand or by registered U.S. mail, postage prepaid, return receipt requested, or courier service, postage prepaid, to the attention of the Secretary at the principal executive offices of the Corporation. A Special Meeting Request shall be valid only if it is signed and dated by each stockholder of record submitting the Special Meeting Request and the beneficial owners, if any, on whose behalf the Special Meeting Request is being made, or such stockholder’s or beneficial owner’s duly authorized agent (each, a “Requesting Stockholder”) collectively representing the Requisite Percentage, and includes (A) a statement of the specific purpose(s) of the special meeting and the reasons for conducting such business at the special meeting; (B) as to any director nominations proposed to be presented at the special meeting and any matter (other than a director nomination) proposed to be conducted at the special meeting and as to each Requesting Stockholder, the information, statements, representations, agreements and other documents that would be required to be set forth in or included with a stockholder’s notice of a nomination pursuant to Section 2(a)(2) of this Article I (including any nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected and a completed and the additional information signed representation and agreement as required by Section 2(a)(2)(A) and (C)-(E) of this Article I) and/or a stockholder’s notice of business proposed to be brought before a meeting pursuant to Section 2(a)(2)(B)-(E) of this Article I, as applicable; (C) a representation that each Requesting Stockholder, or one or more representatives of each such stockholder, intends to appear in person or by proxy at the

special meeting to present the nomination(s) or business to be brought before the special meeting; (D) an agreement by the Requesting Stockholders to notify the Corporation promptly in the event of any disposition prior to the record date for the special meeting of shares of the Corporation owned beneficially or of record and an acknowledgement that any such disposition shall be deemed to be a revocation of such Special Meeting Request with respect to such disposed shares; and (E) documentary evidence that the Requesting Stockholders own the Requisite Percentage as of the date on which the Special Meeting Request is delivered to the Secretary; provided, however, that if the Requesting Stockholders are not the beneficial owners of the shares representing the Requisite Percentage, then to be valid, the Special Meeting Request must also include documentary evidence (or, if not simultaneously provided with the Special Meeting Request, such documentary evidence must be delivered to the Secretary within 10 days after the date on which the Special Meeting Request is delivered to the Secretary) that the beneficial owners on whose behalf the Special Meeting Request is made beneficially own the Requisite Percentage as of the date on which such Special Meeting Request is delivered to the Secretary. In addition, the Requesting Stockholders and the beneficial owners, if any, on whose behalf the Special Meeting Request is being made shall (x) further update and supplement the information provided in the Special Meeting Request, if necessary, so that the information provided or required to be provided therein shall be true and correct as of the record date for the special meeting, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five business days following the later of the record date for the meeting or the date notice of the record date is first publicly disclosed and (y) promptly provide any other information reasonably requested by the Corporation.

(ii)A Special Meeting Request shall not be valid, and a special meeting requested by stockholders shall not be held, if (A) the Special Meeting Request does not comply with this section 3(b); (B) the Special Meeting Request relates to an item of business that is not a proper subject for stockholder action under applicable law (as determined in good faith by the Board of Directors); (C) the Special Meeting Request is delivered during the period commencing 120 days prior to the first anniversary of the date of the immediately preceding annual meeting of stockholders and ending on the earlier of (x) the date of the next annual meeting and (y) 30 days after the first anniversary of the date of the previous annual meeting; (D) an identical or substantially similar item (as determined in good faith by the Board of Directors, a “Similar Item”), other than the election of directors, was presented at an annual or special meeting of stockholders held not more than 12 months before the Special Meeting Request is delivered; (E) a Similar Item was presented at an annual or special meeting of stockholders held not more than 120 days before the Special Meeting Request is delivered (and, for purposes of this clause (E), the election of directors shall be deemed to be a “Similar Item” with respect to all items of business involving the election or removal of directors, changing the size of the Board of Directors and the filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors); (F) a Similar Item is included in the Corporation’s notice of meeting as an item of business to be brought before an annual or special meeting of stockholders that has been called but not yet held or that is called for a date within 120 days of the receipt by the Corporation of a Special Meeting Request; or (G) the Special Meeting Request was made in a manner that involved a violation of Regulation 14A under the Exchange Act or other applicable law.

(iii)Special meetings of stockholders called pursuant to this Section 3(b) shall be held at such place, on such date, and at such time as the Board of Directors shall fix; provided, however, that the special meeting shall not be held more than 120 days after receipt by the Corporation of a valid Special Meeting Request.

(iv)The Requesting Stockholders may revoke a Special Meeting Request by written revocation delivered to the Secretary at the principal executive offices of the Corporation at any time prior to the special meeting. If, at any point after 60 days following the earliest dated Special Meeting Request, the unrevoked requests from Requesting Stockholders (whether by specific written revocation or deemed revocation pursuant to clause (D) of Section 3(b)(i)) represent in the aggregate less than the Requisite Percentage, the Board of Directors, in its discretion, may cancel the special meeting.

(v)In determining whether a special meeting of stockholders has been requested by the Requesting Stockholders representing in the aggregate at the least the Requisite Percentage, multiple Special Meeting Requests delivered to the Secretary of the Corporation will be considered together only if (A) each Special Meeting Request identifies substantially the same purpose or purposes of the special meeting and substantially the same matters proposed to be acted on at the special meeting, in each case as determined by the Board of Directors (which, if such purpose is the election or removal of directors, changing the size of the Board of Directors and/or the filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors, will mean that the exact same person or persons are proposed for election or removal in each relevant Stockholder Meeting Request), and (B) such Special Meeting Requests have been dated and delivered to the Secretary of the Corporation within 60 days of the earliest dated Special Meeting Request.

(vi)If none of the Requesting Stockholders appear or send a duly authorized agent to present the business to be presented for consideration specified in the Special Meeting Request, the Corporation need not present such business for a vote at the special meeting, notwithstanding that proxies in respect of such matter may have been received by the Corporation.

(vii)Business transacted at any special meeting called pursuant to this section 3(b) shall be limited to (A) the purpose(s) stated in the valid Special Meeting Request received from the Requisite Percentage of record holders and (B) any additional matters that the Board of Directors determines to include in the Corporation’s notice of the special meeting.

SECTION 4.Notice of Meetings; Adjournments.

(a)A notice of each Annual Meeting stating the hour, date and place, if any, of such Annual Meeting and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, shall be given not less than ten (10) days nor more than sixty (60) days before the Annual Meeting, to each stockholder entitled to vote thereat by delivering such notice to such stockholder or by mailing it, postage prepaid, addressed to such stockholder at the address of such stockholder as it appears on the Corporation’s stock transfer books. Without limiting the manner by which notice may otherwise be given to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the Delaware General Corporation Law (“DGCL”).

(b)Notice of all special meetings of stockholders shall be given in the same manner as provided for Annual Meetings, except that the notice of all special meetings shall state the purpose or purposes for which the meeting has been called.

(c)Notice of an Annual Meeting or special meeting of stockholders need not be given to a stockholder if a waiver of notice is executed, or waiver of notice by electronic transmission is provided, before or after such meeting by such stockholder or if such stockholder attends such meeting, unless such attendance is for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.

(d)The Board of Directors may postpone and reschedule any previously scheduled Annual Meeting or special meeting of stockholders and any record date with respect thereto, regardless of whether any notice or public disclosure with respect to any such meeting has been sent or made pursuant to Section 2 of this Article I of these Bylaws or otherwise. In no event shall the public announcement of an adjournment, postponement or rescheduling of any previously scheduled meeting of stockholders commence a new time period for the giving of a stockholder’s notice under this Article I of these Bylaws.

(e)When any meeting is convened, the presiding officer may adjourn the meeting if (i) no quorum is present for the transaction of business, (ii) the Board of Directors determines that adjournment is necessary or appropriate to enable the stockholders to consider fully information which the Board of Directors determines has not been made sufficiently or timely available to stockholders, or (iii) the Board of Directors determines that adjournment is otherwise in the best interests of the Corporation. When any Annual Meeting or special meeting of stockholders is adjourned to another hour, date or place, notice need not be given of the adjourned meeting other than an announcement at the meeting at which the adjournment is taken of the hour, date and place, if any, to which the meeting is adjourned and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting; provided, however, that if the adjournment is for more than thirty (30) days from the meeting date, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting shall be given to each stockholder of record entitled to vote thereat and each stockholder who, by law or under the Certificate of Incorporation of the Corporation (as the same may hereafter be amended and/or restated, the “Certificate”) or these Bylaws, is entitled to such notice.

SECTION 5.Quorum. A majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at any meeting of stockholders. If less than a quorum is present at a meeting, the holders of voting stock representing a majority of the voting power present at the meeting or the presiding officer may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice, except as provided in Section 4 of this Article I. At such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally noticed. The stockholders present at a duly constituted meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

SECTION 6.Voting and Proxies. Stockholders shall have one vote for each share of stock entitled to vote owned by them of record according to the stock ledger of the Corporation as of the record date, unless otherwise provided by law or by the Certificate. Stockholders may vote either (i) in person, (ii) by written proxy or (iii) by a transmission permitted by Section 212(c) of the DGCL. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission permitted by Section 212(c) of the DGCL may be substituted for or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. Proxies shall be filed in accordance with the procedures established for the meeting of stockholders. Except as otherwise limited therein or as otherwise provided by law, proxies authorizing a person to vote at a specific meeting shall entitle the persons authorized thereby to vote at any adjournment of such meeting, but they shall not be valid after final adjournment of such meeting. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by or on behalf of any one of them unless at or prior to the exercise of the proxy the Corporation receives a specific written notice to the contrary from any one of them.

SECTION 7.Action at Meeting. When a quorum is present at any meeting of stockholders, any matter before any such meeting (other than an election of a director or directors) shall be decided by a majority of the votes properly cast for and against such matter, except for any matter where a different or minimum vote is provided by law, by the Certificate or by these Bylaws, or the rules of any stock exchange on which the Corporation’s securities are listed, in which case such different or minimum vote shall be the applicable vote on such matter. Any election of directors by stockholders shall be determined by a plurality of the votes properly cast on the election of directors.

SECTION 8.Stockholder Lists. The Corporation shall prepare and make, at least ten (10) days before every Annual Meeting or special meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for a period of at least ten (10) days prior to the meeting in the manner provided by law. The list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law.

SECTION 9.Presiding Officer. The Board of Directors shall designate a representative to preside over all Annual Meetings or special meetings of stockholders, provided that if the Board of Directors does not so designate such a presiding officer, then the Chairman of the Board of Directors (the “Chairman of the Board”), if one is elected, shall preside over such meetings. If the Board of Directors does not so designate such a presiding officer and there is no Chairman of the Board or the Chairman of the Board is unable to so preside or is absent, then the Chief Executive Officer, if one is elected, shall preside over such meetings, provided further that if there is no Chief Executive Officer or the Chief Executive Officer is unable to so preside or is absent, then the President shall preside over such meetings. The presiding officer at any Annual Meeting or special meeting of stockholders shall have the power, among other things, to adjourn such meeting at any time and from time to time, subject to Sections 4 and 5 of this Article I. The order of business and all other matters of procedure at any meeting of the stockholders shall be determined by the presiding officer.

SECTION 10.Inspectors of Elections. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the presiding officer shall appoint one or more inspectors to act at the meeting. Any inspector may, but need not, be an officer, employee or agent of the Corporation. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall perform such duties as are required by the DGCL, including the counting of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors. The presiding officer may review all determinations made by the inspectors, and in so doing the presiding officer shall be entitled to exercise his or her sole judgment and discretion and he or she shall not be bound by any determinations made by the inspectors. All determinations by the inspectors and, if applicable, the presiding officer, shall be subject to further review by any court of competent jurisdiction.

SECTION 11. Action by Written Consent.

(a)Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request that the Board of Directors fix a record date. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such written notice is received, adopt a resolution fixing the record date (unless a record date has previously been fixed by the Board of Directors pursuant to Article IV, Section 4(c) prior to the receipt of such written notice). If no record date has been fixed by the Board of Directors pursuant to Article IV, Section 4(c) or otherwise within ten (10) days after the date on which such written notice is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be the date provided in such circumstance in Article IV, Section 4.

(b)In the event of the delivery, in the manner provided by this Section 11 and applicable law, to the Corporation of written consent or consents to take corporate action and/or any related revocation or revocations, the Corporation shall engage independent inspectors of elections for the purpose of performing promptly a ministerial review of the validity of the consents and revocations. For the purpose of permitting the inspectors to perform such review, no action by written consent and without a meeting shall be effective until such inspectors have completed their review, determined that the requisite number of valid and unrevoked consents delivered to the Corporation in accordance with this Section 11 and applicable law have been obtained to authorize or take the action specified in the consents, and certified such determination for entry in the records of the Corporation kept for the purpose of recording the proceedings of meetings of stockholders. Nothing contained in this Section 11(b) shall in any way be construed to suggest or imply that the Board of Directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after such certification by the independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

(c)No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days after the date of the first delivery of a written consent to the Corporation in accordance with this Section 11, a valid written consent or valid written consents signed by a sufficient number of stockholders to take such action are delivered to the Corporation in the manner prescribed in this Section 11 and applicable law, and not revoked.

ARTICLE II

Directors

SECTION 1.Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors except as otherwise provided by the Certificate or required by law.

SECTION 2.Number and Terms. The number of directors of the Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors. The directors shall hold office in the manner provided in the Certificate.

SECTION 3.Qualification. No director need be a stockholder of the Corporation.

SECTION 4.Vacancies. Vacancies in the Board of Directors shall be filled in the manner provided in the Certificate.

SECTION 5.Removal. Directors may be removed from office as provided in the Certificate.

SECTION 6.Resignation. A director may resign at any time by giving written notice to the Chairman of the Board, if one is elected, the President or the Secretary. A resignation shall be effective upon receipt, unless the resignation otherwise provides.

SECTION 7.Regular Meetings. The regular annual meeting of the Board of Directors may be held, without notice other than this Section 7, on the same date and at the same place as the Annual Meeting following the close of such meeting of stockholders. Other regular meetings of the Board of Directors may be held at such hour, date and place as the Board of Directors may by resolution from time to time determine.

SECTION 8.Special Meetings. Special meetings of the Board of Directors may be called, orally or in writing, by or at the request of a majority of the directors, the Chairman of the Board, if one is elected, or the President. The person calling any such special meeting of the Board of Directors may fix the hour, date and place thereof.

SECTION 9.Notice of Meetings. Notice of the hour, date and place of all special meetings of the Board of Directors shall be given to each director by the Secretary or an Assistant Secretary, or in case of the death, absence, incapacity or refusal of such persons, by the Chairman of the Board, if one is elected, or the President or such other officer designated by the Chairman of the Board, if one is elected, or the President. Notice of any special meeting of the Board of Directors shall be given to each director in person, by telephone, or by facsimile,

electronic mail or other form of electronic communication, sent to his or her business or home address, at least twenty-four (24) hours in advance of the meeting, or by written notice mailed to his or her business or home address, at least forty-eight (48) hours in advance of the meeting. Such notice shall be deemed to be delivered when hand-delivered to such address, read to such director by telephone, deposited in the mail so addressed, with postage thereon prepaid if mailed, dispatched or transmitted if sent by facsimile transmission or by electronic mail or other form of electronic communications. A written waiver of notice signed before or after a meeting by a director and filed with the records of the meeting shall be deemed to be equivalent to notice of the meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because such meeting is not lawfully called or convened. Except as otherwise required by law, by the Certificate or by these Bylaws, neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

SECTION 10.Quorum. At any meeting of the Board of Directors, a majority of the total number of directors shall constitute a quorum for the transaction of business, but if less than a quorum is present at a meeting, a majority of the directors present may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice. Any business which might have been transacted at the meeting as originally noticed may be transacted at such adjourned meeting at which a quorum is present. For purposes of this section, the total number of directors includes any unfilled vacancies on the Board of Directors.

SECTION 11.Action at Meeting. At any meeting of the Board of Directors at which a quorum is present, the vote of a majority of the directors present shall constitute action by the Board of Directors, unless otherwise required by law, by the Certificate or by these Bylaws.

SECTION 12.Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the records of the meetings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Such consent shall be treated as a resolution of the Board of Directors for all purposes.

SECTION 13.Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

SECTION 14.Presiding Director. The Board of Directors shall designate a representative to preside over all meetings of the Board of Directors, provided that if the Board of Directors does not so designate such a presiding director or such designated presiding director is unable to so preside or is absent, then the Chairman of the Board, if one is elected, shall preside over all meetings of the Board of Directors. If both the designated presiding director, if one is so designated, and the Chairman of the Board, if one is elected, are unable to preside or are absent, the Board of Directors shall designate an alternate representative to preside over a meeting of the Board of Directors.

SECTION 15.Committees. The Board of Directors may designate one or more committees, including, without limitation, a Compensation Committee, a Nominating & Corporate Governance Committee and an Audit Committee, and may delegate thereto some or all of its powers except those which by law, by the Certificate or by these Bylaws may not be delegated. Except as the Board of Directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the Board of Directors or in such rules, its business shall be conducted so far as possible in the same manner as is provided by these Bylaws for the Board of Directors. Except as the Board of Directors may otherwise determine, all members of such committees shall hold such offices at the pleasure of the Board of Directors. Except as the Board of Directors may otherwise determine, the Board of Directors may abolish any such committee at any time. Any committee to which the Board of Directors delegates any of its powers or duties shall keep records of its meetings and shall report its action to the Board of Directors.

SECTION 16.Compensation of Directors. Directors shall receive such compensation for their services as shall be determined by a majority of the Board of Directors, or a designated committee thereof, provided that directors who are serving the Corporation as employees and who receive compensation for their services as such, shall not receive any salary or other compensation for their services as directors of the Corporation.

ARTICLE III

Officers

SECTION 1.Enumeration. The officers of the Corporation shall consist of a President, a Treasurer, a Secretary and such other officers, including, without limitation, a Chairman of the Board of Directors, a Chief Executive Officer and one or more Vice Presidents (including Executive Vice Presidents or Senior Vice Presidents), Assistant Vice Presidents, Assistant Treasurers and Assistant Secretaries, as the Board of Directors may determine.

SECTION 2.Election. The Board of Directors shall elect, from time to time at a regular or special meeting, the President, the Treasurer and the Secretary. Other officers may be elected by the Board of Directors at any other regular or special meeting.

SECTION 3.Qualification. No officer need be a stockholder or a director. Any person may occupy more than one office of the Corporation at any time.

SECTION 4.Tenure. Except as otherwise provided by the Certificate or by these Bylaws, each of the officers of the Corporation shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.

SECTION 5.Resignation. Any officer may resign by delivering his or her written resignation to the Corporation addressed to the President or the Secretary, and such resignation shall be effective upon receipt, unless the resignation otherwise provides.

SECTION 6.Removal. Except as otherwise provided by law, the Board of Directors may remove any officer with or without cause by the affirmative vote of a majority of the directors then in office.

SECTION 7.Absence or Disability. In the event of the absence or disability of any officer, the Board of Directors may designate another officer to act temporarily in place of such absent or disabled officer.

SECTION 8.Vacancies. Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors.

SECTION 9.President. The President shall, subject to the direction of the Board of Directors, have such powers and shall perform such duties as the Board of Directors may from time to time designate.

SECTION 10.Chairman of the Board. The Chairman of the Board, if one is elected, shall have such powers and shall perform such duties as the Board of Directors may from time to time designate.

SECTION 11.Chief Executive Officer. The Chief Executive Officer, if one is elected, shall have such powers and shall perform such duties as the Board of Directors may from time to time designate.

SECTION 12.Vice Presidents and Assistant Vice Presidents. Any Vice President (including any Executive Vice President or Senior Vice President) and any Assistant Vice President shall have such powers and shall perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.

SECTION 13.Treasurer and Assistant Treasurers. The Treasurer shall, subject to the direction of the Board of Directors and except as the Board of Directors or the Chief Executive Officer may otherwise provide, have general charge of the financial affairs of the Corporation and shall cause to be kept accurate books of account. The Treasurer shall have custody of all funds, securities, and valuable documents of the Corporation. He or she shall have such other duties and powers as may be designated from time to time by the Board of Directors or the Chief Executive Officer. Any Assistant Treasurer shall have such powers and perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.

SECTION 14.Secretary and Assistant Secretaries. The Secretary shall record all the proceedings of the meetings of the stockholders and the Board of Directors (including committees of the Board of Directors) in books kept for that purpose. In his or her absence from any such meeting, a temporary secretary chosen at the meeting shall record the proceedings thereof. The Secretary shall have charge of the stock ledger (which may, however, be kept by any transfer or other agent of the Corporation). The Secretary shall have custody of the seal of the Corporation, and the Secretary, or an Assistant Secretary shall have authority to affix it to any instrument requiring it, and, when so affixed, the seal may be attested by his or her signature or that of an Assistant Secretary. The Secretary shall have such other duties and powers as may be designated from time to time by the Board of Directors or the Chief Executive Officer. In the absence of the Secretary, any Assistant Secretary may perform his or her duties and responsibilities. Any Assistant Secretary shall have such powers and perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.

SECTION 15.Other Powers and Duties. Subject to these Bylaws and to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors or the Chief Executive Officer.

ARTICLE IV

Capital Stock

SECTION 1.Certificates of Stock. Each stockholder shall be entitled to a certificate of the capital stock of the Corporation in such form as may from time to time be prescribed by the Board of Directors. Such certificate shall be signed by the Chairman of the Board, the President or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary. The Corporation’s seal and the signatures by the Corporation’s officers, the transfer agent or the registrar may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the time of its issue. Every certificate for shares of stock which are subject to any restriction on transfer and every certificate issued when the Corporation is authorized to issue more than one class or series of stock shall contain such legend with respect thereto as is required by law. Notwithstanding anything to the contrary provided in these Bylaws, the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares (except that the foregoing shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation), and by the approval and adoption of these Bylaws the Board of Directors has determined that all classes or series of the Corporation’s stock may be uncertificated, whether upon original issuance, re-issuance, or subsequent transfer.

SECTION 2.Transfers. Subject to any restrictions on transfer and unless otherwise authorized by the Board of Directors, shares of stock that are represented by a certificate may be transferred on the records of the Corporation by the surrender to the Corporation or its transfer agent of the certificate theretofore properly endorsed or accompanied by a written assignment or power of attorney properly executed, with transfer stamps (if necessary) affixed, and with such proof of the authenticity of signature as the Corporation or its transfer agent may reasonably require. Shares of stock that are not represented by a certificate may be transferred on the records of the Corporation by submitting to the Corporation or its transfer agent such evidence of transfer and following such other procedures as the Corporation or its transfer agent may require, or in such other manner as is authorized by the Board of Directors.

SECTION 3.Record Holders. Except as may otherwise be required by law, by the Certificate or by these Bylaws, the Corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock, until the shares have been transferred on the records of the Corporation in accordance with the requirements of these Bylaws.

SECTION 4.Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date: (a) in the case of determination of stockholders entitled to vote at any meeting of stockholders, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting, (b) in the case of any other action, shall not be more than sixty (60) days prior to such other action, and (c) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting shall not be more ten(10) days after the date upon such the resolution fixing the record date is adopted by the Board of Directors. If no record date is fixed: (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto;. and (iii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting shall: (A) when no prior action of the Board of Directors is required by law, be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (B) if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

SECTION 5.Replacement of Certificates. In case of the alleged loss, destruction or mutilation of a certificate of stock of the Corporation, a duplicate certificate may be issued in place thereof, upon such terms as the Board of Directors may prescribe.

ARTICLE V

Indemnification

SECTION 1.Definitions. For purposes of this Article:

(a)“Corporate Status” describes the status of a person who is serving or has served (i) as a Director of the Corporation, (ii) as an Officer of the Corporation, (iii) as a Non-Officer Employee of the Corporation, or (iv) as a director, partner, trustee, officer, employee or agent of any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan, foundation, association, organization or other legal entity which such person is or was serving at the request of the Corporation. For purposes of this Section 1(a), a Director, Officer or Non-Officer Employee of the Corporation who is serving or has served as a director, partner, trustee, officer, employee or agent of a Subsidiary shall be deemed to be serving at the request of the Corporation. Notwithstanding the foregoing, “Corporate Status” shall not include the status of a person who is serving or has served as a director, officer, employee or agent of a constituent corporation absorbed in a merger or consolidation transaction with the Corporation with respect to such person’s activities prior to said transaction, unless specifically authorized by the Board of Directors or the stockholders of the Corporation;

(b)“Director” means any person who serves or has served the Corporation as a director on the Board of Directors;

(c) “Disinterested Director” means, with respect to each Proceeding in respect of which indemnification is sought hereunder, a Director of the Corporation who is not and was not a party to such Proceeding;

(d)“Expenses” means all attorneys’ fees, retainers, court costs, transcript costs, fees of expert witnesses, private investigators and professional advisors (including, without limitation, accountants and investment bankers), travel expenses, duplicating costs, printing and binding costs, costs of preparation of demonstrative evidence and other courtroom presentation aids and devices, costs incurred in connection with document review, organization, imaging and computerization, telephone charges, postage, delivery service fees, and all other disbursements, costs or expenses of the type customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settling or otherwise participating in, a Proceeding;

(e)“Liabilities” means judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement;

(f)“Non-Officer Employee” means any person who serves or has served as an employee or agent of the Corporation, but who is not or was not a Director or Officer;

(g)“Officer” means any person who serves or has served the Corporation as an officer of the Corporation appointed by the Board of Directors;

(h)“Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, inquiry, investigation, administrative hearing or other proceeding, whether civil, criminal, administrative, arbitrative or investigative; and

(i)“Subsidiary” shall mean any corporation, partnership, limited liability company, joint venture, trust or other entity of which the Corporation owns (either directly or through or together with another Subsidiary of the Corporation) either (i) a general partner, managing member or other similar interest or (ii) (A) fifty percent (50%) or more of the voting power of the voting capital equity interests of such corporation, partnership, limited liability company, joint venture or other entity, or (B) fifty percent (50%) or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other entity.

SECTION 2.Indemnification of Directors and Officers.

(a)Subject to the operation of Section 4 of this Article V of these Bylaws, each Director and Officer shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), and to the extent authorized in this Section 2.

(1)Actions, Suits and Proceedings Other than By or In the Right of the Corporation. Each Director and Officer shall be indemnified and held harmless by the Corporation against any and all Expenses and Liabilities that are incurred or paid by such Director or Officer or on such Director’s or Officer’s behalf in connection with any Proceeding or any claim, issue or matter therein (other than an action by or in the right of the Corporation), which such Director or Officer is, or is threatened to be made, a party to or participant in by reason of such Director’s or Officer’s Corporate Status, if such Director or Officer acted in good faith and in a manner such Director or Officer reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.

(2)Actions, Suits and Proceedings By or In the Right of the Corporation. Each Director and Officer shall be indemnified and held harmless by the Corporation against any and all Expenses that are incurred by such Director or Officer or on such Director’s or Officer’s behalf in connection with any Proceeding or any claim, issue or matter therein by or in the right of the Corporation, which such Director or Officer is, or is threatened to be made, a party to or participant in by reason of such Director’s or Officer’s Corporate Status, if such Director or Officer acted in good faith and in a manner such Director or Officer reasonably believed to be in or not opposed to the best interests of the Corporation; provided, however, that no indemnification shall be made under this Section 2(a)(2) in respect of any claim, issue or matter as to which such Director or Officer shall have been finally adjudged by a court of competent jurisdiction to be liable to the Corporation, unless, and only to the extent that, the Court of Chancery or another court in which such Proceeding was brought shall determine upon application that, despite adjudication of liability, but in view of all the circumstances of the case, such Director or Officer is fairly and reasonably entitled to indemnification for such Expenses that such court deems proper.

(3)Survival of Rights. The rights of indemnification provided by this Section 2 shall continue as to a Director or Officer after he or she has ceased to be a Director or Officer and shall inure to the benefit of his or her heirs, executors, administrators and personal representatives.

(4)Actions by Directors or Officers. Notwithstanding the foregoing, the Corporation shall indemnify any Director or Officer seeking indemnification in connection with a Proceeding initiated by such Director or Officer only if such Proceeding (including any parts of such Proceeding not initiated by such Director or Officer) was authorized in advance by the Board of Directors of the Corporation, unless such Proceeding was brought to enforce such Officer’s or Director’s rights to indemnification or, in the case of Directors, advancement of Expenses under these Bylaws in accordance with the provisions set forth herein.

SECTION 3.Indemnification of Non-Officer Employees. Subject to the operation of Section 4 of this Article V of these Bylaws, each Non-Officer Employee may, in the discretion of the Board of Directors, be indemnified by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended, against any or all Expenses and Liabilities that are incurred by such Non-Officer Employee or on such Non-Officer Employee’s behalf in connection with any threatened, pending or completed Proceeding, or any claim, issue or matter therein, which such Non-Officer Employee is, or is threatened to be made, a party to or participant in by reason of such Non-Officer Employee’s Corporate Status, if such Non-Officer Employee acted in good faith and in a manner such Non-Officer Employee reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The rights of indemnification provided by this Section 3 shall exist as to a Non-Officer Employee after he or she has ceased to be a Non-Officer Employee and shall inure to the benefit of his or her heirs, personal representatives, executors and administrators. Notwithstanding the foregoing, the Corporation may indemnify any Non-Officer Employee seeking indemnification in connection with a Proceeding initiated by such Non-Officer Employee only if such Proceeding was authorized in advance by the Board of Directors.

SECTION 4.Determination. Unless ordered by a court, no indemnification shall be provided pursuant to this Article V to a Director, to an Officer or to a Non-Officer Employee unless a determination shall have been made that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal Proceeding, such person had no reasonable cause to believe his or her conduct was unlawful. Such determination shall be made by (a) a majority vote of the Disinterested Directors, even though less than a quorum of the Board of Directors, (b) a committee comprised of Disinterested Directors, such committee having been designated by a majority vote of the Disinterested Directors (even though less than a quorum), (c) if there are no such Disinterested Directors, or if a majority of Disinterested Directors so directs, by independent legal counsel in a written opinion, or (d) by the stockholders of the Corporation.

SECTION 5.Advancement of Expenses to Directors Prior to Final Disposition.

(a)The Corporation shall advance all Expenses incurred by or on behalf of any Director in connection with any Proceeding in which such Director is involved by reason of such Director’s Corporate Status within thirty (30) days after the receipt by the Corporation of a written statement from such Director requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by such Director and shall be preceded or accompanied by an undertaking by or on behalf of such Director to repay any Expenses so advanced if it shall ultimately be determined that such Director is not entitled to be indemnified against such Expenses. Notwithstanding the foregoing, the Corporation shall advance all Expenses incurred by or on behalf of any Director seeking advancement of expenses hereunder in connection with a Proceeding initiated by such Director only if such Proceeding (including any parts of such Proceeding not initiated by such Director) was (i) authorized by the Board of Directors, or (ii) brought to enforce such Director’s rights to indemnification or advancement of Expenses under these Bylaws.

(b)If a claim for advancement of Expenses hereunder by a Director is not paid in full by the Corporation within thirty (30) days after receipt by the Corporation of documentation of Expenses and the required undertaking, such Director may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and if successful in whole or in part, such Director shall also be entitled to be paid the expenses of prosecuting such claim. The failure of the Corporation (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders) to make a determination concerning the permissibility of such advancement of Expenses under this Article V shall not be a defense to an action brought by a Director for recovery of the unpaid amount of an advancement claim and shall not create a presumption that such advancement is not permissible. The burden of proving that a Director is not entitled to an advancement of expenses shall be on the Corporation.

(c)In any suit brought by the Corporation to recover an advancement of Expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such Expenses upon a final adjudication that the Director has not met any applicable standard for indemnification set forth in the DGCL.

SECTION 6.Advancement of Expenses to Officers and Non-Officer Employees Prior to Final Disposition.

(a)The Corporation may, at the discretion of the Board of Directors, advance any or all Expenses incurred by or on behalf of any Officer or any Non-Officer Employee in connection with any Proceeding in which such person is involved by reason of his or her Corporate Status as an Officer or Non-Officer Employee upon the receipt by the Corporation of a statement or statements from such Officer or Non-Officer Employee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by such Officer or Non-Officer Employee and shall be preceded or accompanied by an undertaking by or on behalf of such person to repay any Expenses so advanced if it shall ultimately be determined that such Officer or Non-Officer Employee is not entitled to be indemnified against such Expenses.

(b)In any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the Officer or Non-Officer Employee has not met any applicable standard for indemnification set forth in the DGCL.

SECTION 7.Contractual Nature of Rights.

(a)The provisions of this Article V shall be deemed to be a contract between the Corporation and each Director and Officer entitled to the benefits hereof at any time while this Article V is in effect, in consideration of such person’s past or current and any future performance of services for the Corporation. Neither amendment, repeal or modification of any provision of this Article V nor the adoption of any provision of the Certificate of Incorporation inconsistent with this Article V shall eliminate or reduce any right conferred by this Article V in respect of any act or omission occurring, or any cause of action or claim that accrues or arises or any state of facts existing, at the time of or before such amendment, repeal, modification or adoption of an inconsistent provision (even in the case of a proceeding based on such a state of facts that is commenced after such time), and all rights to indemnification and advancement of

Expenses granted herein or arising out of any act or omission shall vest at the time of the act or omission in question, regardless of when or if any proceeding with respect to such act or omission is commenced. The rights to indemnification and to advancement of expenses provided by, or granted pursuant to, this Article V shall continue notwithstanding that the person has ceased to be a Director or Officer of the Corporation and shall inure to the benefit of the estate, heirs, executors, administrators, legatees and distributes of such person.

(b)If a claim for indemnification hereunder by a Director or Officer is not paid in full by the Corporation within sixty (60) days after receipt by the Corporation of a written claim for indemnification, such Director or Officer may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim, and if successful in whole or in part, such Director or Officer shall also be entitled to be paid the expenses of prosecuting such claim. The failure of the Corporation (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders) to make a determination concerning the permissibility of such indemnification under this Article V shall not be a defense to an action brought by a Director or Officer for recovery of the unpaid amount of an indemnification claim and shall not create a presumption that such indemnification is not permissible. The burden of proving that a Director or Officer is not entitled to indemnification shall be on the Corporation.

(c)In any suit brought by a Director or Officer to enforce a right to indemnification hereunder, it shall be a defense that such Director or Officer has not met any applicable standard for indemnification set forth in the DGCL.

SECTION 8.Non-Exclusivity of Rights. The rights to indemnification and to advancement of Expenses set forth in this Article V shall not be exclusive of any other right which any Director, Officer, or Non-Officer Employee may have or hereafter acquire under any statute, provision of the Certificate or these Bylaws, agreement, vote of stockholders or Disinterested Directors or otherwise.

SECTION 9.Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any Director, Officer or Non-Officer Employee against any liability of any character asserted against or incurred by the Corporation or any such Director, Officer or Non-Officer Employee, or arising out of any such person’s Corporate Status, whether or not the Corporation would have the power to indemnify such person against such liability under the DGCL or the provisions of this Article V.

SECTION 10.Other Indemnification. The Corporation’s obligation, if any, to indemnify or provide advancement of Expenses to any person under this Article V as a result of such person serving, at the request of the Corporation, as a director, partner, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount such person may collect as indemnification or advancement of Expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or enterprise (the “Primary Indemnitor”). Any indemnification or advancement of Expenses under this Article V owed by the Corporation as a result of a person serving, at the request of the Corporation, as a director, partner, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall only be in excess of, and shall be secondary to, the indemnification or advancement of Expenses available from the applicable Primary Indemnitor(s) and any applicable insurance policies.

ARTICLE VI

Miscellaneous Provisions

SECTION 1.Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.

SECTION 2.Seal. The Board of Directors shall have power to adopt and alter the seal of the Corporation.

SECTION 3.Execution of Instruments. All deeds, leases, transfers, contracts, bonds, notes and other obligations to be entered into by the Corporation in the ordinary course of its business without director action may be executed on behalf of the Corporation by the Chairman of the Board, if one is elected, the Chief Executive Officer, the President or the Treasurer or any other officer, employee or agent of the Corporation as the Board of Directors or a committee of the Board of Directors may authorize.

SECTION 4.Voting of Securities. Unless the Board of Directors otherwise provides, the Chairman of the Board, if one is elected, the Chief Executive Officer, the President or the Treasurer may waive notice of and act on behalf of the Corporation, or appoint another person or persons to act as proxy or attorney in fact for the Corporation with or without discretionary power and/or power of substitution, at any meeting of stockholders or shareholders of any other corporation or organization, any of whose securities are held by the Corporation.

SECTION 5.Resident Agent. The Board of Directors may appoint a resident agent upon whom legal process may be served in any action or proceeding against the Corporation.

SECTION 6.Corporate Records. The original or attested copies of the Certificate, Bylaws and records of all meetings of the incorporators, stockholders and the Board of Directors and the stock transfer records, which shall contain the names of all stockholders, their record addresses and the amount of stock held by each, may be kept in any form permitted by law, and may be kept at the principal office of the Corporation or at such other place or places as may be designated from time to time by the Board of Directors.

SECTION 7.Certificate. All references in these Bylaws to the Certificate shall be deemed to refer to the Amended and Restated Certificate of Incorporation of the Corporation, as amended and/or restated and in effect from time to time.

SECTION 8.Exclusive Jurisdiction of Delaware Courts. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or the Certificate or Bylaws, or (iv) any action asserting a claim against the Corporation governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 8.

SECTION 9.Amendment of Bylaws.

(a)Amendment by Directors. Except as provided otherwise by law, these Bylaws may be amended, altered or repealed by the Board of Directors .

(b)Amendment by Stockholders. These Bylaws may be amended, altered or repealed at any Annual Meeting, or special meeting of stockholders called for such purpose in accordance with these Bylaws, by the affirmative vote of a majority of the outstanding shares entitled to vote on such amendment or repeal.

SECTION 10.Notices. If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. Without limiting the manner by which notice otherwise may be given to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the DGCL.

SECTION 11.Waivers. A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business to be transacted at, nor the purpose of, any meeting need be specified in such a waiver.

Adopted June 7, 2018 and effective as of June 22, 2018.

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Neil Kumar, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Eidos 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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;

(c)

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

(d)

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

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

(a)

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

(b)

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

Date: October 31, 2019	By:	/s/ Neil Kumar
		Neil Kumar
		Chief Executive Officer and Director (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christine Siu, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Eidos 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

(c)

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

(d)

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

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

(a)

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

(b)

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

Date: October 31, 2019	By:	/s/ Christine Siu
		Christine Siu
		Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Eidos Therapeutics, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: October 31, 2019	By:	/s/ Neil Kumar
		Neil Kumar
		Chief Executive Officer and Director (Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: October 31, 2019	By:	/s/ Christine Siu
		Christine Siu
		Chief Financial Officer (Principal Financial and Accounting Officer)