IDEAYA Biosciences, Inc. (Form: 10-Q, Received: 08/12/2020 16:44:26)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended June 30, 2020

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

For the transition period from to

Commission File Number: 001-38915

IDEAYA Biosciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware		47-4268251
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7000 Shoreline Court, Suite 350 South San Francisco, California		94080
(Address of principal executive offices)		(Zip Code)

(650) 443-6209

(telephone number, including area code)

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

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

IDYA

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 August 3, 2020, the registrant had 29,028,463 shares of common stock, $0.0001 par value per share, outstanding.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated products, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described under the sections in this Quarterly Report on Form 10-Q entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q. These forward-looking statements are subject to numerous risks, including, without limitation, the following:

•	our status as a development-stage company and our expectation to incur losses in the future;

•	our future capital needs and our need to raise additional funds;

•	our ability to build a pipeline of product candidates and develop and commercialize drugs;

•	our unproven approach to therapeutic intervention;

•	our ability to enroll patients and volunteers in clinical trials, timely and successfully complete those trials and receive necessary regulatory approvals;

•	our ability to establish our own manufacturing facilities and to receive or manufacture sufficient quantities of our product candidates;

•	the success of the collaboration agreement with GSK and our dependence on the development and marketing efforts of GSK for certain of our programs;

•	our expectations about the impact of natural disasters and public health epidemics, such as the COVID-19 pandemic, on our business, results of operations and financial condition;

•	our ability to protect and enforce our intellectual property rights;

•	federal, state, and foreign regulatory requirements, including FDA regulation of our product candidates;

•	the timing of clinical trials and the likelihood of regulatory filings and approvals;

•	our ability to obtain and retain key executives and attract and retain qualified personnel; and

•	our ability to successfully manage our growth.

Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not occur or be achieved, and actual results could differ materially from those projected in the forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

IDEAYA Biosciences, Inc.

Form 10-Q for Quarterly Period Ended June 30, 2020

Table of Contents


PART I—FINANCIAL INFORMATION	3
Item 1. Financial Statements (Unaudited)	3
Condensed Balance Sheets	3
Condensed Statements of Operations and Comprehensive Loss	4
Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	5
Condensed Statements of Cash Flows	7
Notes to Condensed Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Item 4. Controls and Procedures	40
PART II—OTHER INFORMATION	41
Item 1. Legal Proceedings	41
Item 1A. Risk Factors	41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	101
Item 3. Defaults Upon Senior Securities	101
Item 4. Mine Safety Disclosures	101
Item 5. Other information	101
Item 6. Exhibits	102
SIGNATURES	103

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (UNAUDITED).

IDEAYA Biosciences, Inc.

Condensed Balance Sheets

(in thousands, except share and per share amounts)

(Unaudited)

	June 30,			December 31,
	2020			2019
Assets
Current assets
Cash and cash equivalents	$	147,543		$	34,067
Short-term marketable securities		22,871			64,889
Prepaid expenses and other current assets		3,536			2,698
Total current assets		173,950			101,654
Restricted cash		106			106
Long-term marketable securities		1,545			1,526
Property and equipment, net		4,289			4,642
Right-of-use assets		4,594			5,057
Other non-current assets		26			16
Total assets	$	184,510		$	113,001
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	952		$	709
Accrued liabilities		5,223			5,023
Lease liabilities		1,206			1,145
Other current liabilities		45			63
Total current liabilities		7,426			6,940
Long-term lease liabilities		5,010			5,627
Other non-current liabilities		16			34
Total liabilities		12,452			12,601
Commitments and contingencies (Note 5)
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized as of June 30, 2020 and December 31, 2019; no shares issued and outstanding as of June 30, 2020 and December 31, 2019		—			—
Common stock, $0.0001 par value, 300,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 27,184,824 and 20,339,461 shares issued and outstanding as of June 30, 2020 and December 31, 2019		3			2
Additional paid-in capital		288,923			192,824
Accumulated other comprehensive income		57			65
Accumulated deficit		(116,925	)		(92,491	)
Total stockholders’ equity		172,058			100,400
Total liabilities and stockholders’ equity	$	184,510		$	113,001

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

IDEAYA Biosciences, Inc.

Condensed Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Operating expenses
Research and development	$	8,596		$	8,859		$	17,622		$	16,855
General and administrative		3,994			2,376			7,446			4,474
Total operating expenses		12,590			11,235			25,068			21,329
Loss from operations		(12,590	)		(11,235	)		(25,068	)		(21,329	)
Interest income and other income (expense), net		199			579			634			1,104
Net loss	$	(12,391	)	$	(10,656	)	$	(24,434	)	$	(20,225	)
Change in unrealized (losses) gains on marketable securities		57			29			(8	)		68
Comprehensive loss	$	(12,334	)	$	(10,627	)	$	(24,442	)	$	(20,157	)
Net loss per common share, basic and diluted	$	(0.59	)	$	(1.30	)	$	(1.18	)	$	(4.32	)
Weighted average number of common shares outstanding used in computing net loss per share, basic and diluted		21,001,730			8,218,010			20,626,139			4,679,206

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

IDEAYA Biosciences, Inc.

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

(in thousands, except share amounts)

(Unaudited)

														Accumulated					Total
	Redeemable Convertible											Additional		Other					Stockholders'
	Preferred Stock						Common Stock					Paid-In		Comprehensive		Accumulated			Equity
	Shares			Amount			Shares			Amount		Capital		Income (Loss)		Deficit			(Deficit)
Balances as of March 31, 2020		—		$	—			20,347,539		$	2	$	193,635	$	—	$	(104,534	)	$	89,103
Issuance of common stock upon follow-on public offering, net of issuance costs		—			—			6,666,667			1		93,623		—		—			93,624
Issuance of common stock upon exercise of stock options		—			—			154,482			—		694		—		—			694
Employee stock purchase plan (ESPP) purchase								18,494			—		132		—		—			132
Repurchase of early exercised shares		—			—			(2,358	)		—		—		—		—			—
Vesting of early exercised common stock options		—			—			—			—		15		—		—			15
Stock-based compensation		—			—			—			—		824		—		—			824
Other comprehensive income		—			—			—			—		—		57		—			57
Net loss		—			—			—			—		—		—		(12,391	)		(12,391	)
Balances as of June 30, 2020		—		$	—			27,184,824		$	3	$	288,923	$	57	$	(116,925	)	$	172,058

Balances as of March 31, 2019		13,139,794		$	138,391			1,338,860		$	—	$	2,015	$	8	$	(60,085	)	$	(58,062	)
Conversion of redeemable convertible preferred stock into common stock		(13,139,794	)		(138,391	)		13,139,794			1		138,390		—		—			138,391
Issuance of common stock upon initial public offering, net of issuance costs		—			—			5,750,000			1		50,246		—		—			50,247
Issuance of common stock upon exercise of stock options		—			—			49,219			—		70		—		—			70
Early exercised common stock options		—			—			2,112			—		—		—		—			—
Repurchase of early exercised shares		—			—			(11,882	)		—		—		—		—			—
Vesting of early exercised common stock options and restricted stock		—			—			—			—		41		—		—			41
Stock-based compensation		—			—			—			—		548		—		—			548
Other comprehensive income		—			—			—			—		—		29		—			29
Net loss		—			—			—			—		—		—		(10,656	)		(10,656	)
Balances as of June 30, 2019		—		$	-			20,268,103		$	2	$	191,310	$	37	$	(70,741	)	$	120,608

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

IDEAYA Biosciences, Inc.

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

(in thousands, except share amounts)

(Unaudited)

														Accumulated						Total
	Redeemable Convertible											Additional		Other						Stockholders'
	Preferred Stock						Common Stock					Paid-In		Comprehensive			Accumulated			Equity
	Shares			Amount			Shares			Amount		Capital		Income (Loss)			Deficit			(Deficit)
Balances as of December 31, 2019		—		$	—			20,339,461		$	2	$	192,824	$	65		$	(92,491	)	$	100,400
Issuance of common stock upon follow-on public offering, net of issuance costs		—			—			6,666,667			1		93,623		—			—			93,624
Issuance of common stock upon exercise of stock options		—			—			165,371			—		731		—			—			731
Employee stock purchase plan (ESPP) purchase								18,494			—		132		—			—			132
Repurchase of early exercised shares		—			—			(5,169	)		—		—		—			—			—
Vesting of early exercised common stock options		—			—			—			—		31		—			—			31
Stock-based compensation		—			—			—			—		1,582		—			—			1,582
Other comprehensive loss		—			—			—			—		—		(8	)		—			(8	)
Net loss		—			—			—			—		—		—			(24,434	)		(24,434	)
Balances as of June 30, 2020		—		$	—			27,184,824		$	3	$	288,923	$	57		$	(116,925	)	$	172,058

Balances as of December 31, 2018		13,139,794		$	138,391			1,335,690		$	—	$	1,599	$	(31	)	$	(50,516	)	$	(48,948	)
Conversion of redeemable convertible preferred stock into common stock		(13,139,794	)		(138,391	)		13,139,794			1		138,390		—			—			138,391
Issuance of common stock upon initial public offering, net of issuance costs		—			—			5,750,000			1		50,246		—			—			50,247
Issuance of common stock upon exercise of stock options		—			—			52,389			—		71		—			—			71
Early exercised common stock options		—			—			2,112			—		—		—			—			—
Repurchase of early exercised shares		—			—			(11,882	)		—		—		—			—			—
Vesting of early exercised common stock options and restricted stock		—			—			—			—		73		—			—			73
Stock-based compensation		—			—			—			—		931		—			—			931
Other comprehensive income		—			—			—			—		—		68			—			68
Net loss		—			—			—			—		—		—			(20,225	)		(20,225	)
Balances as of June 30, 2019		—		$	—			20,268,103		$	2	$	191,310	$	37		$	(70,741	)	$	120,608

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

IDEAYA Biosciences, Inc.

Condensed Statements of Cash Flows

(in thousands)

(Unaudited)

	Six Months Ended June 30,
	2020			2019
Cash flows from operating activities
Net loss	$	(24,434	)	$	(20,225	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		673			591
Net amortization of premiums and discounts on marketable securities		31			(390	)
Stock-based compensation		1,582			931
Loss on sale of property and equipment		2			3
Realized gain on marketable securities		(3	)		(7	)
Changes in assets and liabilities
Prepaid expenses and other assets		(848	)		(1,743	)
Right-of-use assets		462			604
Accounts payable		191			(189	)
Accrued and other liabilities		(251	)		945
Lease liabilities		(556	)		(577	)
Net cash used in operating activities		(23,151	)		(20,057	)
Cash flows from investing activities
Purchases of property and equipment, net		(69	)		(1,055	)
Purchases of marketable securities		(26,246	)		(38,458	)
Maturities of marketable securities		68,209			18,094
Sales of marketable securities		—			58,238
Net cash provided by investing activities		41,894			36,819
Cash flows from financing activities
Proceeds from issuance of common stock upon public offering, net of issuance costs		93,875			50,781
Proceeds from exercise of common stock options, net of repurchases		726			67
Proceeds from ESPP purchase		132			—
Net cash provided by financing activities		94,733			50,848
Net increase in cash, cash equivalents and restricted cash		113,476			67,610
Cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, at beginning of period		34,173			20,611
Cash, cash equivalents and restricted cash, at end of period	$	147,649		$	88,221

Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	147,543		$	88,115
Restricted cash	$	106		$	106
Cash, cash equivalents and restricted cash	$	147,649		$	88,221

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	1		$	1
Cash paid for interest	$	42		$	24
Supplemental non-cash investing and financing activities:
Unpaid deferred offering costs	$	251		$	463
Vesting of early exercised options and restricted stock	$	31		$	71
Purchases of property and equipment in accounts payable and accrued liabilities	$	253		$	42
Conversion of redeemable convertible preferred stock into common stock	$	—		$	138,391

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

IDEAYA Biosciences, Inc.

Notes to Condensed Financial Statements (Unaudited)

1. Organization

Description of the Business

IDEAYA Biosciences, Inc. (the “Company”) is an oncology-focused precision medicine company committed to the discovery and development of targeted therapeutics for patient populations selected using molecular diagnostics. The Company is headquartered in South San Francisco, California and was incorporated in the State of Delaware in June 2015. To date, the Company has been primarily engaged in business planning, research, development, recruiting and raising capital.

Follow-On Offering

On June 22, 2020, the Company completed an underwritten public offering and sold and issued 6,666,667 shares of common stock at a price to the public of $15.00 per share for gross proceeds of $100.0 million. The aggregate net proceeds to the Company were $93.6 million after deducting underwriting discounts and commissions and other offering costs.

On July 22, 2020, the Company sold and issued an additional 500,000 shares of common stock upon the exercise of the overallotment option by the underwriters for gross proceeds of $7.5 million.

Liquidity

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $116.9 million as of June 30, 2020. The Company has historically financed its operations primarily through the sale of convertible notes, redeemable convertible preferred stock and common stock. To date, none of the Company’s product candidates have been approved for sale, and the Company has not generated any revenue since inception. Management expects operating losses to continue and increase for the foreseeable future, as the Company progresses into clinical development activities for its lead product candidates. The Company’s prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the biotechnology industry as discussed under Risks and Uncertainties in Note 2. While the Company has been able to raise multiple rounds of financing, there can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

As of June 30, 2020, the Company had cash, cash equivalents and marketable securities of $172.0 million. Management believes that the Company’s current cash, cash equivalents and marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance of these financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). 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, 2019 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. The accompanying balance sheet as of June 30, 2020, the statements of operations and comprehensive loss, of redeemable convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended June 30, 2020 and June 30, 2019, and the statements of cash flows for the six months ended June 30, 2020 and June 30, 2019 are unaudited. In the opinion of management, the unaudited data reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2020, the results of its operations and comprehensive loss for the three and six months ended June 30, 2020 and June 30, 2019 and its cash flows for the six months ended June 30, 2020 and June 30, 2019. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2020 and June 30, 2019 are also unaudited. The results for the three and six months ended June 30, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020, any other interim periods or any future year or period.

The accompanying interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2019, which are included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 24, 2020 (the “Form 10-K”).

Reverse Stock Split

In May 2019, the Company’s board of directors approved a 1-for-10.2564 reverse stock split of the Company’s common stock and redeemable convertible preferred stock, which was effected on May 21, 2019. The par value and authorized shares of the common stock and redeemable convertible preferred stock were not adjusted as a result of the reverse stock split. All issued and outstanding common stock, options to purchase common stock and per share amounts contained in these financial statements have been retroactively adjusted to give effect to the reverse stock split for all periods presented.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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. Such estimates include useful lives of property and equipment, determination of the discount rate for operating leases, accruals for research and development activities, stock-based compensation, and income taxes. Actual results could differ from those estimates.

Risks and Uncertainties

The Company operates in a dynamic and highly competitive industry and is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturer, contract research organizations and collaboration partners, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows; ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials and collaboration activities; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Company’s ability to attract and retain employees necessary to support its growth.

Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that the products will receive the necessary approvals, or that any approved products will be commercially viable. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval, it could have a materially adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties.

Beginning in late 2019, the outbreak of a novel strain of virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease 2019, or COVID-19, has evolved into a global pandemic. The extent of the impact of the coronavirus outbreak on the Company’s business will depend on certain developments, including the duration and spread of the outbreak and the extent and severity of the impact on the Company’s clinical trial activities, research activities and suppliers, all of which are uncertain and cannot be predicted. At this point, the extent to which the coronavirus outbreak may materially impact the Company’s financial condition, liquidity or results of operations is uncertain.

The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which would materially and adversely affect its business, financial condition and operations.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and marketable securities. Substantially all the Company’s cash is held by one financial institution that management believes is of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company’s investment policy addresses credit ratings, diversification, and maturity dates. The Company invests its cash equivalents and marketable securities in money market funds, U.S. government securities, commercial paper, and corporate bonds. The Company limits its credit risk associated with cash equivalents and marketable securities by placing them with banks and institutions it believes are highly creditworthy and in highly rated investments and, by policy, limits the amount of credit exposure with any one commercial issuer. The Company has not experienced any credit losses on its deposits of cash, cash equivalents or marketable securities.

Summary of Significant Accounting Policies

There have been no material changes in the accounting policies from those disclosed in the financial statements and the related notes included in the Form 10-K.

Revenue Recognition

The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes revenue when its 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 revenue recognition for arrangements that the Company determines are 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 a performance obligation.

The Company applies the five-step model to contracts when (1) parties have approved the contract and are committed to performing respective obligations, (2) the Company can identify each party’s rights regarding the goods or services to be transferred, (3) the Company can identify the payment terms for the goods or services to be transferred, (4) the contract has commercial substance, and (5) it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines the performance obligations by assessing whether each promised good or service is distinct. Goods or services that are not distinct are bundled with other goods or services in the contract until a bundle of goods or services that is distinct is created. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligations when (or as) the performance obligations are satisfied. The Company constrains its estimate of the transaction price up to the amount (the “variable consideration constraint”) that a significant reversal of recognized revenue is not probable.

Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other promised goods or services identified in an arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license at the point in time when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company applies judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward satisfying the performance obligation for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of progress and related revenue recognition.

Milestone payments: At the inception of each arrangement or amendment that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 prescribes two methods to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur when the uncertainty associated with the milestone is resolved, the associated milestone value is included in the transaction price. Milestone payments that are highly susceptible to factors outside the Company’s influence, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. If there is more than one performance obligation, the transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes 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 contract liabilities upon receipt or when due 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. Amounts payable to the Company and not yet billed to the collaboration partner are recorded as contract assets. 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.

Contractual cost sharing payments made to a customer or collaboration partner are accounted for as a reduction to the transaction price if such payments are not related to distinct goods or services received from the customer or collaboration partner.

Contracts may be amended to account for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new, or changes existing, enforceable rights and obligations. When contract modifications create new performance obligations and the increase in consideration approximates the standalone selling price for goods and services related to such new performance obligations as adjusted for specific facts and circumstances of the contract, the modification is accounted for as a separate contract. If a contract modification is not accounted for as a separate contract, the Company accounts for the promised goods or services not yet transferred at the date of the contract modification (the remaining promised goods or services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification. The Company accounts for a contract modification as if it were a part of the existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification. In such case the effect that the contract modification has on the transaction price, and on the entity’s measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis).

Upfront payment contract liabilities resulting from the Company’s license and collaboration agreements do not represent a financing component as the payment is not financing the transfer of goods and services, and the technology underlying the licenses granted reflects research and development expenses already incurred by the Company. As such, the Company does not adjust its revenues for the effects of a significant financing component.

Net Loss per Share Attributable to Common Stockholders

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, redeemable convertible preferred stock, stock options and restricted stock that is subject to repurchase at the original purchase price are considered to be potentially dilutive securities. Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two-class method required for participating securities. The Company considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock. The holders of early exercised shares subject to repurchase do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date, unless otherwise discussed below.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements. ASU 2018-13 removes the requirement to disclose: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. For public business entities, this ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company adopted this ASU on January 1, 2020. The adoption did not result in a material impact on the Company’s financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 requires that certain implementation costs incurred in a cloud computing arrangement be deferred and recognized over the term of the arrangement. For public business entities, this ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company adopted this ASU on January 1, 2020, using the prospective transition method. The adoption did not result in a material impact on the Company’s financial statements and related disclosures.

In November 2018, the FASB issued ASU 2018-18, Collaborative arrangements (Topic 808)—Clarifying the interaction between Topic 808 and Topic 606. ASU 2018-18 (i) clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account, (ii) adds unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606, and (iii) requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company adopted this ASU on January 1, 2020. The adoption did not result in a material impact on the Company’s financial statements and related disclosures.

New Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. For public business entities, this ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The FASB subsequently issued supplemental guidance to ASC 326 within ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief, ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. ASU 2019-10 extended the effectiveness of Topic 326 for smaller reporting companies until fiscal years beginning after December 31, 2020. Early adoption is permitted. The Company is currently evaluating the impact the adoption of these ASUs will have on its financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying existing guidance. For public business entities, this ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its financial statements and related disclosures.

3. Fair Value Measurement and Marketable Securities

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date.

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.

Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

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.

As of June 30, 2020, financial assets measured and recognized at fair value are as follows (in thousands):

		June 30, 2020
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Assets
U.S. government securities	Level 1	$	14,994	$	—	$	—	$	14,994
Corporate bonds	Level 2		9,365		57		—		9,422
Marketable securities			24,359		57		—		24,416
Money market funds⁽¹⁾	Level 1		147,529		—		—		147,529
Total fair value of assets		$	171,888	$	57	$	—	$	171,945

(1)	Included in cash and cash equivalents on the balance sheet

As of December 31, 2019, financial assets measured and recognized at fair value are as follows (in thousands):

		December 31, 2019
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Assets
U.S. government securities	Level 1	$	24,973	$	32	$	—		$	25,005
Corporate bonds	Level 2		39,185		37		(4	)		39,218
Commercial paper	Level 2		2,192		—		—			2,192
Marketable securities			66,350		69		(4	)		66,415
Money market funds⁽¹⁾	Level 1		34,008		—		—			34,008
Total fair value of assets		$	100,358	$	69	$	(4	)	$	100,423

(1)	Included in cash and cash equivalents on the balance sheet

As of June 30, 2020, all marketable securities had a remaining maturity of one year or less, except for corporate bonds with a fair value of $1.5 million that had maturities of one to two years. As of December 31, 2019, all marketable securities had a remaining maturity of one year or less, except for corporate bonds with a fair value of $1.5 million that had maturities of one to two years. There were no financial liabilities measured and recognized at fair value as of June 30, 2020 and December 31, 2019.

4. Balance Sheet Components

Property and Equipment, Net

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

	Useful Life	June 30,			December 31,
	(In Years)	2020			2019
Laboratory equipment	5	$	4,334		$	4,034
Computer equipment	3		117			117
Software	3		118			118
Leasehold improvements	Shorter of useful life or lease term		2,598			2,581
Furniture and fixtures	5		308			308
Total property and equipment			7,475			7,158
Less: Accumulated depreciation and amortization			(3,186	)		(2,516	)
Property and equipment, net		$	4,289		$	4,642

Depreciation and amortization expense was $0.4 million and $0.3 million for the three months ended June 30, 2020 and June 30, 2019, respectively, and $0.7 million and $0.6 million for the six months ended June 30, 2020 and June 30, 2019, respectively.

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

	June 30,		December 31,
	2020		2019
Accrued salaries and benefits	$	1,686	$	1,733
Accrued research and development expenses		2,379		2,787
Legal and professional fees		900		457
Other		258		46
Accrued liabilities	$	5,223	$	5,023

5. Commitments and Contingencies

Contingencies

From time to time, the Company may be involved in litigation related to claims that arise in the ordinary course of its business activities. The Company accrues for these matters when it is probable that future expenditures will be made and these expenditures can be reasonably estimated. As of June 30, 2020, the Company does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Indemnification

The Company enters into standard indemnification arrangements in the ordinary course of business with vendors and other parties. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the fair value of these agreements is not material.

6. Income Taxes

The Company did not record a federal or state income tax provision or benefit for the six months ended June 30, 2020 and June 30, 2019 as it has incurred net losses since inception. In addition, the net deferred tax assets generated from net operating losses are fully offset by a valuation allowance as the Company believes it is not more likely than not that the benefit will be realized.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law and GAAP requires recognition of the tax effects of new legislation during the reporting period that includes the enactment date. The CARES Act includes changes to the tax provisions that benefits business entities, and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act. The tax relief measures for businesses in the CARES Act include a five-year net operating loss carryback for certain net operating losses, suspension of the annual deduction limitation of 80% of taxable income for certain net operating losses, changes in the deductibility of interest, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property. The CARES Act also provides other non-tax benefits to assist those impacted by the pandemic. The Company evaluated the impact of the CARES Act and determined that there is no material impact to the income tax provision for the quarter ended June 30, 2020.

On June 29, 2020, California Assembly Bill 85 (AB 85) was signed into law, which suspends the use of net operating losses and limits the use of research tax credits for 2020, 2021 and 2022, respectively. The Company evaluated the impact of AB 85 and determined that the new legislation did not materially impact the Company’s income tax provision for the quarter ended June 30, 2020.

7. Common Stock

As of June 30, 2020 and December 31, 2019, the Company’s certificate of incorporation authorized the Company to issue 300,000,000 shares of common stock at a par value of $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors. As of June 30, 2020 and December 31, 2019, no dividends have been declared to date.

The Company had reserved common stock for future issuance as follows:

	June 30,		December 31,
	2020		2019
Exercise of outstanding options under the 2015 and 2019 Plans		2,480,542		1,962,332
Issuance of common stock options under the 2019 Plan		1,171,912		1,036,746
Issuance of common stock options under the Employee Stock Purchase Plan		379,900		195,000
Total		4,032,354		3,194,078

8. Stock-Based Compensation

2019 Incentive Award Plan

In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Incentive Award Plan (the “2019 Plan”), under which the Company may grant cash and equity-based incentive awards to the Company’s employees, consultants and directors. Following the effectiveness of the 2019 Plan, the Company will not make any further grants under the 2015 Equity Incentive Plan (the “2015 Plan”). However, the 2015 Plan continues to govern the terms and conditions of the outstanding awards granted under it. Shares of common stock subject to awards granted under the 2015 Plan that are forfeited or lapse unexercised and which following the effective date of the 2019 Plan are not issued under the 2015 Plan will be available for issuance under the 2019 Plan.

Options granted under the 2019 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees and consultants.

The exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares on the date of grant. The exercise price of an ISO granted to an employee who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of stock of the Company (a “10% stockholder”) shall be no less than 110% of the estimated fair value of the shares on the date of grant. Options granted under the 2019 Plan have a term of 10 years (or five years if granted to a 10% stockholder) and generally vest over a 4-year period with 1-year cliff vesting.

2015 Equity Incentive Plan

In 2015, the Company established its 2015 Plan which provides for the granting of stock options to employees and consultants of the Company. Options granted under the 2015 Plan may be either ISOs or NSOs.

2019 Employee Stock Purchase Plan

In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides eligible employees with the opportunity to acquire an ownership interest in the Company through periodic payroll deductions up to 15% of eligible compensation. The offering period is determined by the Company in its discretion but may not exceed 27 months. The per-share purchase price on the applicable exercise date for an offering period is equal to the lesser of 85% of the fair market value of the common stock at either the first business day or last business day of the offering period, provided that no more than 4,000 shares of common stock may be purchased by any one employee during each offering period. The ESPP is intended to constitute an “employee stock purchase plan” under Section 423(b) of the Internal Revenue Code of 1986, as amended. A total of 195,000 shares of common stock were initially reserved for issuance under the ESPP, subject to an annual increase on January 1 of each year, beginning on January 1, 2020. For the six months ended June 30, 2020, the Company recorded less than $0.1 million of compensation expense related to participation in the ESPP.

Stock-Based Compensation Expense

Total stock-based compensation expense recorded related to awards granted to employees and non-employees was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Research and development	$	283	$	257	$	597	$	452
General and administrative		541		291		985		479
Total stock-based compensation expense	$	824	$	548	$	1,582	$	931

Stock Options

Activity under the Company’s 2015 and 2019 Plans is set forth below:

				Outstanding Options
	Shares available for Grant			Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Balance, January 1, 2020		1,036,746			1,962,332		$	6.03		8.63
Additional shares authorized		813,578			—
Options granted		(996,426	)		996,426		$	7.46
Options exercised		—			(165,371	)	$	4.45
Options repurchased		5,169			—		$	0.92
Options canceled		312,845			(312,845	)	$	6.41
Balance, June 30, 2020		1,171,912			2,480,542		$	6.66		8.48
Exercisable as of June 30, 2020					713,113		$	5.59		7.32
Vested and expected to vest as of June 30, 2020					2,480,542		$	6.66		8.48

The weighted-average grant-date fair value of options granted during the six months ended June 30, 2020 and June 30, 2019 was $5.38 and $7.50 per share, respectively. The aggregate intrinsic value of options exercised for the six months ended June 30, 2020 and June 30, 2019 was $1.0 million and $0.5 million, respectively. Intrinsic values are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock on the date of exercise.

As of June 30, 2020 and December 31, 2019, total unrecognized stock-based compensation expense for stock options was $8.3 million and $5.9 million, respectively, which is expected to be recognized over a weighted-average period of 2.73 years and 2.81 years, respectively.

Early Exercise of Stock Options

The terms of the 2015 Plan permit the exercise of options granted under the 2015 Plan prior to vesting, subject to required approvals. The shares so acquired prior to vesting are subject to a lapsing repurchase right in favor of the Company at the original purchase price of such shares, exercisable upon a termination of the holder’s service with the Company prior to full vesting. The proceeds are initially recorded in other liabilities from the early exercise of stock options and are reclassified to additional paid-in capital as the Company’s repurchase right lapses.

During the six months ended June 30, 2020 and June 30, 2019, the Company repurchased 5,169 and 11,882 shares of common stock, respectively. As of June 30, 2020 and December 31, 2019, shares that were subject to repurchase were 44,861 and 84,964, respectively. The aggregate exercise price of early exercised shares as of June 30, 2020 and December 31, 2019 was less than $0.1 million and $0.1 million, respectively, which were recorded in other current liabilities and other non-current liabilities.

Black-Scholes Assumptions

The fair values of options were calculated using the assumptions set forth below:

	Three Months Ended June 30, 2020	Three Months Ended June 30, 2019		Six Months Ended June 30, 2020	Six Months Ended June 30, 2019
Expected term	5.5 - 6.1 years		—	5.5 - 6.1 years	6.1 years
Expected volatility	86.7% - 91.7%		—	84.9% - 91.7%	79.7% - 82.2%
Risk-free interest rate	0.4% - 0.5%		—	0.4% - 1.5%	2.3% - 2.5%
Dividend yield	0%		—	0%	0%

Expected term. The expected term represents the weighted-average period the stock options are expected to remain outstanding and is based on the options’ vesting terms, contractual terms and industry peers, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.

Expected Volatility. The Company uses an average historical stock price volatility of a peer group of publicly traded companies to be representative of its expected future stock price volatility, as the Company does not have sufficient trading history for its common stock. For purposes of identifying these peer companies, the Company considers the industry, stage of development, size and financial leverage of potential comparable companies. For each grant, the Company measures historical volatility over a period equivalent to the expected term. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Risk-Free Interest Rate. The risk-free rate assumption is based on U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options.

Expected Dividend Rate. The Company has not paid and does not anticipate paying any dividends in the near future. Accordingly, the Company has estimated the dividend yield to be zero.

The Company accounts for forfeitures as they occur.

Fair Value of Common Stock

The fair value of the Company’s common stock is determined based on its closing market price on the date of grant.

Restricted Stock

Restricted stock activity was as follows:

	Number of Shares Underlying Outstanding Restricted Stock Awards		Weighted Average Grant Date Fair Value
Unvested, December 31, 2019		14,625	$	0.82
Vested		—
Unvested, June 30, 2020		14,625	$	0.82

As of June 30, 2020 and December 31, 2019, 14,625 shares of restricted stock were outstanding with an aggregate purchase price of less than $0.1 million, which is recorded in other non-current liabilities on the balance sheets. The restricted stock vests upon the achievement of pre-defined research milestones. The holder of restricted stock has voting and dividend rights with respect to such shares held without regard to vesting. Shares of restricted stock are subject to a right of repurchase at the original purchase price held by the Company. As the restricted stock was purchased by an employee at a price equal to its fair value at the time of issuance, there was no stock-based compensation expense related to these awards. The total fair value of restricted stock vested during the six months ended June 30, 2020 and June 30, 2019 was zero and less than $0.1 million, respectively.

9. Significant Agreements

GlaxoSmithKline Collaboration, Option and License Agreement

In June 2020, the Company entered into a Collaboration, Option and License Agreement, or the GSK Collaboration Agreement, with an affiliate of GlaxoSmithKline, GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4), Limited, or GSK, pursuant to which the Company and GSK have entered into a collaboration and collaboration for its synthetic lethality programs targeting methionine adenosyltransferase 2a, or MAT2A, DNA Polymerase Theta, or Pol Theta or POLQ, and Werner Helicase, or WRN. The GSK Collaboration Agreement is expected to become effective on the date that the parties receive Hart-Scott-Rodino Antitrust Improvements Act clearance, or HSR Clearance, therefor, or the Effective Date. As of June 30, 2020, the GSK Collaboration Agreement is a wholly unperformed contract for the purpose of application of ASC 606; as such, the GSK Collaboration Agreement does not result in any impact on the Company’s financial position as of June 30, 2020 and the results of its operations and cash flows for the three and six months ended June 30, 2020.

Pursuant to the GSK Collaboration Agreement, GSK has agreed to pay the Company $100.0 million (the “Upfront Payment”) within ten business days of the Effective Date of the GSK Collaboration Agreement. On July 27, 2020, the Company and GSK received HSR Clearance, and the GSK Collaboration Agreement became effective. On July 31, 2020, the Company received the Upfront Payment.

MAT2A Program

For the MAT2A program, the Company will lead research and development through early clinical development. GSK has an exclusive option to obtain an exclusive license to continue development of and commercialize MAT2A products arising out of the MAT2A program, or the Option, exercisable within a specified time period after the Company delivers to GSK a data package resulting from its conduct of a MAT2A Phase 1 monotherapy clinical trial. At such time of exercise, GSK has agreed to pay the Company an option exercise payment of $50.0 million.

GSK may initiate, or request that the Company initiates, a Phase 1 combination clinical trial for a MAT2A product and GSK’s Type I PRMT inhibitor (GSK3368715) product, or the MAT2A Combination Trial, prior to GSK’s exercise of the Option. The Company will be responsible for the costs of research and early clinical development activities that the Company conducts for the MAT2A program prior to GSK’s exercise of the Option, excluding the costs of conducting the MAT2A Combination Trial. GSK will be solely responsible for costs of the conduct of the MAT2A Combination Trial, except for supply of the MAT2A product therefor, to be provided by the Company at its own cost.

Subject to GSK’s exercise of the Option, GSK will lead later stage global clinical development for the MAT2A program, with IDEAYA responsible for 20% and GSK responsible for 80% of further development costs. The cost-sharing percentages will be adjusted based on the actual ratio of U.S. to global profits for MAT2A products, as measured three and six years after global commercial launch thereof.

Subject to GSK’s exercise of the Option, the Company will be eligible to receive future development and regulatory milestones of up to $465.0 million, and commercial milestones of up to $475.0 million, with respect to each MAT2A product. Additionally, the Company is entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales (as defined) of MAT2A products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. The Company will have a right to opt-out of the 50% U.S. net profit share and corresponding development cost share for the MAT2A program, in which case the Company would be eligible to receive tiered royalties on U.S. net sales of MAT2A products by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the MAT2A program at the time of opt-out.

Pol Theta Program

Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize POLQ products arising out of the POLQ program. GSK and the Company will collaborate on ongoing preclinical research for the POLQ program, and GSK will lead clinical development for the POLQ program. GSK will be responsible for all research and development costs for the POLQ program, including those incurred by the Company.

The Company will be eligible to receive future development and regulatory milestones of up to $485.0 million, with respect to each POLQ product, including as applicable, for multiple POLQ products that target certain alternative protein domains or are based on alternative modalities. Additionally, the Company is eligible to receive up to $475.0 million of commercial milestones with respect to each POLQ product. The Company is also entitled to receive tiered royalties on global net sales of POLQ products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions.

WRN Program

Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize WRN products arising out of the WRN program. The Company and GSK will collaborate on ongoing preclinical research for the WRN program, and GSK will lead clinical development for the WRN program, with IDEAYA responsible for 20% and GSK responsible for 80% of such global research and development costs. The cost-sharing percentages will be adjusted based on the actual ratio of U.S. to global profits for WRN products, as measured three and six years after global commercial launch thereof.

The Company will be eligible to receive future development milestones of up to $485.0 million, with respect to each WRN product, including as applicable, for multiple WRN products that are based on alternative modalities. Additionally, the Company will be eligible to receive up to $475.0 million of commercial milestones with respect to each WRN product. The Company will be entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of WRN products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. The Company will have a right to opt-out of the 50% U.S. net profit share and corresponding research and development cost share for the WRN program, and would be eligible to receive tiered royalties on U.S. net sales of WRN products by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the WRN program at the time of opt-out.

General

Under the terms of the GSK Collaboration Agreement, subject to certain exceptions, the Company and GSK will not, directly or through third parties, develop or commercialize other products whose primary and intended mechanism of action is the modulation of WRN, POLQ, or MAT2A (unless GSK does not exercise the Option, in which case such restriction shall cease to apply with respect to MAT2A) for an agreed upon period of time. The Company and GSK will form a joint steering committee, joint development committees, and joint commercialization committees responsible for coordinating all activities under the GSK Collaboration Agreement. Ownership of intellectual property developed under the GSK Collaboration Agreement is allocated between or shared by the parties depending on development and subject matter.

GSK’s royalty obligations continue with respect to each country and each product until the later of (i) the date on which such product is no longer covered by certain intellectual property rights in such country and (ii) the 10th anniversary of the first commercial sale of such product in such country.

Each party has the right to sublicense its rights under the GSK Collaboration Agreement subject to certain conditions.

The GSK Collaboration Agreement will continue in effect on a product-by-product and country-by-country basis until the expiration of the obligation to make payments under the GSK Collaboration Agreement with respect to such product in each country, unless earlier terminated by either party pursuant to its terms. Either the Company or GSK may terminate the GSK Collaboration Agreement for the other party’s insolvency or certain uncured breaches. The Company may terminate the GSK Collaboration Agreement if GSK or any of its sublicensees or affiliates challenge certain patents of the Company. GSK may terminate the GSK Collaboration Agreement in its entirety or on a target-by-target basis upon certain notice to the Company.

Pfizer Clinical Trial Collaboration and Supply Agreement

In March 2020, the Company entered into a clinical trial collaboration and supply agreement with Pfizer Inc., or the Supply Agreement, pursuant to which Pfizer will supply the Company with their MEK inhibitor, binimetinib, to evaluate the combination in patients with tumors harboring activating GNAQ or GNA11 hotspot mutations. Under the Supply Agreement, the Company will sponsor a Phase 1/2 clinical trial for its product candidate, IDE196, and Pfizer will supply the Company with binimetinib for use in the clinical trial at no cost to the Company. The Supply Agreement provides that the Company and Pfizer will jointly own clinical data generated from the clinical trial.

10. Net Loss Per Share Attributable to Common Stockholders

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Numerator:
Net loss attributable to common stockholders	$	(12,391	)	$	(10,656	)	$	(24,434	)	$	(20,225	)
Denominator:
Weighted-average shares outstanding		21,070,679			8,408,698			20,705,962			4,892,807
Less: weighted-average unvested restricted shares and shares subject to repurchase		(68,949	)		(190,688	)		(79,823	)		(213,601	)
Weighted-average shares used in computing net loss per share attributable to common stock, basic and diluted		21,001,730			8,218,010			20,626,139			4,679,206
Net loss per share attributable to common stockholders, basic and diluted	$	(0.59	)	$	(1.30	)	$	(1.18	)	$	(4.32	)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:

	As of June 30,
	2020		2019
Options to purchase common stock		2,480,542		1,974,416
Unvested restricted stock awards		14,625		15,393
Unvested early exercised common stock options		44,861		151,330
Total		2,540,028		2,141,139

As of June 30, 2020, the Company has contributions from plan participants of $0.2 million under the ESPP, which if converted, would be equivalent to 24,863 shares based on 85% of the stock price at the beginning of the offering period.

11. Subsequent Events

Exercise of the Overallotment Option

On July 22, 2020, the Company sold and issued additional 500,000 shares of common stock upon the exercise of the overallotment option by the underwriters for gross proceeds of $7.5 million.

Effectiveness of the GSK Collaboration Agreement

On July 27, 2020, the Company and GSK received HSR Clearance, and the GSK Collaboration Agreement became effective. On July 31, 2020, the Company received the Upfront Payment.

Private placement with GSK

Pursuant to the terms of the GSK Collaboration Agreement, the Company has entered into a stock purchase agreement with Glaxo Group Limited, or GGL, an entity affiliated with GSK, on June 17, 2020, pursuant to which GGL will purchase, subject to certain conditions, shares of the Company’s common stock. Under the stock purchase agreement, GGL is obligated to purchase in a private placement, at a price of $15.00 per share, 1,333,333 shares of the Company’s common stock (“Private Placement”). On August 3, 2020, the Private Placement was closed, and the Company sold 1,333,333 shares at a price of $15.00 per shares to GGL for gross proceeds of $20.0 million.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described, in or implied, by these forward-looking statements. Please also see the section of this Quarterly Report on Form 10-Q titled “Forward-Looking Statements.”

Overview

We are an oncology-focused precision medicine company committed to the discovery and development of targeted therapeutics for patient populations selected using molecular diagnostics. Our approach integrates small molecule drug discovery with extensive capabilities in identifying and validating translational biomarkers to develop targeted therapies for select patient populations most likely to benefit. Our small molecule drug discovery expertise includes discovery and development of small molecule inhibitors and protein degrader modalities. We are applying these capabilities to develop a robust pipeline in precision medicine oncology, with a research focus in synthetic lethality – which represents an emerging class of precision medicine targets.

Public Offering and Sale of IDEAYA Common Stock

On June 22, 2020, we closed on an underwritten public offering, or the Offering, of 6,666,667 shares of our common stock at an offering price of $15.00 per share, pursuant to which we received gross proceeds of $100.0 million, before deducting underwriting discounts and commissions and other offering expenses. In addition, as part of the Offering, on July 22, 2020, the Company sold and issued an additional 500,000 shares of common stock upon the exercise of the overallotment option by the underwriters for gross proceeds of $7.5 million before deducting underwriting discounts and commissions and other offering.

Private Placement of IDEAYA Common Stock with GSK

On June 17, 2020, we entered into a stock purchase agreement with Glaxo Group Limited, or GGL, an affiliate of GlaxoSmithKline, pursuant to which GGL agreed to purchase in a private placement, subject to certain conditions, 1,333,333 shares of our common stock at a price per share of $15.00, which is equal to the public offering price per share in the Offering. The common stock sold pursuant thereto was not registered under the Securities Act of 1933, as amended, or the Securities Act. The closing of this private placement occurred on August 3, 2020, following HSR Clearance of the associated GSK Collaboration Agreement, described below, and satisfaction of other certain customary closing conditions, pursuant to which we received proceeds of $20.0 million.

Collaboration, Option and License Agreement with GSK

On June 15, 2020, we entered into a Collaboration, Option and License Agreement, or the GSK Collaboration Agreement, with an affiliate of GlaxoSmithKline, GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4), Limited, or GSK, pursuant to which we and GSK have entered into a strategic partnership and collaboration for our synthetic lethality programs targeting Methionine adenosyltransferase 2a, or MAT2A, DNA Polymerase Theta, or Pol Theta or POLQ, and Werner Helicase, or WRN. The GSK Collaboration Agreement became effective on July 27, 2020, or the Effective Date, upon the parties’ receipt of Hart-Scott-Rodino Antitrust Improvements Act clearance, or HSR Clearance for the GSK Collaboration Agreement.

Pursuant to the GSK Collaboration Agreement, we received from GSK an up-front payment of $100.0 million in cash following the Effective Date.

MAT2A Program

For the MAT2A program, we will continue to lead research and development through early clinical development. GSK has an exclusive option to obtain an exclusive license to continue development of and commercialize MAT2A products arising out of the MAT2A program, or the Option, exercisable within a specified time period after we deliver to GSK a data package resulting from our conduct of a MAT2A Phase 1 monotherapy clinical trial. GSK’s exercise of the Option may be subject to HSR Clearance therefor at such time of exercise, and following exercise and HSR Clearance, GSK has agreed to pay us an option exercise payment of $50.0 million.

GSK may initiate, or request that we initiate, a Phase 1 combination clinical trial for a MAT2A product and GSK’s Type I PRMT inhibitor (GSK3368715) product, or the MAT2A Combination Trial, prior to GSK’s exercise of the Option. We will be responsible for the costs of research and early clinical development activities that we conduct for the MAT2A program prior to GSK’s exercise of the Option (including during any interim waiting period for HSR Clearance for such Option exercise, if applicable), excluding the costs of conducting the MAT2A Combination Trial. GSK will be solely responsible for costs of the conduct of the MAT2A Combination Trial, except for supply of the MAT2A product therefor, to be provided by us at our own cost.

Subject to GSK’s exercise of the Option (and HSR Clearance thereof, if applicable), GSK will lead later stage global clinical development for the MAT2A program, with IDEAYA responsible for 20% and GSK responsible for 80% of further development costs. The cost-sharing percentages will be adjusted based on the actual ratio of U.S. to global profits for MAT2A products, as measured three and six years after global commercial launch thereof.

Subject to GSK’s exercise of the Option (and HSR Clearance thereof, if applicable), we will be eligible to receive future development and regulatory milestones of up to $465.0 million, and commercial milestones of up to $475.0 million, with respect to each MAT2A product. Additionally, we are entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of MAT2A products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. We have a right to opt-out of the 50% U.S. net profit share and corresponding development cost share for the MAT2A program, in which case we would be eligible to receive tiered royalties on U.S. net sales of MAT2A products by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the MAT2A program at the time of opt-out.

Pol Theta

Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize POLQ products arising out of the POLQ program. GSK and we will collaborate on ongoing preclinical research for the POLQ program, and GSK will lead clinical development for the POLQ program. GSK will be responsible for all research and development costs for the POLQ program, including those incurred by us.

We will be eligible to receive future development and regulatory milestones of up to $485.0 million, with respect to each POLQ product, including as applicable, for multiple POLQ products that target certain alternative protein domains or are based on alternative modalities. Additionally, we are eligible to receive up to $475.0 million of commercial milestones with respect to each POLQ product. We are also entitled to receive tiered royalties on global net sales of POLQ products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions.

We believe there are potential synergies to evaluate a combination between our Pol Theta program and GSK’s approved PARP inhibitor, Zejula, targeting the BRCA and HRD patient population.

Werner Helicase

Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize WRN products arising out of the WRN program. We and GSK will collaborate on ongoing preclinical research for the WRN program, and GSK will lead clinical development for the WRN program, with IDEAYA responsible for 20% and GSK responsible for 80% of such global research and development costs. The cost-sharing percentages will be adjusted based on the actual ratio of U.S. to global profits for WRN products, as measured three and six years after global commercial launch thereof.

We will be eligible to receive future development milestones of up to $485.0 million, with respect to each WRN product, including as applicable, for multiple WRN products that are based on alternative modalities. Additionally, we will be eligible to receive up to $475.0 million of commercial milestones with respect to each WRN product. We will be entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of WRN products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. We will have a right to opt-out of the 50% U.S. net profit share and corresponding research and development cost share for the WRN program, and would be eligible to receive tiered royalties on U.S. net sales of WRN products by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the WRN program at the time of opt-out.

General

Under the terms of the GSK Collaboration Agreement, subject to certain exceptions, we and GSK will not, directly or through third parties, develop or commercialize other products whose primary and intended mechanism of action is the modulation of WRN, POLQ, or MAT2A (unless GSK does not exercise the Option or HSR Clearance does not occur with respect thereto, in which case such restriction shall cease to apply with respect to MAT2A) for an agreed upon period of time. We and GSK will form a joint steering committee, joint development committees, and joint commercialization committees responsible for coordinating all activities under the GSK Collaboration Agreement.

Each party has the right to sublicense its rights under the GSK Collaboration Agreement subject to certain conditions.

The GSK Collaboration Agreement will continue in effect on a product-by-product and country-by-country basis until the expiration of the obligation to make payments under the GSK Collaboration Agreement with respect to such product in each country, unless earlier terminated by either party pursuant to its terms. Either we or GSK may terminate the GSK Collaboration Agreement for the other party’s insolvency or certain uncured breaches. We may terminate the GSK Collaboration Agreement if GSK or any of its sublicensees or affiliates challenge certain patents of the Company. GSK may terminate the GSK Collaboration Agreement in its entirety or on a target-by-target basis upon certain notice to us.

The GSK Collaboration Agreement contains various representations, warranties, covenants, dispute resolution mechanisms, indemnities and other provisions generally customary for transactions of this nature.

IDE397 – MAT2A Inhibitor Development Candidate

Our lead synthetic lethality research program targets MAT2A for solid tumors with MTAP deletions, a patient population estimated to represent approximately 15% of solid tumors.

In June 2020, we selected a MAT2A inhibitor designated as IDE397 as a development candidate. Our preclinical activities continue to support IDE397 as a development candidate and potential clinical candidate. Our preclinical data shows in vivo efficacy in multiple endogenous MTAP-null models demonstrating that MTAP-null tumors are more dependent on the activity of MAT2A, resulting in synthetic lethality when MAT2A is pharmacologically inhibited with IDE397. For example, we have shown that IDE397 demonstrates in vivo dose-dependent efficacy and tumor regression (with >100% TGI, or tumor growth inhibition) as monotherapy in an endogenous non-small cell lung cancer, or NSCLC, MTAP-null PDX model.

We have initiated good laboratory practice-compliant toxicology studies with our development candidate, IDE397. Subject to satisfactory completion thereof, we anticipate submitting an investigational new drug application, or IND, to the FDA for our IDE397 development candidate in the fourth quarter of 2020. Subject to effectiveness of the IND, we anticipate initiating a Phase 1 clinical trial for clinical evaluation of IDE397 in the first half of 2021.We plan to lead research and development through early clinical development of this program, in collaboration with GSK pursuant to the GSK Collaboration Agreement.

PARG

We are advancing our preclinical research for an inhibitor of poly (ADP-ribose) glycohydrolase, or PARG, for patients having tumors with BRCA2 mutations, impaired base excision repair, or BER, and potentially other genetic and/or molecular signatures. We have an ongoing collaboration with Cancer Research UK and University of Manchester evaluating our PARG inhibitors in vitro and in vivo in tumor models having a replication stress genetic signature, which is believed to impart DNA replication vulnerabilities in cancer cells. We have demonstrated in vivo proof of concept in a relevant animal model having a replication stress genetic signature.

In addition, we are validating a potential synthetic lethality biomarker for identifying tumor cells having sensitivity to a PARG inhibitor, and potentially enabling a patient selection strategy for treatment with a PARG inhibitor. One of our PARG inhibitor compounds, designated as IDB-PARG, has demonstrated monotherapy in vivo efficacy with tumor regression or stasis in multiple PDX models.

Subject to further preclinical studies, we are targeting to identify a PARG inhibitor development candidate in 2021.

Werner Helicase

We are also continuing to pursue preclinical research in collaboration with GSK for an inhibitor targeting Werner Helicase, or WRN, for patients having tumors with high microsatellite instability, or MSI. We have observed dose-dependent cellular viability effect and a dose-dependent cellular pharmacodynamic, or PD, response in multiple endogenous MSI high cell lines.

For this program, we plan to continue further development in collaboration with GSK pursuant to the GSK Collaboration Agreement.

Pol Theta

We are progressing our Pol-theta program in collaboration with GSK for patients having solid tumors with BRCA or other homologous recombination deficiency, or HRD, mutations. We have shown combination activity with multiple PARP inhibitors, including niraparib and olaparib. We have observed synergistic cell viability activity and synergistic in vivo tumor growth inhibition with olaparib in the DLD1 BRCA2 -/- engineered model, with a weak drug-drug interaction signal. We have demonstrated synergistic in vivo efficacy of a Pol-theta inhibitor with niraparib: the combination of our Pol-theta inhibitor with niraparib greatly enhanced the activity of niraparib in the DLD1 BRCA2^-/- xenograft model. Tumor regressions were observed for all animals in the study which were

administered the combination. All treatments were well-tolerated, with body weights similar to vehicle control at end of study.

We plan to continue further development of our POLQ inhibitors in collaboration with GSK pursuant to the GSK Collaboration Agreement, and are targeting filing of an IND for a Pol Theta inhibitor in 2021.

DNA Damage Target

We have initiated an early preclinical research program to identify a small molecular inhibitor for a DNA Damage Target, or DDT, for patients with solid tumors characterized by a proprietary biomarker or a gene signature.

IDE196 - PKC Inhibitor Clinical Candidate

We continue to execute on our ongoing Phase 1/2 clinical trial and preclinical research activities for our clinical candidate IDE196, a protein kinase C, or PKC, inhibitor for genetically-defined cancers having GNAQ or GNA11 hotspot mutations.

IDE196 / Binimetinib Combination Therapy

On June 26, 2020, we initiated a combination arm of our Phase 1/2 clinical trial to evaluate IDE196 in combination with binimetinib in patients having tumors harboring activating GNAQ or GNA11 hotspot mutations. An initial dose escalation portion of this arm of the clinical trial is evaluating the safety and efficacy of IDE196 in combination with binimetinib at various dose combinations, initially in patients with metastatic uveal melanoma, or MUM. As of August 1, 2020, we have initiated dosing of 3 MUM patients into a first cohort of the dose escalation portion of the combination arm. Following our evaluation of tolerability and preliminary efficacy from the IDE196 / binimetinib combination arm of the clinical trial in MUM, we may also evaluate IDE196 / binimetinib combination therapy in patients having other solid tumors with activating GNAQ/11 hotspot mutations outside of uveal melanoma, such as skin melanoma.

The IDE196 / binimetinib combination arm of our Phase 1/2 clinical trial is supported through a clinical trial collaboration and supply agreement with Pfizer Inc., pursuant to which Pfizer supplies us with their MEK inhibitor, binimetinib. We have established a Joint Development Committee with Pfizer to facilitate combination arm drug supply, trial initiation and ongoing development.

We anticipate interim data from the IDE196 / binimetinib combination therapy Phase 1/2 portion of the clinical trial in MUM patients in late 2021 or early 2022.

IDE196 Monotherapy

Our ongoing monotherapy arm of the Phase 1/2 clinical trial was initiated in June 2019 to evaluate IDE196 in solid tumors harboring GNAQ or GNA11 hotspot mutations in a basket trial design. We have completed enrollment in the monotherapy arm of the Phase 1/2 clinical trialin MUM. We are continuing to enroll patients having other, non-MUM solid tumors harboring GNAQ or GNA11 hotspot mutations, such as skin melanoma.

In the Phase 2 basket arm evaluating IDE196 as monotherapy in solid tumors harboring GNAQ or GNA11 hotspot mutations (GNAQ/11), the clinical protocol criteria have been met for cohort expansion in cutaneous melanoma, or skin melanoma. As of August 1, 2020, we have enrolled 5 cutaneous melanoma patients harboring GNAQ/11 mutations, toward a target Stage 1 enrollment of 9 patients. The protocol of this Simon two-stage clinical trial design requires at least one RECIST (Response Evaluation Criteria in Solid Tumors) response in the first Stage 1 cohort (n=9) in order to expand into a second Stage 2 cohort (n=15). Of 4 evaluable skin melanoma patients harboring GNAQ/11 hotspot mutations (excluding 1 non-evaluable), a 100% Disease Control Rate was observed, and one confirmed partial response (cPR) was determined by RECIST 1.1 guidelines. Following satisfaction of the clinical protocol criteria, we can enroll an additional 15 skin melanoma patients harboring GNAQ/11 mutations into the Stage 2 cohort expansion.

The skin melanoma patient with cPR observed an initial partial response (-31.1%) at 8 weeks, which was sustained at 20 weeks (-37%) with reduction in target liver lesion and inguinal lymph node. Treatment with IDE196 is ongoing as of August 1, 2020. Prior treatments included multiple immuno-oncology therapies, Nivolumab (Nivo), Ipilimumab, and Pembrolizumab through 2016 and 2017. Liver metastasis in 2018 was followed by treatment with Nivo in combination with radiation in 2018, and by further treatment with T-VEC in 2019. A subsequent progression was followed by adoptive T-cell therapy in 2019, with a further confirmed progression noted in February 2020. Treatment was subsequently initiated with IDE196 in the monotherapy arm of the clinical trial.

We also enrolled a first leiomyosarcoma patient in the Phase 2 basket arm evaluating IDE196 as monotherapy, expanding the tissue-agnostic approach to additional solid tumors harboring GNAQ or GNA11 hotspot mutations (GNAQ/11).

We are continuing to access potential additional clinical trial sites to supplement enrollment into the Phase 2 basket arm of the IDE196 clinical trial. We have established a relationship with CARIS through which we are accessing their network of clinical trial sites into which we can enroll qualifying patients having tumors harboring GNAQ/11 hotspot mutations.

The tablet formulation of IDE196 is complete and has been successfully introduced in the ongoing IDE196 clinical trial, including the IDE196 / binimetinib combination arm, and the GNAQ/11 non-MUM basket arm, where in each case we are continuing to enroll new patients.

Based on the increased target enrollment in the skin melanoma cohort of our GNAQ/11 basket arm and the potential impact of the COVID-19 pandemic, we are planning to disclose interim data from the monotherapy arm of our ongoing IDE196-001 Phase 1/2 basket trial in the first half of 2021.

IDE196 was initially developed by Novartis, and we obtained an exclusive, worldwide license to IDE196 from Novartis in September 2018. Pursuant to our license agreement with Novartis, except for Novartis’ ongoing Phase 1 clinical trial, we control all future clinical development, and all commercial rights to IDE196, and may rely on and incorporate data previously submitted to the FDA by Novartis into our own regulatory submissions. Novartis has completed enrollment in a Phase 1 clinical trial it is conducting to evaluate IDE196 in metastatic uveal melanoma. Phase 1 monotherapy data from Novartis was presented at the American Association for Cancer Research, or AACR, in April 2019. A confirmed Complete Response at the 200 mg BID dose level was observed at month 31 in one of four patients previously reported with confirmed partial response out of 30 total (28 evaluable) BID patients in the monotherapy arm of the Novartis clinical trial. As of May 14, 2020, this patient with a confirmed Complete Response in the monotherapy arm of this clinical trial remains on treatment with IDE196.

Regulatory / Potentially Registration-Enabling Clinical Trial

In an end of Phase 1 meeting with the FDA in the fourth quarter of 2019, the FDA indicated that our proposed single-arm Phase 2 portion of the IDE196 001 Phase 1/2 clinical trial may be adequate to support a new drug application, or NDA, seeking Accelerated Approval for IDE196 monotherapy in MUM. The FDA indicated that such a single-arm, potentially registration enabling part of the Phase 1/2 clinical trial could target enrollment of 60 evaluable MUM patients with the primary endpoint of overall response rate, or ORR, as determined by blinded independent central review, or BICR, supported by BICR determined duration of response, or DOR, as a secondary endpoint.

We initiated 13-week good laboratory practice-, or GLP-, compliant toxicology studies in two species in November 2019, in support of an FDA requirement that results of these studies be submitted prior to enrollment of more than approximately 50 patients in the potentially registrational arm that will support a marketing application. As of August 1, 2020, we have completed the 13-week preclinical toxicology studies of IDE196 in two species, following our receipt of submission-ready audited draft reports.

We will evaluate clinical tolerability and efficacy data from each of the ongoing IDE196 monotherapy Phase 1 portion of the clinical trial in MUM patients and the IDE196 / binimetinib combination therapy Phase 1/2 portion of the clinical trial in MUM patients in late 2021 early 2022, as well as potential strategic partnering of the IDE196 program, prior to initiation of a potentially registrational clinical trial in MUM. We will provide updated guidance

on timing for a potential NDA submission for IDE196 in MUM after making such decision on a potential registrational pathway in MUM.

Preclinical Evaluation of IDE196 with Other Combination Agents / Other Potential Patient Populations or Other Potential Indications

We are continuing our preclinical evaluation of IDE196 in combination with various other potential combination agents, including for potential clinical relevance in metastatic uveal melanoma or other solid tumors harboring GNAQ or GNA11 hotspot mutations.

We are continuing our preclinical evaluation of IDE196 in Sturge-Weber Syndrome, or SWS, a rare neurocutaneous disorder characterized by capillary malformations and associated with mutations in GNAQ. Our preclinical evaluation will include potential feasibility for pediatric use.

Impact of COVID-19 Pandemic on IDE-001 Phase 1/2 Clinical Trial and IDE196 Preclinical Research

We continue to monitor the COVID-19 pandemic and its potential impact on the ongoing IDE196 clinical program. GNAQ/11 patients enrolled in the ongoing Phase 1/2 clinical trial and sites affected by COVID-19 restrictions are adapting to logistical constraints on activities, such as travel and site visits. For example, patients are continuing on IDE196 therapy, which is an oral drug and is being shipped to and self-administered by patients at home. Patients are being monitored through a combination of telemedicine visits and local visits. COVID‐19 infection rates have increased recently in several states in which our clinical trial sites are located. As such, ongoing monitoring of enrolled patients, including obtaining patient computed tomography, or CT, scans, may be impacted; the specific impact is currently uncertain.

Additionally, enrollment into the Phase 2 expansion arm for IDE196 as a monotherapy in non-MUM solid tumors having GNAQ or GNA11 hotspot mutations may be delayed by circumstances resulting from the COVID-19 pandemic, including for example, as a result of recent increases in COVID-19 infection rates in several states in which our clinical trial sites are located, and by clinical site-specific policies and practices related to COVID-19. The specific impact on enrollment into the Phase 2 expansion of the monotherapy arm for non-MUM solid tumors having GNAQ or GNA11 hotspot mutations is currently uncertain.

Enrollment into the combination arm evaluating IDE196 and binimetinib as combination therapy in MUM and non-MUM solid tumors having GNAQ or GNA11 hotspot mutations may be delayed by circumstances resulting from the COVID-19 pandemic, including for example, by clinical site-specific policies and practices related to COVID-19. The specific impact on enrollment into this combination arm of the Phase 1/2 clinical trial is currently uncertain.

We plan to continue to use third-party service providers, including clinical research organizations, or CROs, and clinical manufacturing organizations, or CMOs, to carry out our preclinical and clinical development and manufacture and supply of our preclinical and clinical materials to be used during the development of our product candidates. To date, the COVID-19 pandemic has not materially affected our supply chain or development schedule, but further escalation of the health crisis has the potential to cause delays in our supply chain and manufacturing operations, which could materially adversely impact our business.

Corporate Update

We do not have any products approved for sale and have not generated any revenue since inception. We have funded our operations through June 30, 2020 primarily through the sale and issuance of common stock, redeemable convertible preferred stock, and convertible promissory notes. In May 2019, we completed our initial public offering, or IPO. In June and July 2020, we added an aggregate of $227.5 million to our balance sheet from a follow-on public offering of $107.5 million in gross proceeds, a direct private placement equity investment by GSK with $20.0 million in gross proceeds, and a non-dilutive upfront cash payment of $100 million from GSK.

Since our inception in June 2015, we have devoted substantially all of our resources to discovering and developing our product candidates. We have incurred significant operating losses to date and expect that our operating expenses will increase significantly as we advance our product candidates through preclinical and clinical development; seek regulatory approval, and prepare for, and, if approved, proceed to commercialization; acquire, discover, validate and

develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel. Certain program costs that contribute to our operating expenses will be reimbursed by GSK pursuant to the GSK Collaboration Agreement, including 100% of costs we incur for research we perform in connection with the Pol Theta program and 80% of the aggregate program costs incurred by us and GSK for research each of us performs for the MAT2A program, if GSK exercises the Option, and the Werner Helicase program. In addition, we expect to incur additional costs associated with operating as a public company.

Our net losses were $24.4 million and $20.2 million for the six months ended June 30, 2020 and June 30, 2019, respectively. As of June 30, 2020, we had an accumulated deficit of $116.9 million.

Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates, ourselves, or for some programs, in collaboration with our strategic partners. We are leading and solely responsible for preclinical, translational and clinical research and development, as applicable, for (i) the IDE196 monotherapy arm of our IDE196-001 clinical trial, (ii) our PARG program and (iii) our DNA Damage Target or DDT program. We are leading clinical development in the ongoing IDE196 / binimetinib combination arm of our IDE196-001 clinical trial, in coordination with Pfizer pursuant to the Clinical Trial Collaboration and Supply Agreement. We are leading preclinical development and plan to lead early-stage clinical development for evaluation of IDE397 in a clinical trial which we plan to initiate in the first half of 2020, in coordination with GSK pursuant to the GSK Collaboration Agreement. We are collaborating with GSK on preclinical research for our Pol Theta and Werner Helicase programs, pursuant to the GSK Collaboration Agreement.

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

As of June 30, 2020, we had cash, cash equivalents and marketable securities of $172.0 million. We supplemented our quarter-end balance sheet of $172.0 million with an additional $127.5 million aggregate gross proceeds received subsequent to quarter end, including $100.0 million non-dilutive upfront cash payment from GSK, $20.0 million proceeds from the direct private placement equity investment by GSK, and $7.5M gross proceeds from the overallotment option exercise of the Offering. We believe that our cash, cash equivalents and marketable securities will be sufficient to fund our planned operations for at least 12 months from the date of the issuance of these financial statements.

Components of Operating Results

Collaboration Revenues

To date, we have not generated any revenue from product sales, and we do not expect to generate any revenue from product sales for the foreseeable future. To date, we have not generated any collaboration revenue, and we expect to start generating collaboration revenue in the third quarter of 2020. Our revenue will primarily consist of collaboration revenue under the GSK Collaboration Agreement, including amounts that are recognized related to upfront payments, milestone payments, option exercise payments, and amounts due to us for research and development services. In the future, revenue may include additional milestone payments, option exercise payments, profit sharing, and royalties on any net product sales under our collaborations. We expect that any revenue we generate will fluctuate from period to period as a result of the timing and amount of license, research and development services, and milestone and other payments.

Operating Expenses

Research and Development Expenses

Substantially all of our research and development expenses consist of expenses incurred in connection with discovery and development of our product candidates. These expenses include certain payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expenses for our research and product development employees, fees to third parties to conduct certain research and development activities on our behalf including fees to CMOs and CROs in support of manufacturing and clinical activity for IDE 196, consulting

costs, costs for laboratory supplies, costs for product licenses and allocated overhead, including rent, equipment, depreciation, information technology costs and utilities. We expense both internal and external research and development expenses as they are incurred.

We have entered into various agreements with CMOs and CROs. Our research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities on the balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, we will adjust the accrual accordingly. Payments made to CMOs and CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered.

Costs of certain activities, such as preclinical studies, are generally recognized based on an evaluation of the progress to completion of specific tasks. 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 as prepaid expenses and other current assets on our balance sheet. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed.

We do not allocate our costs by product candidate, as a significant amount of research and development expenses include internal costs, such as payroll and other personnel expenses, laboratory supplies and allocated overhead, and external costs, such as fees to third parties to conduct research and development activities on our behalf, none of which are tracked by product candidate. In particular, with respect to internal costs, several of our departments support multiple product candidate research and development programs, and therefore the costs cannot be allocated to a particular product candidate or development program.

We are focusing substantially all of our resources on the development of our product candidates. We expect our research and development expenses to increase substantially during the next few years, as we seek to initiate clinical trials for our product candidates, complete our clinical program, pursue regulatory approval of our product candidates and prepare for a possible commercial launch. Predicting the timing or the cost to complete our clinical program or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including factors outside of our control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Furthermore, we are unable to predict when or if our product candidates will receive regulatory approval with any certainty.

General and Administrative Expenses

General and administrative expenses consist primarily of payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense, professional fees for legal, patent, consulting, accounting and tax services, allocated overhead, including rent, equipment, depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses.

We anticipate that our general and administrative expenses will increase, as a result of increased personnel costs, including salaries, benefits and stock-based compensation expense, patent costs for our product candidates, expanded infrastructure and higher consulting, legal and accounting services associated with maintaining compliance with our NASDAQ stock exchange listing and requirements of the Securities and Exchange Commission, or the SEC, investor relations costs and director and officer insurance policy premiums associated with being a public company.

Other Income (Expense)

Interest Income and Other Income (Expense), Net

Interest income and other income (expense), net consists primarily of interest income earned on our cash, cash equivalents and marketable securities.

Results of Operations

Comparison of Three Months Ended June 30, 2020 and 2019

The following table summarizes our results of operations for the periods indicated (in thousands):

	Three Months Ended June 30,									%
	2020			2019			Change			Change
Operating expenses:
Research and development	$	8,596		$	8,859		$	(263	)		(3	%)
General and administrative		3,994			2,376			1,618			68	%
Loss from operations		(12,590	)		(11,235	)		(1,355	)		12	%
Interest income and other income (expense), net		199			579			(380	)		(66	%)
Net loss	$	(12,391	)	$	(10,656	)	$	(1,735	)		16	%

Research and Development Expenses

Research and development expenses decreased by $0.3 million, or 3%, from the three months ended June 30, 2019 to the three months ended June 30, 2020. The decrease in research and development expenses was due to a decrease in payroll expenses, including salaries and benefits, of $0.8 million, and a decrease in costs for laboratory supplies used in support of our research programs of $0.6 million, which was partially offset by an increase in fees to CROs of $0.7 million as well as fees to contractors of $0.4 million related to support costs for our Phase 1/2 clinical trial to evaluate IDE196 in solid tumors and the advancement of our lead product candidates through preclinical studies.

General and Administrative Expenses

General and administrative expenses increased by $1.6 million, or 68%, from the three months ended June 30, 2019 to the three months ended June 30, 2020. The increase in general and administrative expenses was primarily due to an increase in payroll expenses, including salaries, benefits and stock-based compensation expense, of $0.6 million related to increased headcount to support our growth as a public company, an increase in director and officer, or D&O, insurance policy premiums of $0.3 million as a public company, an increase in costs associated with the filing of a shelf registration statement on Form S-3 of $0.3 million, and an increase in legal expense of $0.3 million related to an increase in patent filings and work related to the GSK Collaboration Agreement.

Interest Income and Other Income (Expense), Net

Interest income and other income (expense), net decreased by $0.4 million, or 66%, from the three months ended June 30, 2019 to the three months ended June 30, 2020, primarily due to a decrease in interest rate yields on our cash, cash equivalents and marketable securities balances during the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

Comparison of Six Months Ended June 30, 2020 and 2019

The following table summarizes our results of operations for the periods indicated (in thousands):

		Six Months Ended June 30,												%
		2020				2019				Change				Change

Operating expenses:
Research and development	$	17,622		$	16,855		$	767		5	%
General and administrative		7,446			4,474			2,972		66	%
Loss from operations		(25,068	)		(21,329	)		(3,739	)	18	%
Interest income		634			1,104			(470	)	(43	%)
Net loss	$	(24,434	)	$	(20,225	)	$	(4,209	)	21	%

Research and Development Expenses

Research and development expenses increased by $0.8 million, or 5%, from the six months ended June 30, 2019 to the six months ended June 30, 2020. The increase in research and development expenses was primarily due to an increase in fees to CROs $2.1 million as well as fees to contractors of $0.7 million related to support costs for our Phase 1/2 clinical trial to evaluate IDE196 in solid tumors and the advancement of our lead product candidates through preclinical studies, which was partially offset by a decrease in payroll expenses, including salaries and benefits, of $1.3 million, and a decrease in costs for laboratory supplies used in support of our research programs of $1.0 million.

General and Administrative Expenses

General and administrative expenses increased by $3.0 million, or 66%, from the six months ended June 30, 2019 to the six months ended June 30, 2020. The increase in general and administrative expenses was primarily due to an increase in payroll expenses, including salaries, benefits and stock-based compensation expense, of $1.3 million related to increased headcount to support our growth as a public company, an increase in D&O insurance policy premiums of $0.8 million as a public company, an increase in costs associated with the filing of a shelf registration statement on Form S-3 of $0.3 million, and an increase in legal expense of $0.3 million related to an increase in patent filings and work related to the GSK Collaboration Agreement.

Interest Income and Other Income (Expense), Net

Interest income and other income (expense), net decreased by $0.5 million, or 43%, from the six months ended June 30, 2019 to the six months ended June 30, 2020, primarily due to a decrease in interest rate yields on our cash, cash equivalents and marketable securities balances during the six months ended June 30, 2020 compared to the six months ended June 30, 2019.

Liquidity and Capital Resources; Plan of Operations

Sources of Liquidity

We have funded our operations primarily through the sale and issuance of common stock, redeemable convertible preferred stock, and convertible promissory notes. In May 2019, we completed our IPO. As of June 30, 2020, we had cash, cash equivalents and marketable securities of $172.0 million, consisting primarily of money market funds, U.S. government securities, commercial paper, and corporate bonds.

Future Funding Requirements

We have incurred net losses since our inception. For the six months ended June 30, 2020 and June 30, 2019, we had net losses of $24.4 million and $20.2 million, respectively, and we expect to incur substantial additional losses in future periods. As of June 30, 2020, we had an accumulated deficit of $116.9 million. Based on our current business plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations for at least 12 months from the date of the issuance of these financial statements.

To date, we have not generated any revenue. We do not expect to generate any meaningful revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates or enter into collaborative agreements with third parties, and we do not know when, or if, either will occur. We expect to continue to incur significant losses for the foreseeable future, and we expect the losses to increase as we continue the development of,

and seek regulatory approvals for, our product candidates and begin to commercialize any approved products. We are subject to all of the risks typically related to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. Moreover, we expect to incur additional costs associated with operating as a public company.

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise capital through private or public equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements for which will depend on many factors, including:

•

the scope, timing, rate of progress and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidates;

•

the number and scope of clinical programs we decide to pursue;

•

the scope and costs of manufacturing development and commercial manufacturing activities;

•

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

•

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

•

potential delays in our ongoing clinical programs as a result of the COVID-19 pandemic;

•

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

•

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

•

our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates;

•

the costs associated with being a public company; and

•

the cost and timing associated with commercializing our product candidates, if they receive marketing approval.

A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.

Adequate additional funding may not be available to us on acceptable terms or at all. See the section of this Quarterly Report titled “Part II, Item 1A – Risk Factors” for additional risks associated with our substantial capital requirements.

Summary Statement of Cash Flows

The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for each of the periods presented below (in thousands):

	Six Months Ended June 30,
	2020			2019
Net cash (used in) provided by:
Operating activities	$	(23,151	)	$	(20,057	)
Investing activities		41,894			36,819
Financing activities		94,733			50,848
Net increase in cash, cash equivalents and restricted cash	$	113,476		$	67,610

Cash Flows from Operating Activities

Net cash used in operating activities was $23.2 million for the six months ended June 30, 2020. Cash used in operating activities was primarily due to the use of funds in our operations to develop our product candidates resulting in a net loss of $24.4 million, adjusted for an increase in prepaid expenses and other assets of $0.8 million mainly due to advance payment for our D&O insurance policy premiums, and a decrease in lease liabilities of $0.6 million due to lease amortization, partially offset by stock-based compensation expense of $1.6 million, depreciation and amortization expense of $0.7 million and a decrease in right-of-use assets of $0.5 million due to lease amortization.

Net cash used in operating activities was $20.1 million for the six months ended June 30, 2019. Cash used in operating activities was primarily due to the use of funds in our operations to develop our product candidates resulting in a net loss of $20.2 million, adjusted for an increase in prepaid expenses and other assets of $1.7 million mainly due to advance payment for D&O insurance policy premiums and net amortization of premiums and discounts on marketable securities of $0.4 million, partially offset by stock-based compensation expense of $0.9 million, an increase in accrued and other liabilities of $0.9 million mainly due to fees to our CROs and CMOs and depreciation and amortization expense of $0.6 million.

Cash Flows from Investing Activities

Net cash provided by investing activities was $41.9 million for the six months ended June 30, 2020, which consisted of $68.2 million provided by maturities of marketable securities, partially offset by $26.2 million used to purchase marketable securities and $0.1 million used to purchase property and equipment..

Net cash provided by investing activities was $36.8 million for the six months ended June 30, 2019, which consisted of $18.1 million provided by maturities of marketable securities and $58.2 million from sales of marketable securities, partially offset by $38.4 million used to purchase marketable securities and $1.1 million used to purchase property and equipment.

Cash Flows from Financing Activities

Net cash provided by financing activities was $94.7 million for the six months ended June 30, 2020, which consisted of $93.9 million of net proceeds from our follow-on offering, $0.7 million of proceeds from exercise of common stock options, and $0.1 million of proceeds from ESPP purchase.

Net cash used in financing activities was $50.8 million for the six months ended June 30, 2019, which consisted primarily of $50.8 million of net proceeds from our IPO.

Contractual Obligations and Commitments

The disclosure of our contractual obligations and commitments is set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations” in our Annual Report on Form 10-K filed with the SEC on March 24, 2020. There have been no material changes in our contractual obligations and commitments since December 31, 2019.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Policies, Significant Judgments and Use of Estimates

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and 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. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our Annual Report on Form 10-K filed with the SEC on March 24, 2020, and the notes to the financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the six months ended June 30, 2020, except as described in Note 2 to the unaudited interim condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K filed with the SEC on March 24, 2020.

Revenue Recognition

We follow Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, we recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform 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) we satisfy a performance obligation.

We apply the five-step model to contracts when (1) parties have approved the contract and are committed to performing respective obligations, (2) we can identify each party’s rights regarding the goods or services to be transferred, (3) we can identify the payment terms for the goods or services to be transferred, (4) the contract has commercial substance, and (5) it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, we assess the goods or services promised within each contract and determine the performance obligations by assessing whether each promised good or service is distinct. Goods or services that are not distinct are bundled with other goods or services in the contract until a bundle of goods or services that is distinct is created. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligations when (or as) the performance obligations are satisfied. We constrain our estimate of the transaction price up to the amount (the “variable consideration constraint”) that a significant reversal of recognized revenue is not probable.

Licenses of intellectual property: If a license to our intellectual property is determined to be distinct from the other promised goods or services identified in an arrangement, we recognize revenue from non-refundable, upfront fees allocated to the license at the point in time when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward satisfying the performance obligation for purposes of recognizing revenue from non-refundable, upfront fees. We evaluate the measure of progress each reporting period and, if necessary, adjusts the measure of progress and related revenue recognition.

Milestone payments: At the inception of each arrangement or amendment that includes development, regulatory or commercial milestone payments, we evaluate whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 prescribes two methods to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for us to use the same approach for all contracts. We expect to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur when the uncertainty associated with the milestone is resolved, the associated milestone value is included in the transaction price. Milestone payments that are highly susceptible to factors outside the Company’s influence, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. If there is more than one performance obligation, the transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. We recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability or achievement of each milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, we 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 contract liabilities upon receipt or when due and may require deferral of revenue recognition to a future period until we perform its obligations under these arrangements. Amounts payable to us are recorded as accounts receivable when our right to consideration is unconditional. Amounts payable to us and not yet billed to the collaboration partner are recorded as contract assets. We do 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.

Contracts may be amended to account for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new, or changes existing, enforceable rights and obligations. When contract modifications create new performance obligations and the increase in consideration approximates the standalone selling price for goods and services related to such new performance obligations as adjusted for specific facts and circumstances of the contract, the modification is accounted for as a separate contract. If a contract modification is not accounted for as a separate contract, we account for the promised goods or services not yet transferred at the date of the contract modification (the remaining promised goods or services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification. We account for a contract modification as if it were a part of the existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification. In such case the effect that the contract modification has on the transaction price, and on the entity’s measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis).

Upfront payment contract liabilities resulting from our license and collaboration agreements do not represent a financing component as the payment is not financing the transfer of goods and services, and the technology underlying the licenses granted reflects research and development expenses already incurred by us. As such, we do not adjust its revenues for the effects of a significant financing component.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Sensitivity

The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates or exchange rates. As of June 30, 2020, we had cash equivalents and marketable securities of $171.9 million, consisting of interest-bearing money market funds, investments in U.S. government securities, commercial paper, and corporate bonds, for which the fair value would be affected by changes in the general level of U.S. interest rates. However, due to the short-term maturities and the low-risk profile of our cash equivalents and marketable securities, an immediate 10% change in interest rates would not have a material effect on the fair value of our cash equivalents and marketable securities.

We do not believe that inflation, interest rate changes or exchange rate fluctuations have had a significant impact on our results of operations for any periods presented herein.

Item 4. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2020.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(e) and 15d-15(e) of the Exchange Act 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.

From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on our business, financial condition, cash flows, results of operations and prospects because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form 10-Q, including our unaudited condensed financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations, growth prospects and stock price. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Many of the following risks and uncertainties are, and will be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements

We are an early-stage biopharmaceutical company with a limited operating history and no products approved for commercial sale. We have incurred significant losses since our inception, and we anticipate that we will continue to incur significant losses for the foreseeable future, which, together with our limited operating history, makes it difficult to assess our future viability.

Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We are an early-stage biopharmaceutical company, and we have only a limited operating history upon which you can evaluate our business and prospects. We currently have no products approved for commercial sale, have not generated any revenue from sales of products and have incurred losses in each year since our inception in June 2015. In addition, we have limited experience as a company and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical industry. Only one of our product candidates, IDE196, is currently in ongoing clinical trials – one ongoing Phase 1 clinical trial conducted and controlled by Novartis and one ongoing Phase 1/2 clinical trial that we initiated in June 2019 to evaluate IDE196 in solid tumors harboring GNAQ or GNA11 hotspot mutations.

We have had significant operating losses since our inception. Our net losses for the six months ended June 30, 2020 and June 30, 2019 were $24.4 million and $20.2 million, respectively. As of June 30, 2020, we had an accumulated deficit of $116.9 million. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. One of our product candidates, IDE196, is currently in a Phase 1 clinical trial being conducted by Novartis and in a Phase 1/2 clinical trial we are conducting. We have multiple other product candidates in preclinical development, as well as early-stage research programs. Our product candidates will require substantial additional development time and resources before we will be able to apply for or receive regulatory approvals and, if approved, begin generating revenue from product sales. Furthermore, we expect to continue to incur additional costs associated with operating as a public company. We also do not yet have a sales organization or commercial infrastructure and, accordingly, we will incur significant expenses to develop a sales organization or commercial infrastructure in advance of regulatory approval and generating any commercial product sales. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue to develop IDE196, our other product candidates and any future product candidates, conduct clinical trials and pursue research and development activities. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ deficit and working capital.

We will require substantial additional financing to achieve our goals, and failure to obtain additional capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations.

Since our inception, we have invested a significant portion of our efforts and financial resources in research and development activities for our precision medicine target and biomarker discovery platform and our initial preclinical and clinical product candidates. Preclinical studies and clinical trials and additional research and development activities will require substantial funds to complete. As of June 30, 2020, we had cash, cash equivalents and marketable securities of $172.0 million. We believe that we will continue to expend substantial resources for the foreseeable future in connection with the research and development of our precision medicine target and biomarker discovery platform, clinical and preclinical product candidates, and any other future product candidates we may choose to pursue, as well as other corporate uses. Specifically, in the near term, we expect to incur substantial expenses as we advance our synthetic lethality product candidates through preclinical studies, advance IDE196 through clinical development, seek regulatory approval, prepare for and, if approved, proceed to commercialization, and continue our research and development efforts. These expenses will include our cost sharing obligations with GSK for research and development for our WRN program and MAT2A program (if GSK exercises its exclusive option to obtain an exclusive license to continue development of and commercialize MAT2A products). These expenditures will include costs associated with conducting preclinical studies and clinical trials, obtaining regulatory approvals, and manufacturing and supply, as well as marketing and selling any products approved for sale. In addition, other unanticipated costs may arise. Because the outcome of any preclinical study or clinical trial is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully develop and commercialize our product candidates or any future product candidates.

We believe that our existing cash, cash equivalents and marketable securities will allow us to fund our planned operations for at least 12 months from the date of the issuance of the financial statements included in this Form 10-Q. However, our operating plans and other demands on our capital resources 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. 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. Such financing may result in dilution to stockholders, imposition of burdensome debt covenants and repayment obligations, or other restrictions that may adversely affect our business. If we raise additional funds through licensing or collaboration arrangements with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. Attempting to secure additional financing may also divert our management from our day-to-day activities, which may adversely affect our ability to develop our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.

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

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the scope, progress, results and costs of developing our product candidates or any other future product candidates, and conducting preclinical studies and clinical trials, including our ongoing IDE196 Phase 1/2 clinical trial in solid tumors harboring GNAQ or GNA11 mutations;

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the scope, progress, results and costs related to the research and development of our precision medicine target and biomarker discovery platform, including costs related to the development of our proprietary libraries and database of tumor genetic information and specific cancer-target dependency networks;

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the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates or any future product candidates, or any applicable diagnostics;

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the number and characteristics of any additional product candidates we develop or acquire;

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the scope, progress, results and costs of developing, in collaboration with certain diagnostic companies, diagnostics for biomarkers associated with our product candidates or any other future product candidates in support of our preclinical studies and clinical trials, including our ongoing Phase 1/2 clinical trial for IDE196 in solid tumors harboring GNAQ or GNA11 mutations;

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the cost of coordinating and/or collaborating with certain diagnostic companies for manufacturing and supply of companion diagnostics for biomarkers associated with our product candidates and any future product candidates;

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our ability to maintain existing, and establish new, strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the Collaboration, Option and License Agreement with GSK, the License Agreement with Novartis and the Option and License Agreement with Cancer Research United Kingdom, or Cancer Research UK, and University of Manchester;

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the timing and amount of any option exercise, milestone, royalty or other payments we may or may not receive pursuant to any current or future collaboration or license agreement, including under the Collaboration, Option and License Agreement with GSK;

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the timing and amount of any milestone, royalty or other payments we are required to make pursuant to any current or future collaboration or license agreement, including under the License Agreement with Novartis or the Option and License Agreement with Cancer Research UK and University of Manchester;

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potential delays in our ongoing clinical programs as a result of the COVID-19 pandemic;

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the cost of manufacturing our product candidates and any future products we successfully commercialize;

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the cost of commercialization activities, including the cost of building a sales force in anticipation of product commercialization and distribution costs;

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any product liability or other lawsuits related to our product candidates or future approved products;

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the expenses needed to attract, hire and retain skilled personnel;

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the costs associated with being a public company;

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the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing our intellectual property portfolio; and

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the timing, receipt and amount of sales of any future approved products, if any.

Our ability to raise additional funds will depend on financial, economic and other factors, including the ongoing effects of the COVID-19 pandemic, many of which are beyond our control. 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:

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delay, limit, reduce or terminate preclinical studies, clinical trials or other research and development activities or eliminate one or more of our development programs altogether; or

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delay, limit, reduce or terminate our efforts to establish manufacturing and sales and marketing capabilities or other activities that may be necessary to commercialize IDE196, if approved, or any other future approved products, or reduce our flexibility in developing or maintaining our sales and marketing strategy.

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

To date, we have primarily financed our operations through the sale of equity securities and payments received under our collaboration agreements. We will be required to seek additional funding in the future and currently intend to do so through collaborations, public or private equity offerings or debt financings, credit or loan facilities or a combination of one or more of these funding sources. If we raise additional funds by issuing equity securities, our stockholders may suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights or jointly own some aspects of our technologies or product candidates that we would otherwise pursue on our own.

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

Our quarterly and annual operating results may fluctuate significantly, which will make it difficult for us to predict our future results. These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including:

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the timing and cost of, and level of investment in, research, development and commercialization activities, which may change from time to time;

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the timing and status of enrollment for our clinical trials;

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the timing of regulatory approvals, if any, in the United States and internationally;

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the cost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity of productions, and the terms of any agreements we enter into with third-party suppliers;

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timing and amount of any option exercise, milestone, royalty or other payments we may or may not receive pursuant to any current or future collaboration or license agreement, including under the Collaboration, Option and License Agreement with GSK;

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timing and amount of any milestone, royalty or other payments due under any current or future collaboration or license agreement, including the License Agreement with Novartis or the Option and License Agreement with Cancer Research UK and University of Manchester;

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coverage and reimbursement policies with respect to any future approved products, and potential future drugs that compete with our products;

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expenditures that we may incur to acquire, develop or commercialize additional products and technologies;

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the level of demand for any future approved products, which may vary significantly over time;

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future accounting pronouncements or changes in our accounting policies; and

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

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. Investors should not rely on our past results as an indication of our future performance.

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 revenue or 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. Such a stock price decline could occur even when we have met any previously publicly stated revenue or earnings guidance we may provide.

Risks Related to Our Business

We are early in our development efforts. Our business is dependent on the successful development of our product candidates, future product candidates, and companion diagnostics for biomarkers associated with our product candidates and future product candidates.

Our current product candidates are in early stages of development and we are further developing our precision medicine target and biomarker discovery platform. We have no products approved for sale and our most advanced product candidate, IDE196, is in the early stages of clinical development and will require additional clinical development, regulatory review and approval in each jurisdiction in which we intend to market it, access to sufficient commercial manufacturing capacity, and significant sales and marketing efforts before we can generate any revenue from product sales. IDE196 is currently being evaluated in an ongoing Phase 1/2 clinical trial in patients having tumors with GNAQ or GNA11 hotspot mutations, that we initiated in June 2019, including the combination arm with binimetinib that we initiated in June 2020. IDE196 is also being tested in an earlier-initiated, ongoing Phase 1 clinical trial conducted by Novartis in patients with metastatic uveal melanoma. Our other product candidates have not been tested in clinical trials. The success of our business, including our ability to finance our company and generate revenue in the future, will primarily depend on the successful development, regulatory approval and commercialization of our product candidates, which may never occur. In the future, we may also become dependent on other product candidates that we may develop or acquire; however, given our early stage of development, it may be many years, if at all, before we have demonstrated the safety and efficacy of a product candidate sufficient to support approval for commercialization.

We have not previously submitted a new drug application, or NDA, to the FDA or similar approval filings to a comparable foreign regulatory authority, for any product candidate. An NDA or other relevant regulatory filing must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe and effective for each desired indication. The NDA or other relevant regulatory filing must also include significant information regarding the chemistry, manufacturing and controls for the product. We cannot be certain that our current or future product candidates will be successful in clinical trials or receive regulatory approval. Further, even if they are successful in clinical trials, our product candidates or any future product candidates may not receive regulatory approval. If we do not receive regulatory approvals for current or future product candidates, we may not be able to continue our operations. Even if we successfully obtain regulatory approval to market a product candidate, our revenue will depend, in part, upon the size of the markets in the territories for which we gain regulatory approval and have commercial rights, as well as the availability of competitive products, whether there is sufficient third-party reimbursement and adoption by physicians.

We plan to seek regulatory approval to commercialize our product candidates both in the United States and in select foreign countries. While the scope of regulatory approval generally is similar in other countries, in order to obtain separate regulatory approval in other countries we must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy. Other countries also have their own regulations governing, among other things, clinical trials and commercial sales, as well as pricing and distribution of drugs, and we may be required to expend significant resources to obtain regulatory approval and to comply with ongoing regulations in these jurisdictions.

The clinical and commercial success of our current and any future product candidates will depend on a number of factors, including the following:

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our ability to raise any additional required capital on acceptable terms, or at all;

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our ability to develop and successfully utilize our precision medicine target and biomarker discovery platform;

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timely and successful completion of our preclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;

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acceptance of investigational new drug applications, or INDs, by the FDA, or similar regulatory filing by a comparable foreign regulatory authority for the conduct of clinical trials of our product candidates and our proposed design of future clinical trials;

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whether we are required by the FDA or a comparable foreign regulatory agency to conduct additional clinical trials or other studies beyond those planned to support approval of our product candidates;

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our ability to timely execute our ongoing clinical trials and enroll a sufficient number of patients on a timely basis, particularly in light of the effects of the COVID-19 pandemic, to evaluate the potential of our product candidates in clinical development;

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acceptance of our proposed indications and primary endpoint assessments of our product candidates by the FDA and comparable foreign regulatory authorities;

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the availability or successful development of companion diagnostics for biomarkers associated with our product candidates or any other future product candidates;

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our ability to make arrangements with third-party manufacturers for, or establish, commercial manufacturing capabilities, and to consistently manufacture our product candidates on a timely basis;

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our ability, and the ability of any third parties with whom we contract, to remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices, or cGMPs;

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our ability to demonstrate to the satisfaction of the FDA and comparable foreign regulatory authorities the safety, efficacy and acceptable risk-benefit profile of our product candidates;

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the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates, either as monotherapy or in combination with other drugs, or future approved products, if any;

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the timely receipt of necessary marketing approvals from the FDA and comparable foreign regulatory authorities;

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achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to our current product candidates or any future product candidates or approved products, if any;

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the willingness of physicians, operators of hospitals and clinics and patients to use or adopt any approved products, as well as the willingness of physicians and other health-care providers to incorporate molecular diagnostics or genetic sequencing into their clinical practice;

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our ability to successfully develop a commercial strategy and thereafter commercialize any approved products in the United States and internationally, whether alone or in collaboration with others;

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the availability and level of coverage and adequate reimbursement from managed care plans, private insurers, government payors, such as Medicare and Medicaid, and other third-party payors for any of our product candidates that may be approved;

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the convenience of our treatment or dosing regimen;

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our ability to compete with other approved therapies, if any;

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acceptance by physicians, payors and patients of the benefits, safety and efficacy of our product candidate or any future product candidates, if approved, including relative to alternative and competing treatments;

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patient demand for any approved products;

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our ability to establish and enforce intellectual property rights in and to our product candidates; and

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our ability to avoid third-party patent interference, intellectual property challenges or intellectual property infringement claims.

These factors, many of which are beyond our control, could cause us to experience significant delays or an inability to obtain regulatory approvals or commercialize our current or future product candidates. Even if regulatory approvals are obtained, we may never be able to successfully commercialize any products. Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of products to continue our business or achieve profitability.

In connection with the Collaboration, Option and License Agreement with GSK, if GSK does not exercise its option or if it terminates any development program under its collaborations with us, whether as a result of our inability to meet milestones or otherwise, any potential revenue from those collaborations will be significantly reduced or non-existent, and our results of operations and financial condition will be materially and adversely affected.

We have invested a significant portion of our time and financial resources in the development of multiple product candidates that are included in our strategic partnership and collaboration with GSK, under the Collaboration, Option and License Agreement entered into on June 15, 2020, or the GSK Collaboration Agreement. The programs included in the GSK Collaboration Agreement are the MAT2A, Pol Theta (POLQ) and Werner Helicase (WRN) programs. Our ability to continue to advance these synthetic lethality programs in development, in particular prior to the exercise by GSK of its exclusive option to obtain an exclusive license to continue development of and commercialize MAT2A products, is highly dependent on achieving certain development milestones in these programs and triggering related milestone fee payments to us.

Under the GSK Collaboration Agreement, within a specified time period after we deliver to GSK a data package from our MAT2A Phase 1 monotherapy clinical trial, GSK is entitled to exercise an option to obtain an exclusive license for continued development and commercialization of MAT2A products arising out of the MAT2A program on a worldwide basis, which we refer to as the Option. GSK’s exercise of the Option may be subject to Hart-Scott-Rodino clearance, or HSR Clearance, therefor at such time of exercise. After GSK exercises the Option and, if required, HSR Clearance is obtained, GSK must pay us an option exercise payment of $50.0 million.

Under the GSK Collaboration Agreement, we are eligible to receive from GSK future development and regulatory milestones of up to $465.0 million for each MAT2A product, and up to $485.0 million for each POLQ and WRN product, and commercial milestones of up to $475.0 million, with respect to each MAT2A (if GSK exercises the Option and receives HSR Clearance with respect thereto), POLQ and WRN product. Additionally, we are entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of MAT2A (if GSK exercises the Option and receives HSR Clearance with respect thereto) and WRN products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. We are entitled to receive tiered royalties on global net sales of POLQ products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. We have a right to opt-out of the 50% U.S. net profit share and corresponding development cost share for either or both the MAT2A and WRN programs, and would be eligible to receive tiered royalties on U.S. net sales of MAT2A or WRN products, as applicable, by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with potential positive economic adjustments based on the stage of the MAT2A or WRN program, as applicable, at the time of opt-out. There is no guarantee that we will be able to successfully continue to advance the POLQ and WRN programs and receive regulatory filing milestone payments related to any POLQ or WRN product. There is no guarantee that we will be able to advance a MAT2A product to or successfully conduct the MAT2A Phase 1 monotherapy clinical trial. Even if we successfully advance a MAT2A product and conduct the MAT2A Phase 1 monotherapy clinical trial, GSK is under no obligation to

exercise the Option. Further, in the event that GSK is required to obtain HSR Clearance after exercising the Option, and such HSR Clearance is not obtained, GSK will not participate in further development of any MAT2A products and the product rights would revert to us. We would then have worldwide rights to those assets and be responsible for funding the development of the assets. GSK may terminate the entire GSK Collaboration Agreement or any collaboration program on a target-by-target basis for any or no reason upon written notice to us after expiration of a defined notice period. The GSK Collaboration Agreement or any program under the GSK Collaboration Agreement may also be terminated by either party for the other party’s insolvency or certain uncured breaches. We may terminate the GSK Collaboration Agreement if GSK or any of its sublicensees or affiliates challenge certain of our patents. Depending on the timing of any such termination we may not be entitled to receive the option exercise fees, or potential milestone payments, as these payments terminate with termination of the GSK Collaboration Agreement.

If GSK does not exercise the Option with respect to any MAT2A product (or HSR Clearance thereof is not obtained), or terminates its rights and obligations with respect to a program or the entire GSK Collaboration Agreement, then depending on the timing of such event:

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the development of our product candidates subject to the GSK Collaboration Agreement may be terminated or significantly delayed;

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our cash expenditures could increase significantly if it is necessary for us to hire additional employees and allocate scarce resources to the development and commercialization of product candidates that were previously funded by GSK;

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we would bear all of the risks and costs related to the further development and commercialization of product candidates that were previously the subject of the GSK Collaboration Agreement, including the reimbursement of third parties; and

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in order to fund further development and commercialization, we may need to seek out and establish alternative collaboration arrangements with third-party collaboration partners; this 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 would have a material adverse effect on our results of operations and financial condition.

Clinical development of our lead product candidate, IDE196, depends, in part, on data from Novartis’ ongoing Phase 1 clinical trial of IDE196 in patients with metastatic uveal melanoma. We have no control over the execution of Novartis’ trial.

Our most advanced product candidate, IDE196, is currently being evaluated in a Phase 1 clinical trial conducted by Novartis. Novartis’ ongoing clinical trial has two arms – a monotherapy arm, and a combination arm evaluating IDE196 in combination with Novartis’ p53-MDM2 inhibitor, HDM201. Our license agreement with Novartis provides that we may reference clinical data from the monotherapy arm and safety data from both arms of Novartis’ ongoing clinical trial in our regulatory filings. Updated monotherapy data from Novartis was presented at AACR in April 2019.

We have no control or oversight over the design or implementation of Novartis’ clinical trial. The license agreement does not impose obligations on Novartis with respect to the conduct of the ongoing Phase 1 clinical trial, its timing, or whether Novartis must complete it. Novartis may delay or discontinue the monotherapy arm and/or the combination arm of their ongoing clinical trial at their own discretion as the trial progresses. Failure on behalf of Novartis, or any third parties with which Novartis has separately contracted with respect to the trial, to adhere to the trial protocols, GCP or applicable regulations may delay Novartis’ clinical trial, lead to Novartis’ discontinuation of the trial, or cause the results of the trial to be unacceptable for use in a submission by us to the FDA or a comparable regulatory authority. Furthermore, HDM201 is still in clinical development and has not been approved. If Novartis encounters any clinical or regulatory difficulty with regard to HDM201, it may result in the delay or the complete discontinuation of the combination arm of the trial. If Novartis’ clinical trial is delayed or discontinued for any reason, or if we identify another issue with Novartis’ data, it may delay our development of IDE196, or make it

difficult or impossible for us to rely on Novartis’ clinical data in regulatory filings as planned. Furthermore, although the agreement requires Novartis to provide us with certain data at specified intervals, if Novartis does not make data available to us, our IDE196 development program may be significantly delayed and we may need to conduct additional studies or trials independently. As a result, we may not be able to obtain regulatory approval for IDE196 in a timely fashion, at the expected cost to us, or at all, and our business, financial position, results of operations and prospects may be adversely affected.

As an organization, we have never completed a clinical trial, and may be unable to do so for any of our product candidates.

We will need to successfully initiate and complete our own Phase 1 clinical trials and later-stage and pivotal clinical trials in order to obtain FDA or a comparable foreign regulatory body’s approval to market our product candidates. Carrying out clinical trials and the submission of regulatory filings is a complicated process. As an organization, we have not yet completed any clinical trials for any of our product candidates. Our lead product candidate, IDE196, is currently in a Phase 1 clinical trial being conducted by Novartis. IDE196 is also in a Phase 1/2 clinical trial that we are conducting. We have limited experience in preparing, submitting and prosecuting regulatory filings, and have not previously submitted any NDA or other comparable foreign regulatory submission for any product candidate. In addition, we have had limited interactions with the FDA and cannot be certain how many additional clinical trials of IDE196 or how many clinical trials of any of our other product candidates will be required or whether the FDA will agree with the design or implementation of our clinical trials. We are required to comply with certain regulatory requirements, and the FDA may identify specific clinical or other development-related requirements that we must satisfy, as a condition to initiating or continuing our clinical trials; if we fail to meet such a requirement, the FDA may issue a clinical hold or designate other conditions on our clinical trials. Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to regulatory submission of a marketing application for, and approval of IDE196 or any of, our other product candidates. We may require more time and incur greater costs than our competitors and may not succeed in obtaining regulatory approvals of product candidates that we develop. Failure to commence or complete, or delays in, our planned clinical trials, could prevent us from or delay us in commercializing IDE196 or any other product candidate.

The successful development of targeted therapeutics, including therapeutics involving direct targeting of an oncogenic pathway and synthetic lethality therapeutics, including our portfolio of synthetic lethality small molecule inhibitors, as well as any related diagnostics, is highly uncertain.

Successful development of targeted therapeutics, including therapeutics involving direct targeting oncogenic pathways and synthetic lethality therapeutics, such as our portfolio of synthetic lethality small molecule inhibitors, as well as any related diagnostics, is highly uncertain and is dependent on numerous factors, many of which are beyond our control. Our precision medicine target and biomarker discovery platform is based on new technologies and methods relating to drug target and biomarker identification, screening and validation, including Dual CRISPR genetic screening and bioinformatics and we have not, to date, sought regulatory approval for any therapeutics developed through our precision medicine target and biomarker discovery platform. As such, it is difficult to accurately predict the developmental challenges we or our collaboration partners, such as GSK, may incur for our current and future product candidates as we proceed through product discovery, identification, preclinical studies and clinical trials.

Our precision medicine target and biomarker discovery platform is novel and may not be effective at identifying targets and/or biomarkers for product candidates. We therefore cannot provide any assurance that we will be able to successfully identify additional product candidates or biomarkers, advance any of these additional product candidates or diagnostics for their associated biomarkers through the development process.

Additionally, particular patient genetic alterations, such as mutations, deletions or fusions may not be functionally active genetic drivers of the disease. Further, whether a genetic alteration is functionally active may be difficult to ascertain from preclinical cancer models, may be tissue-type dependent and may vary from patient to patient within a specific indication. If that was the case, we would need to functionally validate such genetic alterations, for example, using in vitro and in vivo models, potentially across more than one tumor-tissue type and across multiple cell lines. If some of the genetic alterations are not functionally validated, this would reduce the size of our addressable patient population. Even if genetic alterations are preclinically validated, the relevance of these alterations may not translate into a human clinical setting, which could adversely impact our clinical trial results and our commercial opportunities.

Targeted therapeutics that appear promising in the early phases of development may fail to reach the market for several reasons, including:

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research or preclinical studies may show our targeted small molecule inhibitors or antagonists to be less effective than desired or to have harmful or problematic side effects or toxicities;

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failure to accurately identify, validate or develop clinically relevant biomarkers for our targeted therapeutic product candidates;

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clinical trial results may show our targeted therapeutic small molecule inhibitors to be less effective than expected based on preclinical studies (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities;

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failure to receive the necessary regulatory approvals or a delay in receiving such approvals. Among other things, such delays may be caused by slow enrollment in clinical trials, patients dropping out of trials, length of time to achieve trial endpoints, additional time requirements for data analysis, IND preparation, discussions with the FDA, an FDA request for additional preclinical or clinical data, or unexpected safety or manufacturing issues;

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manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that may make our targeted therapeutic small molecule inhibitors uneconomical; and

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proprietary rights of others and their competing products and technologies that may prevent our targeted therapeutic small molecule inhibitors, or the diagnostics for biomarkers associated with such small molecule inhibitors, from being commercialized.

As a result of these factors, it is more difficult for us to predict the time and cost of product candidate development, and we cannot predict whether the application of our precision medicine target and biomarker discovery platform will result in the identification, development, and regulatory approval of any products. The length of time necessary to complete clinical trials and to submit an application for marketing approval for a decision by a regulatory authority may be difficult to predict for targeted therapeutic small molecule inhibitors, in large part because of the limited regulatory history associated with them. The clinical trial requirements of the FDA and other comparable foreign regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the product candidate. Except for certain PARP inhibitors, no products based on synthetic lethality have been approved to date by regulators. As a result, the regulatory approval process for product candidates such as ours is uncertain and may be more expensive and take longer than the approval process for product candidates based on other, better known or more extensively studied technologies. It is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in either the United States or other comparable regions of the world or how long it will take to commercialize our product candidates. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product candidate to market would adversely affect our business, financial condition, results of operations and prospects.

Even if we are successful in obtaining regulatory approval, commercial success of any approved products will also depend in large part on the availability of insurance coverage and adequate reimbursement from third-party payors, including government payors, such as the Medicare and Medicaid programs, and managed care organizations, which may be affected by existing and future healthcare reform measures designed to reduce the cost of healthcare. Third-party payors could require us to conduct additional studies, including post-marketing studies related to the cost-effectiveness of a product, to qualify for reimbursement, which could be costly and divert our resources. If government and other healthcare payors were not to provide adequate insurance coverage and reimbursement levels for one any of our products once approved, market acceptance and commercial success would be limited.

In addition, if any of our products is approved for marketing, we will be subject to significant regulatory obligations regarding the submission of safety and other post-marketing information and reports and registration, and will need to continue to comply (or ensure that our third-party providers comply) with cGMPs, and good clinical practices, or GCPs, for any clinical trials that we conduct post-approval. In addition, there is always the risk that we or a regulatory authority might identify previously unknown problems with a product post-approval, such as adverse events, or AEs, of unanticipated severity or frequency. Compliance with these requirements is costly and any failure to comply or other post-approval issues with our product candidates could have a material adverse effect on our business, financial condition, results of operations and prospects.

Preclinical and clinical drug development is a lengthy and expensive process with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product candidates, which could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our business, financial condition, results of operations and prospects. Furthermore, results of earlier studies and trials may not be predictive of future trial results.

Before we can initiate clinical trials for our product candidates, we must submit the results of preclinical studies to the FDA or a comparable foreign regulatory authority along with other information, including information about product candidate chemistry, manufacturing and controls, diagnostics for biomarkers for our product candidates and our proposed clinical trial protocol, as part of an IND application or similar regulatory filing.

Before obtaining marketing approval from regulatory authorities for the sale of any products, we, or our collaboration partners, such as GSK, must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. Clinical trials are expensive and can take many years to complete, and their outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. In addition, we may rely in part on preclinical, clinical and quality data generated by contract research organizations, or CROs, and other third parties for regulatory submissions for our product candidates. While we have or will have agreements governing these third parties’ services, we have limited influence over their actual performance. Further, pursuant to our license agreement with Novartis, we have a right of reference to certain data from Novartis’ ongoing Phase 1 clinical trial data for our regulatory filings for IDE196.

If these third parties, including Novartis, fail to make data available to us, or, if applicable, make regulatory submissions in a timely manner, in each case pursuant to our agreements with them, our development programs may be significantly delayed and we may need to conduct additional studies or trials or collect additional data independently. In either case, our development costs would increase.

Our clinical trial collaboration and supply agreement with Pfizer for the supply of their MEK inhibitor, binimetinib, supports our plans to evaluate the safety and efficacy of IDE196 in combination with binimetinib in a Phase 1/2 clinical trial which we initiated in June 2020. If Pfizer delays or fails to supply binimetinib in support of the combination arm of the IDE196 clinical trial, the development program as pertaining to combination of IDE196 and a MEK inhibitor may be significantly delayed, and our development costs may increase. Subject to completion of and satisfactory results from preclinical studies, we may evaluate IDE196 in combination with one or more anti-cancer agent(s) in addition to binimetinib, such as a different inhibitor of MEK or an inhibitor of FAK, mTOR and/or CDK4/6, in a Phase 1/2 clinical trial in patients with metastatic uveal melanoma. This may require us to establish additional supply agreements and rely upon third parties for supply of such combination agents, or if such combination agents are commercially available, in the absence of a supply agreement, we may incur the cost of purchasing such combination agents and may be at risk of having insufficient supply. We may initiate clinical trials in which our product candidates, including IDE196, are combined with one or more other pharmaceutical agents that have not yet been approved by the FDA or comparable foreign regulatory authorities; in such situations, we may be relying on third parties for obtaining appropriate regulatory approvals and we may have no or limited influence over whether or not such regulatory approvals are achieved for such combination agents.

We and our strategic collaborators, such as GSK, also may experience numerous unforeseen events during, or as a result of, any preclinical studies or clinical trials that could delay or prevent us or our strategic collaborators from successfully developing our product candidates, including:

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we may be unable to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of clinical trials;

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the FDA or a comparable foreign regulatory authority disagreeing as to the design or implementation of our clinical trials;

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delays in obtaining regulatory authorization to commence a clinical trial;

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reaching agreement on acceptable terms with prospective 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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obtaining IRB approval at each clinical trial site;

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recruiting an adequate number of suitable patients to participate in a clinical trial, particularly in light of the potential impact of the COVID-19 pandemic on patient enrollment and clinical site closures;

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having patients complete a clinical trial or return for post-treatment follow-up;

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clinical sites deviating from clinical trial protocol or dropping out of a clinical trial;

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addressing subject safety concerns that arise during the course of a clinical trial;

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adding a sufficient number of clinical trial sites;

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obtaining sufficient quantities of product candidate for use in preclinical studies or clinical trials from third-party suppliers; or

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accessing third-party products or product candidates for use in combination with our product candidates in preclinical studies or clinical trials, including third-party product candidates that have not yet been approved by the FDA.

We and our strategic collaborators, such as GSK, may experience numerous adverse or unforeseen events during, or as a result of, preclinical studies and clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:

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we may receive feedback from regulatory authorities that requires us to modify the design of our clinical trials;

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

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

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we or our third-party contractors may fail to comply with regulatory requirements, fail to maintain adequate quality controls, or be unable to produce sufficient product supply to conduct and complete preclinical studies or clinical trials of our product candidates in a timely manner, or at all;

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we or our investigators might have to suspend or terminate clinical trials of our product candidates for various reasons, including non-compliance with regulatory requirements, a finding that our product candidates have undesirable side effects or other unexpected characteristics, or a finding that the participants are being exposed to unacceptable health risks;

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the cost of clinical trials of our product candidates may be greater than we anticipate;

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

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regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; and

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collaborators, such as GSK, may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us.

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

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incur unplanned costs;

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be delayed in obtaining marketing approval for our product candidates or not obtain marketing approval at all;

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obtain marketing approval in some countries and not in others;

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

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obtain marketing approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings;

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be subject to additional post-marketing testing requirements, which could be expensive and time-consuming; or

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have the treatment removed from the market after obtaining marketing approval.

We and our strategic collaborators, such as GSK, could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by the Data Safety Monitoring Board, or DSMB, for such trial or by the FDA or another comparable foreign regulatory authority. 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. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial.

Further, conducting clinical trials in foreign countries, as we may do for certain of our product candidates, presents additional risks that may delay completion of our clinical trials. These risks include the possibility that we could be required to conduct additional preclinical studies before initiating any clinical trials, the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with comparable foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

Principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or a regulatory authority concludes that the financial relationship may have affected the interpretation of the clinical trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of the marketing application we submit. Any such delay or rejection could prevent or delay us from commercializing our current or future product candidates.

If any of our preclinical studies or clinical trials of our product candidates are delayed or terminated, the commercial prospects of our product candidates may be harmed, and our ability to ultimately generate revenues from any of these product candidates will be delayed or not realized at all. In addition, any delays in completing our clinical trials may increase our costs, slow down our product candidate development and regulatory approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may significantly harm our business, financial condition, results of operations and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. If our product candidates and any future product candidates prove to be ineffective, unsafe or commercially unviable, our entire platform and approach would have little, if any, value, which would have a material adverse effect on our business, financial condition, results of operations and prospects.

Furthermore, the results of preclinical studies and clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through preclinical studies and initial clinical trials. Furthermore, for some of our programs, in the future we intend to conduct basket trials, which will be designed to include multiple clinically defined populations under one investigational protocol, although each population is enrolled and analyzed separately. A basket trial design could potentially decrease the time to study new populations by decreasing administrative burden, however, these trials may not provide opportunities for accelerated regulatory pathways, and do not overcome limitations to extrapolating data from the experience in one disease to other diseases, because safety and efficacy results in each indication are analyzed separately. Accordingly, clinical success in a basket trial, or any trial in one indication, may not predict success in another indication. In contrast, in the event of an adverse safety issue, clinical hold, or other adverse finding in one or more indications being tested, such event could adversely affect our trials in the other indications and may delay or prevent completion of the clinical trials. A number of companies in the pharmaceutical, biopharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials for similar indications that we are pursuing 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 our clinical trials are completed, the results may not be sufficient to obtain regulatory approval of any products.

Synthetic lethality represents an emerging class of precision medicine targets, and negative perceptions of the efficacy, safety or tolerability of this class of targets, including any that we develop, could adversely affect our ability to conduct our business, advance our product candidates or obtain regulatory approvals.

Aside from PARP inhibitors, such as Lynparza, Rubraca, Zejula and Talzenna, no synthetic lethality small molecule inhibitor therapeutics have been approved to date by the FDA or other comparable regulators. AEs in future clinical trials of our product candidates or in clinical trials of others developing similar products and the resulting publicity, as well as any other AEs in the field of synthetic lethality, or other products that are perceived to be similar to synthetic lethality, such as those related to gene therapy or gene editing, could result in a decrease in the perceived benefit of one or more of our programs, increased regulatory scrutiny, decreased confidence by patients and CROs in our product candidates, and less demand for any product that we may develop. Our substantial pipeline of synthetic lethality small molecule inhibitor product candidates could result in a greater quantity of reportable AEs or other reportable negative clinical outcomes, manufacturing reportable events or material clinical events that could lead to clinical delays or holds by the FDA or applicable regulatory authority or other clinical delays, any of which could negatively impact the perception of one or more of our synthetic lethality programs, as well as our business as a whole. In addition, responses by U.S. federal, state or foreign governments to negative public perception may result in new legislation or regulations that could limit our ability to develop any product candidates or commercialize any approved products, obtain or maintain regulatory approval, or otherwise achieve profitability. More restrictive statutory regimes, government regulations, or negative public opinion would have an adverse effect on our business, financial condition, results of operations, and prospects, and may delay or impair the development of our product candidates and commercialization of any approved products or demand for any products we may develop.

Tissue-type agnostic basket trials are an emerging clinical approach, that may result in delays in clinical development, additional regulatory requirements and delays in, or the prevention of, our ability to obtain regulatory approval or commercialize our product candidates.

We initiated a Phase 1/2 tissue-type agnostic basket trial with IDE196 in June 2019, and may also utilize a basket trial approach in clinical trials for other product candidates. Basket trials allow us to evaluate the safety and efficacy of a product candidate in a variety of tumor types with a specific molecular profile. We believe that this clinical approach provides many benefits, however, there are limited precedents, and as a result, there a number of inherent risks.

There is limited precedent for the FDA and foreign regulatory authorities to review and grant tissue-type agnostic approvals. Furthermore, as clinical trials increasingly use classification of tumors by molecular profiling, the FDA or other regulatory authority may change or issue guidance or adopt a policy that adversely affects requirements for basket trials. In the event that such guidance or policy has an effect on any of our protocols or trials, as the case may be, it may result in the delay of clinical development, or require us to conduct additional preclinical studies or clinical trials.

Even if we obtain a tissue-type agnostic approval for one or more of our product candidates, there is limited precedent for obtaining reimbursement. Third-party payors may reimburse at different levels across tumor tissue types and indicates, or not at all.

We may find it difficult to enroll patients in our clinical trials given the limited number of patients who have the diseases for which our product candidates are being developed. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our and our collaboration partners’, such as GSK, ability to enroll a sufficient number of patients who remain in the preclinical study until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The enrollment of patients depends on many factors, including:

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the patient eligibility and exclusion criteria defined in the protocol;

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the size and nature of the patient population required for analysis of the clinical trial’s primary endpoints;

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the proximity of patients to clinical trial sites;

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the design of the clinical trial;

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the risk that enrolled patients will not complete a clinical trial;

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

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clinical trial investigators’ willingness to continue enrolling patients and patients' willingness to complete protocol assessments during the COVID-19 pandemic;

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clinicians’ and patients’ perceptions as to the safety of the product candidate;

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clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new therapies that may be approved for the indications we are investigating as well as any drugs under development; and

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our ability to obtain and maintain patient consents.

We will be required to identify and enroll a sufficient number of patients for each of our clinical trials. Potential patients for any planned clinical trials may not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for such trials. We also may encounter difficulties in identifying and enrolling patients with a stage of disease appropriate for our planned clinical trials and monitoring such patients adequately during and after treatment. We may not be able to initiate or continue clinical trials if we are unable to locate a sufficient number of eligible patients to participate in the clinical trials required by the FDA or a comparable foreign regulatory authority. In addition, the process of finding and diagnosing patients may prove costly.

In addition, our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. As a result of the COVID-19 pandemic, competition for potential patients in our trials is further exacerbated as a result of multiple clinical site closures. Since the number of qualified clinical investigators is already limited, we may conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site.

Furthermore, certain conditions for which we plan to evaluate our current development candidates are rare diseases, such as metastatic uveal melanoma, with limited patient pools from which to draw for clinical trials. For example, our lead product candidate, IDE196, is currently being evaluated in a Phase 1 clinical trial in patients with metastatic uveal melanoma conducted by Novartis. We initiated our own Phase 1/2 basket trial in June 2019 to evaluate IDE196 in solid tumors harboring GNAQ/GNA11 hotspot mutations in metastatic uveal melanoma, and potentially in other solid tumors such as cutaneous melanoma and colorectal cancer. The timing of our clinical trials depends, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods. The eligibility criteria of our clinical trials, once established, will further limit the pool of available trial participants.

In addition, our clinical trials may be affected by the COVID-19 pandemic. Clinical site initiation and patient enrollment may be delayed. Several of our sites have halted new enrollment at this time and we continue to monitor whether additional sites would need to be activated. Some patients may not be able to comply with clinical trial protocols, and data collected may be incomplete, if quarantines impede patient movement or interrupt healthcare services. Similarly, the ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 and adversely impact our clinical trial operations.

If patients are unwilling to participate in our clinical trials for any reason, including the existence of other approved therapies or concurrent clinical trials for similar patient populations, if they are unwilling to enroll in a clinical trial with a placebo-controlled design, or we otherwise have difficulty enrolling a sufficient number of patients, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of our product candidates may be delayed. Our inability to enroll a sufficient number of patients for any of our future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. In addition, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will have limited influence over their actual performance.

We cannot assure you that we will not experience delays in enrollment, which would result in the delay of completion of such trials beyond our expected timelines.

Our product candidates or any future product candidates may be associated with undesirable side effects or AEs that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

As with most pharmaceutical products, use of our product candidates could be associated with side effects or AEs which can vary in severity from minor reactions to death and in frequency from infrequent to prevalent. Undesirable side effects or unacceptable toxicities caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or a comparable foreign regulatory authority. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these or other side effects. Furthermore, certain of our product candidates, such as IDE196, may be co-administered with third-party approved or experimental therapies, such as binimetinib in the combination arm of our Phase 1/2 clinical trial. These combinations may have additional side effects. The uncertainty resulting from the use of our product candidates in combination with other therapies may make it difficult to accurately predict side effects in future clinical trials.

To date, only one of our product candidates, IDE196, has been tested in clinical trials, including an ongoing Phase 1 clinical trial and an ongoing Phase 1/2 clinical trial, and has been observed to be generally well tolerated, with the most common AEs reported being hypotension, GI toxicities, and fatigue. If unacceptable side effects arise in the further development of IDE196, including in combination with binimetinib, or in the development of any of our other product candidates, we, the FDA, or the IRBs at the institutions in which the clinical trials are being conducted could suspend or terminate our clinical trials or the FDA or a comparable foreign regulatory authority could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete any of our clinical trials or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. We expect to have to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death. Any of these occurrences may harm our business, financial condition, results of operations and prospects significantly.

In addition, even if we successfully advance our product candidates or any future product candidates into and through clinical trials, such trials will likely only include a limited number of patients and limited duration of exposure to our product candidates. As a result, we cannot be assured that adverse effects of our product candidates will not be uncovered when a significantly larger number of patients are exposed to the product candidate. Further, any clinical trials may not be sufficient to determine the effect and safety consequences of taking our product candidates over a multi-year period.

If any of our product candidates receives marketing approval and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

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regulatory authorities may withdraw their approval of the product;

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we may be required to recall a product or change the way such product is administered to patients;

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additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof;

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regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;

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we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a Medication Guide outlining the risks of such side effects for distribution to patients;

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we could be sued and held liable for harm caused to patients;

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the product may become less competitive; and

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our reputation may suffer.

Any of the foregoing events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and result in the loss of significant revenues to us, which would adversely affect our business, financial condition, results of operations and prospects. In addition, if one or more of our product candidates prove to be unsafe, our entire technology platform and pipeline could be affected, which would have a material adverse effect on our business, financial condition, results of operations and prospects.

If we are unable to successfully develop molecular diagnostics for biomarkers that enable patient selection and/or that demonstrate drug-target interaction, or experience significant delays in doing so, we may not realize the full commercial potential of our product candidates.

A key component of our strategy includes the use of molecular diagnostics to guide patient selection and/or to confirm target engagement of our product candidates. In some cases, a diagnostic may be commercially available, for example, on a tumor-profiling panel. If not already commercially available, we may collaborate with diagnostic companies for the development of biomarkers associated with our product candidates. We may have difficulty in establishing or maintaining such development relationships, and we will face competition from other companies in establishing these collaborations.

There are also several risks associated with biomarker identification and validation. We, in collaboration with any diagnostic partners, may not be able to identify predictive biomarkers or pharmacodynamic biomarkers for one or more of our programs. We may not be able to validate potential biomarkers (e.g., certain genetic mutations) or their functional relevance preclinically in relevant in vitro or in vivo models. Data analytics and information from databases that we rely on for identifying or validating some of our biomarker-target relationships may not accurately reflect potential patient populations. Potential biomarkers, even if validated preclinically, may not be functionally effective or validated in human clinical trials.

If we, in collaboration with these parties, are unable to successfully develop companion diagnostics for our product candidates, or experience delays in doing so, the development of our product candidates may be adversely affected. The development of companion diagnostic products requires a significant investment of working capital, and may not result in any future income. This could require us to raise additional funds, which could dilute our current investors or impact our ability to continue our operations in the future.

There are also risks associated with diagnostics that are commercially available, including that we may not have access to reliable supply for such diagnostics.

The failure to obtain required regulatory approvals for any companion diagnostic tests that we may pursue may prevent or delay approval of our product candidates. Moreover, the commercial success of any of our product candidates may be tied to the regulatory approval, market acceptance and continued availability of a companion diagnostic.

The FDA regulates in vitro companion diagnostics as medical devices that will likely be subject to and require prospective validation in clinical trials in conjunction with the clinical trials for our product candidates, and which will require regulatory clearance or approval prior to commercialization. We plan to collaborate with third parties for the development, testing and manufacturing of these companion diagnostics, the application for and receipt of any required regulatory clearances or approvals, and the commercial supply of these companion diagnostics. Our third-party collaborators may fail to obtain the required regulatory clearances or approvals, which could prevent or delay approval of our product candidates. In addition, the commercial success of any of our product candidates may be tied to and dependent upon the receipt of required regulatory clearances or approvals of the companion diagnostic.

Even if a companion diagnostic is approved, we will rely on the continued ability of any third-party collaborator to make the companion diagnostic commercially available to us on reasonable terms in the relevant geographies. Furthermore, if commercial tumor profiling panels are not able to be updated to include additional tumor-associated genes, or if clinical oncologists do not incorporate molecular or genetic sequencing into their clinical practice, we may not be successful in developing or commercializing our existing product candidates or any future product candidates.

Interim, “topline” and preliminary data from our clinical trials may differ materially from the final data.

From time to time, we may publicly disclose preliminary or “topline” data from our clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the topline results that we report may differ from future results of the same clinical trials, or different conclusions or considerations may qualify such topline results, once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, topline data should be viewed with caution until the final data are available. From time to time, we may also disclose interim data from our clinical trials. Interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between preliminary or interim data and final data could significantly harm our business, financial condition, results of operations and prospects.

Others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and the value of our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is typically a summary of extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product, product candidate or our business. If the topline data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, financial condition, operating results and prospects.

We may be unable to obtain regulatory approval for our product candidates or any future product candidates. The denial or delay of such approval would prevent or delay commercialization of our product candidates and adversely impact our business, financial condition, operating results and prospects.

The process of obtaining regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity and novelty of the product candidates involved, as well as the target indications and patient population. Approval policies or regulations may change, and the FDA has substantial discretion in the drug approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons. Despite the time and expense invested in clinical development of product candidates, regulatory approval is never guaranteed. Neither we nor any collaborator, such as GSK or any future collaborator, is permitted to market any of our product candidates in the United States until we receive approval of an NDA from the FDA.

Prior to obtaining approval to commercialize a product candidate in the United States, we or our collaborators must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA, that such product candidates are safe and effective for their intended uses. Foreign regulatory authorities may require a similar demonstration before we can obtain approval to commercialize a product candidate abroad. Results from preclinical studies and clinical trials can be interpreted in different ways. Even if we believe the preclinical or clinical data for our product candidates are promising, such data may not be sufficient to support approval by the FDA or comparable foreign regulatory authorities. The FDA or a comparable foreign regulatory authority, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program.

The FDA or a comparable foreign regulatory authority can delay, limit or deny approval of a product candidate for many reasons, including:

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such authorities may disagree with the design or implementation of our clinical trials;

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

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

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

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such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States;

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we are unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

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the FDA’s or the applicable comparable foreign regulatory agency’s non-approval of the formulation, labeling or specifications of our product candidates or any of our future product candidates;

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such authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

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such authorities could question the integrity of data obtained in our current or future clinical trials, for example, due to missed protocol procedures due to the impact of the COVID-19 pandemic;

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such authorities may not agree that the data collected from clinical trials of our product candidates are acceptable or sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials;

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such authorities may disagree regarding the formulation, labeling and/or the specifications of our product candidates;

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such authorities may only approve indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use;

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such authorities may find deficiencies in the manufacturing processes or facilities of our third-party manufacturers with which we or any of our collaborators, such as GSK or any potential future collaborators, contract for clinical and commercial supplies; and

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the approval policies or regulations of such authorities may significantly change in a manner rendering our or any of our collaborators’ clinical data insufficient for approval.

With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods and agreements with pricing authorities. In addition, events raising questions about the safety of certain marketed pharmaceuticals may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing new drugs based on safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals. Any delay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us or any of our collaborators, such as GSK or any potential future collaborators, from commercializing any products.

Of the large number of drugs in development, only a small percentage successfully complete the FDA or comparable foreign regulatory approval processes and are commercialized. The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.

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

We may develop our product candidates and future product candidates in combination with other therapies, and safety or supply issues with combination-use products may delay or prevent development and approval of our product candidates.

We may develop our product candidates in combination with one or more cancer therapies, both approved and unapproved. Even if any product candidate we develop were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the therapy used in combination with our product candidate or that safety, efficacy, manufacturing or supply issues could arise with these existing therapies. Combination therapies are commonly used for the treatment of cancer, and we would be subject to similar risks if we develop any of our product candidates for use in combination with other drugs or for indications other than cancer. Similarly, if the therapies we use in combination with our product candidates are replaced as the standard of care for the indications we choose for any of our product candidates, the FDA or similar regulatory authorities outside of the United States may require us to conduct additional clinical trials. The occurrence of any of these risks could result in our own products, if approved, being removed from the market or being less successful commercially.

We may also evaluate our product candidates in combination with one or more cancer therapies that have not yet been approved for marketing by the FDA or a similar regulatory authority outside of the United States. We may be unable to effectively identify and collaborate with third parties for the evaluation of our product candidates in combination with their therapies. We will not be able to market and sell any product candidate we develop in combination with any such unapproved cancer therapies that do not ultimately obtain marketing approval. The regulations prohibiting the promotion of products for unapproved uses are complex and subject to substantial interpretation by the FDA and other government agencies. In addition, there are additional risks similar to the ones described for our products currently in development and clinical trials that result from the fact that such cancer therapies are unapproved, such as the potential for serious adverse effects, delay in their clinical trials and lack of FDA approval.

If the FDA or a similar regulatory authority outside of the United States does not approve these other drugs or revokes approval of, or if safety, efficacy, manufacturing, or supply issues arise with, the drugs we choose to evaluate in combination with any product candidate we develop, we may be unable to obtain approval of or market such product.

A breakthrough therapy designation by the FDA for our product candidates may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will obtain marketing approval.

We may seek a breakthrough therapy designation for some of our product candidates. A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs and biologics that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the clinical trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drugs designated as breakthrough therapies by the FDA are also eligible for accelerated approval. For some of our programs for which we intend to conduct basket trials, which will be designed to include multiple clinically defined populations under one investigational protocol though each population is enrolled and analyzed separately, we may not be eligible for accelerated approval.

Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a breakthrough therapy designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our drug candidates qualify as breakthrough therapies, the FDA may later decide that the products no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

We face significant competition in an environment of rapid technological and scientific change, and our failure to effectively compete may prevent us from achieving significant market penetration. Most of our competitors have significantly greater resources than we do and we may not be able to successfully compete.

The biotechnology and pharmaceutical industries in particular are characterized by rapidly advancing technologies, intense competition and a strong emphasis on developing proprietary therapeutics. We compete with a variety of multinational biopharmaceutical companies and specialized biotechnology companies, as well as technology being developed at universities and other research institutions. Our competitors have developed, are developing or will likely develop product candidates and processes competitive with our product candidates. Competitive therapeutic treatments include those that have already been approved and accepted by the medical community and any new treatments that enter the market. We believe that a significant number of product candidates are currently under development, and may become commercially available in the future, for the treatment of diseases and other conditions for which we may try to develop product candidates. Our competitors may obtain regulatory approval of their products more rapidly than we may or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates. We believe that while our precision medicine target and biomarker discovery platform and our scientific and technical know-how give us a competitive advantage in this space, competition from many sources remains. Our competitors include larger and better funded biopharmaceutical, biotechnological and oncology therapeutics companies, as well as universities and other research institutions.

Our commercial opportunity and success will be reduced or eliminated if competing products emerge that are safer, more effective, or less expensive than the therapeutics we develop. Our competitors may develop drugs that are more effective, more convenient, more widely used and less costly or have a better safety profile than our products and these competitors may also be more successful than us in manufacturing and marketing their products.

Although we believe that IDE196 is currently the most advanced small molecule PKC inhibitor for genetically-defined cancers having GNAQ or GNA11 gene mutations in clinical trials, others may receive approval for competitive products before we do. If any of our product candidates are approved, they will compete with a range of therapeutic treatments that are either in development or currently marketed. For IDE196, our small molecule inhibitor targeting PKC in genetically-defined solid tumors having GNAQ or GNA11 mutations or other genetic alterations that activate the PKC signaling pathway, other companies are conducting research and development of potential therapies for metastatic uveal melanoma based on other targets and approaches. For example, Immunocore is developing IMCgp100 as monotherapy for metastatic uveal melanoma in a current Phase 2 clinical trial for patients with the HLA-A2 allele – which represents approximately 50% of metastatic uveal melanoma patients. For our pipeline of small molecule therapeutics based on synthetic lethality, potential competition includes established companies as well as earlier-stage emerging biotechnology companies. Multiple companies have been involved with research and development of PARP inhibitors, including AstraZeneca (Lynparza), Clovis (Rubraca), Tesaro (Zejula), and Pfizer (Talzenna). With respect to our MAT2A inhibitor for solid tumors having MTAP gene deletion, Agios is developing AG-270 in a Phase 1 clinical trial for certain advanced solid tumors or lymphoma. Additionally, several other early-stage companies, including Artios, Cyteir, KSQ, MetaboMed, NeoMed, Repare and Tango are performing research in synthetic lethality. Development decisions and data from clinical trials of our competitors may adversely impact clinical development of our product candidates, and may additionally or alternatively have a material adverse impact on our financial condition or business prospects.

Furthermore, we also face competition more broadly across the market for cost-effective and reimbursable cancer treatments. The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy and targeted drug therapy or a combination of such methods. There are a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. Some of these drugs are branded and subject to patent protection, and others are available on a generic basis. Insurers and other third-party payors may also encourage the use of generic products or specific branded products. We expect that if our product candidates are approved, they will be priced at a significant premium over competitive generic, including branded generic, products. As a result, obtaining market acceptance of, and a gaining significant share of the market for, any of our product candidates that we successfully introduce to the market will pose challenges. In addition, many companies are developing new therapeutics, and we cannot predict what the standard of care will be as our product candidates progress through clinical development.

In some cases we may also develop diagnostics to enable relevant biomarker screening for clinical and commercial purposes in connection with our product candidates. If not already commercially available, we anticipate working in collaboration with diagnostic companies for this development, and we will face competition from other companies in establishing these collaborations. Our competitors will also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Many of our competitors have significantly greater financial, technical, manufacturing, marketing, sales and supply resources or experience than we do. If we successfully obtain approval for any product candidate, we will face competition based on many different factors, including the safety and effectiveness of our products, the ease with which our products can be administered and the extent to which patients accept relatively new routes of administration, the timing and scope of regulatory approvals for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, coverage, reimbursement and patent position. Competing products could present superior treatment alternatives, including by being more effective, safer, less expensive or marketed and sold more effectively than any products we may develop. Competing products may make any products we develop obsolete or noncompetitive before we recover the expense of developing and commercializing our product candidates. Such competitors could also recruit our employees, which could negatively impact our level of expertise and our ability to execute our business plan.

We expect to expand our development and regulatory capabilities and potentially implement sales and distribution capabilities, and as a result, we will need to increase the size of our organization, and we may experience difficulties in managing growth.

As of June 30, 2020, we had 46 employees. We will need to continue to expand our managerial, operational, finance and other resources in order to manage our operations and clinical trials, continue our development activities, submit for regulatory approval and, if approved, commercialize our lead product candidate or any future product candidates. Our management and personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively execute our growth strategy requires that we:

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manage our preclinical studies and clinical trials effectively;

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identify, recruit, retain, incentivize and integrate additional employees, including sales personnel;

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manage our internal development and operational efforts effectively while carrying out our contractual obligations to third parties; and

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continue to improve our operational, financial and management controls, reports systems and procedures.

There is no assurance that any of these increases in scale, expansion of personnel, equipment, software and computing capacities, or process enhancements will be successfully implemented, or that we will have adequate space in our laboratory facilities to accommodate such required expansion.

We currently have no sales organization. If we are unable to establish sales capabilities on our own or through third parties, we may not be able to market and sell any products effectively, if approved, or generate product revenue.

We currently do not have a marketing or sales organization. In order to commercialize any product, if approved, in the United States and foreign jurisdictions, we must build our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. In advance of any of our product candidates receiving regulatory approval, we expect to establish a sales organization with technical expertise and supporting distribution capabilities to commercialize each such product candidate, which will be expensive and time-consuming. We have no prior experience in the marketing, sale and distribution of pharmaceutical products, and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain, and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products. Under our GSK Collaboration Agreement, GSK will be responsible for commercialization of any MAT2A (if GSK exercises the Option and obtains HSR Clearance thereof), POLQ, or WRN products. We may choose to collaborate with additional third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. If we are unable to enter into such arrangements on acceptable terms or at all, we may not be able to successfully commercialize our product candidates. If we are not successful in commercializing products, either on our own or through arrangements with one or more third parties, we may not be able to generate any future product revenue and we would incur significant additional losses.

If we fail to attract and retain senior management and key scientific personnel, our business may be materially and adversely affected.

Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. We are highly dependent upon our senior management, particularly our President and Chief Executive Officer, as well as our senior scientists and other members of our senior management team. The loss of services of any of these individuals could delay or prevent the successful development of any products, initiation or completion of our planned clinical trials or the commercialization of our lead product candidate or any other product candidates.

Competition for qualified personnel in the biotechnology and biopharmaceutical fields is intense due to the limited number of individuals who possess the skills and experience required by our industry. We will need to hire additional personnel as we expand our clinical development and if we initiate commercial activities. We may not be able to attract and retain quality personnel on acceptable terms, or at all. In addition, 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 depend on our information technology systems, and any failure of these systems could harm our business. Security breaches, loss of data or financial assets, and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business, results of operations and financial condition.

We collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business. In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information, including both our own and that of third parties. We have established physical, electronic and organizational measures to safeguard and secure our systems to prevent a data compromise, and rely on commercially available systems, software, tools, and monitoring to provide security for our information technology systems and the processing, transmission and storage of digital information. We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information. Our internal information technology systems and infrastructure, and those of our current and any future collaborators, contractors and consultants and other third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.

The risk of a security breach or disruption or data loss, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments and cyber-terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In addition, the pervasive use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information or other intellectual property, including both our own and that of third parties. The costs to us to mitigate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our data security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service and other harm to our business and our competitive position. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. For example, the loss of clinical trial data could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Moreover, if a computer security breach affects our systems or results in the unauthorized release of personally identifiable information, our reputation could be materially damaged. In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal and state privacy and security laws, if applicable, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Clinical Health Act of 2009, or HITECH, and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws. We would also be exposed to a risk of loss, including financial assets or litigation and potential liability, which could materially adversely affect our business, financial condition, results of operations and prospects.

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

We are exposed to the risk that our employees and independent contractors, including principal investigators, consultants, collaborators, service providers and other vendors may engage in misconduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized activities that violate: the laws and regulations of the FDA and other similar regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies; manufacturing standards; U.S. federal and state healthcare fraud and abuse laws, data privacy and security laws and other similar non-U.S. laws; or laws that require the true, complete and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, the creation of fraudulent data in our preclinical studies or clinical trials, or illegal misappropriation of product, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other 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 or regulations. In addition, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other U.S. federal healthcare programs or healthcare programs in other jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations, any of which could adversely affect our business, financial condition, results of operations and prospects.

Our business involves the use of hazardous materials and we and our third-party manufacturers and suppliers must comply with environmental laws and regulations, which can be expensive and restrict how we do business.

Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use and disposal of hazardous materials owned by us, including the components of our product candidates and other hazardous compounds. We and any third-party manufacturers and suppliers we engage are subject to numerous federal, state and local environmental, health and safety laws, regulations and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment, and disposal of hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air and water; and employee health and safety. Our operations involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials. Our operations also produce hazardous waste. In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination, which could cause an interruption of our research and development efforts, commercialization efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products.

Although we believe that the safety procedures utilized by our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance.

Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our research, product development and manufacturing efforts. In addition, we cannot entirely eliminate the risk of accidental injury or contamination from these materials or wastes. 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 carry specific biological or hazardous waste insurance coverage, and our property, casualty, and general liability insurance policies specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We attempt to distribute our technology, biology, execution and financing risks across a range of therapeutic classes, disease states, programs and technologies. Due to the significant resources required for the development of our broad portfolio of programs, and depending on our ability to access capital, we must make certain risk assessments and prioritize development of certain product candidates. Moreover, we may expend our limited resources to pursue a particular product candidate and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Our organization is committed to a broad approach to precision medicine that seeks to maximize our integrated biomarker and small molecule drug discovery capabilities. Our current portfolio consists of multiple programs, extending across multiple classes of precision medicine, including direct targeting of oncogenic pathways and synthetic lethality. Together, these programs require significant capital investment. The directly targeted therapy programs are at various stages of preclinical and early clinical development, and our synthetic lethality programs are in the target identification, validation and lead optimization stages of development. We seek to maintain a process of prioritization and resource allocation to maintain an optimal balance between advancing and expanding our synthetic lethality and direct targeting programs. Because we have limited financial and managerial resources, we focus on specific product candidates, indications and discovery programs. As a result, we may forgo or delay pursuit of opportunities with other product candidates that could have had 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 product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

Furthermore, as our programs progress, we or others may determine: that certain of our risk allocation decisions were incorrect or insufficient; that we made platform level technology mistakes; that individual programs or our approach to synthetic lethality or precision medicine in general has technology or biology risks that were unknown or underappreciated; that our choices on how to build our organizational infrastructure to drive our expansion will result in an inability to manufacture our products for clinical trials or otherwise impede our manufacturing capabilities; or that we have allocated resources in such a way that large investments are not recovered and capital allocation is not subject to rapid re-direction. All of these risks may relate to our current or future precision medicine programs or companion diagnostics, and in the event material decisions in any of these areas turn out to have been incorrect or under-optimized, we may experience a material adverse impact on our business, financial condition, results of operations and prospects.

The COVID-19 pandemic, or any other pandemic, epidemic or outbreak of an infectious disease may materially and adversely affect our business and operations.

Outbreaks of epidemic, pandemic, or contagious diseases, such as the current novel coronavirus or, historically, the Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, or the H1N1 virus, could disrupt our business. For example, beginning in late 2019, the outbreak of a novel strain of virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease 2019, or COVID-19, has evolved into a global pandemic. On January 30, 2020, the World Health Organization declared the outbreak of COVID-19 a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. The governors of California and over forty other states, as well as mayors of many cities, ordered their residents to cease traveling to non-essential jobs and to curtail all unnecessary travel, and to stay in their homes as much as possible. As of late July 2020, the coronavirus has spread to most regions of the world and the United States continues to experience escalating COVID-19 outbreaks, particularly in certain states, such as California. If the current economic conditions worsen or last for an extended period of time, we will be forced to significantly scale back our business and growth plans, which could have a material adverse effect on our business.

The COVID-19 pandemic is affecting the United States and global economies and may affect our operations and those of third parties on which we rely. Some of these third parties are experiencing shut-downs, supply chain and experimental study interruptions or slow-downs, and more third parties could experience such shut-downs, interruptions or slow-downs. Individuals at our company or at such third parties could become ill, quarantined, or otherwise unable to work and/or travel due to health reasons or governmental restrictions. In response to the COVID-19 pandemic, San Mateo County, California, in which our primary office resides, issued a “shelter in place” order in March 2020, which was issued in accordance with the March 2020 Proclamation of a State of Emergency issued by the Governor of California. We have closed our offices and requested that most of our personnel, including all of our administrative employees, work remotely, restricted on-site staff to only those personnel and contractors who must perform essential activities that must be completed on-site and limited the number of staff in any given research and development laboratory. While the San Mateo County “shelter in place” order was rescinded on June 17, 2020 and replaced with a “reopening plan” order, we have continued to restrict our personnel as outlined above. The COVID-19 pandemic could disrupt our ability to secure supplies for our facilities and to provide personal protective equipment for our employees. The safety, health and well-being of our workforce is of primary concern and we may need to enact further precautionary measures to help minimize the risk of our employees being exposed to the novel coronavirus. In addition, the COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays of reviews and approvals, including with respect to our product candidates. The evolving COVID-19 pandemic may also, directly or indirectly, impact the pace of enrollment in current or future clinical trials.

While the COVID-19 pandemic did not materially adversely affect our business operations in the quarter ended June 30, 2020, economic and health conditions in the United States and across most of the globe have changed rapidly since the end of the quarter and may materially affect us economically. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a continuing widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock. The global pandemic of COVID-19 continues to rapidly evolve. The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole. However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.

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.

Our corporate headquarters is located in the San Francisco Bay Area, which in the past has experienced both severe earthquakes and wildfires. We do not carry earthquake insurance. Earthquakes, wildfires 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, such as the COVID-19 pandemic, occurred that prevented us from using all or a significant portion of our headquarters or other facilities, that damaged critical infrastructure, such as our enterprise financial systems or manufacturing resource planning and enterprise quality systems, 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.

Furthermore, the third parties on which we depend, including suppliers, contract manufacturers and CROs are similarly vulnerable to natural disasters or other sudden, unforeseen and serious adverse events. If such an event were to affect our supply chain, manufacturing arrangements or interfere with a preclinical study or clinical trial, it could have a material adverse effect on our business.

Risks Related to Our Dependence on Third Parties

The commercial success of our partnered product candidates in our MAT2A (if GSK successfully exercises the Option and obtains HSR Clearance thereof), POLQ and WRN programs, which are part of the GSK Collaboration Agreement, will depend in large part on the development and marketing efforts of GSK. If GSK is unable to perform in accordance with the terms of the GSK Collaboration Agreement, our potential to generate future revenue from these programs would be significantly reduced and our business would be materially and adversely harmed.

We will have limited influence and/or control over GSK’s approaches to development and commercialization of any MAT2A (if GSK exercises the Option and obtains HSR Clearance thereof), POLQ or WRN products. While we will have the right to receive potential milestone, profit share and royalty streams payable as GSK or its sublicensees advance development of such MAT2A, POLQ, or WRN products, we are likely to have limited ability to influence GSK’s development and commercialization efforts. If GSK does not perform in the manner that we expect or fulfill its responsibilities in a timely manner, or at all, the clinical development, regulatory approval and commercialization efforts related to product candidates we have licensed to GSK could be delayed or terminated. Furthermore, GSK or its licensees may elect to devote greater resources to other programs that do not relate to us or our collaboration.

If we terminate the GSK Collaboration Agreement, or any program thereunder due to a material breach by GSK, we have the right to assume the responsibility at our own expense for the development of the applicable product candidates. Assumption of sole responsibility for further development will greatly increase our expenditures, and may mean we need to limit the size and scope of one or more of our programs, seek additional funding and/or choose to stop work altogether on one or more of the affected product candidates. This could result in a limited potential to generate future revenue from such product candidates, and our business could be materially and adversely affected.

We rely on third parties to conduct certain of our preclinical studies and all of our clinical trials and intend to rely on third parties in the conduct of all of our future clinical trials. If these third parties do not successfully carry out their contractual duties, fail to comply with applicable regulatory requirements or meet expected deadlines, it may delay or prevent us from seeking or obtaining regulatory approval or commercializing our current or future product candidates.

We currently do not have the ability to independently conduct preclinical studies that comply with the regulatory requirements known as good laboratory practice, or GLP, requirements. We also do not currently have the ability to independently conduct any clinical trials. The FDA and regulatory authorities in other jurisdictions require us to comply with regulations and standards, commonly referred to as GCP, requirements for conducting, monitoring, recording and reporting the results of clinical trials, in order to ensure that the data and results are scientifically credible and accurate and that the clinical trial patients are adequately informed of the potential risks of participating in clinical trials. We rely on medical institutions, clinical investigators, contract laboratories and other third parties, such as CROs, to conduct GLP-compliant preclinical studies and GCP-compliant clinical trials on our product candidates properly and on time. The third parties with whom we contract for execution of our GLP-compliant preclinical studies and our GCP-compliant clinical trials play a significant role in the conduct of these studies and trials and the subsequent collection and analysis of data. These third parties are not our employees and, except for restrictions imposed by our contracts with such third parties, we have limited ability to control the amount or timing of resources that they devote to our programs. Although we rely on these third parties to conduct our GLP-compliant preclinical studies and GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities.

Many of the third parties with whom we contract may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities that could harm our competitive position. Further, some of these agreements may also be terminated by such third parties on short notice, or under certain circumstances, including our insolvency. If the third parties conducting our preclinical studies or our clinical trials do not adequately perform their contractual duties or obligations, experience significant business challenges, disruptions or failures, do not meet expected deadlines, terminate their agreements with us or need to be replaced, or if the quality or accuracy of the data they obtain is compromised due to their failure to adhere to our protocols or to GCPs, or for any other reason, we may need to enter into new arrangements with alternative third parties. This could be difficult, costly or impossible, and our preclinical studies or clinical trials may need to be extended, delayed, terminated or repeated. As a result, we may not be able to obtain regulatory approval in a timely fashion, or at all, for the applicable product candidate, and our business, financial position, results of operations and prospects may be adversely affected.

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

We do not own or operate manufacturing facilities and have no plans to build our own clinical or commercial scale manufacturing capabilities. We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates and related raw materials for preclinical and clinical development, as well as for commercial manufacture of any future approved products. The facilities used by third-party manufacturers to manufacture our product candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our NDA to the FDA. We do not control the manufacturing process of, and are completely dependent on, third-party manufacturers for compliance with cGMP requirements for manufacture of drug products. If these third-party manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, including requirements related to the manufacturing of high potency compounds, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities.

In addition, we have no control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. 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, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.

In addition, we may be unable to establish or renew 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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failure of third-party manufacturers to comply with regulatory requirements and maintain quality assurance;

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breach of the manufacturing agreement by the third party;

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failure to manufacture our product according to our specifications;

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failure to manufacture our product according to our schedule or at all;

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

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

Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us, particularly if the COVID-19 pandemic continues or worsens.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval, and any related remedial measures may be costly or time-consuming to implement. We do not currently have arrangements in place for redundant supply or a second source for all required raw materials used in the manufacture of our product candidates. If our current third-party manufacturers cannot perform as agreed, we may be required to replace such manufacturers and we may be unable to replace them on a timely basis or at all.

We rely on, and in the future may rely on, third-party databases and collaborations with third parties to inform patient selection and drug target identification for our existing product candidates and any future product candidates and for the supply of biomarker companion diagnostics.

We are using bioinformatics, including data analytics, biostatistics, and computational biology, to identify new target and biomarker opportunities. As part of this approach, we interrogate public and proprietary databases comprising human tumor genetic information and specific cancer-target dependency networks. We rely on these databases and data analytics for identifying or validating some of our biomarker-target relationships and access to these databases may not continue to be available publicly or through a proprietary subscription on acceptable terms.

Many of our precision medicine targeted therapeutic product candidates also rely on the availability and use of commercially available tumor diagnostics panels or data on the prevalence of our target patient population to inform the patient selection and drug target identification for our product candidates. In cases where such biomarker diagnostic is not already commercially available, we expect to establish strategic collaborations for the clinical supply and development of companion diagnostics. If these diagnostics are not able to be developed, or if commercial tumor profiling panels are not able to be updated to include additional tumor-associated genes, or if clinical oncologists do not incorporate molecular or genetic sequencing into their clinical practice, we may not be successful in developing our existing product candidates or any future product candidates.

We depend on third-party suppliers for key materials required for the production of our product candidates, and the loss of these third-party suppliers or their inability to supply us with adequate materials could harm our business.

We rely on third-party suppliers for certain materials, such as starting reagents, required for the production of our product candidates and/or for certain materials and assays, such as diagnostics, for clinical and commercial use of our product candidates. Our dependence on these third-party suppliers and the challenges we may face in obtaining adequate supplies of materials involve several risks, including limited control over pricing, availability, quality and delivery schedules. As a small company, our negotiation leverage is limited and we are likely to get lower priority than our competitors that are larger than we are. We cannot be certain that our suppliers will continue to provide us with the quantities of these raw materials that we require or satisfy our anticipated specifications and quality requirements. Any supply interruption in limited or sole sourced raw materials could materially harm our ability to manufacture our product candidates until a new source of supply, if any, could be identified and qualified. We may be unable to find a sufficient alternative supply channel in a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers could delay the development and potential commercialization of our product candidates, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a material adverse effect on our business.

Additionally, the facilities to manufacture our product candidates must be the subject of a satisfactory inspection before the FDA or other regulatory authorities approve an NDA or grant a marketing authorization for the product candidate manufactured at that facility. We will depend on these third-party manufacturing partners for compliance with the FDA’s requirements for the manufacture of our finished products. If our manufacturers cannot successfully manufacture material that conforms to our specifications and the FDA’s and other regulatory authorities’ cGMP requirements, our product candidates will not be approved or, if already approved, may be subject to recalls.

Furthermore, certain of the third-party suppliers on which we rely are based in the PRC. The evolving trade dispute between the PRC and the United States has resulted in the imposition of significant tariffs on certain imports from the PRC. Any deterioration of the relationship between the United States and the PRC, or the imposition of more stringent export controls or tariffs applicable to our suppliers in the PRC, could adversely affect our ability to obtain the raw materials required for the manufacture of our product candidates, and therefore adversely affect our business, financial condition, results of operations and prospects.

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

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the possibility of a breach of the manufacturing agreements by the third parties because of factors beyond our control;

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the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer; and

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the possibility that we may not be able to secure a manufacturer or manufacturing capacity in a timely manner and on satisfactory terms in order to meet our manufacturing needs.

Any of these factors could cause the delay of approval or commercialization of any products, cause us to incur higher costs or prevent us from commercializing any products successfully. Furthermore, if any of our product candidates are approved and contract manufacturers fail to deliver the required commercial quantities of finished product on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volumes and quality and on a timely basis, we would likely be unable to meet demand for our products and could lose potential revenue. It may take several years to establish an alternative source of supply for our product candidates and to have any such new source approved by the FDA or any other relevant regulatory authority.

If we fail to comply with our obligations under our license agreement with Novartis, we could lose license rights that are important to our business.

Our license agreement with Novartis provides that we must use commercially reasonable efforts to obtain regulatory approval for a product candidate using the licensed compound. The agreement further imposes an obligation to make various milestone payments and royalty payments as well as other obligations on us. If we materially breach the terms of the license agreement and fail to cure such breach within 90 days of being notified of the breach, then Novartis may terminate the license agreement. In addition, Novartis has the right to terminate on our insolvency. If the agreement is terminated, then we will not be able to further develop or commercialize, as the case may be, IDE196 or any future related product candidates.

Furthermore, any dispute with Novartis may result in the delay or termination of the research, development or commercialization of IDE196 or any future related product candidates, and may result in costly litigation or arbitration that diverts management attention and resources away from our day-to-day activities, which may adversely affect our business, financial condition, results of operations and prospects.

Our existing collaboration arrangements and any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our product candidates or diagnostics associated with such product candidates.

In the future, we may seek to enter into additional collaboration arrangements for the development or commercialization of certain of our product candidates or diagnostics for biomarkers associated with our product candidates. To the extent that we decide to enter into additional collaboration agreements in the future, we may face significant competition in seeking appropriate collaborators. Moreover, collaboration arrangements are complex and time-consuming to negotiate, document, implement and maintain and challenging to manage. We may not be successful in our efforts to prudently manage our existing collaborations or to enter new ones should we chose to do so. The terms of new collaborations or other arrangements that we may establish may not be favorable to us.

The success of our collaboration arrangements, including our GSK Collaboration Agreement, will depend heavily on the efforts and activities of our collaborators. Collaborations are subject to numerous risks, which may include risks that:

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

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collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or their internal development of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

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collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

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collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates;

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a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities;

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we could grant exclusive rights to our collaborators that would prevent us from collaborating with others;

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collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

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disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources;

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collaborations may be terminated, which may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates;

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collaborators may own or co-own intellectual property covering products that result from our collaboration with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property;

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disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaborations; and

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a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

If we engage in future acquisitions or strategic collaborations, it 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 evaluate various acquisitions and strategic collaborations, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses. Any potential 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 or incurrence of additional indebtedness or contingent liabilities;

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the issuance of our equity securities;

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assimilation of operations, intellectual property and products 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 a strategic merger or acquisition;

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

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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 technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

In addition, if we undertake acquisitions, we may incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business.

Risks Related to Commercialization of Our Product Candidates

Even if we receive regulatory approval for any product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions on marketing or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.

If one of our product candidates is approved, it 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.

For example, the FDA may impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly and time-consuming post-approval studies, post-market surveillance or clinical trials to monitor the safety and efficacy of the product candidate. The FDA may also require a REMS as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates, the manufacturing processes, labeling, packaging, distribution, AE reporting, storage, advertising, promotion, import, export and recordkeeping for our product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and GCP requirements for any clinical trials that we conduct post-approval. Later discovery of previously unknown problems with our product candidates, including AEs of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

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suspension or withdrawal of regulatory approval, restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market, or voluntary or mandatory product recalls;

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restrictions on product distribution or use, or requirements to conduct post-marketing studies or additional clinical trials;

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suspension of any of our ongoing clinical trials;

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fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials;

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refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals;

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product seizure or detention, or refusal to permit the import or export of our product candidates; and

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injunctions or the imposition of civil or criminal penalties.

The occurrence of any event or penalty described above may inhibit our ability to commercialize any future approved product and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.

In addition, if any of our product candidates is approved, our product labeling, advertising and promotion will be subject to regulatory requirements and continuing regulatory review. The FDA strictly regulates the promotional claims that may be made about drug products. In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling. If we receive marketing approval for a product, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses, we may become subject to significant liability. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant sanctions. The federal government has levied large civil and criminal fines against companies for alleged improper promotion 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.

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.

We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad. For example, certain policies of the Trump Administration may impact our business and industry. Namely, the Trump Administration has taken several executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications. It is difficult to predict how these executive actions, including the Executive Orders will be implemented, and the extent to which they will impact the FDA’s ability to exercise its regulatory authority. If these executive actions impose constraints on FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.

The incidence and prevalence of our target patient populations are estimations. If the market opportunities for our product candidates are smaller than we estimate, our business, financial position, results of operations and prospects may be harmed.

We rely on various sources, including published literature and public or proprietary databases, to ascertain an estimate of the number of patients having particular genetic alterations, such as mutations, deletions or fusions, across various tissue-type specific indications. The determinable prevalence may vary depending on the source and quality of the underlying data and in some cases, insufficient data or poorly curated data may impact our ability to accurately estimate the prevalence of our target patient populations for each indication and in the aggregate across multiple indications both in the clinical trial setting, as well as in the commercial setting, if our product is approved. If the market opportunities for our product candidates are smaller than we estimate, our business, financial position, results of operations and prospects may be harmed. In addition, upon treatment with our product candidates, patients may have or develop resistance to our product candidates, reducing the addressable patient population and the duration of treatment.

Even if our product candidates or any future product candidate obtains regulatory approval, they may fail to achieve the broad degree of physician and patient adoption and use necessary for commercial success.

Even if our product candidates or any future product candidate receives FDA or other regulatory approvals, the commercial success of any product will depend significantly on the broad adoption and use of the resulting product by physicians and patients for approved indications. For a variety of reasons, including among other things, competitive factors, pricing or physician preference, reimbursement by insurers, the degree and rate of physician and patient adoption of any products, if approved, will depend on a number of factors, including:

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the clinical indications for which the product is approved and patient demand for approved products that treat those indications;

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the safety and efficacy of our product as compared to other available therapies;

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the availability of companion diagnostics for biomarkers associated with our product candidates or any other future product candidates;

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the time required for manufacture and release of our products;

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the availability of coverage and adequate reimbursement from managed care plans, private insurers, government payors (such as Medicare and Medicaid) and other third-party payors for any of our products that may be approved;

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acceptance by physicians, operators of hospitals and clinics and patients of the product as a safe and effective treatment;

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physician and patient willingness to adopt a new therapy over other available therapies for a particular indication;

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proper training and administration of our product candidates by physicians and medical staff;

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patient satisfaction with the results and administration of our product candidates and overall treatment experience, including, for example, the convenience of any dosing regimen;

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the cost of treatment with our product candidates in relation to alternative treatments and reimbursement levels, if any, and willingness to pay for the product, if approved, on the part of insurance companies and other third-party payors, physicians and patients;

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the prevalence and severity of side effects;

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limitations or warnings contained in the FDA-approved labeling for our products;

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the willingness of physicians, operators of hospitals and clinics and patients to utilize or adopt our products as a solution;

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any FDA requirement for a REMS;

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the effectiveness of our sales, marketing and distribution efforts;

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adverse publicity about our products or favorable publicity about competitive products; and

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potential product liability claims.

We cannot assure you that our current or future product candidates, if approved, will achieve broad market acceptance among physicians and patients. Any failure by our product candidates that obtain regulatory approval to achieve market acceptance or commercial success would adversely affect our business, financial condition, results of operations and prospects.

The successful commercialization of any products will depend in part on the extent to which governmental authorities, private health insurers, managed care plans and other third-party payors provide coverage, adequate reimbursement levels and implement pricing policies favorable for any products. Failure to obtain or maintain coverage and adequate reimbursement for products, if approved, could limit our ability to market those products and decrease our ability to generate revenue.

The availability of coverage and adequacy of reimbursement by governmental healthcare programs, such as Medicare and Medicaid, private health insurers, managed care plans and other third-party payors are essential for most patients to be able to afford medical services and pharmaceutical products such as our product candidates that receive FDA approval. Our ability to achieve acceptable levels of coverage and reimbursement by third-party payors for our products will have an effect on our ability to successfully commercialize our product candidates.

No uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. The process for determining whether a third-party payor will provide coverage for a product typically is separate from the process for setting the price of such product or for establishing the reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the FDA-approved products for a particular indication, or place products at certain formulary levels that result in lower reimbursement levels and higher cost-sharing obligation imposed on patients. One third-party payor’s decision to cover a particular medical product or service does not ensure that other payors will also provide coverage for the medical product or service. As a result, the coverage determination process will often require us to provide scientific and clinical support for the use of our products to each payor separately and can be a time-consuming process, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. We cannot be sure that coverage will be available for any product that we may develop. A decision by a third-party payor not to cover any of our product candidates could reduce physician utilization of our products once approved and adversely affect our business, financial condition, results of operations and prospects.

Assuming there is coverage for our products, if any, by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases on short notice, and we believe that changes in these rules and regulations are likely.

Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs or biologics when an equivalent generic drug, biosimilar or a less expensive therapy is available. It is possible that a third-party payor may consider our product candidates as substitutable and only offer to reimburse patients for the less expensive product. Even if we show improved efficacy or improved convenience of administration with our products, pricing of other third-party therapeutics may limit the amount we will be able to charge for our products. These third-party payors may deny or revoke the reimbursement status of our products, if approved, or establish prices for our products at levels that are too low to enable us to realize an appropriate return on our investment. If reimbursement is not available, is decreased or eliminated in the future, or is available only at limited levels, we may not be able to successfully commercialize our products and may not be able to obtain a satisfactory financial return on our products.

Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe and other countries has and will continue to put pressure on the pricing and usage of our products, if any. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our products. 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 revenue and profits.

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

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any products.

We face an inherent risk of product liability as a result of the planned clinical trials of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranty. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of any products. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

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decreased demand for any products;

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injury to our reputation;

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withdrawal of clinical trial participants;

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costs to defend the related litigation;

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a diversion of management’s time and our resources;

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substantial monetary awards to clinical trial participants or patients;

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regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;

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loss of revenue; and

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the inability to commercialize any products.

Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims could prevent or inhibit the commercialization of any products. Although we have obtained and intend to maintain product liability insurance covering our clinical trials, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions and deductibles, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient funds to pay such amounts. Moreover, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses. If and when we obtain approval for marketing any of our product candidates, we intend to expand our insurance coverage to include the sale of such product candidate; however, we may be unable to obtain this liability insurance on commercially reasonable terms or at all.

Risks Related to Intellectual Property

Our success depends on our ability to obtain and maintain protection for our intellectual property and our proprietary technologies and to avoid infringing the rights of others.

Our commercial success depends in part on our ability to obtain and maintain patent, trade secret and other intellectual property protection for our product candidates and proprietary technologies as well as our ability to operate without infringing upon the proprietary rights of others.

We and our licensors have applied, and we intend to continue applying, for patents covering important aspects of our product candidates, proprietary technologies and their uses as we deem appropriate. However, the patent prosecution process is expensive, time-consuming and complex, and we may not be able to apply for patents on certain aspects of our current or future product candidates and proprietary technologies in a timely fashion, at a reasonable cost, in all jurisdictions, or at all.

Our patent applications cannot be enforced against third parties practicing the inventions claimed in such applications unless, and until, patents issue from such applications, and then only to the extent the issued claims cover the invention as claimed. The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our actual or potential future collaborators or licensors will be successful in protecting our product candidates and proprietary technologies by obtaining and defending patents. These risks and uncertainties include the following:

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the United States Patent Office, or USPTO, and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other requirements during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction;

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patent applications may not result in any patents being issued;

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our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained or licensed patents that will limit, interfere with or eliminate our ability to make, use and sell our product candidates;

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other parties may have designed or may design around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position;

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any successful opposition to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any product candidates that we may develop;

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because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to our product candidates and proprietary technologies;

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an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications for any application with an effective filing date before March 16, 2013;

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there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and

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countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.

The patent position of biopharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. It is possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. And although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents or the patent rights that we license from others, may be challenged in the courts or patent offices in the United States and abroad. Once granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or derivation action or similar proceedings in court or before patent offices in the United States or foreign jurisdictions for a given period after allowance or grant, during which time third parties can raise objections against such patents. Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, all of 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.

The degree of future protection for our patent rights is uncertain, and we cannot ensure that:

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any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates;

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any of the patents we own or license will be found to ultimately be valid and enforceable if subject to challenge;

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any patents issued to us or our licensors will provide a basis for an exclusive market for any commercially viable products we may develop or will provide us with any competitive advantages;

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we will develop or in-license additional proprietary technologies that are patentable;

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the patents of others will not have an adverse effect on our business;

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our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and

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our commercial activities will not infringe upon the patents of others.

Our ability to enforce patent rights also depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components or methods that are used in connection with their products and services. Such proceedings could also provoke third parties to assert claims against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product or service. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded if we were to prevail may not be commercially meaningful. If we initiate lawsuits to protect or enforce our patents, or litigate against third-party claims, such proceedings would be expensive and would divert the attention of our management and technical personnel.

Where we obtain licenses from or collaborate with third parties, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties, or such activities, if controlled by us, may require the input of such third parties. We may also require the cooperation of our licensors and collaborators to enforce any licensed patent rights, and such cooperation may not be provided. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. Moreover, if we do obtain necessary licenses, we will likely have obligations under those licenses, and any failure to satisfy those obligations could give our licensor the right to terminate the license. Termination of a necessary license, or expiration of licensed patents or patent applications, could have a material adverse impact on our competitive position, business, financial condition, results of operations and prospects.

Furthermore, our owned and in-licensed intellectual property rights may be subject to a reservation of rights by one or more third parties. For example, the research resulting in certain of our owned and in-licensed patent rights and technology was funded in part by the U.S. government. As a result, the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to use the invention for non-commercial purposes. These rights may permit the government to disclose our confidential information to third parties and to exercise march-in rights to use or allow third parties to use our licensed technology. The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the government-funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to U.S. industry. In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could harm our competitive position, business, financial condition, results of operations, and prospects.

If we fail to obtain sufficient patent or other intellectual property protection for our product candidates or proprietary technologies or if we lose any patent or other intellectual property protection for our product candidates or proprietary technologies, our business, financial condition, results of operations and prospects could be adversely affected.

If we do not obtain patent term extension for patents covering our product candidates, our business may be materially harmed, and in any case, the terms of our patents may not be sufficient to effectively protect our product candidates and business.

Patents have a limited term. In most countries, including the United States, the expiration of a patent is generally 20 years after its first effective non-provisional filing date. However, depending upon the timing, duration and specifics of FDA marketing approval of IDE196, our other product candidates or any future product candidates, one or more of any U.S. patents we may be issued or have licensed may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. 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 may also be available in certain foreign countries upon regulatory approval of our product candidates. However, we may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded 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, our competitors may obtain approval of competing products following our patent expiration, and our competitive position, business, financial condition, results of operations, and prospects could be harmed, possibly materially.

If there are delays in obtaining regulatory approvals or other additional delays, the period of time during which we can market our product candidates under patent protection could be further reduced. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. Once the patent term has expired, we may be open to competition from similar or generic products. The launch of a generic version of one of our products in particular would be likely to result in an immediate and substantial reduction in the demand for that product, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Our rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by others, and the patent protection, prosecution and enforcement for some of our product candidates may be dependent on our licensors.

We currently are reliant upon licenses of certain intellectual property rights and proprietary technology from third parties that are important or necessary to the development of our proprietary technology, including technology related to our product candidates. For example, we rely on our exclusive license agreement with Novartis for the clinical development of IDE196 and our option and license agreement with Cancer Research UK for the clinical development of PARG inhibitors. These licenses, and other licenses we may enter into in the future, may not provide adequate rights to use such intellectual property rights and proprietary technology in all relevant fields of use or in all territories in which we may wish to develop or commercialize technology and product candidates in the future. Licenses to additional third-party proprietary technology or intellectual property rights that may be required for our development programs may not be available in the future or may not be available on commercially reasonable terms. In that event, we may be required to expend significant time and resources to redesign our proprietary technology or product candidates or to develop or license replacement technology, which may not be feasible on a technical or commercial basis. If we are unable to do so, we may not be able to develop and commercialize technology and product candidates in fields of use and territories for which we are not granted rights pursuant to such licenses, which could harm our business, financial condition, results of operations and prospects significantly.

In some circumstances, we may not have the right to control the preparation, filing, prosecution and enforcement of patent applications, or to maintain the patents, covering technology that we license from third parties. In addition, some of our agreements with our licensors require us to obtain consent from the licensor before we can enforce patent rights, and our licensor may withhold such consent or may not provide it on a timely basis. Therefore, we cannot be certain that our licensors or collaborators will prosecute, maintain, enforce and defend such intellectual property rights in a manner consistent with the best interests of our business, including by taking reasonable measures to protect the confidentiality of know-how and trade secrets, or by paying all applicable prosecution and maintenance fees related to intellectual property registrations for any of our product candidates. We also cannot be certain that our licensors have drafted or prosecuted the patents and patent applications licensed to us in compliance with applicable laws and regulations, which may affect the validity and enforceability of such patents or any patents that may issue from such applications. This could cause us to lose rights in any applicable intellectual property that we in-license, and as a result our ability to develop and commercialize product candidates may be adversely affected and we may be unable to prevent competitors from making, using and selling competing products.

Our current licenses impose, and our future licenses likely will impose, various royalty payments, milestones, and other obligations on us. If we fail to comply with any of these obligations, we may be subject to liability, including the payment of damages, and the licensor may have the right to terminate the license. Termination by the licensor would cause us to lose valuable rights, and could prevent us from developing and commercializing our product candidates and proprietary technologies. Furthermore, if any current or future licenses terminate, or if the underlying patents fail to provide the intended exclusivity, competitors or other third parties may gain the freedom to seek regulatory approval of, and to market, products similar or identical to our planned products. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights. In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in product candidates that we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize product candidates, we may be unable to achieve or maintain profitability. In addition, we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses to a portion of the intellectual property rights that are subject to our existing licenses. Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

We may fail to comply with any of our obligations under existing or future agreements pursuant to which we license or have otherwise acquired intellectual property rights or technology, which could result in the loss of rights or technology that are material to our business.

We are party to various agreements that we depend on to operate our business, including intellectual property rights relating to IDE196, in particular, our agreement with Novartis. Our rights to use currently licensed intellectual property, or intellectual property to be licensed in the future, are or will be subject to the continuation of and our compliance with the terms of these agreements. These agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations which could lead to disputes, including but not limited to those regarding:

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the scope of rights granted under the license agreement;

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the extent to which our proprietary technology and product candidates 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;

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

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the ownership of inventions and know-how resulting from the creation or use of intellectual property by us or our counterparties, alone or jointly;

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the scope and duration of our payment obligations;

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rights upon termination of such agreement; and

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the scope and duration of exclusivity obligations of each party to the agreement.

The resolution of any contractual interpretation dispute that may arise, if unfavorable to us, could have a material adverse effect on our business, financial condition, results of operations and prospects. Such resolution could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, increase what we believe to be our financial or other obligations under the relevant agreement or decrease the third party’s financial or other obligations under the relevant agreement.

Furthermore, if disputes over intellectual property rights that we have licensed or acquired from third parties prevent or impair our ability to maintain our current license agreements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. If we fail to comply with our obligations under current or future license agreements, these agreements may be terminated or the scope of our rights under them may be reduced and we might be unable to develop, manufacture or market any product that is licensed under these agreements.

We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses.

Our programs may require the use of intellectual property rights held by third parties to which we do not have rights. In such a case, the growth of our business will depend in part on our ability to acquire, in-license or use these rights. However, we may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary for our product candidates on reasonable terms and conditions or at all.

The acquisition or licensing of intellectual property rights for pharmaceutical products is very competitive. If we seek to acquire or license additional intellectual property rights, we may face substantial competition from a number of more established companies, some of which have acknowledged strategies to license or acquire products, and many of which have more institutional experience and greater financial and other resources than we have. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities, as may other emerging companies taking similar or different approaches to product licenses and/or acquisitions. In addition, a number of established research-based pharmaceutical and biotechnology companies may acquire products in late stages of development to augment their internal product lines, which may provide those companies with an even greater competitive advantage. Furthermore, companies that perceive us to be a competitor may be unwilling to assign or license rights to us or may interfere with our acquisition or licensing of rights from others. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.

We have collaborated with U.S. academic institutions and may in the future collaborate with U.S. and foreign academic institutions to accelerate our preclinical research or development under written agreements with these institutions. These institutions may provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us.

If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have on reasonable terms, we may have to abandon development of that program and our competitive position, business, financial condition, results of operations, and prospects could suffer.

Third-party claims of intellectual property infringement could require us to spend significant time and money and could prevent us from selling our products.

Our commercial success depends significantly on our ability to operate without infringing the intellectual property rights of third parties. However, our research, development and commercialization activities may nonetheless be subject to claims that we infringe or otherwise violate patents or other intellectual property rights owned or controlled by third parties. Claims by third parties that we infringe their intellectual property rights may result in liability for damages or prevent or delay our developmental and commercialization efforts. We cannot assure you that our operations do not, or will not in the future, be found to infringe existing or future patents.

Other entities may have or obtain patents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import our product candidates or impair our competitive position. As the biotechnology industry expands and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties. Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidates. 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, reexaminations, inter partes review proceedings and post-grant review proceedings before the USPTO and/or corresponding foreign patent offices. Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields in which we are developing product candidates. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. For example, we are aware of an international patent application published as PCT WO 2017/096165 A1. If a patent issues from such patent application with claims similar to those published, our ability to commercialize a product candidate for our MAT2A program may be adversely affected if we do not obtain a license under such patent.

Furthermore, the scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history and can involve other factors such as expert opinion. Our analysis of these issues, including interpretation the relevance or the scope of claims in a patent or a pending application, determining applicability of such claims to our proprietary technologies or product candidates, predicting whether a third party’s pending patent application will issue with claims of relevant scope, and determining the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates. We do not always conduct independent reviews of pending patent applications of and patents issued to third parties.

Additionally, patent applications in the United States and elsewhere are typically published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Certain U.S. applications that will not be filed outside the United States can remain confidential until patents issue. In addition, patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived. Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our product candidates or the use of our product candidates. These applications may later result in issued patents, or the revival of previously abandoned patents, that will prevent, limit

or otherwise interfere with our ability to make, use or sell our products. As a result, we may be unaware of third-party patents that may be infringed by commercialization of IDE196 or our other product candidates, and cannot be certain that we were the first to file a patent application related to a product candidate or proprietary technology. In addition, identification of third-party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims.

Although no third party has asserted a claim of patent infringement against us as of June 30, 2020, others may hold proprietary rights that could prevent IDE196, our other product candidates or any future product candidates from being marketed. Any patent-related legal action against us claiming damages and seeking to enjoin commercial activities relating to our product candidates or proprietary technologies could subject us to potential liability for damages, including treble damages if we were determined to willfully infringe or attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing, and require us to obtain a license to manufacture or market IDE196, our other product candidates or any future product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be time-consuming and a substantial diversion of management and employee resources from our business. We cannot predict whether we would prevail in any such actions or that any license required under any of these patents would be made available on commercially acceptable terms, if at all. Even if such licenses are available, we could incur substantial costs related to royalty payments for licenses obtained from third parties, which could negatively affect our gross margins, and the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us. In addition, we cannot be certain that we could redesign our product candidates or proprietary technologies to avoid infringement, if necessary, or on a cost-effective basis. Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing IDE196, our other product candidates or any future product candidates, until the asserted patent expires or is held finally invalid or not infringed in a court of law. In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity or the disclosure of confidential information, and the perceived value of our product candidates or intellectual property could be diminished correspondingly.

Additionally, our collaborators, such as GSK or any third parties with which we collaborate in the future, may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to litigation or potential liability. Further, collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability. Also, we may be obligated under our agreements with our collaborators, licensors, suppliers and others to indemnify and hold them harmless for damages arising from intellectual property infringement by us. Any of the foregoing could harm our competitive position, business, financial condition, results of operations, and prospects.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming, and unsuccessful. Further, our issued patents could be found invalid or unenforceable if challenged.

Competitors may infringe our intellectual property rights or those of our licensors. To prevent infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in a patent infringement proceeding, a court or administrative tribunal may decide that a patent we own or in-license is not valid, is unenforceable and/or is not infringed. If we or any of our collaborators, such as GSK or potential future collaborators, were to initiate legal proceedings against a third party to enforce a patent directed at one of our product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable in whole or in part. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge include an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could include 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 the USPTO, even outside the context of litigation. Similar mechanisms for challenging the validity and enforceability of a patent exist in foreign patent agencies. The outcome following legal assertions of invalidity and unenforceability is unpredictable, and could result in the revocation, cancellation, or amendment of our patents or those of our licensors. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we could lose at least part, and perhaps all, of the patent protection on an affected product candidate. Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations and prospects.

Additionally, interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO, or equivalent actions brought in foreign jurisdictions, may be necessary to determine the priority of invention with respect to our patents or patent applications or those of our licensors. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. An unfavorable outcome could require us to cease using the covered 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. These and other 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 or manufacturing partnerships that would help us bring our product candidates to market.

Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace.

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. Any of the foregoing could harm our business, financial condition, results of operations and prospects.

We may be subject to claims that we have wrongfully hired an employee, consultant, advisor or other third party from a competitor or that we or our employees, consultants, advisors or other third parties have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers.

As is common in the biotechnology and biopharmaceutical industries, in addition to our employees, we engage the services of consultants, advisors and other third parties to assist us in the development of our product candidates. Many of these individuals, and many of our employees, were previously employed at, or may have previously provided or may be currently providing consulting services to, other biotechnology or biopharmaceutical companies including our competitors or potential competitors. Although we try to ensure that individuals working for or collaborating with us do not use the proprietary information or know-how of others in their work for us, we may become subject to claims that we, our employees, consultants, advisors or other third parties inadvertently or otherwise used or disclosed trade secrets or other information proprietary to their former employers or their former or current clients. We may also be subject to claims that patents and applications we have filed to protect inventions of our employees, consultants advisors or other third parties, even those related to one or more of our product candidates, are rightfully owned by their former or concurrent employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, which could adversely affect our competitive position, business, financial condition, results of operations, and prospects. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team.

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

Our agreements with employees and our personnel policies provide that any inventions conceived by an individual in the course of rendering services to us shall be our exclusive property. Although our policy is to have all such individuals complete these agreements, we may not obtain these agreements in all circumstances, and individuals with whom we have these agreements may not comply with their terms. The assignment of intellectual property may not be self-executing and despite such agreement, such inventions may become assigned to third parties. In the event of unauthorized use or disclosure of our trade secrets or proprietary information, these agreements, even if obtained, may not provide meaningful protection, particularly for our trade secrets or other confidential information. We may be subject to claims that former employees, consultants, advisors or other third parties have an ownership interest in our patents or other intellectual property. In addition, we may face claims by third parties that our agreements with employees, consultants, advisors or other third parties obligating them to assign intellectual property to us are ineffective or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such intellectual property. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. Such an outcome could have a material adverse effect on our competitive position, business, financial condition, results of operations, and prospects. Even if we are successful in defending against such claims, litigation could result in substantial costs and distraction to management and other employees.

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

We rely on the protection of our trade secrets, including unpatented know-how, technology and other proprietary information. We have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and invention assignment agreements with employees, consultants, advisors and appropriate third parties. In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly accepted physical and technological security measures. Despite these efforts, we cannot provide any assurances that all such agreements have been duly executed, and 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. In addition, such security measures may not provide adequate protection for our proprietary information, for example, in the case of misappropriation of a trade secret by an employee, consultant, customer or third party with authorized access. Our security measures may not prevent an employee, consultant, advisor or other third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective.

Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. We may not be able to obtain adequate remedies in the event of such unauthorized use. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. Even though we use commonly accepted security measures, the criteria for protection of trade secrets can vary among different jurisdictions.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. Because from time to time we expect to rely on third parties in the development, manufacture, and distribution of our products and provision of our services, we must, at times, share trade secrets with them. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Trade secrets will over time be disseminated within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art from company to company or academic to industry scientific positions. Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights. In addition, if any of our trade secrets 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. Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our

competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced and our competitive position, business, financial condition, results of operations, and prospects would be harmed. If we do not apply for patent protection prior to such publication or if we cannot otherwise maintain the confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential collaborators or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. We may license our trademarks and trade names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects.

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

Our patent rights may be affected by developments or uncertainty in the United States’ or other jurisdictions’ patent statutes, patent case law, USPTO rules and regulations or the rules and regulations of other jurisdictions’ patent offices.

There are a number of recent changes to U.S. patent laws that may have a significant impact on our ability to protect our technology and enforce our intellectual property rights. For example, on September 16, 2011, the Leahy-Smith America Invents Act, or Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. In particular, under the Leahy-Smith Act, the United States transitioned in March 2013 to a “first to file” system in which the first inventor to file a patent application is typically entitled to the patent. Third parties are allowed to submit prior art before the issuance of a patent by the USPTO, and may become involved in post-grant proceedings including opposition, derivation, reexamination, inter partes 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 or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position. In addition, the U.S. congress may pass additional patent reform legislation that is unfavorable to us.

The Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on decisions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents we might obtain in the future. Similarly, statutory or judicial changes to the patent laws of other countries may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.

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

Filing, prosecuting and defending all current and future patents 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, further, may export otherwise 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 product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

The legal systems of many foreign countries do not favor the enforcement of patents and other intellectual property protection, 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. For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, some countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Proceedings to enforce our patent rights in foreign jurisdictions 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. If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations, and prospects may be adversely affected.

Obtaining and maintaining 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.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. 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 employ reputable professionals and rely on such third parties to help us comply with these requirements and effect payment of these fees with respect to the patents and patent applications that we own, and if we license intellectual property we may have to rely upon our licensors to comply with these requirements and effect payment of these fees with respect to any patents and patent applications that we license. 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 noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case.

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

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business or permit us to maintain our competitive advantage. For example:

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others may be able to make precision medicines that are similar to ours but that are not covered by the claims of the patents that we own or have exclusively licensed;

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we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed;

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

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

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our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and

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we may not develop additional proprietary technologies that are patentable;

Should any of these events occur, they could significantly harm our business, results of operations and prospects.

Risks Related to Government Regulation

Enacted and future healthcare legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and may affect the prices we may set.

In the United States, the European Union and other jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes to the healthcare system that could affect our future results of operations. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively the ACA, was enacted, which substantially changed the way healthcare is financed by both governmental and private payors. Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology industries include the following:

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an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents (other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain government healthcare programs;

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an increase to the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and an extension the rebate program to individuals enrolled in Medicaid managed care organizations;

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a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

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expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

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a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;

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

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establishment of a Center for Medicare Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

Since its enactment, there have been judicial and congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future. By way of example, the Tax Cuts and Jobs Act of 2017, or the Tax Act, which includes a provision that entered into effect on January 1, 2019, that repeals 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.” On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas 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 Act, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court’s decision that the individual mandate was unconstitutional but remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. It is unclear how these decisions, subsequent appeals, if any, or other efforts to challenge, repeal or replace the ACA will impact the ACA or our business.

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, led to aggregate reductions of Medicare payments to providers of 2% per fiscal year. These reductions went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2029 unless additional action is taken by Congress. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws or any other similar laws introduced in the future may result in additional reductions in Medicare and other health care funding, which could negatively affect our customers and accordingly, our financial operations.

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery models, such as bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor programs, and review the relationship between pricing and manufacturer patient programs. The Trump Administration’s budget proposal for fiscal year 2020 contains further drug price control measures that could be enacted during the 2020 budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients. While any proposed measures will require authorization through additional legislation to become effective, Congress and the Trump Administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

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

Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Legally-mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. These reforms could reduce the ultimate demand for our product candidates or put pressure on our product pricing.

In the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our product candidates, if approved. In addition to continuing pressure on prices and cost containment measures, legislative developments at the European Union or member state level may result in significant additional requirements or obstacles that may increase our operating costs. The delivery of healthcare in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than European Union, law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most European Union member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing European Union and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to commercialize our product candidates, if approved. In markets outside of the United States and European Union, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action in the United States, the European Union or any other jurisdiction. If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.

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

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

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the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, 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 any U.S. federal healthcare program, such as Medicare and Medicaid. 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;

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the U.S. federal civil and criminal false claims and civil monetary penalties laws, including the civil False Claims Act, which prohibit, among other things, including through civil whistleblower or qui tam actions, individuals or entities from knowingly presenting, or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. federal government. Pharmaceutical manufacturers can cause false claims to be presented to the U.S. federal government by engaging in impermissible marketing practices, such as the off-label promotion of a product for an indication for which it has not received FDA approval. In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

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HIPAA, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services. Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific intent to violate it in order to have committed a violation;

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the Federal Food Drug or Cosmetic Act, or FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices;

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the U.S. Physician Payments Sunshine Act and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the government information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other health care professionals beginning in 2022, and teaching hospitals, as well as ownership and investment interests held by the physicians described above 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;

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analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private 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 U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives;

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the U.S. Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof; and

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similar healthcare and data protection laws and regulations in the European Union and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and laws governing the privacy and security of certain protected information.

Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations. If any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment, which could affect our ability to operate our business. Further, defending against any such actions can be costly, time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

We face regulation and potential liability related to the privacy, data protection and information security which may require significant resources and may adversely affect our business, operations and financial performance.

The regulatory environment surrounding information security, data collection and privacy is increasingly demanding. We are subject to numerous U.S. federal and state laws and non-U.S. regulations governing the protection of personal and confidential information of our clinical subjects, clinical investigators, employees and vendors/business contacts, including in relation to medical records, credit card data and financial information. For example, on May 25, 2018, the GDPR became effective, implementing more stringent requirements in relation to our use of personal data. The GDPR repeals the Data Protection Directive (95/46/EC) and is directly applicable in all E.U. member states and will also remain law in the United Kingdom until the end of the transition period on

December 31, 2020 provided for in the Withdrawal Agreement between the EU and the U.K. The GDPR significantly increased fines to up to 4% total worldwide annual turnover or up to €20 million (whichever is higher) for non-compliance with its requirements. We will be subject to the GDPR where we have an E.U. presence or “establishment”, when conducting clinical trials with E.U. based data subjects (whether the trials are conducted directly by us or through a clinical vendor or collaborator) or when offering approved products or services in the future to E.U. based data subjects. After the end of the transition period on December 31, 2020, a similar data protection regime will apply in the United Kingdom.

The GDPR sets out a number of requirements that must be complied with when handling the personal data of such E.U. based data subjects including: providing expanded disclosures about how their personal data will be used; higher standards for organizations to demonstrate that they have obtained valid consent or have another legal basis in place to justify their data processing activities; the obligation to appoint data protection officers in certain circumstances; new rights for individuals to be “forgotten” and rights to data portability, as well as enhanced current rights (e.g., access requests); the principal of accountability and demonstrating compliance through policies, procedures, training and audit; the new mandatory data breach regime. In particular, medical or health data, genetic data and biometric data where the latter is used to uniquely identify an individual (even, in certain situations, where such data is key coded) are all classified as “special category” data under GDPR and afford greater protection and require additional compliance obligations. Further, E.U. member states have a broad right to impose additional conditions – including restrictions – on these data categories. This is because the GDPR allows E.U. member states to derogate from the requirements of the GDPR mainly in regard to specific processing situations (including special category data and processing for scientific or statistical purposes). As the E.U. member states reframe their national legislation to harmonize with the GDPR, we will need to monitor compliance with all relevant E.U. member states' laws and regulations, including where permitted derogations from the GDPR are introduced.

The introduction of the GDPR, and any resultant changes in E.U. member states’ national laws and regulations, will increase our compliance obligations and will necessitate the review and implementation of policies and processes relating to our collection and use of data. This increase in compliance obligations could also lead to an increase in compliance costs which may have an adverse impact on our business, financial condition or results of operations.

In the United States, HIPAA imposes privacy, security and breach reporting obligations with respect to individually identifiable health information upon “covered entities” (health plans, health care clearinghouses and certain health care providers), and their respective business associates, individuals or entities that create, received, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HIPAA mandates the reporting of certain breaches of health information to HHS, affected individuals and if the breach is large enough, the media. Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information, a complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. Even when HIPAA does not apply, according to the Federal Trade Commission or the FTC, failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, or the FTCA, 15 U.S.C § 45(a). The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards. The FTC’s guidance for appropriately securing consumers’ personal information is similar to what is required by the HIPAA Security Rule.

In addition, certain states govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. By way of example, California enacted the California Consumer Privacy Act, or CCPA, on June 28, 2018, which went into effect on January 1, 2020. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States, which could increase our potential liability and adversely affect our business.

If any person, including any of our employees, clinical trial collaborators or those with whom we share such information, negligently disregards or intentionally breaches our established controls with respect to clinical subject, clinical investigator or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions. In addition, a data breach could result in negative publicity which could damage our reputation and have an adverse effect on our business, financial condition or results of operations.

Risks Related to Our Common Stock

Our stock price may be volatile and you may not be able to resell shares of our common stock at or above the price you paid.

The trading price of our common stock could be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These factors include those discussed in this “Risk Factors” section of this Quarterly Report on Form 10-Q and others such as:

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results from, and any delays in, our clinical trials for IDE196, or any other future clinical development programs, including public misperception of the results of our clinical trials;

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announcements by academic or other third parties challenging the fundamental premises underlying our approach to treating cancer and/or biopharmaceutical product development;

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announcements of regulatory approval or disapproval of our current or any future product candidates;

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failure or discontinuation of any of our research and development programs;

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manufacturing setbacks or delays of or issues with the supply of the materials for our product candidates;

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announcements relating to or results from our GSK Collaboration Agreement;

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announcements relating to future licensing, collaboration or development agreements;

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

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public misperception regarding the use of our therapies;

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acquisitions and sales of new products, technologies or businesses;

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quarterly variations in our results of operations or those of our future competitors;

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changes in earnings estimates or recommendations by securities analysts;

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announcements by us or our competitors of new products, significant contracts, commercial relationships, acquisitions or capital commitments;

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developments with respect to intellectual property rights;

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our commencement of, or involvement in, litigation;

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changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;

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major changes in our board of directors or management;

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new legislation in the United States relating to the sale or pricing of pharmaceuticals;

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FDA or other U.S. or comparable foreign regulatory actions affecting us or our industry;

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product liability claims or other litigation or public concern about the safety of our product candidates;

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market conditions in the biopharmaceutical and biotechnology sectors, particularly as a result of the volatility in the market caused by the COVID-19 pandemic; and

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general economic conditions in the United States and abroad.

In addition, the stock markets in general, and the markets for biopharmaceutical and biotechnology stocks in particular, have experienced extreme volatility, particularly in response to the COVID-19 pandemic. In particular, the market prices of securities of smaller biotechnology have experienced dramatic fluctuations that often have been unrelated or disproportionate to the operating results of these companies. These broad market fluctuations may adversely affect the trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management would be diverted from the operation of our business.

An active, liquid and orderly market for our common stock may not develop, and you may not be able to resell your common stock at or above the public offering price.

Prior to our initial public offering, or IPO, in May 2019, there was no public market for shares of our common stock. An active trading market may not develop or, if it is developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. An inactive market may also impair our ability to raise capital and may impair our ability to acquire other businesses or technologies using our shares as consideration.

If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We currently have research coverage by securities and industry analysts. If no further or fewer securities or industry analysts commence coverage of us, the trading price for our stock could be negatively impacted. If any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if our clinical trials and operating results fail to meet the expectations of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

We incur significant costs as a result of operating as a public company, and our management devotes substantial time to new compliance initiatives. We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, which could result in sanctions or other penalties that would harm our business.

We incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations under the Exchange Act and regulations regarding corporate governance practices. The listing requirements of the Nasdaq Global Market and the rules of the Securities and Exchange Commission, or SEC, require that we satisfy certain corporate governance requirements relating to director independence, filing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our management and other personnel devote a substantial amount of time to ensure that we comply with all of these requirements. Moreover, the reporting requirements, rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including D&O, insurance, on acceptable terms.

As a public company, we are subject to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, and the related rules of the SEC, which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. Beginning with the second annual report that we will be required to file with the SEC, Section 404 requires an annual management assessment of the effectiveness of our internal control over financial reporting. However, for so long as we remain an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404. Once we are no longer an emerging growth company 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. 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 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 $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

To date, we have never conducted a review of our internal control for the purpose of providing the reports required by these rules. During the course of our review and testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports. Furthermore, if we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our audited financial statements may be materially misstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. In addition, as a public company we are required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. In order to report our results of operations and financial statements on an accurate and timely basis, we will depend on CROs and contract manufacturing organizations, or CMOs, to provide timely and accurate notice of their costs to us. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from the Nasdaq Global Market or other adverse consequences that would materially harm to our business.

If we are unable to maintain effective internal controls, our business, financial position, results of operations and prospects could be adversely affected.

As a public company, we are subject to reporting and other obligations under the Exchange Act, including Section 404, which require annual management assessments of the effectiveness of our internal control over financial reporting. However, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an emerging growth company if we continue to take advantage of the exemptions available to us through the JOBS Act.

The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act of 2002. These reporting and other obligations place significant demands on our management and administrative and operational resources, including accounting resources.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Any failure to maintain effective internal controls could have an adverse effect on our business, financial position, and results of operations.

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

We are an “emerging growth company,” as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404, not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, the information we provide stockholders will be different than the information that is available with respect to other public companies. We cannot predict whether investors will find our common stock less attractive because we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, we are subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

The closing of the private placement of $20.0 million of shares of our common stock by Glaxo Group Limited, an entity affiliated with GSK, or the Private Placement, has resulted in substantial dilution to our stockholders. If we sell shares of our common stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may decline.

The closing of the Private Placement has resulted in substantial dilution to our stockholders. Immediately following the closing for $20.0 million of shares in the Private Placement, the holders of our common stock immediately prior to the closing of the Private Placement held approximately 95% of our outstanding common stock. If the common equity closing had occurred on June 30, 2020, the holders of our common stock prior to the Private Placement would have held approximately 95% of our outstanding common stock as of that date.

We may from time to time issue additional shares of common stock at a discount from the current trading price of our common stock. As a result, our stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at such discount. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock. If we issue common stock or securities convertible into common stock, our common stockholders would experience additional dilution and, as a result, our stock price may decline.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

If our stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the lock-up entered into in connection with our IPO and other legal restrictions on resale lapse, the trading price of our common stock could decline. As of June 30, 2020, we have a total of 27.2 million outstanding shares of our common stock.

The lock-up agreements pertaining to our IPO expired on November 18, 2019. After the expiration of the lock-up agreements, up to approximately 14.6 million additional shares of common stock became eligible for sale in the public market, approximately 6.7 million of which shares were held by directors, executive officers and other affiliates and are be subject to Rule 144 under the Securities Act of 1933, as amended, or the Securities Act.

In addition, as of June 30, 2020, approximately 4.0 million shares of common stock that are either subject to outstanding options or reserved for future issuance under our equity incentive plans will become eligible for sale in the public market. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

The holders of approximately 5.0 million shares of our common stock, or approximately 18% of our total outstanding common stock as of June 30, 2020, are entitled to rights with respect to the registration of their shares under the Securities Act. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock.

Our ability to use 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 losses for U.S. federal income tax purposes, unused losses will carry forward to offset a portion of future taxable income, if any, until such unused losses expire, if ever. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders 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 and development tax credits) to offset its post-change taxable income or tax liability may be limited. If finalized, Treasury Regulations currently proposed under Section 382 of the Code may further limit our ability to utilize our pre-change NOLs or credits if we undergo a future ownership change. We have experienced ownership changes in the past, and we may experience ownership changes in the future and/or subsequent shifts in our stock ownership (some of which may be outside our control). As a result, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes, which could potentially result in increased future tax liability to us.

Enacted on June 29, 2020, California’s Assembly Bill No. 85 generally prohibits the total amount of refunds or credit offsets that would otherwise be allowed for a taxable year beginning on or after January 1, 2020, and before January 1, 2023, from exceeding $5,000,000. This bill would, subject to certain exceptions related to a taxpayer’s income, disallow a net operating loss deduction for any taxable year beginning on or after January 1, 2020, and before January 1, 2023, and would extend the carryover period for a net operating loss deduction disallowed by that provision, as specified. It is possible that these provisions could adversely affect our ability to utilize our net operating losses and business credits.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could delay or prevent changes in control or changes in our management without the consent of our board of directors. These provisions include the following:

•

a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;

•

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

•

the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

•

the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;

•

the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval;

•

the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors;

•

a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

•

the requirement that a special meeting of stockholders may be called only by our chief executive officer or president or by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

•

advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.

We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law. Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the transaction.

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law.

In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that:

•

we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if 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 registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;

•

we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;

•

we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

•

we will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification;

•

the rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and

•

we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.

The cost of D&O insurance policy premiums is expected to continue to increase. If the costs of maintaining adequate D&O insurance coverage increase significantly in the future, our operating results could be materially adversely affected. Likewise, if any of our current D&O insurance coverage should become unavailable to us or become economically impractical, we may need to decrease our coverage limits or increase our self-insured retention or we may be unable to renew such insurance at all. If we incur liabilities that exceed our coverage or incur liabilities not covered by our insurance, we would have to self-fund any indemnification amounts owed to our directors and officers and employees in which case our results of operations and financial condition could be materially adversely affected. Additionally, a lack of D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers to serve our company, which could adversely affect our business.

Our amended and restated certificate of incorporation provides for an exclusive forum in the Court of Chancery of the State of Delaware and in the U.S. federal district courts for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any state law derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, any action to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.

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

We do not 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.

100

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

Unregistered Sales of Equity Securities

None.

Use of Proceeds from the Sale of Registered Securities

Pursuant to a registration statement on Form S-1 (File No. 333-231081), as amended, which was declared effective by the SEC on May 22, 2019, we registered common stock to be sold in our IPO, in which we sold and issued 5,750,000 shares of common stock at a price to the public of $10.00 per share, which includes the full exercise of the underwriters’ over-allotment option to purchase an additional 750,000 shares of common stock. We received aggregate gross proceeds of $57.5 million, or aggregate net proceeds of $50.2 million, after underwriting discounts, commissions and other offering costs.

There has been no material change in our planned use of the net proceeds from our IPO as updated in our Quarterly Report on Form 10-Q filed with the SEC on May 12, 2020.

Issuer Purchases of Equity Securities

The following table summarizes repurchases of our common stock during the first quarter of fiscal 2020:

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Repurchased Under the Plans or Programs
April 1, 2020 to April, 2020		2,358	$	0.82		—	$	—
May 1, 2020 to May 31, 2020		—		—		—		—
June 1, 2020 to June 30, 2020		—		—		—		—
Total		2,358	$	0.82		—	$	—

All of the shares repurchased, as reflected in the table above, were repurchases of unvested shares of our common stock that had been issued upon early exercise of stock options. Upon termination of employment of a person holding unvested shares, we are entitled to repurchase the unvested shares.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other information.

Not applicable.

101

Item 6. Exhibits.

Exhibit Number	Exhibit Description	Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Date	Number	Filed Herewith

3.1	Amended and Restated Certificate of Incorporation.	8-K	5/28/2019	3.1

3.2	Amended and Restated Bylaws.	8-K	5/28/2019	3.2

4.1	Reference is made to Exhibits 3.1 through 3.2.

4.2	Form of Common Stock Certificate.	S-1/A	5/13/2019	4.2

10.1#	Transition and Separation Agreement, as amended, by and between IDEAYA Biosciences, Inc. and Julie Hambleton.	10-Q	5/12/2020	10.2

10.2#	Consulting Agreement by and between IDEAYA Biosciences, Inc. and Julie Hambleton.	10-Q	5/12/2020	10.3

10.3†	Collaboration, Option and License Agreement between GlaxoSmithKline Intellectual Property (No. 4) Limited and IDEAYA Biosciences, Inc. dated as of June 15, 2020.				X

31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

32.1*	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

101.INS	XBRL Instance Document				X

101.SCH	XBRL Taxonomy Extension Schema Document				X

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				X

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				X

101.LAB	XBRL Taxonomy Extension Labels Linkbase Document				X

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				X

†	Certain information in this exhibit has been excluded pursuant to Regulation S-K, Item 601(b)(10).

#	Indicates management contract or compensatory plan.

The certification attached as Exhibit 32.1 that accompanies this Quarterly Report on Form 10-Q is not deemed filed with the SEC and is not to be incorporated by reference into any filing of IDEAYA Biosciences, 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.

102

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 thereto duly authorized.

	IDEAYA Biosciences, Inc.

Date: August 12, 2020	By:	/s/ Yujiro Hata
		Yujiro Hata
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: August 12, 2020	By:	/s/ Paul Stone, J.D.
		Paul Stone, J.D.
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

103

Exhibit 10.3

EXECUTION VERSION

COLLABORATION, OPTION AND LICENSE AGREEMENT

Between

GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4) LIMITED

And

IDEAYA Biosciences, INC.

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

COLLABORATION, OPTION AND LICENSE AGREEMENT

This Collaboration, Option and License Agreement (the “Agreement”) is made and entered into as of June 15, 2020 (“Execution Date”) and is effective as of the Effective Date (as defined below), between GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4) LIMITED (“GSK”), and IDEAYA Biosciences, Inc., a Delaware corporation having an office at 7000 Shoreline Court, Suite 350, South San Francisco, CA 94080 (“IDEAYA”). GSK and IDEAYA are sometimes referred to individually as a “Party” and collectively as the “Parties.”

BACKGROUND

WHEREAS, GSK, among other things, conducts programs to discover, develop, manufacture and commercialize innovative pharmaceutical medicines;

WHEREAS, IDEAYA, among other things, conducts programs to discover and develop therapeutic products for the treatment and prevention of diseases;

WHEREAS, GSK and IDEAYA desire to enter into this Agreement to collaborate with respect to three (3) Collaboration Programs, consistent with the terms and conditions set forth herein; and

WHEREAS, IDEAYA wishes to grant, and GSK wishes to accept the Option and licenses set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

ARTICLE 1
Definitions

Capitalized terms used in this Agreement, whether used in the singular or plural, shall have the meanings set forth below, unless otherwise specifically indicated herein.

1.1

“Accounting Standards” means, with respect to GSK, IFRS, and with respect to IDEAYA, GAAP, in each case as consistently applied by the applicable Party and its Affiliates, as the same may be changed from time to time by the Parties; provided, however, that each Party shall promptly notify the other Party in the event that such Party changes its Accounting Standards pursuant to which such Party’s records are maintained, and it being understood that each Party may only use internationally recognized accounting principles (e.g., IFRS, GAAP).

1.2

“Affiliate” means, with respect to a given Party, any corporation, firm, limited liability company, partnership or other entity which directly or indirectly controls, or is controlled by, or is under common control with such Party. For the purposes of this Section 1.2, “control” means ownership, directly or indirectly through one or more Affiliates, of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interests in the case of any other type of

legal entity, or status as a general partner in the case of any partnership, or any other arrangement whereby a corporation or other entity controls or has the right to control the board of directors or equivalent governing body or management of another corporation or other entity.

1.3	“Aggregate Purchase Price” has the meaning set forth in the Purchase Agreement.

1.4	“Agreement” has the meaning set forth in the preamble.

1.5	“Alliance Manager” has the meaning set forth in Section 5.9.

1.6	“Allowable Expenses” has the meaning set forth in the Pre-Tax Profit or Loss Schedule.

1.7	“Applicable Law” means, individually and collectively, any and all laws, ordinances, rules, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction.

1.8	“Arising Technology” means all Patents and Know-How invented, discovered, created or developed by or on behalf of a Party solely or the Parties jointly in connection with the exercise of its or their rights or performance of its or their obligations under this Agreement.

1.9	“Balancing Payment” has the meaning set forth in Schedule 7.4.1.

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

1.11	“Beneficial Ownership Limitation” has the meaning set forth in Section 7.1.2.

1.12	“Big Four Accounting Firm” means one of the following: (i) Deloitte, (ii) Ernst & Young, (iii) KPMG, or (iv) PricewaterhouseCoopers.

1.13

“Business Day” means a day that is not (a) a Saturday, Sunday or a day on which banking institutions in New York, New York or London, United Kingdom are required by Applicable Law to remain closed, or (b) the nine (9) consecutive calendar days beginning on December 24 through and including January 1 of each Calendar Year to the extent those days are not included in (a) in this Section 1.13.

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

1.15	“Calendar Year” means each successive period of twelve (12) months commencing on January 1 and ending on December 31.

1.16	“CDA” means that certain Mutual Confidential Disclosure Agreement between GlaxoSmithKline LLC and IDEAYA effective June 4, 2019, as amended on April 23, 2020.

1.17

“Change of Control” means, with respect to a Party, an event or transaction or series of events or transactions by which: (a) any Third Party (or group of Third Parties acting in concert) becomes the beneficial owner, directly or indirectly, of more than fifty percent (50%) of the outstanding securities of such Party or the total voting power of such securities entitled to vote in elections of directors; (b)(i) such Party reorganizes, consolidates or comes under common control with, or merges into another Third Party entity, or (ii) any Third Party entity reorganizes, consolidates or comes under common control with, or merges into such Party, in either event of the foregoing ((i) or (ii)) where more than fifty percent (50%) of the total voting power of the securities outstanding of the surviving entity entitled to vote in elections of directors is not held by the parties holding at least fifty percent (50%) of the outstanding shares of such Party immediately preceding such reorganization, consolidation or merger; (c) such Party conveys, transfers or leases to a Third Party (x) all or substantially all of its assets or the control thereof, or (y) all or substantially all of its assets or business relating to this Agreement or the control thereof; or (d) any other arrangement whereby a Third Party (or group of Third Parties acting in concert) obtains control or the right to control the board of directors or equivalent governing body that has the ability to cause the direction of the management, policies or affairs of such Party; provided, however, that, notwithstanding subsections (a) through (d) above, a sale of a Party’s securities in an underwritten public offering of such Party’s securities to multiple non-affiliated investors or other financing transaction the primary purpose of which is to raise capital to fund the operations of such Party shall not constitute a Change of Control.

1.18	“Clinical Dose Expansion” means the first person dosed in an expansion cohort of the applicable Phase 1 Clinical Study for the relevant Licensed Product being conducted by a Party utilizing the recommended dose for expansion for such Licensed Product.

1.19	“Closing Date” has the meaning set forth in the Purchase Agreement.

1.20	“Co-Chair” has the meaning set forth in Section 5.7.1.

1.21	“Collaboration Budget” means the budget for conducting the corresponding Collaboration Plan as agreed by the Parties and approved by the applicable JDC and the JSC, as updated from time to time.

1.22

“Collaboration Plan” means a plan for each Collaboration Program, setting out the preclinical Development activities (and solely with respect to the MAT2A Program, the limited clinical Development activities) to be conducted by or on behalf of the Parties, including the Party responsible for each activity and any other matters pertinent to the scope of activities to be conducted under such Collaboration Plan.

1.23	“Combination Product” means a product that includes a Licensed Compound in combination with one or more pharmaceutically active ingredients that is not any

other Licensed Compound (the “Other Component(s)”), whether in a single formulation finished form, co-packaged, or as separate products otherwise sold under a single invoiced price. For clarity, a Companion Diagnostic shall not be considered Other Components with respect to any Licensed Compound.

1.24

“Collaboration Program” means the programs described in ARTICLE 3 of this Agreement, conducted by the Parties in accordance with mutually agreed Collaboration Plans and Collaboration Budgets (if applicable). The Collaboration Programs include the (a) POLQ Program, (b) WRN Program, and (c) MAT2A Program.

1.25	“Commercial Manufacturing” means Manufacture of a Licensed Product (including the cost of API) or acquisition of such Licensed Product, in each case, for Commercialization of such Licensed Product in the Profit-Sharing Territory.

1.26

“Commercialization” means any and all activities directed to the preparation for sale of, offering for sale of, or sale of a given Licensed Product, including activities related to marketing, promoting, Commercial Manufacturing, selling, distributing, importing and exporting such Licensed Product, Launch Preparation Activities and interacting with Regulatory Authorities regarding any of the foregoing, but excluding for clarity interactions with Regulatory Authorities regarding clinical trials, obtaining Regulatory Approvals, and other Development activities (including for clarity Manufacturing activities related to Development). “Commercialize” and “Commercializing” shall have their correlative meanings.

1.27	“Commercialization Budget” means the budget for conducting the corresponding Commercialization Plan for a given Licensed Product as presented by GSK to the applicable JCC pursuant to Section 6.2.3, and as updated on a Calendar Year basis by GSK.

1.28	“Commercialization Excess Costs” has the meaning set forth in Schedule 7.4.1.

1.29	“Commercialization Plan” means a plan for the Commercialization of WRN Products or MAT2A Products, as applicable, each in the Field in the Profit-Sharing Territory as presented by GSK to the applicable JCC pursuant to Section 6.2.3, and as updated annually by GSK.

1.30	“Commercialization Permitted Overage” has the meaning set forth in Schedule 7.4.1.

1.31

“Commercially Reasonable Efforts” means such efforts that are consistent with the efforts and resources normally used by GSK (in the case of GSK) or IDEAYA (in the case of IDEAYA) in the exercise of its reasonable business discretion relating to discovery, Development and Commercialization of a compound or product owned by it or to which it has exclusive rights, with similar characteristics as the applicable relevant Licensed Compound and Licensed Product hereunder, which is of similar market potential at a similar stage in its development or product life as such Licensed Compound or Licensed Product, taking into account

issues of patent coverage, safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position, the regulatory structure involved, profitability (including pricing and reimbursement status achieved or projected to be achieved), and other relevant factors, including technical, legal, scientific or medical factors. For purposes of clarity, it is anticipated that the level of effort may be different for different markets and may change over time, reflecting changes in the status of the product and the market(s) involved.

1.32	“Committee” means, individually, the JSC, each JDC, each JCC and the Financial Working Group or any other Subcommittee established as set forth in Section 5.6.

1.33	“Committee Deadlock” has the meaning set forth in Section 5.8.1.

1.34	“Common Stock” has the meaning set forth in Section 7.1.

1.35

“Companion Diagnostic” means a product designed for use in a diagnostic biomarker assay tailored or optimized for use with a Licensed Product, for predicting or monitoring the suitability of such Licensed Product for prophylactic or therapeutic use in human patients or defined subpopulations thereof. A Companion Diagnostic shall be intended for use (a) as a means to select or monitor the patient population for the conduct of clinical studies of such Licensed Product, (b) to predict predisposition to treatment in clinical use with such Licensed Product, or (c) to predict or monitor potential safety considerations in clinical use with such Licensed Product. Use of a Companion Diagnostic to guide use of the Licensed Product will be contingent on appropriate Regulatory Approvals for such uses as deemed necessary by the FDA or other similar Regulatory Authority with appropriate jurisdiction.

1.36	“Competing Product” has the meaning set forth in Section 10.3.1.

1.37

“Confidential Information” means any technical, business, or other information provided by or on behalf of one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) in connection with this Agreement, whether prior to, on, or after the Effective Date, including under the CDA, including information relating to the GSK Technology, where GSK is the Disclosing Party, and information relating to the IDEAYA Technology, where IDEAYA is the Disclosing Party, or the scientific, regulatory or business affairs or other activities of the Disclosing Party.

1.38

“Control” (including variations such as “Controlled,” “Controlling” and the like) means, with respect to any material, information, or intellectual property, the possession (whether by ownership or license, other than the licenses granted hereunder) of the ability to grant a license or sublicense or other right to exploit, without violating the terms of any agreement or other arrangement with any Third Party, or any Applicable Law.

1.39	“Controlling Party” has the meaning set forth in Section 10.2.1.

1.40	“Cost Share End Date” has the meaning set forth in Section 7.5.1.

1.41	“Cost Share Opt Out Compounds and Products” means any Licensed Compounds and Licensed Products for which IDEAYA has exercised the IDEAYA Opt-Out.

1.42	“Cost Share Ratio” has the meaning set forth in Section 6.2.5.

1.43

“Currency Gains and Losses” means the gain or loss resulting from changes in exchange rates between the U.S. dollar and the foreign currency in which the transaction is denominated, to the extent directly attributable or reasonably allocable to a Licensed Compound or Licensed Product, and shall only include the currency gains and losses realized between the end of a Calendar Quarter and the date of invoice payment for that Calendar Quarter.

1.44

“Data” means preclinical data (including computational validation, genetic data (including genotype, phenotype and genetic sequencing data), in vitro and in vivo data), clinical data (including broad data sets, study and investigator reports, both preliminary and final, statistical analyses, expert opinions and reports, safety and other electronic databases), and regulatory, Manufacturing, biological, chemical, pharmacological, toxicological, pharmaceutical, physical, analytical, safety and quality control data, information and documentation, whether in written or electronic form.

1.45	“Data Security Breach” has the meaning set forth in Section 9.4.

1.46	“Data Sharing Initiative” means GSK’s policy initiative (as may be amended from time to time), known at the Execution Date as the “SHARE Initiative”, to provide researchers with access to clinical trial and study information, including anonymized patient level data.

1.47

“Development” means any and all activities conducted that are necessary for seeking, obtaining, or maintaining Regulatory Approvals for the Licensed Compounds and Licensed Products, which include preclinical studies and non-clinical studies, clinical studies, quality of life assessments, Companion Diagnostic development that is required by a Regulatory Authority or are reasonably necessary for Development, pharmacoeconomics, regulatory affairs, manufacturing process development, formulation development and all activities (including Manufacturing activities) performed in support of the CMC (chemistry, manufacturing and controls, or equivalent) section of an IND or NDA and other Regulatory Filings, as are set forth in any Collaboration Plan or Development Plan approved by, as applicable, the relevant JDC and the JSC. For clarity, Development excludes Commercialization activities (including Commercial Manufacture and Launch Preparation Activities). “Develop” and “Developing” shall have their correlative meanings.

1.48	“Development Budget” means the budget for conducting the corresponding portion of the Development Plan for a given Licensed Compound or Licensed Product as presented by GSK to the applicable JDC pursuant to Section 6.2.2, and as updated on an annual basis by GSK.

1.49

“Development Costs” means the reasonable out-of-pocket costs and internal costs incurred by a Party or its Affiliates after the Effective Date that are consistent with the respective Development activities of such Party that are directly attributable or reasonably allocable to the Development of a Licensed Product (including Manufacturing Costs incurred in connection with such pre-clinical or clinical Development activities, but excluding Manufacturing Costs incurred in connection with Commercial Manufacture, even if conducted prior to Regulatory Approval of such Licensed Product), in accordance with, as applicable, (a) the Collaboration Plan and Collaboration Budget applicable to the WRN Program, (b) the Development Plan and Development Budget applicable to the WRN Compound and WRN Product, and (c) solely if the Option Closing Date occurs (i) the Development Plan and Development Budget applicable to the MAT2A Compound and MAT2A Product and (ii) all Interim MAT2A Activities incurred after the Option Closing Date, including in each case of the foregoing all Third Party invoiced costs and expenses incurred for activities specified in the applicable Collaboration Plan (and corresponding Collaboration Budget) or the Development Plan (and corresponding Development Budget). For purposes of this definition (A) out-of-pocket costs means the actual amounts paid by a Party or its Affiliate to a Third Party for specific external Development activities conducted for the relevant Licensed Compound or Licensed Product, including all filing fees required for and other costs associated with, any Regulatory Filings and all applicable Patent Costs pursuant to Section 10.2.3 and (B) internal costs means the applicable FTE Rate multiplied by the number of FTE hours utilized in the relevant period on activities directly relating to Development in accordance with the applicable Collaboration Plan or Development Plan. For clarity Development Costs excludes all costs incurred in connection with Commercialization of Licensed Products.

1.50

“Development Plan” means a plan, as presented by GSK to the applicable JDC pursuant to Section 6.2.2, and as updated on an annual basis by GSK as set forth in this Agreement, governing the Development of each of (a) WRN Compound(s) and WRN Product(s) in the Field in the Territory and (b) solely if the Option Closing Date occurs, the MAT2A Compound(s) and MAT2A Product(s) in the Field in the Territory. For clarity, the Development Plan for the relevant Licensed Compounds and Licensed Products shall not duplicate the Development activities conducted or to be conducted pursuant to the relevant Collaboration Plan for such Licensed Compounds and Licensed Products, unless required by a Regulatory Authority or, are reasonably necessary for the Development of the Licensed Compounds and Licensed Products.

1.51	“Development Reports” has the meaning set forth in Section 6.2.7.

1.52	“Disclosing Party” has the meaning set forth in the definition of “Confidential Information.”

1.53	“Dollars” or “$” means the official currency of the United States of America.

1.54	“DOJ” has the meaning set forth in Section 2.2.

1.55	“Effective Date” has the meaning set forth in Section 2.1.

1.56	“EMA” means the European Medicines Agency, or any successor entity thereto performing similar functions for the European Union or the United Kingdom.

1.57	“Entity” has the meaning set forth in Section 7.14.4.

1.58	“European Union” means the economic, scientific and political organization of member states in Europe, as it may be constituted from time to time, including Switzerland and the United Kingdom.

1.59	“Excess Costs” has the meaning set forth in Section 7.3.2(b).

1.60	“Execution Date” has the meaning set forth in the preamble.

1.61	“Exercise Period” has the meaning set forth in Section 8.1.

1.62	“FDA” means the U.S. Food and Drug Administration, or any successor entity thereto performing similar functions in the United States.

1.63	“Field” means any use or purpose, including the treatment, palliation, diagnosis or prevention of any human or animal disease.

1.64	“Financial Report” has the meaning set forth in Schedule 7.3.1.

1.65	“Financial Working Group” has the meaning set forth in Section 5.5.

1.66

“First Commercial Sale” means, with respect to a given Licensed Product in a country, the first commercial sale in an arms-length transaction of such Licensed Product by or on behalf of GSK, its Affiliate or Sublicensee in such country following receipt of applicable Regulatory Approval of such Licensed Product in such country; provided, however, that First Commercial Sale shall not include any transfer of a product (a) between or among GSK and its Affiliates or its Sublicensees or (b) for purposes of patient assistance programs, treatment IND sales, named patient sales, compassionate use sales or the like, provided, in case of (b), such product is sold at a price no greater than GSK’s fully burdened cost of manufacture, distribution and selling.

1.67

“Force Majeure” means any event beyond the reasonable control of the affected Party, including: embargoes; war or acts of war, including terrorism; insurrections, riots, or civil unrest; strikes, lockouts or other labor disturbances; epidemics (including pandemics), fire, floods, earthquakes or other acts of nature; or acts, omissions or delays in acting by any governmental authority (including the refusal of any Regulatory Authority to issue required Regulatory Approvals due to reasons other than the affected Party’s negligence or willful misconduct or any other cause within the reasonable control of the affected Party), and failure of plant or machinery (provided that such failure could not have been prevented by the exercise of skill, diligence, and prudence that would be reasonably and ordinarily expected from a skilled and experienced person engaged in the same type of undertaking under the same or similar circumstances).

1.68	“FTC” has the meaning set forth in Section 2.2.

1.69

“FTE” means, with respect to employees of a Party or its Affiliates, the equivalent of the work of one (1) full time person for one (1) year (consisting of at least a total of [***] ([***]) hours per year, or such other number as may be agreed to by the Parties). 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. If any person works partially on other work in a given Calendar Year, then the full-time equivalent to be attributed to such person’s work hereunder shall be equal to the percentage of such person’s total work time in such Calendar Year that such person spent working on activities contemplated under this Agreement. FTE efforts shall not include the work of general corporate personnel. Each Party shall track FTEs of its personnel using such Party's standard practices and methodologies.

1.70

“FTE Rate” means, unless otherwise agreed by the unanimous decision of the Financial Working Group or mutually by the Parties in writing, commencing on the Effective Date, $[***] per FTE. The FTE Rate shall be increased or decreased on each anniversary of the Effective Date by a percentage equivalent to the change over the preceding twelve (12)-month period in the Consumer Price Index for All Urban Consumers (All Items), or any successor to such published measure, not seasonally adjusted, as published by the U.S. Department of Labor Bureau of Labor Statistics. For clarity, the FTE Rate is “fully burdened” and covers base salary, target bonus (yearly bonus based on achievement of personal/corporate targets), plus benefits including holiday allowance, pension, medical, risk, share-based payments and other remuneration-based benefits, tax and social security, facilities, travel expenses, and IT allocation.

1.71	“GAAP” means generally acceptable accounting standards, principles, and procedures as issued by the Financial Accounting Standards Board (FASB).

1.72

“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) FDA regulations and guidelines for good clinical practice, as promulgated by the FDA under 21 CFR Parts 50, 54, 56, 312 and 812, (b) as set forth in European Commission Directive 2001/20/EC relating to the implementation of good clinical practice in the conduct of clinical trials on medicinal products for human use, and brought into law by European Commission Directive 2005/28/EC laying down the principles and detailed guidelines for good clinical practice for investigational medicinal products, (c) the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (“ICH”) Harmonised Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for trials on medicinal products in the EU, (d) the Declaration of Helsinki (2008), and (e) any further amendments or clarifications with respect to any of the foregoing and any equivalents thereto in the country in which clinical studies of a product are conducted.

1.73	“Generic Product” means, with respect to a Licensed Product, any pharmaceutical product that has the same active pharmaceutical ingredient as a Licensed Product

and that is distributed by a Third Party under an MAA approved by a Regulatory Authority in reliance, in whole or in part, on the prior approval (or on safety or efficacy data submitted in support of the prior approval) of such Licensed Product.

1.74

“GLP” means all applicable Good Laboratory Practice standards, including, as applicable: (a) FDA regulations and guidelines for good laboratory practice, as promulgated by the FDA under 21 CFR Part 58; (b) European Commission Directive 2004/10/EC relating to the application of the principles of good laboratory practices, as may be amended from time to time as well as any Rules Governing Medicinal Products in the European Community Vol. III, ISBN 92.825 9619-2 (ex - OECD principles of GLP); and (c) any further amendments or clarifications with respect to any of the foregoing and any equivalents thereto in the country in which pre-clinical or clinical studies of a product are conducted.

1.75	“GLP Toxicology Study” means a pre-clinical toxicity safety study conducted under GLP with respect to the applicable Licensed Compound to generate data to support filing of an IND.

1.76

“GMP” means all applicable Good Manufacturing Practices, including: (a) the applicable part of quality assurance to ensure that products are consistently produced and controlled in accordance with the quality standards appropriate for their intended use, as defined in European Commission Directive 2003/94/EC laying down the principles and guidelines of good manufacturing practice; (b) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Sections 210, 211, 601, 610 and 820; (c) the Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products; (d) the principles detailed in the ICH Q7A guidelines; and (e) the equivalent Laws in any relevant country, each as may be amended and Applicable from time to time.

1.77

“Government Official” (where “government” means all levels and subdivisions of governments, i.e. local, regional, national, administrative, legislative, executive, or judicial, and royal or ruling families) means (a) any officer or employee of a government or any department, agency or instrumentality of a government (which includes public enterprises, and entities owned or controlled by the state); (b) any officer or employee of a public international organization such as the World Bank or United Nations; (c) any officer or employee of a political party, or any candidate for public office; (d) any individual defined as a government or public official under Applicable Laws (including anti-bribery and corruption laws) and not already covered by any of the above; or (e) any individual acting in an official capacity for or on behalf of any of the above. “Government Official” includes any individual with close family members who are Government Officials (as defined above) with the capacity, actual or perceived, to influence or take official decisions affecting the business of a Party.

1.78	“GSK” has the meaning set forth in the preamble.

1.79	“GSK Arising Know-How” has the meaning set forth in Section 10.1.3.

1.80	“GSK Arising Patents” has the meaning set forth in Section 10.1.3.

1.81	“GSK Arising Technology” means GSK Arising Know-How and GSK Arising Patents.

1.82	“GSK Existing Patents” has the meaning set forth in Section 10.1.1.

1.83	“GSK Existing Know-How” has the meaning set forth in Section 10.1.1.

1.84	“GSK Existing Technology” has the meaning set forth in Section 10.1.1.

1.85	“GSK Indemnitees” has the meaning set forth in Section 14.1.1.

1.86	“GSK MAT2A Preclinical Activities” has the meaning set forth in Section 3.2.1(b).

1.87	“GSK Patents” has the meaning set forth in Section 10.2.3.

1.88	“GSK PRMT Product” means a compound that is a Type 1 protein arginine methyl transferase inhibitor that is Controlled by GSK.

1.89

“GSK Technology” means (a) all GSK Existing Technology, (b) all GSK Arising Technology Controlled by GSK during the Term, and (c) GSK’s joint ownership interest in Joint Arising Technology Controlled by GSK during the Term, in each case that are necessary or reasonably useful for IDEAYA’s conduct of activities under a Collaboration Plan or that are disclosed to IDEAYA for purposes of the foregoing.

1.90	“GSK Termination Technology” means (a) all GSK Existing Technology, (b) all GSK Arising Technology Controlled by GSK, (c) GSK’s joint ownership interest in Joint Arising Technology Controlled by GSK and (d) subject to [*], in each case that are (i) [] or (ii) otherwise [**].

1.91	“Hatch-Waxman Act” has the meaning set forth in Section 10.3.1.

1.92	“HSR Act” has the meaning set forth in Section 2.2.

1.93	“HSR Clearance Date” has the meaning set forth in Section 2.2.

1.94	“HSR Filing” has the meaning set forth in Section 2.2.

1.95	“ICC Rules” has the meaning set forth in Section 15.2.

1.96	“IDEAYA” has the meaning set forth in the preamble.

1.97	“IDEAYA Arising Know-How” has the meaning set forth in Section 10.1.4.

1.98	“IDEAYA Arising Patents” has the meaning set forth in Section 10.1.4.

1.99	“IDEAYA Arising Technology” means IDEAYA Arising Know-How and IDEAYA Arising Patents.

1.100

“IDEAYA Existing Patents” has the meaning set forth in Section 10.1.1.

1.101

“IDEAYA Existing Know-How” has the meaning set forth in Section 10.1.1.

1.102

“IDEAYA Existing Technology” has the meaning set forth in Section 10.1.1.

1.103

“IDEAYA Indemnitees” has the meaning set forth in Section 14.1.2.

1.104

“IDEAYA Opt-Out” has the meaning set forth in Section 7.5.1.

1.105

“IDEAYA Technology” means (a) all IDEAYA Existing Technology, (b) all IDEAYA Arising Technology Controlled by IDEAYA during the Term, and (c) IDEAYA’s joint ownership interest in Joint Arising Technology Controlled by IDEAYA during the Term, in each case, that are necessary or reasonably useful for the making, having made, using, selling, offering for sale and importing Licensed Compounds and Licensed Products in the Field in the Territory.

1.106

“IFRS” means the International Financial Reporting Standards as adopted by the European Union, applied on a consistent basis.

1.107

“Increased Withholding Taxes” has the meaning set forth in Section 7.14.2.

1.108

“IND” means an Investigational New Drug Application (including any amendments thereto) filed with the FDA pursuant to 21 CFR Part 312, or any equivalent filing with any relevant Regulatory Authority in any jurisdiction.

1.109

“Indemnifying Party” has the meaning set forth in Section 14.1.3.

1.110

“Indemnitee” has the meaning set forth in Section 14.1.3.

1.111

“Infringement” has the meaning set forth in Section 10.3.1.

1.112

“Infringement Notice” has the meaning set forth in Section 10.3.1.

1.113

“Initiation” means, with respect to any (a) clinical study, including a [***], the first patient dosed in such clinical trial, and (b) GLP Toxicology Study, first dosing in an animal species in such GLP Toxicology Study.

1.114

“Institutional Review Board” means an institutional review board (“IRB”) or independent ethics committee (“IEC”) that reviews the methods proposed for research and development activities to ensure such methods satisfy ethical requirements.

1.115

“Interim MAT2A Activities” has the meaning set forth in Section 3.2.1(c).

1.116

“Interim MAT2A Operating Period” has the meaning set forth in Section 3.2.1(c).

1.117

“Internal Policies” means, with respect to a Party, such Party’s health care compliance, ethical, reputational, anti-bribery and corruption and other policies applicable to such Party’s activities under this Agreement, and any standard operating procedures implementing such policies, including the codes of conduct of any self-regulatory body of which that Party is a member.

1.118

“Joint Arising Technology” has the meaning set forth in Section 10.1.5.

1.119

“Joint Commercialization Committee” or “JCC” has the meaning set forth in Section 5.4.1.

1.120

“Joint Development Committee” or “JDC” has the meaning set forth in Section 5.2.1.

1.121

“Joint Steering Committee” or “JSC” has the meaning set forth in Section 5.1.1.

1.122

“Know-How” means proprietary and confidential trade secrets, models, discoveries, ideas, Data and other types of data, databases, results, assays, instructions, processes, techniques, formulas, algorithms, Materials, inventions, computational models, human-relevant disease models, computer software (including source code), predictive model implementations, data analytic tools, biotechnology hardware and associated algorithms and methodologies, methods of use, expert knowledge and information.

1.123“Launch Preparation Activities” means all Commercialization activities undertaken with respect to a relevant Licensed Product in the Territory prior to First Commercial Sale and in preparation for First Commercial Sale of such Licensed Product in the Territory. Launch Preparation Activities shall exclude all Development activities.

1.124

“Licensed Compound” means (a) solely if the Option Closing Date occurs, a MAT2A Compound, (b) a WRN Compound, or (c) a POLQ Compound.

1.125

“Licensed Product” means (a) solely if the Option Closing Date occurs, a MAT2A Product, (b) a WRN Product, or (c) a POLQ Product. For clarity, if a given Licensed Product contains (i) [***] or (ii) [***], such Licensed Product shall be considered to be multiple Licensed Products for the purposes of this Agreement, [***].

1.126

“Losses” has the meaning set forth in Section 14.1.1.

1.127

“Major Indication” means (a) each type of cancer for which Regulatory Approval for a Licensed Product is being sought or has been obtained by GSK, its Affiliates, or their Sublicensees that is [***] or (b) a [***]. For clarity, [***] shall count as [***]; provided, however, that, for clarifying purposes:

(i)the [***], or the [***], shall [***]; and

(ii)the determination whether a [***] is a separate Major Indication shall be guided by generally accepted medical treatment and standards in the field of oncology, as such may develop during the Term.

1.128

“Manufacture” means all activities related to the synthesis, making, production, processing, purifying, formulating, filling, finishing, packaging, serialization, labeling, shipping, and holding of any product, or any component or intermediate thereof, including process development, process qualification and validation, scale-up, qualification, validation, pre-clinical, clinical and commercial production and analytic development, product characterization, stability testing, quality assurance, and quality control. “Manufacturing” shall have a correlative meaning.

1.129“Manufacturing Cost” means, with respect to a Licensed Product, GSK’s reasonable and necessary FTE Costs and Third Party invoiced cost, determined in accordance with IFRS, and the terms and conditions of this Agreement, incurred in Manufacturing or acquisition of such Licensed Product, in each case to the extent [***], which shall be:

1.129.1for such Licensed Product (or components thereof) Manufactured [***]; and

1.129.2for such Licensed Product (or components thereof) Manufactured [***]. Such costs include the following costs incurred by GSK or its Affiliates:

(a)“[***]” are, for purposes of ongoing cost accounting purposes, budgeted unit costs of [***], and consistent with customary practice; and

(b)“Cost Variances” are actual costs of Manufacturing [***], and consistent with customary practice (including volume variances, variable overhead spending variances and fixed overhead spending variances).

“Manufacturing FTE Costs” means, as applicable with respect to any period, the FTE Rate(s) for Manufacturing activities, multiplied by the number of FTEs performing such Manufacturing activities under this Agreement, respectively, during such period.

Manufacturing Cost shall not include [***]. Subject to the foregoing, all Manufacturing Costs shall be calculated [***]. In addition, Manufacturing Costs shall exclude costs that result from the [***]. Only the portion of Manufacturing Cost of each Licensed Product that is associated with

such Licensed Product for use in Commercialization in the Profit-Sharing Territory shall be included in the definition of Pre-Tax Profit or Loss.

1.130

“Marketing Approval Application” or “MAA” means an NDA or any corresponding application in the applicable country or jurisdiction outside of the United States, including, with respect to the European Union, an application for Regulatory Approval filed with the EMA pursuant to the centralized approval procedure, or with the applicable national Regulatory Authority of a country in the European Union with respect to the mutual recognition procedure, decentralized procedure or any other national approval and with respect to Japan, an application for Regulatory Approval filed with the MHLW.

1.131

“MAT2A Combination Study” means a Phase 1 Clinical Study combining a MAT2A Product with any pharmaceutical preparation, substance, formulation or dosage which is comprised of or contains a GSK PRMT Product.

1.132

“MAT2A Compound” means any compound that modulates the MAT2A Target [***] that is Controlled by IDEAYA as of the Execution Date or otherwise discovered by either Party in the course of performing its activities under this Agreement, including any [***], metabolites, prodrugs, isomers, enantiomers, esters, salts, hydrates, solvates, or polymorphs thereof.

1.133

“MAT2A CTCSA” has the meaning set forth in Section 3.2.1(b).

1.134

“MAT2A Development Costs” has the meaning set forth in Section 6.2.4.

1.135

“MAT2A Development Program” has the meaning set forth in Section 5.2.1.

1.136

“MAT2A Patents” has the meaning set forth in Section 10.2.1.

1.137

“MAT2A Product” means any pharmaceutical preparation, substance, formulation or dosage which is comprised of or contains a MAT2A Compound (whether or not such MAT2A Compound is the sole active ingredient).

1.138

“MAT2A Program” has the meaning set forth in Section 3.1.

1.139

“MAT2A Program Costs” means all Development Costs incurred by IDEAYA or its Affiliates in the performance of the MAT2A Program in accordance with the applicable Collaboration Plan up to and until the Option Package Delivery Date. For the avoidance of doubt, the costs of conducting the MAT2A Combination Study shall be borne by GSK as set out in this Agreement and the MAT2A CTCSA and are not included in the MAT2A Program Costs; provided that, if the MAT2A Combination Study is conducted by IDEAYA as a combination arm of its Phase 1 Clinical Study of the MAT2A Product that also includes a Phase 1 MAT2A Monotherapy Study arm, then GSK will only pay for such combination arm and control arm, and not the Phase 1 MAT2A Monotherapy Study arm of such Phase 1 Clinical Study.

1.140

“MAT2A Program Diligence Data” has the meaning set forth in Section 8.1.

1.141

“MAT2A Target” means methionine adenosyltransferase II alpha.

1.142

“Material Receiving Party” means the Party receiving Materials from the other Party as contemplated in Section 3.2.5(a).

1.143

“Materials” means any chemical or biological substances, including any biological or chemical compounds, drug products, human samples, or other materials, regardless of the route of transfer, which are supplied by a Party or its nominee to the other Party or its nominee for use in the conduct of activities under this Agreement, including any applicable Collaboration Plan or Development Plan.

1.144

“Materials Transferring Party” means the Party providing Materials to the other Party as contemplated in Section 3.2.5(a).

1.145

“MTR” has the meaning set forth in Section 3.2.5(a).

1.146

“MHLW” means the Ministry for Health, Labor and Welfare of Japan, or the Pharmaceutical and Medical Devices Agency (the “PMDA”), or any successor to either of them, as the case may be.

1.147

“NDA” means a New Drug Application (as more fully defined in 21 C.F.R. 314.5 et seq. or its successor regulation) and all amendments and supplements thereto filed with the FDA.

1.148

“Net Sales” means, with respect to a Licensed Product during a stated time period, the gross invoiced sales amounts for such Licensed Product sold by or on behalf of GSK, its Affiliates or Sublicensees in arm’s length transactions to Third Parties (but not including sales relating to transactions by and between GSK, its Affiliates or Sublicensees) less the following deductions from such gross amounts which are actually incurred, allowed, paid, accrued or specifically allocated to the extent that such amounts are deducted from gross invoiced sales amounts as reported by GSK in its financial statements in accordance with IFRS, applied on a consistent basis:

(a)credits or allowances actually granted for a damaged Licensed Product, returns or rejections of the Licensed Product, price adjustments, and billing errors;

(b)governmental and other rebates (or equivalents thereof) to national, state/provincial, local and other governments, their agencies and purchasers, and reimbursers, or to trade customers;

(c)normal and customary trade, cash and quantity discounts, allowances, and credits actually allowed or paid;

(d)commissions allowed or paid to Third Party distributors, brokers or agents other than sales personnel, sales representatives and sales agents employed or engaged by GSK;

(e)transportation costs, including insurance, for outbound freight related to delivery of the Licensed Product to the extent included in the gross amount invoiced; and

(f)non-recoverable sales taxes, value added taxes, and other taxes directly linked to the sales of the Product to the extent included in the gross amount invoiced; and

(g)any other items actually deducted from gross invoiced sales amounts as reported by GSK in its financial statements in accordance with IFRS, applied on a consistent basis.

Upon any sale or other disposal of the Licensed Product that should be included within Net Sales for any consideration other than an exclusively monetary consideration on bona fide arm’s length terms, then for purposes of calculating the Net Sales under this Agreement, the Licensed Product shall be deemed to be sold exclusively for money at the average sales price during the applicable reporting period generally achieved for the Licensed Product in the country in which such sale or other disposal occurred.

Notwithstanding the foregoing, (i) Net Sales shall not include disposals of the Licensed Product for, or use of the Licensed Product in, clinical or pre-clinical trials, given as free samples, or distributed at no charge to patients unable to purchase the Licensed Product and (ii) Net Sales shall not include amounts for any Licensed Product distributed for compassionate, named patient or similar use provided at no charge.

In the event a Licensed Product containing specific Licensed Compound(s) is sold as a Combination Product in a given country, the Net Sales of such Licensed Product, solely for the purposes of determining royalty payments (and for clarity not with respect to the calculation of Net Sales of Combination Products for the purpose of determining Pre-Tax Profit or Loss for the Profit-Sharing Territory), shall be determined by multiplying the Net Sales of such Combination Product by the fraction, A/(A+B) where A is the weighted (by sales volume) average sale price in a particular country of the Licensed Product containing the relevant Licensed Compound(s) as the sole active ingredient(s) when sold separately in finished form in such country and B is the weighted average sale price in that country of the product containing Other Components as the sole active ingredient when sold separately in finished form. In the event that such weighted average sale price cannot be determined for either the Licensed Product containing the relevant Licensed Compound(s) as sole active ingredients or product containing the Other Components, each as sold separately in such country, comprising such Combination Product, the Parties shall negotiate in good faith a reasonable adjustment to Net Sales of such Combination Product solely for purposes of determining royalty payments (and for clarity not with respect to the calculation of Net Sales of Combination Products for the purpose of determining Pre-Tax Profit or Loss for the Profit-Sharing Territory), based on the following methodology: the Net Sales of the

Combination Product will be multiplied by the fraction C/D where C equals [***] and D equals [***].

1.149

“Net Sales Territory” means (a) for POLQ Products, the Territory, and (b) for MAT2A Products and WRN Products, the Territory excluding the Profit-Sharing Territory. For clarity, effective as of the effective date of an IDEAYA Opt-Out, “Net Sales Territory” means the Territory with respect to Cost Share Opt Out Compounds and Products.

1.150

“Option” has the meaning set forth in Section 8.1.

1.151

“Option Closing Date” has the meaning set forth in Section 8.1.

1.152

“Option Data Package” means that certain Data generated from and to support the conduct of the Phase 1 MAT2A Monotherapy Study by IDEAYA pursuant to the MAT2A Program and as specifically set forth on Schedule 1.152.

1.153

“Option Exercise” has the meaning set forth in Section 8.1.

1.154

“Option Fee” has the meaning set forth in Section 7.6.

1.155

“Option Package Delivery Date” means the date on which the Option Data Package is provided by IDEAYA to GSK in accordance with this Agreement.

1.156

“Orange Book” means the FDA publication titled “Approved Drug Products with Therapeutic Equivalence Evaluations.”

1.157

“Other Component(s)” has the meaning set forth in Section 1.23.

1.158

“Other Product” has the meaning set forth in Section 2.3.2.

1.159

“Party” or “Parties” has the meaning set forth in the preamble.

1.160

“Patent Costs” means all out-of-pocket expenses (including reasonable attorneys’ fees) incurred in the preparation, prosecution, filing and maintenance of the Subject Patents.

1.161

“Patent Liaisons” has the meaning set forth in Section 5.10.

1.162

“Patents” means all patents and pending patent applications (including inventor’s certificates and utility models) and any patents issuing therefrom, in any country in the Territory, including any and all provisionals, non-provisionals, substitutions, continuations, continuations-in-part, divisional and other continuing applications, supplementary protection certificates, renewals, and any and all reissues, extensions, registrations, reexaminations, extensions, confirmations, registrations and patents of addition on any of the foregoing.

1.163

“Payee” has the meaning set forth in Section 7.14.2.

1.164

“Payor” has the meaning set forth in Section 7.14.2.

1.165

“Permitted Overage” has the meaning set forth in Section 7.3.2(a).

1.166

“Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government, or any agency or political subdivisions thereof.

1.167

“Personally Identifiable Information (PII)” means information that can be used to distinguish or trace an individual’s identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual, including: (a) a first and last name; (b) a home or other physical address, including street name and name of city or town; (c) an email address or other online contact information, such as an instant messaging user identifier or a screen name that reveals an individual’s email address; (d) a telephone number; (e) a social security number; (f) a bank, loan, or credit card account number; (g) a persistent identifier, such as a customer number held in a “cookie” or processor serial number, that is combined with other available data that identifies an individual consumer; or (h) any information that is combined with any of (a) through (g) above.

1.168

“Phase 1 Clinical Study” means a human clinical trial of a product in any country, the principal purpose of which is a preliminary determination of safety in patients, that would satisfy the requirements of 21 C.F.R. 312.21(a), or a similar clinical study prescribed by the relevant Regulatory Authorities in a country other than the United States.

1.169

“Phase 1 MAT2A Monotherapy Study” has the meaning set forth in Section 3.2.1(b).

1.170

“POLQ Compound” means any compound that modulates the POLQ Target [***] that is Controlled by IDEAYA as of the Execution Date or otherwise [***] and any [***], metabolites, prodrugs, isomers, enantiomers, esters, salts, hydrates, solvates, or polymorphs thereof. For clarity and without limitation, the Parties acknowledge and agree (a) that there are at least [***] ([***]) [***]: [***], and (b) [***].

1.171

“POLQ Product” means any pharmaceutical preparation, substance, formulation or dosage which is comprised of or contains a POLQ Compound (whether or not such POLQ Compound is the sole active ingredient). For clarity and without limitation, [***].

1.172

“POLQ Program” has the meaning set forth in Section 3.1.

1.173

“POLQ Program Costs” has the meaning set forth in Section 7.2.

1.174

“POLQ Report” has the meaning set forth in Section 6.1.3.

1.175

“POLQ Target” means DNA polymerase theta.

1.176

“Pre-Tax Profit or Loss” has the meaning set forth in the Pre-Tax Profit or Loss Schedule.

1.177

“Pre-Tax Profit or Loss Schedule” means the schedule set forth in Schedule 7.4.1 attached hereto.

1.178

“Private Placement” has the meaning set forth in Section 7.1.2.

1.179

“Product Claims” has the meaning set forth in Schedule 7.4.1.

1.180

“Profit-Sharing Term” has the meaning set forth in Section 7.4.1.

1.181

“Profit-Sharing Territory” means the United States only with respect to any WRN Product or MAT2A Product for which the Parties are then sharing Pre-Tax Profit or Loss.

1.182

“Public Offering” has the meaning set forth in the Purchase Agreement.

1.183

“Purchase Agreement” has the meaning set forth in Section 7.1.2.

1.184

“Purchase Price” has the meaning set forth in the Purchase Agreement.

1.185

“Receiving Party” has the meaning set forth in the definition of “Confidential Information.”

1.186

“Reconciliation Procedures” has the meaning set forth in the Pre-Tax Profit and Loss Schedule.

1.187

“Registration Study” means, with respect to a given Licensed Product, any pivotal clinical study of such Licensed Product for the purpose of establishing safety and efficacy of such Licensed Product in patients with the disease or condition being studied for purposes of filing an NDA with the FDA, as described under 21 C.F.R. §312.21(c) with respect to the United States, or, with respect to a jurisdiction other than the United States, a similar clinical study for the purpose of enabling the filing of a Marketing Approval Application equivalent to an NDA with the applicable Regulatory Authority(ies) in such jurisdiction. For the avoidance of doubt, Registration Study includes an adaptive study only at such time and to the extent such adaptive study meets the criteria of a pivotal study sufficient for registration.

1.188

“Regulatory Approval” means all approvals, licenses, registrations or authorizations of any Regulatory Authority, necessary for the Manufacturing, use, storage, import, export, transport, or Commercialization of a Licensed Product, as applicable, in a regulatory jurisdiction in the Territory, including approval of any Marketing Approval Application.

1.189

“Regulatory Authority” means the FDA, the EMA, the MHLW or any regulatory body with similar regulatory authority in any other jurisdiction anywhere in the world.

1.190

“Regulatory Filing” means any filing or regulatory application or submission specifically related to a Licensed Product filed with a Regulatory Authority, including authorizations, approvals or clearances arising from the foregoing, and all correspondence with a Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with such Regulatory Authority in each case with respect to a Licensed Product in the Territory.

1.191

“Relative U.S. Market Share” has the meaning set forth in Section 6.2.5.

1.192

“Royalty Term” has the meaning set forth in Section 7.12.1.

1.193

“Senior Manager” has the meaning set forth on Section 15.1.1.

1.194

“Shared Development Costs” has the meaning set forth in Section 7.3.1.

1.195

“Subcommittee” has the meaning set forth in Section 5.6.

1.196

“Subcommittee Deadlock” has the meaning set forth in Section 5.8.1.

1.197

“Subject Patents” has the meaning set forth in Section 10.2.1.

1.198

“Sublicensee” has the meaning set forth in Section 8.4.

1.199

“Target” means each of the MAT2A Target, POLQ Target and WRN Target; provided that, if applicable, as of the expiration of the Exercise Period without GSK’s exercise of the Option hereunder, the MAT2A Target shall immediately cease to be considered a “Target”.

1.200

“Tax” or “Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including interest, penalties and additions thereto).

1.201

“Term” has the meaning set forth in Section 11.1.

1.202

“Terminated Compounds” and “Terminated Products” has the meaning set forth in Section 12.2.

1.203

“Termination Date” means the earliest to occur of (a) [***], (b) the Closing Date, (c) the valid termination of the Purchase Agreement pursuant to the termination provisions contained therein, (d) the valid termination, prior to the Closing Date, of the obligations set forth in Section 7.1.2 of this Agreement pursuant to a written instrument signed by IDEAYA and GSK, (e) the valid termination, prior to the Closing Date, of this Agreement, pursuant to Section 2.2 hereof, or (f) a Change of Control of IDEAYA prior to the Closing Date.

1.204

“Territory” means all countries and territories in the world.

1.205

“Third Party” means a person or entity other than (a) IDEAYA and its Affiliates, and (b) GSK and its Affiliates.

1.206

“Third Party Infringement Claim” has the meaning set forth in Section 10.4.1.

1.207

“[***]” means [***].

1.208

“Total Equity Commitment” has the meaning set forth in Section 7.1.2.

1.209

“True Up Costs” has the meaning set forth in Section 6.2.5.

1.210

“[***]” means a [***].

1.211

“United States” or “U.S.” means the United States and its territories and possessions.

1.212

“Valid Patent Claim” means a claim of any issued, unexpired Patent within the Joint Arising Technology, IDEAYA Existing Patents, IDEAYA Arising Patents or GSK Arising Patents that shall not have lapsed, been revoked, cancelled or abandoned, been donated to the public, finally disclaimed, nor held finally invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision and which has not been held unenforceable through disclaimer or otherwise.

1.213

“VAT” means any value added, sales, use, purchase, turnover or consumption tax as may be applicable in any relevant jurisdiction, including but not limited to value added tax chargeable under legislation implementing EU Council Directive 2006/112/EC.

1.214

“WRN Development Costs” has the meaning set forth in Section 6.2.4.

1.215

“WRN Development Program” has the meaning set forth in Section 5.2.1.

1.216

“WRN Compound” means any compound that modulates the WRN Target [***] that is Controlled by IDEAYA as of the Execution Date or otherwise [***], and any [***], metabolites, prodrugs, isomers, enantiomers, esters, salts, hydrates, solvates, or polymorphs thereof. For clarity and without limitation, the Parties acknowledge and agree (a) that there are at least [***]: [***], and (b) [***].

1.217

“WRN Product” means any pharmaceutical preparation, substance, formulation or dosage which is comprised of or contains a WRN Compound (whether or not such WRN Compound is the sole active ingredient). For clarity and without limitation, [***].

1.218

“WRN Program” has the meaning set forth in Section 3.1.

1.219

“WRN Program Costs” means all Development Costs incurred for activities conducted in accordance with the applicable Collaboration Plan and Collaboration Budget for the WRN Program.

1.220

“WRN Target” means Werner Syndrome Helicase-Nuclease protein.

ARTICLE 2
EffectiveNess; Exclusivity

2.1	Effectiveness of the Agreement. This Agreement shall become effective as of the HSR Clearance Date (the “Effective Date”); provided that Section 7.1.2 shall be effective and binding as of the Execution Date.

2.2

HSR Filing. Both Parties (or their Affiliates) shall use reasonable efforts to file the appropriate notices (the “HSR Filings”) under the Hart Scott Rodino Antitrust Improvements Act (“HSR Act”) within ten (10) Business Days after the Execution Date. The Parties shall promptly make required filings to obtain clearance under the HSR Act for the consummation of this Agreement and the transactions contemplated hereby and shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the United States’ Federal Trade Commission (“FTC”) or the Antitrust Division of the United States Department of Justice (“DOJ”) and shall comply promptly with any reasonable FTC or DOJ inquiry or request of this nature; provided that neither Party shall be required to consent to the divestiture or other disposition of any of its assets or the assets of its Affiliates or to consent to any other structural or conduct remedy, and each Party and its Affiliates shall have no obligation to contest, administratively or in court, any ruling, order or other action of the FTC or DOJ or any Third Party with respect to the transactions contemplated by this Agreement. Each Party shall be responsible for paying the filing fees it incurs in connection with the HSR Filings. As used herein, the “HSR Clearance Date” means the earlier of (i) the date on which the FTC or DOJ shall notify the Parties of early termination of the waiting period under the HSR Act or (ii) the date on which the applicable waiting period under the HSR Act expires; provided that, if the FTC or DOJ commences any investigation by means of a second request or otherwise, HSR Clearance Date means the date on which any investigation opened by the FTC or DOJ has been terminated, without action to prevent the Parties from implementing the transactions contemplated by this Agreement with respect to the United States. Notwithstanding any other provisions of this Agreement to the contrary, either Party may terminate its obligation under this Section 2.2, and this Agreement shall be void and of no further effect upon notice to the other Party, if the HSR Clearance Date has not occurred on or before the date that is one hundred twenty (120) days after the date on which both Parties have made their respective HSR Filings and the initial waiting period under the HSR Act has commenced.

2.3	Exclusivity.

2.3.1

Commencing on the Effective Date, except with respect to the Licensed Compounds and Licensed Products in accordance with and pursuant to this Agreement, on a Target-by-Target basis, and lasting solely during the Term until the earlier of (i) [***] after

the Effective Date or (ii) [***] a Licensed Product on a per Target basis, neither Party nor any of its Affiliates shall, alone or with or for any Third Party, engage in development ([***]) or commercialize (or manufacture for such purposes) any compound whose [***] mechanism of action is modulation [***] of any Target in the Field in the Territory, subject to Section 16.3.

2.3.2

Potential Pharmaceutical Candidate. After the first Clinical Dose Expansion for a Licensed Product, if a Party believes that a potential pharmaceutical product candidate of interest to it, if commercialized, would not be reasonably expected to diminish the sales or sales potential of such Licensed Product being Developed or Commercialized under this Agreement, (each such product candidate, an “Other Product”), and yet the development or commercialization of such Other Product may or would be prohibited by Section 2.3.1, if such Party wishes to proceed with such development or commercialization it will discuss this matter with the other Party to obtain their consent to do so. If such Party seeks the consent of the other Party for it to proceed with the development and commercialization of the Other Product, notwithstanding the prohibition of Section 2.3.1, the other Party may not financially condition its consent if its intellectual property would not be infringed by such activities, and in any event the other Party may not unreasonably object. Reasonable grounds for objecting to such a request are limited to that the Other Product is reasonably expected to diminish the sales or sales potential of any Licensed Product being Developed or Commercialized under this Agreement or infringement of the other Party’s intellectual property in connection therewith.

ARTICLE 3
Collaboration Programs

3.1

General. Commencing on the Effective Date, the Parties will collaborate on three (3) separate Collaboration Programs as more fully described in this ARTICLE 3. Specifically, the Parties shall conduct a Collaboration Program with respect to POLQ (the “POLQ Program”), a Collaboration Program with respect to WRN (the “WRN Program”) and a Collaboration Program with respect to MAT2A (the “MAT2A Program”). The POLQ Program and WRN Program shall include only preclinical Development activities and only to the extent necessary to support the filing of an IND. The MAT2A Program shall include preclinical activities and the Phase 1 MAT2A Monotherapy Study to generate the Option Data Package designed to allow GSK to determine whether it will exercise the Option. For clarity, any reference in this Agreement to GSK’s rights and obligations with regard to the MAT2A Compounds and MAT2A Products (other than those set forth in Section 3.2.1(b)(1) or the MAT2A Combination Study), shall only apply if GSK has exercised the Option, and the Option Closing Date has occurred. If GSK does not exercise the Option, this Agreement with respect to the MAT2A Target shall be deemed to be terminated pursuant to Section 6.2.8. Each Collaboration Program will be conducted in accordance with the applicable Collaboration Plan for such Collaboration Program, including a Collaboration Budget for each of the POLQ Program and WRN Program. A Collaboration Plan for each Collaboration Program is attached to this Agreement as Schedule 3.1. Within [***] ([***]) days of the Effective Date, the applicable JDCs shall establish a corresponding Collaboration Budget (with respect to the POLQ Program and WRN Program) for each Collaboration Program. Each Collaboration Plan and corresponding Collaboration Budget (with

respect to the POLQ Program and WRN Program) may be amended from time to time as set forth in this Agreement.

3.2	Conduct and Diligence of the Collaboration Programs

3.2.1

Activities. Each Party shall use its Commercially Reasonable Efforts to perform all the obligations assigned to it under each Collaboration Plan in accordance with the corresponding timelines and Collaboration Budgets (with respect to the POLQ Program and WRN Program). Each Party shall perform (or ensure that its subcontractors and collaborators perform) each Collaboration Plan using personnel which are suitably qualified and experienced to perform the activities set out in the applicable Collaboration Plan. Each Party shall conduct its activities in good scientific manner and in compliance with its Internal Policies, Applicable Law, including (if applicable) laws regarding the environment, safety and industrial hygiene, and GMP, GLP, GCP, informed consent and Institutional Review Board regulations, current standards for pharmacovigilance practice, and all applicable requirements relating to the protection of human subjects. Without limiting the generality of the foregoing:

(a)	it is anticipated that the Parties will generally share equal responsibility for activities to be conducted under the POLQ Program and WRN Program though such sharing may not be equal where a Party’s unique capabilities are leveraged for the benefit of the applicable Collaboration Program; and

(b)

subject to the terms of this Agreement, all Development activities set forth in the Collaboration Plan for the MAT2A Program shall be performed by IDEAYA, and for clarity IDEAYA shall have the sole right to conduct the Phase 1 Clinical Study for the MAT2A Product as a monotherapy, as set forth in the Collaboration Plan for the MAT2A Program (the “Phase 1 MAT2A Monotherapy Study”); provided that GSK may conduct certain preclinical activities as agreed by the JDC (the “GSK MAT2A Preclinical Activities”). IDEAYA shall ensure that patient informed consents are sufficient to convey adequate rights in the MAT2A Compounds and MAT2A Products to GSK upon Option Exercise.

(1)Notwithstanding the foregoing, GSK shall have the right to conduct, or may request IDEAYA to conduct, the MAT2A Combination Study pursuant to a separate clinical trial collaboration and supply agreement to be entered into by the Parties within [***] days after GSK provides written notification to IDEAYA of its decision to proceed with the MAT2A Combination Study regardless of which Party will conduct it (the “MAT2A CTCSA”); provided that the MAT2A CTCSA shall contain at least the terms set forth on Schedule 3.2.1(b). Except as specifically set forth in this Agreement, the MAT2A CTCSA shall contain the terms and conditions governing the conduct of the MAT2A Combination Study.

(c)

starting on the Option Package Delivery Date and continuing until the earlier of (i) the Option Closing Date or (ii) expiration of the Exercise Period without GSK exercising the Option (the “Interim MAT2A Operating Period”), notwithstanding any other provision to the contrary in this Agreement, IDEAYA may, in accordance with the principles and

parameters outlined by the JDC, continue the Development of the MAT2A Compounds and MAT2A Products (the “Interim MAT2A Activities”).

3.2.2

Data Integrity Practices. All activities conducted under the Collaboration Plans, including the conduct of any clinical studies, will be conducted in accordance with the following practices:

(a)	Data will be generated using sound scientific techniques and processes;

(b)	Data will be accurately recorded by the persons performing the applicable development activities in accordance with data integrity practices;

(c)	Data will be analyzed appropriately without bias in accordance with data integrity practices;

(d)	Data and results from experiments and clinical studies will be stored securely such that it can be retrieved without undue burden; and

(e)	Data trails will exist to demonstrate or reconstruct without undue burden key decisions made during the performance of, presentations made about, and conclusions reached with respect to the activities undertaken in the performance of the Collaboration Plans.

(f)

At any time after the Effective Date and for so long as IDEAYA is conducting activities under any Collaboration Plan, GSK may request changes to the requirements set forth above in this Section 3.2.2 where GSK reasonably believes such changes are required to ensure that such activities are undertaken in compliance with data integrity practices, and IDEAYA shall use reasonable efforts to accommodate such changes. GSK shall be permitted, in its sole discretion and sole cost and expense, no more than once per Calendar Year, to undertake on-site compliance audits of IDEAYA’s data integrity practices in respect of the activities performed by IDEAYA under each Collaboration Plan by providing IDEAYA with [***] days’ written notice of GSK’s intent to do so, such audits to be conducted at a time mutually convenient to both Parties. All information revealed to GSK in such audit shall be considered Confidential Information of IDEAYA.

3.2.3

Animal Welfare.

(a)

With respect to any activities conducted by or on behalf of either Party under a Collaboration Plan that involve the use of animals, including any animal studies, such Party agrees to comply with this Section 3.2.3. The Parties shall comply with all Applicable Laws related to the care, welfare and ethical treatment of animals in the country where it is performing activities under the relevant Collaboration Plan. The Parties further agree to comply with the “3Rs” principles – reducing the number of animals used, replacing animals with non-animal methods whenever possible and refining the research techniques used. All work must be conducted in adherence to the core principles for animals set forth below. Local customs, norms,

practices or Applicable Laws may be additive to the core principles, but the Parties agree to comply and shall procure and ensure that those acting for or on behalf of each Party (including each Party’s subcontractors or collaborators) comply, at a minimum, with these core principles: [***].

(b)	If a Party is currently accredited by AAALACi, then such Party agrees to use Commercially Reasonable Efforts to maintain its AAALACi accreditation during the Term.

(c)	Each Party shall conduct its animal work only through appropriately trained and qualified staff. Each Party shall ensure that those acting for or on its behalf (including subcontractors and collaborators) will comply with the obligations identified in this Section 3.2.3(c).

(d)

Upon reasonable advanced written notice of at least [***] days to IDEAYA, GSK (or its delegate) shall have the right to inspect, at its sole cost and expense, IDEAYA’s records solely as they relate to the conduct of animal work under a Collaboration Plan for a maximum of once per Calendar Year unless otherwise agreed by IDEAYA in writing. The scope of the inspection may include the opportunity to view relevant SOPs, training records, building management records, animal health records, ethical review documents, and any other documents reasonably necessary to assess compliance by IDEAYA with any of the terms and conditions of this Section 3.2.3; provided that such inspection shall not extend to those parts of the records and facilities which IDEAYA can demonstrate to be subject to confidentiality arrangements with Third Parties. To the extent that any significant deficiencies are identified as the result of such inspection, IDEAYA shall endeavor in good faith to take reasonable and practical corrective measures to remedy any such material deficiencies. All information revealed to GSK in such audits shall be considered Confidential Information of IDEAYA.

(e)

IDEAYA shall promptly provide to GSK information regarding any significant deficiencies impacting the applicable activities under a Collaboration Plan regarding its animal care and welfare program and any corrective actions taken. IDEAYA shall use reasonable efforts to cause those acting for or on its behalf (including subcontractors or collaborators) to comply with the obligations identified in this Section 3.2.3.

(f)

IDEAYA shall use reasonable efforts to assess and approve its external suppliers and distributors who supply animals to IDEAYA to (i) ascertain and confirm the quality of the animals supplied, (ii) ascertain and confirm legal requirements for the care and welfare of animals are met and (iii) ascertain and confirm that only purpose bred animals are used to conduct animal work under any Collaboration Program. IDEAYA shall ensure checks are in place to confirm healthy animals are used in the conduct of the Collaboration Programs. GSK shall have the right to present any concerns it might have with IDEAYA’s choice of supplier of non-human primates or other animals to be engaged by IDEAYA after the Effective Date in accordance with Section 3.2.4(a).

3.2.4Subcontracting.

(a)

Each Party may engage its Affiliates or Third Party subcontractors (including contract research organizations and contract manufacturing organizations) to perform certain of its obligations under the Collaboration Plans without the prior written consent of the other Party; provided that IDEAYA shall inform the applicable JDC reasonably in advance of engaging new subcontractors after the Effective Date for the purpose of performing material activities under a Collaboration Plan and the Parties shall jointly discuss any concern GSK might raise with respect to any such subcontractor.

(b)

Each Party shall cause any subcontract between a Party and any Third Party subcontractor used by such Party to perform its obligations under a Collaboration Program to provide that all intellectual property rights conceived, created or generated during the performance of such services material to the Development, Manufacture or Commercialization of the Licensed Compounds or Licensed Products contemplated by this Agreement shall be owned or Controlled by such subcontracting Party. Any Third Party subcontractor to be engaged by a Party to perform such Party’s obligations set forth in a Collaboration Plan shall meet the qualifications typically required by such subcontracting Party for the performance of work similar in scope and complexity to the subcontracted activity. The activities of any such Third Party subcontractors will be considered activities of such subcontracting Party under this Agreement. The subcontracting Party will be responsible for ensuring compliance by any such Third Party subcontractor with the terms of this Agreement, as if such Third Party contractor was a Party hereunder. Upon the reasonable request of GSK, IDEAYA shall audit its subcontractors that perform obligations under a Collaboration Plan on GSK’s behalf and at GSK’s sole expense to the extent IDEAYA has the contractual right to do so; provided that IDEAYA shall use reasonable efforts to include such right in its agreements with subcontractors that perform obligations under a Collaboration Plan entered into after the Effective Date. All information revealed to GSK in such audits shall be considered Confidential Information of the IDEAYA.

3.2.5

Materials Transfer.

(a)

During the course of a Collaboration Program, either Party (or such Party’s designee) (the “Materials Transferring Party”) may transfer to the other Party or its designee (the “Materials Receiving Party”) certain Materials for use in connection with activities contemplated under a particular Collaboration Plan; provided, that for clarity any Material transfer contemplated in connection with the conduct of the MAT2A Combination Study shall be as set forth in the MAT2A CTCSA. Such Materials will be provided under the terms and conditions of this Agreement and in such amount as described in the material transfer record for the particular transfer (“MTR”), in the form attached hereto as Schedule 3.2.5, which MTR shall set forth the type and name of the Materials transferred, the amount of the Materials transferred, the date of the transfer of such Materials and the proposed use of such Materials by the Material Receiving Party.

(b)

MATERIALS SUPPLIED BY THE MATERIALS TRANSFERRING PARTY HEREUNDER ARE SUPPLIED IN “AS IS” CONDITION WITH NO WARRANTY, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT, EXCLUSIVITY, OR FITNESS FOR A PARTICULAR PURPOSE. ANY MATERIAL DELIVERED PURSUANT TO THIS

AGREEMENT IS UNDERSTOOD TO BE EXPERIMENTAL IN NATURE AND MAY HAVE HAZARDOUS PROPERTIES. THE MATERIALS RECEIVING PARTY WILL HANDLE THE MATERIAL ACCORDINGLY AND WILL INFORM THE MATERIALS TRANSFERRING PARTY IN WRITING OF ANY ADVERSE EFFECTS EXPERIENCED BY PERSONS HANDLING THE MATERIAL.

(c)

The Materials Receiving Party acknowledges that, except for the licenses and other express rights granted herein, it does not have any claim to the Materials supplied by the Materials Transferring Party, or any license or rights to any proprietary information or intellectual property rights in or to the Materials. For clarity, the Materials shall remain the sole and exclusive property of the Materials Transferring Party and shall be returned or destroyed at the request of the Materials Transferring Party.

(d)	The Materials Receiving Party agrees that the Material(s):

(1)	will be used solely for, and in compliance with, the activities described in the applicable Collaboration Plan, the MTR, or this Agreement;

(2)	will be used in compliance with all Applicable Laws;

(3)	will not be used in human subjects, in clinical studies, or for diagnostic purposes involving human subjects (except as otherwise described in this Agreement);

(4)	will be used only by the Materials Receiving Party and only in the Materials Receiving Party’s laboratory, except with the prior written consent of the Materials Transferring Party;

(5)	will not be transferred to a Third Party without the prior written consent of the Materials Transferring Party; and

(6)

the Materials Receiving Party shall not reverse engineer or attempt to determine the chemical structure, make-up or sequence of, or determine the chemical or biological properties of, or make or attempt to make any analogues, progeny or derivatives of, or modifications to, such Materials except as expressly required to carry-out such Party’s obligations hereunder, including its activities pursuant to the applicable Collaboration Plan.

(e)

The Materials Receiving Party assumes all liability for damages which may arise from its use, storage or disposal of the Materials. The Materials Transferring Party shall not be liable to the Materials Receiving Party for any loss, claim or demand made by the Materials Receiving Party, or made against the Materials Receiving Party by any Third Party, due to or arising from the use of the Materials, except to the extent permitted by Applicable Law when caused by the negligence or willful misconduct of the Materials Transferring Party. Upon termination of a Collaboration Program, as applicable, except for any continuing rights as set forth in this Agreement, the Materials Receiving Party shall discontinue its use of any Materials

and shall, upon direction of the Materials Transferring Party, return or destroy (and certify destruction of) any remaining Material in compliance with all Applicable Laws.

ARTICLE 4

FUNDING of THE COLLABORATION PROGRAMS

4.1

POLQ Program. GSK shall be responsible for all POLQ Program Costs, whether incurred by GSK or its Affiliates or IDEAYA or its Affiliates after the Effective Date in the Territory, in each case in accordance with the applicable Collaboration Plan and Collaboration Budget. GSK shall reimburse IDEAYA for POLQ Program Costs as set forth in Section 7.2.

4.2

WRN Program. The Parties will share all WRN Program Costs, whether incurred by GSK or its Affiliates or IDEAYA or its Affiliates after the Effective Date in the Territory, in each case in accordance with the applicable Collaboration Plan and Collaboration Budget, with GSK bearing eighty percent (80%) and IDEAYA bearing twenty percent (20%) of such WRN Program Costs. Sharing of WRN Program Costs shall be managed in accordance with Section 7.3.

4.3

MAT2A Program. Subject to Section 6.2 IDEAYA shall be responsible for all MAT2A Program Costs incurred by it after the Effective Date in accordance with the applicable Collaboration Plan in the Territory; provided that, if GSK elects to conduct or have IDEAYA conduct the MAT2A Combination Study in accordance with this Agreement, then GSK shall be responsible for all costs thereof except that IDEAYA’s supply of all required amounts of MAT2A Compound or MAT2A Product needed for the conduct of the MAT2A Combination Study shall be at IDEAYA’s sole cost (and for clarity each Party’s respective costs incurred in connection with the conduct of the MAT2A Combination Study shall not be considered MAT2A Program Costs). To the extent that the Parties through the JDC agree that GSK or its Affiliates may conduct GSK MAT2A Preclinical Activities in support of the MAT2A Program in accordance with Section 3.2.1(b), GSK shall solely bear the cost of such GSK MAT2A Preclinical Activities, which for clarity shall not be considered MAT2A Program Costs.

ARTICLE 5

Management of the Collaboration

5.1	Joint Steering Committee.

5.1.1

Establishment of JSC. Within thirty (30) days of the Effective Date, the Parties shall establish a Joint Steering Committee (“Joint Steering Committee” or “JSC”), which shall be constituted in accordance with Section 5.7. The JSC shall operate in accordance with the provisions of Section 5.7 and Section 5.8. At its meetings, the JSC shall discuss, as appropriate and necessary, the matters described in Section 5.1.2 or such other matters as are reasonably requested by either Party.

5.1.2

Responsibilities of the JSC. The JSC shall perform the following functions:

(a)	oversee and guide the overall strategic direction of the Collaboration Programs (but without modifying or limiting the rights or obligations of either Party as otherwise set forth herein);

(b)	facilitate communications between the Parties regarding the activities undertaken under each Collaboration Program;

(c)	establish, as appropriate, additional sub-committees or working groups responsible for managing specific aspects of the Collaboration Programs or Development Programs as contemplated herein;

(d)	oversee and supervise the subcommittees and resolve issues or Disputes elevated to it by the JDC, JCC, Financial Working Group, or any subcommittee the JSC may establish;

(e)	for each Collaboration Program, review and approve Collaboration Plans and Collaboration Budgets and all amendments to any of the foregoing, as submitted by the JDC;

(f)	review and approve draft Development Plans and Development Budgets, annual updates thereto, and any material amendments to the foregoing;

(g)	coordinate with the Financial Working Group, JDC or JCC, as appropriate, with respect to the reconciliation or approval, as applicable, of Shared Development Costs, Excess Costs, and the Pre-Tax Profit or Loss; and

(h)	perform such other functions as are assigned to the JSC in this Agreement, or otherwise agreed by the Parties in writing.

5.1.3

Term of JSC. The JSC shall meet in accordance with Section 5.7.2 for so long as either (a) the Parties are conducting activities under any Collaboration Program or (b) GSK or its Affiliates or Sublicensees are Commercializing the MAT2A Product or WRN Product in the Profit-Sharing Territory.

5.2	Joint Development Committees.

5.2.1

Establishment of JDCs. Promptly following and in no event later than thirty (30) days after the Effective Date, the Parties shall establish three (3) separate joint development committees (each a “Joint Development Committee” or “JDC”) to (a) oversee the conduct of, and coordinate the Parties’ activities with respect to each of the (1) POLQ Program, (2) WRN Program and (3) MAT2A Program, and (b) following completion of the WRN Program to establish Development Plans and Development Budgets for WRN Compounds and WRN Products (the “WRN Development Program”) and following the Option Closing Date (if

applicable), to establish Development Plans and Development Budgets for MAT2A Compounds and MAT2A Products (the “MAT2A Development Program”), and coordinate on the execution of the Development Plans in accordance with such Development Budgets.

5.2.2

Responsibilities of the JDCs. Each JDC shall perform the following functions for its Collaboration Program, WRN Development Program or MAT2A Development Program, as applicable, to the extent such activities are applicable to such Collaboration Program, WRN Development Program or MAT2A Development Program, as applicable:

(a)	oversee, review and coordinate the conduct and progress of the Development of the applicable Licensed Compound or Licensed Product, as described in the applicable Collaboration Plan and in accordance with the applicable Collaboration Budget;

(b)

periodically review and update the applicable Collaboration Plan, including the Collaboration Budget and the allocation of responsibilities between the Parties, from time to time, and present such Collaboration Plan and updates, as well as other amendments thereto as agreed in accordance with this Agreement, to the JSC for review and approval in accordance with Section 5.1.2;

(c)	oversee the implementation of each Collaboration Plan, and monitor whether activities thereunder are performed in accordance with the timelines set forth therein and the terms set forth in ARTICLE 3;

(d)	review and discuss Data arising from Development activities undertaken under this Agreement;

(e)	coordinate with the Financial Working Group with respect to the reconciliation of Shared Development Costs, and review and approve Excess Costs and other budget overruns in consultation with the Financial Working Group;

(f)	review Development Reports;

(g)	manage the transfer of Know-How upon completion of Collaboration Programs and Option Exercise, including choosing the format and media for such transfer;

(h)	review draft Development Plans and Development Budgets provided by GSK, and any material amendments to the foregoing to allow IDEAYA’s representatives on the applicable JDC to comment on such Development Plans and Development Budgets for GSK’s good-faith consideration;

(i)	submit each JDC-reviewed Development Plan and Development Budget to the JSC for further review and approval;

(j)	liaise with the Financial Working Group with respect to the calculation of Development Costs and sharing thereof; and

(k)	perform such other functions as are specifically designated to the JDC in this Agreement, or as the Parties otherwise agree in writing are appropriate to further the purposes of this Agreement.

5.3

Term of the JDCs. The JDC for the POLQ Program shall meet in accordance with Section 5.7.2 for so long as the Parties are engaging in activities under the applicable Collaboration Plan for the POLQ Program. The JDC for the WRN Program and WRN Development Program and the JDC for the MAT2A Program and MAT2A Development Program shall meet in accordance with Section 5.7.2 for so long as (a) the Parties are engaging in activities under the applicable Collaboration Plan, or (b) GSK and IDEAYA are sharing Development Costs under the applicable Development Plan as described in Sections 4.2 and 6.2.4, as applicable. Prior to the Option Closing Date, the JDC role for MAT2A Program shall be a forum through which IDEAYA keeps GSK informed about its Development activities related to the MAT2A Product. After the completion of the WRN Program and following the Option Closing Date, the applicable JDC’s role shall transition from a decision-making body to the forum through which GSK keeps IDEAYA informed about its Development activities related to the WRN Products and MAT2A Products, respectively, to facilitate transparency for planning purposes with respect to the sharing of Development Costs.

5.4	Joint Commercialization Committees.

5.4.1

Establishment of JCCs. No later than the Initiation of the first Registration Study for the WRN Product and the first Registration Study for the MAT2A Product, respectively, and in each case with respect to the United States, the JSC will establish separate joint commercialization committees (each a “Joint Commercialization Committee” or “JCC”) for each of the WRN Product and the MAT2A Product.

5.4.2

Responsibility of the JCCs. Each JCC shall be the forum through which GSK keeps IDEAYA informed about its Commercialization activities related to the WRN Product and MAT2A Product to facilitate transparency for planning purposes with respect to the anticipated Pre-Tax Profit and Loss. GSK shall provide the JCC with draft Commercialization Plans and Commercialization Budgets, and any material amendments to the foregoing, for review and comment. Each JCC shall submit each JCC-reviewed Commercialization Plan and Commercialization Budget to the JSC for further review and comment. Each JCC shall liaise with the Financial Working Group with respect to the calculation of the Pre-Tax Profit or Loss and shall perform such other functions as the Parties may agree in writing are appropriate to further the purposes of this Agreement.

5.4.3

Term of the JCCs. Each of the JCC for the WRN Product and the JCC for the MAT2A Product shall meet in accordance with Section 5.7.2 until the expiration or termination of the Profit-Sharing Term with respect to the applicable JCC’s Licensed Product.

5.5

Financial Working Group. Within thirty (30) days following the Effective Date, the Parties will establish a financial working group subcommittee (“Financial Working Group”) which shall work with (a) the JDCs responsible for the WRN Program, the WRN Development Program and MAT2A Development Program, (b) the JCCs responsible for the Commercialization of each of the WRN Products and MAT2A Products, and (c) the JSC with respect to the preparation of Pre-Tax Profit or Loss statements in accordance with the Reconciliation Procedures in the Pre-Tax Profit and Loss Schedule. The Financial Working Group shall include individuals from each Party with reasonable expertise in the areas of accounting, cost allocation, budgeting and financial reporting. The Parties shall determine the appropriate number of representatives of each Party that will constitute the Financial Working Group, which shall be an equal number, and the frequency of meetings thereof. Each Party shall designate their respective initial representatives to the Financial Working Group to allow such Financial Working Group to begin organizing information for the initial meetings of the applicable JDC and the JSC. The Financial Working Group shall operate generally in accordance with the provisions of Section 5.7, and shall have no authority to alter or amend the terms and conditions of this Agreement. The Financial Working Group shall meet in accordance with Section 5.7.2 for so long as either (a) the Parties are engaging in sharing of Development Costs for the WRN Program, or for the WRN Development Program or MAT2A Development Program, respectively, or (b) GSK or its Affiliates are Commercializing the MAT2A Product or WRN Product in the Profit-Sharing Territory.

5.6

Other Subcommittees. From time to time, the JSC may establish other subcommittees of the JSC to oversee particular projects or activities under this Agreement, and such subcommittees shall be constituted and have such responsibility as the JSC approves (such subcommittees, along with the other subcommittees established hereunder (each referred to herein as a “Subcommittee”)). The Subcommittees shall operate in accordance with the provisions of Section 5.7, and shall have no authority to alter or amend the terms and conditions of this Agreement.

5.7	Membership, Meetings and Meeting Minutes

5.7.1

Membership. Except as otherwise stated herein, each Committee shall be composed of three (3) representatives (or such other equal number of representatives as the Parties may agree) from each of IDEAYA and GSK. Either Party may replace its respective Committee representatives at any time with prior written notice to the other Party, provided that such replacement is of comparable authority and scope of functional responsibility within that Party’s organization as the person he or she is replacing. Each Party’s representatives to each Committee shall be individuals suitable in seniority and experience and amongst such representatives shall be at least one representative from each Party with relevant decision-making authority to make decisions within the scope of the applicable Committee’s responsibilities; provided that it is understood that such individual may need to seek appropriate authority from the relevant Party with respect to certain matters. For each Committee, each Party shall designate one of its representatives on such Committee to co-chair the meetings for such Committee (each, a “Co-Chair”). The Co-Chairs shall coordinate and prepare the agenda for, and ensure the orderly conduct of, the meetings of such Committee and solicit agenda items from Committee members

and provide an agenda, along with appropriate information for such agenda, reasonably in advance of any meeting. Such agenda shall include all items requested by either Co-Chair for inclusion therein. If the Co-Chairs or another Committee member from either Party is unable to attend or participate in a meeting of such Committee, the Party whose Co-Chair or member is unable to attend may designate a substitute co-chair or other representative for the meeting. For clarity, the Alliance Manager shall assist the Co-Chairs of the JSC with respect to the foregoing activities, and attend all meetings of the JSC as a non-voting member; provided that attendance by the Alliance Manager does not count towards either Party’s representation on the JSC.

5.7.2

Meetings. The JSC shall meet quarterly (or more or less frequently as agreed by the Parties in writing). JSC meetings may be called at other times to resolve Committee Deadlocks in accordance with Section 5.8.1. At least one JSC meeting per year will be in-person, unless the Parties agree to meet by an alternative mechanism (e.g., telephone or videoconference). The JDCs, JCCs, the Financial Working Group and other Subcommittees, if any, shall each meet at least quarterly after the Subcommittee is formed, or as more or less often as otherwise agreed by the Parties in writing. Committee meetings may be conducted by telephone, videoconference or in person. Any in-person Committee meetings shall be held on an alternating basis between IDEAYA’s and GSK’s facilities, unless otherwise agreed by the Parties in writing. Each Party shall be responsible for its own expenses in attending such meetings and those expenses will not be included in Development Costs hereunder. As appropriate, the Committee may invite a reasonable number of non-voting employees, consultants, and scientific advisors to attend its meetings as nonvoting observers, provided that such invitees are bound by appropriate confidentiality obligations substantially similar to the ones set forth in this Agreement. Each Party may also call for special meetings of a Committee to discuss matters requested by such Party. The Alliance Managers shall provide the members of the JSC with no less than [***] Business Days’ notice of each regularly scheduled meeting and, to the extent reasonably practicable under the circumstances, no less than [***] Business Days’ notice of any special meetings of the JSC called by either Party.

5.7.3

Meeting Minutes. Minutes will be kept of all Committee meetings. Minutes will be sent to all members of the Committee by e-mail for review and approval within [***] days after each meeting. The Alliance Managers will be responsible for taking and circulating minutes of each JSC meeting and for all other Committees, and the Co-Chairs will be responsible for taking and circulating minutes, in each case on a rotating basis (commencing with the Alliance Manager of GSK and the Co-Chair of each other Committee designated by GSK). If a Party’s Alliance Manager (or his or her designee) is not present at a JSC meeting and that Party is responsible for keeping minutes, such Party shall designate one of its JSC members to keep minutes. Minutes shall record all action items and decisions of the applicable Committee. The Committee shall formally accept the minutes of the previous Committee meeting at or before the next Committee meeting. Minutes will be deemed approved unless any member of the Committee objects to the accuracy of such minutes by providing written notice to the other members of the Committee prior to the next meeting of such Committee. Minutes shall list action items and shall designate any issues that need to be resolved by the JSC or applicable dispute resolution process. In the event of any such objection to the minutes that is not resolved by mutual agreement of the Parties, such minutes will be amended to reflect such unresolved dispute.

5.8	Decision-Making

5.8.1

Committee Decision Making. Decisions of each Committee shall be made by unanimous vote, with each Party having one vote. In order to make any decision, any Committee must have present (in person or via telephone or videoconference) and voting at least one representative of each Party. Unless otherwise specified by the JSC, in the event that the JDCs, JCCs, the Financial Working Group or any other Subcommittee cannot or does not reach consensus with respect to a particular matter within the authority of such Subcommittee (a “Subcommittee Deadlock”) after endeavoring for [***] days to do so, such matter shall be referred to the JSC for discussion and attempted resolution. In the event that the JSC does not reach a decision with respect to a Subcommittee Deadlock, or if the JSC cannot or does not reach consensus with respect to any other matter within its authority, in each case, after endeavoring for [***] days to do so, then such matter (a “Committee Deadlock”) shall be decided by the Parties in accordance with Section 5.8.2 below.

5.8.2

Decision Making Authority. The Committee Deadlock shall be submitted by either Party to the Senior Managers of both Parties. The Senior Managers of each Party or their respective designees, shall attempt to resolve such Committee Deadlock within [***] days of submission. If the Senior Managers (or their respective designees) cannot resolve the Committee Deadlock, then [***], any material updates or amendments to the MAT2A Program Collaboration Plan proposed by a Party to be made prior to the Option Closing Date shall be submitted to the JDC for review and comment. Within [***] Business Days of receiving such proposed update or amendment, the JDC will, in turn, submit such reviewed updates and amendments thereto to the JSC for review and approval. The JSC shall review and approve proposed amendments presented by the JDC to it within [***] Business Days thereafter. Notwithstanding the foregoing, (i) [***] shall not modify the requirements for the Option Data Package unless otherwise mutually agreed by the Parties in writing and (ii) [***] with respect to the calculation or reconciliation, as applicable, of Shared Development Costs and the Pre-Tax Profit or Loss, which for clarity any disagreement by a Committee or by the Parties with respect thereto shall be resolved in accordance with Sections 7.20 and 7.21. Neither Party shall have the right to use its final decision-making authority to resolve disputes arising out of the interpretation of this Agreement, which for clarity shall be resolved in accordance with Section 15.2.

5.8.3

Day-to-Day Decision-Making Authority. Each Party shall have decision making authority with respect to the day-to-day operational and tactical activities of such Party (and such Party’s employees, agents and subcontractors) under this Agreement, provided that such decisions are not inconsistent with the terms and conditions of this Agreement (including any applicable Collaboration Plan, Development Plan or Commercialization Plan) or the decisions and actions of the JSC, the JDCs, the JCCs, Financial Working Group or any other Subcommittee, as applicable.

5.8.4

Limitation of Powers. Each Committee will have only the powers as are specifically delegated to it under this Agreement. The JSC is not a substitute for the rights of the Parties under this Agreement and is intended to coordinate and facilitate the activities of the Parties. The JSC will not be involved with the day-to-day management of activities to be

performed by a Party under this Agreement. Matters explicitly reserved to the consent, approval or other decision-making authority of one or both Parties, as expressly provided in this Agreement, are outside the jurisdiction and authority of the JSC, including amendment, modification or waiver of compliance with the Agreement, which shall be made by the Parties in accordance with Section 16.9.

5.9

Alliance Managers. Promptly following the Effective Date, each Party shall designate an individual to serve as the main point of contact for each Party to exchange information, facilitate communication and coordinate the Parties’ activities hereunder (each, an “Alliance Manager”). The Alliance Managers shall attend the meetings of the JSC. For all other Committees, the Alliance Managers may participate in meetings but are not required to participate. The Alliance Managers shall not be counted as members of any Committee (and shall not vote on matters discussed at any Committee meeting). Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party.

5.10

Patent Liaisons . Promptly following and in no event later than thirty (30) days after the Effective Date, the Parties shall each designate representative(s) to consult with the other Party’s representative(s) with respect to Patent prosecution, maintenance, enforcement and defense matters (the “Patent Liaisons”) as more fully described in this Section 5.10. The Patent Liaisons shall discuss, at such times, places and frequencies as either Patent Liaison determines is necessary, material issues and provide input to each other regarding determination of inventorship of Know-How hereunder, and the prosecution, maintenance, enforcement or defense of Patents comprising IDEAYA Technology, Joint Arising Technology or GSK Arising Technology as more fully described in ARTICLE 10. All final decisions related to the prosecution, maintenance, enforcement or defense of any Patents comprising IDEAYA Technology, Joint Arising Technology or GSK Technology shall be made by the Party with the right to control such prosecution, maintenance, enforcement or defense, as applicable, as set forth in ARTICLE 10 and subject to the terms and conditions therein.

ARTICLE 6
POST-Collaboration Program and POST-option exercise responsibilities

6.1	POLQ Activities. This Section 6.1 sets forth the Parties’ responsibilities with respect to POLQ Compounds and POLQ Products after completion of the POLQ Program.

6.1.1

Responsibilities. After completion of the POLQ Program, GSK, either itself or by or through its Affiliates, Sublicensees or subcontractors, shall be solely responsible for and have decision-making authority with respect to, all Development, Manufacturing, pharmacovigilance, regulatory (including preparing and filing in its own name all Regulatory Filings, INDs, Marketing Approval Authorizations and any other documents in support of obtaining Regulatory Approvals) and Commercialization activities in connection with POLQ Compounds and POLQ Products in the Field in the Territory. All costs associated with such activities shall be borne solely by GSK. As reasonably requested by GSK from time to time during the Term, IDEAYA shall promptly provide assistance to GSK with filings and other interactions

with Regulatory Authorities regarding POLQ Compounds and POLQ Products; provided that GSK shall reimburse IDEAYA for any out-of-pocket expenses and FTE costs at the FTE Rate reasonably incurred in connection with such assistance.

6.1.2

Technology Transfer. Promptly following completion of the POLQ Program, to the extent not previously transferred and delivered to GSK, IDEAYA shall transfer and deliver to GSK, at GSK’s cost (in order to enable GSK to practice under the license granted to GSK under Section 8.2.1(b)), IDEAYA Know-How and Know-How comprising Joint Arising Technology (including Materials) in its Control, in each case to the extent necessary to enable GSK to Develop, Manufacture and Commercialize POLQ Compounds and POLQ Products as contemplated under this Agreement. Without limiting the foregoing, IDEAYA shall use Commercially Reasonable Efforts to facilitate orderly transition and uninterrupted Development of POLQ Compounds and POLQ Products. The format of, and media for exchanging, any of the foregoing information shall be decided by the JDC.

6.1.3

Reporting. Commencing on the first anniversary of the completion of the POLQ Program and every six (6) months thereafter until (i) Regulatory Approval by the FDA of the first Marketing Approval Application for a POLQ Compound or (ii) cessation of Development of all POLQ Compounds, GSK shall provide to IDEAYA a report setting out the status of GSK’s material activities with respect to the Development of such POLQ Compounds and POLQ Products conducted for the prior year, any material issues affecting Development or timelines for Development, as well as a high-level plan showing anticipated material Development inflection points in the coming year (the “POLQ Report”). GSK shall provide POLQ Reports to the JSC for so long as the JSC is in existence and GSK’s obligation to provide POLQ Reports has not expired. If GSK is obligated under this Section 6.1.3 to provide POLQ Reports after expiration of the JSC term, the Alliance Managers shall act as the primary point of contact for the Parties regarding the provision of POLQ Reports.

6.2	MAT2A and WRN Activities. This Section 6.2 sets forth the Parties’ responsibilities with respect to (a) MAT2A Compounds and MAT2A Products after the Option Closing Date (solely if applicable), and (b) WRN Compounds and WRN Products after completion of the WRN Program.

6.2.1

Responsibilities. After (i) the Option Closing Date (solely if applicable) for Development of MAT2A Compounds and MAT2A Products and (ii) completion of the WRN Program for Development of WRN Compounds and WRN Products, respectively, GSK, either itself or by and through its Affiliates, Sublicensees or subcontractors, shall be solely responsible for and have decision-making authority with respect to, all Development, Manufacturing, pharmacovigilance, regulatory (including preparing and filing in its own name all Regulatory Filings, INDs, Marketing Approval Authorizations and any other documents in support of obtaining Regulatory Approvals) and Commercialization activities in connection with MAT2A Compounds and MAT2A Products (solely if the Option Closing Date occurs) and WRN Compounds and WRN Products, in each case, in the Field in the Territory. Development of the applicable Licensed Products will be conducted by or on behalf of GSK in accordance with a Development Plan and associated Development Budget, each as reviewed by the applicable JDC

and the JSC as described in Section 6.2.2. Commercialization of the applicable Licensed Products in the Profit-Sharing Territory will be conducted solely by or on behalf of GSK in accordance with a Commercialization Plan and associated Commercialization Budget as described in Section 6.2.3. As reasonably requested by GSK from time to time during the Term, IDEAYA shall promptly provide reasonable assistance to GSK with respect to filings and other interactions with Regulatory Authorities regarding Licensed Compounds and Licensed Products; provided that costs of such assistance will be shared as set forth in Section 6.2.4.

6.2.2

Development Plans and Development Budgets. GSK shall prepare and submit to the applicable JDC (i) an initial Development Plan for MAT2A Compounds and MAT2A Products, [***] and (ii) an initial Development Plan for WRN Compounds and WRN Products [***], each with a corresponding Development Budget for JDC review and comment, which comments GSK will consider in good faith. Such initial Development Plans and Development Budgets shall be comprised of the relevant Development activities contemplated for the next year [***]. Additionally, such Development Plans and Development Budgets will be updated by GSK and submitted to the JDC for review and comment not less frequently than annually thereafter. The JDC will, in turn, submit such reviewed initial Development Plans and Development Budgets and updates thereto to the JSC for review and approval. GSK may also develop and submit to the JDC from time to time other proposed amendments to a Development Plan, which the JDC will review and submit for approval to the JSC. The JSC shall review proposed amendments presented by the JDC and, upon completion of review and approval by the JSC, the Development Plan shall be amended accordingly. For clarity, JDC and JSC approval of the Development Plans and Development Budgets are not required for GSK to commence activities thereunder. All Development Plans and Development Budgets shall be deemed Confidential Information of GSK.

6.2.3

Commercialization Plans and Commercialization Budgets. GSK shall prepare and submit to the applicable JCC a Commercialization Plan for the MAT2A Products (solely if the Option Closing Date occurs) and a Commercialization Plan for the WRN Products, with a corresponding Commercialization Budget at least [***] ([***]) months prior to [***] (solely if the Option Closing Date occurs) or WRN Product for review by the applicable JCC. Such Commercialization Plans and Commercialization Budgets for each such Licensed Product will be updated by GSK not less frequently than annually following their respective First Commercial Sale. IDEAYA’s representatives on the JCC shall have the right to comment on the Commercialization Plans and Commercialization Budgets and GSK will consider such comments in good faith. The JCC will submit the final Commercialization Plan and Commercialization Budget to the JSC for review and comment. GSK may also develop and submit to the applicable JCC from time to time other proposed amendments to the Commercialization Plan, which the JCC will review together with any amendments to the Commercialization Budget. The JSC shall review proposed amendments presented by the applicable JCC. For the avoidance of doubt, provision of Commercialization Plans and Commercialization Budgets to the applicable JCC and JSC is for informational and planning purposes only. IDEAYA’s representatives on each JCC and the JSC may comment thereon and GSK shall consider IDEAYA’s comments in good faith, but GSK shall have the final decision-making authority with respect to the Commercialization Plans and Commercialization Budgets. For clarity, JCC and JSC approval of the Commercialization

Plans and Commercialization Budgets are not required for GSK to commence activities thereunder. All Commercialization Plans and Commercialization Budgets shall be deemed Confidential Information of GSK.

6.2.4

Funding. Subject to Section 6.2.5 and 7.5, the Parties will share all Development Costs for the Development (excluding for clarity any Development activities conducted under any Collaboration Program and any activities conducted in connection with Commercialization and Launch Preparation Activities) of (i) solely as of the Option Closing Date, if applicable, the MAT2A Compounds and MAT2A Products (“MAT2A Development Costs”) and (ii) the WRN Compounds and WRN Products (“WRN Development Costs”), whether incurred by GSK or its Affiliates or IDEAYA or its Affiliates in the Territory after the Option Closing Date or the completion of the WRN Program, respectively, in each case in accordance with the applicable Development Plan and Development Budget, and in each case with GSK bearing eighty percent (80%) and IDEAYA bearing twenty percent (20%). For clarity, the Development Costs shared under the preceding sentence include Development Costs incurred in the conduct of any pre-clinical or clinical Development activities regarding a combination of a MAT2A Compound, MAT2A Product, WRN Compound or WRN Product, on the one hand, and a compound or product Controlled by GSK or its Affiliate (other than by way of this Agreement), on the other hand (e.g., a GSK PRMT Product). Sharing of WRN Development Costs and MAT2A Development Costs shall be managed in accordance with Section 7.3. For further clarity, it is not expected that IDEAYA or its Affiliates will incur any MAT2A Development Costs or WRN Development Costs except as set forth in the final sentence of Section 6.2.1.

6.2.5

Cost Share Adjustment. With respect to each Licensed Product that is Commercialized hereunder, twice during the Term following the date on which First Commercial Sale of such Licensed Product occurs in each of [***] (the date of the occurrence of the last of such [***], the “Global Commercialization Date”), at both three (3) and six (6) years after such Global Commercialization Date with respect to such Licensed Product, the Parties shall engage a Big Four Accounting Firm, as mutually agreed by the Parties, to calculate the actual worldwide profits of such Licensed Product in accordance with GSK’s Accounting Standard. If such Big Four Accounting Firm concludes that the profits of such Licensed Product in the U.S. is not equal to [***]% of such profits for such Licensed Product globally in each case, for the then-preceding year, then the Parties shall adjust the 20% IDEAYA/80% GSK Development Cost share ratio set forth in Section 6.2.4 (“Cost Share Ratio”) to reflect the actual relative profits in the U.S. compared to the profits in the world other than the U.S. as follows: for each [***] [***]% profits of such Licensed Product in the U.S. as compared to worldwide profits of such Licensed Product as determined by the Big Four Accounting Firm (“Relative U.S. Market Share”), the Cost Share Ratio of IDEAYA will be increased by [***] by [***]% of the Relative U.S. Market Share, the Cost Share Ratio of IDEAYA will be decreased by [***]. Such updated Cost Share Ratio will apply both prospectively to the sharing of future Development Costs hereunder, as well as retroactively to Development Costs previously reconciled for the three (3) years prior (such amount of Development Costs a Party owes to the other Party with respect to such Development Cost previously reconciled by way of such modified Cost Share Ratio, “True Up Costs”). To the extent that IDEAYA owes to GSK any True Up Costs, GSK shall credit against any amounts otherwise due to IDEAYA under this Agreement until such True Up Costs are fully recouped by

GSK. To the extent that GSK owes to IDEAYA any True Up Costs, GSK shall add such True Up Costs in its next payment due to IDEAYA pursuant to ARTICLE 7.

6.2.6

Technology Transfer. Promptly following completion of the (a) WRN Program and (b) if applicable, the Option Closing Date, to the extent not previously transferred and delivered to GSK, IDEAYA shall transfer and deliver to GSK (in order to enable GSK to practice under the licenses granted to GSK under Section 8.2.1(a) and 8.1, respectively), IDEAYA Know-How and Know-How comprising Joint Arising Technology (including Materials) in its Control (including any Know-How arising from the Interim MAT2A Activities), in each case to the extent necessary to enable GSK to Develop, Manufacture and Commercialize WRN Compounds and WRN Products and, solely if the Option Closing Date occurs, the MAT2A Compounds and MAT2A Products as contemplated under this Agreement. Without limiting the foregoing, IDEAYA shall use Commercially Reasonable Efforts to facilitate orderly transition and uninterrupted Development of the applicable Licensed Compounds and Licensed Products. The format of, and media for exchanging, any of the foregoing information shall be decided by the applicable JDC.

6.2.7

Reporting. Commencing six (6) months following the initial submission of a Development Plan and Development Budget for the applicable Licensed Compounds and Licensed Products to the JDC in accordance with Section 6.2.2, and every six (6) months thereafter until (i) Regulatory Approval by the FDA of the first Marketing Approval Application for such Licensed Product or (ii) permanent cessation of Development of all applicable Licensed Compounds and Licensed Products, GSK shall provide to the applicable JDC and JSC a report setting out the status of GSK’s material activities with respect to the Development of such Licensed Compounds and Licensed Products conducted for the prior year, any material issues affecting Development or timelines for Development, as well as a high-level plan showing anticipated material inflection points in the coming year (the “Development Reports”). GSK shall provide Development Reports to the applicable JDC and the JSC for so long as they are in existence and GSK is required to provide such Development Report as described above.

6.2.8

Non-Exercise of Option. Notwithstanding any other provision in this Section 6.2 or any other provision of this Agreement to the contrary, if GSK does not exercise the Option within the Exercise Period, then as of the expiration of the Exercise Period, this Agreement shall automatically terminate with respect to the MAT2A Target, and GSK shall have no rights whatsoever under this Agreement or under any Patents, Know-How, or other intellectual property Controlled by IDEAYA or its Affiliates (including IDEAYA Technology) to make, have made, use, sell, offer for sale and import, or otherwise exploit any MAT2A Compound or MAT2A Product, and IDEAYA shall have the right, but not the obligation, to make, have made, use, sell, offer for sale and import, or otherwise exploit all MAT2A Compounds and MAT2A Products which it owns or otherwise Controls, at its sole cost and sole discretion.

6.3

Diligence. GSK shall use Commercially Reasonable Efforts in the exercise of its rights and performance of its obligations under Sections 6.1 and 6.2, including the activities set forth in each Development Plan and Commercialization Plan. Without limiting the forgoing, GSK shall use Commercially Reasonable Efforts to Develop and Commercialize (a) solely

following the Option Closing Date, [***], (b) [***], and (c) [***], in each case in the Field and [***]. GSK shall conduct its Development and Commercialization activities in good scientific manner (as applicable) and in compliance with its Internal Policies, Applicable Law, including those regarding the environment, safety and industrial hygiene, and GMP, GLP, GCP, informed consent and Institutional Review Board regulations, current standards for pharmacovigilance practice, and all applicable requirements relating to the protection of human subjects.

6.4

Subcontracting. GSK may engage its Affiliates, Sublicensees or Third Party subcontractors (including distributors, contract research organizations and contract manufacturing organizations) to perform certain of its obligations under the Development Plans, Commercialization Plans or otherwise in connection with its obligation to Develop, Manufacture and Commercialize Licensed Compounds and Licensed Products under this Agreement. GSK shall cause any subcontract between GSK and any Third Party subcontractor used by GSK to perform such obligations to provide that all intellectual property rights conceived, created or generated during the performance of such services material to the Development, Manufacture or Commercialization of such Licensed Compounds or Licensed Products contemplated by this Agreement shall be owned or Controlled by GSK. GSK’s use of Affiliates, Sublicensees or subcontractors shall not relieve GSK of any obligation hereunder and GSK shall cause its Affiliates, Sublicensees or subcontractors to comply with its applicable obligations under this Agreement. GSK shall remain responsible under this Agreement for ensuring, and shall be liable to IDEAYA for, the compliance of Affiliates, Sublicensees and subcontractors with this Agreement. Any Third Party subcontractor to be engaged by GSK to perform GSK’s obligations under this Agreement shall meet the qualifications typically required by GSK for the performance of work similar in scope and complexity to the subcontracted activity.

ARTICLE 7
Financial Provisions

7.1	Upfront Payment; Equity Investment.

7.1.1Upfront Payment. In partial consideration of the rights and licenses granted to GSK under this Agreement, GSK shall pay IDEAYA One Hundred Million Dollars ($100,000,000) within ten (10) Business Days after the Effective Date and upon receipt of a valid invoice from IDEAYA. Such payment shall be non-creditable and non-refundable.

7.1.2Equity Investment. [On the Closing Date, GSK agrees to cause Glaxo Group Limited (the “GSK Purchaser”) to purchase for the Aggregate Purchase Price, and IDEAYA agrees to issue and sell, in a private placement pursuant to a Stock Purchase Agreement (as may be amended and/or restated from time to time, the “Purchase Agreement”), to be entered into by GSK Purchaser and IDEAYA substantially in the form set forth in Exhibit A (the “Private Placement”), the number of shares of IDEAYA’s common stock, par value $0.0001 (the “Common Stock”), determined by dividing $20,000,000 (the “Total Equity Commitment”) by a price per share equal to the Purchase Price, rounded down to the nearest number of whole shares (if applicable); provided that GSK Purchaser shall not be obligated to purchase shares of Common Stock pursuant to this Agreement or the Purchase Agreement prior to the date that is two Business

Days (as defined in the Stock Purchase Agreement) after the HSR Clearance Date, or following the Termination Date; provided, further, that in the event that following the effectiveness of the Stock Purchase Agreement, the Stock Purchase Agreement is terminated prior to the Closing (as defined in the Stock Purchase Agreement) pursuant to Sections 6.12(i)-(iii) thereof, such termination shall not, unless otherwise agreed in writing by the Parties, terminate GSK Purchaser’s obligation to purchase shares of Common Stock pursuant to this Section 7.1; provided, further, that, Glaxo Group Limited shall not be obligated to purchase, and IDEAYA shall not issue or sell, in the Private Placement any shares of Common Stock which would result in the beneficial ownership of Common Stock by GSK and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) of more than 9.99% of the as adjusted issued and outstanding shares of Common Stock giving effect to the Private Placement and the Public Offering (the “Beneficial Ownership Limitation”); provided, further, that any obligations of GSK or GSK Purchaser to purchase shares of Common Stock in the Private Placement pursuant to this Section 7.1 shall be deemed to be fully satisfied, and GSK and GSK Purchaser shall have no further obligation to purchase shares of Common Stock, if GSK Purchaser purchases such number of shares of Common Stock in the Private Placement so as to be in compliance with the Beneficial Ownership Limitation, regardless of whether the Aggregate Purchase Price for such shares of Common Stock is less than the Total Equity Commitment. In no event shall GSK Purchaser be obligated to purchase shares of Common Stock at an Aggregate Purchase Price exceeding the Total Equity Commitment. The Purchase Agreement shall be entered into by GSK Purchaser and IDEAYA on or about the same time as the underwriting agreement for the Public Offering is entered into by IDEAYA and the underwriters for the Public Offering.

7.2

Reimbursement of POLQ Program Costs. Within [***] days after the end of each Calendar Quarter during the conduct of the POLQ Program, IDEAYA, in accordance with GAAP, shall submit to GSK a reasonably detailed report and any additional documentation reasonably requested by GSK, setting forth all Development Costs for the Development of the POLQ Compounds and POLQ Products in the Field in the Territory actually incurred by IDEAYA in the conduct of the POLQ Program in accordance with the applicable Collaboration Plan and Collaboration Budget during such Calendar Quarter (the “POLQ Program Costs”). GSK shall reimburse IDEAYA for the POLQ Program Costs incurred as set forth in such report; provided that any POLQ Program Costs incurred in excess of [***] of the budgeted POLQ Program Costs for the applicable Calendar Quarter shall be borne by IDEAYA unless such overage was approved in advance by the applicable JDC and JSC. Notwithstanding the foregoing, any POLQ Program Costs that are incurred by IDEAYA as a result of IDEAYA’s failure to use Commercially Reasonable Efforts in performing its obligations under the POLQ Program or due to IDEAYA’s negligence, whether or not such POLQ Program Costs are in excess of [***] of the Development Budget for the applicable Calendar Quarter, shall be borne entirely by IDEAYA. GSK shall reimburse POLQ Program Costs within [***] days after receipt of an invoice from IDEAYA.

7.3	Sharing of WRN Program Costs, WRN Development Costs, and MAT2A Development Costs.

7.3.1

Reports; Reconciliation Payments. Subject to Section 7.3, with respect to (a) WRN Program Costs incurred by the Parties in accordance with Section 4.2 and (b)

WRN Development Costs and MAT2A Development Costs incurred by the Parties in accordance with Section 6.2.4 ((a) and (b) referred to collectively as the “Shared Development Costs”), within [***] days following the end of each Calendar Quarter during which any such Shared Development Costs are incurred, each of IDEAYA and GSK (as applicable), in accordance with Accounting Standards, shall submit to the Financial Working Group a written report setting forth in reasonable detail all WRN Program Costs, WRN Development Costs or MAT2A Development Costs incurred by each such Party over such Calendar Quarter, provided, however, that a preliminary estimate of the Shared Development Costs, in a format agreed by the Financial Working Group, shall be provided by each IDEAYA and GSK within [***] days following the end of the Calendar Quarter for purposes of financial statement close process. For clarity, such estimate may be based on forecasted numbers and the Parties agree that the final Development Costs and other Allowable Expenses reported in the Financial Reports may differ from this estimate. Within [***] days following the receipt by the Financial Working Group of such written reports, the Financial Working Group shall prepare and submit to each Party a written report (the “Financial Reports”) setting forth in reasonable detail (i) the calculation of all such Shared Development Costs incurred by both Parties over such Calendar Quarter and any deviations from the applicable Collaboration Budget or Development Budget, and (ii) the calculation of the net amount owed by GSK to IDEAYA or by IDEAYA to GSK in order to ensure the appropriate sharing of such Shared Development Costs in accordance with Sections 4.2 and 6.2.4. The Party that is due for reimbursement of Shared Development Costs shall invoice the other Party within [***] days of receipt of such report from the Financial Working Group. Such payments by one Party to reimburse the other Party’s expenditures for Shared Development Costs shall be paid within [***] days following receipt of the invoice. Any WRN Program Costs, WRN Development Costs or MAT2A Development Costs incurred in excess of the agreed upon Collaboration Budget or Development Budget in any Calendar Quarter will be subject to the terms set forth in Section 7.3.2.

7.3.2

Overruns. Each Party shall notify the other Party promptly upon becoming aware that the anticipated Development Costs to be incurred by such Party under a particular Collaboration Plan or Development Plan for a given Calendar Year shall be in excess of the applicable approved Collaboration Budget or Development Budget. Thereafter, the following shall apply:

(a)

Following such notification, the Financial Working Group, in consultation with the applicable JDC (as and if needed), shall discuss the causes of any such increase and evaluate potential mitigation measures to prevent a further increase of Development Costs. To the extent, based on this discussion, that the Financial Working Group concludes that the anticipated amount of the concerned category of Development Costs is likely not to exceed [***] of the amounts budgeted (the “Permitted Overage”) as set forth in the then-current applicable Development Budget, such anticipated Development Costs shall be included in the calculation of the applicable Development Costs for the purposes of determining the amounts to be paid from one Party to the other Party to reflect the sharing percentages set forth in Sections 4.2 and 6.2.4.

(b)If the Financial Working Group, in consultation with the JDC, concludes that the anticipated amount of the applicable Development Costs is likely to exceed the Permitted Overage (such amount the “Excess Costs”) and there are no mitigation measures to prevent such Excess Costs, then such Excess Costs shall not be included in the calculation of the Shared Development Costs and shall be borne by the Party incurring them, unless mutually agreed by the Parties through the JSC to be shared. Notwithstanding the foregoing, to the extent that Excess Costs are directly attributable and reasonably allocable to and required by a change in Applicable Laws, a requirement of a Regulatory Authority, a change required to mitigate a safety issue or a Force Majeure event, or are otherwise mutually agreed by the Parties, then such costs shall not be borne solely by the Party incurring them and shall be included in the calculation of Shared Development Costs for the purposes of determining the amounts to be paid from one Party to the other Party for the applicable Calendar Year.

(c)

Notwithstanding the foregoing, any WRN Program Costs, WRN Development Costs or MAT2A Development Costs that are incurred by a Party as a result of that Party’s failure to use Commercially Reasonable Efforts in connection with performing its obligations hereunder or due to that Party’s negligence, whether or not such WRN Program Costs, WRN Development Costs or MAT2A Development Costs are in excess of [***] of the applicable Collaboration Budget or Development Budget for the applicable Calendar Year, shall be borne entirely by that Party.

7.4	Pre-Tax Profit or Loss Sharing.

7.4.1

Pre-Tax Profit or Loss. Subject to Section 7.5, the Parties shall share in Pre-Tax Profit or Loss in the Profit-Sharing Territory solely with respect to MAT2A Products (subject to occurrence of the Option Closing Date) and WRN Products as follows: IDEAYA shall bear (and be entitled to) fifty percent (50%), and GSK shall bear (and be entitled to) fifty percent (50%), commencing with the First Commercial Sale of the applicable Licensed Product in the Profit-Sharing Territory and continuing for as long as the relevant Licensed Product continues to be sold by GSK, its Affiliates, and their Sublicensees in the Profit-Sharing Territory (the “Profit-Sharing Term”). Procedures for reporting, quarterly reconciliation and other finance and accounting matters will be as set forth in the Pre-Tax Profit or Loss Schedule.

7.4.2

Income Taxes. Subject to Section 7.14, income and withholding Taxes imposed on either of the Parties hereunder shall not be included in Pre-Tax Profit or Loss hereunder.

7.5	Development Cost Share Opt Out.

7.5.1

Exercise by IDEAYA. IDEAYA may, upon written notice to GSK, with respect to the [***] and with respect to [***] with respect to the relevant Licensed Compound or Licensed Product, opt out of future sharing of Shared Costs and the Pre-Tax Profit or Loss in the Profit Sharing Territory (the “IDEAYA Opt-Out”), in each case, with respect to either, as independently elected by IDEAYA, (i) the WRN Compounds and WRN Products or (ii) solely if the Option Closing Date occurs, the MAT2A Compounds and MAT2A Products (any such

Licensed Compounds and Licensed Products for which IDEAYA has exercised the IDEAYA Opt-Out as specified in the IDEAYA Opt-Out, the “Cost Share Opt Out Compounds and Products”). Such notice shall specify the date upon which such IDEAYA Opt-Out will be effective (such date to be no sooner than [***] days after the date such notice is delivered to GSK pursuant to Section 16.5) (the “Cost Share End Date”). Effective from and after the Cost Share End Date, sharing of Shared Development Costs and of the Pre-Tax Profit or Loss in the Profit Sharing Territory in accordance with the relevant provisions of this Agreement will no longer apply with respect to the Cost Share Opt Out Compounds and Products (and for clarity GSK shall be solely responsible for such costs that were previously shared hereunder, and shall have no obligation to share any Pre-Tax Profit or Loss in the form of profits in the Profit Sharing Territory with IDEAYA with respect to such Cost Share Opt Out Compounds and Products), but for clarity such Cost Share Opt Out Compounds and Product shall continue to be a “Licensed Compound” and “Licensed Product” (as applicable) under this Agreement, subject to this Section 7.5. Notwithstanding the foregoing, IDEAYA shall continue to be responsible for its portion of Shared Development Costs obligations for any and all studies, solely to the extent as contemplated in the relevant Collaboration Plans and Development Plans in the form as they exist as of the date such IDEAYA Opt-Out notice is delivered to GSK, that are ongoing as of the Cost Share End Date until such studies have been completed.

7.5.2

Adjustment of Economics. Effective from and after the Cost Share End Date, notwithstanding any other provision of this Agreement to the contrary, the following economic terms shall apply with respect to the applicable Cost Share Opt Out Compounds and Products:

(a)If the Cost Share End Date occurs prior to the achievement of the Registration Study Initiation milestone set forth in Section 7.8 with respect to such Cost Share Opt Out Compounds and Products then GSK shall pay to IDEAYA a running royalty on Net Sales of such Cost Share Opt Out Compounds and Products by GSK, its Affiliates, and its Sublicensees in accordance with Section 7.12.

(b)If the Cost Share End Date occurs after the achievement of the Registration Study Initiation milestone set forth in Section 7.8 with respect to such Cost Share Opt Out Compounds and Products then GSK shall pay to IDEAYA a running royalty on Net Sales of such Cost Share Opt Out Compounds and Products by GSK, its Affiliates, and its Sublicensees in accordance with Section 7.12; provided that the [***] percent ([***]%), [***] percent ([***]%), [***] percent ([***]%) and [***] percent ([***]%) royalty rates set forth therein shall be [***] [***] percent ([***]%), [***] percent ([***]%), [***] percent ([***]%) and [***] percent ([***]%), respectively.

7.6

Option Exercise Fee. Subject to Section 7.6.1, GSK shall pay to IDEAYA a one-time, non-refundable, non-creditable fee of Fifty Million Dollars ($50,000,000.00) (the “Option Fee”) by the fifth (5th) day of the month following the sixtieth (60th) day from GSK’s receipt of an invoice from IDEAYA therefor, which invoice will be provided only after Option Exercise by GSK.

7.6.1

HSR Filing. If GSK reasonably determines that the transactions to occur upon consummation of Option Exercise require an HSR Filing, then upon notice of Option Exercise (a) GSK shall provide notice of such HSR Filing obligation to IDEAYA (to the extent it has not already done so), (b) Section 2.2 shall apply with respect to the effectiveness of such Option Exercise (replacing Execution Date in the first sentence thereof with the notice date of Option Exercise) and (c) all rights and obligations of the Parties related to such Option or Option Exercise (including payment of the Option Fee and the grant of any license to GSK, but not with respect to making any HSR Filing) shall be tolled until the HSR Clearance Date. The last sentence of Section 2.2 (i.e., a Party’s termination right) shall not apply to any delay in achieving the HSR Clearance Date with respect to an HSR Filing following notice of Option Exercise under this Section 7.5.1. If the HSR Clearance Date with respect to such Option Exercise has not occurred on or before the date that is one hundred eighty (180) days after the date as of which both Parties have made their respective HSR Filings and the initial waiting period under the HSR Act has commenced with respect to such Option, then either Party may terminate the MAT2A Program upon notice to the other Party (and such termination, regardless of whether by IDEAYA or GSK, shall be treated as an automatic termination of this Agreement with respect to the MAT2A Target in accordance with Section 6.2.8).

7.7

Early Stage Development Milestones. GSK shall make the non-refundable, non-creditable milestone payments to IDEAYA that are set forth below upon the first achievement by IDEAYA, GSK, or their respective Affiliates or Sublicensees, of the milestone events set forth below with respect to the applicable Licensed Compound or Licensed Product. Each milestone shall be payable only once per Licensed Compound or Licensed Product of the same class as set forth in the table below; provided, that with respect to a given Target for which two or more Licensed Compounds in different classes achieve such milestones (for example, a POLQ ATPase Compound, a POLQ Polymerase Compound, or a POLQ Degrader Compound), GSK shall not be required to pay the GLP Toxicology Study Initiation milestone and the IND Acceptance by FDA milestone for the second (or any subsequent) Licensed Compound(s) to achieve those milestones unless, and until, such second (or applicable subsequent) Licensed Compound(s) achieves the Clinical Dose Expansion milestone.


Milestone Event	POLQ Compound or POLQ Product	WRN Compound or WRN Product
[***]	$[***]	$[***]
[***]	$[***]	$[***]
[***]	$[***]	$[***]

7.8Late Stage Development and Filing Milestones. GSK shall make the non-refundable, non-creditable milestone payments to IDEAYA that are set forth below upon the first achievement by GSK, or its Affiliates or Sublicensees of the milestone events set forth below with respect to the applicable Licensed Product (“Late Stage Development and Filing Milestone”).

Each milestone shall be payable only once per Major Indication per Licensed Product, up to a maximum of three (3) Major Indications per Licensed Product as set forth in the table below. For clarity, [***]. For clarity, [***] (for example, [***]).


	POLQ Product
Milestone Event	First Major Indication	Second Major Indication	Third Major Indication
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]


	MAT2A Product (solely if the Option Closing Date occurs)
Milestone Event	First Major Indication	Second Major Indication	Third Major Indication
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]


	WRN Product
Milestone Event	First Major Indication	Second Major Indication	Third Major Indication
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]

For the avoidance of doubt, the total amount of potential milestone payments payable under this Section 7.8 per Major Indication for each Licensed Product listed above is One Hundred Fifty Five Million Dollars ($155,000,000.00) and the total amount of potential milestone payments payable per Licensed Product if all milestones are achieved for all three (3) Major Indications ([***]) is Four Hundred Sixty Five Million Dollars ($465,000,000.00). In the event that a given Licensed Product achieves a Late Stage Development and Filing Milestone for more than one Major Indication (e.g., [***] for the treatment of both breast cancer and prostate cancer Major Indications) then all relevant preceding Late Stage Development and Filing Milestone payments for such Licensed Product shall become due and payable by GSK (e.g., the $[***] milestone payment for each of the first and second Major Indication, or, if a $[***] milestone payment was already made by GSK for a first Major Indication that was not breast cancer and prostate cancer,

then the $[***] milestone payment for each of the second and third Major Indication would become due and payable).

7.9

First Commercial Sales Milestones. GSK shall make the non-refundable, non-creditable milestone payments to IDEAYA that are set forth below upon the first achievement by GSK, or its Affiliates or Sublicensees of the milestone events set forth below with respect to the applicable Licensed Product. Each milestone shall be payable only once per Licensed Product as set forth in the table below.


Milestone Event	POLQ Product	MAT2A Product (solely if the Option Closing Date occurs)	WRN Product
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]
[***]	$[***]	$[***]	$[***]

7.10	Net Sales Milestones . GSK shall pay to IDEAYA the Net Sales-based milestone payments set forth below the first time the aggregate Net Sales for the applicable Licensed Product within any Calendar Year in the applicable Net Sales Territory meets the corresponding threshold indicated below.


Milestone Event	POLQ Products	MAT2A Products	WRN Products
Net Sales in a Calendar Year are at least $[***]	$[***]	$[***]	$[***]
Net Sales in a Calendar Year are at least $[***]	$[***]	$[***]	$[***]
Net Sales in a Calendar Year are at least $[***]	$[***]	$[***]	$[***]

7.11Milestone Payment Terms. A Party achieving a milestone shall notify the other Party in writing promptly, but in no event later than [***] Business Days after each achievement of each milestone set out in Sections 7.7, 7.8, 7.9 and 7.10 that triggers a payment. GSK shall pay all such milestone payments due in Dollars [***] days after GSK’s receipt of an invoice from IDEAYA therefor following the achievement of the corresponding milestone event. Additionally, for clarity, [***]. Similarly, for clarity, [***]. Notwithstanding the foregoing, in the circumstance where [***], then the following principles shall apply: (A) [***], and (B) [***].

7.12	Royalties and Payments.

7.12.1

Net Sales Royalties. In partial consideration for the rights and licenses granted to GSK under this Agreement, GSK will pay IDEAYA royalties on aggregate Net Sales of Licensed Products, on a Licensed Product–by–Licensed Product basis, in the applicable

Net Sales Territory in each Calendar Year at the royalty rates set out below. The period in which royalties are payable for any Licensed Product commences with the First Commercial Sale of the Licensed Product in a country within its Net Sales Territory and ends, with respect to that Licensed Product in that country upon the later to occur of either: (i) ten (10) years from First Commercial Sale of the Licensed Product in that country; or (ii) expiration of the last-to-expire Valid Patent Claim covering the composition of matter or method of use of the Licensed Product in that country (the “Royalty Term”).


Calendar Year Net Sales	Royalty Rate
For that portion of aggregate Net Sales in a Calendar Year of the applicable Licensed Product in the applicable Net Sales Territory up to and including $[***]	[***]%
For that portion of aggregate Net Sales in a Calendar Year of the applicable Licensed Product in the applicable Net Sales Territory greater than $[*] up to and including $[*]	[***]%
For that portion of aggregate Net Sales in a Calendar Year of the applicable Licensed Product in the applicable Net Sales Territory greater than $[*] up to and including $[*]	[***]%
For that portion of aggregate Net Sales in a Calendar Year of the applicable Licensed Product in the applicable Net Sales Territory greater than $[***]	[***]%

7.12.2

No Valid Patent Claim. The foregoing provisions of Section 7.12.1 notwithstanding, the royalties payable with respect to Net Sales of Licensed Products shall be reduced, on a Licensed Product–by–Licensed Product and country-by-country basis, to [***] of the amounts otherwise payable pursuant to 7.12.1 and subject to Section 7.12.5 during any portion of the Royalty Term after expiration of the last-to-expire Valid Patent Claim covering the composition of matter or method of use of the applicable Licensed Product in that country.

7.12.3

Generic Step-Down. If, on a Licensed Product–by–Licensed Product and country-by-country basis, one or more Generic Products of such Licensed Product are sold in such country, and Net Sales of such Licensed Product in such country in two (2) consecutive Calendar Quarters are less than [***] of the aggregate market of the Generic Products and Licensed Product, as measured by IQVIA (or other industry accepted source used by GSK at such time), then the royalties payable with respect to Net Sales of such Licensed Product pursuant to Sections 7.12.1 and 7.12.2 for such Calendar Quarter shall be reduced to [***] of the royalties otherwise payable pursuant to Section 7.12.1, subject to Section 7.12.5.

7.12.4

Third Party Payments. GSK shall be entitled to credit against the royalties due to IDEAYA upon Net Sales of a Licensed Product in a country solely in the Net Sales Territory an amount equal to [***] of the total royalties paid by GSK to Third Parties with respect to license rights to Patents or Know-How Controlled by Third Parties that GSK reasonably determines, after consultation with counsel, are necessary to avoid infringement of such Third Party Patents or misappropriation of such Third Party Know-How in the manufacture, use, offer for sale, sale or importation of such Licensed Product solely in the Net Sales Territory; provided that all such credits pursuant to this Section 7.12.4 shall not reduce the royalties payable to IDEAYA with respect to a MAT2A Product in any country to less than [***] of the royalties otherwise due to IDEAYA pursuant to Section 7.12.1 and subject to Section 7.12.5; and provided further that, GSK shall have the right to carry forward for application against royalties payable to IDEAYA with respect to Net Sales of such Licensed Product solely in the Net Sales Territory in future periods any amount that is not so credited due to the limitation in the immediately preceding proviso (but for clarity subject to the floor stated in the preceding proviso).

7.12.5

Royalty Floor. In no event shall the cumulative royalty reductions and offsets in Sections 7.12.2–7.12.4 operate to reduce the total royalties due and payable by GSK to IDEAYA to more than [***] of the amounts as set forth in Section 7.12.1.

7.12.6

Royalty Reporting. Each Calendar Quarter following the First Commercial Sale of a Licensed Product in the applicable Net Sales Territory, GSK shall furnish to IDEAYA a written report showing on a Licensed Product–by–Licensed Product and country-by-country basis (a) the Net Sales; and (b) the calculation of the royalties payable under this Agreement on account of those Net Sales. Each royalty report along with the royalties shown to have accrued on that report are due and payable to IDEAYA within [***] days following the end of such Calendar Quarter. All payments due under this Section 7.12 shall be made by bank wire transfer in immediately available funds to an account designated by IDEAYA.

7.13

Audits. Each Party shall, and shall ensure that its Affiliates and Sublicensees, keep complete and accurate records of the items underlying Shared Development Costs, and GSK shall, and shall ensure that its Affiliates and Sublicensees, keep complete and accurate records of Net Sales (for any royalty-bearing Licensed Products hereunder and for calculation of Pre-Tax Profit or Loss as applicable), and, in the case in which the Parties are sharing Pre-Tax Profit or Loss, Allowable Expenses and Other Income. Each Party will have the right, at its own expense and no more frequently than once in any twelve (12)-month period (except in the case of fraud), to have an independent, certified public accountant, selected by such Party from nationally reputable accounting firms in the United States or the United Kingdom and reasonably acceptable to the other Party, review any such records of the other Party in the location(s) where such records are maintained by the other Party upon [***] days’ prior written notice and during regular business hours and under obligations of confidentiality, for the sole purpose of verifying the basis and accuracy of payments made under this Agreement, with respect to any Calendar Year ending not more than three (3) years prior to the request of the auditing Party. If the review of such records reveals that the other Party has failed to accurately report financial information required to be reported hereunder, or to make any payment (or portion thereof) required under this Agreement, then the other Party shall pay to the auditing Party any underpaid amounts due

hereunder together with interest calculated in the manner provided in Section 7.16 within [***] days. If any such discrepancies are greater than [***] percent ([***]%) of the amounts actually due for the audited period, the other Party shall pay all reasonable costs incurred in conducting such review. Once a Party has conducted a review and audit of the other Party pursuant to this Section 7.13 in respect of any given period, it may not subsequently re-inspect the other Party’s records in respect of such period, unless a subsequent audit of a separate reporting period uncovers fraud on the part of the audited Party that is reasonably expected to have been occurring during the prior audited period. For clarity, however, if a discrepancy is identified by the accountant during the course of an audit and the Parties do not agree upon a resolution of such discrepancy, then the auditing Party’s accountant may re-inspect the books and records to the extent reasonably relevant to resolving such discrepancy. Unless otherwise defined or stated, financial terms shall be calculated by the accrual method under the applicable Party’s Accounting Standards. Financial records related to the foregoing shall be maintained (in such form as may be available) by each Party for a period of no less than seven (7) years following the end of the period to which they pertain.

7.14

Tax Matters. Each Party will make all payments to each other under this Agreement without deduction or withholding for Taxes except to the extent that any such deduction or withholding is required by Applicable Law in effect at the time of payment. The Parties shall reasonably cooperate with one another to reduce or minimize any such deduction or withholding required by Applicable Law, including by providing reasonable advance notice of such deduction or withholding by providing any forms or other certifications necessary to reduce the amount of such withholding.

7.14.1

Any amount payable by one Party to the other under this Agreement is deemed to be exclusive of any amount in respect of any VAT chargeable on the supply for which that sum is the consideration (in whole or in part) for VAT purposes. If anything done by one Party under this Agreement constitutes, for VAT purposes, the making of a supply to the other Party and VAT is or becomes chargeable on that supply, the Party receiving the supply shall pay the other Party, in addition to any amount otherwise payable under this Agreement by the Party receiving the supply, a sum equal to the amount of the VAT chargeable on that supply against delivery of a valid VAT invoice to the Party receiving the supply.

7.14.2

Any Tax required to be withheld on amounts payable under this Agreement will promptly be paid by the Party making the payment (the “Payor”) on behalf of the Party receiving the payment (the “Payee”) to the appropriate governmental authority, and Payor will furnish Payee with proof of payment of such Tax. Any such Tax required to be withheld will be an expense of and borne by Payee, except that notwithstanding anything to the contrary in this Agreement, if a Payor assigns, transfers or otherwise disposes of some or all of its rights and obligations to any Person (without the prior written consent of the Payee) and if, as a result of such action, the withholding or deduction of tax required by Applicable Law with respect to payments under this Agreement is increased (the “Increased Withholding Taxes”), then any amount payable to the Payee under this Agreement shall be increased to take into account such Increased Withholding Taxes as may be necessary so that, after making all required withholdings (including

withholdings on the withheld amounts), the Payee receives an amount equal to the sum it would have received had no such Increased Withholding Taxes been made.

7.14.3

The Parties will cooperate with respect to all documentation required by any taxing authority or reasonably requested by either Party to secure a reduction in the rate of applicable withholding Taxes or an exemption from withholding Taxes. Notwithstanding the foregoing, if a Party is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, or recovery of, applicable withholding tax, then it may deliver to the other Party or the appropriate governmental authority the prescribed forms necessary to reduce the applicable rate of withholding or to relieve the Payor of its obligation to withhold tax. If a Payee timely delivers to the Payor a validly executed form establishing a reduced rate or exemption from withholding, the Payor shall apply the reduced rate of withholding, or not withhold, as the case may be, provided that the Payor is in receipt of evidence, in a form reasonably satisfactory to the Payor. If, in accordance with the foregoing, the Payor withholds any amount, then it will pay to the Payee the balance when due, timely remit to the proper taxing authority of the withheld amount, and send the Payee proof of such remittance within [***] days following that remittance.

7.14.4

No Partnership. Nothing contained in this Agreement shall be deemed or construed by the Parties, any of their Affiliates or any third person to treat the relationship between the Parties contemplated by this Agreement as a partnership, joint venture or other business entity under Treasury Regulations Section 301.7701-1(a)(2) (or any corresponding provision under state, local or non-U.S. tax Law) (an “Entity”). Without the prior written consent of the Parties (such consent not to be unreasonably withheld, delayed or conditioned), no Party (or successor or assignee) shall, for Tax purposes, report the relationships established by this Agreement as an Entity, including either (a) making any disclosure that the relationships established by this Agreement may give rise to an Entity (whether on a U.S. Internal Revenue Service Form 8275 or otherwise) or (b) withholding any amounts from payments made to the other Party pursuant to Section 1446 of the Code (or any corresponding provision under state, local or non-U.S. tax law), unless required by a tax authority on audit or other examination.

7.15	Invoicing. To the extent an invoice is required to be submitted to GSK hereunder, such invoice shall include the information set forth in Schedule 7.15.

7.16

Late Payments. Without limiting either Party’s remedies under this Agreement, any undisputed payments or portions thereof due hereunder that are not paid on the date such payments are due under this Agreement shall bear interest at a rate equal to [***] percentage points above the prime rate as published by Citibank, N.A., New York, New York, or any successor thereto, at 12:01 a.m. on the first day of each Calendar Quarter in which such payments are overdue, calculated on the number of days such payment is delinquent. Where the late payment is caused by the Party that is owed the payment, including for reasons such as failure to communicate in a timely manner changes to bank details, or failure to respond to communications from the Party owing the payment regarding the interpretation or dispute of the terms of such payment, then no interest will be payable by the Party owing the payment.

7.17

Currency Conversion. Except as otherwise agreed by the Parties, all payments to be made by either Party to the other Party under this Agreement shall be made by such Party or its Affiliate in U.S. Dollars to the account designated by the Party to which the relevant payment is due. In the case of any amounts designated in another currency, then each Party shall convert such foreign currency into U.S. Dollars using its standard conversion method consistent with its applicable Accounting Standard in a manner consistent with the respective Party’s customary and usual conversion procedures used in preparing its audited financial reports applied on a consistent basis, provided that such procedures use a widely accepted source of published exchange rates. With respect to MAT2A Compounds and MAT2A Products and WRN Compounds and WRN Products for which IDEAYA has not exercised the IDEAYA Opt-Out, the Parties shall share equally (50/50) any Currency Gains and Losses as a result of such conversion.

7.18

Blocked Payments. In the event that, by reason of Applicable Laws in any country, it becomes impossible or illegal for a Party or its Affiliate to transfer, or have transferred on its behalf, payments to the other Party, such Party shall promptly notify the other Party of the conditions preventing such transfer and such payments shall be deposited in local currency in the relevant country to the credit of the other Party in a recognized banking institution designated by the other Party or, if none is designated by the other Party within a period of [***] days, in a recognized banking institution selected by such Party or its Affiliate, as the case may be, and identified in a notice given to the other Party.

7.19

Disclaimer. IDEAYA and GSK each acknowledge and agree that nothing in this Agreement will be construed as representing any estimate or projection of (i) the successful Development or Commercialization of any Licensed Product under this Agreement, (ii) if Commercialized, that any Licensed Product will achieve any particular pricing or reimbursement amount or any particular sales level, or (iii) anticipated sales or the actual value of any Licensed Product that may be successfully Developed or Commercialized under this Agreement.

7.20

Cooperation on Inter-Party Structure. The Parties will reasonably cooperate to establish or facilitate an optimal inter-Party financial operational structure (including, if necessary, procedures and agreements among the various Affiliates of the Parties) which is consistent with the economic result contemplated herein, consistent to the extent feasible with each Party’s internal structures and procedures, and not adverse to the Parties financial, economic, or tax positions.

7.21

Resolution of Financial Disputes. If a Party has a dispute, claim or controversy relating to calculation or reconciliation of (i) Shared Development Costs or (ii) (a)Net Sales, (b) Allowable Expenses, or (c) Other Income, as each (a) through (c) relates to the calculation or reconciliation under the Pre-Tax Profit or Loss Schedule, such Party shall provide such other Party with a written notice setting forth in reasonable detail the nature and factual basis for such good-faith dispute and each Party agrees that it shall seek to resolve such dispute within [***] Business Days within the Financial Working Group after the date such written notice is received. If no such resolution is reached by the Parties, the dispute shall be referred to the JSC for resolution, and if the JSC is unable to reach resolution within [***] Business Days, then the dispute shall be resolved in accordance with the procedures set forth in Section 7.22.

Notwithstanding any other provision of this Agreement to the contrary, the obligation to pay any reasonably disputed amount shall not be deemed to have been triggered until such dispute is resolved hereunder, provided that any undisputed portion of such payment shall be paid by the paying Party in accordance with the payment terms set forth in this Agreement. Any disputed portion of any payment shall be paid by the responsible Party within [***] days after the date on which the Financial Working Group or JSC, as applicable, resolves the dispute.

7.22

Specific Finance Disputes. If the Parties are unable to reach a mutually acceptable resolution of any dispute falling within Section 7.21 as set forth therein, the dispute shall be submitted for resolution to a certified public accounting firm jointly selected by each Party’s certified public accountants or to such other Person as the Parties shall mutually agree (the “Finance Expert”). The decision of the Finance Expert shall be final, and the costs of such dispute resolution shall be borne by the Party that the Finance Expert has determined owes an amount to the other Party. Any amounts owed by one Party to the other Party as a result of such resolution shall be paid or reimbursed by the owing Party within [***] days following the applicable decision of the Finance Expert.

7.23

Commercialization of Companion Diagnostics.Reasonably in advance of GSK, or its Affiliates desiring to make a Companion Diagnostic (that is owned or Controlled by GSK or its Affiliates) available for patients in order to generate separate material financial benefit from any Licensed Product, GSK shall notify IDEAYA in writing thereof, and, as a condition of such use, the Parties shall negotiate in good faith on an amendment to this Agreement such that IDEAYA will receive an equitable economic benefit based on revenues generated by such Companion Diagnostic, in consideration of IDEAYA’s grant of licenses under this Agreement and payment of Development Costs for the Development of such Companion Diagnostic in accordance with the terms and conditions of this Agreement.

ARTICLE 8
MAT2A Option; Licenses

8.1

MAT2A Option; License. Commencing on the Effective Date, IDEAYA hereby grants to GSK the exclusive option to obtain an exclusive, sublicensable (through multiple tiers and in accordance with this Agreement) license under the IDEAYA Technology to make, have made, use, sell, offer for sale and import MAT2A Compounds and MAT2A Products in the Field in the Territory (the “Option”). GSK may exercise the Option at any time commencing on the Effective Date and (i) if the MAT2A Combination Study has not been Initiated prior to the Option Package Delivery Date, expiring on the date which is [***] after the Option Package Delivery Date, or (ii) if the MAT2A Combination Study has been Initiated prior to the Option Package Delivery Date, expiring [***] after the Option Package Delivery Date (the time period until such expiration of GSK’s right to exercise the Option, the “Exercise Period”). To exercise such Option (the “Option Exercise”), GSK shall provide written notice indicating such exercise to IDEAYA prior to expiration of the Exercise Period. The first day on which all of the following have occurred shall be deemed the “Option Closing Date”: (1) IDEAYA has received such notice of Option Exercise, (2) the HSR Clearance Date has occurred or is deemed inapplicable in accordance with Section 7.6, and (3) IDEAYA has received the Option Fee in accordance with

Section 7.6. Prior to GSK’s Option Exercise, during the Exercise Period IDEAYA shall (a) disclose to GSK, or make available to GSK by granting to GSK designated personnel access to a virtual data room containing, further Data (in addition to that required under the Option Data Package) including preclinical, clinical, toxicology, CMC, regulatory documentation necessary for GSK to conduct diligence (the “MAT2A Program Diligence Data”) within [***] days after the Option Package Delivery Date, and (b) as reasonably requested by GSK, provide GSK with reasonable consultation and assistance to the extent necessary or reasonably useful for GSK to understand and conduct diligence on the Option Data Package and MAT2A Program Diligence Data in a manner and on such timelines to enable GSK to make an informed decision in respect of the Option. Effective solely upon the Option Closing Date (if applicable), IDEAYA shall grant and hereby grants to GSK and its Affiliates an exclusive, royalty-bearing, sublicensable (through multiple tiers) license under the IDEAYA Technology to make, have made, use, sell, offer for sale and import MAT2A Compounds and MAT2A Products in the Field in the Territory during the Term. For clarity, GSK acknowledges and agrees that Section 6.2.8 shall apply if GSK does not timely exercise the Option during the Exercise Period and the Option Closing Date does not occur.

8.2	License Grants to GSK.

8.2.1

IDEAYA hereby grants to GSK and its Affiliates, as of the Effective Date, an exclusive, royalty-bearing, sublicensable (through multiple tiers) license under the IDEAYA Technology to make, have made, use, sell, offer for sale and import (a) WRN Compounds and WRN Products, and (b) POLQ Compounds and POLQ Products, in each case of (a) and (b) in the Field in the Territory during the Term; provided that IDEAYA reserves the right under all such IDEAYA Technology to conduct activities assigned to it under the relevant Collaboration Plan for the WRN Program and POLQ Program; and provided further that such reservation of rights shall terminate upon completion of the WRN Program and POLQ Program, respectively.

8.2.2

IDEAYA hereby grants to GSK and its Affiliates, as of the Effective Date and solely to the extent that it is agreed in the Collaboration Plan applicable to the MAT2A Program that GSK shall conduct GSK MAT2A Preclinical Activities, a non-exclusive, royalty-free, worldwide license to IDEAYA Technology solely to the extent necessary for GSK’s performance of such GSK MAT2A Preclinical Activities under the relevant Collaboration Plan for the MAT2A Program, and for no other purpose whatsoever. The foregoing license shall expire on the earlier to occur of (a) the Option Closing Date; (b) expiration of the Option Period without exercise of the Option; or (c) completion by GSK of the GSK MAT2A Preclinical Activities under the relevant Collaboration Plan for the MAT2A Program. The foregoing license shall be sublicensable to GSK’s Affiliates and subcontractors solely to the extent such Affiliates and subcontractors are performing any of the GSK MAT2A Preclinical Activities on behalf of GSK under the relevant Collaboration Plan for the MAT2A Program. For the avoidance of doubt, the foregoing license does not include the right to conduct the MAT2A Combination Study and any license to IDEAYA Technology required for the conduct of the MAT2A Combination Study shall be as set forth in the MAT2A CTCSA.

8.3

License Grant to IDEAYA. GSK hereby grants to IDEAYA as of the Effective Date, a non-exclusive, royalty-free, worldwide license under the GSK Technology solely for the purpose of (i) IDEAYA’s performance of its assigned activities under the relevant Collaboration Plan for the applicable Collaboration Program. The forgoing licenses are sublicensable to IDEAYA’s Affiliates, Sublicensees, and subcontractors.

8.4

Sublicenses. Each Party shall have the right to grant sublicenses to its Affiliates and shall have the further right to grant sublicenses to Third Parties (each, a “Sublicensee”), and any such sublicenses shall be subject to the conditions set forth in this ARTICLE 8. Any and all sublicenses shall be in writing and shall be subject to, and consistent with, the terms and conditions of this Agreement applicable to Sublicensees. Each Party shall be responsible for ensuring the compliance of its Sublicensees with all obligations owed to the other Party under this Agreement, shall remain liable to the other Party for all acts and omissions of such Sublicensees and shall remain responsible for performance of all of its obligations to the other Party hereunder. Neither Party’s grant of any sublicense will not relieve such Party or its Affiliates from any of its obligations under this Agreement. To the extent GSK grants an exclusive sublicense to any Sublicensee of any rights exclusively licensed from IDEAYA hereunder (an “Exclusive Sublicense”), GSK shall promptly notify IDEAYA thereof and shall promptly thereafter provide IDEAYA with a copy of such Exclusive Sublicense, which copy may be reasonably redact the detailed financial terms of such Exclusive Sublicense agreement and which is deemed Confidential Information of GSK. As a condition precedent to and requirement of any such Exclusive Sublicense, if sales by such Sublicensee are included in Net Sales hereunder, such Sublicensee shall permit audit rights with respect to its reporting of Net Sales that are consistent with those given by GSK hereunder with respect to its sales included in Net Sales.

8.5

No Implied Licenses; Retained Rights. Each Party acknowledges that the licenses granted under this ARTICLE 8 are limited to the scope expressly granted, and all other rights to Patents and Know-How licensed hereunder are expressly reserved to the Party granting the license to such Patents or Know-How. Without limiting the foregoing, it is understood that where an exclusive license under Patents or Know-How is granted to a Party under this ARTICLE 8 for a particular purpose, the Party granting such license retains all of its rights to such Patents or Know-How for all purposes not expressly licensed.

8.6

Rights in Bankruptcy. The Parties intend to take advantage of the protections of Section 365(n) (or any successor provision) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction to the maximum extent permitted by Applicable Law. All rights and licenses granted under or pursuant to this Agreement, but only to the extent they constitute licenses of a right to “intellectual property” as defined in Section 101 of the U.S. Bankruptcy Code, shall be deemed to be “intellectual property” for the purposes of Section 365(n) or any analogous provisions in any other country or jurisdiction. The non-bankrupt Party shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, including the right to obtain such intellectual property from another entity. In the event of the commencement of a bankruptcy proceeding by or against a Party under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the non-bankrupt Party shall be entitled to a complete duplicate

of (or complete access to, as appropriate) all such intellectual property (including all embodiments of such intellectual property), which, if not already in the non-bankrupt Party’s possession, shall be promptly delivered to it upon its’s written request (a) upon commencement of a bankruptcy proceeding, unless the bankrupt Party continues to perform all of its obligations under this Agreement, or (b) if not delivered pursuant to clause (a) because the bankrupt continues to perform, upon the rejection of this Agreement by or on behalf of the bankrupt Party. Unless and until the bankrupt Party rejects this Agreement, the bankrupt Party shall perform this Agreement or provide such intellectual property (including all embodiments of such intellectual property) to the non-bankrupt Party, and shall not interfere with the rights of the non-bankrupt Party to such intellectual property, including the right to obtain the intellectual property from another entity. In the case of an insolvency that is governed by non-U.S. bankruptcy law, the Parties agree that, to the extent not prohibited by the applicable insolvency law, the non-bankrupt Party will be entitled to at least the same rights and protections afforded by the U.S. Bankruptcy Code, including survival of the licenses granted hereunder even if the bankrupt Party revokes or terminates this Agreement and a copy of the embodiments of such intellectual property, without conditions other than any legally required payment of royalties.

ARTICLE 9
CONFIDENTIALITY; Publications and Presentations

9.1

Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed by the Parties in writing, during the Term and for a period of ten (10) years following termination or expiration thereof (provided that with respect to any such Confidential Information which constitutes a bona fide trade secret of such Party as specifically identified by such Party as a trade secret to the other Party, in writing during the Term, such obligations shall continue for as long as such Confidential Information remains a trade secret), each Party will be obligated to keep confidential and not publish or otherwise disclose to a Third Party, and not to use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement or is reasonably necessary or useful for the performance of a Party’s obligations, or the exercise of such Party’s rights under, this Agreement. The confidentiality and non-use obligations with respect to a Party’s Confidential Information in this Section 9.1 will not include any information that:

9.1.1

is or becomes part of the public domain through no wrongful act, fault or negligence on the part of the Receiving Party;

9.1.2

can be demonstrated by competent proof to have been in the Receiving Party’s possession prior to initial disclosure by the Disclosing Party without any obligation of confidentiality with respect to such information;

9.1.3

is subsequently received by the Receiving Party from a Third Party who is not bound by any obligation of confidentiality with respect to such information;

9.1.4

has been published by a Third Party or otherwise enters the public domain through no fault of the Receiving Party in breach of its contractual obligations to the Disclosing Party; or

9.1.5

can be demonstrated by competent proof to have been independently developed (outside the scope of this Agreement) by or for the Receiving Party without reference to or use of the Disclosing Party’s Confidential Information.

9.2	Authorized Disclosure. The Receiving Party may disclose Confidential Information of the Disclosing Party to the extent that such disclosure is:

(a)

made in response to a valid order of a court or other governmental authority or, if in the reasonable opinion of the Receiving Party’s legal counsel, such disclosure is otherwise required by Applicable Law, including by reason of filing with securities regulators; provided that the Receiving Party shall, where practicable, first have given notice to the Disclosing Party and given the Disclosing Party a reasonable opportunity to quash such order or to obtain a protective order or confidential treatment; and provided further that the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in response to such court or governmental order;

(b)

made by or on behalf of the Receiving Party to Regulatory Authorities as required in connection with any filing, application or request for Regulatory Approval for the Licensed Products as permitted by this Agreement; provided that reasonable measures shall be taken to assure confidential treatment of such information to the extent practicable and consistent with Applicable Law;

(c)

made by or on behalf of the Receiving Party to a patent authority as may be reasonably necessary or useful for purposes of obtaining a Patent as permitted by this Agreement; provided that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available; or

(d)

made by the Receiving Party to its attorneys, auditors, advisors, consultants, contractors, existing or prospective collaboration partners, licensees, sublicensees, existing or prospective investors, prospective acquirers, prospective lenders or other Third Parties as may be necessary in connection with the performance of this Agreement, in each case, for limited purposes; provided that such persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the Receiving Party set forth herein.

9.3

Injunctive Relief. Each Party, as a Receiving Party, acknowledges and agrees that due to the unique nature of a Disclosing Party’s Confidential Information, there may be no adequate remedy at law for any breach of its obligations hereunder and that any such breach may allow a Receiving Party or Third Parties unfairly to compete with the Disclosing Party, resulting in irreparable harm to the Disclosing Party. Therefore, notwithstanding the provisions

of Section 15.1, the Parties agree that upon any such breach or any threat thereof, the Disclosing Party shall be entitled to seek appropriate equitable relief at the Disclosing Party’s option in either (a) a court of competent jurisdiction where such Disclosing Party resides, or (b) as provided in Section 15.1, as applicable, in addition to whatever remedies it might have at law in connection with any breach or enforcement of a Receiving Party’s obligations hereunder for the unauthorized use or release of any such Confidential Information.

9.4

Data Breach. When transferring Confidential Information, all communications between GSK and IDEAYA will use encryption methods agreed to by the Parties. Upon discovering any suspected or actual unauthorized disclosure, loss or theft of Confidential Information (a “Data Security Breach”) IDEAYA will send an e-mail to [***] notifying GSK, and upon discovering any suspected or actual Data Security Breach, GSK will send an e-mail to [***], notifying IDEAYA. The Parties shall work with each other in good faith to identify a root cause and remediate the Data Security Breach.

9.5

Press Releases and Other Public Statements. Both Parties shall keep the terms of this Agreement confidential and such terms shall be treated as Confidential Information of both Parties in accordance with this ARTICLE 9 (and for clarity subject to Section 9.2), except that each Party may make the publications and presentations described in Sections 9.6 through 9.8 on the terms set forth therein, and each Party may (a) issue a public announcement of the execution of this Agreement in a form attached hereto as Schedule 9.5; (b) disclose the content of the Agreement to existing or prospective attorneys, auditors, advisors, consultants, contractors, existing or prospective collaboration partners, licensees, sublicensees, existing or prospective shareholders, investors, prospective acquirers, or prospective lenders for limited purposes under obligations of confidentiality and non-use no less restrictive than those in this Agreement; (c) disclose the content as necessary to subcontractors, sublicensees and other bona fide collaboration partners under obligations of confidentiality and non-use similar to those in this Agreement; or (d) as necessary as required by securities regulators, the rules of any stock exchange or as part of any listing of the securities of IDEAYA or GSK on any stock exchange. Neither Party will use the other’s name or logo in any press release or product advertising, or for any other promotional purpose, without first obtaining the other's written consent and entering into appropriate trademark or housemark licenses, as applicable. Any public announcement to be made in accordance with this Section 9.5 will be provided by the publishing Party to the other Party at least [***] days prior to its scheduled release; provided that, if the Party proposing such public announcement cannot provide the reviewing Party with [***] days’ notice due to extraordinary circumstances, such Party will use reasonable efforts to provide the reviewing Party with the proposed public statement for comment at least [***] hours before release. Notwithstanding the foregoing in this Section 9.5, a Party may make subsequent public announcements or press releases of solely of information previously publicly disclosed in accordance with this ARTICLE 9 without the advance written consent of the other Party, so long as (i) such subsequent public announcements or press releases are released without changes to the substantive information provided therein, (ii) are released within [***] months of the original release, and (iii) the information provided therein is still considered accurate and has not been superseded by other subsequent information known by IDEAYA.

9.6

Publications by GSK. Subject to this Section 9.6 and Section 9.7, as between the Parties, GSK shall control all scientific publications relating to all activities undertaken under this Agreement after completion of each Collaboration Program and after the Option Closing Date (if applicable) for the relevant Licensed Compounds and Licensed Products, which publications shall not require the prior written approval of IDEAYA. For clarity, except as may be set forth in the MAT2A CTCSA, GSK shall not publish any information regarding the activities conducted under the MAT2A Program or during the Interim MAT2A Operating Period without the prior written approval of IDEAYA, and IDEAYA shall have the right to make such publications and other disclosures about its activities conducted under the MAT2A Program or Interim MAT2A Operating Period at its sole discretion.

9.6.1

If GSK or its employees or consultants (such as clinical investigators) wish to publish or publicly present any information about a Licensed Product or the results of any activities relating to the research or development of a Licensed Product, which publication contains any of IDEAYA’s Confidential Information, it shall deliver to IDEAYA a copy of the proposed written publication or an outline of an oral disclosure at least [***] days ([***] days in the case of abstracts) prior to submission for publication or presentation. IDEAYA shall respond in writing promptly and in no event later than [***] days ([***] days in the case of abstracts) after receipt of the proposed material, and may have the right to propose modifications to the publication or presentation for confidentiality reasons, or request a reasonable delay in publication or presentation in order to protect patentable information. If IDEAYA requests a delay to protect patentable information, GSK shall delay submission or presentation for a period not to exceed [***] days to enable relevant patent applications to be filed. Upon expiration of such [***] days, GSK will be free to proceed with the publication or presentation. If IDEAYA reasonably requests modifications to the publication or presentation to prevent disclosure of IDEAYA Confidential Information, GSK shall edit such publication to prevent the disclosure of such information prior to submission of the publication or presentation.

9.6.2

Once a publication or presentation has been approved, GSK may use the information contained in the publication or presentation without seeking further approval.

9.6.3

GSK will ascribe authorship of any proposed publication using accepted standards used in peer-reviewed, academic journals at the time of the proposed publication.

9.6.4

Each publication made in accordance with this Section 9.6 shall not be a breach of the confidentiality provisions contained in Section 9.1.

9.7	Publication of Clinical Information.

9.7.1Notwithstanding anything to the contrary in Section 9.7.2, IDEAYA is responsible for, and has the sole right to, publish clinical Data from the Phase 1 MAT2A Monotherapy Study and Interim MAT2A Activities (a) at its discretion at any time prior to the Option Closing Date, and (b) as required by Applicable Law or IDEAYA’s Internal Policies,

subject to GSK’s ability to review and delay publication solely under the circumstances specified in Section 9.6.1 applied mutatis mutandis, after the Option Closing Date.

9.7.2Notwithstanding the provisions of this ARTICLE 9, and subject to Sections 9.6 and 9.7.1, GSK shall have the right at any time during and after the Term to (a) publish the results or summaries of results of all clinical studies, observational studies and other studies such a meta analyses, conducted with respect to any and all Licensed Products in any clinical trial register maintained by GSK or its Affiliates and the protocols of such clinical studies on www.clinicaltrials.gov or in each case publish the results, summaries or protocols of such clinical or other studies on such other websites or repositories or at scientific congresses and in peer-reviewed journals within such timescales as required by Applicable Law or GSK’s or its Affiliate’s Internal Policies, irrespective of the outcome of such clinical studies; (b) make information from clinical or other studies conducted by or on behalf of GSK with respect to a Licensed Product available under its Data Sharing Initiative; and (c) and make any other public disclosures of clinical Data that become required of GSK due to its Internal Policies and procedures or Applicable Laws.

9.8	Collaboration Program Publications. Each JDC shall discuss whether to publish preclinical Data and if so agreed, the JDC will propose a publication strategy for approval by the JSC.

ARTICLE 10

INTELLECTUAL PROPERTY

10.1	Ownership of Intellectual Property.

10.1.1

Pre-Existing Patents and Know-How. IDEAYA shall retain all of its right, title and interest in, to and under Patents (“IDEAYA Existing Patents”) and Know-How (“IDEAYA Existing Know-How”) Controlled by IDEAYA and existing prior to the Effective Date (collectively, the “IDEAYA Existing Technology”), and GSK shall retain all of its rights, title and interest in, to and under Patents (“GSK Existing Patents”) and Know-How (the “GSK Existing Know-How”) Controlled by GSK and existing prior to the Effective Date (collectively, the “GSK Existing Technology”), except to the extent that any such rights are expressly licensed by one Party to the other Party under this Agreement.

10.1.2

Inventorship. For purposes of this Agreement, the determination of inventorship of any Know-How, whether or not patentable, and Patents claiming such Know-How first invented, discovered, created or developed in the course of performing activities under this Agreement, shall be made in accordance with United States patent law. Such principles of inventorship shall be used to determine whether a Party solely, or the Parties jointly, invented, discovered, created or developed Know-How arising as a result of the performance of its or their obligations or exercise of its or their rights under this Agreement.

10.1.3

Ownership by GSK. GSK shall be the sole owner of all right, title and interest in and to any Know-How (whether or not patentable) and Patents claiming such Know‑How first invented, discovered, created or developed (a) solely by GSK or by a Third Party

acting on behalf of GSK in the performance of activities under this Agreement (with respect to such Third Party, including the conduct of any Collaboration Program), (it being understood that any activities carried out by or on behalf of IDEAYA under this Agreement shall not be construed or interpreted to be carried out by or on behalf of GSK for purposes hereof) or (b) regardless of inventorship, in the conduct of the GSK MAT2A Preclinical Activities that relate solely to the GSK PRMT Product (such Know-How under (a) and (b), the “GSK Arising Know-How”, and such Patents under (a) and (b), the “GSK Arising Patents”), and GSK shall retain all of its right, title and interest thereto, except to the extent that any rights or licenses are expressly granted hereunder by GSK to IDEAYA under this Agreement. IDEAYA hereby assigns to GSK all of its right, title, and interest to such GSK Arising Know-How and GSK Arising Patents.

10.1.4

Ownership by IDEAYA. IDEAYA shall be the sole owner of all right, title and interest in and to any Know-How (whether or not patentable) and Patents claiming such Know‑How first invented, discovered, created or developed (a) solely by IDEAYA or by a Third Party acting on behalf of IDEAYA in the performance of activities under this Agreement (with respect to such Third Party, including in the conduct of any Collaboration Program), (it being understood that any activities carried out by or on behalf of GSK under this Agreement shall not be construed or interpreted to be carried out by or on behalf of IDEAYA for purposes hereof), (b) regardless of inventorship, in the conduct of the GSK MAT2A Preclinical Activities that relate solely to the MAT2A Products, or (c) regardless of inventorship, in the conduct of the MAT2A Program or Interim MAT2A Activities, in each case, prior to the Option Closing Date and that solely relate to the MAT2A Products (such Know-How under (a), (b), and (c), the “IDEAYA Arising Know-How”, and such Patents under (a), (b), and (c), the “IDEAYA Arising Patents”), and IDEAYA shall retain all of its right, title and interest thereto, except to the extent that any rights or licenses are expressly granted hereunder by IDEAYA to GSK under this Agreement. GSK hereby assigns to IDEAYA all of its right, title, and interest to such IDEAYA Arising Know-How and IDEAYA Arising Patents.

10.1.5

Joint Ownership. The Parties shall be the joint owners of all right, title and interest in and to any Know-How (whether or not patentable) and Patents claiming such Know-How first invented, discovered, created or developed either (a) at any time during the Term by or on behalf of IDEAYA on the one hand and by or on behalf of GSK on the other hand, and (b) regardless of inventorship, in the conduct of the GSK MAT2A Preclinical Activities that are not subject to Section 10.1.3 or 10.1.4, including those that relate to the combination of the MAT2A Product and the GSK PRMT Product which were the subject of such GSK MAT2A Preclinical Activities, (collectively, the “Joint Arising Technology”), subject to any rights or licenses that are expressly granted by one Party to the other Party under this Agreement. Except to the extent either Party is restricted by the licenses granted by one Party to the other Party pursuant to this Agreement, or the covenants contained herein, each Party shall be entitled to practice and license the Joint Arising Technology without restriction and without consent of, or (subject to the financial provisions of this Agreement) an obligation to account to the other Party (and to the extent necessary by way of Applicable Laws of any jurisdiction regarding joint ownership of intellectual property rights, each Party grants the other Party the right and license to do the same), and each Party hereby waives any right it may have under Applicable Laws to require any such consent or accounting.

10.1.6

Assignment Obligation. Each Party shall cause all employees, independent contractors, consultants and others who perform activities for such Party under this Agreement to be under an obligation to assign (or, if such Party is unable to cause such person or entity to agree to such assignment obligation despite such Party using reasonable efforts to negotiate such assignment obligation, provide a license under) their rights in and to any Know-How and all intellectual property rights therein to such Party (or to an entity that is obligated to assign such rights to such Party), except where Applicable Law requires otherwise and except in the case of governmental, not-for-profit and public institutions that have standard policies against such an assignment (in which case a Party shall obtain a suitable license, or right to obtain such a license). Further, each Party acknowledges and agrees that it will not intentionally take any action or make any statement that contradicts or negates any such assignment of Know-How or intellectual property rights by its employees, independent contractors, consultants or others who perform activities for such Party under this Agreement.

10.2	Prosecution, Maintenance and Defense.

10.2.1

Subject Patents. As of the Effective Date and throughout the Territory, GSK shall have the first right, but not the obligation, to prepare, file, prosecute, and maintain each of the Patents within the IDEAYA Technology and Joint Arising Technology, and the GSK Arising Patents (“Subject Patents”); provided that, prior to the Option Closing Date, IDEAYA shall have the first right, but not the obligation, to prepare, file, prosecute and maintain each of the Subject Patents related primarily to MAT2A Compounds and MAT2A Products (the “MAT2A Patents”); provided further, that upon the Option Closing Date, GSK shall assume responsibility for the preparation, filing, prosecution and maintenance of such MAT2A Patents; and provided further, if the Option Closing Date does not occur because GSK does not timely exercise its Option during the Option Period, GSK shall have no rights whatsoever for the preparation, filing, prosecution, maintenance, enforcement, or defense of such MAT2A Patents, which shall automatically cease to be “Subject Patents” upon expiration of the Option Period without GSK’s timely exercise of the Option. The Patent Liaison for the Party responsible for preparation, filing, prosecution and maintenance as set forth in the foregoing sentence (the “Controlling Party”) shall keep the other Party’s Patent Liaison reasonably informed on a regular basis regarding such activities, including by providing copies of any material communications or correspondence received from relevant patent authorities to such Patent Liaison, and without limiting the generality of the foregoing, provide the other Party’s Patent Liaison with a copy of any proposed filing or correspondence with any patent authority at least [***] days prior to the anticipated filing or submission date thereof to allow such other Party to have a reasonable opportunity to comment and consult on, all such filings or correspondence, and the Controlling Party shall take all such comments of the other Party with respect thereto under good faith consideration. The Controlling Party will give reasonable notice to the other Party, but in any event at least [***] days advance written notice, before determining to abandon the prosecution, maintenance or defense of any Subject Patent, and the other Party shall, upon receipt of such notice, be entitled to assume and thereafter direct such prosecution, maintenance or defense activities. Upon provision of written notice by the other Party to the Controlling Party of its desire to assume control of such activities, the Controlling Party shall, and shall cause any patent counsel engaged by such Controlling Party to promptly transfer all relevant documents and records, and

provide all such other necessary support to such other Party in order to promptly and fully transfer such activities to the other Party. In such circumstances, the Patent Liaison for the Controlling Party relinquishing direction of the prosecution, maintenance or defense activities will still be kept reasonably informed on a regular basis by the assuming Party’s Patent Liaison regarding, and provided with reasonable opportunity to comment and consult on, all such activities in compliance with the preceding principles in this Section 10.2.1 applied mutatis mutandis.

10.2.2

Patent Costs. During the Term, GSK shall pay all Patent Costs with respect to Subject Patents covering or claiming, or arising in connection with, the POLQ Program. The Parties shall share all Patent Costs as Shared Development Costs with respect to Subject Patents covering or claiming, or arising in connection with, the WRN Program during the Term until the Regulatory Approval of the first WRN Product. Following Regulatory Approval of the first WRN Product, GSK shall pay all such Patent Costs in the Net Sales Territory and the Parties shall share such Patent Costs with respect to Profit Sharing Territory as set forth in the Pre-Tax Profit or Loss Schedule. IDEAYA shall pay all Patent Costs with respect to MAT2A Patents until the Option Closing Date if GSK exercises its option to MAT2A. From and after the Option Closing Date, the Parties shall share all Patent Costs as Shared Development Costs with respect to Subject Patents covering or claiming, or arising in connection with, the MAT2A Program during the Term until the Regulatory Approval of the first MAT2A Product. Following Regulatory Approval of the first MAT2A Product, GSK shall pay all such Patent Costs in the Net Sales Territory and the Parties shall share such Patent Costs with respect to the Profit-Sharing Territory as set forth in the Pre-Tax Profit or Loss Schedule.

10.2.3

GSK Patents. GSK shall have the right to pursue and direct, at its own cost and discretion, the preparation, filing, prosecution and maintenance of GSK Existing Patents and any other Patents Controlled by GSK and used in the performance of this Agreement excluding Subject Patents (the “GSK Patents”) and shall have no obligation to keep IDEAYA informed with respect to such activities.

10.2.4

Cooperation. The Party that is not the Controlling Party will cooperate with the other Party, including furnishing a power of attorney, inventor declaration or assignment documentation, to allow such preparation, prosecution, maintenance or defense activities to be carried out effectively and expeditiously.

10.3	Enforcement Rights

10.3.1

Notification of Infringement. If either Party learns of any infringement or threatened or suspected infringement, or misappropriation or threatened or suspected misappropriation, of any (a) IDEAYA Technology or GSK Technology by the manufacture, use, development or commercialization by a Third Party of a product that competes with a Licensed Product (a “Competing Product”) or (b) Joint Arising Technology, whether or not such Third Party infringement is by a Competing Product (each of (a) and (b), an “Infringement”), such Party shall promptly, but in any event within [***] days of becoming aware of such Infringement, provide notice to the Patent Liaisons describing such Infringement (each, an “Infringement Notice”) and, without limiting the foregoing, in the case of any certification filed

under the “U.S. Drug Price Competition and Patent Term Restoration Act of 1984” (the “Hatch-Waxman Act”) where a response is required under Applicable Law (in order to avoid waiving rights), such Party shall provide notice as quickly as possible and in no event later than [***] days prior to the applicable deadline for filing a response. For clarity, any certification filed under the Hatch-Waxman Act shall constitute an Infringement for the purposes of this Agreement.

10.3.2

Enforcement and Recoveries.

(a)

The Controlling Party shall have the initial right, but not the obligation, to pursue and direct enforcement of the applicable Subject Patent against such Infringement. If the Controlling Party decides not to abate such Infringement by way of enforcing one of more applicable Subject Patents against the relevant Third Parties, the Controlling Party shall inform the other Party of such decision in writing no later than [***] days after such Controlling Party first becomes aware of such Infringement. Upon receiving such notice from the Controlling Party, or if no such action to abate such Infringement is taken by the Controlling Party within such [***] day time period, the other Party shall thereafter immediately become deemed the Controlling Party for the purposes of this Section 10.3.2. The Controlling Party will keep the other Party reasonably informed through the Patent Liaisons on a regular basis regarding, and provide such other Party with reasonable opportunity to consult and comment on, all enforcement activities in respect of the Subject Patents. The non-Controlling Party shall have the right, to the extent permitted by Applicable Laws and procedural rules to join, at its own cost and using its own counsel, as a party to the enforcement actions included in such enforcement activities.

(1)Any damages or other monetary awards recovered from the settlement of or judgment from such enforcement actions shall be allocated first to reimburse the Parties for the costs and expenses incurred by it in connection with such enforcement actions (excluding any cost of separate counsel engaged by the non-Controlling Party pursuant to the preceding sentence). Any amounts remaining will be allocated between the Parties as follows: (i) with respect to Infringement in the Profit-Sharing Territory by a Competing Product in relation to WRN Products or MAT2A Products so long as IDEAYA has not exercised the IDEAYA Opt-Out with respect to the applicable Licensed Product, then in a manner consistent with the applicable split of Pre-Tax Profit and Loss; (ii) with respect to Infringement in the Net Sales Territory by a Competing Product in relation to WRN Products or MAT2A Products, Infringement in the Profit-Sharing Territory by a Competing Product in relation to WRN Products or MAT2A Products if IDEAYA has exercised the IDEAYA Opt-Out with respect to the applicable Licensed Product, or Infringement in the Territory by a Competing Product in relation to POLQ Products, then (X) if GSK is the Controlling Party, to GSK with IDEAYA receiving a royalty on the recovery proceeds in accordance with the provisions of Section 7.12 and (Y) if IDEAYA is the Controlling Party, then [***] to IDEAYA and [***] to GSK; and (iii) with respect to Infringement in the Territory that is not by a Competing Product but against which a Joint Arising Patent is nevertheless enforced by the Controlling Party, then such amounts shall be shared equally by the Parties.

(b)	GSK shall have the right to pursue and direct, at its own cost, enforcement of all GSK Patents. Any damages or other monetary awards recovered from the settlement of or judgment from such enforcement actions shall be allocated to GSK.

10.3.3

Cooperation. If the Controlling Party brings an enforcement action or proceeding in accordance with Section 10.3.2, then the other Party shall cooperate as reasonably requested in the pursuit of such enforcement action, including if necessary by joining as a party to any such enforcement action for which it is a necessary or indispensable party or taking such other actions as are necessary for standing, furnishing a power of attorney, or for the Controlling Party to otherwise maintain or pursue such enforcement action effectively and expeditiously.

10.3.4

Settlement with a Third Party. The Controlling Party that is controlling an enforcement action shall also have the right to control the settlement of such enforcement action; provided that the Controlling Party shall not settle such enforcement action in any way that imposes a monetary obligation upon the other Party or its Affiliates, or in any way that narrows the scope of, or admits the unenforceability or invalidity of Patents Controlled by the other Party or its Affiliates, or of Patents within the Joint Arising Technology, in all cases without such other Party’s prior written consent.

10.4	Infringement Claims by Third Parties.

10.4.1

Notice; Control. Each Party shall promptly notify the other Party in writing of (a) any allegation by a Third Party that any Development, Manufacture or Commercialization or other activities with respect to any Licensed Product infringes or misappropriates or may infringe or misappropriate the intellectual property rights of such Third Party (a “Third Party Infringement Claim”). Each Party shall have the right to control the defense of the Third Party Infringement Claim brought against such Party.

10.4.2

Cooperation; Settlement. Each Party shall keep the other Party reasonably informed of all material developments in connection with any Third Party Infringement Claim through the Patent Liaisons. Such Party shall provide the other Party with copies of all filings by or correspondence from the counterparty(ies) in any suit or proceeding relating to such Third Party Infringement Claim, and with copies of proposed filings to be filed or material correspondence to be delivered to such counterparty(ies) by the Party defending such Third Party Infringement Claim in such proceedings at least [***] days prior to the anticipated filing or delivery date thereof for the other Party to comment on, and the Party defending such Third Party Infringement Claim shall take all such comments received under good faith consideration. The Party defending such Third Party Infringement Claim may enter into a settlement or compromise of any Third Party Infringement Claim, provided that, if such settlement or compromise would admit liability on the part of the other Party or any of its Affiliates or would otherwise have a material adverse effect on the rights or interests of the other Party or its Affiliates (including by imposing any monetary obligation upon the other Party or its Affiliates or by limiting the scope of or admitting the unenforceability or invalidity of Patents owned or exclusively licensed by the other Party or its Affiliates), then such Party shall not enter into such settlement or compromise without the prior written consent of the other Party. Any counterclaims of Infringement shall be handled as set forth in Section 10.3.

10.4.3

Costs; Recoveries. All out-of-pocket expenses incurred by a Party in defending a Third Party Infringement Claim (including outside counsel fees), and all amounts

payable by either Party as a judgment based on a Third Party Infringement Claim or in settlement of such Third Party Infringement Claim, shall be allocated as follows: (a) with respect to Third Party Infringement Claims directed to the activities conducted hereunder for the WRN Products or MAT2A Products in the Profit-Sharing Territory, so long as IDEAYA has not exercised the IDEAYA Opt-Out for the applicable Licensed Product, then in a manner consistent with the applicable split of Pre-Tax Profit and Loss, (b) with respect to Third Party Infringement Claims directed to the activities conducted hereunder for the WRN Products or MAT2A Products in the Net Sales Territory, then GSK shall be solely responsible for such costs, and (c) with respect to Third Party Infringement Claims directed to the activities conducted hereunder for the POLQ Products and Third Party Infringement Claims directed to the activities conducted hereunder for the WRN Products or MAT2A Products in the Profit-Sharing Territory if IDEAYA has exercised the IDEAYA Opt-Out for the applicable Licensed Product, GSK shall be solely responsible.

10.5

Orange Book. GSK will have sole decision-making authority with respect to the determination of whether or not to submit IDEAYA Existing Patents, IDEAYA Arising Patents, Patents within the Joint Arising Technology, or any GSK Patent, in each case, which Patents claim or cover a POLQ Product, WRN Product, or, and solely as of and after the Option Closing Date, if applicable, the MAT2A Product to the applicable regulatory authorities for listing in the Orange Book as required under the Hatch-Waxman Act.

ARTICLE 11
Term and Termination

11.1	Term. This Agreement shall become effective on the Effective Date and, unless earlier terminated pursuant to this ARTICLE 11, shall remain in effect until it expires (the “Term”) as follows:

11.1.1

on a Licensed Product–by–Licensed Product and country-by-country basis, this Agreement shall expire on the date of the expiration of all applicable Royalty Terms or Profit-Sharing Terms with respect to such Licensed Product in such country; and

11.1.2

this Agreement shall expire in its entirety upon the expiration of all applicable Royalty Terms and Profit-Sharing Terms under this Agreement with respect to all Licensed Products in all countries in the Territory.

11.1.3

Effect of Expiration. After expiration of the Term with respect to any Licensed Product in a country pursuant to Section 11.1.1, or with respect to the Agreement in its entirety pursuant to Section 11.1.2, GSK shall have a non-exclusive, fully-paid, royalty-free right and license, with the right to grant sublicenses, under the IDEAYA Technology, to continue to make, have made, use, sell, offer to sell and import each Licensed Product in the Field in such country, or in the case of expiration of the Agreement in its entirety, all Licensed Products in the Field in all countries in the Territory, as applicable.

11.2	Termination for Cause. In addition to any other remedies conferred by this Agreement or by Applicable Law or in equity, either Party may terminate this Agreement with

respect to Licensed Compounds or Licensed Products directed to a given Target on a per Target basis (e.g. POLQ, WRN, or, solely if the Option Closing Date occurs, MAT2A) if there is an uncured material breach of this Agreement by the other Party with respect to such Licensed Compounds or Licensed Products directed to such Target. To exercise its termination rights under this Section 11.2, the non-breaching Party shall provide to the breaching Party with written notice, identifying the material breach in reasonable detail and whether the non-breaching Party is intending to terminate this Agreement with respect to the applicable Licensed Compounds or Licensed Products with respect to one or more Targets. If such breaching Party, upon receiving such written notice identifying such material breach in reasonable detail, fails to cure such material breach within sixty (60) days after the date of such notice of breach is received (or if such breach is curable but cannot reasonably be cured within such sixty (60) day period, then within such reasonable period thereafter as is required to cure such breach), then this Agreement with respect to such particular Target against which the relevant Licensed Product and Licensed Compounds are directed shall terminate, unless there is a good faith dispute with respect to the existence of a material breach or whether such material breach has been cured, and if such alleged breach or failure to cure is contested in good faith by the alleged breaching Party in writing within sixty (60) days of the delivery of the breach notice, then the dispute resolution procedure pursuant to Section 15.1, may be initiated by either Party to determine whether a material breach or a failure to cure has actually occurred. If either Party so initiates the dispute resolution procedure, then the applicable cure period (and the corresponding termination of this Agreement, in whole or in part), shall be tolled until such time as the dispute is resolved pursuant to Section 15.1.

11.3

Termination by GSK for Convenience. GSK shall have the right, at its sole discretion, exercisable at any time during the Term to terminate this Agreement with respect to one or more Targets against which the relevant Licensed Compounds or Licensed Products upon ninety (90) days prior written notice to IDEAYA hereunder. In addition, GSK shall have the right, at its sole discretion, exercisable at any time during the Term to terminate this Agreement in its entirety upon ninety (90) days prior written notice to IDEAYA hereunder.

11.4

Termination for Insolvency. Either Party may terminate this Agreement in its entirety, effective immediately upon written notice to the other Party if, at any time such other Party (or any Affiliate that controls such Party) (a) files in any court or agency pursuant to any statute or regulation of any state or country a petition in bankruptcy or insolvency or for reorganization (except for solvent reorganization or solvent reconstruction) or for an arrangement or for the appointment of a receiver or trustee of the Party or of substantially all of its assets, (b) proposes a written agreement of composition or extension of substantially all of its debts, (c) is served with an involuntary petition against it, filed in any insolvency proceeding, and such petition is not be dismissed within ninety (90) days after the filing thereof, (d) proposes to be a party to any dissolution or liquidation, (e) admits in writing its inability generally to meet its obligations as they fall due in the general course or (f) makes an assignment of substantially all of its assets for the benefit of creditors.

11.5	Termination for Patent Challenge. Except to the extent that this Section 11.5 is unenforceable under the law of the applicable jurisdiction where the applicable Patent is pending or issued, if GSK, its Affiliates, or its Sublicensees directly asserts in its own respective

name, or directs a Third Party to assert, an action challenging the validity, scope, or enforceability of any Patent within the IDEAYA Technology with respect to a Target (including a Licensed Compound or Licensed Product relating to such Target) (including for clarity within the relevant Joint Arising Technology) that is then exclusively licensed to GSK under this Agreement (each, a “Patent Challenge” relating to such Target), IDEAYA may terminate this Agreement with respect to such Target (and all Licensed Compounds and Licensed Products relating to such Target) upon thirty (30) days’ written notice to GSK if GSK does not withdraw, or cause to be withdrawn, such Patent Challenge within such thirty (30) day period. Further, this Section 11.5 shall not apply to any Affiliates of GSK that first become Affiliates of GSK after the Effective Date in connection with a merger or acquisition event, where such Affiliates of GSK were already engaged in a Patent Challenge prior to such merger or acquisition event, so long as GSK causes such Patent Challenge to terminate within sixty (60) days after such merger or acquisition event.

ARTICLE 12
Effects of Expiration or Termination

12.1

Accrued Obligations. Expiration or termination of this Agreement (in whole or in part) for any reason shall not release either Party from any liability that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination, nor will any early termination of this Agreement preclude either Party from pursuing any and all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement.

12.2

Effects of Termination by GSK for Convenience, or by IDEAYA for GSK Insolvency or Material Breach or Patent Challenge. If (x) this Agreement is terminated by IDEAYA in its entirety or with respect to one or more Targets against which the relevant Licensed Compounds or Licensed Products are directed as a result of GSK’s uncured material breach, GSK’s bankruptcy, or a Patent Challenge or (y) GSK terminates this Agreement in its entirety or with respect to one or more Collaboration Programs or Licensed Products for convenience (upon any termination under the foregoing clause (x) or (y), then all such terminated Licensed Compounds and Licensed Products directed to such Target shall be deemed “Terminated Compounds” and “Terminated Products”, respectively), and the following will apply:

(a)License Termination. All licenses granted to GSK under this Agreement with respect to the Terminated Compounds and Terminated Products shall be terminated and of no further force and effect, except to the extent necessary to effect the transition set forth in Section 12.2(c).

(b)Summary of Activities. Within [***] days after the effective date of such termination, GSK shall provide to IDEAYA a reasonably detailed, accurate summary report of the status and results of its (and its Affiliates’ and Sublicensees’) material Development, Manufacturing and Commercialization activities directed to the Terminated Compounds and Terminated Products prior to the effective date of such termination.

(c)Transition Assistance. Without limiting the generality of the remainder of this Section 12.2(c), the Parties shall effect a seamless, timely transition to IDEAYA or its designee of the then ongoing Development, Manufacturing and Commercialization activities and responsibilities, as applicable, with respect to the Terminated Compounds and Terminated Products in accordance with a transition plan to be negotiated in good faith by the Parties starting as soon as practical, but not later than [***] days after the effective date of termination, so long as the Parties are not in dispute over such termination or where GSK is actively curing a breach as permitted in Section 11.2. The transition plan will set out all relevant terms, including costs required to effect the transition including regarding transfer or completion of on-going clinical studies of Terminated Compounds and Terminated Products, transfer of Regulatory Filings and Regulatory Approvals, assignment or transfer of material Third Party agreements to the extent solely related to the Development, Manufacturing, distribution or Commercialization of Terminated Compounds or Terminated Products and transfer of any filings for trademarks solely relating to the Terminated Compounds or Terminated Products (“Product Marks”), timing and format for transfer of all Data related to the Terminated Compounds or Terminated Products, reasonable accommodations for the supply of Terminated Compounds and Terminated Products or transfer of existing inventory of Terminated Compounds and Terminated Products, and responsibility for prosecution, maintenance, enforcement and defense of Patents comprising Joint Arising Technology Notwithstanding anything to the contrary that may be set forth in such transition plan, GSK hereby assigns to IDEAYA all such Regulatory Filings, Regulatory Approvals, and Product Marks effective as of the effective date of such termination. Additionally, notwithstanding the foregoing, if GSK terminates the Agreement in its entirety or with respect to a Terminated Compound and Terminated Product in accordance with Section 11.3 as a result of material safety concerns that GSK in good faith determines make the further Development or Commercialization of the applicable Terminated Compound(s) and Terminated Product(s) unreasonable from a scientific, regulatory or ethical perspective, then GSK shall have no obligation to continue any on-going clinical trials of the Terminated Compounds and Terminated Products or enable a Third Party to do the same, or provide any supply of the applicable Terminated Compounds and Terminated Products for Development or Commercial purposes).

(d)License Grant to IDEAYA. Effective upon any such termination, GSK hereby grants to IDEAYA an exclusive, perpetual, irrevocable, royalty-bearing license, with the right to sublicense (through multiple tiers) under GSK Termination Technology to make, use, sell, offer for sale and import the applicable Terminated Compounds and Terminated Products in the Field in the Territory as of the effective date of such termination; provided, that if any GSK Termination Technology was in-licensed or acquired from a Third Party, and is subject to payment or other obligations to such Third Party, GSK shall disclose a description of such GSK Termination Technology and such obligations to IDEAYA in writing and such GSK Termination Technology shall be subject to the license granted in this Section 12.2(d) only to the extent IDEAYA agrees in writing to be bound by such obligations and reimburse or pay all amounts owed to such Third Party as a result of IDEAYA’s exercise of such license with respect to such GSK Termination Technology. In addition, IDEAYA shall pay to GSK a royalty during the applicable Royalty Term on Net Sales of Terminated Products by IDEAYA, its Affiliates or Sublicensees on a Terminated Product-by-Terminated Product and country-by-country basis at a rate of (i) [***] percent ([***]%) if this Agreement is terminated prior to first Clinical Dose Expansion of such Terminated Product;

(ii) [***] percent ([***]%) if this Agreement is terminated after first Clinical Dose Expansion of any such Terminated Product but prior to First Commercial Sale of any such Terminated Product; or [***] percent ([***]%) if this Agreement is terminated after the First Commercial Sale of any such Terminated Product. For purposes of this royalty obligation, Sections 7.12, 7.13, 7.14, 7.16, 7.17, and 7.18, and applicable definitions used herein and therein shall survive with respect to this royalty obligation, adapted as appropriate, mutatis mutandis, with IDEAYA and its Affiliates and Sublicensees being the selling parties for the applicable Terminated Products subject to this royalty and related obligations.

12.3	Effects of IDEAYA Material Breach.

12.3.1

In the event GSK has the right under Section 11.2 to terminate this Agreement in its entirety or with respect to one or more Licensed Compounds or Licensed Products as a result of IDEAYA’s uncured material breach, and GSK elects to terminate this Agreement or with respect to such applicable Licensed Compounds or Licensed Products, then all licenses granted to GSK under Sections 8.1 or 8.2, as applicable, either in their entirety (if applicable) or only with respect to such Terminated Compounds and Terminated Products, shall be terminated and of no further force and effect.

12.3.2

Further, in the event IDEAYA materially breaches any of its obligations under Section 3.2 and fails to cure such material breach within sixty (60) days after the date of such notice of material breach is received (or if such material breach is curable but cannot reasonably be cured within such sixty (60) day period, then within such reasonable period thereafter as is required to cure such material breach), [***]. GSK may, at its election, with notice of its election but without demand, [***]. If IDEAYA desires to contest GSK’s assertion of any such material breach of Section 3.2 as described under this Section 12.3.2 [***], IDEAYA may elect to initiate dispute resolution under ARTICLE 15 with respect to such matters, but no such election by IDEAYA shall toll or otherwise prevent GSK from exercising its right to take the actions, in accordance with this Section 12.3.2, [***].

12.4

Effects of Expiration of the Exercise Period or Non-Occurrence of Option Closing Date. In the event that the Agreement is terminated with respect to the MAT2A Target because GSK does not exercise the Option within the Exercise Period, or because the Option Closing Date does not occur, GSK shall have no rights or obligations whatsoever under this Agreement or under any Patents, Know-How, or other intellectual property Controlled by IDEAYA or its Affiliates (including IDEAYA Technology) to make, have made, use, sell, offer for sale and import, or otherwise exploit any MAT2A Compound or MAT2A Product, and, subject to Section 12.7, all other rights with respect to MAT2A Compounds or MAT2A Products set forth in this Agreement, including Section 2.3, shall be terminated.

12.5

Unaffected Programs or Products. If this Agreement is terminated only with respect to a particular Target or Targets, then all unaffected Licensed Compounds and Licensed Products shall remain in effect in accordance with and subject to the terms and conditions of this Agreement. Without limiting the foregoing, the rights granted by each Party to the other Party with respect to such Licensed Compounds and Licensed Product that are not subject to the

termination, shall remain in effect, in accordance with and subject to terms and conditions of this Agreement.

12.6

Return of Confidential Information. At the written request of the Disclosing Party promptly following the termination of this Agreement, the Receiving Party shall (and shall cause its Affiliates and their respective representatives to) return to the Disclosing Party or destroy all originals of documents (in paper or electronic form) and physical materials then in its possession, and copies thereof, containing Confidential Information received from the Disclosing Party and constituting its exclusive Confidential Information, and destroy all documents and other materials that it created including any such Confidential Information; provided that the Receiving Party may retain in confidence (a) one (1) archival copy of the Confidential Information in its legal files solely to permit the Receiving Party to determine compliance with its obligations hereunder; (b) any portion of the Confidential Information of the other Party which is contained in the Receiving Party’s laboratory notebooks or automatic computer backups; (c) any portion of the Confidential Information of the other Party which a Receiving Party is required by Applicable Law to retain; and (d) any Confidential Information that the Receiving Party has the right to continue to use after the date of the Disclosing Party’s request after termination or expiration of this Agreement, as applicable. Notwithstanding the return or destruction of the documents and tangible items described above, the Parties will continue to be bound by their obligations under ARTICLE 9.

12.7

Survival. In addition to any other terms or conditions that are otherwise expressly stated to survive elsewhere in this ARTICLE 12, the following provisions shall survive termination or expiration of this Agreement in its entirety, or with respect to a particular Collaboration Program or Licensed Product: Section 9.1– 9.3 (for the period of time provided for in Section 9.1), Section 10.1, 11.1.3, and 13.4 and ARTICLE 1 (Definitions) ARTICLE 12 (Effects of Expiration or Termination), ARTICLE 14 (Indemnification), ARTICLE 15 (Dispute Resolution), and ARTICLE 16 (Miscellaneous).

12.8	Termination Not Sole Remedy. Termination is not the sole remedy under this Agreement and, whether or not termination is effected, all other remedies at equity or law shall remain available to the Parties except as agreed to otherwise herein.

ARTICLE 13

Representations and Warranties AND Covenants

13.1	Mutual Representations, Warranties and Covenants. Each Party represents and warrants to the other Party as of the Execution Date and the Effective Date, that:

13.1.1

such Party is duly organized, validly existing and in good standing under the Applicable Laws of the jurisdiction of its incorporation and has full corporate power and authority and legal right to enter into this Agreement and to carry out the provisions hereof;

13.1.2

such Party has the right to grant the licenses to the other Party purported to be granted pursuant to this Agreement;

13.1.3

such Party has taken all necessary action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder, and this Agreement constitutes a legal, valid and binding obligation of such Party that is enforceable against it in accordance with the terms and conditions hereof;

13.1.4

such Party has received all necessary licenses and certificates with respect to facilities within such Party’s ownership or control sufficient to allow such Party to conduct the activities assigned to such Party under each Collaboration Plan, and such Party is in compliance with the requirements of such licenses and certificates;

13.1.5

the execution, delivery and performance of this Agreement by such Party (a) will not constitute a default under, or conflict with, any agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound, (b) violate any Applicable Law or regulation of any court, governmental body or administrative or other agency having jurisdiction over such Party; and (c) is not prohibited or limited by, and shall not result in the breach of or a default under, any provision of the certificate or articles of incorporation or bylaws of such Party;

13.1.6

Except for any HSR Filings that may be required to comply with the HSR Act, it is not and will not be required to give any notice to any governmental authority or obtain any approval in connection with the execution and delivery of this Agreement;

13.1.7

such Party and its Affiliates have not employed and during the Term, will not employ any Person debarred by the FDA (or subject to a similar sanction of EMA or foreign equivalent), or to its knowledge, any Person who is the subject of an FDA debarment investigation or proceeding (or similar proceeding of EMA or foreign equivalent);

13.1.8

such Party and its Affiliates performing activities under this Agreement has in place or will have in place prior to its conduct of its activities under the Agreement a written agreement with its employees and other personnel it appoints to perform such activities hereunder to ensure that such Party has sufficient ownership or license rights to any Arising Technology invented, discovered, created or developed by such Party to grant the rights to the other Party as required to be granted under this Agreement;

13.1.9

as relevant to this Agreement: (a) such Party did not employ child labor, forced labor, or cruel or abusive disciplinary practices in the workplace; (b) such Party did not discriminate against any workers on any ground in violation of Applicable Law (including race, religion, disability, gender, sexual orientation or gender identity); and (c) such Party paid each employee at least the minimum wage, provided each employee with all legally mandated benefits, and complies with all Applicable Laws on working hours and employment rights in the countries in which it operates;

13.1.10

such Party has complied with Applicable Laws relating to anti-corruption and anti-bribery. It has not prior to the Execution Date as relevant to this Agreement, and will not, in connection with the performance of this Agreement, directly or indirectly, make, promise, authorize, ratify or offer to make, or take any act in furtherance of any payment or transfer of anything of value for the purpose of influencing, inducing or rewarding any act, omission or decision to secure an improper advantage, or improperly assisting such Party in obtaining or retaining business, or in any way with the purpose or effect of public or commercial bribery. Each Party will use Commercially Reasonable Efforts to prevent subcontractors, agents or any other Third Parties, subject to its control or determining influence, from doing any of the foregoing activities. For the avoidance of doubt, the foregoing activities include facilitating payments, which are unofficial, improper, small payments or gifts offered or made to Government Officials to secure or expedite a routine or necessary action to which such Party is legally entitled;

13.1.11

such Party shall, and shall cause its Affiliates and its and their respective subcontractors and Sublicensees to, conduct all activities undertaken pursuant to this Agreement in accordance with Applicable Law.

13.2	Representations, Warranties and Covenants of IDEAYA. IDEAYA represents and warrants to GSK, as of the Execution Date and the Effective Date, as follows:

13.2.1

IDEAYA has the right to grant the Option to GSK as purported to be granted pursuant to this Agreement;

13.2.2

IDEAYA owns or otherwise Controls the IDEAYA Existing Patents and IDEAYA Existing Know-How, and that the IDEAYA Existing Patents on Schedule 13.2.2 are solely owned by IDEAYA;

13.2.3

IDEAYA has not entered into any agreement, and shall not enter into any agreement, granting any right, interest or claim in or to, any Licensed Compounds or Licensed Products or the IDEAYA Technology that would conflict or contravene with the rights and licenses or Option granted or required to be granted to GSK in this Agreement and has not granted, and will not grant any right to any Third Party that would conflict or contravene with the rights granted to GSK hereunder;

13.2.4

all IDEAYA Existing Patents are existing and are not invalid or unenforceable in whole or in part;

13.2.5

to IDEAYA’s knowledge, (i) no Person is infringing or threatening to infringe or misappropriating or threatening to misappropriate any IDEAYA Existing Patents or IDEAYA Existing Know-How (ii) and there are no activities by Third Parties that would constitute infringement or misappropriation of the IDEAYA Existing Patents or IDEAYA Existing Know-How;

13.2.6

no claim or litigation has been brought or threatened in writing by any Person against IDEAYA alleging, and IDEAYA has no knowledge of any reasonable basis

for any such claim or allegation, whether or not asserted, that (a) any IDEAYA Existing Patents are invalid or unenforceable, or (b) except to the extent otherwise disclosed by IDEAYA to GSK prior to such date, the use or practice of any IDEAYA Existing Patents or IDEAYA Existing Know-How, or the disclosing, copying, making, assigning or licensing of any IDEAYA Existing Patents or IDEAYA Existing Know-How, or the exploitation of the Licensed Compounds as contemplated as of the Effective Date, does or will violate, infringe, misappropriate or otherwise conflict or interfere with, any issued valid Patent claim of any Third Party;

13.2.7

all information and data provided by or on behalf of IDEAYA to GSK on or before the Effective Date in contemplation of this Agreement was and is true and accurate in all materials respects;

13.2.8

the conception and reduction to practice of any inventions and the use or development of any other information within the IDEAYA Existing Know-How owned by IDEAYA have not, to IDEAYA’s knowledge, constituted or involved the misappropriation of trade secrets or other rights or property of any Third Party; and

13.2.9

IDEAYA, is in material compliance with (i) all Applicable Laws relating to data privacy and data security, including with respect to the collection, use, storage, sharing, transfer, disposition, protection and processing of PII; (ii) all privacy policies and other related policies, programs and other notices of IDEAYA relating to the privacy, protection and security of PII; and (iii) all contractual and other legal requirements to which IDEAYA is subject with respect to the privacy, protection, and security of PII; and has in place reasonable safeguards to protect the confidentiality and security of PII, including from unauthorized access or misuse, based on Applicable Law, in each case of (i) through (iii), as applicable to the IDEAYA’s operations and activities directly related to this Agreement.

13.3	Representations, Warranties and Covenants of GSK. GSK represents and warrants to IDEAYA, as of the Execution Date and the Effective Date, as follows, except to the extent otherwise disclosed by GSK to IDEAYA prior to such date:

13.3.1

GSK shall not knowingly engage in any activities that use the IDEAYA Technology in a manner that is outside the scope of the license rights granted to GSK under this Agreement;

13.3.2

GSK shall not bring suit or any claim against IDEAYA asserting that IDEAYA has infringed [***] under the Collaboration Program; and

13.3.3

GSK is in material compliance with (i) all Applicable Laws relating to data privacy and data security, including with respect to the collection, use, storage, sharing, transfer, disposition, protection and processing of PII; (ii) all privacy policies and other related policies, programs and other notices of GSK relating to the privacy, protection and security of PII; and (iii) all contractual and other legal requirements to which GSK is subject with respect to the privacy, protection, and security of PII; and has in place reasonable safeguards to protect the confidentiality and security of PII, including from unauthorized access or misuse, based on

Applicable Law, in each case of (i) through (iii), as applicable to GSK’s operations and activities directly related to this Agreement.

13.4

Disclaimer of Warranty. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, AND BOTH PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.

ARTICLE 14
Indemnification

14.1	Indemnification.

14.1.1

Indemnification by IDEAYA. IDEAYA hereby agrees to indemnify, defend and hold harmless GSK and its Affiliates and their respective directors, officers, employees and agents, and the respective successors and assigns any of the foregoing (“GSK Indemnitees”), from and against any and all suits, claims, actions, demands, losses, damages, liabilities, settlements, penalties, fines, costs and expenses (including reasonable attorneys’ fees and other expenses of litigation) (collectively, “Losses”) asserted by a Third Party to the extent arising from (i) any inaccuracy as of the date when made of any of IDEAYA’s representations and warranties hereunder, (ii) an IDEAYA Indemnitee’s breach of this Agreement, gross negligence or willful misconduct, (iii) a IDEAYA’s or any of the IDEAYA Indemnitees’ failure to abide by any Applicable Law, or (iv) the Development, Commercialization, or other exploitation of the Licensed Compounds and Licensed Products by IDEAYA pursuant to this Agreement (including for the avoidance of doubt, the Terminated Compounds and Terminated Products), except to the extent such Losses arise out of (A) Product Claims relating to or asserted in the Profit-Sharing Territory, other than to the extent attributable to gross negligence or willful misconduct of GSK or its Affiliates, Sublicensees or Third Party contractors, or (B) the conduct described in Section 14.1.2(i)–(iv) below.

14.1.2

Indemnification by GSK. GSK hereby agrees to indemnify, defend and hold harmless IDEAYA and its Affiliates and their respective directors, officers, employees and agents, and the respective successors and assigns of any of the foregoing (“IDEAYA Indemnitees”), from and against any and all Losses asserted by a Third Party to the extent arising from (i) any inaccuracy as of the date when made of any of GSK’s representations and warranties hereunder, (ii) a GSK Indemnitee’s breach of this Agreement, gross negligence or willful misconduct, (iii) a GSK’s or any of the GSK Indemnitee’s failure to abide by any Applicable Law, or (iv) the Development, Commercialization, or other exploitation of the Licensed Compounds and Licensed Products by GSK pursuant to this Agreement, except to the extent such Losses arise out of (A) Product Claims relating to or asserted in the Profit-Sharing Territory other than to the extent attributable to gross negligence or willful misconduct of GSK or its Affiliates, Sublicensees or Third Party contractors, or (B) the conduct described in Section 14.1.1(i)–(iv) above.

14.1.3

Indemnification Procedures. Upon becoming aware or receipt of notice of any Third Party claim that may be subject to indemnification by the other Party (the “Indemnifying Party”) under this Section 14.1, any GSK Indemnitee or any IDEAYA Indemnitee (each, an “Indemnitee”), as the case may be, shall promptly notify the Indemnifying Party in writing. The Indemnifying Party shall have the right, but not the obligation, to conduct and control, through counsel of its choosing, any action for which indemnification is sought, and if the Indemnifying Party elects to assume the defense thereof, the Indemnifying Party shall not be liable to the Indemnitee for any legal expenses of other legal counsel or any other expenses subsequently incurred by such Indemnitee in connection with the defense thereof. The Indemnifying Party may settle any action, claim or suit for which the Indemnitee is seeking indemnification; provided that the Indemnifying Party shall first give the Indemnitee advance notice of any proposed compromise or settlement and such Indemnitee provides prior written approval, such approval not to be unreasonably withheld. The Parties and their employees shall cooperate fully with each other and their legal representatives in the investigation, defense, prosecution, negotiation, or settlement of any such claim or suit. Each Party’s indemnification obligations under this ARTICLE 14 shall not apply to amounts paid by an Indemnitee in settlement of any action with respect to a Third Party claim, if such settlement is effected without the prior written consent of the Indemnifying Party, which consent shall not be withheld unreasonably. In no event shall the Indemnifying Party settle or abate any Third Party claim in a manner that would diminish the rights or interests of the Indemnitee, admit any liability on the part of the Indemnitee, or obligate the Indemnitee to make any payment, take any action, or refrain from taking any action, without the prior written approval of the Indemnitee.

14.2	Insurance.

14.2.1

IDEAYA’s Insurance Obligations. IDEAYA shall maintain, at its cost, reasonable insurance against liability and other risks associated with its activities contemplated by this Agreement, including its indemnification obligations herein, in such amounts and on such terms as are determined to be advisable by IDEAYA, based on advice from insurance professionals, for companies of similar size and with similar resources for the activities to be conducted by it under this Agreement taking into account the scope of the activities for which IDEAYA is responsible hereunder. IDEAYA shall furnish to GSK evidence of such insurance, upon request.

14.2.2

GSK’s Insurance Obligations. GSK shall maintain, at its cost, insurance or self-insurance with respect to liabilities and other risks associated with its activities and obligations under this Agreement, including its indemnification obligations herein, in such amounts and on such terms as are customary for prudent practices for large companies in the pharmaceutical industry for the activities to be conducted by GSK under this Agreement. GSK shall furnish to IDEAYA evidence of such insurance or self-insurance, upon reasonable request.

14.3	LIMITATION OF CONSEQUENTIAL DAMAGES. EXCEPT FOR A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 14.1, A BREACH OF SECTION 2.3, OR A BREACH OF A PARTY’S CONFIDENTIALITY OBLIGATIONS IN ARTICLE 9, NEITHER IDEAYA NOR GSK, NOR ANY OF THEIR AFFILIATES OR

SUBLICENSEES WILL BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT, ITS AFFILIATES OR ANY OF THEIR SUBLICENSEES, FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR OTHER INDIRECT DAMAGES, LOST PROFITS, LOST DATA OR COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY) OR CONTRIBUTION, AND IRRESPECTIVE OF WHETHER THAT PARTY OR ANY REPRESENTATIVE OF THAT PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE.

ARTICLE 15
DISPUTE RESOLUTION

15.1

Dispute Resolution. Except as otherwise pursuant to Sections 5.8, 7.21, or 7.22, or with respect to any matter for which a Party has a final-decision making authority as expressly provided herein, any dispute arising out of or relating to the Agreement, or the breach, termination or validity thereof (a “Dispute”), shall be finally resolved pursuant to the following provisions:

15.1.1

In the event a Dispute arises, the Parties agree that they shall attempt in good faith to resolve the Dispute by negotiation between GSK’s Head of Oncology R&D or Head of Oncology Commercial, as applicable, and IDEAYA’s Chief Executive Officer (or their respective designee with power and authority to resolve such dispute) (each, a “Senior Manager”). Either Party may refer a Dispute to the applicable Senior Manager of the other Party by serving notice that such Dispute has arisen and demand that negotiations commence (“Notice of Dispute”).

15.1.2

If the Parties’ Senior Managers are unable for any reason to resolve a Dispute within [***] days of service of the Notice of Dispute, the Parties agree that they shall try in good faith to resolve the Dispute by referring it for confidential mediation under the CPR Mediation Procedure in effect at the start of mediation, before resorting to arbitration. If the Parties cannot agree on a mediator within [***] days after the Dispute was referred to mediation, the mediator shall, upon request by either Party, be appointed by CPR pursuant to CPR Mediation Procedure. The cost of mediator shall be borne equally by the Parties.

15.2

Arbitration. Any Dispute not resolved within [***] days (or within such other time period as may be agreed to by Parties in writing) after appointment of the mediator shall be finally settled by binding arbitration under the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”).

15.2.1

Any disputes concerning the propriety of the commencement of the arbitration or the scope or applicability of this agreement to arbitrate shall be finally settled by the arbitrator(s).

15.2.2

There shall be one or more arbitrators appointed in accordance with the ICC Rules.

15.2.3

The governing law in Section 16.1 shall govern such proceedings. The place of arbitration shall be San Francisco, California, unless otherwise agreed to by the Parties, and the language of the arbitration shall be English.

15.2.4

The arbitrator(s) shall use their best efforts to rule on the Dispute within [***] months after appointment of the arbitrator(s). The determination of the arbitrator(s) as to the resolution of any Dispute shall be binding and conclusive upon the Parties, absent manifest error. All rulings of the arbitrator(s) shall be in writing and shall be delivered to the Parties as soon as is reasonably possible. Nothing contained herein shall be construed to permit the arbitrator(s) to award punitive, exemplary or any similar damages. Any arbitration award may be entered in and enforced by a court in accordance with Sections 15.2.5, 15.2.7 and 15.2.10 .

15.2.5

Award. Any award to be paid by one Party to the other Party as determined by the arbitrator(s) as set forth above under Section 15.2.4 shall be promptly paid in Dollars free of any tax, deduction or offset; and any costs, fees or taxes incident to enforcing the award shall, to the maximum extent permitted by Applicable Law, be charged against the Party resisting enforcement. Each Party agrees to abide by the award rendered in any arbitration conducted pursuant to this ARTICLE 15, and agrees that judgment may be entered upon the final award in a court of competent jurisdiction and that other courts may award full faith and credit to such judgment in order to enforce such award.

15.2.6

Costs. The arbitrator(s) shall award to the prevailing Party, if any, as determined by the arbitrator(s), the prevailing Party’s cost, fees, and expenses incurred in connection with such arbitration.

15.2.7

Injunctive Relief. Nothing in this ARTICLE 15 will preclude either Party from seeking equitable relief or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction or other interim equitable relief, concerning a Dispute either prior to or during any arbitration if necessary to protect the interests of such Party or to preserve the status quo pending the arbitration proceeding. For the avoidance of doubt, nothing in this Section 15.2.7 shall otherwise limit a breaching Party’s opportunity to cure a material breach as permitted in accordance with Section 11.2.

15.2.8

Confidentiality. The arbitration proceeding shall be confidential and the arbitrator(s) shall issue appropriate protective orders to safeguard each Party’s Confidential Information. Except as required by Applicable Law, no Party shall make (or instruct the arbitrator(s) to make) any public announcement with respect to the proceedings or decision of the arbitrator(s) without prior written consent of the other Party. The existence of any Dispute submitted to arbitration, and any award shall be kept in confidence by the Parties and the arbitrator(s), except as required in connection with the enforcement of such award or as otherwise required by Applicable Law. Notwithstanding the foregoing, each Party shall have the right to

disclose information regarding the arbitration proceeding to the same extent as it may disclose Confidential Information of the other Party under ARTICLE 9 above.

15.2.9

Survivability. Any duty to arbitrate under this Agreement shall remain in effect and be enforceable after termination of this Agreement for any reason.

15.2.10

Patent Disputes. Notwithstanding this Section 15.2, any dispute, controversy or claim to the extent regarding the validity, scope, enforceability, or inventorship of intellectual property rights shall be submitted to a court of competent jurisdiction or patent office in the country in which such intellectual property rights were granted or arose.

ARTICLE 16

MISCELLANEOUS

16.1

Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed in accordance with the laws of the State of New York, without reference to conflicts of laws principles. The Parties acknowledge that this Agreement evidences a transaction involving interstate commerce and a foreign (non-U.S.) Party. Notwithstanding the provision in the preceding sentence with respect to the applicable substantive law, any arbitration, decision, or award rendered hereunder and the validity, effect, and interpretation of the arbitration provision shall be governed by the Federal Arbitration Act.

16.2

Assignment. This Agreement shall not be assignable by either Party in whole or in part to any Third Party without the prior written consent of the other Party(ies) hereto. Notwithstanding the foregoing, a Party may assign its rights and delegate its obligations under this Agreement, in whole or in part, without any consent of the other Party, to (a) an Affiliate or (b) to a Third Party that acquires all or substantially all of the business or assets of such Party to which the subject matter of this Agreement pertains (whether by merger, reorganization, acquisition, sale of assets, by way of Change of Control or otherwise).

16.3

Change of Control. Neither Party will be in breach of the restrictions applicable to such Party set forth in Section 2.3 if such Party undergoes a Change of Control with a Third Party (together with such Third Party and its Affiliates following the closing of the applicable Change of Control transaction, the “Acquired Party”) that is (either directly or through an Affiliate, or in collaboration with the Third Party) performing activities with respect to one or more products that would otherwise cause the Party undergoing the Change of Control to be in violation of the terms of Section 2.3 (“Competitive Activities”) applicable to such Party upon the closing of such Change of Control transaction, and such Acquired Party may continue to perform such Competitive Activities with respect to such products after such Change of Control transaction; as long as (a) no [***] by or on behalf of such Acquired Party or its Affiliates in connection with any subsequent performance of Competitive Activities with respect to the applicable products, and (b) such Acquired Party institutes commercially reasonable [***] to ensure the requirements set forth in the foregoing [***] any Competitive Activities and the [***] with respect to the Licensed Compounds or Licensed Products, or [***] of the Parties.

Notwithstanding the foregoing, IDEAYA and/or its acquirer shall no longer have any right to (i) be involved in operational aspects of Collaboration Programs, (ii) input or approve any Collaboration Plans, Collaboration Budgets, Development Plans or Development Budgets, or (iii) input into any Commercialization Plans or Commercialization Budgets, unless, in each case, requested by GSK; provided that IDEAYA and/or its acquirer shall continue to have the rights to receive reports and information from GSK as set forth in Sections 6.1.3, 6.2.7, 7.3.1, and 7.12.6.

16.4

Force Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by a Force Majeure and the nonperforming Party promptly provides notice to the other Party. Such excuse shall be continued so long as the condition constituting Force Majeure continues and the non-performing Party takes reasonable efforts to remove the condition, for up to a maximum of one (1) year, after which time the Parties will negotiate in good faith any modifications of the terms and conditions of this Agreement that may be necessary to arrive at an equitable solution. To the extent possible, each Party shall use reasonable efforts to minimize the duration of any Force Majeure. [***]

16.5

Notices. Any notice required or permitted to be given by either Party under this Agreement shall be in writing and shall be personally delivered or sent by a nationally recognized private express courier, or by first class mail (registered or certified) to the respective Parties as set forth below. Notices will be deemed effective (a) the next day if sent by courier; or (b) five (5) Business Days after deposit, postage prepaid, if mailed. Either Party may change its address for purposes hereof by written notice to the other in accordance with the provisions of this Section 16.5.

If to GSK:

GlaxoSmithKline

259 E Grand Ave Fifth Floor, Suite 1

San Francisco, CA 94080

Attn: SVP & Head R&D Business Development

With a copy (which shall not constitute notice to):

GlaxoSmithKline

980 Great West Road

Brentford, Middlesex TW8 9GS

United Kingdom

Attn: VP & Head of Legal Business Development & Corporate

If to IDEAYA:

IDEAYA Biosciences, Inc.
7000 Shoreline Court, Suite 350

South San Francisco, CA 94080
Attn: Legal Department

With a copy (which shall not constitute notice to):

Latham & Watkins LLP
140 Scott Drive
Menlo Park, CA, 94025

Attention: [***]

16.6

Export Clause. Each Party acknowledges that the Applicable Laws of the United States and other Applicable Laws restrict the export and re-export of certain commodities and technical data. Each Party agrees that it will not export or re-export restricted commodities or technical data of the other Party in any form without the appropriate United States or foreign government licenses.

16.7

Waiver. The terms and conditions of this Agreement may be waived or released only by a written instrument executed by the Party or Parties waiving or releasing compliance. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver or subsequent waiver of such condition or term or of another condition or term.

16.8

Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction, unless the invalid, illegal or unenforceable provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without such invalid provisions.

16.9

Entire Agreement. This Agreement, together with the Schedules attached hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement supersedes all prior or contemporaneous agreements and understandings between the Parties with respect to the subject matter hereof, including the CDA, and all information exchanged between the Parties under the CDA shall be considered Confidential Information exchanged hereunder upon the Effective Date; provided, that certain Confidential Disclosure Agreement effective as of March 31, 2020 by and among IDEAYA, GlaxoSmithKline LLC, [***] shall remain in full force and effect and is not

superseded, amended, or modified by this Agreement. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of both Parties.

16.10

Independent Contractors. Nothing herein shall be construed to create a partnership, or any relationship of employer and employee, agent and principal, or joint venture between the Parties. Each Party is an independent contractor. Neither Party shall assume, either directly or indirectly, any liability of or for the other Party. Neither Party shall have the authority to bind or obligate the other Party, and neither Party shall represent that it has such authority. Neither Party shall report the transactions and undertakings contemplated by this Agreement as a partnership for United States federal income tax purposes unless required pursuant to a “final determination” as defined in Section 1313 of the United States Internal Revenue Code.

16.11

Headings. Headings used herein are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting this Agreement.

16.12

Further Actions. Each Party shall execute, acknowledge and deliver such further instruments, and do all such other acts, as may be reasonably necessary or appropriate in order to carry out the expressly stated purposes and the clear intent of this Agreement.

16.13

Supremacy. To the extent of any express conflict or inconsistency between this Agreement and any Schedule hereto, the terms and conditions of this Agreement shall control. Upon mutual execution of the Parties of the MAT2A CTCSA, the terms of the MAT2A CTCSA shall control to the extent of any conflict with Schedule 3.2.1(b).

16.14

Counterparts. This Agreement may be executed and delivered (including by PDF or any other electronically transmitted signatures) in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

16.15

No Third Party Beneficiaries. This Agreement is intended for the benefit of the Parties, their respective permitted successors and assigns, and is not for the benefit of, nor many any provision hereof be enforced by, any other Person other than with respect to the indemnification provisions in ARTICLE 14 and as otherwise expressly set forth herein.

16.16

Interpretation. The definitions of the terms herein will apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun will include the corresponding masculine, feminine, and neuter forms. The word “any” will mean “any and all” unless otherwise clearly indicated by context. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument, or other document herein will 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 or therein), (b) any reference to any Applicable Laws herein will be construed as referring to such Applicable Laws as from time to time enacted, repealed, or amended, (c) any reference herein to any Person will be construed to mean the Person’s successors and assigns (after any such succession or assignment), (d) the words “herein”,

“hereof” and “hereunder”, and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) the word “or” will be interpreted to mean “and/or”, (f) all references herein to Articles, Sections, or Exhibits, unless otherwise specifically provided, will be construed to refer to Articles, Sections, and Exhibits of this Agreement, and (g) the words “include” and “including” will be interpreted to mean “include without limitation” and “including without limitation,” respectively.

[Signature page follows]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Execution Date by their respective duly authorized representatives as set forth below.

GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4) LIMITED

/s/ Adam Walker

By: Adam Walker

Its: Director

IDEAYA Biosciences, Inc.

/s/ Yujiro S. Hata

By: Yujiro S. Hata

Its: President and Chief Executive Officer

[SIGNATURE PAGE TO COLLABORATION, OPTION AND LICENSE AGREEMENT]

SCHEDULE 1.152

OPTION DATA PACKAGE

[***]

SCHEDULE 3.1

COLLABORATION PLANS AND COLLABORATION BUDGETS

[***]

SCHEDULE 3.2.1(b)

MAT2A CTCSA TERMS

[***]

SCHEDULE 3.2.5

FORM OF MATERIAL TRANSFER RECORD

Material Transfer Record

From:[•]

To:[•]

We refer to the Collaboration Agreement dated July 24, 2018 (the “Agreement”) between [GSK] and [IDEAYA]

The Materials described below are supplied by [•] to [•] subject to the terms and conditions set out in the Agreement.


Material name
Material type/description
Amount supplied
Approved use

By:______________________________

For and on behalf of [•] as the Materials Transferring Party

______________________________

Date material sent /provided

By:______________________________

For and on behalf of [•] as the Materials Receiving Party

______________________________

Date material received

SCHEDULE 7.15

INVOICING and BANK DETAILS INSTRUCTIONS

All invoices shall include, at a minimum, the following information:

A copy of all invoices in PDF format should be sent via email to Alliance Management copying the Deal Accounting and Alliances Finance department (email: [***]).

Invoice must include the following details:

IDEAYA letterhead.

Bank details – see format below

Contact name and contact number.

Invoice date and invoice number.

Reference stating the contractual clause invoice relates to.

Payment terms and currency, with reference to the relevant clause

Invoice must be addressed to the following company and address:

[***]

For any queries in relation to invoicing, please contact Finance Analyst Deal Accounting and Alliances Finance department (email: [***]).

Bank information details format

IDEAYA shall provide a scan copy of a letter (on its letterhead), signed by finance and scanned into a PDF or ‘read only’ word document i.e. password protected.

The PDF or word file referred to above shall be sent via email to the GSK Alliance Partner and also copying the Deal Accounting and Alliances Finance department (email: [***]).

Please do not disclose the password to any GSK contact.

A verification call by GSK’s Procurement Team will be made to the supplier

SCHEDULE 7.4.1

PRE-TAX PROFIT AND LOSS SCHEDULE

A.General Principles

Pre-Tax Profit or Loss for the Profit-Sharing Territory shall be calculated in accordance with this Schedule 7.4.1 and shall exclude capital expenditures, and any other cost not specifically included in Allowable Expenses, including, by way of example, costs attributable to general corporate activities, executive management, investor relations, treasury services, business development, corporate government relations, external financial reporting and other overhead.

Principles for Calculation of Pre-Tax Profit or Loss

Pre-Tax Profit or Loss shall be calculated for each Calendar Quarter by determining the Net Sales of the applicable Licensed Product in the Profit-Sharing Territory, adding any Other Income and subtracting Allowable Expenses directly attributable and reasonably allocable to such Licensed Product incurred during such Calendar Quarter (the “Pre-Tax Profit or Loss”).

2.	No cost item shall be allocated to more than one cost category, i.e., Net Sales or Allowable Expenses (or any cost item within Net Sales (such as governmental and other rebates) or Allowable Expenses, such as Health Care Reform Fees, etc.).

3.	Costs incurred by GSK in connection with Commercialization shall be allocated to the appropriate category of Allowable Expenses in accordance with GSK’s customary practices for its other products.

Where GSK incurs costs under this Agreement that apply to more than one Licensed Product as well as products or programs that are not included under this Agreement then GSK shall make an equitable allocation of such costs between all of such Licensed Products and other programs and products as applicable, in accordance with GSK’s Accounting Standards such that the applicable Licensed Product does not bear a disproportionate portion of such costs.

All undefined terms shall be construed in accordance with GSK’s Accounting Standards, but only to the extent consistent with their usage and the other definitions in this Schedule 7.4.1 and the Agreement. To the extent reasonably requested by IDEAYA, GSK shall provide IDEAYA the appropriate back-up detail for Pre-Tax Profit or Loss to enable IDEAYA to state its share of such Pre-Tax Profit or Loss in its applicable Accounting Standard. In addition, following the Effective Date, each Party shall consider in good faith reasonable procedures proposed by the other Party for sharing financial information in accordance with Section B below and in order to permit each Party to close its books periodically in a timely manner.

6.	The Parties shall comply with any reporting requirements under Applicable Law (including securities law). For the avoidance of doubt, income and withholding Taxes imposed on either of the Parties shall not be included in the calculation of Pre-Tax Profit or Loss.

7.	Nothing in this Schedule 7.4.1 will apply to any Licensed Product for which the Parties are not sharing Pre-Tax Profit or Loss.

B.Reconciliation Procedures.

1.Reporting.

(a)Reporting Generally. On a Licensed Product-by-Licensed Product basis, within [***] days after the end of each Calendar Quarter beginning with the first Calendar Quarter in which the First Commercial Sale of such Licensed Product occurs, GSK shall provide to the Financial Working Group a report of its calculation of actual Pre-Tax Profit or Loss with respect to such Licensed Product for such Calendar Quarter (each, a “Financial Report”), in such reporting format as the Financial Working Group shall mutually agree upon for use, which reporting format shall be consistent with the categories calculated by GSK in accordance with its Accounting Standards; provided that a preliminary estimate of the Pre-Tax Profit or Loss, in a format agreed by the Financial Working Group, shall be provided by GSK within [***] days following the end of the Calendar Quarter for purposes of financial statement close process and that the Financial Report of GSK’s calculation of Pre-Tax Profit or Loss for the Calendar Quarter in which the First Commercial Sale of a Licensed Product occurs will include any Allowable Expenses incurred by GSK with respect to such Licensed Product prior to such Calendar Quarter (i.e., Allowable Expenses associated with Launch Preparation Activities). Each Financial Report shall specify in reasonable detail, as applicable, the Net Sales, Other Income and Allowable Expenses for such Licensed Product in the corresponding Calendar Quarter received and incurred by GSK or any of its Affiliates or Sublicensees in accordance with this Agreement in such Calendar Quarter. If requested by IDEAYA or by the Financial Working Group, GSK will promptly provide invoices or other supporting documentation in sufficient detail to permit IDEAYA to confirm the accuracy of the reported cost. GSK will work to ensure that there will be separate invoices with respect to expenses and income so that accounting can be allocated appropriately to activities with respect to Licensed Products for sale in the Profit-Sharing Territory for purposes of calculating Pre-Tax Profit or Loss.

(b)Net Sales Reporting. Within [***] days after the end of each Calendar Quarter, GSK shall provide the Financial Working Group with a report of the Net Sales for such Calendar Quarter on a Licensed Product-by-Licensed Product basis in the Profit-Sharing Territory in the same format as provided in Section 7.12.6 of the Agreement; provided that a preliminary estimate of the Net Sales for the Calendar Quarter, in a format agreed by the Financial Working Group, shall be provided by GSK within [***] days following the end of the Calendar Quarter for purposes of financial statement close process.

(c)Estimates. For clarity, the foregoing estimates set forth in Sections B.1(a) and B.1(b) may be based on forecasted numbers and the Parties agree that the final Pre-Tax Profit or Loss or Net Sales, as applicable, reported in the Financial Reports may differ from this estimate.

2.Overruns.

(a)GSK shall notify IDEAYA promptly after becoming aware that the anticipated Allowable Expenses to be incurred by GSK for a Licensed Product for a given Calendar Year shall be in excess of the applicable approved Commercialization Budget for such Licensed Product for such Calendar Year.

(b)Following such notification, the Financial Working Group shall discuss the causes of any such increase and evaluate potential mitigation measures to prevent a further increase of Allowable Expenses, as applicable. To the extent, based on this discussion, the Financial Working Group mutually concludes that the anticipated amount of the concerned category of Allowable Expenses is likely not to exceed [***] of the amounts budgeted (the “Commercialization Permitted Overage”) to be incurred by or on behalf of GSK for its activities for the Licensed Product in such Calendar Year as set forth in the then-current applicable Commercialization Budget, then such anticipated costs or expenses shall be included in the calculation of the applicable Allowable Expenses for the purposes of calculating the Pre-Tax Profit or Loss hereunder.

(c)If the Financial Working Group, in consultation with the JSC, mutually concludes that the anticipated amount of the applicable Allowable Expenses is likely to exceed the Commercialization Permitted Overage (such amount the “Commercialization Excess Costs”) and there are no mitigation measures to prevent such Commercialization Excess Costs, then such Commercialization Excess Costs shall not be included in the calculation of the applicable Allowable Expenses for the purposes of calculating the Pre-Tax Profit or Loss, unless mutually agreed by the Parties through the JSC to be shared.

(d)Notwithstanding the foregoing, any Allowable Expenses that are incurred by GSK as a result of GSK’s failure to use Commercially Reasonable Efforts in connection with performing its obligations hereunder or due to the gross negligence or willful misconduct of GSK or its Affiliates, Sublicensees, or Third Party contractors, whether or not such Allowable Expenses are in excess of [***] of the applicable Commercialization Budget for the applicable Calendar Quarter, shall be borne entirely by GSK. Further, to the extent that Commercialization Excess Costs are directly attributable to and required by a change in Applicable Laws, a requirement of a Regulatory Authority, a change required to mitigate a safety issue or a Force Majeure event, or are otherwise mutually agreed by the Parties, then such Commercialization Excess Costs shall not be borne solely by GSK and shall be included in the calculation of the applicable Allowable Expenses.

3.Reconciliation and Payment.

(a)Reconciliation Discussion. If IDEAYA has any questions or concerns regarding the calculation of Pre-Tax Profit or Loss reported by GSK in a Financial Report, the Financial Working Group shall endeavor to resolve such questions and concerns within [***] days after the end of each Calendar Quarter. Additionally, the Financial Working Group may by mutual agreement adjust the timing for notification and/or payment of any reconciliation payments hereunder.

(b)Quarterly Reconciliation Payment. Unless such timing is otherwise modified by mutual agreement of the Financial Working Group, within [***] Business Days after receipt of the Financial Report provided pursuant to Section B.1(a) above, the Financial Working Group shall confer and mutually agree in writing on a reconciliation report setting out the calculation of any payment to be paid by IDEAYA to GSK or by GSK to IDEAYA, as the case may be (in each case, the “Balancing Payment”) to effect the sharing of Pre-Tax Profit or Loss in accordance with Section 7.4.1 of the Agreement. In the event of any dispute regarding any Balancing Payment due, the Parties shall use good faith efforts to resolve the dispute provided that, if not so resolved within [***] additional Business Days, such dispute shall be resolved pursuant to Sections 7.21 and 7.22 of the Agreement. Each Party that is owed a Balancing Payment shall invoice the other Party for the amount of the Balancing Payment due and the other Party shall pay such invoiced amount within [***] days after such invoice is delivered; provided that, in the event of any dispute regarding the Balancing Payment due, the undisputed portion of such Balancing Payment shall be paid in accordance with the foregoing timetable by the applicable Party, and the remaining, disputed portion shall be paid in accordance with Sections 7.21 and 7.22 of the Agreement.

C.Financial Definitions

The following definitions, along with capitalized terms that are defined elsewhere in the Agreement, shall apply for the purposes of calculating Pre-Tax Profit or Loss. If a financial term is not defined in this Schedule 7.4.1, or elsewhere in the Agreement, then such term shall, on a Licensed Product-by-Licensed Product basis, be defined by mutual agreement of the Financial Working Group. For purposes of the following definitions, the terms “costs” and “expenses” shall mean all direct Third Party invoiced costs and Commercial FTE Costs, unless otherwise expressly provided herein. Additionally, in no event shall a particular cost or expense (i) be counted more than once as part of calculating Allowable Expenses, even if falling under more than one category of Allowable Expense hereunder or (ii) be counted separately as an Allowable Expense if otherwise already accounted for as part of determining Allowable Expenses.

“Allowable Expenses” means the sum of the following costs and expenses incurred during the Term by GSK or its Affiliates, in the conduct of Commercialization of the applicable Licensed Products for the Profit-Sharing Territory in accordance with this Agreement during the applicable Calendar Quarter, each to the extent incurred and recorded as an expense in accordance with the applicable Accounting Standards:

[***].

Allowable Expenses shall include, subject the annual Commercialization Budget, all Third Party invoiced expenses as well as Commercial FTE Costs reasonably necessary and directly attributable and reasonably allocable to the Licensed Products for sale in the Profit-Sharing Territory, either direct expenses or expenses that shall be allocated based on a percent of effort, costs driver, or other reasonable basis used in the normal course of business. Upon request by either Party, the Financial Working Group shall review the methodology used to allocate expenses in connection with the calculation of Allowable Expenses. If the Financial Working Group does not approve such methodology, the Financial Working Group shall mutually agree upon a revised methodology. Notwithstanding any other clauses in this Schedule 7.4.1, Allowable Expenses shall

exclude costs that result from the gross negligence or willful misconduct of GSK or its Affiliates, Sublicensees, or Third Party contractors. “Net Sales” and “Other Income” shall not include any deductions that are included in “Allowable Expenses”. No Development Cost item may also be an Allowable Expense item, and vice-versa.

“[***]” means amounts [***] to the extent consistent with GSK’s or its Affiliate’s business practices for its other products, if not deducted [***], and provided that any amounts actually [***] shall be deducted from Allowable Expenses.

“[***]” means, as applicable with respect to any period, the FTE Rate(s) for Commercialization activities other than Commercial Manufacture, multiplied by the number of FTEs directly relating to performing such Commercialization activities in accordance with the applicable Commercialization Plan under this Agreement, during such period.

“[***]” means Manufacturing Costs directly attributable and reasonably allocable to the Manufacture of a given Licensed Product (including the cost of API) for Commercialization of such Licensed Product in the Profit-Sharing Territory. “Commercial Manufacture Costs” shall not include any costs of activities conducted for supply of Licensed Products for which the Parties are not sharing Pre-Tax Profit or Loss.

“v” means costs and expenses incurred by or on behalf of GSK that are directly attributable and reasonably allocable to the [***] for sale in the Profit-Sharing Territory, including: (a) [***]; (b) [***]; (c) reasonable and customary [***]; and (d) to the extent not paid for by customers, [***], but for clarity, excluding in each case ((a) through (d)) any such amounts to the extent included as a [***]. [***] shall not exceed [***] of [***].

“[***]” means the annual fee paid to the [***] as defined in the [***] and similar [***] in the Profit-Sharing Territory to the extent directly attributable and reasonably allocable to the applicable Licensed Product and not included as a [***]. If any similar [***] is legislated or rule created in the Profit-Sharing Territory directly attributable and reasonably allocable to the applicable Licensed Product, this shall also be included as an Allowable Expense to the extent directly attributable and reasonably allocable to the applicable Licensed Product and not included as a deduction in calculating Net Sales.

“[***]” means, to the extent not included in Development Costs and not covered in the applicable Development Plan, costs incurred in the [***] of the applicable Licensed Product for sale in the Profit-Sharing Territory, and related [***], including, in each case to the extent directly attributable and reasonably allocable to such Licensed Product:

(1) [***];

(2) [***];

(3) [***] expenses directly attributable and reasonably allocable to such Licensed Product such as [***], provided that if professional staff support more than one product then their expenses shall be allocated based on a percent of effort or other reasonable basis used in the normal course of business;

(4) [***], which means [***] supports more than one product, then the expenses shall be allocated based on a percent of effort or other reasonable basis used in the normal course of business;

(5) [***], which means [***] directly attributable and reasonably allocable to a Licensed Product for sale in the Profit-Sharing Territory; provided that, if employees provide this service, then such employees’ Commercial FTE Costs; provided further that if an employee supports more than one product, then the Commercial FTE Costs shall be allocated based on a percent of effort or other reasonable basis used in the normal course of business; and

(6) [***], which means expenses reasonably necessary and directly attributable and reasonably allocable to the applicable Licensed Product, such as [***] directly attributable and reasonably allocable to such Licensed Product.

[***] will specifically exclude the costs of activities to the extent such activities promote (a) [***], (b) products other than the Licensed Products for sale in the Profit-Sharing Territory, or (c) Licensed Products outside the Profit-Sharing Territory.

“[***]” means expenses reasonably necessary and directly attributable and reasonably allocable to the Licensed Products for sale in the Profit-Sharing Territory or allocated on a percent of effort or other reasonable basis used in the normal course of business, [***].

“[***]” means any payment, income, or other consideration (other than Net Sales) received by GSK or its Affiliates from a Third Party [***], and any payment, income, or other consideration received pursuant to [***] of the Agreement consistent with [***] of the Agreement.

“[***]” means a [***] that is subject to sharing of Pre-Tax Profit or Loss for which IDEAYA has not exercised the IDEAYA Opt-Out, [***].

“[***]” means, to the extent not subject to GSK’s indemnification obligations under this Agreement, expenses directly attributable and reasonably allocable to the v a Licensed Product in the Profit-Sharing Territory, v Licensed Product, [***] Licensed Product and [***] Licensed Product, in each case incurred with respect to a [***]; provided that [***]. For clarity, [***] shall exclude expenses associated with any [***] Manufacture of the Licensed Product.

“[***]” means, with respect to a Licensed Product for which Regulatory Approval has been obtained in the Profit-Sharing Territory, [***] to the extent directly attributable and reasonably allocable to such Licensed Product in the Profit-Sharing Territory, including Third Party invoiced costs and Commercial FTE Costs of personnel, or if personnel support more than one product, then the expenses shall be allocated based on a percent of effort or other reasonable basis used in the normal course of business, consultants and agents engaged in the maintenance of Regulatory Approvals or in activities relating to obtaining and maintaining pricing or reimbursement approvals, and costs to establish, maintain and enforce the Product Marks associated with such Licensed Products the Profit-Sharing Territory.

“[***]” means, with respect to the applicable Licensed Product in the Profit-Sharing Territory:

(1) [***].

(2) [***] and directly attributable and reasonably allocable to such Licensed Product, allocated on a [***], directly attributable and reasonably allocable to the [***].

“[***]” means, to the extent not subject to GSK’s or IDEAYA’s [***] under this Agreement, amounts paid to Third Parties by GSK or its Affiliates (including [***], excluding any such amounts attributable to [***], which amounts will be borne solely by GSK.

“v” means out-of-pocket expenses incurred by either Party or its Affiliates in [***] specifically relating to a Licensed Product for sale in the Profit-Sharing Territory, and amounts payable by either Party or its Affiliates as a [***].

“[***]” means any and all [***] payments made by GSK or its Affiliates to any Third Party with respect to [***] by Third Parties that GSK reasonably determines, after [***] of performing Commercial Manufacture or other Commercialization of a Licensed Product in the Profit-Sharing Territory.

SCHEDULE 9.5

Form of Press Release

IDEAYA and GSK Announce a Broad Partnership in Synthetic Lethality, an Emerging Field in Precision Medicine Oncology

‒	Partnership covers three IDEAYA Synthetic Lethality programs - MAT2A, Pol Theta and Werner Helicase, and will explore combinations between IDEAYA and GSK programs

‒

IDEAYA will receive a $100 million upfront cash payment, and $20 million equity purchase of IDEAYA common stock in a direct private placement, and a potential $50 million cash option exercise fee for the MAT2A program. IDEAYA is also entitled to receive potential preclinical, clinical and sales milestones

‒	IDEAYA will receive a 50% US profit share for the MAT2A and Werner Helicase programs and is responsible for 20% of global development costs for products being developed with GSK

South San Francisco, CA, and London, United Kingdom, June 16, 2020 – IDEAYA Biosciences, Inc. (Nasdaq: IDYA) and GlaxoSmithKline plc (GSK) announce a strategic partnership in Synthetic Lethality, an emerging field in Oncology.

The strategic partnership includes IDEAYA’s Synthetic Lethality programs MAT2A, Pol Theta, and Werner Helicase programs, which are projected to reach clinical trials within the next three years. IDEAYA has solved the crystal structures for each of its MAT2A, Pol Theta and Werner Helicase programs, enabling structure-based drug design, and has demonstrated in vivo proof of concept in relevant animal models for its MAT2A and Pol Theta programs.

Synthetic Lethality is one of four core research focus areas for GSK in oncology. In synthetic lethality, cells tolerate the loss of single genes in isolation but not together in combination. When tumor suppressor genes are functionally lost in cancer, this mode of action can be used to exploit tumor-specific vulnerabilities through new medicines for patients with cancer.

“GSK is the ideal strategic partner for IDEAYA, as this partnership enables compelling potential combinations and the opportunity to build the industry leading Synthetic Lethality pipeline that targets molecularly defined populations in several major solid tumors, including potentially lung, prostate, breast, colorectal, and ovarian cancer,” said Yujiro S. Hata, Chief Executive Officer and President, IDEAYA Biosciences.

IDEAYA will lead the MAT2A program through early clinical development. IDEAYA is responsible for all costs of the MAT2A program prior to the GSK option exercise. Thereafter, IDEAYA is responsible for 20% of global development costs.

IDEAYA will receive a 50% US profit share and ex-US royalties for the MAT2A and Werner Helicase programs and is responsible for 20% of global development costs for licensed products being developed with GSK. IDEAYA will receive global royalties for the Pol Theta program, and GSK will cover all research,

development, and commercialization costs. GSK will be responsible for all commercialization activities and costs globally for licensed products. The collaboration agreement is conditional upon customary conditions including regulatory review by the appropriate regulatory agencies under the Hart-Scott-Rodino Act.

“GSK and IDEAYA have a vision to bring the next generation of innovative precision medicine therapies to patients utilizing the approach of Synthetic Lethality, and a highly complementary pipeline that has the potential to deliver transformative benefit for patients,” said Michael Dillon, Ph.D., Chief Scientific Officer, IDEAYA Biosciences.

IDEAYA Conference Call

At 5:00 a.m. Pacific Time / 8:00 a.m. Eastern Time today, IDEAYA's management will host a conference call and a simultaneous webcast presentation to discuss the transaction. The webcast presentation call can be accessed during the call by visiting the “Investors / News and Events / Presentation” section of IDEAYA’s website at www.ideayabio.com. Please connect to the website prior to the start of the call to allow adequate time for any software download that may be required. A replay of the webcast will be available through approximately fourteen days following the live presentation webcast.

About IDEAYA Biosciences

IDEAYA is an oncology-focused precision medicine company committed to the discovery and development of targeted therapeutics for patient populations selected using molecular diagnostics. IDEAYA’s approach integrates capabilities in identifying and validating translational biomarkers with small molecule drug discovery to select patient populations most likely to benefit from the targeted therapies IDEAYA is developing. IDEAYA is applying these capabilities across multiple classes of precision medicine, including direct targeting of oncogenic pathways and synthetic lethality – which represents an emerging class of precision medicine targets.

___________________

About GSK in Oncology

GSK is focused on maximising patient survival through transformational medicines. GSK’s pipeline is focused on immuno-oncology, cell therapy, cancer epigenetics, and synthetic lethality. Our goal is to achieve a sustainable flow of new treatments based on a diversified portfolio of investigational medicines utilising modalities such as small molecules, antibodies, antibody drug conjugates and cells, either alone or in combination.

About GSK

GSK is a science-led global healthcare company with a special purpose: to help people do more, feel better, live longer. For further information please visit www.gsk.com/about-us.

___________________

Forward-Looking Statements

This press release contains forward-looking statements, including, but not limited to, statements related to (i) the potential for cash payments related to MAT2A program option exercise and preclinical, clinical and sales milestones, (ii) the potential clinical combination of IDEAYA and GSK programs, (iii) the timing of IDEAYA’s Synthetic Lethality programs reaching clinical trials, (iv) the potential for an industry leading pipeline and potential solid tumor types to be addressed, and (v) the ability to deliver transformative value to patients. Such forward-looking statements involve substantial risks and uncertainties that could

cause IDEAYA’s preclinical and clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the drug development process, including IDEAYA’s programs’ early stage of development, the process of designing and conducting preclinical and clinical trials, the regulatory approval processes including Hart Scott Rodino Antitrust Improvements Act clearance, the timing of regulatory filings, the challenges associated with manufacturing drug products, IDEAYA’s ability to successfully establish, protect and defend its intellectual property, the effects on IDEAYA’s business of the worldwide COVID-19 pandemic, and other matters that could affect the sufficiency of existing cash to fund operations. IDEAYA undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of IDEAYA in general, see IDEAYA’s recent Quarterly Report on Form 10-Q filed on May 12, 2020 and any current and periodic reports filed with the U.S. Securities and Exchange Commission.

Cautionary statement regarding forward-looking statements

GSK cautions investors that any forward-looking statements or projections made by GSK, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Such factors include, but are not limited to, those described under Item 3.D "Risk Factors" in the company's Annual Report on Form 20-F for 2019 and any impacts of the COVID-19 pandemic.

Registered in England & Wales:

No. 3888792

Registered Office:

980 Great West Road

Brentford, Middlesex

TW8 9GS

___________________

Investor and Media Contact
IDEAYA Biosciences
Paul Stone
Chief Financial Officer
investor@ideayabio.com


GSK enquiries:
UK Media enquiries:	Simon Steel	+44 (0) 20 8047 5502	(London)
	Tim Foley	+44 (0) 20 8047 5502	(London)
US Media enquiries:	Kristen Neese	+1 804 217 8147	(Philadelphia)
	Kathleen Quinn	+1 202 603 5003	(Washington DC)



Analyst/Investor enquiries:	Sarah Elton-Farr	+44 (0) 20 8047 5194	(London)
	Danielle Smith	+44 (0) 20 8047 0932	(London)
	James Dodwell	+44 (0) 20 8047 2406	(London)
	Jeff McLaughlin	+1 215 751 7002	(Philadelphia)
	Frannie DeFranco	+1 215 751 4855	(Philadelphia)

SCHEDULE 13.2.2

IDEAYA Existing Patents

[***]

EXHIBIT A

PRIVATE PLACEMENT

[Form of stock purchase agreement]

[***]

Omitted pursuant to Regulation S-K, Item 601(a)(5)

Exhibit 31.1

CERTIFICATION OF THE CHIEF 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

I, Yujiro Hata, certify that:

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

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

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

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

(a)

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

(b)

[omitted];

(c)

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

(d)

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

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

(a)

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

(b)

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

Date: August 12, 2020	By:	/s/ Yujiro Hata
		Yujiro Hata
		President and Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF THE CHIEF 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

I, Paul Stone, J.D., certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of IDEAYA Biosciences, 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)

(b)

[omitted];

(c)

(d)

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)

(b)

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

Date: August 12, 2020	By:	/s/ Paul Stone, J.D.
		Paul Stone, J.D.
		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

I, Yujiro Hata, President and Chief Executive Officer of IDEAYA Biosciences, Inc. (the “Company”), hereby 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 Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2020 (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 results of operations of the Company.

Date: August 12, 2020	By:	/s/ Yujiro Hata
		Yujiro Hata
		President and Chief Executive Officer
		(Principal Executive Officer)

I, Paul Stone, J.D., Chief Financial Officer and General Counsel of IDEAYA Biosciences, Inc. (the “Company”), hereby 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 Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2020 (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 results of operations of the Company.

Date: August 12, 2020	By:	/s/ Paul Stone, J.D.
		Paul Stone, J.D.
		Chief Financial Officer
		(Principal Financial and Accounting Officer)