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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-4738379
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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3545 John Hopkins Ct., Suite 210
San Diego, CA
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92121
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.001 per share
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The NASDAQ Global Market
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Page
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PART I
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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PART II
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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PART III
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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PART IV
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Item 15
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•
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the initiation, cost, timing, progress and results of, and our expected ability to undertake certain activities and accomplish certain goals with respect to, our research and development activities, preclinical studies and clinical trials;
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our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations, and/or warnings in the label of an approved product candidate;
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our ability to obtain funding for our operations;
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our plans to research, develop and commercialize our product candidates;
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our strategic alliance partners’ election to pursue development and commercialization;
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our ability to attract collaborators with development, regulatory and commercialization expertise;
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future activities to be undertaken by our strategic alliance partners, collaborators and other third parties;
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our ability to obtain and maintain intellectual property protection for our product candidates;
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the size and growth potential of the markets for our product candidates, and our ability to serve those markets;
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our ability to successfully commercialize, and our expectations regarding future therapeutic and commercial potential with respect to, our product candidates;
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the rate and degree of market acceptance of our product candidates;
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our ability to develop sales and marketing capabilities, whether alone or with potential future collaborators;
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regulatory developments in the United States and foreign countries;
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the performance of our third-party suppliers and manufacturers;
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the success of competing therapies that are or may become available;
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the loss of key scientific or management personnel;
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our ability to successfully secure and deploy capital;
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our ability to satisfy our debt obligations;
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our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act;
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our use of the proceeds from our prior public offerings;
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the accuracy of our estimates regarding expenses, future revenues, capital requirements and need for additional financing; and
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the risks and other forward-looking statements described under the caption “Risk Factors” under Part I, Item 1A of this Annual Report on Form 10-K.
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Item 1.
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Business
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micro
RNAs, until recently, have not been a focus of pharmaceutical research;
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micro
RNAs play a critical role in regulating biological pathways by controlling the translation of many target genes;
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micro
RNA therapeutics target entire disease pathways which may result in more effective treatment of complex multi-factorial diseases; and
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micro
RNA therapeutics may be synergistic with other therapies because of their different mechanism of action.
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a mature platform selectively producing multiple development candidates advancing to the clinic;
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scientific advisors who are pioneers in the
micro
RNA field;
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exclusive access to proven RNA therapeutic technologies through our founding companies, such as GalNac conjugation and the corresponding manufacturing rights licensed to us from Alnylam, which we are utilizing to enhance delivery of RG-101, our wholly-owned GalNAc-conjugated anti-miR targeting
micro
RNA-122, to hepatocytes to more effectively treat HCV.
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a leading
micro
RNA intellectual property estate with access to approximately 850 patents and patent applications relating to RNA technologies, including patent and patent applications relating to chemical modification of oligonucleotides that are useful for
micro
RNA therapeutics, and over 200 patents and patent applications covering compositions and therapeutic uses related to
micro
RNA and
micro
RNA drug products;
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development expertise and financial resources provided by our strategic alliances; and
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•
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numerous academic collaborations that help us identify new
micro
RNA targets and support our early stage discovery efforts.
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existence of significant scientific evidence to support the role of a specific
micro
RNA in a disease;
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availability of predictive preclinical disease models to test our
micro
RNA development candidates;
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ability to effectively deliver anti-miRs to the diseased cells or tissues; and
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existence of a reasonable unmet medical need and commercial opportunity.
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In April 2008, we formed a strategic alliance with GSK to discover and develop
micro
RNA therapeutics for immuno-inflammatory diseases. In February 2010, we and GSK expanded the alliance to include potential
micro
RNA therapeutics for the treatment of HCV. In June 2013, we amended our agreement with GSK and agreed that RG-101 was fully-owned by us and that miR-122 would remain a collaboration target under the agreement. Effective January 2015, this strategic alliance was terminated.
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In June 2010, we formed a strategic alliance with Sanofi to discover and develop
micro
RNA therapeutics for fibrotic diseases. In July 2012, we expanded the alliance to include potential
micro
RNA therapeutics in oncology. The original research term for this strategic alliance expired in June 2013, upon which we and Sanofi entered into an option agreement pursuant to which we granted Sanofi an exclusive right to negotiate the co-development and commercialization of certain of our unencumbered
micro
RNA programs, for which Sanofi paid us an upfront option fee of $2.5 million. In addition, Sanofi granted us an exclusive option to negotiate the co-development and commercialization of miR-21. In February 2014, we and Sanofi extended our strategic alliance and Sanofi concurrently made a $10.0 million investment in our common stock. Under the terms of our extended alliance, Sanofi will have opt-in rights to our RG-012 clinical fibrosis program targeting miR-21 for the treatment of Alport Syndrome, our preclinical program targeting miR-21 for oncology indications, and our preclinical programs targeting miR-221/222 for oncology indications, each of which is to be led by us. If Sanofi chooses to exercise its option on any of these programs, Sanofi will reimburse us for a significant portion of our preclinical and clinical development costs and will also pay us an option exercise fee for any such program, provided that $1.25 million of the $2.5 million upfront option fee paid to us by Sanofi in connection with the June 2013 option agreement will be creditable against such option exercise fee. In addition, we will be eligible to receive clinical and regulatory milestone payments under these programs and potentially commercial milestone payments. We also continue to be eligible to receive royalties on
micro
RNA therapeutic products commercialized by Sanofi or will have the right to co-promote these products. For additional information, see Note 5 to our financial statements under Item 8 of Part II of this Annual Report.
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In August 2012, we formed a strategic alliance with AstraZeneca to discover and develop
micro
RNA therapeutics for cardiovascular diseases, metabolic diseases and oncology. In March 2015, we and AstraZeneca nominated RG-125, a GalNAc-conjugated anti-miR 103/107 oligonucleotide that has been shown to improve insulin sensitivity and glucose tolerance in animal models as a clinical development candidate in NASH in patients with type 2 diabetes/pre-diabetes and we earned a $2.5 million milestone. In December 2015, AstraZeneca commenced the first-in-human dosing of RG-125 (AZD4076) in healthy volunteers and we earned an additional $10.0 million milestone. AstraZeneca is responsible for further development of RG-125 under our collaboration. Pursuant to this alliance, we previously investigated targeting
micro
RNA- 33, or miR-33 for the treatment of atherosclerosis and
micro
RNA-19, or miR-19 in oncology. We and AstraZeneca agreed to terminate these programs as collaboration targets. In addition, AstraZeneca has the right to substitute a new target for miR-33 and miR-19. If products for all three targets are successfully developed and commercialized through pre-agreed sales targets, we could receive additional milestone payments of up to $485.5 million and would be entitled to receive royalties based on a percentage of net sales of those products. For additional information, see Note 5 to our financial statements under Item 8 of this Annual Report.
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In August 2012, we entered into a collaboration agreement with Biogen to evaluate the potential use of
micro
RNA signatures as a biomarker for human patients with multiple sclerosis, or MS. In August 2014, we and Biogen entered into a new collaboration and license agreement to collaborate on
micro
RNA biomarkers for MS and simultaneously terminated the August 2012 collaboration and license agreement. We have completed the research under this collaboration and earned $3.7 million in payments. Following achievement of the final milestone, which was earned by analyzing the treatment effects of a Biogen relapsing MS drug on circulating
micro
RNA profiles identified by Regulus
micro
Markers
SM
, the scope of the research to be performed under the current collaboration agreement has concluded.
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over 250 patents and patent applications that we own or have in-licensed from academic institutions and third parties including our founding companies, Alnylam and Ionis, related to
micro
RNA and
micro
RNA drug products; and
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numerous patents and patent applications exclusively licensed from our founding companies, Alnylam and Ionis, related to RNA technologies, including patent and patent applications relating to chemical modification of oligonucleotides that are useful for
micro
RNA therapeutics, including chemical modifications incorporated into our clinical candidates.
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completion of nonclinical laboratory tests, animal studies and formulation studies according to good laboratory practices, or GLP, or other applicable regulations;
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submission to the FDA of an application for an IND, which must become effective before human clinical trials may begin;
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performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as current good clinical practices, or GCPs, to establish the safety and efficacy of the proposed drug for its intended use;
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submission to the FDA of an NDA for a new drug;
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satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug is produced to assess compliance with the FDA’s current good manufacturing practice standards, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;
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potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA; and
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FDA review and approval of the NDA.
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Phase 1. The drug is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing may be conducted in patients.
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Phase 2. The drug is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule.
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Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA.
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an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs, that began in 2011;
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an increase in the rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for branded and generic drugs, respectively;
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a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts to 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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an extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
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an expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the Federal Poverty Level, thereby potentially increasing manufacturers’ Medicaid rebate liability;
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an expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
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new requirements created by the Physician Payments Sunshine Act to report certain financial arrangements with physicians and teaching hospitals, as defined in the PPACA and as further described above;
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a requirement to annually report drug samples that manufacturers and distributors provide to physicians;
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an expansion of health care fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance;
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a licensure framework for follow-on biologic products;
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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;
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creation of the Independent Payment Advisory Board, which has authority to recommend certain changes to the Medicare program that could result in reduced payments for prescription drugs and those recommendations could have the effect of law even if Congress does not act on the recommendations; and
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establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
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Item 1A.
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Risk Factors
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identifying and validating new
micro
RNAs as therapeutic targets;
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completing our research and preclinical development of product candidates;
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initiating and completing clinical trials for product candidates;
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seeking and obtaining marketing approvals for product candidates that successfully complete clinical trials;
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establishing and maintaining supply and manufacturing relationships with third parties;
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launching and commercializing product candidates for which we obtain marketing approval, with an alliance partner or, if launched independently, successfully establishing a sales force, marketing and distribution infrastructure;
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maintaining, protecting and expanding our intellectual property portfolio; and
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attracting, hiring and retaining qualified personnel.
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significantly delay, scale back or discontinue the development or commercialization of any future product candidates;
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seek strategic alliances for research and development programs at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; or
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relinquish or license on unfavorable terms, our rights to technologies or any future product candidates that we otherwise would seek to develop or commercialize ourselves.
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our research methodology or that of our strategic alliance partners may be unsuccessful in identifying potential product candidates;
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potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval; or
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our strategic alliance partners may change their development profiles for potential product candidates or abandon a therapeutic area.
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successful completion of preclinical studies and clinical trials;
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receipt of marketing approvals from applicable regulatory authorities;
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obtaining and maintaining patent and trade secret protection for future product candidates;
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establishing and maintaining manufacturing relationships with third parties or establishing our own manufacturing capability; and
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successfully commercializing our products, if and when approved, whether alone or in collaboration with others.
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delays in reaching an agreement with the FDA or other regulatory authorities on final trial design;
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imposition of a clinical hold following an inspection of our clinical trial operations or trial sites by the FDA or other regulatory authorities;
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delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;
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our inability to adhere to clinical trial requirements directly or with third parties such as CROs;
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delays in obtaining required institutional review board approval at each clinical trial site;
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delays in recruiting suitable patients to participate in a trial;
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delays in the testing, validation, manufacturing and delivery of the product candidates to the clinical sites;
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delays in having patients complete participation in a trial or return for post-treatment follow-up;
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delays caused by patients dropping out of a trial due to product side effects or disease progression;
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clinical sites dropping out of a trial to the detriment of enrollment;
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time required to add new clinical sites; or
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delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials.
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be delayed in obtaining marketing approval for our future product candidates;
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not obtain marketing approval at all;
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obtain approval for indications or patient populations that are not as broad as originally intended or desired;
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obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
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be subject to additional post-marketing testing requirements; or
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have the product removed from the market after obtaining marketing approval.
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regulatory authorities may withdraw their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy;
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regulatory authorities may require the addition of labeling statements, such as warnings or contraindications;
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we may be required to change the way the product is administered or conduct additional clinical trials;
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we could be sued and held liable for harm caused to patients; or
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our reputation may suffer.
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issue a warning letter asserting that we are in violation of the law;
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seek an injunction or impose civil or criminal penalties or monetary fines;
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suspend or withdraw regulatory approval;
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suspend any ongoing clinical trials;
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refuse to approve a pending NDA or supplements to an NDA submitted by us;
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seize product; or
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refuse to allow us to enter into supply contracts, including government contracts.
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an alliance partner may shift its priorities and resources away from our programs due to a change in business strategies, or a merger, acquisition, sale or downsizing of its company or business unit;
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an alliance partner may cease development in therapeutic areas which are the subject of our strategic alliances;
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an alliance partner may change the success criteria for a particular program or potential product candidate thereby delaying or ceasing development of such program or candidate;
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a significant delay in initiation of certain development activities by an alliance partner will also delay payment of milestones tied to such activities, thereby impacting our ability to fund our own activities;
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an alliance partner could develop a product that competes, either directly or indirectly, with an alliance product;
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an alliance partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution or sale of a product;
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an alliance partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirements;
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an alliance partner may exercise its rights under the agreement to terminate a strategic alliance;
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a dispute may arise between us and an alliance partner concerning the research, development or commercialization of a program or product candidate resulting in a delay in milestones, royalty payments or termination of a program and possibly resulting in costly litigation or arbitration which may divert management attention and resources; and
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an alliance partner may use our proprietary information or intellectual property in such a way as to invite litigation from a third party or fail to maintain or prosecute intellectual property rights such that our rights in such property are jeopardized.
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in the case of Sanofi, under certain circumstances, we may owe Sanofi royalties with respect to product candidates covered by our agreement with Sanofi that we elect to continue to commercialize, depending upon the stage of development at which such product commercialization rights reverted back to us, or additional payments if we license such product candidates to third parties;
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the development of our product candidates subject to the AstraZeneca agreement or the Sanofi agreement, as applicable, 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, or expected to be funded, by AstraZeneca or Sanofi, as applicable;
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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 AstraZeneca agreement or the Sanofi agreement, as applicable, 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 strategic alliances with third-party 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.
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the inability to meet any product specifications and quality requirements consistently;
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a delay or inability to procure or expand sufficient manufacturing capacity;
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manufacturing and product quality issues related to scale-up of manufacturing;
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costs and validation of new equipment and facilities required for scale-up;
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a failure to comply with cGMP and similar foreign standards;
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the inability to negotiate manufacturing or supply agreements with third parties under commercially reasonable terms;
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termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;
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the reliance on a limited number of sources, and in some cases, single sources for raw materials, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell future product candidates in a timely fashion, in sufficient quantities or under acceptable terms;
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the lack of qualified backup suppliers for any raw materials that are currently purchased from a single source supplier;
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operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;
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carrier disruptions or increased costs that are beyond our control; and
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the failure to deliver products under specified storage conditions and in a timely manner.
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discover and develop therapeutics that are superior to other products in the market;
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attract qualified scientific, product development and commercial personnel;
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obtain patent and/or other proprietary protection for our
micro
RNA product platform and future product candidates;
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obtain required regulatory approvals; and
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successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new therapeutics.
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demonstration of clinical safety and efficacy compared to other products;
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the relative convenience, ease of administration and acceptance by physicians, patients and healthcare payors;
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the prevalence and severity of any AEs;
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limitations or warnings contained in the FDA-approved label for such products;
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availability of alternative treatments;
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pricing and cost-effectiveness;
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the effectiveness of our or any collaborators’ sales and marketing strategies;
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our ability to obtain hospital formulary approval;
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our ability to obtain and maintain sufficient third party coverage or adequate reimbursement; and
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the willingness of patients to pay out-of-pocket in the absence of third party coverage.
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different regulatory requirements for drug approvals in foreign countries;
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reduced protection for intellectual property rights;
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unexpected changes in tariffs, trade barriers and regulatory requirements;
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economic weakness, including inflation, or political instability in particular foreign economies and markets;
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compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
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foreign taxes, including withholding of payroll taxes;
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foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;
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workforce uncertainty in countries where labor unrest is more common than in the United States;
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production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and
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business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
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the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs;
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federal civil and criminal false claims laws and civil monetary penalty laws, including the civil False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to the federal government, including Medicare or Medicaid, that are false or fraudulent;
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the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;
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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their implementing regulations, which imposes certain requirements on certain types of individuals and entities relating to the privacy, security and transmission of individually identifiable health information;
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the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians, and further requires applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members; and
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state and foreign law equivalents of each of the above federal laws, such as: anti-kickback and false claims laws which may apply to items or services reimbursed by any third party payor, including commercial insurers;state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not
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•
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an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;
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•
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an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively;
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•
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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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•
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extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
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•
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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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•
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a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D;
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•
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expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; and
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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.
|
•
|
impairment of our business reputation;
|
•
|
withdrawal of clinical trial participants;
|
•
|
costs due to related litigation;
|
•
|
distraction of management’s attention from our primary business;
|
•
|
substantial monetary awards to patients or other claimants;
|
•
|
the inability to commercialize our product candidates; and
|
•
|
decreased demand for our product candidates, if approved for commercial sale.
|
•
|
adverse results or delays in preclinical studies or clinical trials;
|
•
|
inability to obtain additional funding;
|
•
|
any delay in filing an IND or NDA for any of our product candidates and any adverse development or perceived adverse development with respect to the FDA’s review of that IND or NDA;
|
•
|
failure to maintain our existing strategic alliances or enter into new alliances;
|
•
|
failure of our strategic alliance partners to elect to develop and commercialize product candidates under our alliance agreements or the termination of any programs under our alliance agreements;
|
•
|
failure by us or our licensors and strategic alliance partners to prosecute, maintain or enforce our intellectual property rights;
|
•
|
failure to successfully develop and commercialize our product candidates;
|
•
|
changes in laws or regulations applicable to our preclinical and clinical development activities, product candidates or future products;
|
•
|
inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices;
|
•
|
adverse regulatory decisions;
|
•
|
introduction of new products, services or technologies by our competitors;
|
•
|
failure to meet or exceed financial projections we may provide to the public;
|
•
|
failure to meet or exceed the estimates and projections of the investment community;
|
•
|
the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community;
|
•
|
announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic alliance partners or our competitors;
|
•
|
disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
|
•
|
additions or departures of key scientific or management personnel;
|
•
|
significant lawsuits, including patent or stockholder litigation;
|
•
|
changes in the market valuations of similar companies;
|
•
|
sales of our common stock by us or our stockholders in the future; and
|
•
|
trading volume of our common stock.
|
•
|
authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;
|
•
|
prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
eliminating the ability of stockholders to call a special meeting of stockholders;
|
•
|
establishing the state of Delaware as the sole forum for certain legal actions against the Company, its officers and directors; and
|
•
|
establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.
|
Item 4.
|
Mine Safety Disclosures
|
|
Price Range
|
||||||
|
High
|
|
Low
|
||||
Year Ended December 31, 2014:
|
|
|
|
||||
First Quarter
|
$
|
11.88
|
|
|
$
|
6.76
|
|
Second Quarter
|
$
|
9.24
|
|
|
$
|
5.40
|
|
Third Quarter
|
$
|
8.32
|
|
|
$
|
6.13
|
|
Fourth Quarter
|
$
|
25.60
|
|
|
$
|
6.23
|
|
|
|
|
|
||||
Year Ended December 31, 2015:
|
|
|
|
||||
First Quarter
|
$
|
21.22
|
|
|
$
|
13.75
|
|
Second Quarter
|
$
|
18.83
|
|
|
$
|
9.80
|
|
Third Quarter
|
$
|
11.59
|
|
|
$
|
6.30
|
|
Fourth Quarter
|
$
|
10.60
|
|
|
$
|
5.85
|
|
|
Year ended December 31,
|
||||||||||||||||||
Statement of operations data
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Revenue under strategic alliances and collaborations
|
$
|
20,759
|
|
|
$
|
7,669
|
|
|
$
|
19,569
|
|
|
$
|
12,700
|
|
|
$
|
13,767
|
|
Loss from operations
|
(54,758
|
)
|
|
(44,910
|
)
|
|
(17,802
|
)
|
|
(12,574
|
)
|
|
(7,137
|
)
|
|||||
Net loss
|
$
|
(55,748
|
)
|
|
$
|
(56,680
|
)
|
|
$
|
(18,668
|
)
|
|
$
|
(17,408
|
)
|
|
$
|
(7,602
|
)
|
Net loss per share, basic and diluted
|
$
|
(1.08
|
)
|
|
$
|
(1.29
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(2.12
|
)
|
|
$
|
(85.82
|
)
|
|
As of December 31,
|
||||||||||||||||||
Balance sheet data
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Cash, cash equivalents and short-term investments*
|
$
|
115,319
|
|
*
|
$
|
159,743
|
|
|
$
|
114,005
|
|
|
$
|
98,100
|
|
|
$
|
38,144
|
|
Working capital
|
121,626
|
|
|
129,759
|
|
|
106,812
|
|
|
86,161
|
|
|
25,816
|
|
|||||
Total assets
|
141,083
|
|
|
171,480
|
|
|
123,065
|
|
|
103,518
|
|
|
42,881
|
|
|||||
Convertible note payable, at fair value
|
—
|
|
|
23,397
|
|
|
11,279
|
|
|
10,134
|
|
|
10,815
|
|
|||||
Convertible preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,691
|
|
|||||
Accumulated deficit
|
(191,515
|
)
|
|
(135,767
|
)
|
|
(79,087
|
)
|
|
(60,419
|
)
|
|
(43,011
|
)
|
|||||
Total stockholders’ equity (deficit)
|
124,078
|
|
|
132,014
|
|
|
93,457
|
|
|
62,093
|
|
|
(41,494
|
)
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
micro
RNAs, until recently, have not been a focus of pharmaceutical research;
|
•
|
micro
RNAs play a critical role in regulating biological pathways by controlling the translation of many target genes;
|
•
|
micro
RNA therapeutics target entire disease pathways which may result in more effective treatment of complex multi-factorial diseases; and
|
•
|
micro
RNA therapeutics may be synergistic with other therapies because of their different mechanism of action.
|
•
|
employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;
|
•
|
external research and development expenses incurred under arrangements with third parties, such as contract research organizations, or CROs, contract manufacturing organizations, or CMOs, other clinical trial related vendors, consultants and our scientific advisors;
|
•
|
license fees; and
|
•
|
facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory and other supplies.
|
•
|
Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets.
|
•
|
Level 2 includes financial instruments for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
|
•
|
Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable in determining fair values of the instruments.
|
|
Years ended
December 31, |
||||||
|
2015
|
|
2014
|
||||
Revenue under strategic alliances and collaborations
|
$
|
20,759
|
|
|
$
|
7,669
|
|
Research and development expenses
|
56,387
|
|
|
41,046
|
|
||
General and administrative expenses
|
19,130
|
|
|
11,533
|
|
||
Loss from changes in valuation of convertible note payable
|
(1,811
|
)
|
|
(12,118
|
)
|
|
Years ended
December 31, |
||||||
|
2015
|
|
2014
|
||||
AstraZeneca
|
$
|
18,871
|
|
|
$
|
1,859
|
|
Sanofi
|
71
|
|
|
979
|
|
||
GSK
|
—
|
|
|
3,509
|
|
||
Biogen
|
1,817
|
|
|
1,122
|
|
||
Other
|
—
|
|
|
200
|
|
||
Total revenues under strategic alliances and collaborations
|
$
|
20,759
|
|
|
$
|
7,669
|
|
|
Years ended
December 31, |
||||||
|
2014
|
|
2013
|
||||
Revenue under strategic alliances and collaborations
|
$
|
7,669
|
|
|
$
|
19,569
|
|
Research and development expenses
|
41,046
|
|
|
29,942
|
|
||
General and administrative expenses
|
11,533
|
|
|
7,429
|
|
||
Loss from change in valuation of convertible note payable
|
(12,118
|
)
|
|
(1,145
|
)
|
|
Years ended
December 31, |
||||||
|
2014
|
|
2013
|
||||
AstraZeneca
|
$
|
1,859
|
|
|
$
|
1,859
|
|
Sanofi
|
979
|
|
|
15,336
|
|
||
GSK
|
3,509
|
|
|
1,778
|
|
||
Biogen
|
1,122
|
|
|
596
|
|
||
Other
|
200
|
|
|
—
|
|
||
Total revenues under strategic alliances and collaborations
|
$
|
7,669
|
|
|
$
|
19,569
|
|
|
Years ended
December 31, |
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash (used in) provided by:
|
|
|
|
|
|
||||||
Operating activities
|
$
|
(49,859
|
)
|
|
$
|
(39,510
|
)
|
|
$
|
(28,330
|
)
|
Investing activities
|
21,475
|
|
|
(29,207
|
)
|
|
(40,889
|
)
|
|||
Financing activities
|
7,017
|
|
|
88,237
|
|
|
46,474
|
|
|||
Total
|
$
|
(21,367
|
)
|
|
$
|
19,520
|
|
|
$
|
(22,745
|
)
|
•
|
the achievement of milestones under our strategic alliance agreements with Sanofi and AstraZeneca;
|
•
|
the terms and timing of any other strategic alliance, licensing and other arrangements that we may establish;
|
•
|
the initiation, progress, timing and completion of preclinical studies and clinical trials for our product candidates;
|
•
|
the number and characteristics of product candidates that we pursue;
|
•
|
the outcome, timing and cost of regulatory approvals;
|
•
|
delays that may be caused by changing regulatory requirements;
|
•
|
the cost and timing of hiring new employees to support our continued growth;
|
•
|
the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims;
|
•
|
the costs and timing of procuring clinical and commercial supplies of our product candidates;
|
•
|
the costs and timing of establishing sales, marketing and distribution capabilities; and
|
•
|
the extent to which we acquire or invest in businesses, products or technologies.
|
|
|
Payments due by period
|
||||||||||||||||||
|
|
Total
|
|
2016
<1 year
|
|
2017-2018
2-3 years
|
|
2019-2020
4-5 years
|
|
>5 years
|
||||||||||
Operating lease obligations relating to facility(1)
|
|
$
|
21,698
|
|
|
$
|
1,699
|
|
|
$
|
4,905
|
|
|
$
|
5,387
|
|
|
$
|
9,707
|
|
Annual maintenance fees for license agreements
|
|
888
|
|
|
101
|
|
|
203
|
|
|
203
|
|
|
381
|
|
|||||
Total
|
|
$
|
22,586
|
|
|
$
|
1,800
|
|
|
$
|
5,108
|
|
|
$
|
5,590
|
|
|
$
|
10,088
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
15,960
|
|
|
$
|
37,327
|
|
Short-term investments
|
98,103
|
|
|
122,416
|
|
||
Restricted cash
|
1,256
|
|
|
—
|
|
||
Contract and other receivables
|
10,021
|
|
|
274
|
|
||
Prepaid expenses
|
8,159
|
|
|
4,192
|
|
||
Other current assets
|
759
|
|
|
742
|
|
||
Total current assets
|
134,258
|
|
|
164,951
|
|
||
Property and equipment, net
|
5,400
|
|
|
3,568
|
|
||
Intangibles, net
|
1,081
|
|
|
1,150
|
|
||
Other assets
|
344
|
|
|
1,811
|
|
||
Total assets
|
$
|
141,083
|
|
|
$
|
171,480
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,717
|
|
|
$
|
2,188
|
|
Accrued liabilities
|
6,329
|
|
|
4,402
|
|
||
Accrued compensation
|
2,392
|
|
|
2,108
|
|
||
Current portion of deferred revenue
|
1,194
|
|
|
3,097
|
|
||
Convertible note payable, at fair value
|
—
|
|
|
23,397
|
|
||
Total current liabilities
|
12,632
|
|
|
35,192
|
|
||
Deferred revenue, less current portion
|
2,065
|
|
|
3,252
|
|
||
Other long-term liabilities
|
2,308
|
|
|
1,022
|
|
||
Total liabilities
|
17,005
|
|
|
39,466
|
|
||
Commitments and Contingencies (Note 8)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.001 par value; 200,000,000 shares authorized, 52,669,266 and 48,944,530 shares issued and outstanding at December 31, 2015 and 2014, respectively
|
53
|
|
|
49
|
|
||
Additional paid-in capital
|
315,673
|
|
|
267,929
|
|
||
Accumulated other comprehensive loss
|
(133
|
)
|
|
(197
|
)
|
||
Accumulated deficit
|
(191,515
|
)
|
|
(135,767
|
)
|
||
Total stockholders’ equity
|
124,078
|
|
|
132,014
|
|
||
Total liabilities and stockholders’ equity
|
$
|
141,083
|
|
|
$
|
171,480
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Revenue under strategic alliances and collaborations
|
$
|
20,759
|
|
|
$
|
7,669
|
|
|
$
|
19,569
|
|
Total revenues
|
20,759
|
|
|
7,669
|
|
|
19,569
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
56,387
|
|
|
41,046
|
|
|
29,942
|
|
|||
General and administrative
|
19,130
|
|
|
11,533
|
|
|
7,429
|
|
|||
Total operating expenses
|
75,517
|
|
|
52,579
|
|
|
37,371
|
|
|||
Loss from operations
|
(54,758
|
)
|
|
(44,910
|
)
|
|
(17,802
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest and other income
|
855
|
|
|
388
|
|
|
292
|
|
|||
Interest and other expense
|
(52
|
)
|
|
(39
|
)
|
|
(36
|
)
|
|||
Loss from valuation of convertible note payable
|
(1,811
|
)
|
|
(12,118
|
)
|
|
(1,145
|
)
|
|||
Loss before income taxes
|
(55,766
|
)
|
|
(56,679
|
)
|
|
(18,691
|
)
|
|||
Income tax benefit (expense)
|
18
|
|
|
(1
|
)
|
|
23
|
|
|||
Net loss
|
$
|
(55,748
|
)
|
|
$
|
(56,680
|
)
|
|
$
|
(18,668
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on short-term investments, net
|
64
|
|
|
(181
|
)
|
|
36
|
|
|||
Comprehensive loss
|
$
|
(55,684
|
)
|
|
$
|
(56,861
|
)
|
|
$
|
(18,632
|
)
|
Net loss per share, basic and diluted
|
$
|
(1.08
|
)
|
|
$
|
(1.29
|
)
|
|
$
|
(0.49
|
)
|
Weighted average shares used to compute basic and diluted net loss per share
|
51,411,353
|
|
|
44,090,165
|
|
|
38,479,447
|
|
|
|
Common stock
|
|
Additional
paid-in
capital
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Accumulated
deficit
|
|
Total
stockholders’
equity
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2012
|
|
35,831,808
|
|
|
$
|
36
|
|
|
$
|
122,528
|
|
|
$
|
(52
|
)
|
|
$
|
(60,419
|
)
|
|
$
|
62,093
|
|
Issuance of common stock upon exercise of options
|
|
732,483
|
|
|
1
|
|
|
593
|
|
|
—
|
|
|
—
|
|
|
594
|
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
3,422
|
|
|
—
|
|
|
—
|
|
|
3,422
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
|
48,035
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|||||
Issuance of common stock, net of $434 of offering costs
|
|
5,175,000
|
|
|
5
|
|
|
45,774
|
|
|
—
|
|
|
—
|
|
|
45,779
|
|
|||||
Unrealized gain on short-term investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,668
|
)
|
|
(18,668
|
)
|
|||||
Balance at December 31, 2013
|
|
41,787,326
|
|
|
$
|
42
|
|
|
$
|
172,518
|
|
|
$
|
(16
|
)
|
|
$
|
(79,087
|
)
|
|
$
|
93,457
|
|
Issuance of common stock upon exercise of options
|
|
1,006,515
|
|
|
1
|
|
|
2,232
|
|
|
—
|
|
|
—
|
|
|
2,233
|
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
7,039
|
|
|
—
|
|
|
—
|
|
|
7,039
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
|
38,085
|
|
|
—
|
|
|
283
|
|
|
—
|
|
|
—
|
|
|
283
|
|
|||||
Issuance of common stock in private placement
|
|
1,303,780
|
|
|
1
|
|
|
9,568
|
|
|
—
|
|
|
—
|
|
|
9,569
|
|
|||||
Issuance of common stock, net of $347 of offering costs
|
|
4,808,824
|
|
|
5
|
|
|
76,289
|
|
|
—
|
|
|
—
|
|
|
76,294
|
|
|||||
Unrealized loss on short-term investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(181
|
)
|
|
—
|
|
|
(181
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,680
|
)
|
|
(56,680
|
)
|
|||||
Balance at December 31, 2014
|
|
48,944,530
|
|
|
$
|
49
|
|
|
$
|
267,929
|
|
|
$
|
(197
|
)
|
|
$
|
(135,767
|
)
|
|
$
|
132,014
|
|
Issuance of common stock upon exercise of options
|
|
2,298,618
|
|
|
2
|
|
|
6,678
|
|
|
—
|
|
|
—
|
|
|
6,680
|
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
15,368
|
|
|
—
|
|
|
—
|
|
|
15,368
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
|
69,380
|
|
|
—
|
|
|
492
|
|
|
—
|
|
|
—
|
|
|
492
|
|
|||||
Conversion of convertible note payable into common stock
|
|
1,356,738
|
|
|
2
|
|
|
25,206
|
|
|
—
|
|
|
—
|
|
|
25,208
|
|
|||||
Unrealized gain on short-term investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,748
|
)
|
|
(55,748
|
)
|
|||||
Balance at December 31, 2015
|
|
52,669,266
|
|
|
$
|
53
|
|
|
$
|
315,673
|
|
|
$
|
(133
|
)
|
|
$
|
(191,515
|
)
|
|
$
|
124,078
|
|
|
Years ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(55,748
|
)
|
|
$
|
(56,680
|
)
|
|
$
|
(18,668
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
1,591
|
|
|
1,490
|
|
|
1,360
|
|
|||
Loss from valuation of convertible note payable
|
1,811
|
|
|
12,118
|
|
|
1,145
|
|
|||
Stock-based compensation
|
15,368
|
|
|
7,039
|
|
|
3,422
|
|
|||
Amortization of premium on investments, net
|
1,472
|
|
|
1,597
|
|
|
1,439
|
|
|||
Loss on disposal of long-term assets
|
98
|
|
|
18
|
|
|
—
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Contracts and other receivables
|
(9,746
|
)
|
|
(196
|
)
|
|
(79
|
)
|
|||
Prepaid expenses
|
(3,967
|
)
|
|
(1,795
|
)
|
|
(1,890
|
)
|
|||
Other assets
|
(176
|
)
|
|
(87
|
)
|
|
(393
|
)
|
|||
Accounts payable
|
529
|
|
|
940
|
|
|
860
|
|
|||
Accrued liabilities
|
2,094
|
|
|
556
|
|
|
1,355
|
|
|||
Accrued compensation
|
284
|
|
|
811
|
|
|
(51
|
)
|
|||
Deferred revenue
|
(3,090
|
)
|
|
(5,039
|
)
|
|
(16,819
|
)
|
|||
Deferred rent and other liabilities
|
(379
|
)
|
|
(282
|
)
|
|
(11
|
)
|
|||
Net cash used in operating activities
|
(49,859
|
)
|
|
(39,510
|
)
|
|
(28,330
|
)
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of short-term investments
|
(78,401
|
)
|
|
(113,417
|
)
|
|
(72,005
|
)
|
|||
Sales and maturities of short-term investments
|
101,306
|
|
|
85,421
|
|
|
31,951
|
|
|||
Purchases of property and equipment
|
(1,363
|
)
|
|
(1,146
|
)
|
|
(800
|
)
|
|||
Acquisition of intangibles
|
(67
|
)
|
|
(65
|
)
|
|
(35
|
)
|
|||
Net cash provided by (used in) investing activities
|
21,475
|
|
|
(29,207
|
)
|
|
(40,889
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock, net
|
492
|
|
|
86,146
|
|
|
45,980
|
|
|||
Proceeds from exercise of common stock options
|
6,680
|
|
|
2,233
|
|
|
594
|
|
|||
Principal payments on other long-term obligations
|
(155
|
)
|
|
(142
|
)
|
|
(100
|
)
|
|||
Net cash provided by financing activities
|
7,017
|
|
|
88,237
|
|
|
46,474
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(21,367
|
)
|
|
19,520
|
|
|
(22,745
|
)
|
|||
Cash and cash equivalents at beginning of period
|
37,327
|
|
|
17,807
|
|
|
40,552
|
|
|||
Cash and cash equivalents at end of period
|
$
|
15,960
|
|
|
$
|
37,327
|
|
|
$
|
17,807
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Net changes in restricted cash
|
$
|
1,256
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest paid
|
$
|
(27
|
)
|
|
$
|
(39
|
)
|
|
$
|
(37
|
)
|
Income taxes paid
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
|
|
||||||
Allowance for tenant improvements
|
$
|
1,656
|
|
|
$
|
—
|
|
|
$
|
653
|
|
Amounts accrued for property and equipment
|
$
|
223
|
|
|
$
|
76
|
|
|
$
|
—
|
|
Amounts accrued for patent expenditures
|
$
|
28
|
|
|
$
|
42
|
|
|
$
|
11
|
|
|
Years ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Common stock options
|
1,674,119
|
|
|
2,566,423
|
|
|
3,639,270
|
|
Convertible note payable
|
—
|
|
|
1,461,474
|
|
|
1,411,659
|
|
Total
|
1,674,119
|
|
|
4,027,897
|
|
|
5,050,929
|
|
|
Maturity
(in years)
|
|
Amortized
cost
|
|
Unrealized
|
|
Estimated
fair value
|
||||||||||
Gains
|
|
Losses
|
|
||||||||||||||
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
2 or less
|
|
$
|
81,054
|
|
|
$
|
16
|
|
|
$
|
(103
|
)
|
|
$
|
80,967
|
|
Certificates of deposit
|
2 or less
|
|
13,640
|
|
|
—
|
|
|
—
|
|
|
13,640
|
|
||||
Commercial paper
|
1 or less
|
|
3,490
|
|
|
6
|
|
|
—
|
|
|
3,496
|
|
||||
Total
|
|
|
$
|
98,184
|
|
|
$
|
22
|
|
|
$
|
(103
|
)
|
|
$
|
98,103
|
|
|
Maturity
(in years)
|
|
Amortized
cost
|
|
Unrealized
|
|
Estimated
fair value
|
||||||||||
Gains
|
|
Losses
|
|
||||||||||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
2 or less
|
|
$
|
105,085
|
|
|
$
|
2
|
|
|
$
|
(167
|
)
|
|
$
|
104,920
|
|
Certificates of deposit
|
2 or less
|
|
14,600
|
|
|
—
|
|
|
—
|
|
|
14,600
|
|
||||
Commercial paper
|
1 or less
|
|
2,895
|
|
|
1
|
|
|
—
|
|
|
2,896
|
|
||||
Total
|
|
|
$
|
122,580
|
|
|
$
|
3
|
|
|
$
|
(167
|
)
|
|
$
|
122,416
|
|
•
|
Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets.
|
•
|
Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
|
•
|
Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including management’s own assumptions.
|
|
Fair value as of December 31, 2015
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
15,152
|
|
|
$
|
15,152
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
80,967
|
|
|
—
|
|
|
80,967
|
|
|
—
|
|
||||
Certificates of deposit
|
13,640
|
|
|
—
|
|
|
13,640
|
|
|
—
|
|
||||
Commercial paper
|
3,496
|
|
|
—
|
|
|
3,496
|
|
|
—
|
|
||||
|
$
|
113,255
|
|
|
$
|
15,152
|
|
|
$
|
98,103
|
|
|
$
|
—
|
|
|
Fair value as of December 31, 2014
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
37,072
|
|
|
$
|
37,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
104,920
|
|
|
—
|
|
|
104,920
|
|
|
—
|
|
||||
Certificates of deposit
|
14,600
|
|
|
—
|
|
|
14,600
|
|
|
—
|
|
||||
Commercial paper
|
2,896
|
|
|
—
|
|
|
2,896
|
|
|
—
|
|
||||
|
$
|
159,488
|
|
|
$
|
37,072
|
|
|
$
|
122,416
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Convertible note payable
|
$
|
23,397
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,397
|
|
|
Fair Value Measurements
Using Significant
Unobservable Inputs
(Level 3)
|
||
Balance at December 31, 2014
|
$
|
23,397
|
|
Change in estimated fair value of convertible note payable
|
1,811
|
|
|
Convertible note converted to shares of common stock
|
(25,208
|
)
|
|
Balance at December 31, 2015
|
$
|
—
|
|
|
|
December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Laboratory equipment
|
|
$
|
7,310
|
|
|
$
|
6,394
|
|
Computer equipment and software
|
|
305
|
|
|
266
|
|
||
Furniture and fixtures
|
|
138
|
|
|
119
|
|
||
Leasehold improvements
|
|
1,930
|
|
|
1,899
|
|
||
Construction in progress
|
|
2,167
|
|
|
43
|
|
||
|
|
11,850
|
|
|
8,721
|
|
||
Less accumulated depreciation and amortization
|
|
(6,450
|
)
|
|
(5,153
|
)
|
||
Property and equipment, net
|
|
$
|
5,400
|
|
|
$
|
3,568
|
|
|
|
December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Patents
|
|
$
|
1,081
|
|
|
$
|
1,067
|
|
Licenses
|
|
379
|
|
|
379
|
|
||
|
|
1,460
|
|
|
1,446
|
|
||
Accumulated amortization
|
|
(379
|
)
|
|
(296
|
)
|
||
Intangibles, net
|
|
$
|
1,081
|
|
|
$
|
1,150
|
|
|
|
||
2016
|
$
|
1,699
|
|
2017
|
2,330
|
|
|
2018
|
2,575
|
|
|
2019
|
2,654
|
|
|
2020
|
2,733
|
|
|
Thereafter
|
9,707
|
|
|
|
$
|
21,698
|
|
Common stock options outstanding
|
5,125,667
|
|
Common stock available for future grant under the 2012 Plan
|
1,549,163
|
|
Common stock available for future grant under the Inducement Plan
|
958,052
|
|
Employee Stock Purchase Plan
|
1,260,136
|
|
Total common shares reserved for future issuance
|
8,893,018
|
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
Weighted average remaining contractual term
|
|
Aggregate intrinsic value
|
|||||
Options outstanding at December 31, 2014
|
6,643
|
|
|
$
|
6.95
|
|
|
|
|
|
||
Granted
|
1,915
|
|
|
$
|
10.98
|
|
|
|
|
|
||
Exercised
|
(2,299
|
)
|
|
$
|
2.95
|
|
|
|
|
|
||
Canceled/forfeited/expired
|
(1,133
|
)
|
|
$
|
13.13
|
|
|
|
|
|
||
Options outstanding at December 31, 2015
|
5,126
|
|
|
$
|
8.91
|
|
|
7.6
|
|
$
|
8,461
|
|
Vested or expected to vest at December 31, 2015
|
4,911
|
|
|
$
|
8.83
|
|
|
7.6
|
|
$
|
8,319
|
|
Exercisable at December 31, 2015
|
1,963
|
|
|
$
|
6.37
|
|
|
5.3
|
|
$
|
5,816
|
|
|
Year ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Stock options
|
|
|
|
|
|
|||
Risk-free interest rate
|
1.8
|
%
|
|
1.8
|
%
|
|
1.9
|
%
|
Volatility
|
78.9
|
%
|
|
74.3
|
%
|
|
72.4
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Expected term (years)
|
6.1
|
|
|
6.1
|
|
|
6.1
|
|
Performance stock options
|
|
|||||||
Risk-free interest rate
|
1.8
|
%
|
|
2.1
|
%
|
|
—
|
%
|
Volatility
|
76.7
|
%
|
|
69.6
|
%
|
|
—
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Expected term (years)
|
6.0
|
|
|
6.3
|
|
|
0.0
|
|
Employee stock purchase plan shares
|
|
|||||||
Risk-free interest rate
|
0.1
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
Volatility
|
76.1
|
%
|
|
69.8
|
%
|
|
58.8
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Expected term (years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Research and development
|
$
|
8,075
|
|
|
$
|
3,939
|
|
|
$
|
2,246
|
|
General and administrative
|
7,293
|
|
|
3,100
|
|
|
1,176
|
|
|||
Total
|
$
|
15,368
|
|
|
$
|
7,039
|
|
|
$
|
3,422
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(17
|
)
|
|
—
|
|
|
(20
|
)
|
|||
State
|
|
(2
|
)
|
|
—
|
|
|
(4
|
)
|
|||
|
|
(19
|
)
|
|
—
|
|
|
(24
|
)
|
|||
Income tax (benefit) expense
|
|
$
|
(18
|
)
|
|
$
|
1
|
|
|
$
|
(23
|
)
|
|
|
Year ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Expected income tax benefit at federal statutory tax rate
|
|
$
|
(18,960
|
)
|
|
$
|
(19,271
|
)
|
|
$
|
(6,355
|
)
|
State income taxes, net of federal benefit
|
|
(1,580
|
)
|
|
(2,348
|
)
|
|
(1,090
|
)
|
|||
Tax credits
|
|
(5,039
|
)
|
|
(3,307
|
)
|
|
(2,406
|
)
|
|||
Change in fair value of convertible note payable
|
|
616
|
|
|
4,120
|
|
|
456
|
|
|||
Change in valuation allowance
|
|
23,216
|
|
|
20,047
|
|
|
9,026
|
|
|||
Prior year true-up
|
|
110
|
|
|
(92
|
)
|
|
(235
|
)
|
|||
Stock compensation
|
|
1,161
|
|
|
902
|
|
|
667
|
|
|||
Reserve for uncertain tax positions
|
|
254
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
204
|
|
|
(50
|
)
|
|
(86
|
)
|
|||
Income tax (benefit) expense
|
|
$
|
(18
|
)
|
|
$
|
1
|
|
|
$
|
(23
|
)
|
|
|
December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryovers
|
|
$
|
48,912
|
|
|
$
|
34,954
|
|
Research and development and other tax credits
|
|
15,148
|
|
|
8,732
|
|
||
Deferred revenue
|
|
1,210
|
|
|
1,919
|
|
||
Intangibles and property and equipment basis difference
|
|
2,097
|
|
|
1,874
|
|
||
Stock compensation expense
|
|
3,488
|
|
|
1,999
|
|
||
Other
|
|
1,129
|
|
|
617
|
|
||
Total deferred tax assets
|
|
71,984
|
|
|
50,095
|
|
||
Total deferred tax liabilities
|
|
(343
|
)
|
|
(1,670
|
)
|
||
Net deferred tax asset
|
|
71,641
|
|
|
48,425
|
|
||
Valuation allowance
|
|
(71,641
|
)
|
|
(48,425
|
)
|
||
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Beginning balance of unrecognized tax benefits
|
|
$
|
1,853
|
|
|
$
|
1,092
|
|
|
$
|
569
|
|
(Decrease) increase for prior year tax positions
|
|
(250
|
)
|
|
(73
|
)
|
|
137
|
|
|||
Increase for current year tax positions
|
|
695
|
|
|
834
|
|
|
386
|
|
|||
Total
|
|
$
|
2,298
|
|
|
$
|
1,853
|
|
|
$
|
1,092
|
|
|
|
For the quarters ending
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
4,200
|
|
|
$
|
3,834
|
|
|
$
|
1,865
|
|
|
$
|
10,860
|
|
Operating expenses
|
|
17,071
|
|
|
25,015
|
|
|
15,210
|
|
|
18,221
|
|
||||
Net loss
|
|
(14,487
|
)
|
|
(21,035
|
)
|
|
(13,000
|
)
|
|
(7,226
|
)
|
||||
Basic and diluted net loss per share(1)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.14
|
)
|
2014
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
1,631
|
|
|
$
|
736
|
|
|
$
|
1,083
|
|
|
$
|
4,219
|
|
Operating expenses
|
|
12,336
|
|
|
13,749
|
|
|
12,742
|
|
|
13,752
|
|
||||
Net loss
|
|
(12,741
|
)
|
|
(11,973
|
)
|
|
(9,798
|
)
|
|
(22,168
|
)
|
||||
Basic net loss per share(1)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.47
|
)
|
Diluted net loss per share(1)(2)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.47
|
)
|
(1)
|
Net loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly per-share calculations will not necessarily equal the annual per share calculation.
|
(2)
|
Applicable accounting standards provides that a contract (such as the Post-IPO GSK Note) that is reported as an asset or liability for accounting purposes may require an adjustment to the numerator of the diluted earnings per share calculation for any changes in income or loss that would result if the contract had been reported as an equity instrument during the period. For these periods, adjustments were made to the numerator of the diluted earnings per share calculation to adjust net loss to remove the gain from the change in value of the convertible note payable. Adjustments to the denominator were made to add the number of shares to be issued upon conversion of the convertible note payable.
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
|
Regulus Therapeutics Inc.
|
||
Date: February 23, 2016
|
By:
|
|
/s/ Paul C. Grint
|
|
|
|
Paul C. Grint, M.D.
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: February 23, 2016
|
By:
|
|
/s/ Joseph P. Hagan
|
|
|
|
Joseph P. Hagan
|
|
|
|
Chief Operating Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
||||
/s/ Paul C. Grint
|
|
Director, President & Chief Executive Officer
|
|
|
Paul C. Grint, M.D.
|
|
(Principal Executive Officer)
|
|
February 23, 2016
|
|
|
|
|
|
/s/ Joseph P. Hagan
|
|
Chief Operating Officer
|
|
|
Joseph P. Hagan
|
|
(Principal Financial and Accounting Officer)
|
|
February 23, 2016
|
|
|
|
|
|
/s/ Stelios Papadopoulos
|
|
|
|
|
Stelios Papadopoulos, Ph.D.
|
|
Director
|
|
February 23, 2016
|
|
|
|
|
|
/s/ David Baltimore
|
|
|
|
|
David Baltimore, Ph.D.
|
|
Director
|
|
February 23, 2016
|
Signature
|
|
Title
|
|
Date
|
|
||||
/s/ Mark G. Foletta
|
|
|
|
|
Mark G. Foletta
|
|
Director
|
|
February 23, 2016
|
|
|
|
|
|
/s/ William H. Rastetter
|
|
|
|
|
William H. Rastetter, Ph.D.
|
|
Director
|
|
February 23, 2016
|
|
|
|
|
|
/s/ Douglas E. Williams
|
|
|
|
|
Douglas E. Williams, Ph.D.
|
|
Director
|
|
February 23, 2016
|
|
|
|
|
|
|
|
Exhibit Number
|
Description
|
|
|
3.1
|
Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 11, 2012).
|
|
|
3.2
|
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on December 5, 2014).
|
|
|
4.1
|
Reference is made to Exhibits 3.1 and 3.2.
|
|
|
4.2
|
Form of Common Stock Certificate of the Registrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.1*
|
Form of Indemnity Agreement between the Registrant and its directors and officers (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.2*
|
Regulus Therapeutics Inc. 2009 Equity Incentive Plan, as amended, and Form of Stock Option Grant Notice, Option Agreement and Form of Notice of Exercise (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.3*
|
2012 Equity Incentive Plan and Form of Stock Option Agreement and Form of Stock Option Grant Notice thereunder (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.4*
|
Non-Employee Director Compensation Policy, as amended (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014).
|
|
|
10.5*
|
2012 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1, as amended, originally filed with the SEC on August 17, 2012).
|
|
|
10.6
|
Regulus Therapeutics Inc. Inducement Plan and Form of Stock Option Grant Notice, Form of Stock Option Agreement and Notice of Exercise thereunder (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 (File No. 333-206511), filed with the SEC on August 21, 2015).
|
|
|
10.7*
|
Amended and Restated Employment Agreement by and between the Registrant and Paul C. Grint, M.D., dated September 19, 2014 (incorporated by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 19, 2014).
|
|
|
10.8*
|
Paul C. Grint, M.D., Yearly Discretionary Base Salary Increase, effective January 1, 2015 (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K, filed with the SEC on February 19, 2015).
|
|
|
10.9*
|
Paul C. Grint, M.D., Base Salary and Target Bonus Increases, effective June 1, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on August 5, 2015).
|
|
|
10.10*
|
Employment Agreement, effective January 1, 2016, by and between the Registrant and Joseph P. Hagan.
|
|
|
10.11
|
Lease between the Registrant and BMR-John Hopkins Court LLC, a Delaware limited liability company, dated March 19, 2010 (incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.12
|
First Amendment to Lease between the Registrant and BMR-John Hopkins Court LLC, a Delaware limited liability company, dated April 26, 2010 (incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.13
|
Second Amendment to Lease between the Registrant and BMR-John Hopkins Court LLC, a Delaware limited liability company, dated January 26, 2011 (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.14
|
Third Amendment to Lease between the Registrant and BMR-3545-3575 John Hopkins LP, a Delaware limited partnership (formerly known as BMR-John Hopkins Court LLC), dated February 27, 2012 (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.15
|
Fourth Amendment to Lease between the Registrant and BMR-3545-3575 John Hopkins LP, a Delaware limited partnership (formerly known as BMR-John Hopkins Court LLC), dated November 19, 2012 (incorporated by reference to Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on February 19, 2013).
|
|
|
10.16
|
Office Lease by and between the Registrant and Walton Torrey Owner B, L.L.C., dated July 31, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on August 5, 2015).
|
|
|
10.17†
|
Amended and Restated License and Collaboration Agreement among the Registrant, Alnylam Pharmaceuticals, Inc. and Isis Pharmaceuticals, Inc., dated January 1, 2009 (incorporated by reference to Exhibit 10.17 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.18†
|
Amendment Number One to the Amended and Restated License and Collaboration Agreement among the Registrant, Alnylam Pharmaceuticals, Inc. and Isis Pharmaceuticals, Inc., dated June 10, 2010 (incorporated by reference to Exhibit 10.18 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.19†
|
Amendment Number Two to the Amended and Restated License and Collaboration Agreement among the Registrant, Alnylam Pharmaceuticals, Inc. and Isis Pharmaceuticals, Inc., dated October 25, 2011 (incorporated by reference to Exhibit 10.19 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.20†
|
Co-Exclusive License Agreement among the Board of Trustees of the Leland Stanford Junior University, Alnylam Pharmaceuticals, Inc. and Isis Pharmaceuticals, Inc., dated August 31, 2005 (incorporated by reference to Exhibit 10.25 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.21
|
Assignment Agreement between the Registrant and Isis Pharmaceuticals, Inc., dated July 13, 2009 (incorporated by reference to Exhibit 10.26 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.22†
|
License Agreement between the Registrant and Max-Planck-Innovation GmbH, dated June 5, 2009 (incorporated by reference to Exhibit 10.27 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.23†
|
Amended and Restated License Agreement among Max-Planck-Innovation GmbH, the Registrant, Isis Pharmaceuticals, Inc. and Alnylam Pharmaceuticals, Inc., dated April 18, 2011 (incorporated by reference to Exhibit 10.28 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.24†
|
Exclusive Patent License Agreement between the Registrant and Bayerische Patent Allianz GmbH, dated May 18, 2010 (incorporated by reference to Exhibit 10.30 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.25†
|
Non-Exclusive Technology Alliance and Option Agreement between the Registrant and Sanofi, dated June 21, 2010 (incorporated by reference to Exhibit 10.32 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.26†
|
Collaboration and License Agreement between the Registrant and AstraZeneca AB, dated August 14, 2012 (incorporated by reference to Exhibit 10.37 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-183384), originally filed with the SEC on August 17, 2012).
|
|
|
10.27†
|
Amendment No. 1 (to Collaboration and License Agreement) between the Registrant and AstraZeneca AB, dated April 30, 2013 (incorporated by reference to Exhibit 10.49 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-189607), originally filed with the SEC on June 26, 2013).
|
|
|
10.28†
|
Amendment Number Three to the Amended and Restated License and Collaboration Agreement among the Company, Alnylam Pharmaceuticals, Inc. and Isis Pharmaceuticals, Inc., dated August 2, 2013 (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on August 7, 2013).
|
|
|
10.29†
|
Second Amended and Restated Collaboration and License Agreement dated February 5, 2014 between the Registrant and Sanofi (incorporated by reference to Exhibit 10.54 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014).
|
|
|
10.30
|
Registration Rights Agreement dated February 5, 2014 between the Registrant and Aventis Holdings Inc. (incorporated by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K, filed with the SEC on February 5, 2014).
|
|
|
10.31†
|
Letter Agreement, dated as of January 30, 2015, by and between the Registrant and AstraZeneca AB (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 8, 2015).
|
|
|
10.32†
|
Licensing Agreement, dated as of May 7, 2010, by and between the Registrant and ETH Zurich.
|
|
|
23.1
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
24.1
|
Power of Attorney. Reference is made to the signature page hereto.
|
|
|
31.1
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
|
|
|
31.2
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
|
|
|
32.1**
|
Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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1.
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EMPLOYMENT.
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2.
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LOYAL AND CONSCIENTIOUS PERFORMANCE.
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3.
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COMPENSATION OF THE EXECUTIVE.
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Triggering Termination occurs after the Effective Date and on or before the first anniversary of the Effective Date
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$100,000.00 to be repaid
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Triggering Termination occurs after the first anniversary of the Effective Date and on or before the second anniversary of the Effective Date
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$66,667.00 to be repaid
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Triggering Termination occurs after the second anniversary of the Effective Date and on or before the third anniversary of the Effective Date
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$33,334.00 to be repaid
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Triggering Termination occurs after the third anniversary of the Effective Date
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$0 to be repaid
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4.
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DEFINITIONS.
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5.
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COMPENSATION UPON TERMINATION.
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6.
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CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.
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7.
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ASSIGNMENT AND BINDING EFFECT.
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8.
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INDEMNITY.
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9.
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CHOICE OF LAW.
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10.
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INTEGRATION.
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11.
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AMENDMENT.
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12.
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WAIVER.
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13.
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SEVERABILITY.
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14.
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INTERPRETATION; CONSTRUCTION.
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15.
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REPRESENTATION AND WARRANTIES.
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16.
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COUNTERPARTS; FACSIMILIE.
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17.
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DISPUTE RESOLUTION.
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18.
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TRADE SECRETS.
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19.
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ADVERTISING WAIVER.
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20.
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APPLICATION OF SECTION 409A.
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21.
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PARACHUTE PAYMENTS.
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1.
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Recognition of Company’s Rights; Nondisclosure.
At all times during the term of my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any the Company’s Confidential Information (defined below), except as such disclosure, use or publication may be required by the Company in connection with my work for the Company, or unless an officer of the Company expressly authorizes such in writing. I will not make any permitted disclosure, use or publication unless such disclosure, use or publication is in strict compliance with the Company’s publication and presentation clearance policy. I will not export, directly or indirectly, any Company products, any direct product thereof, or any related technical data in violation of the United States Department of Commerce’s Export Administration Regulations.
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2.
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Third Party Information.
I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. In addition, Third Party Information will include the confidential or proprietary information of the Company’s parent, Isis Pharmaceuticals, Inc. (“Isis”). During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose (except as required to be disclosed in connection with my work for the Company) Third Party Information unless expressly authorized by an officer of the Company in writing. I will not make any permitted disclosures unless such disclosure is in strict compliance with the Company’s publication and presentation clearance policy.
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3.
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Assignment of Inventions.
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(a)
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I hereby assign to the Company all my right, title and interest throughout the world in and to any and all Inventions (and all patent rights, copyrights, and all other rights in connection therewith, hereinafter referred to as “Proprietary Rights”) whether or not patentable or registrable under patent, copyright, trademark or similar statutes (together with the goodwill associated therewith), made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company (“Work Inventions”) or within one year after termination of my employment, which relate to any Work Invention or to any work performed by me while I was employed by the Company. Inventions assigned to the Company by this Paragraph 3 are hereinafter referred to as “Company Inventions.” I agree, upon request, to execute, verify and deliver assignments of the Proprietary Rights to the Company or its designee.
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(b)
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If I am employed by the Company in the State of California, I recognize that this Agreement does not require assignment of any invention on which qualifies fully for protection under Section 2870 of the California Labor Code (hereinafter “Section 2870”), which provides as follows:
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(i)
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Any provision in an employment agreement which provides that an employee will assign, or offer to assign, any of his or her rights in an invention to his or her employer will not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:
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(1)
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Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer.
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(2)
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Result from any work performed by the employee for the employer.
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(ii)
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To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (i), the provision is against the public policy of this state and is unenforceable.
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4.
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Enforcement of Proprietary Rights.
I will assist the Company in every proper way to obtain and from time to time enforce United States and foreign Proprietary Rights relating to Company Inventions in any and all countries. My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries will continue beyond the termination of my employment, but the Company will compensate me at a reasonable rate after my termination for the time actually spent by me if the Company requests such assistance.
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5.
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Obligation to Keep Company Informed.
During the period of my employment, I will promptly disclose all Company Inventions to the Company fully and in writing and will hold such Company Inventions in trust for the sole right and benefit of the Company. In addition, after termination of my employment, I will disclose all patent applications filed by me within a year after termination of employment which relate to any Company Invention or to any work performed by me while I was employed by Company.
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6.
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Prior Inventions.
Inventions, if any, patented or unpatented, which I made prior to the commencement of my employment with the Company are excluded from the scope of this Agreement. To preclude any possible uncertainty,
except for any Inventions I have already assigned to Isis prior to executing this Agreement
, I have set forth in Exhibit A attached hereto a complete list of all Inventions that I have, alone or jointly with others, conceived, developed or reduced to practice prior to the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement. If disclosure of any such Invention on Exhibit A would cause me to violate any prior confidentiality agreement, I understand that I am not to list such Inventions in Exhibit A but am to inform the Company that all such Inventions have not been listed for that reason.
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7.
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Additional Activities.
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(a)
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I agree that during the period of my employment by the Company I will not, without the Company’s express written consent, engage in any employment or business activity other than for the Company. Additionally, during the period of my employment by the Company and for one year after the date of termination of my employment with the Company I will not induce any employee of the Company to leave the employ of the Company.
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(b)
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I acknowledge that the Company has developed, through an extensive acquisition process, valuable information regarding actual or perspective partners, licensors, licensees, clients, customers and accounts of the Company (“Trade Secret Information”). I further acknowledge that my use of such Trade Secret Information after the termination of my employment would cause the Company irreparable harm. Therefore I agree that I will not use Trade Secret Information to solicit the business relationship or patronage of any of the actual or prospective partners, licensors, licensees, clients, customers or accounts of the Company.
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8.
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No Improper Use of Materials.
During my employment by the Company, I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person.
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9.
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No Conflicting Obligation.
I represent that my performance (a) of all the terms of this Agreement and (b) as an employee of the Company, does not and will not breach any agreement to keep in confidence information acquired by me in confidence
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10.
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Return of Company Documents.
When I leave the employ of the Company, I will deliver to the company any and all laboratory notebooks, conception notebooks, drawings, notes, memoranda, specifications, devices, formulas, molecules, cells, storage media, including software and documents, including any computer printouts, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Confidential Information of the Company. I further agree that nay property situated on the Company’s premises and owned by the Company including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice. Prior to leaving, I will cooperate with the Company in completing and signing the Company’s termination statement for technical and management personnel.
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11.
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Legal and Equitable Remedies.
Because my services are personal and unique and because I may have access to and become acquainted with the Confidential Information of the Company, the Company will have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond, without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.
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12.
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Notices.
Any notices required or permitted hereunder will be given to me at the address specified below or at such other address as I will specify in writing. Such notice will be deemed given upon personal delivery to the appropriate address, or by facsimile transmission (receipt verified and with confirmation copy following by another permitted method), telexed, sent by express courier service, or, if sent by certified or registered mail, three days after the date of mailing.
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13.
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General Provisions.
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1.
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The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by Regulus Therapeutics, Inc. (the “Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company,
except for any invention I have already assigned to Isis Pharmaceuticals, Inc. prior to executing this Agreement:
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2.
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I proposed to bring to my employment the following devices, materials and documents of a former employer or other person to whom I have an obligation of confidentiality that are not generally available to the public, which materials and documents may be used in my employment pursuant to the express written authorization of my former employer or such other person (a copy is attached hereto):
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1.
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DEFINITIONS
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Affiliate
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Shall mean any corporation or other business entity which controls, is controlled by or is under common control of Licensee. For purposes of this definition, an entity shall be regarded as in “control” of another entity if it owns or controls, directly or indirectly, at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors (or, in the case of an entity that is not a corporation, the corresponding managing authority).
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Blocking Inventions
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Any patent or patent application controlled by Licensor necessary to practice the Technology.
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Effective Date
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Shall be defined as the date of the last signature of the Parties on this Agreement.
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Field of Use
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All fields of use covered by the Patents
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License
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Shall be defined as the rights granted by the Licensor under the terms of this Agreement.
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License Fees
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Shall mean the fees payable by the Licensee to the Licensor for the rights granted to Licensee under this Agreement.
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Licensed Products
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Shall mean any products whose making, using, selling or other commercialization would infringe a Valid Claim of the Patents.
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Net Sales
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Shall mean the total of the gross amounts received for sales of Licensed Products by or on behalf of Licensee, Affiliates
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Patent(s)
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Shall mean (1) patent (application): […***…], any members of the patent family claiming priority of these original patent applications, including any patent application or granted patent, whether domestic or foreign, including all provisionals, and all divisionals, continuations, continuations-in-part, reissues, reexaminations, renewals, extensions, and supplementary protection certificates of any such patents and patent applications, and (ii) any patent issuing therefrom.
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Sub-license
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Shall mean a sublicense granted by Licensee to a non-Affiliate third party, giving rights derived from the license granted to Licensee under Section 3 of this Agreement.
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Sub-licensee
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Shall mean a non-Affiliate third party to whom Licensee grants a Sub-license.
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Technology
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Shall be defined as the inventions claimed in the Patents.
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Territory
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Shall be defined as the countries where (provisional) patent protection for the Patents is sought or granted.
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Valid Claim
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Shall be defined as any (i) issued claim of a Patent not rejected by a final decision of a patent office or of a court of competent jurisdiction until the date of such final decision; or (ii) a claim of a pending patent application of the Patents that has not been abandoned, finally rejected or expired without the possibility of appeal or refiling, provided however, that (a) Valid Claim will exclude any such pending claim that does not have a reasonable bona fide basis for patentability (such reasonable bona fide basis to be determined by outside counsel selected by the parties the event that the parties disagree as to whether there is a reasonable bona fide basis for patentability for such a claim).
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2.
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OBJECT OF LICENSE
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3.
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SCOPE OF LICENSE
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4.
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RIGHT TO GRANT SUB-LICENSES
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(i)
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to the extent possible, ensure that the terms of any Sub-license agreement include obligations equivalent to those contained in this Agreement;
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(ii)
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provide Licensor with a copy of each Sub-license contract issued within 30 days of execution (which copy may be redacted to remove confidential information so long as such redactions will not prevent Licensor’s reasonable determination as to whether such Sub-license was entered into in accordance with this Agreement);
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(iii)
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collect and guarantee payment from Sub-licensees according to Article 5.
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5.
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LICENSE FEES
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(1)
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Upfront payment: CHF 20,000
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(2)
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Milestone payments: With respect to the 1
st
Licensed Product covered by a Valid Claim to achieve a milestone event set forth below, Licensee will pay the following amounts:
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Ù
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Upon entrance into clinical trial phase I: […***…] CHF
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Ù
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Upon entrance into clinical trial phase II: […***…] CHF
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Ù
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Upon entrance into clinical trial phase III: […***…] CHF
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Ù
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Upon market approval: […***…] CHF
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(3)
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Annual minimum payments: CHF 10,000
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(4)
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Royalties: […***…]% on Net Sales of Licensed Products covered by a Valid Claim of the Patent, and sold by either the Licensee, an Affiliate or a Sub-licensee.
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6.
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CONDITIONS OF PAYMENT
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7.
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REPORTING AND BOOK INSPECTION
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8.
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DUTIES OF LICENSEE
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9.
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CONFIDENTIALITY
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(i)
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has been known to the general public prior to disclosure by the Licensor or becomes public domain thereafter;
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(ii)
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came to the knowledge of the Licensee through a third party which obtained such information without breach of any agreement or contract and which was or is authorized to have such information or which obtained such information by an authorized party;
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(iii)
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has been known by the Licensee prior to communication or disclosure by the Licensor.
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10.
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WARRANTY AND LIABILITY
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11.
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ADMINISTRATION, COSTS AND MAINTENANCE OF PATENTS
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12.
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DEFENCE OF PATENTS
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13.
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TERM OF THE AGREEMENT
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14.
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APPLICABLE LAW AND PLACE OF JURISDICTION
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15.
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FINAL PROVISIONS
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Prof. Markus Stoffel
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/s/ M. Stoffel
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/s/ R. Siegwart
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Prof. Markus Stoffel
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Roland Siegwart Vice President Research and
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Corporate Relations
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/s/ Kleanthis G. Xanthopoulos
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Kleanthis G. Xanthopoulos, Ph.D.
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President and Chief Executive Officer
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Date: February 23, 2016
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/s/ Paul C. Grint
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Paul C. Grint, M.D.
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date: February 23, 2016
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/s/ Joseph P. Hagan
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Joseph P. Hagan
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Chief Operating Officer
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(Principal Financial and Accounting Officer)
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Date: February 23, 2016
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/s/ Paul C. Grint
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Paul C. Grint, M.D.
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date: February 23, 2016
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/s/ Joseph P. Hagan
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Joseph P. Hagan
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Chief Operating Officer
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(Principal Financial and Accounting Officer)
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