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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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10614 Science Center Drive
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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Emerging growth company
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¨
o
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PART I
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PART II
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PART III
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PART IV
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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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the potential election of any strategic alliance or collaboration partner to pursue development and commercialization of any programs or product candidates that are subject to a collaboration with such partner;
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our ability to attract collaborators with relevant 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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the accuracy of our estimates regarding future 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 play a critical role in regulating biological pathways by controlling the translation of many target genes;
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micro
RNA therapeutics regulate disease pathways which may result in more effective treatment of complex multi-factorial diseases;
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many human pathogens, including viruses, bacteria and parasites, use
micro
RNAs (host and pathogen encoded) to enable their replication and suppression of host immune responses; 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;
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a leading
micro
RNA intellectual property estate with over 300 patents and patent applications covering compositions and therapeutic uses related to
micro
RNA and
micro
RNA drug products, as well as access to numerous 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;
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development expertise and financial resources provided by our strategic alliance; and
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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 significant unmet medical need and commercial opportunity.
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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 has 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 hepatocellular carcinoma, or HCC, and kidney fibrosis, and our preclinical programs targeting miR-221/222 for oncology indications, each of which is being 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 and 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(AZD4076), 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 NAFLD in patients with type 2 diabetes/pre-diabetes. In December 2015, AstraZeneca commenced the first-in-human dosing of RG-125(AZD4076) in healthy volunteers and commenced dosing patients in a Phase IIa clinical trial in the third quarter of 2016. In June 2017, AstraZeneca informed us that it intends to terminate the clinical development program for AZD4076(RG-125) for the treatment of NASH in Type 2 Diabetes/Pre-diabetes. Pursuant to the terms of our collaboration and license agreement with AstraZeneca, AstraZeneca's rights with respect to AZD4076(RG-125) will revert to us when the termination becomes effective in June 2018. For additional information, see Note 5 to our financial statements under Item 8 of Part II of this Annual Report.
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over 300 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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a requirement to annually report drug samples that manufacturers and distributors provide to physicians;
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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; 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;
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dispose of technology assets, or 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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pursue the sale of our company to a third party at a price that may result in a loss on investment for our stockholders; or
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file for bankruptcy or cease operations altogether.
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dispose of assets;
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complete mergers or acquisitions;
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incur indebtedness;
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encumber assets;
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pay dividends or make other distributions to holders of our capital stock;
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make specified investments; and
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engage in transactions with our affiliates.
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our research methodology or that of any strategic alliance partner 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 current or future strategic alliance partners may change their development profiles for potential product candidates or abandon a therapeutic area.
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successfully designing preclinical studies which may be predictive of clinical outcomes;
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successful results from preclinical and clinical studies;
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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 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 protocol procedures or requirements, 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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product candidates subject to 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; for example, upon expiration of the AstraZeneca termination period, we will be responsible for any further costs of development. In addition, we may owe AstraZeneca certain consideration for use of any intellectual property generated by AstraZeneca; 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
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impairment of our business reputation;
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withdrawal of clinical trial participants;
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costs due to related litigation;
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distraction of management’s attention from our primary business;
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substantial monetary awards to patients or other claimants;
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the inability to commercialize our product candidates; and
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decreased demand for our product candidates, if approved for commercial sale.
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adverse results or delays in preclinical studies or clinical trials;
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inability to obtain additional funding;
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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;
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failure to maintain our existing strategic alliances or enter into new alliances;
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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;
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failure by us or our licensors and strategic alliance partners to prosecute, maintain or enforce our intellectual property rights;
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failure to successfully develop and commercialize our product candidates;
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changes in laws or regulations applicable to our preclinical and clinical development activities, product candidates or future products;
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inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices;
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adverse regulatory decisions;
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introduction of new products, services or technologies by our competitors;
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failure to meet or exceed financial projections we may provide to the public;
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failure to meet or exceed the estimates and projections of the investment community;
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the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community;
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announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic alliance partners or our competitors;
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disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
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additions or departures of key scientific or management personnel;
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significant lawsuits, including patent or stockholder litigation;
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changes in the market valuations of similar companies;
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sales of our common stock by us or our stockholders in the future; and
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trading volume of our common stock.
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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;
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prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;
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eliminating the ability of stockholders to call a special meeting of stockholders;
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establishing the state of Delaware as the sole forum for certain legal actions against the Company, its officers and directors; and
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•
|
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.
|
|
Price Range
|
||||||
|
High
|
|
Low
|
||||
Year Ended December 31, 2016:
|
|
|
|
||||
First Quarter
|
$
|
8.88
|
|
|
$
|
5.14
|
|
Second Quarter
|
$
|
8.90
|
|
|
$
|
2.44
|
|
Third Quarter
|
$
|
4.25
|
|
|
$
|
2.88
|
|
Fourth Quarter
|
$
|
3.65
|
|
|
$
|
2.13
|
|
|
|
|
|
||||
Year Ended December 31, 2017:
|
|
|
|
||||
First Quarter
|
$
|
2.60
|
|
|
$
|
0.94
|
|
Second Quarter
|
$
|
1.95
|
|
|
$
|
0.86
|
|
Third Quarter
|
$
|
1.44
|
|
|
$
|
0.79
|
|
Fourth Quarter
|
$
|
1.52
|
|
|
$
|
0.85
|
|
|
Year ended December 31,
|
||||||||||||||||||
Statement of operations data
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Revenue under strategic alliances and collaborations
|
$
|
72
|
|
|
$
|
1,194
|
|
|
$
|
20,759
|
|
|
$
|
7,669
|
|
|
$
|
19,569
|
|
Loss from operations
|
(70,131
|
)
|
|
(81,502
|
)
|
|
(54,758
|
)
|
|
(44,910
|
)
|
|
(17,802
|
)
|
|||||
Net loss
|
$
|
(71,905
|
)
|
|
$
|
(81,836
|
)
|
|
$
|
(55,748
|
)
|
|
$
|
(56,680
|
)
|
|
$
|
(18,668
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.96
|
)
|
|
$
|
(1.55
|
)
|
|
$
|
(1.08
|
)
|
|
$
|
1.29
|
|
|
$
|
(0.49
|
)
|
|
As of December 31,
|
||||||||||||||||||
Balance sheet data
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Cash, cash equivalents and short-term investments
|
$
|
60,074
|
|
|
$
|
76,111
|
|
|
$
|
115,319
|
|
*
|
$
|
159,743
|
|
|
$
|
114,005
|
|
Working capital
|
34,136
|
|
|
73,667
|
|
|
121,626
|
|
|
129,759
|
|
|
106,812
|
|
|||||
Total assets
|
77,809
|
|
|
100,661
|
|
|
141,083
|
|
|
171,480
|
|
|
123,065
|
|
|||||
Term loan
|
19,859
|
|
|
19,802
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Convertible note payable, at fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
23,397
|
|
|
11,279
|
|
|||||
Accumulated deficit
|
(345,858
|
)
|
|
(273,351
|
)
|
|
(191,515
|
)
|
|
(135,767
|
)
|
|
(79,087
|
)
|
|||||
Total stockholders’ equity
|
35,216
|
|
|
56,075
|
|
|
124,078
|
|
|
132,014
|
|
|
93,457
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
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.
|
|
Years ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Revenue under strategic alliances and collaborations
|
$
|
72
|
|
|
$
|
1,194
|
|
Research and development expenses
|
53,192
|
|
|
64,305
|
|
||
General and administrative expenses
|
17,011
|
|
|
18,391
|
|
||
Interest and other expenses, net
|
(1,971
|
)
|
|
(338
|
)
|
|
Years ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Sanofi
|
$
|
72
|
|
|
$
|
72
|
|
AstraZeneca
|
—
|
|
|
1,122
|
|
||
Total revenues under strategic alliances and collaborations
|
$
|
72
|
|
|
$
|
1,194
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
|
|||||||||||
|
2017
|
|
% of total
|
|
2016
|
|
% of total
|
|
$
|
|
%
|
|||||||||
Research and development
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel and internal expenses
|
$
|
20,998
|
|
|
39
|
%
|
|
$
|
24,452
|
|
|
38
|
%
|
|
$
|
(3,454
|
)
|
|
(14
|
)%
|
Third-party and outsourced expenses
|
28,615
|
|
|
53
|
%
|
|
32,430
|
|
|
50
|
%
|
|
(3,815
|
)
|
|
(12
|
)%
|
|||
Non-cash stock-based compensation
|
1,464
|
|
|
3
|
%
|
|
5,458
|
|
|
8
|
%
|
|
(3,994
|
)
|
|
(73
|
)%
|
|||
Depreciation
|
2,115
|
|
|
5
|
%
|
|
1,965
|
|
|
4
|
%
|
|
150
|
|
|
8
|
%
|
|||
Total research and development expenses
|
$
|
53,192
|
|
|
100
|
%
|
|
$
|
64,305
|
|
|
100
|
%
|
|
$
|
(11,113
|
)
|
|
(17
|
)%
|
|
Years ended
December 31, |
||||||
|
2016
|
|
2015
|
||||
Revenue under strategic alliances and collaborations
|
$
|
1,194
|
|
|
$
|
20,759
|
|
Research and development expenses
|
64,305
|
|
|
56,387
|
|
||
General and administrative expenses
|
18,391
|
|
|
19,130
|
|
||
Interest and other (expenses) income, net
|
(338
|
)
|
|
803
|
|
||
Loss from change in valuation of convertible note payable
|
—
|
|
|
(1,811
|
)
|
|
Years ended
December 31, |
||||||
|
2016
|
|
2015
|
||||
AstraZeneca
|
$
|
1,122
|
|
|
$
|
18,871
|
|
Sanofi
|
72
|
|
|
71
|
|
||
Biogen
|
—
|
|
|
1,817
|
|
||
Total revenues under strategic alliances and collaborations
|
$
|
1,194
|
|
|
$
|
20,759
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
|
|||||||||||
|
2016
|
|
% of total
|
|
2015
|
|
% of total
|
|
$
|
|
%
|
|||||||||
Research and development
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personnel and internal expenses
|
$
|
24,452
|
|
|
38
|
%
|
|
$
|
20,629
|
|
|
37
|
%
|
|
$
|
3,823
|
|
|
19
|
%
|
Third-party and outsourced expenses
|
32,430
|
|
|
50
|
%
|
|
26,207
|
|
|
46
|
%
|
|
6,223
|
|
|
24
|
%
|
|||
Non-cash stock-based compensation
|
5,458
|
|
|
8
|
%
|
|
8,075
|
|
|
14
|
%
|
|
(2,617
|
)
|
|
(32
|
)%
|
|||
Depreciation
|
1,965
|
|
|
4
|
%
|
|
1,476
|
|
|
3
|
%
|
|
489
|
|
|
33
|
%
|
|||
Total research and development expenses
|
$
|
64,305
|
|
|
100
|
%
|
|
$
|
56,387
|
|
|
100
|
%
|
|
$
|
7,918
|
|
|
14
|
%
|
•
|
the achievement of milestones under our strategic alliance agreement with Sanofi;
|
•
|
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;
|
•
|
the extent to which we acquire or invest in businesses, products or technologies; and
|
•
|
payments under our term loan with Oxford.
|
|
Years ended
December 31, |
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash (used in) provided by:
|
|
|
|
|
|
||||||
Operating activities
|
$
|
(58,773
|
)
|
|
$
|
(56,882
|
)
|
|
$
|
(49,859
|
)
|
Investing activities
|
13,936
|
|
|
35,311
|
|
|
21,475
|
|
|||
Financing activities
|
43,415
|
|
|
20,552
|
|
|
7,017
|
|
|||
Total
|
$
|
(1,422
|
)
|
|
$
|
(1,019
|
)
|
|
$
|
(21,367
|
)
|
|
|
Payments due by period
|
||||||||||||||||||
|
|
Total
|
|
<1 year
|
|
1-3 years
|
|
3-5 years
|
|
>5 years
|
||||||||||
Operating lease obligations relating to facility
|
|
$
|
17,670
|
|
|
$
|
2,576
|
|
|
$
|
5,387
|
|
|
$
|
5,716
|
|
|
$
|
3,991
|
|
Outstanding secured term loan
|
|
20,000
|
|
|
5,000
|
|
|
15,000
|
|
|
—
|
|
|
—
|
|
|||||
Annual maintenance fees for license agreements
|
|
490
|
|
|
63
|
|
|
125
|
|
|
125
|
|
|
177
|
|
|||||
Total
|
|
$
|
38,160
|
|
|
$
|
7,639
|
|
|
$
|
20,512
|
|
|
$
|
5,841
|
|
|
$
|
4,168
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
13,519
|
|
|
$
|
14,941
|
|
Short-term investments
|
46,555
|
|
|
61,170
|
|
||
Contract and other receivables
|
373
|
|
|
1,657
|
|
||
Prepaid materials, net
|
4,783
|
|
|
5,552
|
|
||
Prepaid expenses and other current assets
|
1,506
|
|
|
4,154
|
|
||
Total current assets
|
66,736
|
|
|
87,474
|
|
||
Property and equipment, net
|
9,708
|
|
|
11,830
|
|
||
Intangibles, net
|
775
|
|
|
1,015
|
|
||
Other assets
|
590
|
|
|
342
|
|
||
Total assets
|
$
|
77,809
|
|
|
$
|
100,661
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
5,743
|
|
|
$
|
5,840
|
|
Accrued liabilities
|
4,941
|
|
|
5,577
|
|
||
Accrued compensation
|
1,985
|
|
|
2,318
|
|
||
Current portion of term loan, less debt issuance costs
|
19,859
|
|
|
—
|
|
||
Current portion of deferred revenue
|
72
|
|
|
72
|
|
||
Total current liabilities
|
32,600
|
|
|
13,807
|
|
||
Term loan, less current portion and debt issuance costs
|
—
|
|
|
19,802
|
|
||
Deferred revenue, less current portion
|
1,921
|
|
|
1,993
|
|
||
Deferred rent, less current portion
|
8,072
|
|
|
8,840
|
|
||
Other long-term liabilities
|
—
|
|
|
144
|
|
||
Total liabilities
|
42,593
|
|
|
44,586
|
|
||
Commitments and Contingencies (Note 8)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.001 par value; 200,000,000 shares authorized, 103,955,147 and 52,924,805 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
104
|
|
|
53
|
|
||
Additional paid-in capital
|
381,104
|
|
|
329,496
|
|
||
Accumulated other comprehensive loss
|
(134
|
)
|
|
(123
|
)
|
||
Accumulated deficit
|
(345,858
|
)
|
|
(273,351
|
)
|
||
Total stockholders’ equity
|
35,216
|
|
|
56,075
|
|
||
Total liabilities and stockholders’ equity
|
$
|
77,809
|
|
|
$
|
100,661
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Revenue under strategic alliances and collaborations
|
$
|
72
|
|
|
$
|
1,194
|
|
|
$
|
20,759
|
|
Total revenues
|
72
|
|
|
1,194
|
|
|
20,759
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
53,192
|
|
|
64,305
|
|
|
56,387
|
|
|||
General and administrative
|
17,011
|
|
|
18,391
|
|
|
19,130
|
|
|||
Total operating expenses
|
70,203
|
|
|
82,696
|
|
|
75,517
|
|
|||
Loss from operations
|
(70,131
|
)
|
|
(81,502
|
)
|
|
(54,758
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest and other income
|
752
|
|
|
844
|
|
|
855
|
|
|||
Interest and other expense
|
(2,723
|
)
|
|
(1,182
|
)
|
|
(52
|
)
|
|||
Loss from valuation of convertible note payable
|
—
|
|
|
—
|
|
|
(1,811
|
)
|
|||
Loss before income taxes
|
(72,102
|
)
|
|
(81,840
|
)
|
|
(55,766
|
)
|
|||
Income tax benefit
|
197
|
|
|
4
|
|
|
18
|
|
|||
Net loss
|
$
|
(71,905
|
)
|
|
$
|
(81,836
|
)
|
|
$
|
(55,748
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Unrealized (loss) gain on short-term investments, net
|
(11
|
)
|
|
10
|
|
|
64
|
|
|||
Comprehensive loss
|
$
|
(71,916
|
)
|
|
$
|
(81,826
|
)
|
|
$
|
(55,684
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.96
|
)
|
|
$
|
(1.55
|
)
|
|
$
|
(1.08
|
)
|
Weighted average shares used to compute basic and diluted net loss per share
|
75,230,762
|
|
|
52,813,474
|
|
|
51,411,353
|
|
|
|
Common stock
|
|
Additional
paid-in
capital
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Accumulated
deficit
|
|
Total
stockholders’
equity
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
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
|
|
Issuance of common stock upon exercise of options
|
|
89,855
|
|
|
—
|
|
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
12,872
|
|
|
—
|
|
|
—
|
|
|
12,872
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
|
165,684
|
|
|
—
|
|
|
641
|
|
|
—
|
|
|
—
|
|
|
641
|
|
|||||
Unrealized gain on short-term investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81,836
|
)
|
|
(81,836
|
)
|
|||||
Balance at December 31, 2016
|
|
52,924,805
|
|
|
$
|
53
|
|
|
$
|
329,496
|
|
|
$
|
(123
|
)
|
|
$
|
(273,351
|
)
|
|
$
|
56,075
|
|
Issuance of common stock upon exercise of options
|
|
11,000
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
7,642
|
|
|
—
|
|
|
—
|
|
|
7,642
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
|
419,342
|
|
|
—
|
|
|
419
|
|
|
—
|
|
|
—
|
|
|
419
|
|
|||||
Unrealized loss on short-term investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Issuance of common stock, net of $292 of offering costs
|
|
50,600,000
|
|
|
51
|
|
|
42,941
|
|
|
—
|
|
|
—
|
|
|
42,992
|
|
|||||
Cumulative effect of accounting change
|
|
—
|
|
|
—
|
|
|
602
|
|
|
—
|
|
|
(602
|
)
|
|
—
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,905
|
)
|
|
(71,905
|
)
|
|||||
Balance at December 31, 2017
|
|
103,955,147
|
|
|
$
|
104
|
|
|
$
|
381,104
|
|
|
$
|
(134
|
)
|
|
$
|
(345,858
|
)
|
|
$
|
35,216
|
|
|
Years ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(71,905
|
)
|
|
$
|
(81,836
|
)
|
|
$
|
(55,748
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
2,524
|
|
|
2,276
|
|
|
1,591
|
|
|||
Loss from valuation of convertible note payable
|
—
|
|
|
—
|
|
|
1,811
|
|
|||
Stock-based compensation
|
7,642
|
|
|
12,872
|
|
|
15,368
|
|
|||
Amortization of premium on investments, net
|
349
|
|
|
666
|
|
|
1,472
|
|
|||
Other
|
600
|
|
|
1,043
|
|
|
98
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Contracts and other receivables
|
1,284
|
|
|
8,364
|
|
|
(9,746
|
)
|
|||
Prepaid materials
|
394
|
|
|
(616
|
)
|
|
(3,460
|
)
|
|||
Prepaid expenses and other assets
|
2,369
|
|
|
(778
|
)
|
|
(683
|
)
|
|||
Accounts payable
|
(65
|
)
|
|
3,123
|
|
|
529
|
|
|||
Accrued liabilities
|
(492
|
)
|
|
(871
|
)
|
|
2,094
|
|
|||
Accrued compensation
|
(333
|
)
|
|
(74
|
)
|
|
284
|
|
|||
Deferred revenue
|
(72
|
)
|
|
(1,194
|
)
|
|
(3,090
|
)
|
|||
Deferred rent and other liabilities
|
(1,068
|
)
|
|
143
|
|
|
(379
|
)
|
|||
Net cash used in operating activities
|
(58,773
|
)
|
|
(56,882
|
)
|
|
(49,859
|
)
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of short-term investments
|
(55,686
|
)
|
|
(65,110
|
)
|
|
(78,401
|
)
|
|||
Sales and maturities of short-term investments
|
69,941
|
|
|
101,387
|
|
|
101,306
|
|
|||
Purchases of property and equipment
|
(303
|
)
|
|
(913
|
)
|
|
(1,363
|
)
|
|||
Acquisition of intangibles
|
(16
|
)
|
|
(53
|
)
|
|
(67
|
)
|
|||
Net cash provided by investing activities
|
13,936
|
|
|
35,311
|
|
|
21,475
|
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock, net
|
43,411
|
|
|
641
|
|
|
492
|
|
|||
Proceeds from borrowing under term loan, net
|
—
|
|
|
19,768
|
|
|
—
|
|
|||
Proceeds from exercise of common stock options
|
4
|
|
|
310
|
|
|
6,680
|
|
|||
Principal payments on other long-term obligations
|
—
|
|
|
(167
|
)
|
|
(155
|
)
|
|||
Net cash provided by financing activities
|
43,415
|
|
|
20,552
|
|
|
7,017
|
|
|||
Net decrease in cash and cash equivalents
|
(1,422
|
)
|
|
(1,019
|
)
|
|
(21,367
|
)
|
|||
Cash and cash equivalents at beginning of period
|
14,941
|
|
|
15,960
|
|
|
37,327
|
|
|||
Cash and cash equivalents at end of period
|
$
|
13,519
|
|
|
$
|
14,941
|
|
|
$
|
15,960
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Net changes in restricted cash
|
$
|
—
|
|
|
$
|
(1,256
|
)
|
|
$
|
1,256
|
|
Interest paid
|
$
|
(1,944
|
)
|
|
$
|
(981
|
)
|
|
$
|
(27
|
)
|
Income taxes paid
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
|
|
||||||
Allowance for tenant improvements
|
$
|
—
|
|
|
$
|
6,653
|
|
|
$
|
1,656
|
|
Amounts accrued for property and equipment
|
$
|
11
|
|
|
$
|
292
|
|
|
$
|
223
|
|
Amounts accrued for patent expenditures
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
Maturity
(in years)
|
|
Amortized
cost
|
|
Unrealized
|
|
Estimated
fair value
|
||||||||||
Gains
|
|
Losses
|
|
||||||||||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
1 or less
|
|
$
|
32,922
|
|
|
$
|
—
|
|
|
$
|
(55
|
)
|
|
$
|
32,867
|
|
Certificates of deposit
|
1 or less
|
|
8,216
|
|
|
—
|
|
|
—
|
|
|
8,216
|
|
||||
U.S. treasury securities
|
1 or less
|
|
3,996
|
|
|
—
|
|
|
(18
|
)
|
|
3,978
|
|
||||
Debt securities of U.S. government-sponsored agencies
|
1 or less
|
|
1,498
|
|
|
—
|
|
|
(4
|
)
|
|
1,494
|
|
||||
Total
|
|
|
$
|
46,632
|
|
|
$
|
—
|
|
|
$
|
(77
|
)
|
|
$
|
46,555
|
|
|
Maturity
(in years)
|
|
Amortized
cost
|
|
Unrealized
|
|
Estimated
fair value
|
||||||||||
Gains
|
|
Losses
|
|
||||||||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
2 or less
|
|
$
|
49,185
|
|
|
$
|
12
|
|
|
$
|
(77
|
)
|
|
$
|
49,120
|
|
Certificates of deposit
|
1 or less
|
|
9,291
|
|
|
—
|
|
|
—
|
|
|
9,291
|
|
||||
U.S. treasury securities
|
1 or less
|
|
$
|
1,001
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1,000
|
|
U.S. government-sponsored enterprise securities
|
1 or less
|
|
$
|
512
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
512
|
|
Commercial paper
|
1 or less
|
|
$
|
1,247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,247
|
|
Total
|
|
|
$
|
61,236
|
|
|
$
|
12
|
|
|
$
|
(78
|
)
|
|
$
|
61,170
|
|
•
|
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, 2017
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
10,847
|
|
|
$
|
10,847
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
32,867
|
|
|
—
|
|
|
32,867
|
|
|
—
|
|
||||
Certificates of deposit
|
8,216
|
|
|
—
|
|
|
8,216
|
|
|
—
|
|
||||
U.S. treasury securities
|
3,978
|
|
|
—
|
|
|
3,978
|
|
|
—
|
|
||||
Debt securities of U.S. government-sponsored agencies
|
1,494
|
|
|
—
|
|
|
1,494
|
|
|
—
|
|
||||
|
$
|
57,402
|
|
|
$
|
10,847
|
|
|
$
|
46,555
|
|
|
$
|
—
|
|
|
Fair value as of December 31, 2016
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
13,578
|
|
|
$
|
13,578
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
49,120
|
|
|
—
|
|
|
49,120
|
|
|
—
|
|
||||
Certificates of deposit
|
9,291
|
|
|
—
|
|
|
9,291
|
|
|
—
|
|
||||
U.S. treasury securities
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
||||
Debt securities of U.S. government-sponsored agencies
|
512
|
|
|
—
|
|
|
512
|
|
|
—
|
|
||||
Commercial paper
|
1,247
|
|
|
—
|
|
|
1,247
|
|
|
—
|
|
||||
|
$
|
74,748
|
|
|
$
|
13,578
|
|
|
$
|
61,170
|
|
|
$
|
—
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Laboratory equipment
|
|
$
|
8,430
|
|
|
$
|
7,932
|
|
Computer equipment and software
|
|
281
|
|
|
265
|
|
||
Furniture and fixtures
|
|
706
|
|
|
706
|
|
||
Leasehold improvements
|
|
8,550
|
|
|
10,469
|
|
||
Construction in progress
|
|
—
|
|
|
261
|
|
||
|
|
17,967
|
|
|
19,633
|
|
||
Less accumulated depreciation and amortization
|
|
(8,259
|
)
|
|
(7,803
|
)
|
||
Property and equipment, net
|
|
$
|
9,708
|
|
|
$
|
11,830
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Patents
|
|
$
|
871
|
|
|
$
|
1,102
|
|
Licenses
|
|
379
|
|
|
379
|
|
||
|
|
1,250
|
|
|
1,481
|
|
||
Accumulated amortization
|
|
(475
|
)
|
|
(466
|
)
|
||
Intangibles, net
|
|
$
|
775
|
|
|
$
|
1,015
|
|
|
|
||
2018
|
$
|
2,576
|
|
2019
|
2,654
|
|
|
2020
|
2,733
|
|
|
2021
|
2,815
|
|
|
2022
|
2,901
|
|
|
Thereafter
|
3,991
|
|
|
|
$
|
17,670
|
|
2018
|
$
|
5,000
|
|
2019
|
10,000
|
|
|
2020
|
5,000
|
|
|
|
$
|
20,000
|
|
Common stock options outstanding
|
10,648,523
|
|
Restricted stock units outstanding
|
415,728
|
|
Common stock available for future grant under the 2012 Plan
|
649,590
|
|
Common stock available for future grant under the Inducement Plan
|
41,948
|
|
Common stock available for future purchase under the 2012 Employee Stock Purchase Plan
|
1,675,110
|
|
Total common shares reserved for future issuance
|
13,430,899
|
|
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
Weighted average remaining contractual term
|
|
Aggregate intrinsic value
|
|||||
Options outstanding at December 31, 2016
|
8,931
|
|
|
$
|
6.70
|
|
|
|
|
|
||
Granted
|
5,126
|
|
|
$
|
1.35
|
|
|
|
|
|
||
Exercised
|
(11
|
)
|
|
$
|
0.38
|
|
|
|
|
|
||
Canceled/forfeited/expired
|
(3,397
|
)
|
|
$
|
5.75
|
|
|
|
|
|
||
Options outstanding at December 31, 2017
|
10,649
|
|
|
$
|
4.44
|
|
|
6.46
|
|
$
|
227
|
|
Exercisable at December 31, 2017
|
5,099
|
|
|
$
|
6.34
|
|
|
3.59
|
|
$
|
119
|
|
|
Year ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Stock options
|
|
|
|
|
|
|||
Risk-free interest rate
|
2.0
|
%
|
|
1.5
|
%
|
|
1.8
|
%
|
Volatility
|
89.4
|
%
|
|
82.7
|
%
|
|
78.9
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Expected term (years)
|
6.1
|
|
|
6.0
|
|
|
6.1
|
|
Performance stock options
|
|
|||||||
Risk-free interest rate
|
2.1
|
%
|
|
1.4
|
%
|
|
1.8
|
%
|
Volatility
|
89.2
|
%
|
|
82.4
|
%
|
|
76.7
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Expected term (years)
|
5.7
|
|
|
5.9
|
|
|
6.0
|
|
Employee stock purchase plan shares
|
|
|||||||
Risk-free interest rate
|
0.9
|
%
|
|
0.5
|
%
|
|
0.1
|
%
|
Volatility
|
105.6
|
%
|
|
93.7
|
%
|
|
76.1
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Expected term (years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Research and development
|
$
|
2,862
|
|
|
$
|
5,458
|
|
|
$
|
8,075
|
|
Research and development-restructuring related adjustments
|
(1,399
|
)
|
|
—
|
|
|
—
|
|
|||
General and administrative
|
3,500
|
|
|
7,414
|
|
|
7,293
|
|
|||
General and administrative-restructuring related adjustments
|
2,679
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
7,642
|
|
|
$
|
12,872
|
|
|
$
|
15,368
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(143
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
|
|
(142
|
)
|
|
1
|
|
|
1
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(55
|
)
|
|
(5
|
)
|
|
(17
|
)
|
|||
State
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
|
|
(55
|
)
|
|
(5
|
)
|
|
(19
|
)
|
|||
Income tax (benefit)
|
|
$
|
(197
|
)
|
|
$
|
(4
|
)
|
|
$
|
(18
|
)
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Expected income tax benefit at federal statutory tax rate
|
|
$
|
(24,515
|
)
|
|
$
|
(27,826
|
)
|
|
$
|
(18,960
|
)
|
State income taxes, net of federal benefit
|
|
1
|
|
|
(1,152
|
)
|
|
(1,580
|
)
|
|||
Tax credits
|
|
(5,151
|
)
|
|
(5,447
|
)
|
|
(5,039
|
)
|
|||
Change in fair value of convertible note payable
|
|
—
|
|
|
—
|
|
|
616
|
|
|||
Change in valuation allowance
|
|
(8,705
|
)
|
|
31,990
|
|
|
23,216
|
|
|||
Prior year true-up
|
|
1
|
|
|
(1,320
|
)
|
|
110
|
|
|||
Stock compensation
|
|
1,135
|
|
|
2,458
|
|
|
1,161
|
|
|||
Reserve for uncertain tax positions
|
|
311
|
|
|
1,314
|
|
|
254
|
|
|||
Tax Cuts and Jobs Act rate change
|
|
36,249
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
477
|
|
|
(21
|
)
|
|
204
|
|
|||
Income tax (benefit)
|
|
$
|
(197
|
)
|
|
$
|
(4
|
)
|
|
$
|
(18
|
)
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryovers
|
|
$
|
66,549
|
|
|
$
|
70,739
|
|
Research and development and other tax credits
|
|
29,702
|
|
|
22,613
|
|
||
Deferred revenue
|
|
419
|
|
|
735
|
|
||
Stock compensation expense
|
|
4,238
|
|
|
5,664
|
|
||
Other
|
|
2,196
|
|
|
4,679
|
|
||
Total deferred tax assets
|
|
103,104
|
|
|
104,430
|
|
||
Total deferred tax liabilities
|
|
(408
|
)
|
|
(799
|
)
|
||
Net deferred tax asset
|
|
102,696
|
|
|
103,631
|
|
||
Valuation allowance
|
|
(102,641
|
)
|
|
(103,631
|
)
|
||
Net deferred tax asset
|
|
$
|
55
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance of unrecognized tax benefits
|
|
$
|
5,632
|
|
|
$
|
2,298
|
|
|
$
|
1,853
|
|
(Decrease) increase for prior year tax positions
|
|
(2,466
|
)
|
|
1,991
|
|
|
(250
|
)
|
|||
Increase for current year tax positions
|
|
1,255
|
|
|
1,343
|
|
|
695
|
|
|||
Total
|
|
$
|
4,421
|
|
|
$
|
5,632
|
|
|
$
|
2,298
|
|
|
|
For the quarters ending
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
18
|
|
Total operating expenses
|
|
19,711
|
|
|
21,335
|
|
|
15,433
|
|
|
13,724
|
|
||||
Net loss
|
|
(20,021
|
)
|
|
(21,608
|
)
|
|
(15,828
|
)
|
|
(14,448
|
)
|
||||
Net loss per share, basic and diluted (1)
|
|
$
|
(0.38
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.14
|
)
|
2016
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
|
$
|
489
|
|
|
$
|
483
|
|
|
$
|
204
|
|
|
$
|
18
|
|
Total operating expenses
|
|
21,867
|
|
|
21,671
|
|
|
19,396
|
|
|
19,762
|
|
||||
Net loss
|
|
(21,207
|
)
|
|
(21,090
|
)
|
|
(19,519
|
)
|
|
(20,020
|
)
|
||||
Net loss per share, basic and diluted (1)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.38
|
)
|
Item 9A.
|
Controls and Procedures
|
|
|
Exhibit Number
|
Description
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
Reference is made to Exhibits 3.1 and 3.2.
|
|
|
4.2
|
|
|
|
10.1*
|
|
|
|
10.2*
|
|
|
|
10.3*
|
|
|
|
10.4*
|
|
|
|
10.5*
|
|
|
|
10.6
|
|
|
|
10.7*
|
|
|
|
10.8*
|
|
|
|
10.9*
|
|
|
|
10.10*
|
|
|
|
10.11*
|
|
|
|
10.12*
|
|
|
|
10.13*
|
|
|
|
10.14*
|
|
|
|
10.15
|
|
|
|
10.16†
|
|
|
|
10.17†
|
|
|
|
10.18†
|
|
|
|
10.19†
|
|
|
|
10.20
|
|
|
|
10.21†
|
|
|
|
10.22†
|
|
|
|
10.23†
|
|
|
|
10.24†
|
|
|
|
10.25†
|
|
|
|
10.26†
|
|
|
|
10.27†
|
|
|
|
10.28†
|
|
|
|
10.29†
|
|
|
|
10.30
|
|
|
|
10.31
|
|
|
|
10.32†
|
|
|
|
23.1
|
|
|
|
24.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1**
|
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Regulus Therapeutics Inc.
|
||
Date: March 7, 2018
|
By:
|
|
/s/ Joseph P. Hagan
|
|
|
|
Joseph P. Hagan
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: March 7, 2018
|
By:
|
|
/s/ Daniel R. Chevallard
|
|
|
|
Daniel R. Chevallard
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
||||
/s/ Joseph P. Hagan
|
|
President & Chief Executive Officer and Director
|
|
|
Joseph P. Hagan
|
|
(Principal Executive Officer)
|
|
March 7, 2018
|
|
|
|
|
|
/s/ Daniel R. Chevallard
|
|
Chief Financial Officer
|
|
|
Daniel R. Chevallard
|
|
(Principal Financial and Accounting Officer)
|
|
March 7, 2018
|
|
|
|
|
|
/s/ Stelios Papadopoulos
|
|
|
|
|
Stelios Papadopoulos, Ph.D.
|
|
Chairman of the Board of Directors
|
|
March 7, 2018
|
|
|
|
|
|
/s/ David Baltimore
|
|
|
|
|
David Baltimore, Ph.D.
|
|
Director
|
|
March 7, 2018
|
|
|
|
|
|
/s/ Mark G. Foletta
|
|
|
|
|
Mark G. Foletta
|
|
Director
|
|
March 7, 2018
|
|
|
|
|
|
/s/ William H. Rastetter
|
|
|
|
|
William H. Rastetter, Ph.D.
|
|
Director
|
|
March 7, 2018
|
|
|
|
|
|
/s/ Hugh Rosen
|
|
|
|
|
Hugh Rosen, M.D., Ph.D.
|
|
Director
|
|
March 7, 2018
|
|
|
|
|
|
/s/ Pascale Witz
|
|
|
|
|
Pascale Witz
|
|
Director
|
|
March 7, 2018
|
1.
|
Capitalized terms used herein but not otherwise defined shall have the respective meanings given to them in the Loan Agreement.
|
2.
|
Section 13.1 of the Loan Agreement is hereby amended by amending and restating the following definitions therein as follows:
|
3.
|
Limitation of Amendment.
|
a.
|
The amendment set forth in Section 2 above is effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation which Lenders or Borrower may now have or may have in the future under or in connection with any Loan Document, as amended hereby.
|
b.
|
This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.
|
4.
|
To induce Collateral Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows:
|
a.
|
Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;
|
b.
|
Borrower has the power and due authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
|
c.
|
The organizational documents of Borrower delivered to Collateral Agent on the Effective Date, and updated pursuant to subsequent deliveries by the Borrower to the Collateral Agent, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
|
d.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (i) any law or regulation binding on or affecting Borrower, (ii) any contractual restriction with a Person binding on Borrower, (iii) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;
|
e.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and
|
f.
|
This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
|
5.
|
Except as expressly set forth herein, the Loan Agreement shall continue in full force and effect without alteration or amendment. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.
|
6.
|
This Amendment shall be deemed effective as of the Amendment Date upon the due execution and delivery to Collateral Agent of this Amendment by each party hereto.
|
7.
|
Borrower agrees to promptly pay (but in no event in less than 5 Business Days of invoice date) all unpaid Lenders’ Expenses incurred through the date hereof, which may be debited (or ACH’d) from any of Borrower’s accounts.
|
8.
|
This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.
|
9.
|
This Amendment and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of California.
|
BORROWER:
|
|
|
|
|
|
REGULUS THERAPEUTICS INC.
|
|
|
|
|
|
By: /s/ Joseph P. Hagan
|
|
|
Name: Joseph P. Hagan
|
|
|
Title: President and CEO
|
|
|
|
|
|
COLLATERAL AGENT AND LENDER:
|
|
|
|
|
|
OXFORD FINANCE LLC
|
|
|
|
|
|
By: /s/ Colette H. Featherly
|
|
|
Name: Colette H. Featherly
|
|
|
Title: Senior Vice President
|
|
|
1.
|
Capitalized terms used herein but not otherwise defined shall have the respective meanings given to them in the Loan Agreement.
|
2.
|
Subject to the terms and conditions hereof, the Collateral Agent and the Required Lenders hereby consent to the transfer of the Listed Equipment to the Leasing Company for a consideration of $491,637.
|
3.
|
Section 2.2(b) of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
4.
|
Section 2.5 of the Loan Agreement is hereby amended by deleting the word “and” immediately following Section 2.5(d), replacing “.” at the end of Section 2.5(e) with “; and” and adding Section 2.5(f) thereto as follows:
|
5.
|
The Amortization Table attached to the Disbursement Letter dated as of the Effective Date is hereby amended and restated as set forth on the Amortization Table attached as
Exhibit B
hereto.
|
6.
|
Section 6.2(a)(iii) of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
7.
|
The following Section 6.2(d) is hereby added to the Loan Agreement:
|
8.
|
Section 13.1 of the Loan Agreement is hereby amended by adding the following definitions thereto in alphabetical order:
|
9.
|
Section 13.1 of the Loan Agreement is hereby amended by amending and restating the following definition therein as follows:
|
10.
|
Section 13.1 of the Loan Agreement is hereby amended by amending and restating clause (e) of the definition of “Permitted Indebtedness” therein as follows:
|
11.
|
The form of the Compliance Certificate (
Exhibit C
to the Loan Agreement) is hereby amended and restated as set forth on
Exhibit C
attached hereto.
|
12.
|
Limitation of Amendment.
|
a.
|
The amendments and consents set forth above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation which Lenders or Borrower may now have or may have in the future under or in connection with any Loan Document, as amended hereby.
|
b.
|
This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.
|
13.
|
To induce Collateral Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows:
|
a.
|
Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;
|
b.
|
Borrower has the power and due authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
|
c.
|
The organizational documents of Borrower delivered to Collateral Agent on the Effective Date, and updated pursuant to subsequent deliveries by the Borrower to the Collateral Agent, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
|
d.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (i) any law or regulation binding on or affecting Borrower, (ii) any contractual restriction with a Person binding on Borrower, (iii) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;
|
e.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and
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f.
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This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
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14.
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Except as expressly set forth herein, the Loan Agreement shall continue in full force and effect without alteration or amendment. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.
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15.
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This Amendment shall be deemed effective as of the Second Amendment Date upon the due execution and delivery to Collateral Agent of this Amendment by each party hereto.
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16.
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Borrower agrees to promptly pay (but in no event in less than 5 Business Days of invoice date) all unpaid Lenders’ Expenses incurred through the date hereof, which may be debited (or ACH’d) from any of Borrower’s accounts.
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17.
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This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.
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18.
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This Amendment and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of California.
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BORROWER:
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REGULUS THERAPEUTICS INC.
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By
/s/ Daniel Chevallard
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Name: Daniel Chevallard
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Title: Chief Financial Officer
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COLLATERAL AGENT AND LENDER:
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OXFORD FINANCE LLC
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By
/s/ Colette H. Featherly
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Name: Colette H. Featherly
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Title: Senior Vice President
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Description
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Vendor
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Cost
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In-Service Date
|
Memory Upgrade for Bioinformatic Servers
|
[…***…]
|
$ […***…]
|
1/6/17
|
AKTA Pure 150
|
[…***…]
|
$ […***…]
|
7/7/17
|
Next Seq - 500 Sequencing System
|
[…***…]
|
$ […***…]
|
1/26/17
|
Fluorescence Stereoscope
|
[…***…]
|
$ […***…]
|
3/16/17
|
Attune NXT AFC BRV - Laser
|
[…***…]
|
$ […***…]
|
10/6/17
|
DFC Camera
|
[…***…]
|
$ […***…]
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3/16/17
|
Meso QuickPlex Sq 120
|
[…***…]
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$ […***…]
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2/1/17
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|
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$ […***…]
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TO:
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OXFORD FINANCE LLC, as Collateral Agent and Lender
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FROM:
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REGULUS THERAPEUTICS INC.
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|
Institution Name
|
Account Number
|
New Account?
|
Account Control Agreement in place?
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||
1)
|
|
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Yes
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No
|
Yes
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No
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2)
|
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Yes
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No
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Yes
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No
|
3)
|
|
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Yes
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No
|
Yes
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No
|
4)
|
|
|
Yes
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No
|
Yes
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No
|
1)
|
Have there been any changes in management since the last Compliance Certificate?
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Yes
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No
|
|
|
|
|
2)
|
Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?
|
Yes
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No
|
|
|
|
|
3)
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Have there been any new or pending claims or causes of action against Borrower that involve more than Two Hundred Fifty Thousand Dollars ($250,000.00)?
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Yes
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No
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4)
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Have there been any amendments of or other changes to the Borrower’s Operating Documents or any of its Subsidiaries’ Operating Documents? If the Borrower is no longer subject to Securities Exchange Act of 1934, as amended, have there been any material changes to the capitalization of Borrower? If yes, please provide copies of any such amendments or changes to the Operating Documents and capitalization table, as applicable, with this Compliance Certificate.
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Yes
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No
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|
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LENDER USE ONLY
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|
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Received by:
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Date:
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Verified by:
|
Date:
|
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Compliance Status:YesNo
|
|
|
|
Date: March 7, 2018
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|
/s/ Joseph P. Hagan
|
|
|
Joseph P. Hagan
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
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Date: March 7, 2018
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|
/s/ Daniel R. Chevallard
|
|
|
Daniel R. Chevallard
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
Date: March 7, 2018
|
|
/s/ Joseph P. Hagan
|
|
|
Joseph P. Hagan
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Date: March 7, 2018
|
|
/s/ Daniel R. Chevallard
|
|
|
Daniel R. Chevallard
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|