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Bermuda
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98-1333697
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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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20-22 Bedford Row
London, United Kingdom
WC1R 4JS
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Not Applicable
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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 Shares, $0.00001 par value
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New York Stock Exchange
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Large accelerated filer
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o
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Accelerated filer
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ý
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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ý
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the success and timing of our ongoing development programs for intepirdine, nelotanserin, RVT-103 and RVT-104;
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the success of our interactions with international regulatory authorities;
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our plans to develop and commercialize intepirdine, nelotanserin, RVT-103 and RVT-104;
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the anticipated start dates, durations and completion dates of our ongoing and future preclinical studies and clinical trials;
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the anticipated designs of our future clinical studies;
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anticipated future regulatory submissions and the timing of, and our ability to, obtain and maintain regulatory approvals for our product candidates;
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our anticipated commercial launch of our key product candidates, intepirdine and nelotanserin;
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the rate and degree of market acceptance and clinical utility of any approved product candidate;
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our ability to quickly and efficiently identify and develop product candidates;
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our commercialization, marketing and manufacturing capabilities and strategy;
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continued service of our key scientific or management personnel;
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our ability to obtain, maintain and enforce intellectual property rights for our drug candidates;
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our anticipated future cash position;
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our estimates regarding our results of operations, financial condition, liquidity, capital requirements, prospects, growth and strategies;
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the success of competing drugs that are or may become available;
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our stated objective of becoming the leading biopharmaceutical company focused on neurology, with an initial emphasis on the treatment of dementia by addressing multiple forms and aspects of this condition.
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Rapidly advancing intepirdine for the treatment of mild-to-moderate Alzheimer's disease.
In October 2015, we commenced a global, multi-center, double-blind, placebo-controlled confirmatory Phase 3 clinical study of intepirdine, in patients on a background of stable donepezil therapy, called MINDSET, for the treatment of mild-to-moderate Alzheimer’s disease. We expect to report results from the MINDSET study in late September 2017. If the results of the MINDSET study are positive, our plan is to submit a new drug application, or NDA, with the FDA for the regulatory approval and commercialization of intepirdine in the United States, followed by a marketing authorization application, or MAA, with the EMA.
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Developing intepirdine for the treatment of DLB
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In the first quarter of calendar year 2016, we began a Phase 2b clinical trial of intepirdine, called the HEADWAY-DLB study, in patients with DLB on a background of stable standard of care therapy. In addition to the 35 mg dose of intepirdine that is being studied in the MINDSET study, we are evaluating a 70 mg dose of intepirdine in this trial, which we believe could have greater activity against the 5-HT
2A
receptor, which may help address visual hallucinations and behavioral disturbances in this patient population. We expect to report results from the HEADWAY-DLB study in the fourth quarter of calendar year 2017. If the results of this study are favorable, we believe that those results, in combination with positive MINDSET study results, could serve as the basis to seek regulatory approval of intepirdine for the treatment of DLB.
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Developing nelotanserin for the treatment of Lewy Body Dementia.
In January 2016, we initiated a Phase 2 clinical study of nelotanserin in patients with either DLB or Parkinson’s disease dementia who experience frequent visual hallucinations. In March 2016, we initiated a second Phase 2 study of nelotanserin in patients with either DLB or Parkinson’s disease dementia suffering from RBD. We are also exploring the potential use of nelotanserin to improve parkinsonism in DLB patients.
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Acquiring or in-licensing late-stage product candidates for the treatment of neurological disorders in a capital-efficient manner.
We intend to identify, acquire, develop and commercialize novel product candidates for the treatment of neurological disorders, including dementia. Our targeted approach to acquisition and licensing transactions reflects our goal to be the leading biopharmaceutical company focused on neurology, with an initial emphasis on the treatment of dementia by addressing multiple forms and aspects of this condition. In evaluating product acquisition candidates, we focus on candidates that are in late-stage development that offer improved solutions to patients and leverage our business infrastructure. In addition, our acquisition strategy has been to acquire global rights for these compounds wherever possible.
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Maximizing the commercial potential of our product candidates.
We plan to directly commercialize our product candidates in the United States and the European Union. In other markets for which commercialization may be less capital efficient for us, we may selectively pursue strategic collaborations with third parties in order to maximize the commercial potential of our product candidates.
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completion of extensive pre-clinical laboratory tests, animal studies, and formulation studies in accordance with the FDA's Good Laboratory Practice, or GLP, regulations;
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submission to the FDA of an investigational new drug application, or IND, for human clinical testing, which must become effective before human clinical trials may begin;
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performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice, or GCP, requirements to establish the safety and efficacy of the drug for each proposed indication;
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submission to the FDA of an NDA after completion of all pivotal clinical trials;
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satisfactory completion of an FDA inspection of sites involved in our clinical trials;
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satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient, or API, and finished drug product are produced and tested to assess compliance with cGMPs; and
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FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States.
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restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
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fines, warning letters or holds on post-approval clinical trials;
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refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals;
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product seizure or detention, or refusal to permit the import or export of products; or
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injunctions or the imposition of civil or criminal penalties.
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successfully complete clinical trials and obtain regulatory approval for the marketing of our product candidates;
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set an acceptable price for our product candidates and obtain coverage and adequate reimbursement from third-party payors;
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establish effective sales, marketing and distribution systems for our product candidates;
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add operational, financial and management information systems and personnel, including personnel to support our clinical, manufacturing and planned future commercialization efforts and operations as a public company;
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initiate and continue relationships with third-party manufacturers and have commercial quantities of our product candidates manufactured at acceptable cost and quality levels;
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attract and retain an experienced management and advisory team;
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achieve broad market acceptance of our products in the medical community and with third-party payors and consumers;
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launch commercial sales of our products, whether alone or in collaboration with others; and
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maintain, expand and protect our intellectual property portfolio.
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we may not be able to demonstrate that a product candidate is safe and effective as a treatment for our targeted indications to the satisfaction of the applicable regulatory authorities;
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our NDA or other key regulatory filings may be delayed or rejected due to issues, including those related to the FDA’s Pharmaceutical Quality/CMC guidance, timing of results from supporting studies, database lock, and data conversion, cleaning, and transfer;
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the regulatory authorities may require additional nonclinical studies or registrational studies of the product candidate in mild-to-moderate Alzheimer’s disease or other indications, which would increase our costs and prolong our development;
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the results of our clinical trials may not meet the level of statistical or clinical significance required for marketing approval;
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the regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials;
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the contract research organizations, or CROs, that we retain to conduct clinical trials may take actions outside of our control, or otherwise commit errors or breaches of protocols, that materially adversely impact our clinical trials;
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the regulatory authorities may not find the data from nonclinical studies and clinical trials sufficient to demonstrate that the clinical and other benefits of the product candidate outweigh its safety risks;
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the regulatory authorities may disagree with our interpretation of data from our nonclinical studies and clinical trials or may require that we conduct additional studies;
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the regulatory authorities may not accept data generated at our clinical trial sites;
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the FDA may withdraw Fast Track designation of intepirdine if it believes the designation is no longer supported by data from our clinical development programs;
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the regulatory authorities may require, as a condition of approval, limitations on approved labeling or distribution and use restrictions;
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the FDA may require development of a risk evaluation and mitigation strategy, or REMS, as a condition of approval;
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the regulatory authorities may identify deficiencies in the manufacturing processes or facilities of our third-party manufacturers, including Arena, our sole and exclusive supplier for nelotanserin, or any manufacturer that Arena may engage to manufacture nelotanserin on its behalf; or
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the regulatory authorities may change their approval policies or adopt new regulations.
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the progress, timing, costs and results of our clinical trials of our product candidates;
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the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA, or the PMDA, and other comparable foreign regulatory authorities;
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the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
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the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates or any future product candidates;
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the effect of competing technological and market developments;
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the cost and timing of completion of commercial-scale manufacturing activities;
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the cost of establishing sales, marketing and distribution capabilities for our product candidates in regions where we choose to commercialize our products on our own; and
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the initiation, progress, timing and results of our commercialization of our product candidates, if approved for commercial sale.
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the process by which we identify and decide to acquire product candidates may not be successful;
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potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance; or
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potential product candidates may not be effective in treating their targeted diseases.
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multiple, conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other governmental approvals, permits and licenses;
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failure by us or our distributors to obtain appropriate licenses or regulatory approvals for the sale or use of our product candidates, if approved, in various countries;
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difficulties in managing foreign operations;
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complexities associated with managing multiple payor-reimbursement regimes or self-pay systems;
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financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable and exposure to foreign currency exchange rate fluctuations;
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reduced protection for intellectual property rights;
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reduced protection of contractual rights in the event of bankruptcy or insolvency of the other contracting party;
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natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and
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failure to comply with the Foreign Corrupt Practices Act, including its books and records provisions and its anti-bribery provisions, including by failing to maintain accurate information and control over sales and distributors’ activities.
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impairment of our business reputation and significant negative media attention;
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withdrawal of participants from our clinical trials;
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significant costs to defend 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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inability to commercialize our product candidates or any future product candidate;
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product recalls, withdrawals or labeling, marketing or promotional restrictions;
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decreased demand for our product candidates or any future product candidate, if approved for commercial sale; and
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loss of revenue.
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failure to obtain regulatory approval to commence a trial;
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unforeseen safety issues;
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determination of dosing issues;
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lack of effectiveness during clinical trials;
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inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites;
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slower than expected rates of patient recruitment or failure to recruit suitable patients to participate in a trial;
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changes in or modifications to clinical trial design;
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failure to manufacture or obtain supply of sufficient quantities of a drug candidate or placebo or failure to obtain sufficient quantities of concomitant medication for use in clinical trials;
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inability to monitor patients adequately during or after treatment;
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inability or unwillingness of medical investigators to follow our clinical and other applicable protocols;
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failure to establish sufficient number of clinical trial sites; or
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clinical sites or others deviating from trial protocol, inappropriately unblinding results, or dropping out of a trial.
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develop and commercialize drugs that are superior to other products in the market;
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demonstrate through our clinical trials that our product candidates are differentiated from existing and future therapies;
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attract qualified scientific, product development and commercial personnel;
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obtain patent or other proprietary protection for our medicines;
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obtain required regulatory approvals;
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obtain coverage and adequate reimbursement from, and negotiate competitive pricing with, third-party payors; and
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successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new medicines.
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regulatory authorities may withdraw their approval of the product or require a REMS to impose restrictions on its distribution or other risk management measures;
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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 to conduct additional clinical trials;
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we could be sued and held liable for harm caused to patients;
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we could elect to discontinue the sale of our product; and
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our reputation may suffer.
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restrictions on manufacturing such products;
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restrictions on the labeling or marketing of such products;
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restrictions on product distribution or use;
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requirements to conduct post-marketing studies or clinical trials;
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warning or untitled letters;
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withdrawal of the products from the market;
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recall of products;
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fines, restitution or disgorgement of profits or revenues;
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suspension or withdrawal of marketing approvals;
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refusal to permit the import or export of such products;
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product seizure; or
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injunctions or the imposition of civil or criminal penalties.
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the efficacy and potential advantages compared to alternative treatments;
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the effectiveness of sales and marketing efforts;
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the cost of treatment in relation to alternative treatments, including any similar generic treatments;
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our ability to offer our products for sale at competitive prices;
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the convenience and ease of administration compared to alternative treatments;
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the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
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the strength of marketing and distribution support;
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the availability of third-party coverage and adequate reimbursement;
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the prevalence and severity of any side effects; and
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any restrictions on the use of our product together with other medications.
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our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;
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the inability of sales personnel to obtain access to physicians or attain adequate numbers of physicians to prescribe any drugs; and
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unforeseen costs and expenses associated with creating an independent sales and marketing organization.
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different regulatory requirements for drug approvals and rules governing drug commercialization 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 reimbursement, pricing and insurance regimes;
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foreign 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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potential noncompliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act 2010 and similar anti-bribery and anticorruption laws in other jurisdictions;
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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 prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;
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the federal false claims laws, including the civil False Claims Act, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or knowingly making, or causing to be made, a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
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the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false or fraudulent statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on health plans, health care clearing houses, and most providers and their business associates, defined as independent contractors or agents of covered entities that create, receive or obtain protected health information in connection with providing a service for or on behalf of a covered entity;
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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 certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (covered manufacturers are required to submit reports to the government by the 90th day of each calendar year); and
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analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers,
or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and 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 some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
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an annual, nondeductible fee payable by any entity that manufactures or imports specified branded prescription drugs and biologic agents;
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an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
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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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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 under their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
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extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations;
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expansion of eligibility criteria for Medicaid programs in certain states;
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expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
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a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; 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.
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failure to satisfy their contractual duties or obligations;
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inability to meet our product specifications and quality requirements consistently;
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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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failure to comply with applicable laws, regulations, and standards, including cGMP and similar foreign standards;
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deficient or improper record-keeping;
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contractual restrictions on our ability to engage additional or alternative manufacturers;
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inability to negotiate manufacturing 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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reliance on a limited number of sources, and in some cases, single sources for product components, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell our product candidates or any future product candidate in a timely fashion, in sufficient quantities or under acceptable terms;
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lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier;
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lack of access or licenses to proprietary manufacturing methods used by third-party manufacturers to make our product candidates;
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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 or regulatory sanctions related to the manufacture of our or other company’s products;
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carrier disruptions or increased costs that are beyond our control; and
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failure to deliver our products under specified storage conditions and in a timely manner.
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others may be able to make formulations or compositions that are the same as or similar to our product candidates, but that are not covered by the claims of the patents that we own;
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others may be able to make product that is similar to product candidates we intend to commercialize that is not covered by the patents that we exclusively licensed and have the right to enforce;
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we, our licensor or any collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own;
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we or our licensor might not have been the first to file patent applications covering certain of our inventions;
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others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
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it is possible that our pending patent applications will not lead to issued patents;
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issued patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges;
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our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and
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we may not develop additional proprietary technologies that are patentable.
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any delay in the commencement, enrollment and ultimate completion of our clinical trials;
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results of clinical trials of our product candidates or those of our competitors;
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any delay in filing applications for marketing approval of intepirdine or nelotanserin, and any adverse development or perceived adverse development with respect to applicable regulatory authorities’ review of those applications;
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failure to successfully develop and commercialize intepirdine or nelotanserin or any other of our current or future product candidate;
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inability to obtain additional funding;
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regulatory or legal developments in the United States and other countries applicable to our product candidates;
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adverse regulatory decisions or statements;
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changes in the structure of healthcare payment systems;
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inability to obtain adequate product supply for our current product candidates or any future product candidate, or the inability to do so at acceptable prices;
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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 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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changes in the market valuations of similar companies;
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market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations;
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announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
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significant lawsuits, including patent or shareholder litigation, and disputes or other developments relating to our 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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short sales of our common shares;
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sales of our common shares by us or our shareholders in the future;
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negative coverage in the media or analyst reports, whether accurate or not;
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issuance of subpoenas or investigative demands, or the public fact of an investigation by a government agency, whether meritorious or not;
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trading volume of our common shares;
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general economic, industry and market conditions; and
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the other factors described in this “Risk Factors” section.
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that a majority of its board of directors consists of independent directors;
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for an annual performance evaluation of the nominating and corporate governance and compensation committees;
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to have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
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to have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility.
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a classified Board of Directors with staggered three-year terms;
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directors only to be removed for cause;
|
•
|
an affirmative vote of 66 2/3% of our voting shares for certain “business combination” transactions that have not been approved by our Board of Directors;
|
•
|
restrictions on the time period in which directors may be nominated; and
|
•
|
our Board of Directors to determine the powers, preferences and rights of our preference shares and to issue the preference shares without shareholder approval.
|
|
Common Share Price
|
||||||
|
High
|
|
Low
|
||||
Year Ended March 31, 2017
|
|
|
|
||||
First Quarter
|
$
|
15.70
|
|
|
$
|
10.69
|
|
Second Quarter
|
$
|
17.66
|
|
|
$
|
11.94
|
|
Third Quarter
|
$
|
14.79
|
|
|
$
|
11.01
|
|
Fourth Quarter
|
$
|
15.80
|
|
|
$
|
11.01
|
|
|
|
|
|
||||
Year Ended March 31, 2016
|
|
|
|
||||
First Quarter
(1)
|
$
|
31.17
|
|
|
$
|
18.18
|
|
Second Quarter
|
$
|
22.88
|
|
|
$
|
9.99
|
|
Third Quarter
|
$
|
21.30
|
|
|
$
|
11.01
|
|
Fourth Quarter
|
$
|
18.33
|
|
|
$
|
8.86
|
|
|
|
|
|
||||
(1)
Our common shares commenced trading on the NYSE on June 11, 2015.
|
|
Year Ended
|
|
Period From October 31, 2014 (Date Of Inception) To
March 31, 2015 |
||||||||
|
2017
|
|
2016
|
|
|||||||
Statements of Operations Data
|
(In thousands, except share and per share data)
|
||||||||||
Operating expenses:
|
|
|
|
|
|
|
|||||
Research and development expenses
|
|
|
|
|
|
||||||
(includes $19,186, $30,622 and $3,178 of share-based compensation expense for the years ended March 31, 2017 and 2016 and the period from October 31, 2014 (Date of inception) to March 31, 2015, respectively)
|
$
|
134,778
|
|
|
$
|
76,644
|
|
|
$
|
14,324
|
|
General and administrative expenses
|
|
|
|
|
|
||||||
(includes $17,184, $41,764 and $5,118 of share-based compensation expense for the years ended March 31, 2017 and 2016 and the period from October 31, 2014 (Date of inception) to March 31, 2015, respectively)
|
45,721
|
|
|
56,518
|
|
|
6,722
|
|
|||
Total operating expenses
|
180,499
|
|
|
133,162
|
|
|
21,046
|
|
|||
Interest expense
|
1,143
|
|
|
—
|
|
|
—
|
|
|||
Other expense
|
369
|
|
|
—
|
|
|
—
|
|
|||
Loss before provision for income tax
|
(182,011
|
)
|
|
(133,162
|
)
|
|
(21,046
|
)
|
|||
Income tax (benefit) expense
|
(1,060
|
)
|
|
(17
|
)
|
|
1
|
|
|||
Net loss
|
$
|
(180,951
|
)
|
|
$
|
(133,145
|
)
|
|
$
|
(21,047
|
)
|
Net loss per common share — basic and diluted
|
$
|
(1.82
|
)
|
|
$
|
(1.41
|
)
|
|
$
|
(1.32
|
)
|
Weighted average common shares outstanding — basic and diluted
|
99,158,699
|
|
|
94,465,164
|
|
|
15,986,842
|
|
|
As of March 31, |
||||||
|
2017 |
|
2016
|
||||
Balance Sheet Data
|
(In thousands)
|
||||||
Cash
|
$
|
212,573
|
|
|
$
|
276,251
|
|
Working capital
|
173,422
|
|
|
266,331
|
|
||
Total assets
|
222,539
|
|
|
282,498
|
|
||
Long-term liabilities
|
51,436
|
|
|
—
|
|
||
Accumulated deficit
|
(335,143
|
)
|
|
(154,192
|
)
|
||
Total shareholders’ equity
|
124,837
|
|
|
266,743
|
|
•
|
employee-related expenses, such as salaries, share-based compensation, benefits and travel expense for research and development personnel;
|
•
|
costs allocated to us under the services agreements;
|
•
|
expenses incurred under agreements with CROs, as well as consultants who assist in the development of our product candidates;
|
•
|
manufacturing costs in connection with producing materials for use in conducting preclinical and clinical studies;
|
•
|
costs for planning, developing and conducting clinical studies for Alzheimer's disease and other forms of dementia including evaluating intepirdine for patients with DLB and evaluating intepirdine for gait and balance in patients with Alzheimer's disease, DLB and Parkinson's disease dementia;
|
•
|
costs for planning, developing and conducting clinical studies for nelotanserin for patients with LBD;
|
•
|
costs for planning, developing and conducting clinical studies for product candidates that combine cholinesterase inhibitors with peripheral muscarinic receptor antagonists including RVT-103, a combination of a peripheral muscarinic receptor antagonist and donepezil, and RVT-104, a combination of a peripheral muscarinic receptor antagonist and high-dose rivastigmine;
|
•
|
milestone payments and other costs that we incur under the GSK Agreement, the Arena Development Agreement and our license agreement with Qaam;
|
•
|
costs for sponsored research; and
|
•
|
depreciation expense for assets used in research and development activities.
|
•
|
the number of trials required for approval;
|
•
|
the per patient trial costs;
|
•
|
the number of patients who participate in the trials;
|
•
|
the number of sites included in the trials;
|
•
|
the countries in which the trials are conducted;
|
•
|
the length of time required to enroll eligible patients;
|
•
|
the number of doses that patients receive;
|
•
|
the drop-out or discontinuation rates of patients;
|
•
|
the potential additional safety monitoring or other studies requested by regulatory agencies;
|
•
|
the duration of patient follow-up;
|
•
|
the timing and receipt of regulatory approvals; and
|
•
|
the efficacy and safety profile of the product candidates.
|
|
|
Year Ended |
|
Year Ended |
|
Period From October 31, 2014 (Date Of Inception) To March 31,
2015 |
||||||
|
|
March 31, 2017
|
|
March 31, 2016
|
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
||||||
Research and development expenses
|
|
|
|
|
|
|
||||||
(includes $19,186, $30,622 and $3,178 of share-based compensation expense for the years ended March 31, 2017 and 2016 and the period from October 31, 2014 (Date of inception) to March 31, 2015, respectively)
|
|
$
|
134,778
|
|
|
$
|
76,644
|
|
|
$
|
14,324
|
|
General and administrative expenses
|
|
|
|
|
|
|
||||||
(includes $17,184, $41,764 and $5,118 of share-based compensation expense for the years ended March 31, 2017 and 2016 and the period from October 31, 2014 (Date of inception) to March 31, 2015, respectively)
|
|
45,721
|
|
|
56,518
|
|
|
6,722
|
|
|||
Total operating expenses
|
|
180,499
|
|
|
133,162
|
|
|
21,046
|
|
|||
Interest expense
|
|
1,143
|
|
|
—
|
|
|
—
|
|
|||
Other expense
|
|
369
|
|
|
—
|
|
|
—
|
|
|||
Income tax (benefit) expense
|
|
(1,060
|
)
|
|
(17
|
)
|
|
1
|
|
|||
Net loss
|
|
$
|
180,951
|
|
|
$
|
133,145
|
|
|
$
|
21,047
|
|
•
|
continue our Phase 3 MINDSET trial of intepirdine for the treatment of mild-to-moderate Alzheimer’s disease designed to support regulatory approval in the United States and Europe, and potentially initiate additional registrational studies to support regulatory approval in Japan;
|
•
|
continue our open-label extension study of intepirdine for patients completing the MINDSET study;
|
•
|
continue the HEADWAY-DLB study of intepirdine for the treatment of DLB;
|
•
|
continue extension studies for patients completing the HEADWAY-DLB study;
|
•
|
continue studies of intepirdine for gait and balance in patients with Alzheimer's disease, DLB and Parkinson's disease dementia;
|
•
|
continue clinical studies for product candidates that combine cholinesterase inhibitors with peripheral muscarinic receptor antagonists including RVT-103, a combination of a peripheral muscarinic receptor antagonist and donepezil and potentially RVT-104, a combination of a peripheral muscarinic receptor antagonist and high-dose rivastigmine;
|
•
|
potentially commence future studies of intepirdine for the treatment of severe Alzheimer’s disease and other forms of dementia, such as Parkinson's disease dementia and vascular dementia;
|
•
|
continue the development of nelotanserin for LBD and other indications;
|
•
|
continue open-label extension studies for patients completing our nelotanserin phase 2 studies;
|
•
|
seek to identify, acquire, develop and commercialize additional product candidates;
|
•
|
integrate acquired technologies into a comprehensive regulatory and product development strategy;
|
•
|
achieve milestones under our agreements with third parties that will require us to make substantial payments to those parties;
|
•
|
maintain, expand and protect our intellectual property portfolio;
|
•
|
hire scientific, clinical, regulatory, manufacturing, quality control, commercial and administrative personnel;
|
•
|
add operational, financial and management information systems and personnel, including personnel to support our drug development efforts;
|
•
|
seek regulatory approvals for any product candidates that successfully complete clinical trials;
|
•
|
scale up external manufacturing capabilities to commercialize our product candidates;
|
•
|
establish a sales, marketing and distribution infrastructure for drug candidates for which we may obtain regulatory approval; and
|
•
|
operate as a public company.
|
|
Year Ended
March 31, 2017 |
|
Year Ended
March 31, 2016 |
|
Period From October 31, 2014 (Date Of Inception) To
March 31, 2015 |
||||||
Net cash used in operating activities
|
$
|
(112,109
|
)
|
|
$
|
(53,347
|
)
|
|
$
|
(683
|
)
|
Net cash used in investing activities
|
(105
|
)
|
|
(5,346
|
)
|
|
(5,009
|
)
|
|||
Net cash provided by financing activities
|
48,536
|
|
|
334,944
|
|
|
5,692
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
AXOVANT SCIENCES LTD.
|
|
|
|
|
|
|
|
|
By:
|
/s/ David Hung
|
|
|
David Hung
Principal Executive Officer
|
June 13, 2017
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
/s/ David Hung
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
|
June 13, 2017
|
David Hung
|
|
|
|
|
|
|
|
|
|
/s/ Gregory Weinhoff
|
|
Principal Financial Officer
|
|
June 13, 2017
|
Gregory Weinhoff
|
|
|
|
|
|
|
|
|
|
/s/ Michael Adasczik
|
|
Principal Accounting Officer
|
|
June 13, 2017
|
Michael Adasczik
|
|
|
|
|
|
|
|
|
|
/s/ Vivek Ramaswamy
|
|
Director
|
|
June 13, 2017
|
Vivek Ramaswamy
|
|
|
|
|
|
|
|
|
|
/s/ Berndt Modig
|
|
Director
|
|
June 13, 2017
|
Berndt Modig
|
|
|
|
|
|
|
|
|
|
/s/ Atul Pande
|
|
Director
|
|
June 13, 2017
|
Atul Pande
|
|
|
|
|
|
|
|
|
|
/s/ Ilan Oren
|
|
Director
|
|
June 13, 2017
|
Ilan Oren
|
|
|
|
|
|
|
|
|
|
/s/ Kathryn Falberg
|
|
Director
|
|
June 13, 2017
|
Kathryn Falberg
|
|
|
|
|
|
|
|
|
|
/s/ W. Anthony Vernon
|
|
Director
|
|
June 13, 2017
|
W. Anthony Vernon
|
|
|
|
|
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AXOVANT SCIENCES LTD.
|
||
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
March 31, 2017 |
|
March 31, 2016
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash
|
$
|
212,573
|
|
|
$
|
276,251
|
|
Prepaid expenses and other current assets
|
6,457
|
|
|
4,865
|
|
||
Income tax receivable
|
658
|
|
|
970
|
|
||
Total current assets
|
219,688
|
|
|
282,086
|
|
||
|
|
|
|
||||
Property and equipment, net
|
142
|
|
|
89
|
|
||
Deferred tax assets
|
2,709
|
|
|
323
|
|
||
Total assets
|
$
|
222,539
|
|
|
$
|
282,498
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
8,551
|
|
|
$
|
622
|
|
Due to Roivant Sciences Ltd. and Roivant Sciences, Inc.
|
2,919
|
|
|
1,814
|
|
||
Accrued expenses
|
34,796
|
|
|
8,319
|
|
||
Contingent payment liability
|
—
|
|
|
5,000
|
|
||
Total current liabilities
|
46,266
|
|
|
15,755
|
|
||
|
|
|
|
||||
Long term debt
|
51,436
|
|
|
—
|
|
||
|
|
|
|
||||
Total liabilities
|
97,702
|
|
|
15,755
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
|
||
Common shares, par value $0.00001 per share, 1,000,000,000 shares authorized, 99,163,919 and 99,150,000 issued and outstanding at March 31, 2017 and March 31, 2016, respectively
|
1
|
|
|
1
|
|
||
Accumulated other comprehensive income
|
378
|
|
|
—
|
|
||
Additional paid-in capital
|
459,601
|
|
|
420,934
|
|
||
Accumulated deficit
|
(335,143
|
)
|
|
(154,192
|
)
|
||
|
|
|
|
||||
Total shareholders’ equity
|
124,837
|
|
|
266,743
|
|
||
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
$
|
222,539
|
|
|
$
|
282,498
|
|
|
Year Ended March 31, 2017
|
|
Year Ended March 31, 2016
|
|
Period From October 31, 2014 (Date Of Inception) To
March 31, 2015 |
||||||
Operating expenses:
|
|
|
|
|
|
|
|||||
Research and development expenses
|
|
|
|
|
|
||||||
(includes $19,186, $30,622 and $3,178 of share-based compensation expense for the years ended March 31, 2017 and 2016 and the period from October 31, 2014 (Date of inception) to March 31, 2015, respectively)
|
$
|
134,778
|
|
|
$
|
76,644
|
|
|
$
|
14,324
|
|
General and administrative expenses
|
|
|
|
|
|
||||||
(includes $17,184, $41,764 and $5,118 of share-based compensation expense for the years ended March 31, 2017 and 2016 and the period from October 31, 2014 (Date of inception) to March 31, 2015, respectively)
|
45,721
|
|
|
56,518
|
|
|
6,722
|
|
|||
Total operating expenses
|
180,499
|
|
|
133,162
|
|
|
21,046
|
|
|||
Interest expense
|
1,143
|
|
|
—
|
|
|
—
|
|
|||
Other expense
|
369
|
|
|
—
|
|
|
—
|
|
|||
Loss before provision for income tax
|
(182,011
|
)
|
|
(133,162
|
)
|
|
(21,046
|
)
|
|||
Income tax (benefit) expense
|
(1,060
|
)
|
|
(17
|
)
|
|
1
|
|
|||
Net loss
|
$
|
(180,951
|
)
|
|
$
|
(133,145
|
)
|
|
$
|
(21,047
|
)
|
Net loss per common share — basic and diluted
|
$
|
(1.82
|
)
|
|
$
|
(1.41
|
)
|
|
$
|
(1.32
|
)
|
Weighted average common shares outstanding — basic and diluted
|
99,158,699
|
|
|
94,465,164
|
|
|
15,986,842
|
|
|
Year Ended March 31, 2017
|
|
Year Ended March 31, 2016
|
|
Period From October 31, 2014 (Date Of Inception) To
March 31, 2015 |
||||||
|
|
|
|
|
|
||||||
Net loss
|
$
|
(180,951
|
)
|
|
$
|
(133,145
|
)
|
|
$
|
(21,047
|
)
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
378
|
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive income
|
378
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive loss
|
$
|
(180,573
|
)
|
|
$
|
(133,145
|
)
|
|
$
|
(21,047
|
)
|
|
Common Shares
|
|
Common
Shares
Subscribed
|
|
Additional Paid
in Capital
|
|
Accumulated
Deficit
|
|
Accumulated Other Comprehensive Income
|
|
Total
Shareholders’
Equity (Deficit)
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at October 31, 2014
|
10,000,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capital contribution
|
—
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
||||||
Common shares issued to RSL
|
65,000,000
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
518
|
|
|
—
|
|
|
—
|
|
|
518
|
|
||||||
Capital contribution — share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
7,778
|
|
|
—
|
|
|
—
|
|
|
7,778
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,047
|
)
|
|
—
|
|
|
(21,047
|
)
|
||||||
Balance at March 31, 2015
|
75,000,000
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
13,296
|
|
|
$
|
(21,047
|
)
|
|
$
|
—
|
|
|
$
|
(7,751
|
)
|
Sale of common shares in initial public offering ($15.00 per share), net of underwriting discounts and commissions and offering expenses of $27,748
|
24,150,000
|
|
|
—
|
|
|
—
|
|
|
334,502
|
|
|
—
|
|
|
—
|
|
|
334,502
|
|
||||||
Common shares subscription paid
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Capital contribution
|
—
|
|
|
—
|
|
|
—
|
|
|
750
|
|
|
—
|
|
|
—
|
|
|
750
|
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
17,994
|
|
|
—
|
|
|
—
|
|
|
17,994
|
|
||||||
Capital contribution — share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
54,392
|
|
|
—
|
|
|
—
|
|
|
54,392
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(133,145
|
)
|
|
—
|
|
|
(133,145
|
)
|
||||||
Balance at March 31, 2016
|
99,150,000
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
420,934
|
|
|
$
|
(154,192
|
)
|
|
$
|
—
|
|
|
$
|
266,743
|
|
Exercise of stock options
|
13,919
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
||||||
Warrant issued with debt financing
|
—
|
|
|
—
|
|
|
—
|
|
|
2,261
|
|
|
—
|
|
|
—
|
|
|
2,261
|
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
25,449
|
|
|
—
|
|
|
—
|
|
|
25,449
|
|
||||||
Capital contribution — share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
10,921
|
|
|
—
|
|
|
—
|
|
|
10,921
|
|
||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
378
|
|
|
378
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(180,951
|
)
|
|
—
|
|
|
(180,951
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at March 31, 2017
|
99,163,919
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
459,601
|
|
|
$
|
(335,143
|
)
|
|
$
|
378
|
|
|
$
|
124,837
|
|
|
Year Ended March 31, 2017
|
|
Year Ended March 31, 2016
|
|
Period From October 31, 2014 (Date Of Inception) To
March 31, 2015 |
||||||
|
|
|
|
|
|
|
|||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|||||
Net loss
|
$
|
(180,951
|
)
|
|
$
|
(133,145
|
)
|
|
$
|
(21,047
|
)
|
|
|
|
|
|
|
|
|||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|||||
In-process research and development expenses
|
—
|
|
|
5,252
|
|
|
10,000
|
|
|||
Unrealized currency translation gain
|
378
|
|
|
—
|
|
|
—
|
|
|||
Share-based compensation
|
36,370
|
|
|
72,386
|
|
|
8,296
|
|
|||
Depreciation and amortization
|
249
|
|
|
14
|
|
|
—
|
|
|||
Deferred tax assets
|
(2,386
|
)
|
|
(323
|
)
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||||
Prepaid expenses and other current assets
|
(1,592
|
)
|
|
(4,860
|
)
|
|
(4
|
)
|
|||
Accounts payable
|
7,929
|
|
|
219
|
|
|
117
|
|
|||
Due to Roivant Sciences Ltd. and Roivant Sciences, Inc.
|
1,105
|
|
|
(311
|
)
|
|
1,487
|
|
|||
Accrued liabilities
|
26,477
|
|
|
8,391
|
|
|
468
|
|
|||
Income tax receivable
|
312
|
|
|
(1,155
|
)
|
|
—
|
|
|||
Income tax payable
|
—
|
|
|
185
|
|
|
—
|
|
|||
Net cash used in operating activities
|
(112,109
|
)
|
|
(53,347
|
)
|
|
(683
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|||||
Purchase of in-process research and development
|
—
|
|
|
(5,252
|
)
|
|
(5,000
|
)
|
|||
Purchase of furniture and equipment
|
(105
|
)
|
|
(94
|
)
|
|
(9
|
)
|
|||
Net cash used in investing activities
|
(105
|
)
|
|
(5,346
|
)
|
|
(5,009
|
)
|
|||
|
|
|
|
|
|
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|||||
Cash proceeds from issuance of common shares in initial public offering, net of underwriting discount
|
—
|
|
|
336,893
|
|
|
—
|
|
|||
Initial public offering costs paid
|
—
|
|
|
(2,351
|
)
|
|
(25
|
)
|
|||
Cash capital contribution from Roivant Sciences Ltd.
|
—
|
|
|
751
|
|
|
5,000
|
|
|||
Repayment of amounts due to Roivant Sciences Ltd. and Roivant Sciences, Inc. for amounts paid on behalf of the Company
|
—
|
|
|
(627
|
)
|
|
—
|
|
|||
Due to Roivant Sciences Ltd. and Roivant Sciences, Inc. for amounts paid on behalf of the Company
|
—
|
|
|
278
|
|
|
717
|
|
|||
Payment of contingent liability
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|||
Exercise of stock options
|
36
|
|
|
—
|
|
|
—
|
|
|||
Cash proceeds from debt financing, net of financing costs
|
53,500
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
48,536
|
|
|
334,944
|
|
|
5,692
|
|
|||
Net change in cash
|
(63,678
|
)
|
|
276,251
|
|
|
—
|
|
|||
Cash—beginning of period
|
276,251
|
|
|
—
|
|
|
—
|
|
|||
Cash—end of period
|
$
|
212,573
|
|
|
$
|
276,251
|
|
|
$
|
—
|
|
Non-cash financing activities:
|
|
|
|
|
|
|
|||||
Unpaid initial public offering costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,079
|
|
Recognition of warrant issued in debt financing
|
$
|
2,261
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Supplemental disclosure of cash paid:
|
|
|
|
|
|
|
|||||
Income taxes
|
$
|
1,014
|
|
|
$
|
1,279
|
|
|
$
|
—
|
|
Interest
|
$
|
435
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Level 1-Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
|
•
|
Level 2-Valuations are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.
|
•
|
Level 3-Valuations are based on inputs that are unobservable (supported by little or no market activity) and significant to the overall fair value measurement.
|
•
|
$5.0 million
in cash paid at closing, December 17, 2014;
|
•
|
$5.0 million
in a milestone payment made in June 2016;
|
•
|
$35.0 million
,
$25.0 million
and
$10.0 million
upon approval of intepirdine in the United States, the European Union and Japan, respectively;
|
•
|
A one-time payment of
$85.0 million
for the first calendar year in which the Company achieves global net sales of
$1.2 billion
of intepirdine; and
|
•
|
a fixed royalty of
12.5%
on annual net product sales in certain territories, subject to reduction on a product-by-product and country-by-country basis, on account of expiration of patent and regulatory exclusivity or upon generic entry.
|
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
|
|
|
||||
Research and development expenses
|
$
|
27,667
|
|
|
$
|
5,659
|
|
Salaries, bonuses, and other compensation expenses
|
3,497
|
|
|
1,893
|
|
||
Legal expenses
|
1,271
|
|
|
183
|
|
||
Other expenses
|
2,361
|
|
|
584
|
|
||
Total accrued expenses
|
$
|
34,796
|
|
|
$
|
8,319
|
|
Exercise price
|
|
$
|
12.04
|
|
Share price on date of issuance
|
|
$
|
11.96
|
|
Volatility
|
|
77.6
|
%
|
|
Risk-free interest rate
|
|
2.27
|
%
|
|
Expected dividend yield
|
|
—
|
%
|
|
Contractual term (in years)
|
|
7
|
|
|
|
March 31, 2017
|
||
|
|
|
||
Principal amount
|
|
$
|
55,000
|
|
Less: unamortized discount and debt issuance costs
|
|
(3,564
|
)
|
|
Loan payable less unamortized discount and debt issuance costs
|
|
51,436
|
|
|
Less: current maturities
|
|
—
|
|
|
Long-term loan payable, net of current maturities
|
|
$
|
51,436
|
|
|
Year Ended March 31, 2017
|
|
Year Ended March 31, 2016
|
|
Period From October 31, 2014 (Date of Inception to March 31, 2015)
|
|||
Expected share price volatility
|
79.6
|
%
|
|
77.9
|
%
|
|
74.9
|
%
|
Expected risk free interest rate
|
1.58
|
%
|
|
1.70
|
%
|
|
1.62
|
%
|
Expected term, in years
|
6.30
|
|
|
6.58
|
|
|
6.72
|
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Number of Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value
|
||||||||
Options outstanding at October 31, 2014
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
4,012,500
|
|
|
0.90
|
|
|
14.30
|
|
|
9.96
|
|
|
—
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cancelled
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Options outstanding at March 31, 2015
|
4,012,500
|
|
|
0.90
|
|
|
14.30
|
|
|
9.96
|
|
|
$
|
56,576,250
|
|
||
Granted
|
1,983,808
|
|
|
12.10
|
|
|
11.89
|
|
|
—
|
|
|
—
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
(102,725
|
)
|
|
4.99
|
|
|
13.41
|
|
|
—
|
|
|
—
|
|
|||
Cancelled
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Options outstanding at March 31, 2016
|
5,893,583
|
|
|
4.60
|
|
|
13.50
|
|
|
9.11
|
|
|
$
|
47,172,525
|
|
||
Granted
|
2,642,500
|
|
|
13.08
|
|
|
9.06
|
|
|
—
|
|
|
—
|
|
|||
Exercised
|
(13,919
|
)
|
|
2.57
|
|
|
13.28
|
|
|
—
|
|
|
141,796
|
|
|||
Forfeited
|
(682,130
|
)
|
|
4.26
|
|
|
12.86
|
|
|
—
|
|
|
—
|
|
|||
Cancelled
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Options outstanding at March 31, 2017
|
7,840,034
|
|
|
7.49
|
|
|
12.06
|
|
|
8.49
|
|
|
$
|
61,104,445
|
|
||
Options vested and expected to vest at March 31, 2017
|
7,643,202
|
|
|
7.37
|
|
|
12.09
|
|
|
8.48
|
|
|
$
|
60,396,261
|
|
||
Options exercisable at March 31, 2017
|
5,823,714
|
|
|
5.28
|
|
|
12.91
|
|
|
8.24
|
|
|
$
|
57,834,880
|
|
|
Year ended March 31, 2017
|
|
Year ended March 31, 2016
|
|
Period from October 31, 2014 (Date of Inception) through March 31, 2015
|
||||||
Loss before income taxes:
|
|
|
|
|
|
||||||
Bermuda
|
$
|
(109,334
|
)
|
|
$
|
(119,207
|
)
|
|
$
|
(21,047
|
)
|
Switzerland
|
(55,594
|
)
|
|
—
|
|
|
—
|
|
|||
United States
|
(17,083
|
)
|
|
(13,955
|
)
|
|
1
|
|
|||
Total loss before income taxes
|
$
|
(182,011
|
)
|
|
$
|
(133,162
|
)
|
|
$
|
(21,046
|
)
|
|
|
|
|
|
|
||||||
Current taxes:
|
|
|
|
|
|
||||||
United States
|
1,326
|
|
|
306
|
|
|
1
|
|
|||
Switzerland
|
—
|
|
|
—
|
|
|
—
|
|
|||
Bermuda
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total current tax expense
|
1,326
|
|
|
306
|
|
|
1
|
|
|||
Deferred taxes:
|
|
|
|
|
|
||||||
United States
|
(2,386
|
)
|
|
(323
|
)
|
|
—
|
|
|||
Switzerland
|
—
|
|
|
—
|
|
|
—
|
|
|||
Bermuda
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total deferred tax benefit
|
(2,386
|
)
|
|
(323
|
)
|
|
—
|
|
|||
Total income tax (benefit) expense
|
(1,060
|
)
|
|
(17
|
)
|
|
1
|
|
|
March 31, 2017
|
|
March 31, 2016
|
||||
Research tax credits
|
$
|
1,793
|
|
|
$
|
283
|
|
Other
|
937
|
|
|
11
|
|
||
Swiss net operating loss
|
10,623
|
|
|
—
|
|
||
Depreciation
|
(21
|
)
|
|
29
|
|
||
Share-based compensation
|
13,518
|
|
|
6,919
|
|
||
Subtotal
|
26,850
|
|
|
7,242
|
|
||
Valuation allowance
|
(24,141
|
)
|
|
(6,919
|
)
|
||
Total deferred tax assets
|
$
|
2,709
|
|
|
$
|
323
|
|
|
|
Year Ended
|
|
Year Ended
|
|
Period from October 31, 2014
|
||||||||||||
|
|
March 31, 2017
|
|
March 31, 2016
|
|
to March 31, 2015
|
||||||||||||
|
|
$ (000s)
|
%
|
|
$ (000s)
|
%
|
|
$ (000s)
|
%
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Income tax benefit at Bermuda statutory rate
|
|
$
|
—
|
|
—
|
%
|
|
$
|
—
|
|
—
|
%
|
|
$
|
—
|
|
—
|
%
|
Foreign rate differential
|
|
(18,140
|
)
|
9.96
|
|
|
(4,745
|
)
|
3.56
|
|
|
—
|
|
—
|
|
|||
Valuation allowance
|
|
18,607
|
|
(10.22
|
)
|
|
5,194
|
|
(3.90
|
)
|
|
—
|
|
—
|
|
|||
Other
|
|
(1,527
|
)
|
0.84
|
|
|
(466
|
)
|
0.35
|
|
|
1
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||||
Total income tax (benefit) expense
|
|
$
|
(1,060
|
)
|
0.58
|
%
|
|
$
|
(17
|
)
|
0.01
|
%
|
|
$
|
1
|
|
—
|
%
|
|
|
|
|
||||||||||||||||
|
First Quarter Ended
|
|
Second Quarter Ended
|
|
Third Quarter Ended
|
|
Fourth Quarter Ended
|
|
First Quarter Ended
|
|
Second Quarter Ended
|
|
Third Quarter Ended
|
|
Fourth Quarter Ended
|
||||
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
March 31,
|
||||
|
2016
|
|
2016
|
|
2016
|
|
2017
|
|
2015
|
|
2015
|
|
2015
|
|
2016
|
||||
Total operating expenses
|
$37,907
|
|
$41,523
|
|
$47,972
|
|
$53,097
|
|
$24,879
|
|
$15,142
|
|
$
|
62,554
|
|
|
$
|
30,587
|
|
Net loss
|
(38,055)
|
|
(42,252)
|
|
(47,811)
|
|
(52,833)
|
|
(24,953)
|
|
(15,166)
|
|
(63,356
|
)
|
|
(29,671
|
)
|
||
Net loss per share attributable to common shareholders - basic and diluted
|
(0.38)
|
|
(0.43)
|
|
(0.48)
|
|
(0.53)
|
|
(0.31)
|
|
(0.15)
|
|
(0.64
|
)
|
|
(0.30
|
)
|
Exhibit
Number
|
|
Description of Document
|
|
|
|
2.1*
|
|
Asset Purchase Agreement, by and among the Registrant and Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited, dated as of December 17, 2014, incorporated herein by reference to Exhibit 2.1 of the Registrant's Registration Statement on Form S-1 (File No. 333-204073), filed on May 11, 2015.
|
|
|
|
3.1
|
|
Certificate of Incorporation as currently in effect, incorporated herein by reference to Exhibit 3.1 of the Registrant's Registration Statement on Form S-1 (File No. 333-204073), filed on May 11, 2015.
|
|
|
|
3.2
|
|
Memorandum of Association, as currently in effect, incorporated herein by reference to Exhibit 3.2 of the Registrant's Registration Statement on Form S-1 (File No. 333-204073), filed on May 11, 2015.
|
|
|
|
3.3
|
|
Amended and Restated Bye-laws, as currently in effect, incorporated herein by reference to Exhibit 3.4 of the Registrant's Amendment No. 2 to Registration Statement on Form S-1/A (File No. 333-204073) filed on June 11, 2015.
|
|
|
|
10.1
|
|
Amended and Restated Services Agreements, dated as of October 13, 2015, by and among Roivant Sciences, Inc., Axovant Sciences, Inc. and the Registrant, incorporated herein by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q (File No. 001-37418), filed on February 09, 2016.
|
|
|
|
10.2
|
|
Information Sharing and Cooperation Agreement, dated as of March 18, 2015, by and between Roivant Sciences Ltd. and the Registrant, incorporated herein by reference to Exhibit 10.7 of the Registrant's Registration Statement on Form S-1 (File No. 333-204073), filed on May 11, 2015.
|
|
|
|
10.3*
|
|
Development, Marketing and Supply Agreement, dated May 8, 2015, between Roivant Sciences Ltd. and Arena Pharmaceuticals GmbH, incorporated herein by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q (File No. 001-37418), filed on February 09, 2016.
|
|
|
|
10.4
|
|
Waiver and Option Agreement, dated as of May 8, 2015, by and between Roivant Sciences Ltd. and the Registrant, incorporated herein by reference to Exhibit 10.9 of the Registrant's Amendment No.1 to Registration Statement on Form S-1/A (File No. 333-204073), filed on May 22, 2015.
|
|
|
|
10.5+
|
|
2015 Equity Incentive Plan, as amended, incorporated herein by reference to Exhibit 10.1 of the Registrant's Amendment No.1 to Registration Statement on Form S-1/A (File No. 333-204073), filed on May 22, 2015.
|
|
|
|
10.6+
|
|
Forms of Option Grant Notice and Option Agreement under 2015 Equity Incentive Plan, as amended, incorporated herein by reference to Exhibit 10.2 of the Registrant's Amendment No.1 to Registration Statement on Form S-1/A (File No. 333-204073), filed on May 22, 2015.
|
|
|
|
10.7+
|
|
Form of Early Exercise Stock Purchase Agreement under 2015 Equity Incentive Plan as amended, incorporated herein by reference to Exhibit 10.3 of the Registrant's Amendment No.1 to Registration Statement on Form S-1/A (File No. 333-204073), filed on May 22, 2015.
|
|
|
|
10.8+
|
|
Form of Executive Officer Employment Agreement with Axovant Sciences, Inc, incorporated herein by reference to Exhibit 10.7 of the Registrant's Amendment No.1 to Registration Statement on Form S-1/A (File No. 333-204073), filed on May 22, 2015.
|
|
|
|
10.9+
|
|
Employment Offer Letter, dated as of April 25, 2015, by and between Lawrence Friedhoff and Axovant Sciences, Inc., incorporated herein by reference to Exhibit 10.8 of the Registrant's Amendment No.1 to Registration Statement on Form S-1/A (File No. 333-204073), filed on May 22, 2015.
|
|
|
|
10.10+
|
|
Employment Offer Letter, dated as of March 23, 2015, by and between Marianne Romeo Dinsmore and the Registrant, incorporated herein by reference to Exhibit 10.9 of the Registrant's Amendment No.2 to Registration Statement on Form S-1/A (File No. 333-204073), filed on June 01, 2015.
|
|
|
|
10.11+
|
|
Form of Indemnification Agreement with directors and executive officers, incorporated herein by reference to Exhibit 10.4 of the Registrant's Amendment No.1 to Registration Statement on Form S-1/A (File No. 333-204073), filed on May 22, 2015.
|
|
|
|
10.12†+
|
|
Non-Employee Director Compensation Policy.
|
|
|
|
10.13†
|
|
Loan and Security Agreement, dated February 2, 2017, by and among the Registrant, Axovant Holdings Limited, Axovant Sciences GmbH, Axovant Sciences, Inc. and Hercules Capital, Inc., as amended.
|
|
|
|
10.14
|
|
Warrant Agreement, dated February 2, 2017, issued to Hercules Capital, Inc., incorporated herein by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K (File No. 001-37418), filed on February 3, 2017.
|
|
|
|
10.15†
|
|
First Amendment to Loan and Security Agreement, dated May 24, 2017, by and among the Registrant, Axovant Holdings Limited, Axovant Sciences GmbH, Axovant Sciences, Inc. and Hercules Capital, Inc.
|
|
|
|
10.16
|
|
Services Agreement, dated February 14, 2017, by and among Roivant Sciences GmbH and Axovant Sciences GmbH, incorporated herein by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q (File No. 001-37418), filed on February 14, 2017
|
|
|
|
10.17
|
|
Employment Agreement, dated April 7, 2017, by and between David Hung and Axovant Sciences, Inc., incorporated herein by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K (File No. 001-37418), filed on April 10, 2017.
|
|
|
|
10.18
|
|
Employment Agreement, dated April 7, 2017, by and between Marion McCourt and Axovant Sciences, Inc., incorporated herein by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K (File No. 001-37418), filed on April 10, 2017.
|
|
|
|
21.1†
|
|
Subsidiaries of the Registrant.
|
|
|
|
23.1†
|
|
Consent of Ernst & Young LLP, independent registered public accounting firm.
|
|
|
|
23.2†
|
|
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
|
|
|
|
24.1†
|
|
Power of Attorney (included on signature page).
|
|
|
|
31.1†
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2†
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1**
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2**
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS XBRL
|
|
Instance Document
|
|
|
|
101.SCH XBRL
|
|
Taxonomy Extension Schema
|
|
|
|
101.CAL XBRL
|
|
Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF XBRL
|
|
Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB XBRL
|
|
Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE XBRL
|
|
Taxonomy Extension Presentation Linkbase
|
•
|
Annual Board Service Retainer
|
•
|
Annual Committee Member Service Retainer
|
◦
|
Member of the Audit Committee
|
◦
|
Member of the Compensation Committee
|
◦
|
Member of the Nominating and Corporate Governance Committee
|
•
|
Annual Committee Chair Service Retainer
|
◦
|
Chair of the Audit Committee
|
◦
|
Chair of the Compensation Committee
|
◦
|
Chair of the Nominating and Corporate Governance Committee
|
1.
|
not a Qualifying Bank;
|
2.
|
a Qualifying Bank.
|
i.
|
be subject to any fiduciary or other implied duties, regardless of whether any default or any Event of Default has occurred and is continuing;
|
ii.
|
have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent is
|
iii.
|
except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and the Agent shall not be liable for the failure to disclose, any information relating to the Loan Parties or any of their respective Affiliates that is communicated to or obtained by any Person serving as the Agent or any of its Affiliates in any capacity.
|
1.
|
request a refund of the Swiss Withholding Tax under applicable law (including tax treaties), and
|
2.
|
pay to the Agent upon receipt any amount so refunded.
|
Title:
|
Head, Global Transactions and Risk Management
|
Title:
|
President and Chief Commercial Officer
|
$55,000,000
|
Advance Date: ___ __, 20[ ]
|
|
Maturity Date: _____ ___, 20[ ]
|
REPORTING REQUIREMENT
|
REQUIRED
|
CHECK IF ATTACHED
|
Monthly Reporting
|
Monthly within 30 days (10 days for limited deliverables where no Event of Default is continuing)
|
|
Interim Financial Statements
|
Quarterly within 45 days
|
|
Audited Financial Statements
|
FYE within 90 days
|
|
LENDER
|
TERM COMMITMENT
|
Hercules Capital, Inc.
|
$55,000,000.00
|
TOTAL COMMITMENTS
|
$55,000,000.00
|
SECTION 1
|
Definitions; Interpretation.
|
Milestone
|
Applicable Amount
|
The achievement of the Second Clinical Milestone.
|
$30,000,000.00
|
The achievement of the Financial Milestone on or before June 30, 2017, and the failure to achieve the Second Clinical Milestone and Third Clinical Milestone.
|
$30,000,000.00
|
The achievement of each of:
the Second Clinical Milestone,
the Financial Milestone on or before June 30, 2017, and
the Third Clinical Milestone.
|
$25,000,000.00
|
Milestone
|
Amortization Date
|
The achievement of the Clinical Milestone on or before October 1, 2018
|
April 1, 2019
|
The achievement of each of:
the Clinical Milestone on or before October 1, 2018, and
the Second Clinical Milestone on or before April 1, 2019.
|
October 1, 2019
|
Name of Subsidiary
|
|
Jurisdiction of Incorporation or Organization
|
Axovant Sciences, Inc.
|
|
Delaware
|
Axovant Holdings Ltd.
|
|
England and Wales
|
Axovant Sciences GmbH
|
|
Switzerland
|
Date: June 13, 2017
|
By:
|
/s/ David Hung
|
|
|
David Hung
|
|
|
Principal Executive Officer
|
Date: June 13, 2017
|
By:
|
/s/ Gregory Weinhoff
|
|
|
Gregory Weinhoff
|
|
|
Principal Financial Officer
|
Date: June 13, 2017
|
By:
|
/s/ David Hung
|
|
|
David Hung
|
|
|
Principal Executive Officer
|
Date: June 13, 2017
|
By:
|
/s/ Gregory Weinhoff
|
|
|
Gregory Weinhoff
|
|
|
Principal Financial Officer
|