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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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Suite 1, 3rd Floor
11-12 St. James's Square
London SW1Y 4LB, United Kingdom
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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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Trading Symbol
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Name of each exchange on which registered
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Common Shares, par value $0.00001 per share
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AXGT
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The Nasdaq Global Select Market
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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
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Smaller reporting company
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ý
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Emerging growth company
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ý
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Page
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the success and timing of our ongoing development and potential commercialization of our product candidates;
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our relationships under our license agreements;
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the success of our interactions with the U.S. Food and Drug Administration ("FDA") and international regulatory authorities;
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the anticipated start dates, durations and completion dates of our ongoing and future nonclinical studies and clinical trials, as well as subsequent portions or cohorts of our ongoing clinical trials;
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the receipt of approvals or endorsements by data monitoring or other committees necessary for commencement or continuation of 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 approval for our product candidates;
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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 identify and in-license or acquire additional product candidates;
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our commercialization, marketing and manufacturing capabilities and strategy;
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continued service of our executive officers or other key scientific or management personnel;
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our ability to obtain, maintain and enforce intellectual property rights for our product 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 therapies that are or may become available; and
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our stated objective of building the world's leading gene therapy company for the treatment of neurological diseases.
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Gene Therapy Program
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Clinical Indication
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Development Stage
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AXO-LENTI-PD
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Parkinson's disease
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Clinical
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AXO-AAV-GM1
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GM1 gangliosidosis
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Clinical
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AXO-AAV-GM2
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GM2 gangliosidosis (including Tay-Sachs disease
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Clinical
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and Sandhoff disease)
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completion of extensive nonclinical laboratory tests, animal studies, and formulation studies in accordance with the FDA's Good Laboratory Practice ("GLP") regulations;
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submission to the FDA of an 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 ("GCP") requirements to establish the safety and efficacy of the product for each proposed indication;
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submission to the FDA of a BLA, in the case of biological product candidates including gene therapy product candidates, 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 ("API") and finished product are produced and tested to assess compliance with cGMPs; and
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FDA review and approval of the BLA prior to any commercial marketing or sale of the product in the United States.
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Phase 1. The biological product is initially introduced into healthy human subjects and tested for safety. 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 is often conducted in patients. Guidelines on clinical trials with gene therapy products issued by the FDA's Office of Tissues and Advanced Therapies state that the FDA has determined that the benefit-risk ratio of these products does not warrant their evaluation in healthy human subjects.
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Phase 2. The biological product 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, potency 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.
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the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior;
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the applicant consents to a second orphan medicinal product application; or
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the applicant cannot supply enough orphan medicinal product.
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successfully commence and complete clinical trials and obtain regulatory approval for the marketing of our gene therapy product candidates;
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establish effective sales, marketing and distribution systems for our gene therapy 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 suppliers and manufacturers, including Oxford BioMedica (UK) Ltd. ("Oxford BioMedica"), Nationwide Children's Hospital and other third-party cGMP manufacturers, and have clinical and commercial quantities of our gene therapy 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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raise additional funds when needed and on terms acceptable to us;
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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;
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compete effectively with other biotechnology and gene therapy companies targeting neurological diseases; and
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obtain, maintain, expand and protect necessary intellectual property rights.
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pre-clinical and early clinical results of any product candidates we acquire may not be predictive of future clinical results;
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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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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 BLA or other key regulatory filings may be delayed or rejected due to issues, including those related to product quality and manufacturing, timing of results from supporting studies, database lock and data transfer;
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the regulatory authorities may require additional nonclinical studies or clinical studies of the product candidate in Parkinson’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 ("CROs") that we retain to conduct clinical trials may take actions outside of our control, or otherwise commit errors or breaches of protocols, that 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 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 ("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; 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 achievement of certain development, regulatory and commercialization milestones that give rise to milestone and royalty payments to licensors;
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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 obtaining necessary intellectual property and 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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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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unexpected changes in tariffs or trade barriers;
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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;
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failure to comply with foreign laws, regulations, standards and regulatory guidance governing the collection, use, disclosure, retention, security and transfer of personal data, including the European Union General Data Privacy Regulation ("GDPR"); and
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failure to comply with the United Kingdom Bribery Act 2010 ("UK Bribery Act") and similar anti-bribery and anti-corruption laws in other jurisdictions, and 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 gene therapy product 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 products that are superior to other products in the market;
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demonstrate through our clinical trials that our gene therapy 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 marketing, 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 ethical, social and legal concerns about gene therapy;
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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;
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the inability to negotiate with payors regarding reimbursement for our products; 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 and similar anti-bribery and anti-corruption 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 and civil monetary penalties laws, including the civil False Claims Act, which can be enforced through civil whistleblower or qui tam actions, impose criminal and civil penalties 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; in addition, the government may assert that a claim including items and 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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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 health care providers, known as covered entities, 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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a number of federal, state and foreign laws, regulations, guidance and standards that impose requirements regarding the protection of health or other personal data that are applicable to or affect our operations;
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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
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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, marketing expenditures or drug pricing, as well as state and local laws that require the registration of pharmaceutical sales representatives; 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 point-of-sale discounts of 50% prior to January 1, 2019, and 70% thereafter, 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 licensure framework for follow on biologic products;
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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/or product quality issues related to manufacturing development and scale-up;
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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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collaborators have significant discretion in determining the amount and timing of the efforts and resources that they will apply to these collaborations;
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collaborators may not perform their obligations as expected;
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the nonclinical studies and clinical trials conducted as part of these collaborations may not be successful;
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collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on nonclinical study or clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;
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collaborators may delay nonclinical studies and clinical trials, provide insufficient funding for nonclinical studies and clinical trials, stop a nonclinical study or clinical trial or abandon a product candidate, repeat or conduct new nonclinical studies or clinical trials or require a new formulation of a product candidate for nonclinical studies or clinical trials;
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we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product candidates;
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collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
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product candidates developed in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;
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a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate;
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disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any product candidates, may cause delays or termination of the research, development or commercialization of such product candidates, may lead to additional responsibilities for us with respect to such product candidates or may result in litigation or arbitration, any of which would be time consuming and expensive;
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collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;
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disputes may arise with respect to the ownership or inventorship of intellectual property developed pursuant to our collaborations;
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collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;
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the terms of our collaboration agreement may restrict us from entering into certain relationships with other third parties, thereby limiting our options; and
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collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
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the scope of rights granted under the agreement and other interpretation-related issues;
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whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the agreement;
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our right to sublicense patent and other rights to third parties;
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our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations;
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the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners;
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our right to transfer or assign our license; and
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the effects of termination.
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others may be able to make products that are the same as or similar to our product candidates, but that are not covered by the claims of the patents or other intellectual property rights that we own or that we have 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 or license;
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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 or license 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 additional delays in the commencement, enrollment and ultimate completion of our clinical trials;
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•
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results of clinical trials of our product candidates or those of our competitors;
|
•
|
any delay in filing applications for marketing approval of our product candidates, and any adverse development or perceived adverse development with respect to applicable regulatory authorities’ review of those applications;
|
•
|
failure to successfully develop and commercialize our product candidates;
|
•
|
failure to maintain our relationship with Oxford BioMedica or UMMS or comply with the terms of the Oxford BioMedica Agreement or the UMMS Agreement;
|
•
|
inability to obtain additional funding;
|
•
|
inability to obtain, protect or maintain necessary intellectual property;
|
•
|
regulatory or legal developments in the United States and other countries applicable to our product candidates, including gene therapies;
|
•
|
adverse regulatory decisions or statements;
|
•
|
changes in the structure of healthcare payment systems;
|
•
|
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;
|
•
|
introduction of new products, services or technologies by our competitors;
|
•
|
failure to meet or exceed financial projections we provide to the public;
|
•
|
failure to meet or exceed the estimates and projections of the investment community;
|
•
|
changes in the market valuations of similar companies;
|
•
|
market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations;
|
•
|
announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
|
•
|
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;
|
•
|
additions or departures of key scientific or management personnel;
|
•
|
short sales of our common shares;
|
•
|
sales of our common shares by us or our shareholders in the future;
|
•
|
negative coverage in the media or analyst reports, whether accurate or not;
|
•
|
issuance of subpoenas or investigative demands, or the public fact of an investigation by a government agency, whether meritorious or not;
|
•
|
trading volume of our common shares;
|
•
|
general economic, industry and market conditions; and
|
•
|
the other factors described in this "Risk Factors" section.
|
•
|
that a majority of its board of directors consists of independent directors;
|
•
|
for an annual performance evaluation of the nominating and corporate governance and compensation committees;
|
•
|
to require director nominees to be selected, or recommended for the board of directors' selection, either by independent directors constituting a majority of the Board's independent directors in a vote in which only independent directors participate or a nominations committee comprised solely of independent directors; and
|
•
|
to have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility.
|
|
Years Ended March 31,
|
|
Period from October 31, 2014 (Date of Inception) to March 31,
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Statements of Operations Data:
|
(In thousands, except share and per share data)
|
||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
(includes $4,758, $16,597, $19,186, $30,622 and $3,178 of share-based compensation expense for the years ended March 31, 2019, 2018, 2017 and 2016 and the period from October 31, 2014 (Date of Inception) to March 31, 2015, respectively)
|
$
|
87,552
|
|
|
$
|
141,412
|
|
|
$
|
134,778
|
|
|
$
|
76,644
|
|
|
$
|
14,324
|
|
General and administrative expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
(includes $11,671, $15,281, $17,184, $41,764 and $5,118 of share-based compensation expense for the years ended March 31, 2019, 2018, 2017 and 2016 and the period from October 31, 2014 (Date of Inception) to March 31, 2015, respectively)
|
39,466
|
|
|
71,906
|
|
|
45,721
|
|
|
56,518
|
|
|
6,722
|
|
|||||
Total operating expenses
|
127,018
|
|
|
213,318
|
|
|
180,499
|
|
|
133,162
|
|
|
21,046
|
|
|||||
Interest expense
|
7,530
|
|
|
7,545
|
|
|
1,143
|
|
|
—
|
|
|
—
|
|
|||||
Other (income) expense
|
(5,616
|
)
|
|
(211
|
)
|
|
369
|
|
|
—
|
|
|
—
|
|
|||||
Loss before income tax expense (benefit)
|
(128,932
|
)
|
|
(220,652
|
)
|
|
(182,011
|
)
|
|
(133,162
|
)
|
|
(21,046
|
)
|
|||||
Income tax expense (benefit)
|
133
|
|
|
921
|
|
|
(1,060
|
)
|
|
(17
|
)
|
|
1
|
|
|||||
Net loss
|
$
|
(129,065
|
)
|
|
$
|
(221,573
|
)
|
|
$
|
(180,951
|
)
|
|
$
|
(133,145
|
)
|
|
$
|
(21,047
|
)
|
Net loss per common share — basic and diluted
|
$
|
(8.02
|
)
|
|
$
|
(16.51
|
)
|
|
$
|
(14.60
|
)
|
|
$
|
(11.28
|
)
|
|
$
|
(10.53
|
)
|
Weighted average common shares outstanding — basic and diluted
|
16,100,686
|
|
|
13,421,984
|
|
|
12,394,837
|
|
|
11,808,146
|
|
|
1,998,355
|
|
|
As of March 31, |
||||||||||||||||||
|
2019 |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Balance Sheet Data:
|
(In thousands)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
106,999
|
|
|
$
|
154,337
|
|
|
$
|
212,573
|
|
|
$
|
276,251
|
|
|
$
|
—
|
|
Working capital
|
71,085
|
|
|
111,687
|
|
|
173,422
|
|
|
266,331
|
|
|
(2,760
|
)
|
|||||
Total assets
|
122,706
|
|
|
160,786
|
|
|
222,539
|
|
|
282,498
|
|
|
1,117
|
|
|||||
Long-term liabilities
|
22,994
|
|
|
42,925
|
|
|
51,436
|
|
|
—
|
|
|
5,000
|
|
|||||
Accumulated deficit
|
(686,016
|
)
|
|
(556,951
|
)
|
|
(335,143
|
)
|
|
(154,192
|
)
|
|
(21,047
|
)
|
|||||
Total shareholders’ equity (deficit)
|
56,213
|
|
|
71,286
|
|
|
124,837
|
|
|
266,743
|
|
|
(7,751
|
)
|
•
|
direct third-party costs, which include expenses incurred under agreements with CROs and contract manufacturing organizations, the cost of consultants who assist with the development of our product candidates on a program-specific basis, investigator grants, sponsored research, manufacturing costs in connection with producing materials for use in conducting nonclinical and clinical studies, and any other third-party expenses directly attributable to the development of our product candidates; and
|
•
|
upfront payments for the purchase of in-process research and development, which include costs incurred under our agreements with Oxford BioMedica and UMMS, as well as costs incurred for our discontinued AXO-AAV-OPMD, intepirdine and nelotanserin programs.
|
•
|
share-based compensation expense for research and development personnel, including expense related to RSL common share awards and RSL options issued by RSL to RSI and RSG employees;
|
•
|
personnel-related expenses, which include employee-related expenses, such as salaries, benefits and travel expenses, for research and development personnel;
|
•
|
costs allocated to us under our services agreements with RSI and RSG; and
|
•
|
other expenses, which includes the cost of consultants who assist with our research and development but are not allocated to a specific program.
|
•
|
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 dose 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.
|
|
|
Years Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Operating expenses:
|
|
|
|
|
||||
Research and development expenses
|
|
|
|
|
||||
(includes $4,758 and $16,597 of share-based compensation expense for the years ended March 31, 2019 and 2018, respectively)
|
|
$
|
87,552
|
|
|
$
|
141,412
|
|
General and administrative expenses
|
|
|
|
|
||||
(includes $11,671 and $15,281 of share-based compensation expense for the years ended March 31, 2019 and 2018, respectively)
|
|
39,466
|
|
|
71,906
|
|
||
Total operating expenses
|
|
127,018
|
|
|
213,318
|
|
||
Interest expense
|
|
7,530
|
|
|
7,545
|
|
||
Other income
|
|
(5,616
|
)
|
|
(211
|
)
|
||
Income tax expense
|
|
133
|
|
|
921
|
|
||
Net loss
|
|
$
|
(129,065
|
)
|
|
$
|
(221,573
|
)
|
|
Years Ended March 31,
|
|
|
||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Program-specific costs:
|
|
|
|
|
|
||||||
AXO-LENTI-PD
|
$
|
30,253
|
|
|
$
|
—
|
|
|
$
|
30,253
|
|
AXO-AAV-OPMD
|
14,573
|
|
|
—
|
|
|
14,573
|
|
|||
AXO-AAV-GM1 and AXO-AAV-GM2
|
11,154
|
|
|
—
|
|
|
11,154
|
|
|||
Intepirdine
|
1,251
|
|
|
80,243
|
|
|
(78,992
|
)
|
|||
Nelotanserin
|
8,099
|
|
|
18,905
|
|
|
(10,806
|
)
|
|||
RVT-103
|
—
|
|
|
690
|
|
|
(690
|
)
|
|||
RVT-104
|
—
|
|
|
1,781
|
|
|
(1,781
|
)
|
|||
Unallocated internal costs:
|
|
|
|
|
|
||||||
Share-based compensation
|
4,758
|
|
|
16,597
|
|
|
(11,839
|
)
|
|||
Personnel-related
|
10,031
|
|
|
15,376
|
|
|
(5,345
|
)
|
|||
Services agreements
|
2,352
|
|
|
2,689
|
|
|
(337
|
)
|
|||
Other
|
5,081
|
|
|
5,131
|
|
|
(50
|
)
|
|||
Total research and development expenses
|
$
|
87,552
|
|
|
$
|
141,412
|
|
|
$
|
(53,860
|
)
|
•
|
the progress, timing, costs and results of our clinical trials of our gene therapy product candidates;
|
•
|
the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA, or the PMDA, and other comparable foreign regulatory authorities;
|
•
|
the achievement of certain development, regulatory and commercialization milestones that give rise to milestone and royalty payments to licensors;
|
•
|
the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
|
•
|
the cost of obtaining necessary intellectual property and defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or our gene therapy product candidates or any future gene therapy product candidates;
|
•
|
the effect of competing technological and market developments;
|
•
|
the cost and timing of completion of commercial-scale manufacturing activities;
|
•
|
the cost of establishing sales, marketing and distribution capabilities for our gene therapy product candidates in regions where we choose to commercialize our products on our own; and
|
•
|
the initiation, progress, timing and results of our commercialization of our gene therapy product candidates, if approved for commercial sale.
|
|
Years Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net cash used in operating activities
|
$
|
(134,207
|
)
|
|
$
|
(190,348
|
)
|
Net cash used in investing activities
|
(202
|
)
|
|
(4,284
|
)
|
||
Net cash provided by financing activities
|
87,071
|
|
|
136,396
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
Exhibit No.
|
|
Description of Document
|
Schedule/Form
|
File No.
|
Exhibit No.
|
Filing Date
|
|
|
|
|
|
|
|
3.1
|
|
S-1
|
333-204073
|
3.1
|
05/11/2015
|
|
|
|
|
|
|
|
|
3.2
|
|
S-1
|
333-204073
|
3.2
|
05/11/2015
|
|
|
|
|
|
|
|
|
3.3
|
|
8-K
|
001-37418
|
3.1
|
12/21/2017
|
|
|
|
|
|
|
|
|
10.1
|
|
S-1/A
|
333-204073
|
10.9
|
05/22/2015
|
|
|
|
|
|
|
|
|
10.2+
|
|
S-1/A
|
333-204073
|
10.1
|
05/22/2015
|
|
|
|
|
|
|
|
|
10.3+
|
|
S-1/A
|
333-204073
|
10.2
|
05/22/2015
|
|
|
|
|
|
|
|
|
10.4+
|
|
S-1/A
|
333-204073
|
10.3
|
05/22/2015
|
|
|
|
|
|
|
|
|
10.5+
|
|
S-1/A
|
333-204073
|
10.7
|
05/22/2015
|
|
|
|
|
|
|
|
|
10.6+
|
|
S-1/A
|
333-204073
|
10.4
|
05/22/2015
|
|
|
|
|
|
|
|
|
10.7*
|
|
10-Q
|
001-37418
|
10.2
|
02/09/2016
|
|
|
|
|
|
|
|
|
10.8+
|
|
10-K
|
001-37418
|
10.12
|
06/13/2017
|
|
|
|
|
|
|
|
|
10.9
|
|
10-K
|
001-37418
|
10.13
|
06/13/2017
|
|
|
|
|
|
|
|
|
10.10
|
|
10-K
|
001-37418
|
10.15
|
06/13/2017
|
|
|
|
|
|
|
|
|
10.11
|
|
10-Q
|
001-37418
|
10.1
|
11/02/2017
|
|
|
|
|
|
|
|
|
10.12+
|
|
10-K
|
001-37418
|
10.24
|
06/11/2018
|
|
|
|
|
|
|
|
|
10.13
|
|
8-K
|
001-37418
|
1.1
|
06/22/2018
|
|
|
|
|
|
|
|
|
10.14
|
|
10-Q
|
001-37418
|
10.1
|
08/07/2018
|
|
|
|
|
|
|
|
|
10.15
|
|
10-Q
|
001-37418
|
10.2
|
08/07/2018
|
|
|
|
|
|
|
|
|
10.16*
|
|
10-Q
|
001-37418
|
10.3
|
08/07/2018
|
|
|
|
|
|
|
|
|
10.17*
|
|
10-Q
|
001-37418
|
10.1
|
11/07/2018
|
|
|
|
|
|
|
|
|
10.18*
|
|
10-Q
|
001-37418
|
10.2
|
11/07/2018
|
|
|
|
|
|
|
|
|
10.19*
|
|
10-Q
|
001-37418
|
10.1
|
02/07/2019
|
|
|
|
|
|
|
|
|
10.20†+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.21†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.22†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.1†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.1†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
AXOVANT GENE THERAPIES LTD.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Pavan Cheruvu
|
|
|
Pavan Cheruvu
Principal Executive Officer
|
June 11, 2019
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
/s/ Pavan Cheruvu
|
|
Principal Executive Officer and Director
|
|
June 11, 2019
|
Pavan Cheruvu
|
|
|
|
|
|
|
|
|
|
/s/ Gregory Weinhoff
|
|
Principal Financial Officer and Principal Accounting Officer
|
|
June 11, 2019
|
Gregory Weinhoff
|
|
|
|
|
|
|
|
|
|
/s/ Frank Torti
|
|
Director, Chairman of the Board
|
|
June 11, 2019
|
Frank Torti
|
|
|
|
|
|
|
|
|
|
/s/ Atul Pande
|
|
Director, Lead Independent Director
|
|
June 11, 2019
|
Atul Pande
|
|
|
|
|
|
|
|
|
|
/s/ George Bickerstaff
|
|
Director
|
|
June 11, 2019
|
George Bickerstaff
|
|
|
|
|
|
|
|
|
|
/s/ Roger Jeffs
|
|
Director
|
|
June 11, 2019
|
Roger Jeffs
|
|
|
|
|
|
|
|
|
|
/s/ Berndt Modig
|
|
Director
|
|
June 11, 2019
|
Berndt Modig
|
|
|
|
|
|
|
|
|
|
/s/ Ilan Oren
|
|
Director
|
|
June 11, 2019
|
Ilan Oren
|
|
|
|
|
|
|
|
|
|
/s/ Myrtle Potter
|
|
Director
|
|
June 11, 2019
|
Myrtle Potter
|
|
|
|
|
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AXOVANT GENE THERAPIES LTD.
|
||
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
March 31, 2019 |
|
March 31, 2018
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
106,999
|
|
|
$
|
154,337
|
|
Prepaid expenses and other current assets
|
5,859
|
|
|
2,174
|
|
||
Income tax receivable
|
1,726
|
|
|
1,751
|
|
||
Total current assets
|
114,584
|
|
|
158,262
|
|
||
Long-term investment
|
5,871
|
|
|
—
|
|
||
Other non-current assets
|
973
|
|
|
—
|
|
||
Property and equipment, net
|
1,278
|
|
|
2,524
|
|
||
Total assets
|
$
|
122,706
|
|
|
$
|
160,786
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,698
|
|
|
$
|
3,949
|
|
Due to Roivant Sciences Ltd., Roivant Sciences, Inc. and Roivant Sciences GmbH
|
—
|
|
|
1,011
|
|
||
Accrued expenses
|
20,619
|
|
|
31,862
|
|
||
Current portion of long-term debt
|
21,182
|
|
|
9,753
|
|
||
Total current liabilities
|
43,499
|
|
|
46,575
|
|
||
Long-term debt
|
22,994
|
|
|
42,925
|
|
||
Total liabilities
|
66,493
|
|
|
89,500
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
||
Common shares, par value $0.00001 per share, 1,000,000,000 shares authorized, 22,779,891 and 13,473,512 issued and outstanding at March 31, 2019 and March 31, 2018, respectively
|
—
|
|
|
—
|
|
||
Accumulated other comprehensive income
|
911
|
|
|
126
|
|
||
Additional paid-in capital
|
741,318
|
|
|
628,111
|
|
||
Accumulated deficit
|
(686,016
|
)
|
|
(556,951
|
)
|
||
Total shareholders’ equity
|
56,213
|
|
|
71,286
|
|
||
Total liabilities and shareholders’ equity
|
$
|
122,706
|
|
|
$
|
160,786
|
|
|
Years Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating expenses:
|
|
|
|
||||
Research and development expenses
(1)
|
|
|
|
||||
(includes $4,758 and $16,597 of share-based compensation expense for the years ended March 31, 2019 and 2018, respectively)
|
$
|
87,552
|
|
|
$
|
141,412
|
|
General and administrative expenses
(2)
|
|
|
|
||||
(includes $11,671 and $15,281 of share-based compensation expense for the years ended March 31, 2019 and 2018, respectively)
|
39,466
|
|
|
71,906
|
|
||
Total operating expenses
|
127,018
|
|
|
213,318
|
|
||
Interest expense
|
7,530
|
|
|
7,545
|
|
||
Other income
|
(5,616
|
)
|
|
(211
|
)
|
||
Loss before income tax expense
|
(128,932
|
)
|
|
(220,652
|
)
|
||
Income tax expense
|
133
|
|
|
921
|
|
||
Net loss
|
$
|
(129,065
|
)
|
|
$
|
(221,573
|
)
|
Net loss per common share — basic and diluted
|
$
|
(8.02
|
)
|
|
$
|
(16.51
|
)
|
Weighted average common shares outstanding — basic and diluted
|
16,100,686
|
|
13,421,984
|
|
|
Years Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Net loss
|
$
|
(129,065
|
)
|
|
$
|
(221,573
|
)
|
Other comprehensive income (loss):
|
|
|
|
||||
Foreign currency translation adjustment
|
785
|
|
|
(252
|
)
|
||
Total other comprehensive income (loss)
|
785
|
|
|
(252
|
)
|
||
Comprehensive loss
|
$
|
(128,280
|
)
|
|
$
|
(221,825
|
)
|
|
Common Shares
|
|
Additional Paid
in Capital
|
|
Accumulated
Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
Shareholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at March 31, 2017
|
12,395,492
|
|
|
$
|
—
|
|
|
$
|
459,602
|
|
|
$
|
(335,143
|
)
|
|
$
|
378
|
|
|
$
|
124,837
|
|
Adjustment to adopt ASU 2016-09
|
—
|
|
|
—
|
|
|
235
|
|
|
(235
|
)
|
|
—
|
|
|
—
|
|
|||||
Issuance of shares upon exercise of stock options
|
92,604
|
|
|
—
|
|
|
1,557
|
|
|
—
|
|
|
—
|
|
|
1,557
|
|
|||||
Exercise of warrant
|
16,228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock issued for equity financing, net of underwriting discounts and commissions and offering expenses of $9.2 million
|
969,188
|
|
|
—
|
|
|
134,515
|
|
|
—
|
|
|
—
|
|
|
134,515
|
|
|||||
Capital contribution
|
—
|
|
|
—
|
|
|
324
|
|
|
—
|
|
|
—
|
|
|
324
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
26,465
|
|
|
—
|
|
|
—
|
|
|
26,465
|
|
|||||
Capital contribution — share-based compensation
|
—
|
|
|
—
|
|
|
5,413
|
|
|
—
|
|
|
—
|
|
|
5,413
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(252
|
)
|
|
(252
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(221,573
|
)
|
|
—
|
|
|
(221,573
|
)
|
|||||
Balance at March 31, 2018
|
13,473,512
|
|
|
$
|
—
|
|
|
$
|
628,111
|
|
|
$
|
(556,951
|
)
|
|
$
|
126
|
|
|
$
|
71,286
|
|
Issuance of shares upon exercise of stock options
|
39,130
|
|
|
—
|
|
|
335
|
|
|
—
|
|
|
—
|
|
|
335
|
|
|||||
Issuance of shares in connection with Private Placement with RSL
|
1,785,714
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|||||
Shares sold in public offerings, net of underwriting discounts and commissions and offering expenses of $3.7 million
|
7,478,448
|
|
|
—
|
|
|
69,488
|
|
|
—
|
|
|
—
|
|
|
69,488
|
|
|||||
Shares sold under share sales agreement
|
3,087
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
19,067
|
|
|
—
|
|
|
—
|
|
|
19,067
|
|
|||||
Capital contribution — share-based compensation expense
|
—
|
|
|
—
|
|
|
(2,638
|
)
|
|
—
|
|
|
—
|
|
|
(2,638
|
)
|
|||||
Non-cash capital contribution received by ASG from RSI
|
—
|
|
|
—
|
|
|
1,894
|
|
|
—
|
|
|
—
|
|
|
1,894
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
785
|
|
|
785
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(129,065
|
)
|
|
—
|
|
|
(129,065
|
)
|
|||||
Balance at March 31, 2019
|
22,779,891
|
|
|
$
|
—
|
|
|
$
|
741,318
|
|
|
$
|
(686,016
|
)
|
|
$
|
911
|
|
|
$
|
56,213
|
|
|
Years Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|||
Net loss
|
$
|
(129,065
|
)
|
|
$
|
(221,573
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|||
Disposal of fixed assets
|
148
|
|
|
24
|
|
||
Foreign currency translation adjustment
|
785
|
|
|
(252
|
)
|
||
Share-based compensation
|
16,429
|
|
|
31,878
|
|
||
Depreciation and non-cash amortization
|
2,450
|
|
|
3,083
|
|
||
Noncash gain on long-term investment
|
(5,871
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Prepaid expenses and other current assets
|
(3,685
|
)
|
|
4,283
|
|
||
Other non-current assets
|
(973
|
)
|
|
—
|
|
||
Deferred tax assets
|
—
|
|
|
2,709
|
|
||
Income tax receivable
|
25
|
|
|
(1,093
|
)
|
||
Accounts payable
|
(2,251
|
)
|
|
(4,602
|
)
|
||
Due to Roivant Sciences Ltd., Roivant Sciences, Inc. and Roivant Sciences GmbH
|
(956
|
)
|
|
(1,871
|
)
|
||
Accrued expenses
|
(11,243
|
)
|
|
(2,934
|
)
|
||
Net cash used in operating activities
|
(134,207
|
)
|
|
(190,348
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|||
Purchases of property and equipment
|
(202
|
)
|
|
(4,284
|
)
|
||
Net cash used in investing activities
|
(202
|
)
|
|
(4,284
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|||
Capital contribution from Roivant Sciences Ltd., Roivant Sciences, Inc. and Roivant Sciences GmbH
|
1,894
|
|
|
324
|
|
||
Payment of long-term debt
|
(9,707
|
)
|
|
—
|
|
||
Exercise of stock options
|
335
|
|
|
1,557
|
|
||
Cash proceeds from issuance of common shares, net of issuance costs
|
94,549
|
|
|
134,515
|
|
||
Net cash provided by financing activities
|
87,071
|
|
|
136,396
|
|
||
Net change in cash and cash equivalents
|
(47,338
|
)
|
|
(58,236
|
)
|
||
Cash and cash equivalents—beginning of year
|
154,337
|
|
|
212,573
|
|
||
Cash and cash equivalents—end of year
|
$
|
106,999
|
|
|
$
|
154,337
|
|
Non-cash financing activities:
|
|
|
|
|
|||
Issuance of common stock upon exercise of warrant
|
$
|
—
|
|
|
$
|
2,594
|
|
Supplemental disclosure of cash paid:
|
|
|
|
|
|||
Income taxes
|
$
|
71
|
|
|
$
|
377
|
|
Interest
|
$
|
6,376
|
|
|
$
|
6,365
|
|
•
|
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.
|
|
|
Fair Value
|
|
Price Quotations (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Money market fund
|
|
$
|
30,000
|
|
|
$
|
30,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
March 31, 2019
|
|
March 31, 2018
|
||||
|
|
|
|
||||
Research and development expenses
|
$
|
13,416
|
|
|
$
|
21,855
|
|
Salaries, bonuses, and other compensation expenses
|
3,899
|
|
|
7,718
|
|
||
Legal expenses
|
1,319
|
|
|
779
|
|
||
Other expenses
|
1,985
|
|
|
1,510
|
|
||
Total accrued expenses
|
$
|
20,619
|
|
|
$
|
31,862
|
|
|
|
March 31, 2019
|
|
March 31, 2018
|
||||
|
|
|
|
|
||||
Principal amount
|
|
$
|
45,295
|
|
|
$
|
55,000
|
|
Less: unamortized discount and debt issuance costs
|
|
(1,119
|
)
|
|
(2,322
|
)
|
||
Loan payable less unamortized discount and debt issuance costs
|
|
44,176
|
|
|
52,678
|
|
||
Less: current portion of long-term debt
|
|
21,182
|
|
|
9,753
|
|
||
Long-term loan payable, net of current maturities
|
|
$
|
22,994
|
|
|
$
|
42,925
|
|
|
Years Ended March 31,
|
||||
|
2019
|
|
2018
|
||
Expected share price volatility
|
85.5
|
%
|
|
79.6
|
%
|
Expected risk free interest rate
|
2.82
|
%
|
|
2.33
|
%
|
Expected term, in years
|
6.03
|
|
|
6.50
|
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
Expected share price volatility
|
70.6 - 85.6%
|
Contractual term, in years
|
10
|
|
Number of Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value
|
|||||||
Options outstanding at March 31, 2017
|
979,986
|
|
|
$
|
59.93
|
|
|
$
|
96.50
|
|
|
8.49
|
|
$
|
61,104,445
|
|
Granted
|
2,148,976
|
|
|
81.14
|
|
|
55.51
|
|
|
|
|
|
||||
Exercised
|
(92,604
|
)
|
|
17.06
|
|
|
110.84
|
|
|
|
|
$
|
13,002,098
|
|
||
Forfeited
|
(1,275,756
|
)
|
|
117.25
|
|
|
80.56
|
|
|
|
|
|
||||
Cancelled
|
0
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
Options outstanding at March 31, 2018
|
1,760,602
|
|
|
$
|
44.11
|
|
|
$
|
52.68
|
|
|
8.73
|
|
$
|
1,347,255
|
|
Granted
|
606,599
|
|
|
16.41
|
|
|
11.42
|
|
|
|
|
|
||||
Exercised
|
(39,130
|
)
|
|
8.57
|
|
|
100.42
|
|
|
|
|
$
|
242,574
|
|
||
Forfeited
|
(408,913
|
)
|
|
53.04
|
|
|
53.64
|
|
|
|
|
|
||||
Cancelled
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
Options outstanding at March 31, 2019
|
1,919,158
|
|
|
$
|
34.09
|
|
|
$
|
49.35
|
|
|
6.86
|
|
$
|
1,569,809
|
|
Options vested and expected to vest at March 31, 2019
|
1,919,158
|
|
|
$
|
34.09
|
|
|
$
|
49.35
|
|
|
6.86
|
|
$
|
1,569,809
|
|
Options exercisable at March 31, 2019
|
1,501,655
|
|
|
$
|
37.15
|
|
|
$
|
55.57
|
|
|
6.82
|
|
$
|
1,241,873
|
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||
|
|
March 31, 2019
|
|
March 31, 2018
|
||||||||||
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||
Income tax benefit at Bermuda statutory rate
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Foreign rate differential
1
|
|
(14,653
|
)
|
|
11.37
|
|
|
(122,908
|
)
|
|
55.70
|
|
||
Valuation allowance
|
|
29,962
|
|
|
(23.24
|
)
|
|
113,070
|
|
|
(51.24
|
)
|
||
Research and development credit
|
|
(1,437
|
)
|
|
1.12
|
|
|
—
|
|
|
—
|
|
||
Research and development true-up
|
|
318
|
|
|
(0.25
|
)
|
|
—
|
|
|
—
|
|
||
Switzerland rate change
|
|
(14,057
|
)
|
|
10.90
|
|
|
6,216
|
|
|
(2.82
|
)
|
||
U.S. tax reform implications
|
|
—
|
|
|
—
|
|
|
4,543
|
|
|
(2.06
|
)
|
||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total income tax expense
|
|
$
|
133
|
|
|
(0.10
|
)%
|
|
$
|
921
|
|
|
(0.42
|
)%
|
|
March 31, 2019
|
|
March 31, 2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Research tax credits
|
$
|
9,876
|
|
|
$
|
8,757
|
|
Intangibles
|
5,995
|
|
|
—
|
|
||
Other
|
18
|
|
|
293
|
|
||
Net operating loss
|
144,866
|
|
|
118,661
|
|
||
Share-based compensation
|
10,249
|
|
|
9,635
|
|
||
Subtotal
|
171,004
|
|
|
137,346
|
|
||
Valuation allowance
|
(171,004
|
)
|
|
(137,211
|
)
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation
|
—
|
|
|
(135
|
)
|
||
Total net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
2020
|
$
|
1,791
|
|
2021
|
898
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
2,689
|
|
|
|
Balance as of April 1, 2018
|
|
Expenses, net
|
|
Cash
|
|
Noncash
|
|
Balance as of March 31, 2019
|
||||||||||
Employee severance and other personnel benefits
|
|
$
|
2,460
|
|
|
$
|
—
|
|
|
$
|
(2,452
|
)
|
|
$
|
—
|
|
|
$
|
8
|
|
|
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,
|
||||||||||||||||
|
2018
|
|
2018
|
|
2018
|
|
2019
|
|
2017
|
|
2017
|
|
2017
|
|
2018
|
||||||||||||||||
Research and development expenses
|
$
|
37,418
|
|
|
$
|
21,502
|
|
|
$
|
21,483
|
|
|
$
|
7,149
|
|
|
$
|
43,712
|
|
|
$
|
38,555
|
|
|
$
|
37,346
|
|
|
$
|
21,799
|
|
General and administrative expenses
|
11,754
|
|
|
10,622
|
|
|
10,933
|
|
|
6,157
|
|
|
21,518
|
|
|
30,112
|
|
|
18,032
|
|
|
2,244
|
|
||||||||
Total operating expenses
|
49,172
|
|
|
32,124
|
|
|
32,416
|
|
|
13,306
|
|
|
65,230
|
|
|
68,667
|
|
|
55,378
|
|
|
24,043
|
|
||||||||
Net loss
|
(51,888
|
)
|
|
(33,835
|
)
|
|
(34,296
|
)
|
|
(9,046
|
)
|
|
(69,266
|
)
|
|
(69,086
|
)
|
|
(57,902
|
)
|
|
(25,319
|
)
|
||||||||
Net loss per share attributable to common shareholders - basic and diluted
|
$
|
(3.85
|
)
|
|
$
|
(2.24
|
)
|
|
$
|
(2.13
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(5.21
|
)
|
|
$
|
(5.14
|
)
|
|
$
|
(4.30
|
)
|
|
$
|
(1.88
|
)
|
1.
|
Parties To This Agreement
|
2.
|
What You Will Receive Regardless of Whether You Enter Into This Agreement
|
a.
|
Your regular base pay (less applicable withholding) through February 15, 2019; and
|
b.
|
If you are currently enrolled and participating in the Company’s medical/dental/vision benefits, your coverage will extend until the end of February 2019
(the month in which your separation from Axovant takes place.) Thereafter, you will be able to continue as a member of the Company’s Group Health Plans at your expense in accordance with the terms of those plans, as well as COBRA, for the legally required benefit continuation period. You will be receiving a separate letter explaining your rights and responsibilities with regard to electing your COBRA benefits; and
|
c.
|
Accrued vested benefits under any applicable retirement plans offered by the Company. You will receive information directly from Fidelity and you may direct questions to them at 1-800-603-4015; and
|
d.
|
Reimbursement for all approved business-related expenses incurred up to your last day of employment consistent with established travel and expense policies; and
|
e.
|
As long as you direct reference inquiries from potential employers to
Raquel Crystal, Vice President, Human Resources, Axovant Sciences, Inc., 11 Times Square, 33rd Floor, New York, NY 10036, Raquel.Crystal@axovant.com
,
unless otherwise authorized in writing
, the Company will limit information it discloses in response to reference requests to: (1) your dates of employment; and (2) your last position held. Of course, the Company reserves the right to respond truthfully to any compulsory process of law (such as a subpoena) or as otherwise required by law.
|
3.
|
What You Will Receive Only If You Enter Into This Agreement.
|
•
|
You will receive the target annual performance bonus for which you would have been eligible in the performance review cycle ending March 31, 2019 (“Axovant Bonus”), prorated for the period from April 1, 2018 through February 15, 2019. The Axovant Bonus will be paid to you as soon as practicable following the day eight days following your execution of the Agreement, provided you do not revoke the Agreement under Section 24. Your receipt of the Axovant Bonus is also expressly contingent on your continued cooperation with the Company, as set forth in Section 16 of this Agreement; and
|
•
|
You will receive the modifications to your outstanding Axovant options, as described in Section 4.
|
4.
|
Modifications That Will Be Made To Outstanding Axovant Options Only If You Enter Into and Abide by the Terms of This Agreement
|
•
|
You will vest in your time-vesting Options in accordance with the current vesting schedule through to your Termination Date. In addition, if, on January 31, 2019, you have completed part of a vesting period, a pro rata portion of the time-vesting Options that would have vested on the next vesting date will vest on an accelerated basis, based on the number of days completed in that vesting period through to January 31, 2019. For example, if you last vested in a tranche of an Option grant on December 15, 2018, and you will vest in another 6.25% of the Option grant on March 15, 2019, you will have completed 47 days of the 90-day vesting period for that next tranche by January 31, 2019. Therefore, you will be treated as having vested in another 47/90 of the 6.25% tranche on January 31, 2019. The balance of that tranche (43/90 of the 6.25% tranche) will not be subject to prorated vesting and therefore will be forfeited, along with all other unvested Options.
|
•
|
You will vest in your performance-based Options to the extent that the stock price performance criteria under your Options have been met on or before your Termination Date.
|
•
|
Under the terms of the Incentive Plan and your Option grant agreements and notices, the exercise period for your vested Options generally expires three months after the termination of your Continuous Service, which would be May 15, 2019. However, this exercise period will be extended by nine months (for a total of 12 months following your Termination Date). As a result, you may exercise your vested Options through February 15, 2020, the one-year anniversary of your Termination Date. You acknowledge that, as a result of this extension, any Options that qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended (whether time-vesting or performance-based), will cease to qualify as incentive stock options immediately prior to your Termination Date.
|
5.
|
How To Enter Into This Agreement.
|
a.
|
You must sign and date the Agreement and the attached Form of Acknowledgement. Signing and dating the Agreement and Form of Acknowledgment is how you “Execute” the Agreement.
|
b.
|
You must return the Executed Agreement to me on or before
March 29, 2019
, (unless such period is extended in writing by the Company). If the Company does not receive the signed and dated Agreement and Form of Acknowledgement by that date, the offer will be deemed withdrawn, this Agreement will not take effect and you will not receive the benefits described in Section 3 or Section 4.
|
c.
|
You must comply with the terms and conditions of this Agreement.
|
6.
|
Your Acknowledgments.
|
•
|
The benefits in Section 3 and Section 4 are more than any benefits that you are otherwise promised or entitled to receive under any policy, plan, handbook or practice of the Company or any prior offer letter, agreement or understanding between the Company and you.
|
•
|
Your post-employment obligations under your offer letter, employment agreement, and any non-disclosure, confidentiality and restrictive covenant agreements between you and the Company or any of the Releasees, as defined below, shall remain in full force and effect, and you acknowledge and re-affirm those obligations.
|
•
|
You understand and agree that the opportunity created in relation to the cenobomate asset while you were employed by Axovant is Axovant’s corporate opportunity and you have fiduciary and contractual obligations to Axovant with respect to such corporate opportunity, until and unless you accept and commence employment with Arvelle. Therefore, you acknowledge and agree not to accept employment with or participate in any activity related to the cenobomate asset, other than as an employee of Arvelle, without the express written consent of Axovant.
|
•
|
Your outstanding stock options (the “Options”) previously granted to you under the Axovant Sciences Ltd. 2015 Equity Incentive Plan and the applicable award agreements shall be modified in accordance with Section 4.
|
•
|
Except for the items set forth in Section 2 of this Agreement, which you will receive regardless of whether you Execute this Agreement, the Company does not owe you anything except for what it is obligated to do by the terms this Agreement.
|
•
|
You have no legal entitlement to reemployment with the Company and its affiliates, and you waive and release any right to be considered for employment or reemployment with the Company and its affiliates, and/or the Company and its affiliates from any liability for any failure or refusal to hire you or engage you to perform services
|
•
|
During your employment with the Company, you did not violate any federal, state, or local law, statute, or regulation while acting within the scope of your employment with the Company, nor did you violate any material provision of a Company policy (collectively, “Violations”).
|
•
|
You are not aware of any Violation(s) committed by a Company employee, vendor, or customer acting within the scope of his/her/its employment or business with the Company that have not been previously reported to the Company; or to the extent you are aware of any such unreported Violation(s), you will, prior to your execution of this Agreement, immediately report such Violation(s) to the Company.
|
7.
|
YOU ARE RELEASING AND WAIVING CLAIMS
|
•
|
shareholders
|
•
|
officers, directors, employees, attorneys and agents
|
•
|
subsidiaries, divisions and any and all affiliated and related entities
|
•
|
employee benefit and pension plans or funds
|
•
|
successors and assigns
|
•
|
trustees, fiduciaries and administrators
|
8.
|
YOU ARE AGREEING NOT TO SUE
|
9.
|
Representations Under The FMLA (leave law) And FLSA (wage and hour law).
|
10.
|
You Have Not Already Filed An Action.
|
11.
|
Exceptions To Your Release Of Claims And Covenant Not To Sue.
|
•
|
Enforce the terms of this Agreement; or
|
•
|
Challenge the validity of this Agreement; or
|
•
|
Make any disclosure of information required by law; or
|
•
|
Provide information to, testify before or otherwise assist in any investigation or proceeding brought by, any regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company; or
|
•
|
Provide truthful testimony in any forum; or
|
•
|
Cooperate fully and provide information as requested in any investigation by a governmental agency or commission; or
|
•
|
File a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”); or
|
•
|
File a lawsuit or other action to pursue Claims that arise after you Execute this Agreement.
|
12.
|
Your Continuing Obligations.
|
13.
|
Return Of Property.
|
14.
|
Prior Disclosures.
|
15.
|
Non-Disparagement.
|
16.
|
Confidentiality.
|
17.
|
Duty of Cooperation.
|
18.
|
The Company’s Remedies For Breach.
|
19.
|
Governing Law.
|
20.
|
Successors And Assigns.
|
21.
|
Severability And Construction.
|
22.
|
No Admission.
|
23.
|
Do Not Rely On Verbal Statements.
|
•
|
This Agreement sets forth the complete understanding between the Parties.
|
•
|
This Agreement may not be changed orally.
|
•
|
This Agreement constitutes and contains the complete understanding of the Parties with regard to the end of your employment, and supersedes and replaces all prior oral and written agreements and promises between the Parties, except that, as set forth in Section 12, the obligations concerning confidentiality or post-termination activities remain in full force and effect.
|
•
|
Neither the Company nor any representative (nor any representative of any other company affiliated with the Company), has made any promises to you other than as written in this Agreement. All future promises and agreements must be in writing and signed by both Parties.
|
24.
|
Your Opportunity To Review and Revoke.
|
a.
|
Review Period.
You have
forty-five (45) calendar days
from the day you receive this Agreement to consider the terms of this Agreement, sign it and return it to
Raquel Crystal, Vice President, Human Resources, Axovant Sciences, Inc., 11 Times Square, 33rd Floor, New York, NY 10036, Raquel.Crystal@axovant.com
.
Your opportunity to accept the terms of this Agreement will expire at the conclusion of the forty-five (45) calendar day period if you do not accept those terms before time expires. That means that your opportunity to accept the terms of this Agreement will expire on
March 29, 2019
. You may sign the Agreement in fewer than forty-five (45) calendar days, if you wish to do so. If you elect to do so, you acknowledge that you have done so voluntarily.
Your signature below indicates that you are entering into this Agreement freely, knowingly and voluntarily, with full understanding of its terms.
|
b.
|
Talk To A Lawyer.
During the review period, and before executing this Agreement, the Company advises you to consult with an attorney, at your own expense, regarding the terms of this Agreement.
|
c.
|
Seven Days to Change Your Mind.
You have seven (7) calendar days from the date of signing this Agreement to revoke the Agreement by expressing a desire to do so in writing addressed to
Raquel Crystal, Vice President, Human Resources, Axovant Sciences, Inc., 11 Times Square, 33rd Floor, New York, NY 10036, Raquel.Crystal@axovant.com
.
|
25.
|
We Want To Make Absolutely Certain That You Understand This Agreement.
|
•
|
You have carefully read this Agreement in its entirety;
|
•
|
You have had an opportunity to consider the terms of this Agreement;
|
•
|
You have had an opportunity to consider the terms of this Agreement for at least forty-five (45) calendar days;
|
•
|
You understand that the Company urges you to consult with an attorney of your choosing, at your expense, regarding this Agreement;
|
•
|
You have received an attachment to this Agreement (Exhibit B) that identifies:
|
o
|
the decisional unit, which means the class, unit, or group of individuals covered by the offer of the payment(s) in consideration for signing this release as a part of a group termination;
|
o
|
the factors the Company used to determine who was eligible or selected;
|
o
|
the job titles and ages of all individuals within the decisional unit eligible or selected (Exhibit B-1); and
|
o
|
the job titles and ages of all individuals within the decisional unit who were not selected or made eligible (Exhibit B-2);
|
•
|
You have the opportunity to discuss this Agreement with a lawyer of your choosing, and agree that you had a reasonable opportunity to do so, and he or she has answered to your satisfaction any questions you asked with regard to the meaning and significance of any of the provisions of this Agreement;
|
•
|
You fully understand the significance of all of the terms and conditions of this Agreement; and
|
•
|
You are Executing this Agreement voluntarily and of your own free will and agree to all the terms and conditions contained in this Agreement.
|
1.
|
DEFINITIONS
|
1.1
|
Additional Service Recipient
. “Additional Service Recipient” shall mean any Affiliate of Service Recipient who executes a joinder with the Service Provider, in a form provided by the Service Provider pursuant to which such Affiliate joins as a party to this Agreement and the Service Provider agrees to such joinder.
|
1.2
|
Affiliate
. “Affiliate” shall mean any Person, whether de jure or de facto, other than a Party, that directly or indirectly owns, is owned by or is under common ownership with a Party to the extent of at least fifty (50) percent of the equity having the power to vote on or direct the affairs of the entity, and any Person actually controlled by, controlling, or under common control with a Party.
|
1.3
|
Axovant Disclosure
. “Axovant Disclosure” shall mean (i) any disclosure of information that any Service Recipient is required to make under the Securities Laws or any other laws or regulations obligating such Service Recipient to disclose information or (ii) any document, financial report, or other materials that any Service Recipient files with the Securities and Exchange Commission or any other Government Authority.
|
1.4
|
Confidential Information
. “Confidential Information” includes any information or materials in any form or format owned or controlled by the disclosing party, or entrusted to it by others, including, but not limited to, inventions, technology, formulas, processes, technical data, prototypes, biological or other specimens, unpublished patent applications, research results or plans, notes and notebooks, product or development plans, test results or protocols, market research or analysis, marketing plans, regulatory information, business plans, personnel data, customer or prospects lists, existing or anticipated agreements or relationships with Third Parties, and financial information, that is marked as “proprietary,” or “confidential,” or which would, under the circumstances (even without any such markings), be understood by a reasonable person to be proprietary and nonpublic. Any data generated by Service Provider in connection with the Services will be treated as Confidential Information of the applicable Service Recipient.
|
1.5
|
Costs
. “Costs” shall mean the fully-burdened cost incurred by the Service Provider and its Affiliates during any applicable month to provide the Services. For purposes of this definition, the fully-burdened cost includes without limitation: (i) the costs of any materials used in providing the Services; (ii) the salary, benefits (if any) (including without limitation, medical plans and 401(k) or other retirement plans), and employment taxes (if any) of all the Service Provider’s employees involved in providing such services (excluding, however, any compensation that is provided to an employee or independent contractor in the form of equity instruments, options to acquire stock (stock options), rights with respect to (or determined by reference to) equity instruments or stock options, or any non-cash compensation provided by a third party to an employee or independent contractor); (iii) related overhead expenses (including, without limitation, cost of facilities and utilities costs, insurance, and the cost of all general support, operational and business services); (iv) any and all licensing fees paid or payable to Third Parties for any intellectual property incorporated into such services; and (v) any depreciation, amortization or other cost recovery for financial accounting purposes related to assets of the Service Provider to the extent such assets are used in providing the Services; provided, however, that the fully-burdened cost shall not include costs incurred by the Service Provider to engage a Third Party for the purpose of providing Services pursuant to Section 3.4 of the Agreement.
|
1.6
|
Effective Date
. “Effective Date” shall mean, with respect to ASL, ASI and ASG, the date hereof, and with respect to any Additional Service Recipient, the date of full execution of its joinder.
|
1.7
|
General Works
. “General Works” shall mean any Works or portion(s) thereof (including any models, formats, processes, data, databases, software (whether in source code or object code), or algorithms) that both (i) do not directly relate to any of Service Recipient or its Affiliate’s drug products’ or portfolio candidates’ intellectual property (including any formulation(s), specification(s), dosage(s), indication(s), delivery mechanism(s), manufacturing, development, or commercialization thereof), and (ii) have general applicability to the operation of the business of the Service Provider (including for the purposes of undertaking analytics or improving or enhancing any of the Services or any other services of the Service Provider).
|
1.8
|
Government Authority
. “Government Authority” shall mean any United States or non-United States federal, national, state, territory, provincial or local court, arbitral tribunal, administrative agency or commission or other governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), including any regulatory agency or authority, any securities exchange and any organization or body exercising, or entitled exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature.
|
1.9
|
Marks
. “Marks” shall mean and include trademarks, service marks, trade names, domain names, trade dress, logos, and similar designations, whether registered or unregistered, and all applications and registrations therefor.
|
1.10
|
Party
. “Party” shall mean either the Service Provider or any of the Service Recipients, individually, and “Parties” shall mean the Service Provider and the Service Recipients collectively.
|
1.11
|
Person
. “Person” shall mean and include any individual, corporation, trust, estate, partnership, joint venture, company, association, Government Authority, or any other entity regardless of the type or nature thereof.
|
1.12
|
Representatives
. “Representatives” shall mean the directors, officers, managers, members, employees, agents, partners, service providers, existing or potential financing sources, existing or potential investors, and advisors of a Party and its Affiliates (including, without limitation, attorneys, accountants, consultants, and financial advisors) that receive Confidential Information or have Confidential Information made available to them.
|
1.13
|
Securities Laws
. “Securities Laws” shall mean the Securities Act of 1933 (15 U.S.C. § 77), the Securities Exchange Act of 1934 (15 U.S.C. § 78), the Investment Company Act of 1940 (15 U.S.C. § 80a), and any regulations promulgated thereunder.
|
1.14
|
Service Recipient Works
. “Service Recipient Works” shall mean any Works that both (i) relate to intellectual property or potential intellectual property originating from research and development of any Service Recipient or its Affiliate’s drug products or portfolio candidates, and (ii) arise out of Services provided directly or indirectly (e.g., through an employee, consultant clinical research organization, other vendor or other Third Party engaged by the Service Provider) in connection with such research and development. For clarity, Service Recipient Works shall not include any General Works.
|
1.15
|
Third Party
. “Third Party” shall mean any Person other than a Party or an Affiliate of a Party.
|
1.16
|
Works
. “Works” shall mean any work product, technical knowledge, creations, know-how, formulations, recipes, specifications, rights, devices, drawings, instructions, expertise, trade practices, customer lists, computer data, software (whether in source code or object code), algorithms, analytical and quality data, Marks, copyrights, commercial information, inventions, works of authorship, designs, methods, processes, technology, patterns, techniques, data, patents, trade secrets, related contracts, licenses and agreements and the like, and all other intellectual property, in each case, created, authored, composed, or invented by the Service Provider, whether solely or jointly with others, whether patented, patentable or not, whether in written form or otherwise, in performing the Services or any other of Service Provider’s obligations under this Agreement.
|
1.17
|
Year
. “Year” shall mean the 12-month period ending on March 31.
|
2.
|
ENGAGEMENT
|
2.1
|
Subject to the terms of this Agreement, the Service Recipients hereby engage the Service Provider to perform the services it requires from among those set forth on
Exhibit A
attached hereto (the “
Services
”). Any additional services requested by the Service Recipients that are not included within the Services shall, if mutually agreed upon by the Parties, each in its sole discretion, be negotiated and included in this Agreement through written amendments to
Exhibit A
hereto. The scope of the Service Provider’s authority shall be specifically limited to those activities outlined in this Agreement.
|
2.2
|
Each Service Recipient agrees to provide reasonable assistance to, and to cooperate reasonably and in good faith with, the Service Provider with respect to the performance and receipt of the Services. Each Service Recipient shall perform (or cause to be performed) such actions and deliver (or cause to be delivered) to the Service Provider such reports, information, and other materials, in each case, as reasonably requested by the Service Provider in furtherance of the performance of the Services or as otherwise necessary for the Service Provider to perform the Services in an effective manner or to comply with any obligations imposed on it under applicable law or by any Government Authority. Without limiting the foregoing, each Service Recipient will (and will cause its Affiliates to) cooperate with, and provide reasonable assistance to, the Service Provider in connection with any communications with or investigations, inquiries, audits, or other requests for information issued by any Government Authority.
|
2.3
|
Each Service Recipient acknowledges and agrees that the Service Provider’s performance of the Services is subject to the cooperation of such Service Recipient and the timely performance of certain actions and timely delivery of certain reports, information, and other materials by such Service Recipient necessary to enable the performance of the Services. In furtherance of the foregoing, each Service Recipient agrees that the Service Provider shall not be deemed to be in breach of any of its obligations hereunder to the extent that any failure of the Service Provider to perform such obligations is caused by any failure or delay of a Service Recipient in such performance or delivery.
|
2.4
|
Each Service Recipient agrees with the Service Provider that such Service Recipient shall not, and shall cause its Affiliates not to, resell any of the Services to any Person whatsoever or to permit the use of the Services by any Person otherwise than as expressly contemplated by this Agreement or expressly agreed in advance in writing by the Service Provider.
|
3.
|
RELATIONSHIP OF THE PARTIES
|
3.1
|
The Service Provider, on one hand, and each Service Recipient, on the other hand, are each independent contractors and not joint venturers, partners, agents, or representatives of the other. The Service Provider shall perform the Services for the Service Recipients under this Agreement as an independent contractor and neither the Service Provider nor its employees, subcontractors or agents shall be deemed to be agents, servants or employees of any Service Recipient, nor shall the Service Provider and any Service Recipient be deemed or construed solely by this Agreement to be partners or joint venturers. The Service Provider shall have exclusive control over the direction and conduct of its employees in carrying out the activities required under this Agreement.
|
3.2
|
Neither the Service Provider nor its employees, subcontractors or agents shall have the authority to (i) negotiate the terms of or execute contracts and agreements of any Service Recipient outside of agreed guidelines, except as agreed pursuant to this Agreement or other arrangements, or in furtherance of the purposes and activities contained herein or therein; (ii) hire personnel for any Service Recipient; (iii) exercise binding authority with respect to the operations of any Service Recipient; (iv) make binding recommendations to any Service Recipient; (v) make decisions or have decision-making rights with respect to any Service Recipient; (vi) hold itself out as having the authority to bind or conclude contracts on behalf of any Service Recipient or (vii) perform Services for any Service Recipient that are not covered by this Agreement except as mutually agreed.
|
3.3
|
The Service Provider and its employees, subcontractors or agents shall have the authority, in connection with the provision of the Services to a Service Recipient, to, (i) provide advice, assistance, and recommendations to each such Service Recipient with respect to the operation of the business of the Service Recipient; (ii) make recommendations on key points of contracts; (iii) participate in discussions on contracts and agreements; (iv) arrange transactions between each such Service Recipient and other parties, provided that the Service Provider does not make any actual, binding decisions for the Service Recipient; and (v) contact banks in connection with raising capital for each such Service Recipient. Each Service Recipient reserves the right to make all decisions with regard to such matters upon which the Service Provider has rendered advice, assistance, or recommendations.
|
3.4
|
Engagement of Third Parties
. For purposes of performing Services under this Agreement, the Service Provider may engage such Persons (including employees, consultants, clinical research organizations, vendors and other Third Parties) as it deems necessary or desirable;
provided, however
, that the Service Provider shall remain responsible for the performance of all such Services and shall be considered to engage with such Persons in its own name and on its own behalf.
|
3.5
|
Use of Certain Systems
. Each Service Recipient acknowledges and agrees that, in order to receive certain of the Services, such Service Recipient may be required to use certain systems or technology that are the same as, that integrate with, or that are otherwise compatible with the systems and technology used by the Service Provider in performing the Services. Each Service Recipient further acknowledges and agrees that in using such system or technology, it will abide by the policies and procedures established by Service Provider governing the use of that system and technology. With respect to each Service requested by a Service Recipient, the Service Provider will notify the Service Recipient in writing of any such system and technological requirements. If, after reviewing the system and technological requirements, the Service Recipient chooses to have Service Provider perform the requested Service, the Service Recipient shall implement such systems and/or technology at its sole expense. The Parties acknowledge and agree that, if a Service Recipient fails to implement such systems and technology, then the Service Provider shall have no obligation to perform the applicable Services unless and until such Service Recipient implements such systems and technology.
|
4.
|
FEES AND EXPENSES
|
4.1
|
Each Service Recipient shall pay the Service Provider a fee in accordance with
Exhibit B
attached hereto for the Services provided to such Service Recipient hereunder. The fees specified in
Exhibit B
attached hereto shall be reviewed and may be updated from time to time by the Parties. Fees for Services performed by the Service Provider will be billed by the Service Provider to the applicable Service Recipient on a monthly basis. All other costs for Third Party services shall be billed, by or on behalf of the Service Provider, to the applicable Service Recipient, in such manner and format and with such supporting information as the Parties may reasonably agree from time to time. Payment for undisputed invoices received by the applicable Service Recipient shall be due within sixty (60) days after the billing date. Any fees and expenses not paid by the due date thereof shall accrue interest at the safe harbor interest rate based on the applicable Federal rate as set forth in U.S. Treasury Regulations Section 1.482-2(a)(2)(iii)(B). All fees and expenses shall be invoiced and payable in U.S. dollars.
|
4.2
|
Yearly Reconciliation
. The Parties shall perform a yearly reconciliation for the compensation amounts paid as follows:
|
a.
|
Administrative Services Yearly Reconciliation
.
|
i.
|
As soon as reasonably practicable following the close of each Year during the Term of this Agreement, the Parties will calculate the total service fee with respect to the activities listed in
Exhibit A
, subsection 1 (“
Administrative and Support Services
”) owing under this Agreement by each Service Recipient for the Year (the “
Exhibit B Administrative Services Fees
”) by calculating the Service Provider’s Costs with respect to such Services provided to such Service Recipient and applying the mutually agreed mark-up percentage for such Services determined in accordance with
Exhibit B
, and adding the amount of any third-party costs reimbursable under
Exhibit B
paragraph (c) that relate to such Services. As soon as reasonably practicable following the close of each Year, the Parties shall also calculate the total amount of service fees actually paid by such Service Recipient for the Year under
Section 4.1
with respect to the activities listed in
Exhibit A
, subsection 1 (“Administrative and Support Services”), adding the amount of any third-party costs reimbursable under
Exhibit B
paragraph (c) that relate to such Services (the “
Actual Administrative Services Fees
”).
|
ii.
|
If, for any Year, the total Actual Administrative Services Fees paid by a Service Recipient is greater than the
Exhibit B
Administrative Services Fees for such Service Recipient, there shall be deemed to exist an excess of service fee in an amount equal to the difference between the total Actual Administrative Services Fees paid by such Service Recipient and the total
Exhibit B
Administrative Services Fees for such Service Recipient for the Year (hereinafter “
Administrative Services Excess
”).
|
iii.
|
If, for any Year, the total Actual Administrative Services Fees paid by a Service Recipient is less than the total
Exhibit B
Administrative Services Fees for such Service Recipient, there shall be deemed to exist a shortfall in an amount equal to the difference between the total
Exhibit B
Administrative Services Fees for such Service Recipient and the total Actual Administrative Services Fees paid by such Service Recipient (hereinafter “
Administrative Services Shortfall
”).
|
b.
|
Other Services Yearly Reconciliation
.
|
i.
|
As soon as reasonably practicable following the close of each Year during the Term of this Agreement, the Parties will calculate the total service fee with respect to the activities listed in
Exhibit A
, subsection 2 (“
Other Services
”) owing under this Agreement by each Service Recipient for the Year (the “
Exhibit B Other Services Fees
”) by calculating the Service Provider’s Costs with respect to such Services provided to such Service Recipient and applying the mutually agreed mark-up percentage for such Services determined in accordance with
Exhibit B
, and adding the amount of any third-party costs reimbursable under
Exhibit B
paragraph (c) that relate to such Services. As soon as reasonably practicable following the close of each Year, the Parties shall also calculate the total amount of service fees actually paid by each Service Recipient for the Year under
Section 4.1
with respect to the activities listed in Exhibit A, subsection 1 (“Other Services”), adding the amount of any third-party costs reimbursable under
Exhibit B
paragraph (c) that relate to such Services (the “
Actual Other Services Fees
”).
|
ii.
|
If, for any Year, the total Actual Other Services Fees paid by a Service Recipient is greater than the
Exhibit B
Other Services Fees for such Service Recipient, there shall be deemed to exist an excess of service fee in an amount equal to the difference between the total Actual Other Services Fees paid by such Service Recipient and the total
Exhibit B
Other Services Fees for such Service Recipient for the Year (hereinafter “
Other Services Excess
”).
|
iii.
|
If, for any Year, the total Actual Other Services Fees paid by a Service Recipient is less than the total
Exhibit B
Other Services Fees for such Service Recipient, there shall be deemed to exist a shortfall in an amount equal to the difference between the total
Exhibit B
Other Services Fees for such Service Recipient and the total Actual Other Services Fees paid by such Service Recipient (hereinafter “
Other Services Shortfall
”).
|
c.
|
Settlement of Excess or Shortfall Amounts
.
|
i.
|
If, for any Year, (1) the sum of the Administrative Services Shortfall for a Service Recipient and the Other Services Shortfall for such Service Recipient exceeds (2) the sum of the Administrative Services Excess for such Service Recipient and the Other Services Excess for such Service Recipient (such excess amount, the “
Net Shortfall
”), such Service Recipient shall pay such Net Shortfall to the Service Provider within thirty (30) days after the
Exhibit B
Administrative Services Fees,
Exhibit B
Other Services Fees, Actual Administrative Services Fees, and Actual Other Services Fees have been calculated for such Year.
|
ii.
|
If, for any Year, (1) the sum of the Administrative Services Excess for a Service Recipient and the Other Services Excess for such Service Recipient exceeds (2) the sum of the Administrative Services Shortfall for such Service Recipient and the Other Services Shortfall for such Service Recipient (such excess amount, the “
Net Excess
”), the Service Provider shall treat such Net Excess, in whole or in part, as an overpayment to the Service Provider that must be repaid to such Service Recipient within thirty (30) days after the end of the Year.
|
4.3
|
Withholding
. The Service Recipients shall be entitled to deduct from any payments to the Service Provider the amount of any withholding taxes with respect to such amounts payable, or any taxes in each case required to be withheld by the applicable Service Recipient to the extent that such Service Recipient pays to the appropriate Government Authority on behalf of the Service Provider such taxes, levies, or charges. Such Service Recipient shall, upon the request of the Service Provider, deliver to the Service Provider proof of payment of all such taxes, levies, and other charges and the appropriate documentation that is necessary to obtain a tax credit, to the extent such tax credit can be obtained.
|
5.
|
ACCESS TO BOOKS AND RECORDS
|
6.
|
CONFIDENTIAL INFORMATION
|
6.1
|
Obligations.
The Parties acknowledge that, from time to time, one Party (the “
Disclosing Party
”) may disclose to another Party (the “
Receiving Party
”) Confidential Information. The Receiving Party shall retain such Confidential Information in confidence and shall not disclose such Confidential Information to any Third Parties other than:
|
a.
|
in connection with the performance or receipt of the Services, as applicable;
|
b.
|
in connection with the purposes or activities contemplated in (i) this Agreement or (ii) any other written agreement entered into by and between the Parties; or
|
c.
|
to the Receiving Party’s or its Affiliates' Representatives, provided that such Persons owe an obligation of confidence to the Receiving Party that is no less protective than the terms and conditions contained herein.
|
6.2
|
In the event that a Receiving Party or its Representatives are required by any governmental, quasi-governmental or regulatory entity, any judicial body or any legal process to disclose any Confidential Information, the Receiving Party shall provide the Disclosing Party with prompt notice of any such requirement (unless prohibited by applicable law, rule or regulation or the entity, body or process requiring such disclosure) so that the Disclosing Party may in its sole discretion seek a protective order or other appropriate remedy, each at the Disclosing Party’s sole expense, and/or waive compliance with the provisions of this Agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the Disclosing Party, the Receiving Party or any of its Representatives are nonetheless, as advised by counsel, legally compelled to disclose Confidential Information, the Receiving Party and its Representatives may, without liability hereunder, disclose only that portion of Confidential Information or discussion information related to Confidential Information which such counsel advises the Receiving Party or its Representatives is legally required to be disclosed,
provided
that, upon request by the Disclosing Party, the Receiving Party shall use commercially reasonable efforts to preserve the confidentiality of Confidential Information, including, without limitation, by cooperating with the Disclosing Party at the Disclosing Party’s sole expense to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded Confidential Information upon such required disclosure. Notwithstanding anything in this Agreement to the contrary, either Party and its Representatives may disclose Confidential Information, without notice, a protective order or other remedy solely where such disclosure is in connection with a routine audit or examination by, or a blanket document request from, a regulatory or self-regulatory authority, bank examiner or auditor that does not reference the other Party
provided
that the auditor is advised of the confidential nature of the Confidential Information.
|
6.3
|
Exceptions.
Notwithstanding anything to the contrary contained herein, the term Confidential Information shall not include information that, and nothing in this Agreement shall prevent the disclosure by the Receiving Party, or its Representatives of Confidential Information that:
|
a.
|
Prior to the transmittal thereof to the Receiving Party was of general public knowledge;
|
b.
|
Becomes, subsequent to the time of transmittal to the Receiving Party, a matter of general public knowledge otherwise than as a consequence of a breach by the Receiving Party of any obligation under this Agreement;
|
c.
|
Is made public by the Disclosing Party;
|
d.
|
Was in the possession of the Receiving Party or its Representatives in documentary form prior to the time of disclosure thereof to the Receiving Party by the Disclosing Party, and is held by Receiving Party free of any obligation of confidence to the Disclosing Party or any Third Party;
|
e.
|
Is received in good faith from a Third Party who, to the best of the Receiving Party’s knowledge, did not obtain the same from the Disclosing Party and who imposed no obligation of secrecy on the Receiving Party with respect to such information; or
|
f.
|
Can be demonstrated to be independently developed by the Receiving Party or its Representatives without use or benefit of or reference to the Confidential Information.
|
6.4
|
No Unauthorized Use
. The Receiving Party shall refrain from using or exploiting any and all Confidential Information for any purposes or activities other than in connection with:
|
a.
|
the performance or receipt of the Services, as applicable;
|
b.
|
those purposes or activities contemplated in (i) this Agreement or (ii) any other written agreement entered into by and between the Parties;
|
c.
|
corporate or financial transactions, including securing financing, any contemplated merger, acquisition, or sale of all or substantially all of the Receiving Party’s business, equity or assets, or an initial public offering of, or any investment in, the Receiving Party provided that any use thereof is subject to obligations of confidence that are no less protective than the terms and conditions contained herein; or
|
d.
|
the Receiving Party’s compliance with any obligations imposed on Receiving Party under applicable law or by any Government Authority.
|
6.5
|
Residuals
. Notwithstanding anything to the contrary in this Agreement regarding Confidential Information, neither Party nor its Affiliates (including its employees, subcontractors, consultants and agents) shall be prohibited or enjoined from utilizing general knowledge, skills and experience, concepts, know-how and techniques retained in the unaided memory of an individual and acquired as a result of such individual’s authorized access to the other Party’s Confidential Information during the course of the performance or receipt of the Services provided that none of such retained general knowledge, skills and experience, concepts, know-how and techniques include any trade secrets of the other Party.
|
6.6
|
Survival
. The Parties’ obligations under this
Article 6
shall survive the termination of this Agreement for any reason whatsoever.
|
7.
|
OWNERSHIP OF AND LICENSE TO SERVICE RECIPIENT WORKS
|
7.1
|
Ownership
. The Service Provider agrees that all right, title and interest in and to any and all Service Recipient Works will be owned exclusively by the applicable Service Recipient immediately and automatically upon creation, authoring, composition, or invention thereof. All Service Recipient Works, as applicable, shall be considered “works made for hire” to the extent permitted under applicable copyright law and will be considered the sole property of the Service Recipients immediately and automatically upon creation, authoring, composition, or invention thereof. To the extent such Service Recipient Works are not considered “works made for hire,” the Service Provider hereby assigns to the applicable Service Recipient, and the applicable Service Recipient hereby receives, all of the Service Provider’s entire right, title, and interest to such Service Recipient Works, including all copyrights, patents and trade secrets therein, effective immediately and automatically upon creation, authoring, composition, or invention thereof. The Service Provider agrees, at the applicable Service Recipient’s expense, to execute any documents reasonably requested by such Service Recipient or any successor in interest to such Service Recipient, at any time in relation to such assignment. The Service Provider further acknowledges and agrees that any and all derivative works, developments, or improvements based on the Service Recipient Works that also constitute Service Recipient Works, shall also be deemed Service Recipient Works and all right, title and interest therein shall be exclusively owned by the applicable Service Recipient pursuant to the foregoing immediately and automatically upon creation, authoring, composition, or invention thereof. The Service Provider shall cooperate with the applicable Service Recipient and any of its Affiliates, at the applicable Service Recipient’s expense (whether during or after the term of this Agreement), in the confirmation, registration, protection and enforcement of the rights and property of the Service Recipients and their successors in interest in such Service Recipient Works. The Service Provider shall not at any time do or cause to be done, or fail to do or cause to be done, any act or thing, directly or indirectly, contesting or in any way impairing any Service Recipient’s right, title, or interest in the Service Recipient Works. Every use of any Service Recipient Works (and any derivative works, developments, or improvements based on the Service Recipient Works) by the Service Provider shall inure to the benefit of the applicable Service Recipient. For clarity, notwithstanding anything contained herein to the contrary, exclusive ownership of any Works other than Service Recipient Works vests in and remains with the Service Provider, and the Service Provider has and shall retain all right, title and interest in and to all such Works (including all General Works). To the extent that any such Works (including General Works) are incorporated into or otherwise required to use or exploit any Service Recipient Works, Service Provider agrees to grant and hereby grants, and will cause its Affiliates to grant, the Service Recipients a perpetual, worldwide, irrevocable, fully paid-up, royalty-free, transferrable, sublicensable, non-exclusive license under such Works to use, execute, reproduce, display, perform, distribute, prepare derivative works of and otherwise exploit all Service Recipient Works provided, or required to be provided, by Service Provider to the Service Recipients under this Agreement.
|
7.2
|
License
. Each of the Service Recipients hereby grants to the Service Provider a non-exclusive, royalty-free, fully-paid up, worldwide right and license, subject to section 12.1, to all intellectual property rights therein or arising therefrom (a) to use the Service Recipient Works and any other intellectual property provided by each such Service Recipient to the Service Provider solely in connection with the performance of the Services under this Agreement; and (b) notwithstanding anything contained herein to the contrary, to use any and all data provided to, accessed by, or collected by the Service Provider, in whole or in part, in performing the Services (including any data in any Service Recipient Works or Confidential Information) for analytics purposes and/or for purposes of improving or enhancing any of the Services or the operation of the business of the Service Provider generally (including any other Services of the Service Provider); provided, however, that any data that constitutes the Confidential Information of any Service Recipient must be anonymized, de-identified or aggregated, subject to policies that are consistent with the applicable data privacy and security laws – which policies are reasonably acceptable to Service Recipient. Furthermore, Service Provider shall not distribute such data externally without the prior consent of the Service Recipient. The Service Provider agrees that all uses of any Marks included in the Service Recipient Works pursuant to this license are subject to and shall comply with
Article 8
hereof. The rights and license granted in this Section 7.2 may be sublicensed, assigned or otherwise transferred to Affiliates of Service Provider which provide Services to Service Provider in furtherance of the purposes and activities contained herein, in connection with the performance of Services or as a result of a merger, acquisition, sale of all or substantially all of the Service Provider’s business, equity or assets or other business combination.
|
8.
|
USE OF TRADEMARKS
|
9.
|
AXOVANT DISCLOSURES; ETC.
|
9.1
|
The Service Recipients shall have ultimate authority over, and complete and total responsibility for, any and all Axovant Disclosures. For the avoidance of doubt, this includes all decisions regarding (i) whether to make or not make a Axovant Disclosure; (ii) the contents of any Axovant Disclosure; or (iii) whether any Axovant Disclosure is complete, accurate, or complies with applicable legal requirements.
|
9.2
|
The Service Provider shall have no authority over or responsibility for any Axovant Disclosure. For the avoidance of doubt, the Service Provider will not (and will not have the authority to): (i) approve or certify the accuracy or completeness of any Axovant Disclosure; (ii) make any public statements or disclosures on behalf of any Service Recipient; (iii) make, or provide any advice for the Service Recipients to make, any decisions regarding when a Axovant Disclosure is required or whether any Axovant Disclosure complies with applicable law.
|
9.3
|
The Service Provider has no authority to make any statements or disclosure on behalf of any Service Recipient in the disclosures of the Service Recipient, and no Service Recipient will attribute any statements in any Axovant Disclosure to the Service Provider or any of the Service Provider’s employees (except to the extent the employee is an officer, director or employee of Service Recipient and then only in such employee’s capacity as an officer, director or employee of Service Recipient).
|
9.4
|
Third-Party Information and U.S. Defend Trade Secrets Act
.
|
a.
|
During the Term and thereafter, neither Party will improperly use or disclose to the other any confidential, proprietary or secret information of such Party’s former clients or any other person, and such Party will not bring any such information onto the other Party’s property or place of business.
|
b.
|
Notwithstanding the foregoing, the U.S. Defend Trade Secrets Act of 2016 (“
DTSA
”) provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (iii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.
|
10.
|
CERTAIN REGULATIONS
|
10.1
|
Reporting of Compensation
.
|
10.2
|
Insider Trading
.
|
11.
|
COOPERATION REGARDING THE PHARMACEUTICAL QUALITY SYSTEM AND COMPLIANCE
|
11.1
|
To the extent that the Service Recipient seeks Services related to its quality management systems, the Parties agree to cooperate and coordinate as appropriate concerning the quality systems, to enter into a Quality Agreement, and to adopt, implement and maintain at all times while this Services Agreement is in effect, quality standards, as periodically updated, that are consistent with (and no less restrictive than) the Service Provider’s quality standards; provided that such Service Provider quality standards are reasonably necessary or appropriate to comply with applicable rules and industry regulations.
|
11.2
|
Each Party further agrees to notify the other Parties if it identifies any quality systems or compliance issues that could reasonably expected to adversely impact the provision or receipt of Services or performance under the provisions of this Agreement, and to cooperate and coordinate as appropriate in addressing any such issues.
|
12.
|
INDEMNIFICATION; LIMITATION OF LIABILITY
|
12.1
|
Service Provider Indemnity
. The Service Provider, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Recipients and their officers, employees and directors, as the case may be (“
Recipient Indemnified Parties
”), harmless from and against any and all losses, demands, damages, liabilities, interest, awards, judgments, settlements and compromises relating to any Third Party claims, actions or causes of action, or suits, and all reasonable attorney’s fees and other fees and expenses in connection therewith (“
Losses
”) which may be incurred by a Recipient Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the provision of the Services, except to the extent that such Losses are the result of:
|
a.
|
the combination of the Services with any other product or service;
|
b.
|
any technology, materials, information, directions, or specifications provided by such Recipient Indemnified Party or the performance of the Services in accordance with the foregoing;
|
c.
|
any conduct requested or instructed by such Recipient Indemnified Party; or
|
d.
|
the gross negligence or willful misconduct of such Recipient Indemnified Party.
|
12.2
|
Service Recipient Indemnity
. Each Service Recipient, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Provider and its Affiliates and each of their officers, employees and directors, as the case may be (“
Provider Indemnified Parties
”), harmless from and against any and all Losses which may be incurred by a Provider Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the receipt of the Services by the Service Recipient, except to the extent that either: (a) such Losses are the result of the gross negligence or willful misconduct of such Provider Indemnified Party, or (b) such Losses are indemnifiable under Section 12.1 (Service Provider Indemnity).
|
12.3
|
The Service Provider’s aggregate liability under this Agreement for any cause whatsoever, and regardless of the form of action, whether in contract or in tort, shall be limited to the payments made by the applicable Service Recipient under this Agreement for the specific Service that allegedly caused or was related to the Losses during the twelve (12) month period prior to the date the Losses were first incurred. In no event shall the Service Provider be liable for any Losses caused by any Service Recipient’s failure to perform its obligations under this Agreement.
|
12.4
|
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR AT LAW OR IN EQUITY AND EXCEPT TO THE EXTENT THAT ANY THIRD PARTY IS CONTRACTUALLY OBLIGATED TO AND DOES INDEMNIFY THE LIABLE PARTY THEREFOR AND SUCH REMEDIES MAY BE PASSED THROUGH TO THE OTHER PARTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY OR ANY OTHER PERSON (INCLUDING DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, ACTIONS OF THIRD PARTIES OR ANY OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR THE PERFORMANCE OR THE FAILURE TO PERFORM THE SERVICES.
|
13.
|
TERM AND TERMINATION
|
13.1
|
Term
. This Agreement shall commence on the Effective Date and continue until terminated by a Party in accordance with this
Section 13.1
(the “
Term
”). The Service Provider may terminate this Agreement at its discretion by giving written notice to the Service Recipients at least ninety (90) days before the proposed termination date. Each Service Recipient may terminate this Agreement solely with respect to itself at its discretion by giving written notice to the Service Provider at least ninety (90) days before the proposed termination date.
Article 1
,
Article 5
,
Article 6
,
Article 7
,
Section 9.4
,
Article 10
,
Article 12
,
Section 13.2
and
Article 15
shall survive the termination of this Agreement. Each Service Recipient hereby specifically agrees and acknowledges that all obligations of the Service Provider to provide any and all Services shall immediately cease upon termination of this Agreement. The Service Provider hereby specifically agrees and acknowledges that all of its rights to use Marks pursuant to
Article 8
of this Agreement shall cease after a reasonable and mutually-agreed wind-down period commencing upon termination of this Agreement. To the extent permitted by applicable law, no Party shall be liable to another Party for, and each Party hereby expressly waives any right to, any termination compensation of any kind or character whatsoever, to which such Party may be entitled solely by virtue of termination of this Agreement.
|
13.2
|
Rights and Duties on Termination
. Upon termination of this Agreement for any reason, each Party shall cease all use of the other Parties’ Confidential Information, and the Service Recipients shall pay the Service Provider all accrued and unpaid fees for Services performed through the date of termination.
|
14.
|
COMPLIANCE WITH LAWS
|
14.1
|
General Compliance
. The Parties shall at all times strictly comply with all applicable laws, rules, regulations, and governmental orders, now or hereafter in effect, relating to their performance of this Agreement. Each Party further agrees to make, obtain, and maintain in force at all times during the term of this Agreement, all filings, registrations, reports, licenses, permits, and authorizations (collectively, “
Authorizations
”) required under applicable law, regulation, or order for such Party to perform its obligations under this Agreement. Each Service Recipient shall provide the Service Provider with such assistance as the Service Provider may reasonably request in making or obtaining any such Authorizations.
|
15.
|
GENERAL PROVISIONS
|
15.1
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Notices
. Any and all notices, elections, offers, acceptances, and demands permitted or required to be made under this Agreement shall be in writing, signed by the Party giving such notice, election, offer, acceptance, or demand and shall be delivered personally, by messenger, courier service, telecopy, first class mail or similar transmission, to the Party, at its address on file with the Party giving such notice, election, offer, acceptance or demand or at such other address as may be supplied in writing. The date of personal delivery or the date of mailing, as the case may be, shall be the date of such notice, election, offer, acceptance, or demand.
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15.2
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Force Majeure
. If the performance of any part of this Agreement by a Party, or of any obligation under this Agreement (other than an obligation to pay money), is prevented, restricted, interfered with, or delayed by reason of any cause beyond the reasonable control of the Party liable to perform, unless conclusive evidence to the contrary is provided, the Party so affected shall, on giving written notice to the other Parties, be excused from such performance to the extent of such prevention, restriction, interference, or delay, provided that the affected Party shall use its reasonable efforts to avoid or remove such causes of nonperformance and shall continue performance with the utmost dispatch whenever such causes are removed. When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be required in order to arrive at an equitable solution.
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15.3
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Successors and Assigns
. This Agreement may not be assigned or otherwise conveyed by any Party without the prior written consent of the other Parties; provided however that such prior written consent will not be required for an assignment to an Affiliate of a Party. This Agreement shall be binding on and inure to the benefit of the Parties hereto and their respective successors, successors in title and assigns to the extent that such assignment is permitted under this paragraph.
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15.4
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Entire Agreement, Amendments
. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, and communications between the Parties, whether oral or written, relating to the same subject matter. No change, modification, or amendment of this Agreement shall be valid or binding on the Parties unless such change or modification shall be in writing signed by the Party or Parties against whom the same is sought to be enforced.
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15.5
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Remedies Cumulative
. The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which the Party may be lawfully entitled.
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15.6
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Other Persons
. Nothing in this Agreement shall be construed to prevent or prohibit the Service Provider from providing services to any other Person or from engaging in any other business activity.
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15.7
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Not for the Benefit of Third Parties
. This Agreement is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any Third Party.
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15.8
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Further Assurances
. Each Party hereby covenants and agrees that it shall execute and deliver such deeds and other documents as may be required to implement any of the provisions of this Agreement.
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15.9
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No Waiver
. The failure of any Party to insist on strict performance of a covenant hereunder or of any obligation hereunder shall not be a waiver of such Party’s right to demand strict compliance therewith in the future, nor shall the same be construed as a novation of this Agreement.
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15.10
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Integration
. This Agreement constitutes the full and complete agreement of the Parties.
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15.11
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Captions
. Titles or captions of articles and paragraphs contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision hereof.
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15.12
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Construction
. Whenever required by the context, the singular number shall include the plural, the plural number shall include the singular, and the gender of any pronoun shall include all genders. If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). The term “includes” or “including” shall mean “including without limitation.” The words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular section or article in which such words appear. The use of “or” is not intended to be exclusive unless expressly indicated otherwise.
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15.13
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Counterparts
. This Agreement may be executed in multiple copies, each one of which shall be an original and all of which shall constitute one and the same document, binding on the Parties, and each Party hereby covenants and agrees to execute all duplicates or replacement counterparts of this Agreement as may be required.
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15.14
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Governing Law; Arbitration
. This Agreement shall be governed by, and construed and enforced in accordance with, the Laws of the State of New York, without regard to the provisions governing conflict of laws. Any dispute, controversy or claim between the Parties to this Agreement, including any claim arising out of, in connection with, or in relation to the interpretation, performance, breach, or termination thereof, shall be resolved exclusively and finally by confidential binding arbitration. The seat, or legal place, of arbitration shall be New York, New York. The language of the arbitration shall be English. The arbitration shall be administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules in force when the Notice of Arbitration is submitted in accordance with such Rules. Each Party shall select one person to act as arbitrator and the two selected shall select a third arbitrator, who shall act as president of the panel. Where there are multiple claimants or multiple respondents, the multiple claimants, jointly, and the multiple respondents, jointly, shall select the party-appointed arbitrators. Except as may be required by law, to comply with a legal duty, or to pursue a legal right, neither a Party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of the Parties. Nothing herein shall prevent a Party from seeking provisional measures from any court of competent jurisdiction, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. Each Party shall consent, for purposes of provisional measures or the enforcement of any arbitral award, to the non-exclusive jurisdiction of the state and federal courts located in New York, New York, and each Party shall not assert that such courts constitute forum non-conveniens. The award shall be final and binding on the Parties. Judgment on the award may be entered in any court of competent jurisdiction.
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15.15
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Computation of Time
. Whenever the last day for the exercise of any privilege or the discharge of any duty hereunder shall fall on a Saturday, Sunday, or any public or legal holiday, whether local or national, the Party having such privilege or duty shall have until 5:00 p.m. (EST or, if in effect in New York, EDT) on the next succeeding business day to exercise such privilege, or to discharge such duty.
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15.16
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Severability
. In the event any provision, clause, sentence, phrase, or word hereof, or the application thereof in any circumstances, is held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder hereof, or of the application of any such provision, sentence, clause, phrase, or word in any other circumstances.
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15.17
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Costs and Expenses
. Unless otherwise provided in this Agreement, each Party shall bear all fees and expenses incurred in performing its obligations under this Agreement.
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15.18
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Provisions of Law
. A reference in this Agreement to a provision of law, regulation, rule, official directive, request, or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory, or other authority or organization is a reference to that provision as amended or re-enacted currently or in the future.
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15.19
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Meaning in Notices
. Unless a contrary indication appears, a term used in any notice given under or in connection with this Agreement has the same meaning in that notice as in this Agreement.
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15.20
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No Fiduciary Duties
. Each Party shall not have any fiduciary obligations or duties to the other Parties by reason of this Agreement.
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IN WITNESS WHEREOF
, the Parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written.
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AXOVANT GENE THERAPIES LTD.
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ROIVANT SCIENCES, INC.
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/s/ Mathew Bazley
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/s/ Matthew Gline
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By:
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Mathew Bazley
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By:
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Matthew Gline
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Title:
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Authorized Officer
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Title:
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CFO
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Date:
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June 10, 2019
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Date:
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June 11, 2019
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AXOVANT SCIENCES, INC.
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AXOVANT SCIENCES GMBH
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/s/ Gregory Weinhoff
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/s/ Pavan Cheruvu, M.D.
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By:
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Gregory Weinhoff
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By:
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Pavan Cheruvu, M.D.
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Title:
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Authorized Officer
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Title:
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Director
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Date:
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June 10, 2019
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Date:
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June 10, 2019
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1.
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Administrative and Support Services
. Various administrative and supportive services, which may include, but are not limited to:
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2.
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Other Services
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(a)
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The applicable Service Recipient shall reimburse the Service Provider for its Costs, excluding Third Party costs as provided in (c), incurred in providing the
Administrative and Support Services
described in
Exhibit A
to such Service Recipient or in making, obtaining, and maintaining in force the Authorizations as described in
Section 14.1
for such Service Recipient and shall further pay the Service Provider a mark-up on such costs. The mark-up shall be based on the mark-up percentage that the Parties mutually agree is consistent with the financial returns of independent companies performing similar services. The Parties shall review and (if necessary) update the mark-up percentage on an annual basis.
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(b)
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The applicable Service Recipient shall reimburse the Service Provider for its Costs, excluding third-party costs as provided in (c), incurred in providing the
Other Services
described in
Exhibit A
to such Service Recipient, and shall further pay the Service Provider a mark-up on such costs. The mark-up shall be based on the mark-up percentage that the Parties mutually agree is consistent with the financial returns of independent companies performing similar services. The Parties shall review and (if necessary) update the mark-up percentage on an annual basis.
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(c)
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If the Service Provider engages a Third Party pursuant to
Section 3.4
hereof, the applicable Service Recipient shall reimburse the Service Provider for all reasonable and actual out-of-pocket costs incurred by the Service Provider in connection with such engagement to the extent such Service Recipient is the beneficiary of the services performed by such Third Party.
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1.
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DEFINITIONS
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1.1
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Additional Service Recipient
. “Additional Service Recipient” shall mean any Affiliate of Service Recipient who executes a joinder with the Service Provider, in a form provided by the Service Provider pursuant to which such Affiliate joins as a party to this Agreement and the Service Provider agrees to such joinder.
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1.2
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Affiliate
. “Affiliate” shall mean any Person, whether de jure or de facto, other than a Party, that directly or indirectly owns, is owned by or is under common ownership with a Party to the extent of at least fifty (50) percent of the equity having the power to vote on or direct the affairs of the entity, and any Person actually controlled by, controlling, or under common control with a Party.
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1.3
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Axovant Disclosure
. “Axovant Disclosure” shall mean (i) any disclosure of information that any Service Recipient is required to make under the Securities Laws or any other laws or regulations obligating such Service Recipient to disclose information or (ii) any document, financial report, or other materials that any Service Recipient files with the Securities and Exchange Commission or any other Government Authority.
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1.4
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Confidential Information
. “Confidential Information” includes any information or materials in any form or format owned or controlled by the disclosing party, or entrusted to it by others, including, but not limited to, inventions, technology, formulas, processes, technical data, prototypes, biological or other specimens, unpublished patent applications, research results or plans, notes and notebooks, product or development plans, test results or protocols, market research or analysis, marketing plans, regulatory information, business plans, personnel data, customer or prospects lists, existing or anticipated agreements or relationships with Third Parties, and financial information, that is marked as “proprietary,” or “confidential,” or which would, under the circumstances (even without any such markings), be understood by a reasonable person to be proprietary and nonpublic. Any data generated by Service Provider in connection with the Services will be treated as Confidential Information of the applicable Service Recipient.
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1.5
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Costs
. “Costs” shall mean the fully-burdened cost incurred by the Service Provider and its Affiliates during any applicable month to provide the Services. For purposes of this definition, the fully-burdened cost includes without limitation: (i) the costs of any materials used in providing the Services; (ii) the salary, benefits (if any) (including without limitation, medical plans and 401(k) or other retirement plans), and employment taxes (if any) of all the Service Provider’s employees involved in providing such services (excluding, however, any compensation that is provided to an employee or independent contractor in the form of equity instruments, options to acquire stock (stock options), rights with respect to (or determined by reference to) equity instruments or stock options, or any non-cash compensation provided by a third party to an employee or independent contractor); (iii) related overhead expenses (including, without limitation, cost of facilities and utilities costs, insurance, and the cost of all general support, operational and business services); (iv) any and all licensing fees paid or payable to Third Parties for any intellectual property incorporated into such services; and (v) any depreciation, amortization or other cost recovery for financial accounting purposes related to assets of the Service Provider to the extent such assets are used in providing the Services; provided, however, that the fully-burdened cost shall not include costs incurred by the Service Provider to engage a Third Party for the purpose of providing Services pursuant to Section 3.4 of the Agreement.
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1.6
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Effective Date
. “Effective Date” shall mean, with respect to ASG, the date hereof, and with respect to any Additional Service Recipient, the date of full execution of its joinder.
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1.7
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General Works
. “General Works” shall mean any Works or portion(s) thereof (including any models, formats, processes, data, databases, software (whether in source code or object code), or algorithms) that both (i) do not directly relate to any of Service Recipient or its Affiliate’s drug products’ or portfolio candidates’ intellectual property (including any formulation(s), specification(s), dosage(s), indication(s), delivery mechanism(s), manufacturing, development, or commercialization thereof), and (ii) have general applicability to the operation of the business of the Service Provider (including for the purposes of undertaking analytics or improving or enhancing any of the Services or any other services of the Service Provider).
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1.8
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Government Authority
. “Government Authority” shall mean any United States or non-United States federal, national, state, territory, provincial or local court, arbitral tribunal, administrative agency or commission or other governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), including any regulatory agency or authority, any securities exchange and any organization or body exercising, or entitled exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature.
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1.9
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Marks
. “Marks” shall mean and include trademarks, service marks, trade names, domain names, trade dress, logos, and similar designations, whether registered or unregistered, and all applications and registrations therefor.
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1.10
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Party
. “Party” shall mean either the Service Provider or any of the Service Recipients, individually, and “Parties” shall mean the Service Provider and the Service Recipients collectively.
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1.11
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Person
. “Person” shall mean and include any individual, corporation, trust, estate, partnership, joint venture, company, association, Government Authority, or any other entity regardless of the type or nature thereof.
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1.12
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Representatives
. “Representatives” shall mean the directors, officers, managers, members, employees, agents, partners, service providers, existing or potential financing sources, existing or potential investors, and advisors of a Party and its Affiliates (including, without limitation, attorneys, accountants, consultants, and financial advisors) that receive Confidential Information or have Confidential Information made available to them.
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1.13
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Securities Laws
. “Securities Laws” shall mean the Securities Act of 1933 (15 U.S.C. § 77), the Securities Exchange Act of 1934 (15 U.S.C. § 78), the Investment Company Act of 1940 (15 U.S.C. § 80a), and any regulations promulgated thereunder.
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1.14
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Service Recipient Works
. “Service Recipient Works” shall mean any Works that both (i) relate to intellectual property or potential intellectual property originating from research and development of any Service Recipient or its Affiliate’s drug products or portfolio candidates, and (ii) arise out of Services provided directly or indirectly (e.g., through an employee, consultant clinical research organization, other vendor or other Third Party engaged by the Service Provider) in connection with such research and development. For clarity, Service Recipient Works shall not include any General Works.
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1.15
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Third Party
. “Third Party” shall mean any Person other than a Party or an Affiliate of a Party.
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1.16
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Works
. “Works” shall mean any work product, technical knowledge, creations, know-how, formulations, recipes, specifications, rights, devices, drawings, instructions, expertise, trade practices, customer lists, computer data, software (whether in source code or object code), algorithms, analytical and quality data, Marks, copyrights, commercial information, inventions, works of authorship, designs, methods, processes, technology, patterns, techniques, data, patents, trade secrets, related contracts, licenses and agreements and the like, and all other intellectual property, in each case, created, authored, composed, or invented by the Service Provider, whether solely or jointly with others, whether patented, patentable or not, whether in written form or otherwise, in performing the Services or any other of Service Provider’s obligations under this Agreement.
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1.17
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Year
. “Year” shall mean the 12-month period ending on March 31.
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2.
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ENGAGEMENT
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2.1
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Subject to the terms of this Agreement, the Service Recipients hereby engage the Service Provider to perform the services it requires from among those set forth on
Exhibit A
attached hereto (the “
Services
”). Any additional services requested by the Service Recipients that are not included within the Services shall, if mutually agreed upon by the Parties, each in its sole discretion, be negotiated and included in this Agreement through written amendments to
Exhibit A
hereto. The scope of the Service Provider’s authority shall be specifically limited to those activities outlined in this Agreement.
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2.2
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Each Service Recipient agrees to provide reasonable assistance to, and to cooperate reasonably and in good faith with, the Service Provider with respect to the performance and receipt of the Services. Each Service Recipient shall perform (or cause to be performed) such actions and deliver (or cause to be delivered) to the Service Provider such reports, information, and other materials, in each case, as reasonably requested by the Service Provider in furtherance of the performance of the Services or as otherwise necessary for the Service Provider to perform the Services in an effective manner or to comply with any obligations imposed on it under applicable law or by any Government Authority. Without limiting the foregoing, each Service Recipient will (and will cause its Affiliates to) cooperate with, and provide reasonable assistance to, the Service Provider in connection with any communications with or investigations, inquiries, audits, or other requests for information issued by any Government Authority.
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2.3
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Each Service Recipient acknowledges and agrees that the Service Provider’s performance of the Services is subject to the cooperation of such Service Recipient and the timely performance of certain actions and timely delivery of certain reports, information, and other materials by such Service Recipient necessary to enable the performance of the Services. In furtherance of the foregoing, each Service Recipient agrees that the Service Provider shall not be deemed to be in breach of any of its obligations hereunder to the extent that any failure of the Service Provider to perform such obligations is caused by any failure or delay of a Service Recipient in such performance or delivery.
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2.4
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Each Service Recipient agrees with the Service Provider that such Service Recipient shall not, and shall cause its Affiliates not to, resell any of the Services to any Person whatsoever or to permit the use of the Services by any Person otherwise than as expressly contemplated by this Agreement or expressly agreed in advance in writing by the Service Provider.
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3.
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RELATIONSHIP OF THE PARTIES
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3.1
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The Service Provider, on one hand, and each Service Recipient, on the other hand, are each independent contractors and not joint venturers, partners, agents, or representatives of the other. The Service Provider shall perform the Services for the Service Recipients under this Agreement as an independent contractor and neither the Service Provider nor its employees, subcontractors or agents shall be deemed to be agents, servants or employees of any Service Recipient, nor shall the Service Provider and any Service Recipient be deemed or construed solely by this Agreement to be partners or joint venturers. The Service Provider shall have exclusive control over the direction and conduct of its employees in carrying out the activities required under this Agreement.
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3.2
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Neither the Service Provider nor its employees, subcontractors or agents shall have the authority to (i) negotiate the terms of or execute contracts and agreements of any Service Recipient outside of agreed guidelines, except as agreed pursuant to this Agreement or other arrangements, or in furtherance of the purposes and activities contained herein or therein; (ii) hire personnel for any Service Recipient; (iii) exercise binding authority with respect to the operations of any Service Recipient; (iv) make binding recommendations to any Service Recipient; (v) make decisions or have decision-making rights with respect to any Service Recipient; (vi) hold itself out as having the authority to bind or conclude contracts on behalf of any Service Recipient or (vii) perform Services for any Service Recipient that are not covered by this Agreement except as mutually agreed.
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3.3
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The Service Provider and its employees, subcontractors or agents shall have the authority, in connection with the provision of the Services to a Service Recipient, to, (i) provide advice, assistance, and recommendations to each such Service Recipient with respect to the operation of the business of the Service Recipient; (ii) make recommendations on key points of contracts; (iii) participate in discussions on contracts and agreements; (iv) arrange transactions between each such Service Recipient and other parties, provided that the Service Provider does not make any actual, binding decisions for the Service Recipient; and (v) contact banks in connection with raising capital for each such Service Recipient. Each Service Recipient reserves the right to make all decisions with regard to such matters upon which the Service Provider has rendered advice, assistance, or recommendations.
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3.4
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Engagement of Third Parties
. For purposes of performing Services under this Agreement, the Service Provider may engage such Persons (including employees, consultants, clinical research organizations, vendors and other Third Parties) as it deems necessary or desirable;
provided, however
, that the Service Provider shall remain responsible for the performance of all such Services and shall be considered to engage with such Persons in its own name and on its own behalf.
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3.5
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Use of Certain Systems
. Each Service Recipient acknowledges and agrees that, in order to receive certain of the Services, such Service Recipient may be required to use certain systems or technology that are the same as, that integrate with, or that are otherwise compatible with the systems and technology used by the Service Provider in performing the Services. Each Service Recipient further acknowledges and agrees that in using such system or technology, it will abide by the policies and procedures established by Service Provider governing the use of that system and technology. With respect to each Service requested by a Service Recipient, the Service Provider will notify the Service Recipient in writing of any such system and technological requirements. If, after reviewing the system and technological requirements, the Service Recipient chooses to have Service Provider perform the requested Service, the Service Recipient shall implement such systems and/or technology at its sole expense. The Parties acknowledge and agree that, if a Service Recipient fails to implement such systems and technology, then the Service Provider shall have no obligation to perform the applicable Services unless and until such Service Recipient implements such systems and technology.
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4.
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FEES AND EXPENSES
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4.1
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Each Service Recipient shall pay the Service Provider a fee in accordance with
Exhibit B
attached hereto for the Services provided to such Service Recipient hereunder. The fees specified in
Exhibit B
attached hereto shall be reviewed and may be updated from time to time by the Parties. Fees for Services performed by the Service Provider will be billed by the Service Provider to the applicable Service Recipient on a monthly basis. All other costs for Third Party services shall be billed, by or on behalf of the Service Provider, to the applicable Service Recipient, in such manner and format and with such supporting information as the Parties may reasonably agree from time to time. Payment for undisputed invoices received by the applicable Service Recipient shall be due within sixty (60) days after the billing date. Any fees and expenses not paid by the due date thereof shall accrue interest at the safe harbor interest rate based on the applicable Federal rate as set forth in U.S. Treasury Regulations Section 1.482-2(a)(2)(iii)(B). All fees and expenses shall be invoiced and payable in U.S. dollars.
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4.2
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Yearly Reconciliation
. The Parties shall perform a yearly reconciliation for the compensation amounts paid as follows:
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a.
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Administrative Services Yearly Reconciliation
.
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i.
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As soon as reasonably practicable following the close of each Year during the Term of this Agreement, the Parties will calculate the total service fee with respect to the activities listed in
Exhibit A
, subsection 1 (“
Administrative and Support Services
”) owing under this Agreement by each Service Recipient for the Year (the “
Exhibit B Administrative Services Fees
”) by calculating the Service Provider’s Costs with respect to such Services provided to such Service Recipient and applying the mutually agreed mark-up percentage for such Services determined in accordance with
Exhibit B
, and adding the amount of any third-party costs reimbursable under
Exhibit B
paragraph (c) that relate to such Services. As soon as reasonably practicable following the close of each Year, the Parties shall also calculate the total amount of service fees actually paid by such Service Recipient for the Year under
Section 4.1
with respect to the activities listed in
Exhibit A
, subsection 1 (“Administrative and Support Services”), adding the amount of any third-party costs reimbursable under
Exhibit B
paragraph (c) that relate to such Services (the “
Actual Administrative Services Fees
”).
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ii.
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If, for any Year, the total Actual Administrative Services Fees paid by a Service Recipient is greater than the
Exhibit B
Administrative Services Fees for such Service Recipient, there shall be deemed to exist an excess of service fee in an amount equal to the difference between the total Actual Administrative Services Fees paid by such Service Recipient and the total
Exhibit B
Administrative Services Fees for such Service Recipient for the Year (hereinafter “
Administrative Services Excess
”).
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iii.
|
If, for any Year, the total Actual Administrative Services Fees paid by a Service Recipient is less than the total
Exhibit B
Administrative Services Fees for such Service Recipient, there shall be deemed to exist a shortfall in an amount equal to the difference between the total
Exhibit B
Administrative Services Fees for such Service Recipient and the total Actual Administrative Services Fees paid by such Service Recipient (hereinafter “
Administrative Services Shortfall
”).
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b.
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Other Services Yearly Reconciliation
.
|
i.
|
As soon as reasonably practicable following the close of each Year during the Term of this Agreement, the Parties will calculate the total service fee with respect to the activities listed in
Exhibit A
, subsection 2 (“
Other Services
”) owing under this Agreement by each Service Recipient for the Year (the “
Exhibit B Other Services Fees
”) by calculating the Service Provider’s Costs with respect to such Services provided to such Service Recipient and applying the mutually agreed mark-up percentage for such Services determined in accordance with
Exhibit B
, and adding the amount of any third-party costs reimbursable under
Exhibit B
paragraph (c) that relate to such Services. As soon as reasonably practicable following the close of each Year, the Parties shall also calculate the total amount of service fees actually paid by each Service Recipient for the Year under
Section 4.1
with respect to the activities listed in Exhibit A, subsection 1 (“Other Services”), adding the amount of any third-party costs reimbursable under
Exhibit B
paragraph (c) that relate to such Services (the “
Actual Other Services Fees
”).
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ii.
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If, for any Year, the total Actual Other Services Fees paid by a Service Recipient is greater than the
Exhibit B
Other Services Fees for such Service Recipient, there shall be deemed to exist an excess of service fee in an amount equal to the difference between the total Actual Other Services Fees paid by such Service Recipient and the total
Exhibit B
Other Services Fees for such Service Recipient for the Year (hereinafter “
Other Services Excess
”).
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iii.
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If, for any Year, the total Actual Other Services Fees paid by a Service Recipient is less than the total
Exhibit B
Other Services Fees for such Service Recipient, there shall be deemed to exist a shortfall in an amount equal to the difference between the total
Exhibit B
Other Services Fees for such Service Recipient and the total Actual Other Services Fees paid by such Service Recipient (hereinafter “
Other Services Shortfall
”).
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c.
|
Settlement of Excess or Shortfall Amounts
.
|
i.
|
If, for any Year, (1) the sum of the Administrative Services Shortfall for a Service Recipient and the Other Services Shortfall for such Service Recipient exceeds (2) the sum of the Administrative Services Excess for such Service Recipient and the Other Services Excess for such Service Recipient (such excess amount, the “
Net Shortfall
”), such Service Recipient shall pay such Net Shortfall to the Service Provider within thirty (30) days after the
Exhibit B
Administrative Services Fees,
Exhibit B
Other Services Fees, Actual Administrative Services Fees, and Actual Other Services Fees have been calculated for such Year.
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ii.
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If, for any Year, (1) the sum of the Administrative Services Excess for a Service Recipient and the Other Services Excess for such Service Recipient exceeds (2) the sum of the Administrative Services Shortfall for such Service Recipient and the Other Services Shortfall for such Service Recipient (such excess amount, the “
Net Excess
”), the Service Provider shall treat such Net Excess, in whole or in part, as an overpayment to the Service Provider that must be repaid to such Service Recipient within thirty (30) days after the end of the Year.
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4.3
|
Withholding
. The Service Recipients shall be entitled to deduct from any payments to the Service Provider the amount of any withholding taxes with respect to such amounts payable, or any taxes in each case required to be withheld by the applicable Service Recipient to the extent that such Service Recipient pays to the appropriate Government Authority on behalf of the Service Provider such taxes, levies, or charges. Such Service Recipient shall, upon the request of the Service Provider, deliver to the Service Provider proof of payment of all such taxes, levies, and other charges and the appropriate documentation that is necessary to obtain a tax credit, to the extent such tax credit can be obtained.
|
5.
|
ACCESS TO BOOKS AND RECORDS
|
6.
|
CONFIDENTIAL INFORMATION
|
6.1
|
Obligations.
The Parties acknowledge that, from time to time, one Party (the “
Disclosing Party
”) may disclose to another Party (the “
Receiving Party
”) Confidential Information. The Receiving Party shall retain such Confidential Information in confidence and shall not disclose such Confidential Information to any Third Parties other than:
|
a.
|
in connection with the performance or receipt of the Services, as applicable;
|
b.
|
in connection with the purposes or activities contemplated in (i) this Agreement or (ii) any other written agreement entered into by and between the Parties; or
|
c.
|
to the Receiving Party’s or its Affiliates' Representatives, provided that such Persons owe an obligation of confidence to the Receiving Party that is no less protective than the terms and conditions contained herein.
|
6.2
|
In the event that a Receiving Party or its Representatives are required by any governmental, quasi-governmental or regulatory entity, any judicial body or any legal process to disclose any Confidential Information, the Receiving Party shall provide the Disclosing Party with prompt notice of any such requirement (unless prohibited by applicable law, rule or regulation or the entity, body or process requiring such disclosure) so that the Disclosing Party may in its sole discretion seek a protective order or other appropriate remedy, each at the Disclosing Party’s sole expense, and/or waive compliance with the provisions of this Agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the Disclosing Party, the Receiving Party or any of its Representatives are nonetheless, as advised by counsel, legally compelled to disclose Confidential Information, the Receiving Party and its Representatives may, without liability hereunder, disclose only that portion of Confidential Information or discussion information related to Confidential Information which such counsel advises the Receiving Party or its Representatives is legally required to be disclosed,
provided
that, upon request by the Disclosing Party, the Receiving Party shall use commercially reasonable efforts to preserve the confidentiality of Confidential Information, including, without limitation, by cooperating with the Disclosing Party at the Disclosing Party’s sole expense to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded Confidential Information upon such required disclosure. Notwithstanding anything in this Agreement to the contrary, either Party and its Representatives may disclose Confidential Information, without notice, a protective order or other remedy solely where such disclosure is in connection with a routine audit or examination by, or a blanket document request from, a regulatory or self-regulatory authority, bank examiner or auditor that does not reference the other Party
provided
that the auditor is advised of the confidential nature of the Confidential Information.
|
6.3
|
Exceptions.
Notwithstanding anything to the contrary contained herein, the term Confidential Information shall not include information that, and nothing in this Agreement shall prevent the disclosure by the Receiving Party, or its Representatives of Confidential Information that:
|
a.
|
Prior to the transmittal thereof to the Receiving Party was of general public knowledge;
|
b.
|
Becomes, subsequent to the time of transmittal to the Receiving Party, a matter of general public knowledge otherwise than as a consequence of a breach by the Receiving Party of any obligation under this Agreement;
|
c.
|
Is made public by the Disclosing Party;
|
d.
|
Was in the possession of the Receiving Party or its Representatives in documentary form prior to the time of disclosure thereof to the Receiving Party by the Disclosing Party, and is held by Receiving Party free of any obligation of confidence to the Disclosing Party or any Third Party;
|
e.
|
Is received in good faith from a Third Party who, to the best of the Receiving Party’s knowledge, did not obtain the same from the Disclosing Party and who imposed no obligation of secrecy on the Receiving Party with respect to such information; or
|
f.
|
Can be demonstrated to be independently developed by the Receiving Party or its Representatives without use or benefit of or reference to the Confidential Information.
|
6.4
|
No Unauthorized Use
. The Receiving Party shall refrain from using or exploiting any and all Confidential Information for any purposes or activities other than in connection with:
|
a.
|
the performance or receipt of the Services, as applicable;
|
b.
|
those purposes or activities contemplated in (i) this Agreement or (ii) any other written agreement entered into by and between the Parties;
|
c.
|
corporate or financial transactions, including securing financing, any contemplated merger, acquisition, or sale of all or substantially all of the Receiving Party’s business, equity or assets, or an initial public offering of, or any investment in, the Receiving Party provided that any use thereof is subject to obligations of confidence that are no less protective than the terms and conditions contained herein; or
|
d.
|
the Receiving Party’s compliance with any obligations imposed on Receiving Party under applicable law or by any Government Authority.
|
6.5
|
Residuals
. Notwithstanding anything to the contrary in this Agreement regarding Confidential Information, neither Party nor its Affiliates (including its employees, subcontractors, consultants and agents) shall be prohibited or enjoined from utilizing general knowledge, skills and experience, concepts, know-how and techniques retained in the unaided memory of an individual and acquired as a result of such individual’s authorized access to the other Party’s Confidential Information during the course of the performance or receipt of the Services provided that none of such retained general knowledge, skills and experience, concepts, know-how and techniques include any trade secrets of the other Party.
|
6.6
|
Survival
. The Parties’ obligations under this
Article 6
shall survive the termination of this Agreement for any reason whatsoever.
|
7.
|
OWNERSHIP OF AND LICENSE TO SERVICE RECIPIENT WORKS
|
7.1
|
Ownership
. The Service Provider agrees that all right, title and interest in and to any and all Service Recipient Works will be owned exclusively by the applicable Service Recipient immediately and automatically upon creation, authoring, composition, or invention thereof. All Service Recipient Works, as applicable, shall be considered “works made for hire” to the extent permitted under applicable copyright law and will be considered the sole property of the Service Recipients immediately and automatically upon creation, authoring, composition, or invention thereof. To the extent such Service Recipient Works are not considered “works made for hire,” the Service Provider hereby assigns to the applicable Service Recipient, and the applicable Service Recipient hereby receives, all of the Service Provider’s entire right, title, and interest to such Service Recipient Works, including all copyrights, patents and trade secrets therein, effective immediately and automatically upon creation, authoring, composition, or invention thereof. The Service Provider agrees, at the applicable Service Recipient’s expense, to execute any documents reasonably requested by such Service Recipient or any successor in interest to such Service Recipient, at any time in relation to such assignment. The Service Provider further acknowledges and agrees that any and all derivative works, developments, or improvements based on the Service Recipient Works that also constitute Service Recipient Works, shall also be deemed Service Recipient Works and all right, title and interest therein shall be exclusively owned by the applicable Service Recipient pursuant to the foregoing immediately and automatically upon creation, authoring, composition, or invention thereof. The Service Provider shall cooperate with the applicable Service Recipient and any of its Affiliates, at the applicable Service Recipient’s expense (whether during or after the term of this Agreement), in the confirmation, registration, protection and enforcement of the rights and property of the Service Recipients and their successors in interest in such Service Recipient Works. The Service Provider shall not at any time do or cause to be done, or fail to do or cause to be done, any act or thing, directly or indirectly, contesting or in any way impairing any Service Recipient’s right, title, or interest in the Service Recipient Works. Every use of any Service Recipient Works (and any derivative works, developments, or improvements based on the Service Recipient Works) by the Service Provider shall inure to the benefit of the applicable Service Recipient. For clarity, notwithstanding anything contained herein to the contrary, exclusive ownership of any Works other than Service Recipient Works vests in and remains with the Service Provider, and the Service Provider has and shall retain all right, title and interest in and to all such Works (including all General Works). To the extent that any such Works (including General Works) are incorporated into or otherwise required to use or exploit any Service Recipient Works, Service Provider agrees to grant and hereby grants, and will cause its Affiliates to grant, the Service Recipients a perpetual, worldwide, irrevocable, fully paid-up, royalty-free, transferrable, sublicensable, non-exclusive license under such Works to use, execute, reproduce, display, perform, distribute, prepare derivative works of and otherwise exploit all Service Recipient Works provided, or required to be provided, by Service Provider to the Service Recipients under this Agreement.
|
7.2
|
License
. Each of the Service Recipients hereby grants to the Service Provider a non-exclusive, royalty-free, fully-paid up, worldwide right and license, subject to section 12.1, to all intellectual property rights therein or arising therefrom (a) to use the Service Recipient Works and any other intellectual property provided by each such Service Recipient to the Service Provider solely in connection with the performance of the Services under this Agreement; and (b) notwithstanding anything contained herein to the contrary, to use any and all data provided to, accessed by, or collected by the Service Provider, in whole or in part, in performing the Services (including any data in any Service Recipient Works or Confidential Information) for analytics purposes and/or for purposes of improving or enhancing any of the Services or the operation of the business of the Service Provider generally (including any other Services of the Service Provider); provided, however, that any data that constitutes the Confidential Information of any Service Recipient must be anonymized, de-identified or aggregated, subject to policies that are consistent with the applicable data privacy and security laws – which policies are reasonably acceptable to Service Recipient. Furthermore, Service Provider shall not distribute such data externally without the prior consent of the Service Recipient. The Service Provider agrees that all uses of any Marks included in the Service Recipient Works pursuant to this license are subject to and shall comply with
Article 8
hereof. The rights and license granted in this Section 7.2 may be sublicensed, assigned or otherwise transferred to Affiliates of Service Provider which provide Services to Service Provider in furtherance of the purposes and activities contained herein, in connection with the performance of Services or as a result of a merger, acquisition, sale of all or substantially all of the Service Provider’s business, equity or assets or other business combination.
|
8.
|
USE OF TRADEMARKS
|
9.
|
AXOVANT DISCLOSURES; ETC.
|
9.1
|
The Service Recipients shall have ultimate authority over, and complete and total responsibility for, any and all Axovant Disclosures. For the avoidance of doubt, this includes all decisions regarding (i) whether to make or not make an Axovant Disclosure; (ii) the contents of any Axovant Disclosure; or (iii) whether any Axovant Disclosure is complete, accurate, or complies with applicable legal requirements.
|
9.2
|
The Service Provider shall have no authority over or responsibility for any Axovant Disclosure. For the avoidance of doubt, the Service Provider will not (and will not have the authority to): (i) approve or certify the accuracy or completeness of any Axovant Disclosure; (ii) make any public statements or disclosures on behalf of any Service Recipient; (iii) make, or provide any advice for the Service Recipients to make, any decisions regarding when an Axovant Disclosure is required or whether any Axovant Disclosure complies with applicable law.
|
9.3
|
The Service Provider has no authority to make any statements or disclosure on behalf of any Service Recipient in the disclosures of the Service Recipient, and no Service Recipient will attribute any statements in any Axovant Disclosure to the Service Provider or any of the Service Provider’s employees (except to the extent the employee is an officer, director or employee of Service Recipient and then only in such employee’s capacity as an officer, director or employee of Service Recipient).
|
9.4
|
Third-Party Information and U.S. Defend Trade Secrets Act
.
|
a.
|
During the Term and thereafter, neither Party will improperly use or disclose to the other any confidential, proprietary or secret information of such Party’s former clients or any other person, and such Party will not bring any such information onto the other Party’s property or place of business.
|
b.
|
Notwithstanding the foregoing, the U.S. Defend Trade Secrets Act of 2016 (“
DTSA
”) provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (iii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.
|
10.
|
CERTAIN REGULATIONS
|
10.1
|
Reporting of Compensation
.
|
10.2
|
Insider Trading
.
|
11.
|
COOPERATION REGARDING THE PHARMACEUTICAL QUALITY SYSTEM AND COMPLIANCE
|
11.1
|
To the extent that the Service Recipient seeks Services related to its quality management systems, the Parties agree to cooperate and coordinate as appropriate concerning the quality systems, to enter into a Quality Agreement, and to adopt, implement and maintain at all times while this Services Agreement is in effect, quality standards, as periodically updated, that are consistent with (and no less restrictive than) the Service Provider’s quality standards; provided that such Service Provider quality standards are reasonably necessary or appropriate to comply with applicable rules and industry regulations.
|
11.2
|
Each Party further agrees to notify the other Parties if it identifies any quality systems or compliance issues that could reasonably expected to adversely impact the provision or receipt of Services or performance under the provisions of this Agreement, and to cooperate and coordinate as appropriate in addressing any such issues.
|
12.
|
INDEMNIFICATION; LIMITATION OF LIABILITY
|
12.1
|
Service Provider Indemnity
. The Service Provider, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Recipients and their officers, employees and directors, as the case may be (“
Recipient Indemnified Parties
”), harmless from and against any and all losses, demands, damages, liabilities, interest, awards, judgments, settlements and compromises relating to any Third Party claims, actions or causes of action, or suits, and all reasonable attorney’s fees and other fees and expenses in connection therewith (“
Losses
”) which may be incurred by a Recipient Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the provision of the Services, except to the extent that such Losses are the result of:
|
a.
|
the combination of the Services with any other product or service;
|
b.
|
any technology, materials, information, directions, or specifications provided by such Recipient Indemnified Party or the performance of the Services in accordance with the foregoing;
|
c.
|
any conduct requested or instructed by such Recipient Indemnified Party; or
|
d.
|
the gross negligence or willful misconduct of such Recipient Indemnified Party.
|
12.2
|
Service Recipient Indemnity
. Each Service Recipient, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Provider and its Affiliates and each of their officers, employees and directors, as the case may be (“
Provider Indemnified Parties
”), harmless from and against any and all Losses which may be incurred by a Provider Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the receipt of the Services by the Service Recipient, except to the extent that either: (a) such Losses are the result of the gross negligence or willful misconduct of such Provider Indemnified Party, or (b) such Losses are indemnifiable under Section 12.1 (Service Provider Indemnity).
|
12.3
|
The Service Provider’s aggregate liability under this Agreement for any cause whatsoever, and regardless of the form of action, whether in contract or in tort, shall be limited to the payments made by the applicable Service Recipient under this Agreement for the specific Service that allegedly caused or was related to the Losses during the twelve (12) month period prior to the date the Losses were first incurred. In no event shall the Service Provider be liable for any Losses caused by any Service Recipient’s failure to perform its obligations under this Agreement.
|
12.4
|
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR AT LAW OR IN EQUITY AND EXCEPT TO THE EXTENT THAT ANY THIRD PARTY IS CONTRACTUALLY OBLIGATED TO AND DOES INDEMNIFY THE LIABLE PARTY THEREFOR AND SUCH REMEDIES MAY BE PASSED THROUGH TO THE OTHER PARTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY OR ANY OTHER PERSON (INCLUDING DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, ACTIONS OF THIRD PARTIES OR ANY OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR THE PERFORMANCE OR THE FAILURE TO PERFORM THE SERVICES.
|
13.
|
TERM AND TERMINATION
|
13.1
|
Term
. This Agreement shall commence on the Effective Date and continue until terminated by a Party in accordance with this
Section 13.1
(the “
Term
”). The Service Provider may terminate this Agreement at its discretion by giving written notice to the Service Recipients at least ninety (90) days before the proposed termination date. Each Service Recipient may terminate this Agreement solely with respect to itself at its discretion by giving written notice to the Service Provider at least ninety (90) days before the proposed termination date.
Article 1
,
Article 5
,
Article 6
,
Article 7
,
Section 9.4
,
Article 10
,
Article 12
,
Section 13.2
and
Article 15
shall survive the termination of this Agreement. Each Service Recipient hereby specifically agrees and acknowledges that all obligations of the Service Provider to provide any and all Services shall immediately cease upon termination of this Agreement. The Service Provider hereby specifically agrees and acknowledges that all of its rights to use Marks pursuant to
Article 8
of this Agreement shall cease after a reasonable and mutually-agreed wind-down period commencing upon termination of this Agreement. To the extent permitted by applicable law, no Party shall be liable to another Party for, and each Party hereby expressly waives any right to, any termination compensation of any kind or character whatsoever, to which such Party may be entitled solely by virtue of termination of this Agreement.
|
13.2
|
Rights and Duties on Termination
. Upon termination of this Agreement for any reason, each Party shall cease all use of the other Parties’ Confidential Information, and the Service Recipients shall pay the Service Provider all accrued and unpaid fees for Services performed through the date of termination.
|
14.
|
COMPLIANCE WITH LAWS
|
14.1
|
General Compliance
. The Parties shall at all times strictly comply with all applicable laws, rules, regulations, and governmental orders, now or hereafter in effect, relating to their performance of this Agreement. Each Party further agrees to make, obtain, and maintain in force at all times during the term of this Agreement, all filings, registrations, reports, licenses, permits, and authorizations (collectively, “
Authorizations
”) required under applicable law, regulation, or order for such Party to perform its obligations under this Agreement. Each Service Recipient shall provide the Service Provider with such assistance as the Service Provider may reasonably request in making or obtaining any such Authorizations.
|
15.
|
GENERAL PROVISIONS
|
15.1
|
Notices
. Any and all notices, elections, offers, acceptances, and demands permitted or required to be made under this Agreement shall be in writing, signed by the Party giving such notice, election, offer, acceptance, or demand and shall be delivered personally, by messenger, courier service, telecopy, first class mail or similar transmission, to the Party, at its address on file with the Party giving such notice, election, offer, acceptance or demand or at such other address as may be supplied in writing. The date of personal delivery or the date of mailing, as the case may be, shall be the date of such notice, election, offer, acceptance, or demand.
|
15.2
|
Force Majeure
. If the performance of any part of this Agreement by a Party, or of any obligation under this Agreement (other than an obligation to pay money), is prevented, restricted, interfered with, or delayed by reason of any cause beyond the reasonable control of the Party liable to perform, unless conclusive evidence to the contrary is provided, the Party so affected shall, on giving written notice to the other Parties, be excused from such performance to the extent of such prevention, restriction, interference, or delay, provided that the affected Party shall use its reasonable efforts to avoid or remove such causes of nonperformance and shall continue performance with the utmost dispatch whenever such causes are removed. When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be required in order to arrive at an equitable solution.
|
15.3
|
Successors and Assigns
. This Agreement may not be assigned or otherwise conveyed by any Party without the prior written consent of the other Parties; provided however that such prior written consent will not be required for an assignment to an Affiliate of a Party. This Agreement shall be binding on and inure to the benefit of the Parties hereto and their respective successors, successors in title and assigns to the extent that such assignment is permitted under this paragraph.
|
15.4
|
Entire Agreement, Amendments
. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, and communications between the Parties, whether oral or written, relating to the same subject matter. No change, modification, or amendment of this Agreement shall be valid or binding on the Parties unless such change or modification shall be in writing signed by the Party or Parties against whom the same is sought to be enforced.
|
15.5
|
Remedies Cumulative
. The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which the Party may be lawfully entitled.
|
15.6
|
Other Persons
. Nothing in this Agreement shall be construed to prevent or prohibit the Service Provider from providing services to any other Person or from engaging in any other business activity.
|
15.7
|
Not for the Benefit of Third Parties
. This Agreement is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any Third Party.
|
15.8
|
Further Assurances
. Each Party hereby covenants and agrees that it shall execute and deliver such deeds and other documents as may be required to implement any of the provisions of this Agreement.
|
15.9
|
No Waiver
. The failure of any Party to insist on strict performance of a covenant hereunder or of any obligation hereunder shall not be a waiver of such Party’s right to demand strict compliance therewith in the future, nor shall the same be construed as a novation of this Agreement.
|
15.10
|
Integration
. This Agreement constitutes the full and complete agreement of the Parties.
|
15.11
|
Captions
. Titles or captions of articles and paragraphs contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision hereof.
|
15.12
|
Construction
. Whenever required by the context, the singular number shall include the plural, the plural number shall include the singular, and the gender of any pronoun shall include all genders. If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). The term “includes” or “including” shall mean “including without limitation.” The words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular section or article in which such words appear. The use of “or” is not intended to be exclusive unless expressly indicated otherwise.
|
15.13
|
Counterparts
. This Agreement may be executed in multiple copies, each one of which shall be an original and all of which shall constitute one and the same document, binding on the Parties, and each Party hereby covenants and agrees to execute all duplicates or replacement counterparts of this Agreement as may be required.
|
15.14
|
Governing Law; Arbitration
. This Agreement shall be governed by, and construed and enforced in accordance with, the Laws of the State of New York, without regard to the provisions governing conflict of laws. Any dispute, controversy or claim between the Parties to this Agreement, including any claim arising out of, in connection with, or in relation to the interpretation, performance, breach, or termination thereof, shall be resolved exclusively and finally by confidential binding arbitration. The seat, or legal place, of arbitration shall be New York, New York. The language of the arbitration shall be English. The arbitration shall be administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules in force when the Notice of Arbitration is submitted in accordance with such Rules. Each Party shall select one person to act as arbitrator and the two selected shall select a third arbitrator, who shall act as president of the panel. Where there are multiple claimants or multiple respondents, the multiple claimants, jointly, and the multiple respondents, jointly, shall select the party-appointed arbitrators. Except as may be required by law, to comply with a legal duty, or to pursue a legal right, neither a Party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of the Parties. Nothing herein shall prevent a Party from seeking provisional measures from any court of competent jurisdiction, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. Each Party shall consent, for purposes of provisional measures or the enforcement of any arbitral award, to the non-exclusive jurisdiction of the state and federal courts located in New York, New York, and each Party shall not assert that such courts constitute forum non-conveniens. The award shall be final and binding on the Parties. Judgment on the award may be entered in any court of competent jurisdiction.
|
15.15
|
Computation of Time
. Whenever the last day for the exercise of any privilege or the discharge of any duty hereunder shall fall on a Saturday, Sunday, or any public or legal holiday, whether local or national, the Party having such privilege or duty shall have until 5:00 p.m. (EST or, if in effect in New York, EDT) on the next succeeding business day to exercise such privilege, or to discharge such duty.
|
15.16
|
Severability
. In the event any provision, clause, sentence, phrase, or word hereof, or the application thereof in any circumstances, is held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder hereof, or of the application of any such provision, sentence, clause, phrase, or word in any other circumstances.
|
15.17
|
Costs and Expenses
. Unless otherwise provided in this Agreement, each Party shall bear all fees and expenses incurred in performing its obligations under this Agreement.
|
15.18
|
Provisions of Law
. A reference in this Agreement to a provision of law, regulation, rule, official directive, request, or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory, or other authority or organization is a reference to that provision as amended or re-enacted currently or in the future.
|
15.19
|
Meaning in Notices
. Unless a contrary indication appears, a term used in any notice given under or in connection with this Agreement has the same meaning in that notice as in this Agreement.
|
15.20
|
No Fiduciary Duties
. Each Party shall not have any fiduciary obligations or duties to the other Parties by reason of this Agreement.
|
AXOVANT SCIENCES GMBH
|
|
ROIVANT SCIENCES GMBH
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Pavan Cheruvu, M.D.
|
|
|
/s/ Marianne Romeo
|
By:
|
Pavan Cheruvu, M.D.
|
|
By:
|
Marianne Romeo Dinsmore
|
Title:
|
Director
|
|
Title:
|
Managing Director
|
Date:
|
June 10, 2019
|
|
Date:
|
June 11, 2019
|
1.
|
Administrative and Support Services
. Various administrative and supportive services, which may include, but are not limited to:
|
2.
|
Other Services
|
(a)
|
The applicable Service Recipient shall reimburse the Service Provider for its Costs, excluding Third Party costs as provided in (c), incurred in providing the
Administrative and Support Services
described in
Exhibit A
to such Service Recipient or in making, obtaining, and maintaining in force the Authorizations as described in
Section 14.1
for such Service Recipient and shall further pay the Service Provider a mark-up on such costs. The mark-up shall be based on the mark-up percentage that the Parties mutually agree is consistent with the financial returns of independent companies performing similar services. The Parties shall review and (if necessary) update the mark-up percentage on an annual basis.
|
(b)
|
The applicable Service Recipient shall reimburse the Service Provider for its Costs, excluding third-party costs as provided in (c), incurred in providing the
Other Services
described in
Exhibit A
to such Service Recipient, and shall further pay the Service Provider a mark-up on such costs. The mark-up shall be based on the mark-up percentage that the Parties mutually agree is consistent with the financial returns of independent companies performing similar services. The Parties shall review and (if necessary) update the mark-up percentage on an annual basis.
|
(c)
|
If the Service Provider engages a Third Party pursuant to
Section 3.4
hereof, the applicable Service Recipient shall reimburse the Service Provider for all reasonable and actual out-of-pocket costs incurred by the Service Provider in connection with such engagement to the extent such Service Recipient is the beneficiary of the services performed by such Third Party.
|
Name of Subsidiary
|
|
Jurisdiction of Incorporation or Organization
|
Axovant Sciences, Inc.
|
|
Delaware
|
Axovant Holdings Ltd.
|
|
England and Wales
|
Axovant Sciences GmbH
|
|
Switzerland
|
Axovant Sciences America, Inc.
|
|
Delaware
|
Axovant Treasury Holdings, Inc.
|
|
Delaware
|
Axovant Treasury, Inc.
|
|
Delaware
|
Axovant Sciences Europe Ltd.
|
|
Ireland
|
Date: June 11, 2019
|
By:
|
/s/ Pavan Cheruvu
|
|
|
Pavan Cheruvu
|
|
|
Principal Executive Officer
|
Date: June 11, 2019
|
By:
|
/s/ Gregory Weinhoff
|
|
|
Gregory Weinhoff
|
|
|
Principal Financial Officer and Principal Accounting Officer
|
Date: June 11, 2019
|
By:
|
/s/ Pavan Cheruvu
|
|
|
Pavan Cheruvu
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Principal Executive Officer
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Date: June 11, 2019
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By:
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/s/ Gregory Weinhoff
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Gregory Weinhoff
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Principal Financial Officer and Principal Accounting Officer
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