Adverum Biotechnologies, Inc. Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549 FORM 10-K ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission File Number: 001-36579 Adverum Biotechnologies, Inc.(Exact name of registrant as specified in its charter) Delaware 20-5258327(State or other jurisdiction ofincorporation or organization) (IRS EmployerIdentification No.)1035 O’Brien DriveMenlo Park, California 94025(650) 272-6269(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which RegisteredCommon Stock, par value $0.0001 per share Nasdaq Global MarketSecurities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 ofthis chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files): Yes ☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to thebest of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. Seethe definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer☐Accelerated filer☒ Non-accelerated filer☐Smaller reporting company☒ Emerging growth company☒If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒As of June 30, 2018, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $294.8 million, based on the closing price of the registrant’s common stock on the Nasdaq Global Market on June 30, 2018 of $5.30 pershare. Shares of the registrant’s common stock held by each officer and director and each person known to the registrant to own 10% or more of the outstanding common stock of theregistrant have been excluded in that such persons may be deemed affiliates. This determination of affiliate status is not a determination for other purposes.As of February 28, 2019, the registrant had 63,201,009 shares of common stock, par value $0.0001 par value, outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the definitive proxy statement (the Proxy Statement) for the 2019 Annual Meeting of Stockholders of the registrant are incorporated by reference into Part III of thisAnnual Report on Form 10-K. If the Proxy Statement is not filed by April 30, 2019, then the registrant will file an amendment to this Form 10-K on Form 10-K/A to include the PartIII information in this Form 10-K. Table of Contents TABLE OF CONTENTS PagePART I 3 Item 1 Business 33Item 1A Risk Factors 24Item 1B Unresolved Staff Comments 53Item 2 Properties 54Item 3 Legal Proceedings 54Item 4 Mine Safety Disclosures 54 PART II 55 Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 55Item 6 Selected Financial Data 56Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 59Item 7A Quantitative and Qualitative Disclosures About Market Risk 68Item 8 Financial Statements and Supplementary Data 68Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 92Item 9A Controls and Procedures 92Item 9B Other Information 93 PART III 94 Item 10 Directors, Executive Officers and Corporate Governance 94Item 11 Executive Compensation 94Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 94Item 13 Certain Relationships and Related Transactions, and Director Independence 94Item 14 Principal Accountant Fees and Services 94 PART IV 95 Item 15 Exhibits, Financial Statement Schedules 95Item 16 Form 10-K Summary 99 Signatures 100 In this report, unless otherwise stated or the context otherwise indicates, references to “Adverum,” “Adverum Biotechnologies,” “the Company,” “we,” “us,”“our” and similar references refer to Adverum Biotechnologies, Inc., a Delaware corporation. Adverum, the Adverum logo and other trademarks or service marks of Adverum that may appear in this Annual Report on Form 10-K are the property ofAdverum. This Annual Report on Form 10-K contains additional trade names, trademarks, and service marks of other companies. Adverum does not intend its use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement orsponsorship of Adverum by, these other companies, and all such third-party trade names, trademarks, and service marks are the property of their respectiveowners. iTable of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historicalfacts contained in this Annual Report on Form 10-K are forward-looking statements. In some cases, you can identify forward-looking statements byterminology such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,”“contemplate,” “potential” or “continue” or the negative of these terms or other comparable terminology. These forward-looking statements include, but arenot limited to, statements about: •the initiation, progress, timing, costs and results of preclinical studies and any clinical trials for our product candidates; •our ability to advance our viral vector manufacturing and delivery capabilities; •the timing or likelihood of regulatory filings, designations and approvals; •our plans to explore potential applications of our gene therapy platform in other indications in ocular and rare diseases; •our expectations regarding the clinical effectiveness of our product candidates; •our commercialization, marketing and manufacturing capabilities and strategy; •the pricing and reimbursement of our product candidates, if approved; •our expectation regarding the potential market sizes for our product candidates; •our intellectual property position; •the potential benefits of our strategic collaborations and our ability to enter into strategic arrangements; •developments and projections relating to our competitors and our industry; •our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and •the safety, efficacy and projected development timeline and commercial potential of any product candidates.These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that maycause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied bythese forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listedunder the heading “Risk Factors” and elsewhere in this Annual Report on Form 10-K.Any forward-looking statement in this Annual Report on Form 10-K reflects our current views with respect to future events and is subject to these and otherrisks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Given these uncertainties, you should notplace undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management topredict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actualresults to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, theforward-looking events and circumstances discussed in this Annual Report on Form 10-K may not occur and actual results could differ materially andadversely from those anticipated or implied in the forward-looking statements. Except as required by law, we assume no obligation to update or revise theseforward-looking statements for any reason, even if new information becomes available in the future.This Annual Report on Form 10-K contains estimates, projections and other information concerning our industry, our business and the markets for certaindrugs, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Informationthat is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differmaterially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market andother data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data andsimilar sources. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources ofthis type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unlessotherwise expressly stated or the context otherwise requires. iiTable of Contents PART 1.Item 1. BusinessOverviewAdverum is a clinical-stage gene therapy company targeting unmet medical need in ocular and rare diseases. We develop gene therapy product candidatesdesigned to provide durable efficacy by inducing sustained expression of a therapeutic protein. Our core capabilities include clinical development, novelvector discovery, and in-house manufacturing expertise, specifically in scalable process development, assay development, and current Good ManufacturingPractices (“cGMP”) quality control.We are advancing a pipeline of novel gene therapy product candidates designed to treat ocular and rare diseases. Our pipeline of internal programs andpartnered programs is shown below. We are conducting a clinical trial for our most advanced gene therapy candidate ADVM‑022, AAV.7m8-aflibercept, for the treatment of wet age-relatedmacular degeneration (wet AMD). ADVM‑022 uses a proprietary capsid (“AAV.7m8”) to deliver a proprietary expression cassette which expressesaflibercept. ADVM‑022 is administered as a single intravitreal injection and is designed to minimize the treatment burden of repeated anti-VascularEndothelial Growth Factor (“VEGF”) injections, which is the current standard of care for the treatment of wet AMD. In November 2018, we dosed the firstpatient in the ADVM‑022 Phase 1 clinical trial entitled “An Open Label Phase 1 Study of ADVM‑022 (AAV.7m8-aflibercept) in Neovascular (Wet) Age-Related Macular Degeneration (“OPTIC trial”). We expect to provide an update on enrollment from the OPTIC trial in the first half of 2019. In addition, weexpect to provide interim data from the OPTIC trial by the first quarter of 2020.We collaborate with other industry leaders in order to leverage our expertise to develop gene therapy candidates. We have entered into collaborationagreements with Editas Medicine, Inc. (“Editas”) and Regeneron Pharmaceuticals, Inc. (“Regeneron”). In addition, we have licensed the right to useAAV.7m8 to GenSight Biologics S.A. (“GenSight”).Our StrengthsWe believe we have the capabilities, resources, and expertise to enable Adverum to become a leading gene therapy company. These strengths include: •industry-leading development capabilities in adeno- associated virus (“AAV”) technology; •a pipeline of gene therapy product candidates targeting the treatment of ocular and rare diseases; •in-house manufacturing expertise, specifically in scalable process development, assay development, and cGMP quality control; •a growing portfolio of proprietary vectors; •a robust patent portfolio; and •an experienced leadership team with expertise in developing gene therapies.3Table of Contents Our StrategyOur goal is to discover, develop, and commercialize novel gene therapies with the potential to treat patients living with ocular and rare diseases. The keyelements of our strategy to achieve this goal are to: •Target large patient population impacted by wet AMD. There are an estimated 1.2 million individuals in the U.S. and 3 million worldwideliving with wet AMD, and the incidence of new cases is expected to continue to grow significantly as the population ages. We estimate that thestandard-of-care therapies generated in excess of $10 billion worldwide in sales in 2018. •Address unmet medical need by supplanting chronic treatment regimens with a one-time gene therapy treatment. Our gene therapies aredesigned as single-administration treatments to address the unmet needs of patients with ocular and rare diseases. The current standard of care forwet AMD and many rare diseases require frequent injections for the duration of the disease, which represent significant treatment burden forpatients and their care-takers. As an example, for wet AMD, the current standard-of-care treatments require patients to receive intravitrealinjections of anti-VEGF protein every 4-12 weeks, which can be difficult for patients to comply with, leading to loss of vision from underdosing.A single-dose gene therapy has the potential to alleviate this treatment burden. •Pursue indications with well-defined clinical and regulatory paths where possible, to mitigate the risk of the development of our novel genetherapies. We have selected indications that have prior clinical validation, including established endpoints, and defined regulatory paths. Forexample, for wet AMD, aflibercept is an approved standard-of-care treatment, and ADVM‑022 utilizes a proprietary vector designed to providethe same anti-VEGF protein through a single intravitreal injection. We are evaluating whether other ocular diseases with approved anti-VEGFtherapies might also be treated with ADVM‑022. •Advance our earlier-stage research initiatives and leverage our industry-leading capabilities in novel vector development. We leverage ournext-generation AAV-based directed evolution platform to engineer AAV capsids with enhanced tropism for certain tissues and/or improvedantibody neutralization profiles over existing AAV variants. Combining our vectorology and manufacturing expertise, we have the capability togenerate high-quantity recombinant AAV capsid libraries that can be screened in large animals rather than rodents, to maximize applicability ofthe screens to human subjects. We are also focused on discovering improved ubiquitous and cell-specific promoters and expression cassettes tooffer optimal transgene expression target tissues. We plan to use this expertise to expand our pipeline and manage the life cycle of our novelgene therapies. •Collaborate with partners to leverage our industry-leading AAV vector expertise and ocular vector development and product deliverycapabilities. Under a collaboration agreement with Editas Medicine, we are leveraging our proprietary AAV vectors for use with Editas’ leadingCRISPR-based genome editing technologies to treat up to five inherited retinal diseases. Our collaboration agreement with Regeneron providesfor the development of up to eight distinct ocular therapeutic targets and, includes AVA-311 for the treatment of juvenile XLRS. We plan tocontinue to explore ways to work collaboratively with these and potential new partners that may benefit from our capabilities and expertise inAAV vector development and product delivery. •Expand our process development capabilities to support late-stage clinical trials and commercialization. We are investing in a facility whichwill allow us to expand our internal process development capabilities. Our manufacturing process is based on the Baculovirus/Sf9 productionsystem, which has been used for a number of vaccines and recombinant protein therapies approved by the U.S. Food and Drug Administration(“FDA”) and European Medical Agency (“EMA”), and is capable of producing large quantities of AAVs. Our strategy is to develop scalableprocesses to transfer to our cGMP contract manufacturers, commensurate with our stage of development. Our new facility will expand our in-house process development capabilities to support larger, late-stage clinical trials and commercialization.Gene Therapy BackgroundGene therapy is a powerful treatment modality to address disease biology in a targeted and efficient way. With gene therapy, patients receive vectorsencoding therapeutic genes, expressing a therapeutic protein or the functional version of a mutated protein. Instead of providing proteins or other therapiesexternally and dosing them over a long period, gene therapy offers the possibility of dosing once, or a very limited number of times, to achieve a long-term,durable benefit. Once a patient’s cells have incorporated the therapeutic gene, the cells potentially are able to continue to produce the therapeutic protein foryears.Similar to existing classes of protein or biologic therapies such as monoclonal antibodies and drug-antibody conjugates, gene therapy has taken a number ofyears to evolve from a research tool into a viable and compelling treatment modality. There have been several recent advances in gene therapy, including thefollowing:4Table of Contents •Substantial clinical data. Positive data from gene therapy clinical trials have been reported in a variety of indications, including hemophilia,Spinal Muscular Atrophy, X-linked myotubular myopathy, Sanfilippo syndrome, ornithine transcarbamylase deficiency, glycogen storagedisease type 1a, and Duchenne muscular dystrophy, as well as several ocular diseases including biallelic RPE65 mutation-associated retinaldystrophy, choroideremia, and X‑linked retinitis pigmentosa. •Significant investment by biopharmaceutical companies. The modality of gene therapy has received significant interest and investments bybiopharmaceutical companies. Large, global biopharmaceutical companies, such as BioMarin Pharmaceutical Inc., Biogen Idec Inc., CelgeneCorporation, GlaxoSmithKline plc, Hoffmann-La Roche Ltd., Novartis, Regeneron, Sanofi, and Shire Pharmaceuticals Group Plc, have increasedtheir investment in the gene therapy field. Additionally, pure-play gene therapy companies, such as Applied Genetic Technologies Corporation,Audentes Therapeutics, Inc., REGENXBIO Inc., Spark Therapeutics, Inc., Ultragenyx Pharmaceutical Inc., uniQure N.V., Abeona Therapeutics,Nightstar Therapeutics, Sarepta Therapeutics, Solid Biosciences, and Voyager Therapeutics, have attracted recent investment in this growingfield. •Approval of cell and gene therapy products by regulatory authorities. The FDA and EMA have approved several cell and gene therapyproducts. In December 2017, the FDA approved its first AAV vector-based gene therapy product, LUXTURNA™ (voretigene neparvovec-rzyl) forthe treatment of patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy.Our Novel AAV Vector Discovery and Optimization SystemOur next-generation discovery platform is based on vectors derived from AAV, which is a small, non-pathogenic virus, which carry a therapeutic DNA insteadof the viral genes. The resulting vector is used to deliver a gene into a desired cell population, which when expressed, can provide sustained proteinproduction. We believe AAV vectors offer numerous advantages over other viral and non-viral vector technologies used for gene therapy. These advantages,highlighted below, have the potential to allow AAVs to be safe, to be applicable for a variety of indications, and to exhibit long-term efficacy. •Highly-efficient transfer of DNA. AAV vectors offer highly-efficient transfer of DNA to the patient. •Non-pathogenic. Naturally occurring AAV is not known to cause disease in humans. •Non-replicating. Naturally occurring AAV is incapable of replication without co-infection of a helper virus such as adenovirus, herpes virus, orothers. Once inside the host cell, AAV vectors do not replicate, and cannot spread in the absence of co-infection. •Long-term expression. Once incorporated into the host cell, AAV vectors can continue to drive expression of a therapeutic protein for years,making AAV-based gene therapy a compelling treatment modality for diseases requiring frequent chronic treatment regimens. •Low-integrating potential. AAV vector genomes remain mainly as a stable non-integrated episome in the host cell nucleus, mitigating safetyconcerns associated with genomic integration. •Low inflammatory potential. Compared to other vectors used in direct gene therapy approaches, AAV vectors elicit mild inflammatory reactions. •Ability to transduce non-dividing cells. AAV vectors can efficiently transduce non-dividing cells or slow-dividing cells such as retinal cells andhepatocytes, which allow production of the therapeutic protein at the site of the disease (wet AMD) or its natural organ of production (A1AT). •FDA approved. In December 2017, the FDA approved its first AAV vector-based gene therapy product, LUXTURNA (voretigene neparvovec-rzyl)for the treatment of patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy. AAV-derived vectors are a leading vector used in gene therapy. According to the Journal of Gene Medicine, AAV has been used in over 200 clinical trials asof August 2018. As effective as existing AAV vectors are in gene therapy, we believe there are opportunities for improvement. Naturally occurring AAVvariants have evolved with particular characteristics, some of which remain and pose limitations to their use in gene therapy.To create next-generation vectors, we use a multi-step process known as directed evolution. Our directed evolution technology uses a library of engineeredAAV capsid genes, which exhibit different properties and capabilities than naturally occurring AAVs. Once we have created an initial pool of millions ofdifferent AAVs, we screen the AAVs in the pool for novel properties, e.g., specific transduction of a particular cell type, or the capability to evade pre-existingneutralizing immune response. Once capsids with desirable properties are identified, those capsids are screened to create a smaller pool of optimized vectorswhich are further screened until we have identified a select number of engineered AAVs with the characteristics we seek.5Table of Contents Our Product CandidatesWe have a pipeline of novel gene therapy product candidates in development for the treatment of patients with ocular and rare diseases.Ocular DiseasesADVM‑022 for Treatment of Wet AMDMarket for Treating Patients with Wet AMDAge-related macular degeneration (“AMD”) is a progressive disease affecting the retinal cells in the macula, the region of the eye responsible for centralvision. Disease progression results in the death of retinal cells and the gradual loss of vision.Wet AMD is an advanced form of AMD, affecting approximately 10% of patients living with AMD. In patients with wet AMD, blood vessels begin to invadethe space between layers of cells in the retina. These new blood vessels are often leaky, which results in fluid and blood in the retina and causes vision loss.Wet AMD is a leading cause of vision loss in patients over 60 years of age, with a prevalence of approximately 1.2 million individuals in the U.S. and 3million worldwide. The incidence of new cases of wet AMD in the U.S. is approximately 150,000 to 200,000 annually, and this number is expected to growsignificantly as the country’s population ages.Although the underlying molecular causes of wet AMD are not completely known, VEGF is known to play a central role in the growth of new blood vesselsin wet AMD. The current standard-of-care therapies for wet AMD are proteins that bind VEGF and neutralize its activity. We estimate that these standard-of-care therapies generated in excess of $10 billion in sales worldwide in 2018.The standard-of-care therapies for wet AMD can be burdensome, as patients generally require chronic intravitreal injection of anti-VEGF protein every 4-12weeks. Compliance with this regimen can be difficult for patients and their caregivers, leading to compliance deficiencies and loss of vision fromunderdosing.Our Approach for Treating Wet AMDADVM‑022 is our clinical-stage gene therapy product candidate for the treatment of wet AMD. ADVM‑022 uses the AAV.7m8 capsid to deliver a proprietaryexpression cassette expressing aflibercept. ADVM‑022 is administered as a single intravitreal injection and is designed to minimize the treatment burden offrequent injections required for the standard-of-care treatment. The AAV.7m8 capsid was engineered from AAV2 by directed evolution to efficientlytransduce retinal cells following intravitreal injection. The vector carries a vector genome (“vg”) encoding a codon-optimized cDNA of the afliberceptprotein, a current standard of care in wet AMD, under the control of a strong, ubiquitous expression cassette.A number of AAV-based gene therapy products, including LUXTURNA, are designed for subretinal injection. However, we believe intravitreal injection ofgene therapy offers substantial benefits over subretinal injection, including: •intravitreal injection is the current standard of care for wet AMD patients, and more widely used than subretinal injections; •vector delivered by subretinal injection can only access cells near the injection site (the “bleb”), whereas intravitreal injection allows the vector toaccess a larger portion of the retinal surface area; and •subretinal injections require a surgical setting, while intravitreal injections are administered in an outpatient visit. Advancing the Clinical Development of ADVM‑022 for Wet AMDWe initiated the ADVM‑022 Phase 1 clinical trial entitled “An Open Label Phase 1 Study of ADVM 022 (AAV.7m8-aflibercept) in Neovascular (Wet) Age-Related Macular Degeneration – [OPTIC]” (“the OPTIC trial”) with the first patient dosed in November 2018. The OPTIC trial is a multi-center, open-label, Phase 1, dose-escalation trial, designed to assess the safety and tolerability of a single intravitreal injection ofADVM‑022 in patients with wet AMD who are responsive to anti-VEGF treatment. The trial is expected to enroll 18 patients and evaluate three doses ofADVM‑022; first dose: 6 × 1011 vg/eye, second dose: 2 × 1012 vg/eye, and third dose: 6 × 1012 vg/eye. Subjects will be administered a taperingprophylactic corticosteroid regimen. The primary endpoint of the trial is the safety and tolerability of ADVM‑022 at 24 weeks after a single intravitrealinjection. Secondary endpoints include changes in best-corrected visual acuity (“BCVA”), measurement of central retinal thickness (“CRT”), as well as meannumber of rescue anti-VEGF injections and percentage of patients needing rescue anti-VEGF injections. The OPTIC trial will last approximately twoyears. A diagram of the OPTIC trial is shown below.6Table of Contents We expect to provide an update on enrollment from the OPTIC trial in the first half of 2019. In addition, we expect to provide interim data from the OPTICtrial by the first quarter of 2020.In September 2018, we received Fast Track designation from the FDA for ADVM‑022 for wet AMD. The Fast Track designation is given to drugs andbiologics that treat serious conditions and fill unmet medical need. Fast Track designation makes ADVM‑022 for wet AMD eligible for several benefits,including more frequent meetings with the FDA to discuss our development plan, more frequent written communications, and rolling review our BiologicalLicense Application (“BLA”).Beyond wet AMD, we are evaluating whether other ocular diseases with approved anti-VEGF therapies might also be treated with ADVM‑022.Preclinical Proof of Concept for ADVM‑022ADVM‑022 was designed to provide long-term aflibercept expression following intravitreal injection. To evaluate the potential of ADVM‑022 to treat wetAMD, we assessed its efficacy non-human primates (“NHPs”). We observed that a single intravitreal administration of ADVM‑022 provided sustainedexpression of aflibercept for at least two years at levels comparable to those experienced three to four weeks post-injection of aflibercept protein. Further, in alaser-induced choroidal neovascularization model in NHPs, the industry standard model for testing new wet AMD therapies, we observed that a singleintravitreal injection of ADVM‑022 13 months before lasering provided the same level of protection from clinically relevant lesions as an intravitreal bolusof aflibercept at the time of lesioning, the current standard of care. Long-term Aflibercept Expression in Aqueous and Vitreous Humor Following Intravitreal ADVM‑022IVT=intravitreal; OS= oculus sinister; OD= oculus dextrusSource: Angiogenesis, Exudation, and Degeneration Conference, February 2019.7Table of Contents Aflibercept Levels in the Retina ADVM-022 vs. Aflibercept Bolus (1.2 mg)Source: Poster presentation, American Society of Gene and Cell Therapy (ASGCT) 21st Annual Meeting, May 2018Source: Grishanin, et al. “Preclinical Evaluation of ADVM‑022, a Novel Gene Therapy Approach to Treating Wet Age-Related Macular Degeneration.”Molecular Therapy. 2018. DOI:https://doi.org/10.1016/j.ymthe.2018.11.003 Rare DiseasesTreatment of A1AT DeficiencyADVM‑043 is a gene therapy product candidate designed to provide stable, long-term A1AT protein expression for the treatment of A1AT deficiency.Preclinical studies in mice and non-human primates showed that ADVM‑043 provided stable, robust, long-term expression of A1AT protein.In December 2017 we began enrolling patients in the ADVANCE Phase 1/2 Clinical Trial of ADVM‑043 for A1AT deficiency (“the ADVANCE trial”), amulti-center, open-label, dose-escalation study of ADVM‑043 in patients with A1AT deficiency. The ADVANCE trial enrolled a total of six subjects, twosubjects per dose at three doses of ADVM‑043: 1.0 × 1012 vg/kg (8.0 × 1013 vg), 5.0 × 10 12 vg/kg (4.0 × 1014 vg) and 1.5 × 10 13 vg/kg (1.2 × 1015 vg). InNovember 2018, we announced preliminary data from the ADVANCE trial which demonstrate that ADVM‑043 can be safely administered and was welltolerated during a mean follow-up period of 25 weeks post-administration at doses up to 1.5 × 10 13 vg/kg (1.2 × 1015 vg). We observed at total of 15adverse events (AEs), all of which were mild (Grade 1) in severity, except for one serious adverse event (SAE), which was considered Grade 3 in severity butfound to be unrelated to ADVM‑043. Of the 15 adverse events, only two were deemed possibly associated with8Table of Contents ADVM‑043: Two AEs of elevated alanine aminotransferase (“ALT”) (Grade 1, mild). The ALTs normalized within a few days after an increase in prednisonedose. However, A1AT protein expression did not reach a clinically meaningful level, nor was a dose response observed between the three cohorts. Based on data from the ADVANCE trial, we discontinued the development of ADVM‑043, and are conducting additional preclinical studies to evaluatepotential paths forward for development of a product candidate for the treatment of A1AT deficiency. We plan to provide an update on the A1AT deficiency program in the first half of 2019.HAEADVM‑053 is our preclinical gene therapy product candidate for the treatment of HAE. ADVM‑053 is designed to be administered as a single IV injection toprevent HAE attacks. Like ADVM‑043, ADVM‑053 utilizes an AAVrh.10‑based vector, which has been shown to target the liver, which is the natural sourceof C1EI. In preclinical studies, a single IV administration of ADVM‑053 showed robust C1EI protein expression. In a proof-of-concept study, ADVM‑053increased C1EI protein expression above anticipated therapeutic levels. An additional study, in a mouse model of the disease, demonstrated that ADVM‑053decreased vascular permeability. However, due to the lack of clinical efficacy that we observed in ADVM‑043, also an AAVrh.10‑based product candidate,are conducting additional preclinical studies to evaluate potential paths forward for development of a product candidate for the treatment of HAE. We plan to provide an update on the ADVM‑053 program in the first half of 2019. Other Preclinical Product CandidatesIn addition to our lead programs, we are currently utilizing our industry-leading development capabilities for our AAV-based directed evolution platform andare conducting observational studies. We are in the early stages of preclinical development for additional product candidates that we may advance in thefuture.Partnered Program Product CandidatesOur partnered programs include vectors we are developing under collaboration agreements. Under an agreement with Editas we are leveraging our AAV-vectors for use with Editas’ leading Clustered Regularly Interspaced Short Palindromic Repeats (“CRISPR”)-based genome editing technologies to treat up tofive inherited retinal diseases. Our agreement with Regeneron provides for development of up to eight distinct ocular therapeutic targets, which includesAVA-311 for the treatment of juvenile X-Linked Retinoschisis (“XLRS”).We have also licensed to GenSight rights to use AAV.7m8 for GS030 gene therapy encoding channelrhodopsin protein. GenSight has received approval toinitiate a Phase 1/2 trial in retinitis pigmentosa in the U.S., France, and U.K., which began in October 2018.ManufacturingOur AAV vector manufacturing process is based on the Baculovirus Expression Vector System (“BEVS”), which has been used in a number of FDA- andEMA-approved products. This approach is well suited for the production of large quantities of AAVs, as it takes advantage of the efficiency of viral infectioncoupled with the high density and scalability of insect cells grown in serum-free suspension cultures. Compared to the mammalian cell-based approachescommonly used in the field, our manufacturing process is designed to produce higher yields of vectors per manufacturing campaign in a cost-effectivemanner.Our BEVS manufacturing process is presented in the figure below, with the eye as an exemplary target organ. 1)The process begins with two DNA constructs, one encoding the therapeutic protein and the other encoding AAV helper components for the AAVcapsid and vector replication. 2)Each DNA construct is inserted into the genome of a baculovirus to create two types of recombinant baculoviruses. 3)The two baculoviruses are used to transduce Sf9 insect cells, which in turn produce large amounts of AAV vectors containing the therapeutic geneof interest. 4)The transduced Sf9 insect cells are then harvested and treated with a buffer solution to lyse the insect cells and release the AAV vectors. 5)Recovered AAV vectors are then purified to remove unwanted debris. 6)Following purification, the vectors are formulated in a physiological solution and placed in vials. 7)The resulting drug product is ready for use as a therapeutic treatment for the targeted disease (e.g., injection in the eye to treat wet AMD).9Table of Contents BEVS Manufacturing Process Our AAV manufacturing method is industrialized, highly scalable and ready for adaptation for commercial stage. We believe our process provides thefollowing advantages over competing systems: •Industrial-scale biologics production. Our BEVS system can produce quantities of product required at commercial stage by incorporatingscalable, well-established process steps used throughout the industry for biologic products. •Safety advantages. Our BEVS system does not use mammalian cell cultures or tumorigenic cell lines, and the DNA sequences used to allow AAVvector production are inactive in mammalian cells, which lowers the risk of off-target expression from our products in humans. •High yield and low cost. Because of its scalability, our BEVS system allows the production of large quantities of AAV vectors, up to the 2000-liter scale. Production at this scale lowers the unit cost of goods and may enable us to meet global demand for large markets, such as wet AMD. •High purity. Our BEVS system coupled with our proprietary downstream purification process produces a highly pure drug substance. •Precedent regulatory framework. Glybera, an AAV-based gene therapy, and several other vaccines and recombinant protein therapies havebeen approved by the FDA and EMA using a manufacturing process similar to our BEVS technology.Our products are manufactured using proprietary cell banks and a scalable process developed internally that is transferred to approved ContractManufacturing Organizations (“CMOs”). These CMOs produce investigational drugs under cGMP conditions to support our clinical trials. Raw materials ofhighest quality are purchased from various suppliers and are used throughout the manufacturing process.We have entered into a manufacturing technology license agreement with Lonza Houston, Inc. (“Lonza”). The license agreement provides that the partieswill conduct activities to evaluate certain BEVS technology and that we may elect to engage Lonza to manufacture our products. We have also granted toLonza certain licenses to practice the manufacturing technology for products other than those being developed by us, our affiliates or sublicensees.We continue to evaluate new raw material suppliers as well as CMOs with available manufacturing slots, in order to provide manufacturing flexibility. As weprepare for larger, late-stage clinical trials and potential commercialization, we plan to expand our in-house process development capabilities in stages,allowing us to develop larger-scale processes for transfer to our GMP contract manufacturers.CompetitionThe biopharmaceutical industry is characterized by intense and dynamic competition to develop new proprietary technologies and therapies and a strongemphasis on intellectual property. We believe that our single administration, intravitreal approach to the treatment of wet AMD, our AAV-based directedevolution platform, and our expertise in the field of gene therapy provide us with10Table of Contents competitive advantages. However, we face actual or potential competition from various sources, including larger and better-funded pharmaceutical, specialtypharmaceutical, and biotechnology companies, as well as from academic institutions, governmental agencies, and public and private research institutions.Our wet AMD gene therapy ADVM‑022 utilizes a proprietary vector and is administered through a single intravitreal injection and will compete with avariety of therapies currently marketed and in development, including biologics, small molecules and gene therapy. The key factors that contribute tosuccess of any approved product include safety profile, efficacy, mode of administration and cost of goods. Existing anti-VEGF therapies are well-establishedtherapies and are widely accepted by physicians, patients and third-party payers as the standard-of-care treatment of patients with wet AMD. To date, we arenot aware of any treatment that has demonstrated a better benefit to patients than regular anti-VEGF protein delivery.We know of a significant number of product candidates in development for wet AMD, and we group them into four main categories: •biosimilar anti-VEGFs (e.g. FYB201); •combination / add-on therapy for efficacy improvement (e.g. faricimab); •next generation anti-VEGF with quarterly injection (e.g. brolucizumab and abicipar pegol); and •long acting delivery device / gene therapy to lower treatment frequency (e.g. ranibizumab port delivery system)There are several other companies with marketed products or products in development for the treatment of wet AMD. These companies include Allergan,Bayer, Hoffmann-La Roche Ltd., Novartis, and Regeneron. These companies, as well as competitors we may face, either alone or with their partners, for our other product candidates, have substantially greater financial,technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA andother regulatory approvals of treatments, and commercializing those treatments. Accordingly, our competitors may be more successful than us in obtainingapproval for treatments and achieving widespread market acceptance. Our competitors’ treatments may be more effective, or more effectively marketed andsold, than any treatment we may commercialize and may render our treatments obsolete or non-competitive before we can recover the expenses of developingand commercializing any of our treatments.We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available. We expectany treatments that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, convenience of administration anddelivery, price, the level of generic competition and the availability of reimbursement from government and other third-party payers.License and Collaboration AgreementsRegeneronIn May 2014, we entered into a collaboration agreement with Regeneron for an initial period of three years to research, develop and commercialize novelgene therapy products for the treatment of ocular diseases. These products are based on our proprietary viral vectors that express transgenes encodingmolecules that modulate up to a total of eight specified targets, and encoding certain endogenous molecules known to bind to and modulate such targets(such products, including AVA-311, collectively the “Products”). In February 2017, Regeneron exercised its option to extend the research term of thecollaboration agreement for an additional three years, through May 1, 2020.Pursuant to the collaboration agreement, we and Regeneron have been conducting a research program to identify potential Products for a specified timeperiod. Regeneron bears all costs of performing research under the Collaboration Agreement. Regeneron has a right to substitute a certain number of suchtargets and may, subject to a payment to us, expand the collaboration beyond the four initially designated targets to include up to four additional targets, andendogenous molecules known to bind to and modulate such additional targets, in the research program, provided that Adverum is not currently developingthat target.Regeneron has an option, exercisable with respect to all Products containing transgenes expressing molecules that modulate one of the specified targets, toobtain an exclusive, worldwide license to research, develop and commercialize such Products for the treatment, prevention or diagnosis of human disease orother medical disorders. Regeneron may exercise this option prior to the expiration of the term of the research program, within a certain time period after theacceptance for filing with the FDA of the IND for such Products. Regeneron must pay us an option fee each time it exercises an option.Regeneron has the right to submit an IND with the FDA for Products prior to exercising its option. If Regeneron exercises its option for specified Products,Regeneron will be primarily responsible for developing, obtaining and maintaining regulatory approval for, and commercializing such Products.We have a right to co-fund costs of developing, manufacturing and commercializing Products containing transgenes encoding molecules capable ofmodulating a target with respect to which Regeneron has exercised its option, subject to certain exceptions. We may exercise this co-funding right up to twotimes. If we exercise such right, we may elect to bear up to 35% of all development costs incurred for such Products. For any co-funded Products, Regeneron’spayment obligations extend until the Products are no longer sold in the applicable territory. For those Products for which we exercise this option, either partymay opt out of sharing development costs for all Products containing transgenes encoding molecules capable of modulating a protein target, in which casethe other party may11Table of Contents continue to develop and commercialize such Products, subject to the payment of a royalty to the other party ranging from low-single digit to low double-digit royalties. While Regeneron will record all revenue from sales of the co-funded Products, Regeneron will share in the net profits and losses of sales of anyProducts for which we exercised our co-funding right, with each party receiving a share of profits and bearing its share of losses in accordance with the shareof development costs borne by each party for such Product, provided that neither party exercises its opt-out right for such Products.Under the Collaboration Agreement, Regeneron made an initial payment of $8.0 million dollars for collaboration research costs, a one-time option fee and aone-time license grant fee.In addition to the initial payment, Regeneron may make the following payments to us: •Reimbursement for additional collaboration research costs; •Up to $80.0 million in development and regulatory milestones for product candidates directed toward each of the eight therapeutic candidates, fora combined total of up to $640.0 million in potential milestone payments for product candidates directed toward all eight therapeutic targetssubject to the Collaboration Agreement; and •Tiered, low- to mid-single digit royalties on annual net sales, subject to certain adjustments.For each Product, Regeneron’s payment obligations extend until the last to occur of the following: (i) the discontinuation of development of the Product or(ii) once a Product is approved by the FDA, the later of (x) the duration of patent coverage for the Product or (y) ten years after first commercial sale of theProduct in a particular territory.The collaboration agreement will expire with respect to each collaboration target upon expiration of all payment obligations by Regeneron. Thecollaboration agreement may also be terminated (i) by Regeneron at will, either in its entirety or on a target by target basis, upon 30 days’ prior written noticeto us, (ii) by either party, upon written notice in connection with a material breach remaining uncured 60 days after initial written notice, (iii) by us, ifRegeneron challenges the patent rights licensed by us under the collaboration agreement or (iv) by either party, for insolvency of the other party.Under our research, collaboration and license agreement with Regeneron, we are required to have a mutually agreed-on research plan with Regeneron in orderto invoice Regeneron for services performed. We do not currently have a research plan in place, and, consequently, we are not currently receiving anyreimbursements from Regeneron.EditasIn August 2016, we entered into a collaboration, option, and license agreement with Editas pursuant to which we and Editas collaborate on certain studiesusing AAV vectors in connection with Editas’ genome editing technology and we grant to Editas an exclusive option to obtain certain exclusive rights to useour proprietary vectors in up to five ophthalmic indications. We received a $1.0 million non-refundable upfront payment, with $0.5 million of such paymentto be credited against Editas’ obligation to fund research and development costs during the year ended December 31, 2016. Under the terms of the agreement,both we and Editas are subject to exclusivity obligations. In January 2018, we and Editas amended and extended the collaboration, option and licenseagreement. In consideration of extending the agreement, Editas made a one-time payment of $0.5 million to us in February 2018. In June 2018, we andEditas entered into a subsequent amendment to the agreement to extend the Research Period and First Option Exercise Date (each as defined in thecollaboration, option, and license agreement with Editas, as amended).Under the terms of the agreement, as amended, Editas had until November 2018 to exercise the option with respect to a designated initial indication, whichEditas declined to do. With respect to the four other indications, Editas may exercise the option until August 2020, provided that the option will expire inAugust 2019 if Editas has not exercised one option with respect any other indication by such date. Upon Editas’ timely exercise of the option with respect tothe first additional indication for which Editas timely exercises its option, Editas will pay us a $1.5 million fee. Upon each subsequent exercise of the option,Editas will pay us a $1.0 million fee per indication. If Editas elects to develop a product using certain of our proprietary vectors, we will be eligible to receiveup to $15.5 million in development and commercialization milestone payments for such product, and tiered royalties between the mid-single digits and lowteens on net sales of such product, subject to certain adjustments.Unless earlier terminated, the agreement will be in effect until the later of the expiration of the option exercise period or the expiration of the royalty term ofthe last product. At any time after the option is first exercised, Editas may terminate the agreement for convenience in its entirety or on an indication-by-indication or country-by-country basis, upon prior written notice to us. We may also terminate the agreement if Editas challenges our patents relating to ourproprietary vectors and does not withdraw such challenge within a defined period of time. In addition, either party may terminate the agreement with writtennotice upon a bankruptcy of the other party or upon an uncured material breach by the other party.University of CaliforniaGene Therapy for Eye Disease License Agreement: In May 2010, we entered into a license agreement, which was amended in September 2013, with theRegents of University of California (“Regents”). Under the license agreement, the Regents have granted to us an exclusive, even as to the Regents, license,with the right to grant sublicenses, under the Regents’ undivided interest in patent rights covering a method of using recombinant gene delivery vectors fortreating or preventing diseases of the eye, to develop and12Table of Contents commercialize products covered by such patent rights in all fields of use in the U.S. The licensed patent rights are jointly owned by the Regents and ChironCorporation, which was acquired by Novartis AG (“Chiron”), but our license extends only to the Regents’ interest in such patent rights.Under the license agreement, we are obligated to make milestone payments totaling up to $0.9 million upon reaching certain stages of development of thelicensed products for one indication and totaling up to $0.5 million for each subsequent indication for which licensed products are developed, for up to amaximum of two additional indications. Through December 31, 2018, none of these goals had been achieved, and no milestones were payable. The licenseagreement also contains certain royalty payment requirements for net sales of licensed products.This license agreement with the Regents continues in effect for the life of the last-to-expire patent, which we expect to occur in 2020. We expect theagreement to terminate prior to any commercialization of any product candidates to which they apply.AAV.7m8 License Agreement: In June 2013, we entered into an exclusive worldwide sublicensable license agreement with the Regents to certain intellectualproperty related to improved AAV vectors, including the AAV.7m8 capsid. Under this license agreement, we are obligated to make certain de minimislicense payments, certain milestone payments totaling up to $1.0 million upon reaching certain stages of development of the licensed products for a firstindication, and totaling up to $0.5 million for each subsequent indication for which licensed products are developed, for up to a maximum of two additionalindications. In addition, we are obligated to pay Regents royalties on sales of licensed products in the low single-digits, subject to adjustments and minimumthresholds.Unless earlier terminated, this agreement will be in effect on a country-by-country, licensed product-by-licensed product basis until the expiration of the lastclaim of the licensed intellectual property covering the manufacture, use, or sale of such product in such country. We may terminate this agreement in wholeor in party by giving Regents 30 days’ prior written notice. Regents may terminate this agreement for breach by us that remains uncured for 60 days, if webecome insolvent, if we directly or through a third-party file a claim that a licensed patent right is invalid or unenforceable, or if we fail to meet or extend thedate for meeting certain diligence milestones.Cornell UniversityCornell MSAWe were a party to a master service agreement (“MSA”) with Cornell University (“Cornell”) originally established in August 2014 and amended in December2015. Under the MSA, Cornell provided assistance in regulatory affairs, overall project management, and parameter development. The MSA, as amended,provided for Annapurna to pay Cornell $13.3 million ratably over four years for these services as services were performed.In December 2016, we informed Cornell that we decided to terminate the MSA for material breach, effective January 6, 2017. Subsequently, Cornell informedus that it disputes the validity of our termination of the MSA. Although we intend to defend the validity of our termination of the MSA, we recorded $2.0million of estimated costs associated with the termination of the MSA during the year ended December 31, 2017. This MSA included services relating togene therapy programs directed to A1AT deficiency, HAE and severe allergy. Our license agreements with Cornell remained in effect despite termination ofthe MSA.Following termination of the MSA we contracted with a large-scale CMO that complies with cGMP industry standards to produce product quantities forclinical trials and potential commercial supply.Cornell License AgreementsIn December 2015, Annapurna entered into three licensing agreements with Cornell, pursuant to which we have been advancing gene therapy programsADVM‑043, ADVM‑053, and severe allergy, which originally were initiated at the Department of Genetic Medicine at Weill Cornell.A1AT Deficiency License Agreement: Under this agreement, we hold an exclusive license to certain know-how related to A1AT deficiency and rights to anIND application to initiate clinical studies of gene therapy for A1AT.HAE License Agreement: Under this agreement, we hold an exclusive license to certain technology related to HAE and a non-exclusive license to certainother intellectual property related to the HAE program.Allergy License Agreement: Under this agreement, we hold an exclusive license to certain patents related to allergens and a non-exclusive license to certainother technology related to allergens. In October 2018, we notified Cornell of our intent to exercise our right to terminate the Allergy License Agreement,effective January 2019. Across these three license agreements, Cornell is entitled to receive aggregate annual maintenance fees ranging from $30,000 to $0.3 million per year, up to$16.0 million in aggregate milestone payments and royalties on sales in the low single-digits, subject to adjustments and minimum thresholds.We may terminate any of these license agreements for convenience upon ninety days written notice. Cornell may terminate any of the license agreements formaterial breach if such breach is not cured within a specified number of days. Cornell may also terminate the13Table of Contents HAE License Agreement and/or the Allergy License Agreement if we commence any action and file a written claim asserting that any portion of the licensedpatent rights is invalid or unenforceable.Inserm TransfertIn July 2014, we entered into an agreement with Inserm Transfert (“Inserm”) whereby we hold an exclusive license to certain patents to develop andcommercialize products for the treatment of FA and a non-exclusive license to certain other intellectual property related to the FA program. The agreementwas amended in October 2015 to increase the scope of the intellectual property under the licenses. Under this agreement, Inserm is entitled to receive certainde minimis license payments, certain development milestone payments of up to approximately €2.0 million in the aggregate and royalties on sales in the lowsingle-digits, subject to adjustments.Unless earlier terminated, this agreement will be in effect on a country-by-country, licensed product-by-licensed product basis until the later of the expirationof the last claim of the licensed intellectual property which cover the manufacture, use or sale of such product in such country or 10 years after the firstcommercial sale of such product in such country in which such product is sold. Upon a country-by-country and product-by-product basis, we will have a fullypaid up, perpetual, irrevocable license with respect to such product in such country under the licensed intellectual property following expiration of thisagreement with respect to such product in the applicable country. We may terminate this agreement upon 60 days’ prior written notice. Inserm may terminatethis license agreement if Annapurna becomes the subject of a voluntary or involuntary petition in bankruptcy or fails to meet development milestones andsuch failure is not cured within a specified number of days. Inserm may also terminate the license granted to us in a given country if we (i) before regulatoryapproval of a product in any country, have ceased conducting any development of products in all countries for 12 consecutive months or (ii) after regulatoryapproval of a product in a given country, have ceased marketing such product in such country for 12 consecutive months.Pursuant to Section 4.7 of the agreement with Inserm, our acquisition of Annapurna triggered a one-time payment to Inserm of €0.3 million.GenSightOn February 2014, we entered into an agreement with GenSight, in which we granted GenSight a non-exclusive license to our proprietary AAV.7m8 vector todevelop gene therapy products to deliver certain therapeutic transgenes. Under the agreement, we are eligible to receive development, regulatory andcommercial milestones. Also, we are eligible to receive low to mid-single digit royalties on sales of GenSight’s licensed products.GenSight is currently developing GS030, a gene therapy encoding channelrhodopsin protein which incorporates the AAV.7m8 capsid. GenSight has receivedapproval to initiate a Phase 1/2 trial with GS030 to treat retinitis pigmentosa in the U.S., France, and the U.K., which began in October 2018.VirovekOn October 12, 2011, we entered into an agreement with Virovek, Inc. (“Virovek”), in which we received a non-exclusive license to certain Virovektechnology and know-how related to methods and materials for manufacturing AAV. Under the agreement, Virovek is entitled to certain license paymentsand low-single digit royalty payments. This license with Virovek continues in effect until expiration of the last-to-expire patent. Intellectual PropertyOverviewWe strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to the development of ourbusiness, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties. We also rely on tradesecrets relating to our proprietary technology platform and on know-how, continuing technological innovation and in-licensing opportunities to develop,strengthen and maintain our proprietary position in the field of gene therapy that may be important for the development of our business. Additionally, wemay rely on regulatory protection afforded through orphan drug designations, data exclusivity, market exclusivity, and patent term extensions whereavailable.Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for commercially importanttechnology, inventions and know-how related to our business; defend and enforce our patents; preserve the confidentiality of our trade secrets; obtainregulatory exclusivity and operate without infringing the valid enforceable patents and proprietary rights of third parties. Our ability to stop third partiesfrom making, using, selling, offering to sell or importing our products may depend on the extent to which we have rights under valid and enforceablelicenses, patents or trade secrets that cover these activities. In some cases, these rights may need to be enforced by third party licensors. With respect to bothlicensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications orwith respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or14Table of Contents any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing thesame.We own or license more than 100 patent applications pending in the U.S. and foreign jurisdictions, including more than 40 pending applications filed by oron behalf of universities which have granted us exclusive license rights to the technology. In addition, we own or license more than 30 issued patents that arecurrently in force. Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially importantto the development of our business. We seek patent protection in the U.S. and abroad for a variety of technologies, including research tools and methods,AAV-based biological products, methods for treating diseases of interest and methods for manufacturing our AAV-based products. We also intend to seekpatent protection or rely upon trade secret rights to protect other technologies that may be used to discover and validate targets and that may be used toidentify and develop novel biological products. We seek protection, in part, through confidentiality and proprietary information agreements. We are a partyto various other license agreements that give us rights to use specific technologies in our research and development.Company-owned Intellectual PropertyWe own three patent families that are directed to AAV-based compositions and methods for treating or preventing eye diseases associated withneovascularization. Patents and applications in the first of these families relate to compositions and methods for the AAV-based delivery of anti-VEGFproteins, for use in treating neovascular diseases of the eye, including wet AMD, in patients who respond to anti-VEGF protein therapy. Patents in this familyhave issued in the U.S. and the Asia/Pacific region, and corresponding applications are pending in the U.S., elsewhere in North America, Europe, and Asia.Patents in this family are generally expected to expire in 2033, subject to possible patent term extensions. Applications in the second and third of thesefamilies relate to AAV gene therapy for the treatment of wet AMD using the AAV.7m8 vector to deliver ranibizumab or aflibercept. Each family hasapplications pending in the U.S. and corresponding applications pending abroad. Patents that may eventually issue from either of these patent families, ifany, are generally expected to expire in 2037, subject to possible patent term extensions.We also own eight patent families that are directed to various aspects of our proprietary technology platform. One of these families contains issued patents inthe US and Asia, and pending applications in the U.S., elsewhere in North America, Europe, and Asia. The remaining families contain pending U.S.provisional or PCT applications or national phase applications in the U.S., elsewhere in North America, Europe, and Asia. Patents that may eventually issuefrom these families, if any, are generally expected to expire between 2036 and 2038, subject to possible patent term extensions.Licensed Intellectual PropertyWe have obtained both exclusive and non-exclusive licenses to patents directed to both compositions of matter and methods of use and to other intellectualproperty.For example, we have exclusively licensed several families of patents and patent applications that relate to variant rAAV virions having desirablecharacteristics, such as increased infectivity, as well as novel methods to screen for such variants.One patent family directed to improved rAAV virions that we have exclusively licensed in the ocular field includes granted patents in the U.S., as well aselsewhere in North America and Europe, as well as pending patent applications in the U.S. The patents in this family are projected to expire in 2024, subjectto possible patent term extensions.Another patent family directed to improved rAAV virions that we have exclusively licensed includes granted U.S. patents and a pending U.S. patentapplication that are expected to expire in 2031, subject to possible patent term extensions.A third patent family that we have exclusively licensed includes claims directed to the novel AAV.7m8 vector, which allows delivery of transgenes to theretina via intravitreal injection, and which we utilize in our clinical candidate ADVM‑022. This family includes issued patents in the U.S. Correspondingapplications are pending in the U.S. and elsewhere in North America, Asia and the Pacific. Patents that issue from this patent family, if any, are generallyexpected to expire in 2032, subject to possible patent term extensions.We have also nonexclusively licensed rights to a patent family related to the Baculovirus/SF9 production system that includes issued patents in the U.S.,Europe, and Asia. These patents are expected to expire in 2027, subject to possible patent term extensions.We have exclusively licensed a family of patent applications related to gene therapy treatments for HAE, C1-esterase deficiency, which includes pendingU.S. and foreign applications. Patents that grant from this patent family, if any, are generally expected to expire in 2036, subject to possible patent termextensions and adjustments.We have exclusively licensed a family of patents and applications related to the treatment of cardiomyopathy associated with FA. This family includes agranted US patent and pending applications in the U.S. and elsewhere in North America, Europe, Asia, and the Pacific. Patents that grant from this patentfamily, if any, are generally expected to expire in 2033, subject to possible patent term extensions and adjustments.15Table of Contents We have exclusively licensed certain know-how related to gene therapy for A1AT deficiency and rights to an IND to perform clinical studies of gene therapyfor A1AT.Trade Secret ProtectionIn some circumstances we may rely on trade secrets to protect aspects of our technology and product candidates, including aspects for which we do not obtainpatent protection. We seek to protect our trade secrets and confidential information, in part, by entering into confidentiality agreements with our employees,consultants, scientific advisors and contractors. We also seek to preserve the integrity and confidentiality of our confidential information and trade secrets bymaintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in theseindividuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. Inaddition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our consultants, contractors orcollaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how andinventions.Government RegulationIn the U.S., biologic products, including gene therapy products, are primarily regulated under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and thePublic Health Service Act, as well as corresponding implementing regulations promulgated by the FDA. These laws and regulations govern, among otherthings, the testing, manufacturing, safety, purity, potency, efficacy, labeling, packaging, storage, record keeping, distribution, advertising-promotion, post-approval monitoring and reporting, sampling, export and import of biologics products. FDA clearance must be obtained before conducting human clinicaltesting of our gene therapy products. New biologics, as well as new dosage forms or new uses of previously approved biologics, require the submission of aBLA and approval by the FDA before being marketed in the U.S.Within FDA, the Center for Biologics Evaluation and Research (“CBER”) regulates gene therapy products. Within CBER, the review of gene therapy andrelated products is consolidated in the Office of Tissues and Advanced Therapies and FDA has established the Cellular, Tissue and Gene Therapies AdvisoryCommittee to advise CBER in its review. FDA has published a growing body of guidance documents related to, among other things, gene therapy productsdeveloped for rare diseases, on patient-focused drug development, preclinical testing, and chemistry, manufacturing and controls, IND applications, and otherareas of gene therapy development, all of which are intended to facilitate the industry’s development of gene therapy products. Guidance documents providethe FDA’s current thinking about a particular subject, but are not legally binding.The process required by FDA before our product candidates may be marketed in the U.S. generally involves the following: •Completion of non-clinical laboratory test and animal studies in accordance with current Good Laboratory Practice (“GLP”), regulations andapplicable requirements for the humane use of laboratory animals or other applicable regulations; •Submission of an IND to the FDA, which must become effective before human clinical trials may begin; •Approval by the independent institutional review board (“IRB”) of each clinical trial site before the trial may be initiated at that site; •Approval by the institutional biosafety committee (“IBC”) of each clinical trial site, which assesses the safety of clinical research and identifies anypotential risks to public health or the environment; •Performance of adequate and well-controlled human clinical trials according to Good Clinical Practice (“GCP”) regulations, and any additionalrequirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the biologic productfor its proposed indication; •Establishment of the identity, strength, quality, purity or potency of the biologic product manufactured under cGMP; •Satisfactory completion of an FDA inspection of each manufacturing facility at which the biologic product is produced, prior tocommercialization, to assess compliance with cGMP, regulations, and any additional requirements pertaining to the manufacture and distributionof biologic products; •Submission to FDA of a BLA for marketing approval that includes substantial evidence of purity and potency, safety and efficacy from results ofnonclinical testing and clinical trials; •Successful completion of FDA audit(s) of the nonclinical and clinical trial sites that generated the data in support of the BLA; •Successful completion of the advisory committee review, if FDA convenes an advisory committee; •Payment of user fees and FDA review and approval, or licensure, of the BLA prior to any commercial marketing, sale or shipment of the product;application fees for products designated as orphan drugs by FDA as waived; and •Compliance with any post-approval requirements or the potential to conduct post-approval studies.The preclinical and clinical testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvalsfor our product candidates will be granted on a timely basis, if at all.Before testing any biologic product candidate, including a gene therapy product, in humans, the product candidate enters the preclinical testing stage.Preclinical tests include laboratory evaluation of product chemistry, formulation, and stability, as well as16Table of Contents animal studies to assess the characteristics and potential safety and efficacy of the product. The conduct of the preclinical tests must comply with federalregulations and requirements, including GLPs.The results of preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical trialprotocol, are submitted as part of an IND to FDA. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomeseffective 30 days after receipt by the FDA, unless the FDA raises concerns or questions relating to the content of the IND during the review period. In thatcase, the IND sponsor and the FDA must resolve any outstanding concerns before the IND goes into effect and the clinical trial begins. The FDA can imposeclinical holds on a biologic product candidate at any time before or during clinical trials due to safety concerns or non-compliance. If the FDA imposes aclinical hold on an IND, clinical trials may not commence or proceed without FDA authorization, and then only under terms authorized by FDA.Clinical trials involve administering of the investigational biological product candidate to human subjects under the supervision of qualified investigators,who are generally physicians not employed by or under the study sponsor’s control. Clinical trials are conducted under protocols detailing, among otherthings, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, the parameters to be used in monitoring subject safety,including stopping rules that assure a clinical trial will be stopped if certain adverse events should occur, and the effectiveness criteria to be used. Eachprotocol must be submitted to FDA as part of the IND. An independent IRB and IBC at each institution where the clinical trial will be conducted must alsoreview and approve the plan for any clinical trial before it can begin at that institution, and the IRB must monitor the clinical trial until it is completed. TheIBC will also assess the safety of the research and until it is completed. Clinical testing also must satisfy GCP requirements, including the requirements forinformed consent from all subjects.All clinical research performed in the United States in support of a BLA must be authorized in advance by the FDA as described above. However, a sponsorwho wishes to conduct a clinical trial outside the U.S. may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreignclinical trial is not conducted under an IND, the FDA will accept a well-designed, well-conducted, non-IND foreign clinical trial as support for a BLA if (i) theclinical trial was conducted in accordance with GCP as further detailed in the regulation, including review and approval by an independent ethics committee,and (ii) if FDA is able to validate the data from the clinical trial through an onsite inspection, if necessary. In addition, when an applicant submits data from aforeign clinical trial not conducted under an IND to support a BLA, FDA requires a description of the actions the applicant took to ensure that the researchconformed to GCP. Further, additional requirements apply when a sponsor intends to base marketing approval of a new drug solely on foreign clinical data.Clinical TrialsClinical trials are typically conducted in three o sequential phases, which may overlap or be combined. •In Phase 1, the typically biologic product candidate initially is introduced into a small number of healthy human subjects and tested for safety,dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early understanding of its effectiveness. In the case ofsome product candidates for severe or life-threatening diseases, especially when the product candidate may be too inherently toxic to ethicallyadminister to healthy volunteers, the initial human testing is often conducted in patients. Phase 1 clinical trials of gene therapies are typicallyconducted in patients rather than healthy volunteers. •Phase 2 clinical trials are typically well-controlled, closely monitored studies that are generally conducted in a larger subject population thanPhase 1 trials to evaluate dosage tolerance and appropriate dosage, identify possible adverse effects and safety risks, and to preliminarily evaluatethe efficacy of the product candidate for specific targeted indications. For Phase 2 clinical trials in gene therapy, although the subject populationmay be larger than the Phase 1 trials, the subject population may still remain relatively limited. •Phase 3 clinical trials are typically conducted when Phase 2 clinical trials demonstrate that a dose range of the biological product candidate iseffective and has an acceptable safety profile. Phase 3 clinical trials are generally undertaken with large numbers of subjects, to provide substantialevidence of clinical efficacy and to further test for safety in an expanded and diverse subject population at multiple, geographically-dispersedclinical trial sites. Phase 3 clinical trials are commonly referred to as “pivotal” studies, which typically denotes a study which presents the data thatthe FDA or other relevant regulatory agency will use to determine whether or not to approve a product candidate. •Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial approval. These clinical trials are usedto gain additional data from treatment of patients in the intended therapeutic indication, particularly for long-term safety.During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinicaltrial investigators. Annual progress reports detailing the results of the clinical trials must be submitted to the FDA. Written IND safety reports must bepromptly submitted to the FDA and the investigators for any serious and unexpected adverse events that occur during the study, or any clinically importantincrease in the rate of a serious suspected adverse reaction over that listed in the clinical protocol or Investigator’s Brochure, as well as any findings fromother studies, tests in laboratory animals or17Table of Contents in vitro testing that suggest a significant risk for human subjects from the product candidate,. The sponsor must submit an IND safety report within 15calendar days after the sponsor determines that the information qualifies for reporting. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor's initial receipt of the information.Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA or the sponsor or its data safetymonitoring board may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed toan unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conductedin accordance with the IRB's requirements or if the biological product has been associated with unexpected serious harm to patients.Human gene therapy products are a new category of therapeutics. As this is a relatively new and expanding areas of novel therapeutic interventions, there canbe no assurance as to the length of the clinical trial period, the number of patients the FDA will require to be enrolled in the studies in order to establish thesafety, efficacy, purity and potency of human gene therapy products, or that the data generated in these studies will be acceptable to FDA to supportmarketing approval. The FDA and the National Institutes of Health (NIH) developed a publicly accessible database, the Genetic Modification ClinicalResearch Information System, designed to facilitate safety reporting. The database includes information on gene transfer studies and serves as an electronictool to facilitate the reporting and analysis of adverse events on these clinical trials. In addition to the regulations discussed above, there are a number of additional standards that apply to clinical trials involving the use of gene therapy. TheFDA has issued various guidance documents regarding gene therapies, which outline additional factors that the FDA will consider at each of the above stagesof development and relate to, among other things: the proper preclinical assessment of gene therapies; the CMC information that should be included in anIND application; the proper design of tests to measure product potency in support of an IND or BLA; and measures to observe delayed adverse effects insubjects who have been exposed to investigational gene therapies when the risk of such effects is high. Further, FDA usually recommends that sponsorsobserve subjects for potential gene therapy-related delayed adverse events for a 15-year period, including a minimum of five years of annual examinationsfollowed by 10 years of annual queries, either in person or by questionnaire.Each sponsor must register its clinical trials on the ClinicalTrials.gov website, the registry of new, on-going, and completed clinical trials of drugs, biologics,and device products.Biologics License ApplicationsThe results of preclinical studies and clinical trials, together with detailed information on the composition of the product, are submitted to the FDA in theform of a BLA requesting approval to market the product for one or more specified indications. The submission of a BLA must be accompanied by asubstantial user fee unless a waiver applies, and is subject to a sixty-day filing review period to determine if the application is sufficiently complete to permitsubstantive review.Under the Prescription Drug User Fee Act (“PDUFA”), FDA has a performance goal to review applications within 6 months for priority reviews or 10 monthsfor standard reviews. The review timeline begins upon FDA’s acceptance of the original application submission for filing, no later than 60 calendar days fromthe date FDA receives the application. In some instances, the review process and the PDUFA goal date may be extended depending on the informationrequired in order the FDA reviewers to complete their review of the BLA.The FDA may refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved.The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. The FDA may deny approval of aBLA by issuing a complete response letter if the applicable statutory and regulatory criteria are not satisfied, and may require additional clinical data or anadditional Phase 3 clinical trial. Even if such data are submitted, the FDA may ultimately decide that the BLA does not satisfy the criteria for approval. Datafrom clinical trials are not always conclusive and the FDA may interpret the data differently than we interpret data. Moreover, even if a product receivesapproval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited or subject to RiskEvaluation and Mitigation Strategies (REMS), which could restrict the commercial value of the product.Once the FDA approves a BLA, or supplement thereto, the FDA may withdraw the approval if ongoing regulatory requirements are not met or if safetyproblems are identified after the product reaches the market. Even where a withdrawal is not required, the FDA still may seize existing inventory of suchproduct or require a recall of product already on the market. In addition, the FDA may require testing, including Phase 4 clinical trials and surveillanceprograms to monitor the effect of approved biologics which have been commercialized. The FDA has the authority to prevent or limit further marketing of abiologic based on the results of these post-marketing programs.Biologics may be marketed only for the FDA approved indications and in accordance with the provisions of the approved labeling. Further, if there are anymodifications to the product, including changes in indications, labeling, or manufacturing processes or18Table of Contents facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or BLA supplement, which may require the sponsor to developadditional data or conduct additional preclinical studies and clinical trials.Before approving a BLA, the FDA will inspect the facilities at which the biologic is manufactured, and will not approve the product unless it determines thatthe manufacturing processes and facilities are in compliance with cGMP requirements. The FDA may also inspect the site(s) at which the clinical trials wereconducted to assess their GCP compliance and will not approve the product unless compliance with the IND study requirements and GCP requirements issatisfactory.After approval, certain changes to the approved product, such as adding new indications, manufacturing changes, or additional labeling claims are subject tofurther FDA review and approval. Depending on the nature of the change proposed, a BLA supplement must be filed and approved before the change may beimplemented. For many proposed post-approval changes to a BLA, the FDA has up to 180 days to review the application. As with new BLAs, the reviewprocess is often significantly extended by FDA requests for additional information or clarification.Once the FDA approves a BLA for a first indication, the biologic is granted 12 years of data exclusivity, meaning that no biosimilar application can besubmitted to the FDA until four years after approval of the biologic, and no biosimilar application can be approved during the full 12-year period. Theseexclusivity provisions only apply to biosimilars—companies that rely on their own data and file a full BLA may be approved earlier than 12 years.Expedited Development and Review ProgramsThe FDA has provided guidance to sponsors developing regenerative medicine therapies for serious or life-threatening diseases or conditions, withrecommendations on the expedited development and review of these therapies, as provided under the FDCA and the 21st Century Cures Act. Fast track designation. To qualify for fast track designation, a product candidate must be intended to treat a serious condition and address an unmet medicalneed. Advantages of fast track designation include the possibility for a rolling review, eligibility for priority review, and the ability to have greaterinteractions with the FDA. In addition, under the Fast Track program and FDA’s accelerated approval regulations, the FDA may approve a biologic productbased on a surrogate endpoint. A surrogate endpoint is a measurement of laboratory or clinical signs of a disease or conditions that substitutes for a directmeasurement of how a patient feels, functions, or survives. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. Abiologic product candidate approved using a surrogate endpoint is subject to rigorous post-marketing compliance requirements, including the completion ofpost-approval clinical trials to confirm the beneficial effect on a clinical endpoint. Failure to conduct or to confirm a clinical benefit during these requiredtrials may result in FDA withdrawal of the approved biologic product from the market.Any product submitted to the FDA for marketing approval, including under a Fast Track program, may be eligible for other types of FDA programs intendedto expedite development and review, such as breakthrough therapy designation, regenerative medicine advanced therapy (“RMAT”) designation, priorityreview designation, and accelerated approval.Breakthrough therapy designation. To qualify for the breakthrough therapy program, a product candidate must be intended to treat a serious condition, andhave preliminary clinical data indicating that it provides a substantial improvement on one or more clinically significant endpoints over existing therapies.The FDA will seek to ensure the sponsor of a breakthrough therapy product candidate receives intensive guidance on an efficient drug development program;intensive involvement of senior managers and experienced staff on a proactive, collaborative and cross‑disciplinary review; and rolling review.Regenerative medicine advanced therapy (“RMAT”) designation. To qualify for the RMAT designation, a product candidate must be a regenerativemedicine therapy intended to treat a serious condition, and there must be preliminary clinical evidence that the candidate has the potential to address unmetmedical need. The FDA has indicated that gene therapies may qualify as regenerative medicine therapies. Advantages of RMAT designation include earlyinteractions with FDA to discuss any potential surrogate or intermediate endpoints and the addresses potential ways to support accelerated approval andsatisfy post-approval requirements.Priority review. A product, including those that received fast track, breakthrough therapy, or RMAT designations, may be eligible for priority review, if itmeets the criteria for priority review at the time the BLA is submitted. If priority review is granted, FDA has a 6-month goal for reviewing the marketingapplication or efficacy supplementAccelerated approval. Drug or biologic products with evidence showing that they provide meaningful therapeutic benefit over existing treatments for seriousor life‑threatening illnesses may receive accelerated approval. Accelerated approval means that a product candidate may be approved on the basis of clinicaldata establishing that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit. As a condition ofapproval, the FDA may require that a sponsor conduct post‑marketing clinical trials.Orphan Drug Designation (“ODD”)19Table of Contents Under the Orphan Drug Act, the FDA may grant orphan drug designation to biological products intended to treat a rare disease or condition—-generally a disease or condition that affects fewer than 200,000 individuals in the United States, or if there is no reasonable expectation that the cost ofdeveloping and making the product available in the United States will be recovered from sales of the product.ODD must be requested before submitting a BLA. ODD does not affect the regulatory review and approval process. However, the first BLA applicantto receive FDA approval for a particular active moiety to treat a particular disease with FDA ODD is entitled to a seven-year exclusive marketing period in theUnited States for that product in the approved indication. During the seven-year marketing exclusivity period, the FDA may not approve any otherapplications to market a biological product containing the same active moiety for the same indication, except in limited circumstances, such as a showing ofclinical superiority to the product with orphan drug exclusivity. Among the other benefits of ODD are tax credits for certain research and a waiver of the BLAuser fee.Other Regulatory RequirementsAny biologics manufactured or distributed by us or our collaborators pursuant to FDA approvals would be subject to continuing regulation by the FDA,including recordkeeping requirements and reporting of adverse experiences associated with the product. Biologic manufacturers and their subcontractors arerequired to register their establishments with FDA and certain state agencies, and are subject to periodic unannounced inspections by FDA and certain stateagencies for compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon usand our third party manufacturers. Failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or regulatoryaction, such as warning letters, suspension of manufacturing, seizure of product, injunctive action or possible civil penalties. We cannot be certain that we orour present or future third-party manufacturers or suppliers will be able to comply with the cGMP regulations and other ongoing FDA regulatoryrequirements. If we or our present or future third-party manufacturers or suppliers are not able to comply with these requirements, the FDA may halt ourclinical trials, require us to recall a product from distribution or withdraw approval of the BLA for that biologic.The FDA closely regulates the post-approval marketing and promotion of biologics, including standards and regulations for direct-to-consumer advertising,off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet. Under FDA’s currentinterpretation of the relevant laws, in proactively promoting a biologic, a company generally can make only those substantiated claims relating to safety andefficacy that are for indications approved by the FDA and that are otherwise consistent with the FDA-approved label for the biologic. Failure to comply withthese requirements can result in fines, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians mayprescribe legally available biologics for uses that are not described in the product’s labeling and that differ from those tested by the sponsor and approved bythe FDA. Such off-label uses are common across medical specialties. However, if the FDA finds that we have promoted off-label use of any product that iseventually approved, sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical hold, warning or untitled letters,product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandatedcorrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties. Any agency or judicialenforcement action could have a material adverse effect on us. Physicians may believe that such off-label uses are the best treatment for many patients invaried circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, impose stringentrestrictions on manufacturers’ communications regarding off-label use.Other Healthcare Laws and RegulationsIf we obtain regulatory approval for any of our product candidates, we may also be subject to healthcare regulation and enforcement by the federalgovernment and the states and foreign governments in which we conduct our business. These laws may impact, among other things, our proposed sales,marketing, and education programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which weconduct our business. The laws that may affect our ability to operate include: •The federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering orpaying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order orrecommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaidprograms; •Federal false claims laws, including the False Claims Act and civil monetary penalty law, which prohibit, among other things, individuals orentities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that arefalse or fraudulent; •Federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcarematters; •The federal Physician Payment Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to reportannually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments and20Table of Contents other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held byphysicians and other healthcare providers and their immediate family members; •Health Insurance Portability and Accountability Act, as amended by Health Information Technology for Economic and Clinical Health Act, whichgoverns and protects the security and privacy of individually identifiable health information of certain health plans, healthcare clearinghouses andhealthcare providers, and their respective business associates that perform services for them involving individually identifiable health information;and •State and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items orservices reimbursed by any third-party payer, including commercial insurers; state laws that require pharmaceutical companies to comply with thepharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, orotherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturersto report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; andstate laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significantways and may not have the same effect, thus complicating compliance efforts.If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that apply to us, we may besubject to penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, the exclusion from participationin federal and state healthcare programs, imprisonment, and additional reporting requirements and oversight if become subject to a corporate integrityagreement or similar agreement to resolve allegations of non-compliance with these laws, any of which could have a material adverse effect on our business,financial condition, results of operations and prospects.In addition, the pharmaceutical and biotechnology industry have received increased public and governmental scrutiny for the cost of drugs. In particular,U.S. federal prosecutors have issued subpoenas to pharmaceutical companies seeking information about drug pricing practices and the U.S. Senate isinvestigating several pharmaceutical companies relating to drug price increases and pricing practices. If we obtain regulatory approval of any of our productcandidates, our revenue and future profitability could be negatively affected if these inquiries were to result in legislative or regulatory proposals that limitour ability to increase the prices of our products.Coverage and ReimbursementSignificant uncertainty exists as to the coverage and reimbursement status of gene therapy products l. In the U.S. and other countries, sales of any products forwhich we receive marketing approval will depend in part on the availability of coverage and reimbursement from third-party payers. Third-party payersinclude government authorities, managed care providers, private health insurers and other organizations. The process for determining whether a payer willprovide coverage for a drug product may be separate from the process for setting the reimbursement rate that the payer will pay for the drug product. Third-party payers may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drugs for aparticular indication. Moreover, a payer’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will beapproved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on ourinvestment in product development. A number of gene or cell therapy products have been approved over the past several years by the FDA. Although theCMS subsequently approved its first method of coverage and reimbursement for Yescarta and Kymriah, the methodology has been subject to challenge bymembers of Congress. CMS’s decision as to coverage and reimbursement for one product does not mean that all similar products will be eligible foranalogous coverage and reimbursement. As there is no uniform policy for coverage and reimbursement amongst third-party payors in the United States, evenif CMS approves coverage and reimbursement for any of our product candidates, it is unclear what affect, if any, such a decision will have on our ability toobtain and maintain coverage and adequate reimbursement from other private payors.Third-party payers are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, inaddition to their safety and efficacy. In order to obtain coverage and reimbursement for any product that might be approved for sale, we may need to conductexpensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs requiredto obtain regulatory approvals. Our product candidates may not be considered medically necessary or cost-effective. If third-party payers do not consider aproduct to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do,the level of payment may not be sufficient to allow a company to sell its products at a profit. The United States government, state legislatures and foreigngovernments have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, includingprice controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. By way of example, thePatient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively, the Affordable Care Act, containsprovisions that may reduce the profitability of drug products, including, for example, increased the minimum rebates owed by manufacturers under theMedicaid Drug Rebate Program, extended the rebate program to individuals enrolled in Medicaid managed care plans, addressed a new methodology bywhich rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are21Table of Contents inhaled, infused, instilled, implanted or injected, and annual fees based on pharmaceutical companies’ share of sales to federal health care programs.Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limitpayments for pharmaceuticals. In addition, following the November 2016 Presidential election in the United States, significant uncertainty exists regardingthe future of the Affordable Care Act. It is possible that there will be legislation in the future either to amend or replace the Affordable Care Act and that suchnew legislation will be generally unfavorable toward the pharmaceutical and biotechnology industries (including with regard to a possible reduction in thenumber of insured individuals with access to drug coverage or additional measures aimed at high cost drug and biologic products). At this time, it is unclearwhether those changes will also have an impact on biologic product exclusivity, or the biosimilar product licensure pathway established under the BiologicsPrice Competition and Innovation Act (BPCIA), which was enacted as part of the Affordable Care Act.The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payers fail toprovide adequate coverage and reimbursement. In addition, emphasis on cost containment measures in the U.S. and other countries has increased, and weexpect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Evenif favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policiesand reimbursement rates may be implemented in the future.International RegulationIn addition to regulations in the U.S., we or our collaborators will be subject to a variety of foreign regulations governing clinical trials and commercial salesand distribution of our future drugs. Whether or not we obtain FDA approval for a drug, we or our collaborators must obtain approval of a drug by thecomparable regulatory authorities of foreign countries before commencing clinical trials or marketing of the drug in those countries. The approval processvaries from country to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct ofclinical trials, product licensing, pricing and reimbursement vary greatly from country to country.Under European Union regulatory systems, marketing authorizations may be submitted either under a centralized, decentralized or mutual recognitionprocedure. The centralized procedure provides for the grant of a single marking authorization that is valid for all European Union member states. Thedecentralized procedure includes selecting one reference member state (RMS), and submitting to more than one EU member state at the same time. The RMSNational Competent Authority conducts a detailed review and prepares an assessment report, to which concerned member states provide comment. Themutual recognition procedure provides for mutual recognition of national approval decisions. Under this procedure, the holder of a national markingauthorization may submit an application to the remaining member states post-initial approval. Under the centralized procedure, within 120 days of receivingthe marketing applications and assessment report, each member state must decide whether to recognize approval.In addition to regulations in the Europe Union and the United States, we or our collaborators will be subject to a variety of foreign regulations governingclinical trials and commercial distribution of our future products.Environmental RegulationWe are subject to numerous foreign, federal, state and local environmental, health and safety laws and regulations relating to, among other matters, safeworking conditions, product stewardship and end-of-life handling or disposition of products, and environmental protection, including those governing thegeneration, storage, handling, use, transportation and disposal of hazardous or potentially hazardous materials. Some of these laws and regulations require usto obtain licenses or permits to conduct our operations. Environmental laws and regulations are complex, change frequently and have tended to become morestringent over time. Although the costs to comply with applicable laws and regulations, including requirements in the European Union relating to therestriction of use of hazardous substances in products, have not been material, we cannot predict the impact on our business of new or amended laws orregulations or any changes in the way existing and future laws and regulations are interpreted or enforced, nor can we ensure we will be able to obtain ormaintain any required licenses or permits.EmployeesAs of February 28, 2019, we had 82 full-time employees, including a total of 14 employees with M.D. or Ph.D. degrees. Within our workforce, 60 employeesare engaged in research and development and 22 in business development, finance, legal, human resources, facilities, information technology and generalmanagement and administration. None of our employees are represented by labor unions or covered by collective bargaining agreements.Corporate and Available InformationWe were incorporated in Delaware in 2006 under the name “Avalanche Biotechnologies, Inc.” We completed the initial public offering of our common stockin August 2014. On May 11, 2016, upon the completion of our acquisition of Annapurna Therapeutics22Table of Contents SAS, we changed our name to “Adverum Biotechnologies, Inc.” Our common stock is currently listed on The Nasdaq Global Market under the symbol“ADVM.” We are an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, and therefore we are subject to reduced publiccompany reporting requirements.Our principal executive offices are located at 1035 O’Brien Drive, Menlo Park, CA 94025, and our telephone number is (650) 272‑6269. Our website addressis www.adverum.com. We make available on our website, free of charge, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and ourCurrent Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of1934, as amended, or the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities andExchange Commission, or the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding ourfilings at www.sec.gov. The information found on our website is not incorporated by reference into this Annual Report on Form 10-K or any other report wefile with or furnish to the SEC. 23Table of Contents Item 1A. Risk FactorsYou should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K. Ifany of the following risks are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. Therisks described below are not the only risks facing the Company. Risks and uncertainties not currently known to us or that we currently deem to beimmaterial also may materially adversely affect our business, financial condition, results of operations and prospects.Risks Related to Our Financial Position and Need for CapitalWe have incurred significant operating losses since inception, and we expect to incur significant losses for the foreseeable future. We may never becomeprofitable or, if achieved, be able to sustain profitability.We have incurred significant operating losses since we were founded in 2006 and expect to incur significant losses for the foreseeable future as we continuedevelopment of our product candidates. As of December 31, 2018, we had an accumulated deficit of $320.5 million. Losses have resulted principally fromcosts incurred in our research and development programs and from our general and administrative expenses. In the future, we intend to continue to conductresearch and development, regulatory compliance activities and, if any of our product candidates is approved, sales and marketing activities that, togetherwith anticipated general and administrative expenses, will likely result in us incurring significant losses for the next several years.We currently generate no revenue from sales, and we may never be able to commercialize any of our product candidates. We do not currently have therequired approvals to market any of our product candidates, and we may never receive such approvals. We may not be profitable even if we or any of ourfuture development partners succeed in commercializing any of our product candidates. Because of the numerous risks and uncertainties associated withdeveloping and commercializing our product candidates, we are unable to predict the extent of any future losses or when we will become profitable, if at all.We expect that our cash, cash equivalents, and short-term investments will be sufficient to fund our lead gene therapy programs into 2021. If thisexpectation proves to be wrong, we may be forced to delay, limit or terminate certain of our development efforts.As of December 31, 2018, our cash, cash equivalents and short-term investments were approximately $205.1 million. We currently expect this cash, cashequivalents and short-term investments to fund our planned operations and capital expenditures into 2021. However, this estimate is based on a number ofassumptions that may prove to be wrong, including our expectations about the timing of planned clinical trials, and expected expenses to be incurred inconnection with the build out of our new facility, and changing circumstances beyond our control may cause capital to be consumed more rapidly thancurrently anticipated. As a result, our operating plan may change, and we may need to seek additional funds sooner than planned, through collaborationagreements and public or private financings. If we run low on capital before we are able to achieve meaningful clinical data for some or all of our productcandidates, we may be unable to successfully raise additional funds, and, consequentially, may need to significantly curtail some or all of our developmentactivities.We will need to raise additional funding, which may not be available on acceptable terms, or at all. If we fail to obtain additional capital necessary tofund our operations, we will be unable to successfully develop and commercialize our product candidates.We will require substantial future capital in order to complete the preclinical and clinical development for our product candidates and potentially tocommercialize these product candidates. Any future clinical trials of our product candidates would cause an increase in our spending levels, as would othercorporate activities. The amount and timing of any expenditure needed to implement our development and commercialization programs will depend onnumerous factors, including: •the type, number, scope, progress, expansion costs, results of and timing of any future preclinical studies and clinical trials of any of our productcandidates which we are pursuing or may choose to pursue in the future; •the need for, and the progress, costs and results of, any additional clinical trials or nonclinical studies of our product candidates we may initiatebased on the results of any clinical trials that we may plan or discussions with the FDA, including any additional clinical trials or nonclinicalstudies the FDA or other regulatory agencies may require evaluating the safety of our product candidates; •the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; •the costs and timing of obtaining or maintaining manufacturing for our product candidates, including commercial manufacturing if any productcandidate is approved; •the costs and timing of establishing sales and marketing capabilities and enhanced internal controls over financial reporting; •the terms and timing of establishing collaborations, license agreements and other partnerships; •costs associated with any new product candidates that we may develop, in-license or acquire; •the effect of competing technological and market developments;24Table of Contents •our ability to establish and maintain partnering arrangements for development; and •the costs associated with being a public company.Some of these factors are outside of our control. We do not expect our existing capital resources to be sufficient to enable us to fund the completion of ourclinical trials and remaining development program through commercial introduction. We expect that we will need to raise additional funds in the future.We have not sold any products, and we do not expect to sell or derive revenue from any product sales for the foreseeable future. We may seek additionalfunding through collaboration agreements and public or private financings. Additional funding may not be available to us on acceptable terms or at all andthe terms of any financing may adversely affect the holdings or the rights of our stockholders. In addition, the issuance of additional shares by us, or thepossibility of such issuance, may cause the market price of our shares to decline.If we are unable to obtain funding on a timely basis, we will be unable to complete any future clinical trials for our product candidates and we may berequired to significantly curtail some or all of our activities. We also could be required to seek funds through arrangements with collaborative partners orotherwise that may require us to relinquish rights to our product candidates or some of our technologies or otherwise agree to terms unfavorable to us.Risks Related to the Discovery and Development of Our Product CandidatesOur business will depend substantially on the success of one or more of our product candidates. If we are unable to develop, obtain regulatory approvalfor, or successfully commercialize, any or all of our product candidates, our business will be materially harmed.Our product candidates are in the early stages of development and will require substantial preclinical and/or clinical development and testing, manufacturingprocess improvement and validation, bridging studies and regulatory approval prior to commercialization. It is critical to our business to successfullydevelop and ultimately obtain regulatory approval for one or more of these product candidates. Our ability to commercialize our product candidateseffectively will depend on several factors, including the following: •successful completion of preclinical studies and clinical trials, including the ability to demonstrate safety and efficacy of our product candidates; •establishing commercial manufacturing capabilities, for example, by engaging third-party manufacturers that can provide products and services tosupport clinical development and the market demand for our product candidates, if approved; •receipt of marketing approvals for any future products for which we complete clinical trials, including securing regulatory exclusivity to the extentavailable; •successfully launching and commercial sales of the product, whether alone or in collaboration with potential partners; •acceptance of the product as a viable treatment option by patients, the medical community and third-party payers; •establishing market share while competing with other therapies; •a continued acceptable safety profile of our products following regulatory approval; •maintaining compliance with post-approval regulation and other requirements; and •qualifying for, identifying, obtaining, registering, maintaining, enforcing and defending intellectual property rights and claims covering ourproduct candidates. Our product candidate, ADVM‑043 for the treatment of A1AT deficiency, failed to show sufficient efficacy in the ADVANCE trial, and was discontinued in2018. For our lead gene therapy candidate, ADVM‑022, we initiated the OPTIC trial in patients with wet AMD in the fourth quarter of 2018. For our raredisease programs, we are conducting additional preclinical studies to evaluate potential paths forward for development of a product candidate for theseprograms.If we, or our collaborators, do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability tocommercialize our product candidates, which would materially and adversely affect our business, financial condition, results of operations and prospects.Moreover, of the large number of biologics and drugs in development in the pharmaceutical industry, only a small percentage result in the submission of aBLA to the FDA and even fewer are approved for commercialization. Furthermore, even if we do receive regulatory approval to market any of our productcandidates, any such approval may be subject to limitations on the indicated uses for which we may market the product, or limitations related to itsdistribution. Accordingly, even if we are able to obtain the requisite financing to continue to fund our development programs, there can be no assurance thatany of our product candidates will be successfully developed or commercialized. If we or any of our future development partners are unable to develop, orobtain regulatory approval for, or, if approved, successfully commercialize, any of our product candidates, we may not be able to generate sufficient revenueto continue our business.25Table of Contents Our gene therapy platform is based on a novel technology, which makes it difficult to predict the time and cost of product candidate development andsubsequently obtaining regulatory approval.We have concentrated our research and development efforts on our gene therapy platform and our future success depends on the successful development ofproduct candidates based on this platform. There can be no assurance that any development problems we have experienced or may experience in the futurerelated to our platform will not cause significant delays or unanticipated costs, or that such development problems can be solved. We may also experiencedelays in developing a sustainable, reproducible and scalable manufacturing process or transferring that process to commercial partners, which may preventus from completing our clinical trials or commercializing our products on a timely or profitable basis, if at all.In addition, the clinical trial requirements of the FDA, the European Medicines Agency (“EMA”) and other regulatory agencies and the criteria theseregulators may use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended useand market of the potential products. The regulatory approval process for novel gene therapy products such as ours can be more expensive and take longerthan for other product types, which are better known or more extensively studied to date. As an example, the FDA approved the first gene therapy product,LUXTURNATM (voretigene neparvovec-rzyl) for the treatment of patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy inDecember 2017. The European Commission (EC) recently approved LUXTURNATM for the treatment of vision loss due to a genetic mutation in both copiesof the RPE65 gene and who have enough viable retinal cells.Regulatory requirements governing gene and cell therapy products have changed and may continue to change in the future; such as the National Institutes ofHealth (“NIH”) Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules and the modifications to the roles and responsibilitiesof the Recombinant DNA Advisory Committee (“RAC”). The FDA decides whether individual gene therapy protocols may proceed, and the FDA can put anIND on clinical hold.Also, before a clinical trial can begin, that clinical site’s IRB and IBC must review the proposed clinical trial to assess appropriateness to conduct the clinicaltrial at that site. In addition, adverse developments in clinical trials of gene therapy products conducted by others may cause the FDA or other oversightbodies to change the requirements for human research on or for approval of any of our product candidates.These regulatory review committees and advisory groups and the new guidelines they promulgate may lengthen the regulatory review process, require us toperform additional studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval andcommercialization of these treatment candidates or lead to significant post-approval limitations or restrictions. As we advance our product candidates, wemay be required to consult with these regulatory and advisory groups and comply with applicable guidelines or recommendations. If we fail to do so, we maybe required to delay or discontinue development of our product candidates. Delay or failure to obtain, or unexpected costs in obtaining, the regulatoryapproval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue to maintain our business.We may not be successful in our efforts to identify or discover additional product candidates.The success of our business depends primarily upon our ability to identify, develop and commercialize products based on our platform. Our researchprograms may fail to identify other potential product candidates for clinical development for a number of reasons. Our research methodology may beunsuccessful in identifying potential product candidates or our potential product candidates may be shown to lack efficacy, have harmful side effects, or mayhave other characteristics that may make the products unmarketable or unlikely to receive marketing approval.If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which would have a material adverse effect onour business, financial condition, results of operations, and prospects and could potentially cause us to cease operations. Research programs to identify newproduct candidates require substantial technical, financial and human resources. We may focus our efforts and resources on potential programs or productcandidates that may ultimately prove to be unsuccessful.Few of our product candidates and proprietary viral vectors have been tested in clinical trials.Drug development has inherent risk. Few of our product candidates and proprietary viral vectors have been evaluated in clinical trials in patients. Our leadproduct candidate, ADVM‑022 for the treatment of wet AMD, uses a proprietary vector with an unknown safety profile in humans and may experienceunexpected results in clinical trials in the future. Additionally, we decided to discontinue the development of product candidate ADVM‑043 associated theADVANCE trial, during the fourth quarter of 2018. Although ADVM‑043 was safely administered and was well tolerated, A1AT protein measurements didnot reach clinically meaningful levels of expression, and no dose response was observed between the first three cohorts of patients. We, or any licensee ordevelopment partner, will be required to demonstrate through adequate and well-controlled clinical trials that our product candidate or another party’sproduct candidate containing one of our proprietary viral vectors are safe and effective for use in their target indications before seeking regulatory approvalsfor commercial sale. Drug development is a long, expensive and uncertain process, and delay or failure can occur at any stage of development, including aftercommencement of any of our clinical trials or any clinical trials using our26Table of Contents proprietary viral vectors. Any such delay or failure could significantly harm our business prospects, financial condition and results of operations.The results of preclinical studies and early clinical trials are not always predictive of future results. Any product candidate we or any of our futuredevelopment partners advance into clinical trials may not have favorable results in later clinical trials, if any, or receive regulatory approval.If our product candidates are not shown to be safe and effective, we may not realize the value of our investment in our technology. Promising preclinicalresults generated with a product candidate in animal models do not guarantee similar results when the candidate is tested in humans. For example, the levelsof protein expression achieved from a vector in a preclinical model, including non-human primate (“NHP”) models, may be significantly higher than thelevel of protein expression achieved in humans. In addition, even industry-accepted animal models may not accurately replicate human disease. Forexample, the laser-induced choroidal neovascularization model in NHP is the industry accepted animal model for wet AMD, where efficacy is assessed byreduction of the number of clinically relevant neovascular lesions. Success in pre-clinical studies or in early clinical trials does not mean that later clinicaltrials will be successful, because product candidates in later-stage clinical trials may fail to demonstrate sufficient safety or efficacy despite having progressedthrough pre-clinical and initial clinical testing. Further, safety and/or efficacy issues with a product candidate may only become apparent when the candidateis tested in human patients suffering the relevant disease. For example, while pre-clinical testing of ADVM‑043 showed promise, in the ADVANCE trial,A1AT protein did not reach a clinically meaningful level of expression and we decided to discontinue development of ADVM‑043 in the fourth quarter of2018. Furthermore, any future trials for any of our product candidates will need to demonstrate sufficient safety and efficacy for approval by regulatoryauthorities in larger patient populations. Companies frequently suffer significant setbacks in advanced clinical trials, even after earlier clinical trials haveshown promising results. In addition, only a small percentage of products under development result in the submission of a marketing application and evenfewer are approved for commercialization.We cannot guarantee that results from any clinical trials that we plan will be successful, and any safety or efficacy concerns observed in any one of ourclinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications.Preliminary and interim data from our clinical trials that we may announce or publish from time to time may change as each clinical trial progresses.From time to time, we may announce or publish preliminary or interim data from our clinical trials. Preliminary and interim results of a clinical trial are notnecessarily predictive of final results. Preliminary and interim data are subject to the risk that one or more of the clinical outcomes may materially change aspatient enrollment continues or further patient follow up occurs and more patient data become available. As a result, preliminary and interim data should beviewed with caution until the final data from a locked database are available. Material changes in the final data compared to preliminary or interim data,could significantly harm our business prospects, financial condition and results of operations.Our product candidates are subject to extensive regulation, compliance with which is costly and time consuming, and such regulation may causeunanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.The preclinical and clinical development, manufacturing, analytical testing, labeling, storage, record-keeping, advertising, promotion, import, export,marketing and distribution of our product candidates are subject to extensive regulation by the FDA and by comparable regulatory authorities in foreignmarkets. In the U.S., we are not permitted to market our product candidates until we receive regulatory approval from the FDA. The process of obtainingregulatory approval is expensive, often takes many years and can vary substantially based upon the type, complexity and novelty of the products involved,as well as the target indications and patient population. Approval policies or regulations may change, and the regulatory authorities have substantialdiscretion in the drug approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons. Despite the time andexpense invested in clinical development of product candidates, regulatory approval is never guaranteed.The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including: •such authorities may disagree with the design or implementation of our or any of our future development partners’ clinical trials; •we or any of our future development partners may be unable to demonstrate to the satisfaction of the FDA or other regulatory authorities that aproduct candidate is safe and effective for any indication; •such authorities may not accept clinical data from trials which are conducted at multinational clinical facilities or in countries where the standardof care is potentially different from that of the U.S.; •the results of clinical trials may not demonstrate the safety or efficacy required by such authorities for approval;27Table of Contents •we or any of our future development partners may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh itssafety risks; •such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; •approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions ondistribution and use; •such authorities may find deficiencies in the manufacturing processes, analytical testing, or facilities of third-party manufacturers or testinglaboratories with which we or any of our future development partners contract for clinical and commercial supplies; or •the approval policies or regulations of such authorities may significantly change in a manner rendering our or any of our future developmentpartners’ clinical data insufficient for approval.With respect to foreign markets, approval procedures vary among countries and, in addition to the aforementioned risks, can involve additional producttesting, administrative review periods and agreements with pricing authorities. In addition, events raising questions about the safety of related products,including those already on the market, may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing ourproduct candidates based on safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals. Anydelay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us or any of our future development partners from commercializingour product candidates.If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.Identifying and qualifying patients to participate in the OPTIC trial for ADVM‑022 for the treatment of wet AMD and any future planned clinical trials willbe critical to our success. The timing of current and future clinical trials will depend on the speed at which we can recruit patients to participate in futuretesting of these product candidates.Patient enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and nature of the patient population, theproximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that maybe approved for the indications we are investigating. We will be required to identify and enroll a sufficient number of patients with wet AMD for the OPTICtrial for ADVM‑022 and any future clinical trials for our product candidates. Potential patients may not be adequately diagnosed or identified with thediseases which we are targeting or may not meet the entry criteria for our trials. Additionally, some patients may have neutralizing antibodies at titer levelsthat would prevent them from being enrolled in a clinical trial for any of our product candidates. The incidence of neutralizing antibodies in the populationof patients, particularly for rare diseases, is unknown, and may be higher than we expect. As a consequence, enrollment in our clinical trials may be limited orslowed. We also may encounter difficulties in identifying and enrolling patients with a stage of disease appropriate for such future clinical trials. We may notbe able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics to achieve diversity in a trial.For our rare disease programs, these impact a small number of individuals in the U.S. (fewer than 200,000) and therefore there is a limited patient pool fromwhich to draw for clinical trials. Enrollment of eligible patients with rare or orphan diseases may be limited or slower than we anticipate in light of the smallpatient populations involved.We plan to seek initial marketing approval of these product candidates in the U.S. and Europe and we may not be able to successfully conduct clinical trialsif we cannot enroll a sufficient number of eligible patients to participate in the clinical trials required by the FDA or the EMA or other regulatory agencies. Inaddition, the process of finding and diagnosing patients may prove costly.Further, if patients are unwilling to participate in our gene therapy studies because of negative publicity from adverse events in the biotechnology or genetherapy industries or inadequate results in our preclinical studies or clinical trials or for other reasons, including competitive clinical trials for similar patientpopulations or available approved therapies, our recruitment of patients, conduct of preclinical studies or clinical trials and ability to obtain regulatoryapproval of our product candidates may be hindered.Trials using early versions of retroviral vectors, which integrate into, and thereby alter, the host cell’s DNA, have led to several well-publicized adverseevents. Although our vectors do not readily integrate into the patient’s genome and is not known to cause disease in humans, our product candidates do use aviral vector delivery system. If patients negatively associate our product candidates with the adverse events caused by previous gene therapy products, theymay not choose to enroll in our clinical trials, which would have a material adverse effect on our business and operations.If we have difficulty enrolling a sufficient number of patients to conduct clinical trials on our product candidates as planned, we may need to delay, limit orterminate future clinical trials, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.28Table of Contents We believe we have appropriately accounted for the above factors in our trials when determining expected clinical trial timelines, but we cannot assure youthat our assumptions are correct or that we will not experience delays in enrollment, which would result in the delay of completion of such trials beyond ourexpected timelines.The occurrence of serious complications or side effects in connection with use of our product candidates, either in preclinical studies or clinical trials orpost-approval, could lead to discontinuation of our clinical development program, refusal of regulatory authorities to approve our product candidates or,post-approval, revocation of marketing authorizations or refusal to approve new indications, which could severely harm our business prospects, financialcondition and results of operations.During the conduct of preclinical studies and clinical trials, patients may experience changes in their health, including illnesses, injuries and discomforts.Often, it is not possible to determine whether or not the product candidate being studied caused these conditions. Various illnesses, injuries, and discomfortmay be reported from time-to-time in clinical trials of our product candidates. It is possible that as we test our product candidates in larger, longer and moreextensive clinical programs, or as use of these product candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomfortand other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported bypatients. Many times, side effects are only detectable after investigational products are tested in large-scale, Phase 3 clinical trials or, in some cases, after theyare made available to patients on a commercial scale after approval. If additional clinical experience indicates that one or more of our product candidates hasside effects or causes serious or life-threatening side effects, the development of one or more of our product candidates may fail or be delayed, or, if one ormore of our product candidates has received regulatory approval, such approval may be revoked, which would severely harm our business prospects,financial condition and results of operations.Our product candidates built on AAV vectors have similar risks to other gene therapy vectors, including inflammation, cytotoxic T‑cell response, anti-AAVantibodies and immune response to the transgene product, such as T-cell responses and/or antibodies against the expressed protein. For example, patientstreated with ADVM‑022 could develop antibodies against AAV.7m8 capsid and/or aflibercept protein. These antibodies could preclude these patients fromreceiving other AAV-based gene therapies and/or recombinant aflibercept protein in the future. Studies have also found that intravenous delivery of certainAAV vectors at very high doses may result in adverse events and prompted the recommendation that studies involving high doses of AAV vectors should bemonitored carefully for such adverse events. In addition, patients given infusions of any protein may develop severe hypersensitivity reactions, infusionreactions, or serious side effects including transaminitis. With respect to our product candidates that are being or may be studied in diseases of the eye, thereare additional potential serious complications related to intravitreal injection, such as retinal detachment, endophthalmitis, ocular inflammation, cataractformation, glaucoma, hypotony, damage to the retina or cornea, and bleeding in the eye. Serious complications or serious, unexpected side effects inconnection with the use of our product candidates could materially harm our business prospects, financial condition and results of operations.Additionally, our lead product candidate, ADVM‑022 is designed for long-term, sustained expression of an exogenous protein, aflibercept. Even thoughEylea® (aflibercept) has been approved by several regulatory authorities, including the FDA, for the treatment of wet AMD, there may be side effectsassociated with aflibercept being expressed as a gene therapy treatment modality. If such side effects are serious or life-threatening, the development of ourproduct candidate and future product candidates may fail or be delayed, or, if such product candidate(s) have received regulatory approval, such approvalmay be revoked, which would severely harm our business prospects, financial condition and results of operation.Risks Related to Our Reliance on Third PartiesWe will rely on third parties to conduct some preclinical testing and all clinical trials. If these third parties do not meet our deadlines or otherwise fail toconduct the trials as required, our clinical development programs could be delayed or unsuccessful and we may not be able to obtain regulatory approvalfor or commercialize our product candidates when expected or at all.We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves. We are dependent on third parties to conductpreclinical studies and clinical trials for our product candidates, and, therefore, the timing of the initiation and completion of these studies or trials iscontrolled by such third parties and may occur at times substantially different from our estimates. Specifically, we use CROs to conduct our clinical trials andwe rely on medical institutions, clinical investigators, CROs and consultants to conduct our trials in accordance with our clinical protocols and regulatoryrequirements. Our CROs, investigators and other third parties play a significant role in the conduct of these trials and subsequent collection and analysis ofdata.There is no guarantee that any CROs, investigators or other third parties on which we rely for administration and conduct of our clinical trials will devoteadequate time and resources to such trials or perform as contractually required. If any of these third parties fails to meet expected deadlines, fails to adhere toour clinical protocols, fails to meet regulatory requirements, or otherwise performs in a substandard manner, our clinical trials may be extended, delayed orterminated. If any of our clinical trial sites terminates for any reason, we may experience the loss of follow-up information on patients enrolled in our ongoingclinical trials unless we are able to transfer those patients to another qualified clinical trial site. In addition, principal investigators for our clinical trials mayserve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such29Table of Contents services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA concludes that the financialrelationship may have affected the interpretation of the clinical trial, the integrity of the data generated at the applicable clinical trial site may be questionedand the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any BLA we submit to the FDA. Any such delay orrejection could prevent us from commercializing our product candidates.We have relied, and expect to continue to rely, on third parties to conduct some or all aspects of our vector production, product manufacturing, producttesting, protocol development, protocol performance, research, and preclinical and clinical testing, and these third parties may not perform satisfactorily.We do not expect to independently conduct all aspects of our vector production, product manufacturing, product testing, protocol development, protocolperformance, research, preclinical and clinical testing. We currently rely, and expect to continue to rely, on third parties with respect to these items.Any of these third parties may not be successful at fulfilling their contractual obligations or may choose to terminate their engagements with us at any time. Ifwe need to enter into alternative arrangements, it could delay our product development activities. Our reliance on these third parties for research anddevelopment activities will reduce our control over these activities but will not relieve us of our responsibility to ensure compliance with all requiredregulations. If any of these third parties on which we rely do not perform satisfactorily, we will remain responsible for ensuring that each of our preclinicalstudies and clinical trials are conducted in accordance with the study plan and protocols, which we may not be able to do.These third parties may not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatoryrequirements or our stated study plans and protocols. If third parties breach their contractual obligations to us, we may not be able to complete, or may bedelayed in completing, the preclinical studies and clinical trials required to support future IND submissions, development work, and approval of our productcandidates.Reliance on third-party manufacturers also entails risks to which we would not be subject to if we manufactured the product candidates ourselves, including: •the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; •reduced control as a result of using third-party manufacturers for some or all aspects of manufacturing activities; •termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; and •disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations, includingthe bankruptcy of the manufacturer or supplier.Any of these events could lead to clinical trial delays or failure to obtain regulatory approval, or impact our ability to successfully commercialize futureproducts.We and our contractors are subject to significant regulation with respect to manufacturing and testing our products. The contract vendors on which werely may not continue to meet regulatory requirements and may have limited capacity.We currently have relationships with a limited number of suppliers for the manufacturing and testing of our vector product candidates. Our suppliers mayrequire licenses to manufacture or test such components if such processes are not owned by the suppliers or in the public domain and we may be unable totransfer or sublicense the intellectual property rights we may have with respect to such activities, and may be unable to acquire such rights, to the extent thatwe do not already have them. All entities involved in the preparation of therapeutics for clinical trials or commercial sale, including our existing contractvendors for our product candidates, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or usedin clinical trials must be manufactured and tested in accordance with cGMP. These regulations govern manufacturing processes and procedures (includingrecord keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approvedfor sale. Poor control of production processes can lead to the introduction of adventitious agents or other contaminants, or to inadvertent changes in theproperties or stability of our product candidates that may not be detectable in final product testing. We or our contract manufacturers must supply allnecessary documentation in support of a BLA on a timely basis and must adhere to the FDA’s cGMP regulations enforced by the FDA through its facilitiesinspection program. Our contract manufacturers have not produced a commercially-approved AAV product and therefore have not obtained the requisite FDAapprovals to do so. Our facilities and quality systems and the facilities and quality systems of some or all of our third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates or any of our otherpotential products. If the facility does not pass a pre-approval plant inspection, FDA approval of the products will not be granted. In addition, the regulatoryauthorities may, at any time, audit or inspect our manufacturing facilities or those of our third-party contractors involved with the preparation of our productcandidates or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted.30Table of Contents Changes in laws and governmental policies may have an effect on regulations. For example, we and our contract vendors currently rely on other contractorsbased in the United Kingdom (UK). If the implementation of new governmental policies associated with BREXIT occurs, these governmental policies mayaffect our UK-based contractors’ ability to comply with applicable regulations, including existing EU regulations. If they are unable to return to compliance,or if an acceptable substitute vendor cannot be identified, it may negatively impact our business. Further, to the extent that our UK-based contractors havesupply relationships with vendors in the EU, these contractors may experience difficulties, delay or increased costs in receiving materials from their vendorsin the EU, which could have a material adverse effect on our UK-based contractors’ ability to provide the services or materials to us.The regulatory authorities also may, at any time following approval of a product for sale, audit our manufacturing facilities or those of our third-partycontractors. If any such inspection or audit identifies a failure to comply with applicable regulations or if we become aware of a violation of our productspecifications or applicable regulations, independent of an inspection or audit, we or the relevant regulatory authority may require remedial measures thatmay be costly and/or time-consuming for us or a third party to implement and which may include the temporary or permanent suspension of a clinical trial orcommercial sales or the temporary or permanent closure of a facility. Such violations could also result in civil and/or criminal penalties. Any such remedialmeasures or other civil and/or criminal penalties imposed upon us or third parties with whom we contract could materially harm our business.If we or our third-party contractors fail to maintain regulatory compliance, the FDA can impose regulatory sanctions including, among other things, refusal toapprove a pending application for a new biologic product, revocation of a pre-existing approval, other civil or criminal penalties or closing one or moremanufacturing or testing facilities. As a result, our business, financial condition and results of operations may be materially harmed.Additionally, if the service provided by an approved manufacturing or testing contractor is interrupted, there could be a significant disruption in commercialsupply. An alternative contractor would need to be qualified through a BLA supplement which could result in further delay. The regulatory agencies mayalso require additional studies showing comparability between approved product or testing, and product or testing provided after a contractor change, if anew manufacturing or testing contractor is relied upon for commercial production. Switching contractors may involve substantial costs and is likely to resultin a delay in our desired clinical and commercial timelines.These factors could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our product candidates, causing usto incur higher costs, and preventing us from commercializing our products successfully. Furthermore, if our suppliers fail to meet contractual requirements,and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed, orwe could lose potential revenue.Our reliance on third parties requires us to share our trade secrets and other confidential information, which increases the possibility that a competitorwill discover them or that our confidential information, including trade secrets, will be misappropriated or disclosed.Because we rely on third parties to research and develop and to manufacture our product candidates, we must, at times, share confidential information,including trade secrets, with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable,material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior tobeginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidentialinformation, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets andother confidential information increases the risk that such trade secrets become known by our competitors, are purposefully or inadvertently incorporatedinto the technology of others, or are disclosed or used in violation of these agreements. Public disclosure of our confidential information also prevents usfrom seeking patent protection for that or related discoveries. Given that our proprietary position is based, in part, on our know-how and trade secrets, acompetitor’s independent discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have amaterial adverse effect on our business, financial conditions, results of operations and prospects.In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentiallyrelating to our confidential information and trade secrets, although our agreements may contain certain limited publication rights. For example, any academicinstitution that we may collaborate with in the future will usually expect to be granted rights to publish data arising out of such collaboration, provided thatwe are notified in advance and given the opportunity to delay publication for a limited time period in order for us to secure patent protection of intellectualproperty rights arising from the collaboration, in addition to the opportunity to remove confidential information or trade secrets from any suchpublication. However, we may fail to recognize or timely identify such confidential information or trade secrets prior to publication, and they may bedisclosed. In the future we may also conduct joint research and development programs that may require us to share trade secrets under the terms of ourresearch and development or similar agreements. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either throughbreach of our agreements with third parties, independent development or publication of information by any of our third-party collaborators. A competitor’sdiscovery of our trade secrets could impair our competitive position and have an adverse impact on our business, financial condition, results of operationsand prospects.31Table of Contents Risks Related to Commercialization of Our Product CandidatesAny suspension of, or delays in the commencement or completion of, clinical trials for our product candidates could result in increased costs to us, delay orlimit our ability to generate revenue and adversely affect our commercial prospects.Before we can initiate clinical trials in the U.S. for our product candidates, we need to submit the results of preclinical testing to the FDA, along with otherinformation including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND.We may rely in part on preclinical, clinical and quality data generated by CROs and other third parties for regulatory submissions for our product candidates.If these third parties do not provide timely data for our product candidates, it will delay our plans for our IND submissions and clinical trials. If those thirdparties do not make this data available to us, we will likely have to develop all necessary preclinical and clinical data on our own, which will lead tosignificant delays and increase development costs of the product candidate. In addition, the FDA may require us to conduct additional preclinical testing forany product candidate before it allows us to initiate clinical testing under any IND, which may lead to additional delays and increase the costs of ourpreclinical development. Delays with any regulatory body or agency may significantly affect our product development timeline. Delays in thecommencement or completion of any clinical trials that we plan for our product candidates could significantly affect our product development costs. We donot know whether any trials that we plan will begin on time or be completed on schedule, if at all. The commencement and completion of clinical trials canbe delayed or terminated for a number of reasons, including delays or terminations related to: •the FDA failing to grant permission to proceed or placing the clinical trial on hold; •patients failing to enroll or remain in our trial at the rate we expect; •patients choosing an alternative treatment for the indication for which we are developing our product candidates, or participating in competingclinical trials; •lack of adequate funding to continue the clinical trial; •patients experiencing severe or unexpected drug-related adverse effects; •a facility manufacturing any of our product candidates or any of their components being ordered by the FDA or other government or regulatoryauthorities to temporarily or permanently shut down due to violations of cGMP or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; •any changes to our manufacturing process that may be necessary or desired; •third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on ouranticipated schedule or consistent with the clinical trial protocol, Good Clinical Practice or regulatory requirements or other third parties notperforming data collection or analysis in a timely and accurate manner; •inspections of clinical trial sites by the FDA or the finding of regulatory violations by the FDA or an IRB that require us to undertake correctiveaction, result in suspension or termination of one or more sites or the imposition of a clinical hold on the entire trial or that prohibit us from usingsome or all of the data in support of our marketing applications; •third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities forviolations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of thedata produced by such contractors in support of our marketing applications; or •one or more IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional patients, orwithdrawing its approval of the trial.Product development costs will increase if we have delays in testing or approval of any of our product candidates, or if we need to perform more or largerclinical trials than planned. Additionally, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols toreflect these changes. Amendments may require us to resubmit our clinical trial protocols to IRBs for review and approval, which may impact the costs,timing or successful completion of a clinical trial. If we experience delays in completion of our clinical trials, or if we, the FDA or other regulatory authorities,the IRB, other reviewing entities, or any of our clinical trial sites suspend or terminate any of our clinical trials, the commercial prospects for a productcandidate may be harmed and our ability to generate product revenue will be delayed. In addition, many of the factors that cause, or lead to, termination orsuspension of, or a delay in the commencement or completion of, clinical trials may also ultimately lead to the denial of regulatory approval of a productcandidate. If we make manufacturing or formulation changes to our product candidates, we may need to conduct additional studies to bridge our modifiedproduct candidates to earlier versions. Further, if one or more clinical trials are delayed or terminated, our competitors may be able to bring products tomarket before we do, and the commercial viability of our product candidates could be significantly reduced.If we do not achieve our projected development goals in the time frames we announce and expect, the commercialization of our products may be delayedand the credibility of our management team may be adversely affected and, as a result, our stock price may decline.From time to time, we estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development goals, which wesometimes refer to as milestones. These milestones may include the commencement or completion of,32Table of Contents or the availability of data from, scientific studies and clinical trials and the submission of regulatory filings. From time to time, we may publicly announcethe expected timing of some of these milestones. All of these milestones will be based on a variety of assumptions. The actual timing of these milestones canvary dramatically compared to our estimates, in some cases for reasons beyond our control. If we do not meet these milestones as publicly announced, thecommercialization of our products may be delayed and the credibility of our management team may be adversely affected and, as a result, our stock price maydecline.Final marketing approval for our product candidates by the FDA or other regulatory authorities for commercial use may be delayed, limited or denied,any of which would adversely affect our ability to generate operating revenue.After the completion of our clinical trials and, assuming the results of the trials are successful, the submission of a BLA, we cannot predict whether or whenwe will obtain regulatory approval to commercialize our product candidates, and we cannot, therefore, predict the timing of any future revenue. We cannotcommercialize our product candidates until the appropriate regulatory authorities have reviewed and approved the applicable applications. We cannot assureyou that the regulatory agencies will complete their review processes in a timely manner or that we will obtain regulatory approval for our productcandidates. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative actionor changes in FDA policy during the period of product development, clinical trials and FDA regulatory review. If marketing approval for any productcandidate is delayed, limited or denied, our ability to market the product candidate, and our ability to generate product sales, would be adversely affected.Even if we obtain marketing approval for any of our product candidates, they could be subject to restrictions or withdrawal from the market, and we maybe subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, whenand if any of them are approved.Even if U.S. regulatory approval is obtained, the FDA may still impose significant restrictions on a product’s indicated uses, marketing or distribution orimpose ongoing requirements for potentially costly and time-consuming post-approval studies, post-market surveillance or clinical trials. Followingapproval, if at all, of any of our product candidates, such candidate will also be subject to ongoing FDA requirements governing the labeling, packaging,storage, distribution, safety surveillance, advertising, promotion, recordkeeping and reporting of safety and other post-market information. In addition,manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities forcompliance with cGMP requirements relating to quality control, quality assurance and corresponding maintenance of records and documents. If we or aregulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems withthe facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, includingrequesting recall or withdrawal of the product from the market or suspension of manufacturing.If we or the manufacturing facilities for any product candidate that may receive regulatory approval fail to comply with applicable regulatory requirements, aregulatory agency may: •issue warning letters or untitled letters; •seek an injunction or impose civil or criminal penalties or monetary fines; •suspend or withdraw regulatory approval •suspend any ongoing clinical trials; •refuse to approve pending applications or supplements or applications filed by us; •suspend or impose restrictions on operations, including costly new manufacturing requirements; or •seize or detain products, refuse to permit the import or export of product or request us to initiate a product recall.The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue. The FDA hasthe authority to require a risk evaluation and mitigation strategy plan as part of a BLA or after approval, which may impose further requirements orrestrictions on the distribution or use of an approved drug, such as limiting prescribing to certain physicians or medical centers that have undergonespecialized training, limiting treatment to patients who meet certain safe-use criteria and requiring treated patients to enroll in a registry.In addition, if any of our product candidates is approved, our product labeling, advertising and promotion would be subject to regulatory requirements andongoing regulatory review. The FDA strictly regulates the promotional claims that may be made about prescription products. In particular, a product may notbe promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling. If we receive marketing approval for a productcandidate, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with the approved label. If we are found to have promotedsuch off-label uses, we may become subject to significant liability. The FDA and other agencies actively enforce the laws and regulations prohibiting thepromotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant sanctions. The federalgovernment has levied large civil and criminal fines against companies for alleged improper promotion and has33Table of Contents enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or obtainpermanent injunctions under which specified promotional conduct is changed or curtailed.Even if we receive regulatory approval, we still may not be able to successfully commercialize any of our product candidates, and the revenue that wegenerate from its sales, if any, could be limited.Even if any of our product candidates receive regulatory approval, they may not gain market acceptance among physicians, patients, healthcare payers or themedical community. Coverage and reimbursement of our product candidates by third-party payers, including government payers, is also generally necessaryfor commercial success. The degree of market acceptance of our product candidates will depend on a number of factors, including: •demonstration of clinical efficacy and safety compared to other more-established products; •the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling; •acceptance of new therapeutic options by health care providers and their patients; •the prevalence and severity of any adverse effects; •new procedures or methods of treatment that may be more effective in treating or may reduce the incidences of wet AMD, A1AT deficiency,hereditary angioedema, or other conditions for which our products are intended to treat; •pricing and cost-effectiveness; •the effectiveness of our or any future collaborators’ sales and marketing strategies; •our ability to obtain and maintain sufficient third-party coverage and reimbursement from government health care programs, including Medicareand Medicaid, private health insurers and other third-party payers; •unfavorable publicity relating to the product candidate; and •the willingness of patients to pay out-of-pocket in the absence of third-party coverage and reimbursement.If any product candidate is approved but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payers or patients, we may notgenerate sufficient revenue from that product candidate and may not become or remain profitable. Our efforts to educate the medical community and third-party payers on the benefits of such a product candidate may require significant resources and may never be successful. In addition, our ability to successfullycommercialize any of our product candidates will depend on our ability to manufacture our products, differentiate our products from competing products anddefend and enforce our intellectual property rights relating to our products.If the market for the treatment of wet AMD is smaller than we believe it is, our future revenue may be adversely affected, and our business may suffer.We are advancing the development of ADVM‑022 for the treatment of wet AMD, a disease we believe to be the most common cause of vision loss in adultsover the age of 50 in developed countries. If the size of the market for wet AMD is smaller than we anticipate, we may not be able to achieve profitability andgrowth. Our projections of the number of people who have wet AMD, as well as the subset of people with the disease who have the potential to benefit fromtreatment with ADVM‑022, are based on estimates. These estimates have been derived from a variety of sources, including the scientific literature, surveys ofclinics, patient foundations and market research and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence ofthese diseases. The number of patients may turn out to be lower than expected. The effort to identify patients with diseases we seek to treat is in early stagesas we continue to enroll patients in the OPTIC trial of ADVM‑022 for the treatment of wet AMD, and we cannot accurately predict the number of patients forwhom treatment might be possible. For example, some patients with wet AMD have neutralizing antibodies at titer levels that may prevent them frombenefiting from ADVM‑022. If this patient population is larger than we estimate, the market for ADVM‑022 may be smaller than we anticipate, and our futurerevenue may be adversely affected. Additionally, the potentially addressable patient population may be limited or may not be amenable to treatment with ourproduct candidates for other reasons, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect ourresults of operations and our business.Because the target patient population for our rare disease programs is relatively small, we must be able to successfully identify patients and achieve asignificant market share to maintain profitability and growth. If the market opportunities for these product candidates are smaller than we believe theyare, our future revenue may be adversely affected, and our business may suffer.Our programs designed to treat rare genetic diseases may impact a small number of individuals (fewer than 200,000) in the U.S. Our estimates of both thenumber of people who have these rare genetic diseases, as well as the subset of people with these diseases who have the potential to benefit from our productcandidates, may prove to be incorrect. The number of patients in the U.S. and elsewhere, or the portion of those patients who are amenable to treatment withour product candidates, may turn out to be lower than expected or new patients may become increasingly difficult to identify or gain access to, all of whichwould adversely affect our results of operations and our business. Further, even if we obtain significant market share for any of our rare disease programs,because the potential target population is very small, we may never achieve profitability despite obtaining such significant market share.34Table of Contents Additionally, because the target patient population for any of our rare disease programs is relatively small, the pricing and reimbursement of these productcandidates, if approved, must be adequate to support commercial infrastructure. If we are unable to obtain adequate levels of reimbursement, our ability tosuccessfully market and sell any of our product candidates targeting such rare disease will be adversely affected. The manner and level at whichreimbursement is provided for services related to this product candidate (e.g., for administration of such product to patients) is also important. Inadequatereimbursement for such services may lead to physician resistance and adversely affect our ability to market or sell our product candidates targeting such raredisease.Coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, which could make it difficult for us tosell our product candidates profitably.Market acceptance and sales of our product candidates will depend significantly on the availability of adequate coverage and reimbursement from third-partypayers for any of our product candidates and may be affected by existing and future health care reform measures. Government authorities and third-partypayers, such as private health insurers and health maintenance organizations, decide which drugs they will pay for and establish reimbursement levels.Reimbursement by a third-party payer may depend upon a number of factors including the third-party payer’s determination that use of a product candidateis: •a covered benefit under its health plan; •safe, effective and medically necessary; •appropriate for the specific patient; •cost-effective; andObtaining coverage and reimbursement approval for a product candidate from a government or other third-party payer is a time-consuming and costly processthat could require us to provide supporting scientific, clinical and cost effectiveness data for the use of the applicable product candidate to the payer. We maynot be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement. While there is no uniform coverage and reimbursementpolicy among payers in the United States, private payers often follow Medicare coverage policy and payment limitations in setting their own reimbursementrates. We cannot be sure that coverage or adequate reimbursement will be available for any of our product candidates. Further, reimbursement amounts mayreduce the demand for, or the price of, our product candidates. If reimbursement is not available or is available only in limited levels, we may not be able tocommercialize certain of our product candidates profitably, or at all, even if approved.A number of cell and gene therapy products recently have been approved by the FDA. Although the U.S. Center for Medicare & Medicaid Services (“CMS”)approved its first method of coverage and reimbursement for one such product, the methodology has been subject to challenge by members of Congress.CMS’s decision as to coverage and reimbursement for one product does not mean that all similar products will be eligible for analogous coverage andreimbursement. As there is no uniform policy for coverage and reimbursement amongst third-party payors in the United States, even if CMS approvescoverage and reimbursement for any of our product candidates, it is unclear what affect, if any, such a decision will have on our ability to obtain and maintaincoverage and adequate reimbursement from other private payors.As a result of legislative proposals and the trend toward managed health care in the U.S., third-party payers are increasingly attempting to contain health carecosts by limiting both coverage and the level of reimbursement of new drugs. By way of example, in March 2010, the Patient Protection and Affordable CareAct, as amended by the Health Care and Education Reconciliation Act, collectively referred to as the Affordable Care Act, was enacted with a goal ofreducing the cost of healthcare and substantially changing the way healthcare is financed by both government and private insurers. The Affordable Care Act,among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated fordrugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid DrugRebate Program, extended the rebate program to individuals enrolled in Medicaid managed care organizations and established annual fees and taxes onmanufacturers of certain prescription drugs.Some of the provisions of the Affordable Care Act have yet to be implemented, and there have been judicial and Congressional challenges to certain aspectsof the Affordable Care Act. Since January 2017, President Trump has signed Executive Orders and other directives designed to delay, circumvent or loosenthe implementation of certain provisions of the Affordable Care Act or otherwise circumvent some of the requirements for health insurance mandated by theAffordable Care Act. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the Affordable Care Act. WhileCongress has not passed repeal legislation, the Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based sharedresponsibility payment imposed by the Affordable Care Act on certain individuals who fail to maintain qualifying health coverage for all or part of a yearthat is commonly referred to as the “individual mandate.” Additionally, on January 22, 2018, President Trump signed a continuing resolution onappropriations for fiscal year 2018 that delayed the implementation of certain Affordable Care Act-mandated fees, including the so-called “Cadillac” tax oncertain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medicaldevice excise tax on non-exempt medical devices. Moreover, the Bipartisan Budget Act of 2018, or the BBA, among other things, amends the AffordableCare Act, effective January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers whoparticipate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut35Table of Contents hole.” Further, in July 2018, CMS announced that it has suspended further collections and payments to and from certain Affordable Care Act qualified healthplans and health insurance issuers under the Affordable Care Act risk adjustment program pending the outcome of federal district court litigation regardingthe method CMS uses to determine this risk adjustment. Congress may consider other legislation to repeal or replace elements of the Affordable Care Act.Other legislative changes have also been proposed and adopted in the U.S. since the Affordable Care Act was enacted. On August 2, 2011, the BudgetControl Act of 2011 created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending atargeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’sautomatic reduction to several government programs. This included aggregate reductions of Medicare payments to providers of 2% per fiscal year, whichwent into effect on April 1, 2013 and due to subsequent legislative changes to the statute, including the BBA, will stay in effect through 2027 unlessadditional Congressional action is taken.These cost reduction initiatives could decrease the coverage and reimbursement that we receive for any approved products, and could seriously harm ourbusiness. We expect that additional healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal, state andforeign governments will pay for healthcare products and services, which could result in reduced demand for our products, if approved, or additional pricingpressures.Recently there has been heightened governmental scrutiny over pharmaceutical pricing practices in light of the rising cost of prescription drugs andbiologics. Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, amongother things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform governmentprogram reimbursement methodologies for products. At the federal level, the Trump administration’s budget proposal for fiscal year 2019 contains furtherdrug price control measures that could be enacted during the 2019 budget process or in other future legislation, including, for example, measures to permitMedicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and toeliminate cost sharing for generic drugs for low-income patients. Further, the Trump administration released a “Blueprint” to lower drug prices and reduce outof pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcareprograms, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers. The U.S.Department of Health and Human Services has already started the process of soliciting feedback on some of these measures and, at the same, is immediatelyimplementing others under its existing authority. Although a number of these, and other potential, proposals will require authorization through additionallegislation to become effective, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/oradministrative measures to control drug costs. At the state level, legislatures are increasingly passing legislation and implementing regulations designed tocontrol pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product accessand marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.The continuing efforts of the government, insurance companies, managed care organizations and other payers of healthcare services to contain or reducecosts of health care may adversely affect: •the demand for any product candidates for which we may obtain regulatory approval; •our ability to set a price that we believe is fair for our product candidates; •our ability to generate revenue and achieve or maintain profitability; •the level of taxes that we are required to pay; and •the availability of capital.Due to the novel nature of our technology and the potential for our product candidates to offer therapeutic benefit in a single administration, we faceuncertainty related to pricing and reimbursement for these product candidates.Our product candidates are designed to provide potential therapeutic benefit after a single administration and, therefore, the pricing and reimbursement of ourproduct candidates, if approved, must be adequate to support commercial infrastructure. If we are unable to obtain adequate levels of reimbursement, ourability to successfully market and sell our product candidates will be adversely affected. The manner and level at which reimbursement is provided forservices related to our product candidates (e.g., for administration of our product to patients) is also important. Inadequate reimbursement for such servicesmay lead to physician resistance and adversely affect our ability to market or sell our products.We are subject to many manufacturing risks, any of which could substantially increase our costs and limit supply of our products. The process ofmanufacturing our products is complex, highly regulated and subject to several risks, including: •The manufacturing of biologics is extremely susceptible to product loss due to contamination, equipment failure, improper installation oroperation of equipment or vendor or operator error. Even minor deviations from normal manufacturing processes could result in reducedproduction yields, product defects, and other supply disruptions. If microbial, viral, or other36Table of Contents contaminations are discovered in our products or in the manufacturing facility in which our products are made, such manufacturing facility mayneed to be closed for an extended period of time to investigate and remedy the contamination. •The manufacturing facilities in which our products are made could be adversely affected by equipment failures, labor shortages, contaminants, rawmaterials shortages, natural disasters, power failures, and numerous other factors. •We and our contract manufacturers must comply with the FDA’s cGMP regulations and guidelines. We and our contract manufacturers mayencounter difficulties in achieving quality control and quality assurance and may experience shortages in qualified personnel. We and our contractmanufacturers are subject to inspections by the FDA and comparable agencies in other jurisdictions to confirm compliance with applicableregulatory requirements. Any failure to follow cGMP or other regulatory requirements or any delay, interruption, or other issues that arise in themanufacture, fill-finish, packaging or storage of our products as a result of a failure of our facilities, or the facilities or operations of third parties, tocomply with regulatory requirements or pass any regulatory authority inspection could significantly impair our ability to develop andcommercialize our products. This may lead to significant delays in the availability of products for our clinical trials or the termination or hold on aclinical trial, or the delay or prevention of a filing or approval of marketing applications for our product candidates. Significant noncompliancecould also result in the imposition of sanctions, including fines, injunctions, civil penalties, failure of regulatory authorities to grant marketingapprovals for our product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operatingrestrictions, and criminal prosecutions, any of which could be costly and damage our reputation. If we are not able to maintain regulatorycompliance, we may not be permitted to market our products and/or may be subject to product recalls, seizures, injunctions or criminalprosecution. •Our product candidates are biologics and require processing steps that are more complex than those required for most chemical pharmaceuticals.Moreover, unlike chemical pharmaceuticals, the physical and chemical properties of a biologic such as our product candidates generally cannot beadequately characterized prior to manufacturing the final product. As a result, an assay of the finished product is not sufficient to ensure that theproduct will perform in the intended manner. Accordingly, we expect to employ multiple steps to attempt to control our manufacturing process toassure that the process works, and the product or product candidate is made strictly and consistently in compliance with the process. •We have to develop the manufacturing process for late stage clinical product, and our current process has not been fully characterized and thereforeis open to potential variations that could lead to defective product or a product that does not meet specification. •Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failuresthat result in lot failures, product recalls, product liability claims and insufficient inventory. •Some of the raw materials required in our manufacturing process are derived from biological sources. Such raw materials are difficult to procure andmay also be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derivedsubstances in the manufacture of our product candidates could adversely impact or disrupt commercialization. •Any adverse developments affecting manufacturing operations for our products may result in shipment delays, inventory shortages, lot failures,product withdrawals or recalls, or other interruptions in the supply of our products. We may also have to take inventory write-offs and incur othercharges and expenses for products that fail to meet specifications, undertake costly remediation efforts, or seek more costly manufacturingalternatives. We may encounter problems achieving adequate or clinical-grade materials that meet FDA, EMA or other applicable standards orspecifications with consistent and acceptable production yields and costs.We may not be successful in establishing and maintaining strategic collaborations, which could adversely affect our ability to receive potential milestoneand royalty payments.We have entered into development or other strategic collaborations with major biotechnology or pharmaceutical companies. For example, we have enteredinto collaborations with Regeneron and Editas. Research activities under our collaboration agreements are subject to mutually agreed-on research plans andbudgets, and if we and our strategic partners are unable to agree on the research plan or research budget in a timely fashion or at all, performance of researchactivities will be delayed. In addition, some of our strategic partners may terminate any agreements they enter into with us or allow such agreements to expireby their terms. If we fail to maintain our current or future strategic collaborations, we may not realize milestone and royalty payments or other revenues underthe collaboration agreements. We may form strategic alliances in the future, and we may not realize the benefits of such alliances.We may form strategic alliances, create joint ventures or collaborations, or enter into licensing arrangements with third parties that we believe willcomplement or augment our existing business, including for the continued development or commercialization of our product candidates. These relationshipsor those like them may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute ourexisting stockholders, or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic partners and thenegotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternativearrangements for our product37Table of Contents candidates because third parties may view the risk of failure in future clinical trials as too significant, or the commercial opportunity for our productcandidate as too limited. We cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income thatjustifies such transaction. Even if we are successful in our efforts to establish development partnerships, the terms that we agree upon may not be favorable tous, and we may not be able to maintain such development partnerships if, for example, development or approval of a product candidate is delayed or sales ofan approved product candidate are disappointing. Any delay in entering into development partnership agreements related to our product candidates coulddelay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market.If our competitors develop treatments for the target indications of our product candidates that are approved, marketed more successfully, or demonstratedto be safer or more effective than our product candidates, our commercial opportunity will be reduced or eliminated.We operate in highly competitive segments of the biopharmaceutical markets. We face competition from many different sources, including larger and better-funded pharmaceutical, specialty pharmaceutical, biotechnology, and gene therapy companies, as well as from academic institutions, government agenciesand private and public research institutions. Our product candidates, if successfully developed and approved, will compete with established therapies as wellas with new treatments that may be introduced by our competitors. There are a variety of drug candidates and gene therapies in development or beingcommercialized by our competitors for the indications that we intend to test. Many of our competitors have significantly greater financial, product candidatedevelopment, manufacturing, and marketing resources than we do. Large pharmaceutical and biotechnology companies have extensive experience in clinicaltesting and obtaining regulatory approval for drugs. In addition, universities and private and public research institutes may be active in our target diseaseareas, and some could be in direct competition with us. We also may compete with these organizations to recruit management, scientists, and clinicaldevelopment personnel. We will also face competition from these third parties in establishing clinical trial sites, registering patients for clinical trials, and inidentifying and in-licensing new product candidates. Smaller or early-stage companies may also prove to be significant competitors, particularly throughcollaborative arrangements with large and established companies.New developments, including the development of other biotechnology and vectorology technologies and methods of treating disease, occur in thepharmaceutical, biotechnology and gene therapy industries at a rapid pace. Developments by competitors may render our product candidates obsolete ornoncompetitive. Competition in drug development is intense. We anticipate that we will face intense and increasing competition as new treatments enter themarket and advanced technologies become available.Even if we obtain regulatory approval for our product candidates, the availability and price of our competitors’ products could limit the demand, and theprice we are able to charge, for our product candidates. For example, Lucentis® and EYLEA are currently available in the U.S. for treatment of wet AMD,diabetic macular edema, central retinal vein occlusion, and diabetic retinopathy. We will not achieve our business plan if the acceptance of our productcandidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment to our product candidates, or ifphysicians switch to other new drug products or choose to reserve our product candidates for use in limited circumstances. Our inability to compete withexisting or subsequently introduced drug products or other therapies would have a material adverse impact on our business, prospects, financial conditionand results of operations.Our potential competitors in these diseases may be developing novel immune modulating therapies that may be safer or more effective than our productcandidates. For example, if we continue clinical development of, and seek to commercialize, ADVM‑022 for the treatment of wet AMD, it will compete with avariety of therapies currently marketed and in development for wet AMD, using therapeutic modalities such as biologics, small molecules, long actingdelivery devices, and gene therapy. Lucentis and EYLEA are anti-VEGF therapies that are well established and widely accepted by physicians, patients andthird-party payers as the standard of care for the treatment of wet AMD. There are several other companies with marketed products or products in developmentfor the treatment of wet AMD, including Allergan, Bayer, Hoffmann-La Roche Ltd., Novartis, and Regeneron.We have no sales, marketing or distribution capabilities, and we may have to invest significant resources to develop these capabilities.We have no internal sales, marketing, or distribution capabilities. If any of our product candidates ultimately receive regulatory approval, we may not be ableto effectively market and distribute the product candidate. We may have to invest significant amounts of financial and management resources to developinternal sales, distribution and marketing capabilities, some of which will be committed prior to any confirmation that any of our product candidates will beapproved, if at all. We may not be able to hire consultants or external service providers to assist us in sales, marketing and distribution functions onacceptable financial terms or at all. Even if we determine to perform sales, marketing and distribution functions ourselves, we could face a number ofadditional related risks, including: •we may not be able to attract and build an effective marketing department or sales force; •the cost of establishing a marketing department or sales force may exceed our available financial resources and the revenue generated by anyproduct candidates that we may develop, in-license or acquire; and38Table of Contents •our direct sales and marketing efforts may not be successful.Governments may impose price controls, which may adversely affect our future profitability.We intend to seek approval to market our product candidates in both the U.S. and in foreign jurisdictions. If we obtain approval in one or more foreignjurisdictions, we will be subject to rules and regulations in those jurisdictions relating to our product candidates. In some foreign countries, particularly in theEuropean Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmentalauthorities can take considerable time after the receipt of marketing approval for a product candidate. If reimbursement of our future products is unavailableor limited in scope or amount, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability.Risks Related to Our Business OperationsNegative public opinion and increased regulatory scrutiny of gene therapy and genetic research may damage public perception of our product candidatesor adversely affect our ability to conduct our business or obtain marketing approvals for our product candidates.Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medicalcommunity. In particular, our success will depend upon physicians specializing in the treatment of those diseases that our product candidates targetprescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing symptomatic treatments they are already familiarwith and for which greater clinical data may be available.More restrictive government regulations or negative public opinion would have a negative effect on our business or financial condition and may delay orimpair the development and commercialization of our product candidates or demand for any products we may develop. Trials using early versions ofretroviral vectors, which integrate into, and thereby alter, the host cell’s DNA, have led to several well-publicized adverse events. Although none of ourcurrent product candidates utilize retroviruses and AAVs used in our product candidates have low-integrating potential and is not known to cause disease inhumans, our product candidates do use a viral vector delivery system. The risk of serious adverse events remains a concern for gene therapy and we cannotassure that it will not occur in any of our future clinical trials. In addition, there is the potential risk of delayed adverse events following exposure to genetherapy products due to persistent biological activity of the genetic material or other components of products used to carry the genetic material.Adverse events in trials or studies conducted by us or other parties, in particular involving the same or similar AAV serotypes to the ones we are using, even ifnot ultimately attributable to our product candidates or to an AAV serotype that we employ, and resulting publicity, could result in increased governmentalregulation, unfavorable public perception, potential regulatory delays in the testing or approval of our potential product candidates, stricter labelingrequirements for those product candidates that are approved and a decrease in demand for any such product candidates. Similarly, our lead product candidate,ADVM‑022 expresses aflibercept protein that is the same active therapy in Eylea. If safety or efficacy issues occur relating to Eylea, even if not ultimatelyattributable to aflibercept, this may negatively impact our product candidate. If any such adverse events or issues occur, development and commercializationof our product candidates or advancement of any potential clinical trials could be halted or delayed, which would have a material adverse effect on ourbusiness and operations.We are dependent on the services of our key executives and clinical and scientific staff, and if we are not able to retain these members of our managementor recruit additional management, clinical and scientific personnel, our business will suffer.We are dependent on the principal members of our management, clinical and scientific staff. The loss of service of any of our management or clinical orscientific staff could harm our business. In addition, we are dependent on our continued ability to attract, retain and motivate highly qualified additionalmanagement, clinical and scientific personnel. If we are not able to retain our management, and to attract, on acceptable terms, additional qualified personnelnecessary for the continued development of our business, including a permanent Chief Medical Officer and a permanent Chief Financial Officer, we may notbe able to sustain our operations or grow. Although we have executed employment agreements with each member of our current executive management team,these agreements are terminable at will with or without notice and, therefore, we may not be able to retain their services as expected.We may not be able to attract or retain qualified management, scientific and clinical personnel in the future due to the intense competition for qualifiedpersonnel among biotechnology, pharmaceutical and other businesses, particularly in the San Francisco Bay Area. Our industry has experienced a high rateof turnover of management and scientific personnel in recent years. If we are not able to attract, retain and motivate necessary personnel to accomplish ourbusiness objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raiseadditional capital and our ability to implement our business strategy. In addition, our current Chief Executive Officer is currently serving in a dual role asChief Financial Officer, which may result in significant time constraints and burdens on performing each such role.39Table of Contents Additionally, we do not currently maintain “key person” life insurance on the lives of our executives or any of our employees. This lack of insurance meansthat we may not have adequate compensation for the loss of the services of these individuals.We may encounter difficulties in managing our growth and expanding our operations successfully.We had 94 full-time employees as of December 31, 2018. We will need to grow our organization, or certain functions within our organization, substantiallyto continue development and pursue the potential commercialization of our product candidates, as well as function as a public company. As we seek toadvance our product candidates, we may need to expand our financial, development, regulatory, manufacturing, marketing and sales capabilities or contractwith third parties to provide these capabilities for us. As our operations expand, we expect that we will need to manage additional relationships with variousstrategic partners, suppliers and other third parties. Future growth will impose significant added responsibilities on members of management and require us toretain or otherwise manage additional internal capabilities. Our future financial performance and our ability to commercialize our product candidates and tocompete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to manage our developmentefforts and clinical trials effectively and hire, train and integrate any additional management, clinical and regulatory, financial, administrative and sales andmarketing personnel. We may not be able to accomplish these tasks, and our failure to so accomplish could prevent us from successfully growing ourcompany.If we fail to comply with applicable state and federal healthcare laws, we may be subject to civil or criminal penalties and/or exclusion from federaland/or state healthcare programs.In addition to FDA restrictions on the marketing of pharmaceutical products, several other types of state and federal healthcare fraud and abuse laws havebeen applied in recent years to restrict certain marketing practices in the pharmaceutical industry. These laws include anti-kickback, false claims, physicianpayment transparency and privacy and security laws and regulations. Because of the breadth of these laws and the narrowness of their exceptions and safeharbors, it is possible that some of our business activities could be subject to challenge under one or more of these laws.The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, orin return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare,Medicaid or other federally financed healthcare programs. Remuneration has been broadly defined to include anything of value, including cash, improperdiscounts, and free or reduced-price items and services. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers onthe one hand and prescribers, purchasers and formula managers on the other. Although there are several statutory exceptions and regulatory safe harborsprotecting certain common activities from prosecution, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intendedto induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Many states have similarlaws that apply to their state health care programs as well as private payers.The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) created new federal criminal statutes that prohibit among other actions,knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers;knowingly and willfully embezzling or stealing from a healthcare benefit program; willfully obstructing a criminal investigation of a healthcare offense; andknowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connectionwith the delivery of or payment for healthcare benefits, items or services. The Affordable Care Act, among other things, amended the intent requirement of thefederal Anti-Kickback Statute and certain criminal statutes governing healthcare fraud. A person or entity no longer needs to have actual knowledge of thestatute or specific intent to violate it. In addition, the Affordable Care Act provided that the government may assert that a claim including items or servicesresulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.Additionally, federal false claims laws and the civil monetary penalty law, including the False Claims Act, prohibits knowingly presenting or causing thepresentation of a false, fictitious, or fraudulent claim for payment to the U.S. government. Actions under the False Claims Act may be brought by the AttorneyGeneral or as a qui tam action by a private individual in the name of the government. Violations of the False Claims Act can result in significant monetarypenalties and treble damages. The federal government is using the False Claims Act, and the accompanying threat of significant liability, in its investigationand prosecution of pharmaceutical and biotechnology companies throughout the country, for example, in connection with the promotion of products forunapproved uses and other sales and marketing practices. The government has obtained multi-million and multi-billion dollar settlements under the FalseClaims Act in addition to individual criminal convictions under applicable criminal statutes. Given the significant size of actual and potential settlements, itis expected that the government will continue to devote substantial resources to investigating healthcare providers’ and manufacturers’ compliance withapplicable fraud and abuse laws.In addition, there has been a recent trend of increased federal and state regulation of payments made to physicians and other healthcare providers. TheAffordable Care Act, among other things, imposes new reporting requirements on drug manufacturers, under the federal Physician Payments Sunshine Act, forpayments made by them to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate familymembers. Failure to submit required information may result in40Table of Contents significant civil monetary penalties, for all payments, transfers of value or ownership or investment interests that are not timely, accurately and completelyreported in an annual submission. Certain states also mandate implementation of commercial compliance programs, impose restrictions on drug manufacturermarketing practices and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians.The need to build and maintain a robust compliance program with different compliance and/or reporting requirements increases the possibility that ahealthcare company may violate one or more of the requirements. If our operations are found to be in violation of any of such laws or any other governmentalregulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment orrestructuring of our operations, exclusion from participation in federal and state healthcare programs, imprisonment, and additional reporting requirementsand oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, any ofwhich could adversely affect our ability to operate our business and our financial results.We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations(collectively, “Trade Laws”). We can face serious consequences for violations.Among other matters, Trade Laws prohibit companies and their employees, agents, CRO’s, legal counsel, accountants, consultants, contractors, and otherpartners from authorizing, promising, offering, provide, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else oranything of value to or from recipients in the public or private sector. Violations of Trade laws can result in substantial criminal fines and civil penalties,imprisonment, the loss of trade privileges, debarment, tax assessments, breach of contract and fraud litigation, reputational harm, and other consequences. Wehave direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and otherorganizations. We also expect our non-U.S. activities to increase in time. We engage third parties for clinical trials and/or obtain necessary permits, licenses,registrations, and other regulatory approvals. We can be held liable for the corrupt or other illegal activities of our personnel, agents, or partners, even if wedo not explicitly authorize or have prior knowledge of such activities.If we fail to comply with applicable U.S. and foreign privacy and data protection laws and regulation, we may be subject to liabilities that adversely affectour business, operations and financial performance.We are subject to or affected by numerous federal, state and foreign laws and regulations, as well as regulatory guidance, governing the collection, use,disclosure, retention, and security of personal data, such as information that we collect about patients and healthcare providers in connection with clinicaltrials in the U.S. and abroad. The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely toremain uncertain for the foreseeable future. This evolution may create uncertainty in our business, result in liability or impose additional costs on us. The costof compliance with these laws, regulations and standards is high and is likely to increase in the future. Any failure or perceived failure by us to comply withfederal, state, or foreign laws or self-regulatory standards could result in negative publicity, diversion of management time and effort and proceedings againstus by governmental entities or others. In many jurisdictions, enforcement actions and consequences for noncompliance are rising.For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), imposes, among otherthings, certain standards relating to the privacy, security, transmission and breach reporting of individually identifiable health information, upon healthplans, healthcare clearinghouses and certain healthcare providers, and their respective business associates that perform services for them involvingindividually identifiable health information. In the event we are subject to HIPAA, and fail to properly maintain the privacy and security of certainindividually identifiable health information, or we are responsible for an inadvertent disclosure or security breach of such individually identifiable healthinformation, we could be subject to enforcement measures, including civil and criminal penalties and fines for violations of state and federal privacy orsecurity standards, such as HIPAA and HITECH, and their respective implementing regulations. Additionally, certain states have adopted comparable privacyand security laws and regulations, some of which may be more stringent than HIPAA. HIPAA, HITECH and comparable state laws and regulations will besubject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our futurecustomers and strategic partners. Any liability from failure to comply with the requirements of these laws, to the extent such requirements are deemed toapply to our operations, could adversely affect our financial condition. The costs of complying with privacy and security related legal and regulatoryrequirements are burdensome and could have a material adverse effect on our results of operations.Our operations abroad may also be subject to increased scrutiny or attention from data protection authorities. Many countries in these regions haveestablished or are in the process of establishing privacy and data security legal frameworks with which we, our customers, or our vendors must comply. Forexample, the EU has adopted the General Data Protection Regulation, or GDPR, which went into effect in May 2018 and introduced strict requirements forprocessing personal data. The GDPR is likely to increase compliance burden on us, including by mandating potentially burdensome documentationrequirements, granting certain rights to individuals to control how we collect, use, disclose, retain and leverage information about them. The processing ofsensitive personal data, such as physical health condition, may impose heightened compliance burdens under the GDPR and is a topic of active interest41Table of Contents among foreign regulators. In addition, the GDPR provides for breach reporting requirements, more robust regulatory enforcement and fines of up to 20million euros or up to 4% of the annual global revenue. In the United States, California recently enacted the California Consumer Privacy Act (“CCPA”),which takes effect on January 1, 2020. The CCPA gives California residents expanded rights to access and delete their personal information, opt out ofcertain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penaltiesfor violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliancecosts and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in theU.S., which could increase our potential liability and adversely affect our business. Further, as we continue to expand into other foreign countries andjurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.We and our development partners, third-party manufacturer and suppliers use biological materials and may use hazardous materials, and any claimsrelating to improper handling, storage or disposal of these materials could be time consuming or costly.We and our development partners, third-party manufacturer and suppliers may use hazardous materials, including chemicals and biological agents andcompounds that could be dangerous to human health and safety or the environment. Our operations and the operations of our third-party manufacturers andsuppliers also produce hazardous waste products. Federal, state and local laws and regulations govern the use, generation, manufacture, storage, handling anddisposal of these materials and wastes. Compliance with applicable environmental laws and regulations may be expensive, and current or futureenvironmental laws and regulations may impair our product development efforts. In addition, we cannot entirely eliminate the risk of accidental injury orcontamination from these materials or wastes. We do not carry specific biological or hazardous waste insurance coverage, and our property, casualty andgeneral liability insurance policies specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure orcontamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceedingour resources, and our clinical trials or regulatory approvals could be suspended.If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our otherproduct candidates.We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercializeour product candidates. For example, we may be sued if our product candidates allegedly caused or cause injury or are found to be otherwise unsuitableduring product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects indesign, a failure to warn of dangers inherent in the product candidate, negligence, strict liability, and a breach of warranties. Claims could also be assertedunder state consumer protection acts.If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit or cease thecommercialization of our product candidates.Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims mayresult in: •decreased demand for our product candidates; •injury to our reputation; •withdrawal of clinical trial participants; •costs to defend the related litigation; •a diversion of management’s time and our resources; •substantial monetary awards to trial participants or patients; •product recalls, withdrawals or labeling, marketing or promotional restrictions; •loss of revenue; •the inability to commercialize our product candidates; and •a decline in our stock price.We currently hold $5.0 million in product liability insurance, which may not adequately cover all liabilities that we may incur. We may not be able tomaintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. Our inability to obtain and retain sufficientproduct liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of ourproduct candidates. Although we plan to maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement inan amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies will alsohave various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by acourt or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain,sufficient capital to pay such amounts.42Table of Contents We and any of our future development partners will be required to report to regulatory authorities if any of our approved products cause or contribute toadverse medical events, and any failure to do so would result in sanctions that would materially harm our business.If we and any of our future development partners or CROs are successful in commercializing our products, the FDA and foreign regulatory authorities wouldrequire that we and any of our future development partners report certain information about adverse medical events if those products may have caused orcontributed to those adverse events. The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well asthe nature of the event. We and any of our future development partners may fail to report adverse events we become aware of within the prescribed timeframe.We and any of our future development partners may also fail to appreciate that we have become aware of a reportable adverse event, especially if it is notreported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we and any of our futuredevelopment partners fail to comply with our or their reporting obligations, the FDA or a foreign regulatory authority could take action, including criminalprosecution, the imposition of civil monetary penalties, seizure of our products and delay in approval or clearance of future products.Our internal computer systems, or those of our development partners, CROs or other contractors or consultants, may fail or suffer security breaches, whichcould result in a material disruption of our product development programs.In the ordinary course of our business, we, our CROs, and other third parties on which we rely collect and store sensitive data, including legally protectedpatient health information, personally identifiable information about our employees, intellectual property, and proprietary business information. Theseapplications and data encompass a wide variety of critical information including research and development information and business and financialinformation.The secure processing, storage, maintenance, and transmission of this critical information is vital to our operations and business strategy. Despite theimplementation of security measures to protect against unauthorized access or disclosure, our internal computer systems and those of our current and anyfuture CROs and other contractors, consultants and collaborators are vulnerable to damage or attacks from computer viruses, unauthorized access, breaches,interruptions due to employee error, malfeasance or other disruptions, lapses in compliance with privacy and security mandates, natural disasters, terrorism,war and telecommunication and electrical failures. While we have not experienced any such material system failure, accident, or security breach to date, anysuch event could compromise our networks and the information stored there could be accessed by unauthorized parties, publicly disclosed, lost or stolen. Wehave measures in place that are designed to detect and respond to such security incidents and breaches of privacy and security mandates. Any such access,disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, suchas the HIPAA, government enforcement actions and regulatory penalties. Unauthorized access, loss or dissemination could also disrupt our operations,including our ability to conduct research and development activities, process and prepare company financial information, manage various general andadministrative aspects of our business and damage our reputation, any of which could adversely affect our business. For example, the loss of clinical trial datafrom completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce thedata. Likewise, we rely on third parties to manufacture our product candidates and conduct clinical trials, and similar events relating to their computersystems could also have a material adverse effect on our business. In addition, there can be no assurance that we will promptly detect any such disruption orsecurity breach, if at all. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriatedisclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidatecould be delayed.We have entered into a new lease for a new corporate, process development, and research headquarters, which may be more costly to build out than weanticipate and may not provide all of the functionality we expect, which could cause us to incur unanticipated costs.In June 2018, we entered into a lease for a building located in Redwood City, California, which we plan to occupy by year end 2019. This facility will serveas our new corporate headquarters and will include approximately 81,000 square feet of office, development, and research laboratory space. We believe thisfacility will enable us to increase our process development capabilities to the 1000-liter scale. There can be no assurance that the cost of building out thisspace will not be significantly more than we expect, or that the functionality of this space will be as we expect. Additionally, since we are not developing thisspace for clinical or commercial manufacturing production, we will continue to rely upon our limited number of suppliers to manufacture of our gene therapyproducts for clinical trials and if they are approved.Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.Our operations could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extremeweather conditions, medical epidemics and other natural or manmade disasters or business interruptions, for which we are predominantly self-insured. We relyon third-party manufacturers to produce our product candidates. Our ability to obtain clinical supplies of our product candidates could be disrupted if theoperations of these suppliers are affected by a man-made or43Table of Contents natural disaster or other business interruption. The occurrence of any of these business disruptions could seriously harm our operations and financialcondition and increase our costs and expenses.Our employees, independent contractors, principal investigators, CROs, consultants and vendors may engage in misconduct or other improper activities,including noncompliance with our code of conduct or regulatory standards and requirements.We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, consultants and vendors may engage in misconductincluding code of conduct violations, fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/ornegligent conduct, or disclosure of unauthorized activities to us that violates: (1) FDA regulations, including those laws requiring the reporting of true,complete and accurate information to regulatory authorities, (2) manufacturing standards, (3) federal and state health care fraud and abuse laws andregulations or (4) laws that require the reporting of financial information or data accurately. Specifically, sales, marketing, and business arrangements in thehealth care industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These lawsand regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs andother business arrangements. Activities subject to these laws also involve improper use of information obtained in the course of clinical trials, which couldresult in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other thirdparties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or inprotecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If anysuch actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impacton our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation inMedicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailmentof our operations, any of which could adversely affect our ability to operate our business and our results of operations.Risks Relating to Our Intellectual PropertyOur rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by othercompanies and universities.We currently are heavily reliant upon licenses of certain patent rights and proprietary technology from third parties that are important or necessary to thedevelopment of our technology and products, including technology related to our manufacturing process and our gene therapy product candidates. Theseand other licenses may not provide adequate rights to use such intellectual property and technology in all relevant fields of use and in all territories in whichwe may wish to develop or commercialize our technology and products in the future, or may contain other limitations on our ability to use such intellectualproperty or technology. As a result, our ability to develop or commercialize our processes and product candidates may be limited by the terms of suchagreements. In addition, we may not be able to prevent competitors from developing and commercializing competitive products to the extent our licenses topatents are non-exclusive or limited with respect to fields of use or territories.Licenses to additional third-party technology that may be required for our development programs may not be available in the future or may not be availableon commercially reasonable terms, which could have a material adverse effect on our business and financial condition, results of operations and prospects.Our success depends on our ability to protect our intellectual property and our proprietary technologies.Our commercial success depends in part on our ability to obtain and maintain patent protection and trade secret protection for our product candidates,proprietary technologies, and their uses as well as our ability to operate without infringing upon the proprietary rights of others. There can be no assurancethat any of our product candidates will have patent protection, that our patent applications or those of our licensors will result in patents being issued or thatissued patents, if any, will afford sufficient protection against competitors with similar technology, nor is there any assurance that the patents issued will notbe infringed, designed around or invalidated by third parties. Even issued patents may later be found unenforceable or may be modified or revoked inproceedings instituted by third parties before various patent offices or in courts. The degree of future protection for our proprietary rights is uncertain. Onlylimited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. This failure toproperly protect the intellectual property rights relating to our product candidates could have a material adverse effect on our business, financial condition,results of operations and prospects.Composition-of-matter patents on the biological or chemical active pharmaceutical ingredient are generally considered to be the strongest form ofintellectual property protection for pharmaceutical products, as such patents provide protection without regard to any method of use. We cannot be certainthat the claims in our patent applications covering composition-of-matter of any of our product candidates will be considered patentable by the U.S. Patentand Trademark Office (“USPTO”) and courts in the U.S. or by the patent44Table of Contents offices and courts in foreign countries, nor can we be certain that the claims in our issued composition-of-matter patents will not be found invalid orunenforceable if challenged.Method-of-use patents protect the use of a product for the specified method or for treatment of a particular indication. However, methods of treating humandiseases are considered unpatentable in many jurisdictions, and even where available this type of patent does not prevent a competitor from making andmarketing a product that is identical to our product for an indication that is outside the scope of the patented method. Moreover, even if competitors do notactively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions mayinfringe or contribute to the infringement of method-of-use patents, the practice is common and such infringement is difficult to prevent or prosecute.The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our future development partnerswill be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following: •the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment andother provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patentapplication, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enterthe market earlier than would otherwise have been the case; •patent applications may not result in any patents being issued; •patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwisemay not provide any competitive advantage; •our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments incompeting technologies, may seek or may have already obtained patents that will limit, interfere with, or eliminate our ability to make, use, andsell our potential product candidates; •there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both insideand outside the U.S. for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and •countries other than the U.S. may have patent laws less favorable to patentees than those upheld by the U.S. courts, allowing foreign competitors abetter opportunity to create, develop and market competing product candidates.In addition, we rely on the protection of our trade secrets and know-how. Although we have taken steps to protect our trade secrets and know-how, includingentering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants andadvisors, we cannot provide any assurances that all such agreements have been duly executed, and third parties may still obtain this information or may comeupon this or similar information independently.Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties formisappropriating our trade secrets. If any of these events occurs or if we otherwise lose protection for our trade secrets or proprietary know-how, the value ofthis information may be greatly reduced.Claims by third parties that we infringe their proprietary rights may result in liability for damages or prevent or delay our developmental andcommercialization efforts.The biotechnology industry has been characterized by frequent litigation regarding patent and other intellectual property rights. Numerous U.S. and foreignissued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates. As thebiotechnology industry expands, especially in the field of gene therapy, and more patents are issued, the risk increases that our product candidates may besubject to claims of infringement of the patent rights of third parties. Because patent applications are maintained in secrecy until the application is published,we may be unaware of third‑party patents that may be infringed by commercialization of our product candidates. Moreover, because patent applications cantake many years to issue, there may be currently-pending patent applications that may later result in issued patents that our product candidates may infringe.In addition, identification of third‑party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due todifferences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. Any claims of patentinfringement asserted by third parties would be time consuming and could: •result in costly litigation; •divert the time and attention of our technical personnel and management; •cause development delays; •prevent us from commercializing our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court oflaw; •require us to develop non-infringing technology, which may not be possible on a cost-effective basis; or •require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.45Table of Contents Others may hold proprietary rights that could prevent our product candidates from being marketed. Any patent-related legal action against us claimingdamages and seeking to enjoin commercial activities relating to our product candidate or processes could subject us to potential liability for damages andrequire us to obtain a license to continue to manufacture or market our product candidates. We cannot predict whether we would prevail in any such actionsor that any license required under any of these patents would be made available on commercially acceptable terms, if at all. In addition, we cannot be surethat we could redesign our product candidate or processes to avoid infringement, if necessary. Accordingly, an adverse determination in a judicial oradministrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing our product candidates, whichcould harm our business, financial condition, results of operations and prospects.The patent protection and patent prosecution for some of our product candidates may be dependent on third parties.While we normally seek to obtain the right to control the prosecution and maintenance of the patents relating to our product candidates, there may be timeswhen the filing and prosecution activities for platform technology patents that relate to our product candidates are controlled by our licensors. For example,we do not have the right to prosecute and maintain the patent rights licensed to us under agreements with Regents, Cornell University, and VirovekCorporation, and our ability to have input into such filing and prosecution activities is limited. If these licensors or any of our future licensors fail toappropriately prosecute and maintain patent protection for patents covering any of our product candidates or companion diagnostic, our ability to developand commercialize those product candidates and companion diagnostic may be adversely affected and we may not be able to prevent competitors frommaking, using and selling competing products.We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming, andunsuccessful. Further, our issued patents could be found invalid or unenforceable if challenged administratively or in court.If we or any of our future development partners were to initiate legal proceedings against a third party to enforce a patent directed at one of our productcandidates, or one of our future product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable in whole or in part. Inpatent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validitychallenge include an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds for anunenforceability assertion could include an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTOor made a false or misleading statement during prosecution. Third parties may also raise similar claims before the USPTO, even outside the context oflitigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, wecannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution. If a defendant were to prevailon a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on such product candidate.Such a loss of patent protection would have a material adverse impact on our business.Interference proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions withrespect to our patents or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or toattempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commerciallyreasonable terms. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract ourmanagement and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise thefunds necessary to continue our clinical trials, continue our research and development programs, license necessary technology from third parties, or enter intodevelopment or manufacturing partnerships that would help us bring our product candidates to market.Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses andcould distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results ofhearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have asubstantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce theresources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resourcesto conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings moreeffectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or otherproceedings could compromise our ability to compete in the marketplace.Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of ourconfidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results ofhearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have amaterial adverse effect on the price of our common stock.46Table of Contents We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses.We currently have rights to intellectual property, through licenses from third parties and under patents that we own, to develop our product candidates.Because our programs may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability toacquire, in-license, or use these proprietary rights. For example, our product candidates may require specific formulations to work effectively and efficientlyand the rights to these formulations may be held by others. We may be unable to acquire or in-license any compositions, methods of use, processes, or otherthird-party intellectual property rights from third parties that we identify as necessary for our product candidates. The licensing and acquisition of third-partyintellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-partyintellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cashresources, and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwillingto assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make anappropriate return on our investment.We sometimes collaborate with U.S. and foreign academic institutions to accelerate our preclinical research or development under written agreements withthese institutions. Typically, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting fromthe collaboration. Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us.If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have,we may have to abandon development of that program and our business, financial condition, results of operations and prospects could be materially andadversely affected.We may fail to comply with any of our obligations under existing agreements pursuant to which we license or have otherwise acquired intellectualproperty rights or technology, which could result in the loss of rights or technology that are material to our business.Licensing of intellectual property is of critical importance to our business and involves complex legal, business, and scientific issues. Disputes may ariseregarding our rights to intellectual property licensed to us from a third party, including but not limited to: •the scope of rights granted under the license agreement and other interpretation-related issues; •the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; •the sublicensing of patent and other rights; •our diligence obligations under the license agreement and what activities satisfy those diligence obligations; •the ownership of inventions and know-how resulting from the creation or use of intellectual property by us, alone or with our licensors andcollaborators; •the scope and duration of our payment obligations; •our rights upon termination of such agreement; and •the scope and duration of exclusivity obligations of each party to the agreement.If disputes over intellectual property and other rights that we have licensed or acquired from third parties prevent or impair our ability to maintain our currentlicensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosedalleged confidential information or trade secrets of their former employers.As is common in the biotechnology and pharmaceutical industry, in addition to our employees, we engage the services of consultants to assist us in thedevelopment of our product candidates. Many of our employees and consultants were previously employed at, or may have previously provided or may becurrently providing consulting services to, other biotechnology or pharmaceutical companies including our competitors or potential competitors. We maybecome subject to claims that our company, our employees or a consultant inadvertently or otherwise used or disclosed trade secrets or other informationproprietary to their former employers or their former or current clients. Litigation may be necessary to defend against these claims. If we fail in defending anysuch claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impact ourbusiness. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team.47Table of Contents We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.We may also be subject to claims that former employees, collaborators or other third parties have an ownership interest in our patents or other intellectualproperty. We may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involvedin developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we failin defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, orright to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defendingagainst such claims, litigation could result in substantial costs and be a distraction to management and other employees.If we do not obtain term extensions for patents covering our product candidates, our business may be materially harmed.If we are able to secure FDA marketing approval for one of our product candidates that is covered by an issued U.S. patent, that patent may be eligible forlimited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman Act”). The Hatch-Waxman Actpermits a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process.However, we may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration ofrelevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded couldbe less than we request. If we are unable to obtain patent term extension or restoration or the term of any such extension is less than we request, ourcompetitors may obtain approval of competing products following our patent expiration, and our business, financial conditions and results of operations maybe materially and adversely affected.If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and ourbusiness may be adversely affected.Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing onother marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potentialpartners or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability tobuild brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought byowners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the longterm, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively, and ourbusiness may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights orother intellectual property may be ineffective and could result in substantial costs and diversion of resources and could materially and adversely impact ourbusiness, financial condition, results of operations, or prospects.Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining andenforcing patents in the biopharmaceutical industry involve a high degree of technological and legal complexity. Therefore, obtaining and enforcingbiopharmaceutical patents is costly, time consuming and inherently uncertain. In addition, Congress may pass patent reform legislation that is unfavorable tous. The Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances orweakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, thiscombination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federalcourts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patentsor to enforce our existing patents and patents we might obtain in the future.We may not be able to obtain intellectual property rights or protect our intellectual property rights throughout the world.Filing, prosecuting, obtaining and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive, andour intellectual property rights in some countries outside the U.S. can be less extensive than those in the U.S. In addition, the laws of some foreign countriesdo not protect intellectual property rights to the same extent as federal and state laws in the U.S. Consequently, we may not be able to prevent third partiesfrom practicing our inventions in all countries outside the U.S., or from selling or importing products made using our inventions in and into the U.S. or otherjurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further,may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the U.S. These productsmay compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them fromcompeting.48Table of Contents Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systemsof certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularlythose relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products inviolation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert ourefforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applicationsat risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or otherremedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may beinadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.Intellectual property rights do not necessarily address all potential threats to our competitive advantage.The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may notadequately protect our business or permit us to maintain our competitive advantage. For example: •others may be able to make gene therapies that are similar to our product candidates but that are not covered by the claims of any patents that weown or have exclusively licensed; •we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patentapplication that we own or have exclusively licensed; •we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; •others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectualproperty rights; •any patent applications that we have filed or may file in the future may not lead to issued patents; •any of the issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by ourcompetitors; •our competitors might conduct research and development activities in countries where, or for products for which, we do not have patent rights andthen use the information learned from such activities to develop competitive products for sale in our major commercial markets; •we may not develop additional proprietary technologies that are patentable; and •the patents of others may have an adverse effect on our business.Should any of these events occur, they could significantly harm our business, financial condition, results of operations and prospects.Known third-party patent rights could delay or otherwise adversely affect our planned development and sale of product candidates of our programs.We are aware of patent rights held by third parties that could be construed to cover certain aspects of our product candidates. A patent holder has the right toprevent others from making, using, or selling a drug that incorporates the patented compositions while the patent remains in force. While we believe thatthird party patent rights will not affect our planned development, regulatory clearance, and eventual marketing, commercial production, and sale of ourproduct candidates, there can be no assurance that this will be the case. In each case, we expect the relevant patent to expire before we commerciallyintroduce such product candidate. In addition, the Hatch-Waxman exemption provided by U.S. patent law permits uses of compounds and biologics inclinical trials and for other purposes reasonably related to obtaining FDA approval of drugs and biologics that will be sold only after patent expiration, so ouruse of our product candidates in those FDA-related activities does not infringe any patent holder’s rights. However, were a patent holder to assert its rightsagainst us before expiration of such patent holder’s patent for activities unrelated to seeking FDA approval, the development and ultimate sale of our productcandidates could be significantly delayed, and we could incur the expense of defending a patent infringement suit and potential liability for damages forperiods prior to the patent’s expiration.Risks Related to Our Common StockIf we fail to maintain proper and effective internal control over financial reporting in the future, our ability to prepare accurate and timely consolidatedfinancial statements being prepared in accordance with U.S. GAAP could be impaired, which could harm our operating results, investors’ views of us and,as a result, the value of our common stock.Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), our management is required to report upon the effectiveness of our internalcontrol over financial reporting. Following December 31, 2019, unless we are no longer an accelerated filer, our independent registered public accountingfirm will also be required to attest to the effectiveness of our internal control over financial reporting, and the related report will also be required to beincluded in our annual reports filed with the SEC. Sarbanes-Oxley Section 404 compliance requirements are complex and require significant documentation,testing, and possible remediation. If we (or49Table of Contents our auditors if they are required to assess and attest to the effectiveness of our internal control over financial reporting) are unable to conclude that ourinternal control over financial reporting is effective, investors may lose confidence in our financial reporting, and the trading price of our common stock maydecline.Although we have determined that our internal control over financial reporting was effective as of December 31, 2018, we cannot assure that there will not bematerial weaknesses in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting couldseverely inhibit our ability to accurately report our financial condition, results of operations, or cash flows. If we are unable to conclude that our internalcontrol over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness in our internalcontrol over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our commonstock could decline, and we could be subject to sanctions or investigations by The Nasdaq Stock Market, the SEC or other regulatory authorities. Failure toimplement and maintain effective internal control over financial reporting, including failure to remediate any material weaknesses we or our auditorsidentify, could also restrict our future access to the capital markets.The trading price of the shares of our common stock has been and could continue to be highly volatile, and purchasers of our common stock could incursubstantial losses.Our stock price has been and is likely to continue to be volatile. The stock market in general and the market for biotechnology companies in particular haveexperienced extreme volatility that has often been unrelated to the operating performance of particular companies. The market price for our common stockmay be influenced by many factors, including those discussed above and others such as: •our ability to enroll and dose patients in any clinical trials that are on-going, or we that plan to conduct in the future; •our ability to obtain regulatory approvals for our product candidates and delays or failure to obtain such approvals; •our plans to conduct additional preclinical studies to determine the best gene therapy candidates in our rare disease programs to advance indevelopment; •results of any clinical trials, and the results of trials of our competitors or those of other companies in our market sector; •regulatory developments in the U.S. and foreign countries; •variations in our financial results or those of companies that are perceived to be similar to us; •changes in the structure of healthcare payment systems, especially in light of current reforms to the U.S. healthcare system; •announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; •failure to maintain our existing third-party license and collaboration agreements; •delays in manufacturing adequate supply of our product candidates; •adverse publicity relating to the gene therapy market generally, including with respect to other products and potential products in such markets; •market conditions in the pharmaceutical and biotechnology sectors and issuance of securities analysts’ reports or recommendations; •sales of our stock by insiders and stockholders; •trading volume of our common stock; •general economic, industry and market conditions other events or factors, many of which are beyond our control; •additions or departures of key personnel; and •intellectual property, product liability or other litigation against us.In addition, in the past, stockholders have initiated class action lawsuits against biotechnology and pharmaceutical companies following periods of volatilityin the market prices of these companies’ stock, and similar litigation has been instituted against us. Such litigation could cause us to incur substantial costsand divert management’s attention and resources, which could have a material adverse effect on our business, financial condition, results of operations andprospects.We have been subject to securities class action lawsuits in the past, and could be subject to additional such lawsuits in the future, which could result insubstantial losses and may divert management’s time and attention from our business.In the past, we and certain of our former officers were involved in purported securities class action lawsuits, which have since been settled. The purportedsecurities class action lawsuits asserted that the defendants violated the Securities Exchange Act of 1934, as amended, and the Securities Act of 1933, asamended, and alleged that the defendants who are no longer at Adverum made materially false and misleading statements and omitted allegedly materialinformation related to, among other things, the Phase 2a clinical trial for AVA-101, a program which has been discontinued, and the prospects of AVA-101.We settled these lawsuits for $13.0 million, of which $1.0 million we contributed to cover our indemnification obligations to the underwriters, and theremainder was contributed by our insurers. Any future litigation of this type could result in payment of damages or settlement fees and diversion ofmanagement’s attention and resources, any of which could adversely impact our business. Monitoring and defending against legal actions is time-consumingfor our management and detracts from our ability to focus fully on our business activities.50Table of Contents Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including: •variations in the level of expenses related to our clinical trial and development programs; •addition or termination of clinical trials; •any intellectual property infringement lawsuit in which we may become involved; •regulatory developments affecting our product candidates; •our execution of any collaborative, licensing or similar arrangements and the timing of payments we may make or receive under thesearrangements; •nature and terms of stock-based compensation grants; and •derivative instruments recorded at fair value.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially.If we sell shares of our common stock or securities convertible into or exercisable for shares of our common stock in future financings, licensing orcollaboration arrangements, or acquisitions, or additional shares under our at-the-market sales agreement, stockholders may experience immediatedilution and, as a result, our stock price may decline.Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings,licensing, collaboration or similar arrangements, grants and debt financings. We do not have any committed external source of funds. As a result, we mayfrom time to time issue additional shares of common stock or securities convertible into or exercisable for shares of our common stock. We filed a universalshelf registration statement on Form S-3 with the SEC, which was declared effective on August 22, 2017, pursuant to which we registered for sale up to$150.0 million of any combination of our common stock, preferred stock, debt securities, warrants, and/or units from time to time and at prices and on termsthat we may determine, including up to $50.0 million of our common stock available for issuance pursuant to our sales agreement with Cowen. Pursuant tothe sales agreement, we may offer and sell, from time to time at our discretion, shares of our common stock having an aggregate offering price of up to $50.0million through Cowen as our sales agent. Under the sales agreement, Cowen may sell the shares by any method permitted by law deemed to be an “at themarket” offering as defined in Rule 415 of the Securities Act. We may seek to raise additional capital at any time. We have sold a total of 6,550,232 shares ofour common stock at market prices pursuant to the 2017 stock offering agreement and raised total net proceeds of $22.5 million. Further, pursuant to theuniversal shelf registration statement, in February 2018, we completed the issuance of 10,222,235 shares of our common stock at $6.75 per share in anunderwritten public offering for net proceeds to us of $64.5 million. To the extent that we raise additional capital through the sale of equity or convertibledebt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affectyour rights as a holder of our common stock. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability totake specific actions, such as incurring additional debt, making capital expenditures or declaring dividends or other distributions. Furthermore, we may issuecommon stock as consideration in acquisitions. For example, in May 2016, we issued 14,087,246 shares of our common stock to Annapurna’s shareholders asconsideration for all of the outstanding shares of Annapurna. If we issue common stock or securities convertible into common stock, our commonstockholders would experience additional dilution and, as a result, our stock price may decline.If we raise additional funds through licensing, collaboration or similar arrangements, we may have to relinquish valuable rights to our technologies, futurerevenue streams, research and development programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable toraise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate ourproduct development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to developand market ourselves.Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders,more difficult and may prevent attempts by our stockholders to replace or remove our current management.Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may delay or prevent an acquisition of us or a change inour management. These provisions include: •the authorization of the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issuedwithout stockholder approval; •the limitation of the removal of directors by the stockholders; •a staggered board of directors;51Table of Contents •the prohibition of stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; •the elimination of the ability of stockholders to call a special meeting of stockholders; •the ability of our board of directors to accelerate the vesting of outstanding option grants, restricted stock units or other equity awards upon certaintransactions that result in a change of control; and •the establishment of advance notice requirements for nominations for election to the board of directors or for proposing matters that can be actedupon at stockholder meetings.In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, whichlimits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us. Although we believe theseprovisions collectively provide for an opportunity to obtain greater value for stockholders by requiring potential acquirers to negotiate with our board ofdirectors, they would apply even if an offer rejected by our board were considered beneficial by some stockholders. In addition, these provisions may frustrateor prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members ofour board of directors, which is responsible for appointing the members of our management.We do not intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend onappreciation, if any, in the price of our common stock.We have never declared or paid any cash dividend on our common stock and do not currently intend to do so for the foreseeable future. We currentlyanticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying anycash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock. Therefore, the success of aninvestment in shares of our common stock will depend upon any future appreciation in their value. There is no guarantee that shares of our common stockwill appreciate in value or even maintain the price at which our stockholders have purchased their shares.We are an emerging growth company, and the reduced reporting requirements applicable to emerging growth companies may make our common stockless attractive to investors.We are an emerging growth company, as defined in the JOBS Act, and will continue to be an emerging growth company until December 31, 2019. We arealso a smaller reporting company. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from variousreporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply withthe auditor attestation requirements of Section 404 of Sarbanes-Oxley, reduced disclosure obligations regarding executive compensation and our periodicreports and proxy statements and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholderapproval of any golden parachute payments not previously approved. Even after we no longer qualify as an emerging growth company, we may continue tobe a “smaller reporting company,” which would allow us to continue take advantage of many of the same exemptions from disclosure requirements includingnot being required to comply with the reduced disclosure obligations regarding executive compensation and our periodic reports and proxy statements. Wecannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock lessattractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.We have incurred and will continue to incur significant increased costs as a result of operating as a public company, and our management devotessubstantial time to new compliance initiatives.As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses. We are subject to the reportingrequirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to ourbusiness, results of operations and financial condition. In addition, Sarbanes-Oxley, as well as rules adopted by the SEC and The Nasdaq Global Market thatimplement provisions of Sarbanes-Oxley, impose significant requirements on public companies, including requiring establishment and maintenance ofeffective disclosure and financial controls and changes in corporate governance practices. Further, pursuant to the Dodd-Frank Wall Street Reform andConsumer Protection Act of 2010, the SEC adopted additional rules and regulations in these areas, such as mandatory “say on pay” voting requirements thatwill apply to us when we cease to be an emerging growth company. Stockholder activism, the current political environment and the current high level ofgovernment intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliancecosts and impact the manner in which we operate our business in ways we cannot currently anticipate.The rules and regulations applicable to public companies have substantially increased our legal and financial compliance costs and make some activitiesmore time-consuming and costly. To the extent these requirements divert the attention of our management and personnel from other business concerns, theycould have a material adverse effect on our business, financial condition and results of operations and prospects. The increased costs will decrease our netincome or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. Forexample, we expect these rules and regulations to52Table of Contents make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs tomaintain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serveon our board of directors, our board committees or as executive officers.If securities or industry analysts do not publish research or reports or publish unfavorable research or reports about our business, our stock price andtrading volume could decline.The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us, our business,our market or our competitors. If one or more of the analysts who covers us downgrades our stock, our stock price would likely decline. If one or more of theseanalysts ceases to cover us or fails to regularly publish reports on us, interest in our stock could decrease, which could cause our stock price or trading volumeto decline.Our ability to use net operating loss carryforwards and other tax attributes may be limited by the Code.We have incurred substantial losses during our history and do not expect to become profitable in the near future and we may never achieve profitability. Tothe extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire.As of December 31, 2018, we had U.S. federal net operating loss (“NOL”) carryforwards of approximately $100.0 million to offset future federal income.Approximately $57.0 million of NOLs expire at various years beginning with 2036. As of December 31, 2018, we also had U.S. state NOL carryforwards ofapproximately $61.1 million to offset future state income. U.S. State NOLs expire at various years beginning with 2036. At December 31, 2018, we also hadapproximately $65.0 million of foreign net operating loss carryforwards which may be available to offset future foreign income; these carryforwards do notexpire.Under the newly enacted federal income tax law, federal NOLs for approximately $43.0 million incurred in 2018 and in future years may be carried forwardindefinitely, but the deductibility of such federal net operating NOLs is limited. It is uncertain if and to what extent various states will conform to the newlyenacted federal tax law. In addition, under Section 382 of the Code, our ability to utilize NOL carryforwards or other tax attributes, such as research taxcredits, in any taxable year may be limited if we experience an “ownership change.” Generally, a Section 382 ownership change occurs if there is acumulative increase of more than 50 percentage points in the stock ownership of one or more stockholders or groups of stockholders who owns at least 5% ofa corporation’s stock within a specified testing period. Similar rules may apply under state tax laws. In connection with our acquisition of Annapurna in May2016, we determined that certain NOLs and research and developments tax credits for both federal and state purposes were severely limited and therefore weremoved a significant amount of NOLs and research and development tax credits from our deferred tax assets. In addition, we may have experienced anownership change as a result of the February 2018 underwritten public offering of our common stock, and may in the future experience ownership changesfuture offerings or other changes in the ownership of our stock. As a result, the amount of the NOLs and research and credit carryforwards presented in ourfinancial statements could be limited and may expire unutilized.Item 1B. Unresolved Staff CommentsNot applicable. 53Table of Contents Item 2. PropertiesOur corporate headquarters are located in Menlo Park, California, where we lease and occupy approximately 36,000 square feet of office space. The currentterm of our lease expires on May 8, 2020, with an option to extend the term through May 8, 2024.On June 28, 2018, we entered into a lease on a new facility, which will serve as our new corporate headquarters. The new facility is located in Redwood City,California with approximately 81,000 square feet of office, laboratory, and process development space, which we believe is adequate for our current needs.We expect to occupy the new facility by year end 2019. The term of the lease is ten years and also provides for two options to extend the lease term for aperiod of seven years each. Item 3. Legal ProceedingsNot applicable. Item 4. Mine Safety DisclosuresNot applicable. 54Table of Contents PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issue Purchases of Equity SecuritiesOur common stock is listed on the Nasdaq Global Market under the symbol “ADVM”.Holder of RecordAs of February 28, 2019, we had approximately 14 holders of record of our common stock. The actual number of stockholders is greater than this number ofrecord holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number ofholders of record also does not include stockholders whose shares may be held in trust by other entities.Dividend PolicyWe have never declared or paid cash dividends on our capital stock. We intend to retain all available funds and any future earnings, if any, to fund thedevelopment and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination relatedto dividend policy will be made at the discretion of our board of directors. Recent Sales of Unregistered SecuritiesNone. 55Table of Contents Use of ProceedsOn August 5, 2014, we closed our IPO and issued 6,900,000 shares of our common stock at an initial offering price of $17.00 per share. The offer and sale ofall of the shares in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1, as amended (File Nos. 333-197133 and333-197739), which was declared effective by the SEC on July 30, 2014. The joint book-running managers for the IPO were Jefferies LLC, Cowen andCompany, LLC and Piper Jaffray & Co. The aggregate offering price to the public for the shares sold in the IPO was $117.3 million. We received net proceedsfrom the IPO of approximately $106.5 million, after deducting underwriting discounts and commissions of approximately $8.2 million and expenses ofapproximately $2.6 million payable by us. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of anyclass of equity securities, or to their associates, or to our affiliates.We discontinued development of AVA-101, and so we did not use approximately $20.0 million of our net proceeds from the IPO to fund Phase 3 research anddevelopment startup activities for our AVA-101 trial, as we had described in our final prospectus filed with the SEC on July 31, 2014 pursuant to Rule 424(b)of the Securities Act. Instead, we have reallocated such proceeds to fund research and development expenses for additional preclinical and clinical studies,including the clinical development of our wet AMD gene therapy, ADVM-022, and the preclinical studies for our rare disease programs. We have used all ofthe $106.5 million of net proceeds from the IPO for the purposes described in the registration statement, as revised in this paragraph.Purchases of Equity Securities by the Issuer and Affiliated PurchasersNone. Item 6. Selected Financial DataThe following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition andResults of Operations”, the consolidated financial statements and related notes, and other financial information included in this Annual Report on Form 10-K.We derived the consolidated financial data for the years ended December 31, 2018 and 2017 and as of December 31, 2018 and 2017, from our consolidatedfinancial statements, which are included elsewhere in this Annual Report on Form 10-K. We derived the consolidated financial data for the years endedDecember 31, 2016, 2015 and 2014, and as of December 31, 2016, 2015, and 2014, from our audited consolidated financial statements which are notincluded in this Annual Report on Form 10-K. Historical results are not necessarily indicative of the results to be expected in future periods. 56Table of Contents Years ended December 31, (In thousands, except per share data) 2018 2017 2016 2015 2014 Consolidated Statements of Operations and Comprehensive Loss Data: Revenue Collaboration and license revenue $1,612 $1,849 $1,455 $2,319 $572 Operating expenses: Research and development (1) 50,133 39,839 31,670 25,462 16,976 General and administrative (2) 24,560 20,857 24,355 22,107 7,998 Impairment of goodwill and intangible assets (3) 5,000 — 60,714 — — Restructuring charges (4) — — — 2,573 — Total operating expenses 79,693 60,696 116,739 50,142 24,974 Operating loss (78,081) (58,847) (115,284) (47,823) (24,402)Other income (expense) Interest expense — — — — (18)Other income (expense), net 4,204 2,700 762 370 (21)Changes in fair value of warrant liabilities — — — — (759)Loss on extinguishment of related-party convertible notes — — — — (204)Total other income (expense), net 4,204 2,700 762 370 (1,002)Net loss before income tax benefit (73,877) (56,147) (114,522) (47,453) (25,404)Income tax benefit (5) 1,250 — 775 — — Net loss after income tax benefit (72,627) (56,147) (113,747) (47,453) (25,404)Deemed dividend (6) — — — — (3,230)Net loss attributable to common stockholders $(72,627) $(56,147) $(113,747) $(47,453) $(28,634)Other comprehensive loss: Net unrealized loss on marketable securities 168 (182) 6 (6) — Foreign currency translation adjustment (4) (774) (2) (15) (17)Comprehensive loss $(72,463) $(57,103) $(113,743) $(47,474) $(25,421)Net loss per share attributable to common stockholders-basic and diluted $(1.18) $(1.29) $(3.14) $(1.86) $(2.46)Weighted-average common shares outstanding-basic and diluted 61,375 43,661 36,246 25,479 11,651 (1)During the year ended December 31, 2016, we recorded approximately $1.4 million of one-time stock-based compensation charge in connection withthe separation agreement with a certain executive officer.(2)During the year ended December 31, 2015, we recorded approximately $2.4 million of one-time stock-based compensation expense in connection withthe termination of a certain executive officer. During the year ended December 31, 2016, we recorded approximately $1.5 million of one-time stock-based compensation charges in connection with the separation agreements with our certain executive officers. During the year ended December 31,2018, we recorded approximately $3.8 million of one-time stock-based compensation expense in connection with the separation agreement with acertain executive officer.(3)During the year ended December 31, 2016, we recorded $49.5 million of goodwill impairment charge related to our goodwill impairment analysis.Additionally, we performed our annual impairment assessment of our in-process research and development intangible assets in the fourth quarter of2016 and recorded $11.2 million of intangible impairment charge during the year ended December 31, 2016. During the year ended December 31, 2018,we recorded an impairment charge of $5.0 million on in-process research and development assets related to our intangible assets.(4)During the year ended December 31, 2015, we recorded a total of $2.6 million restructuring charges related to one-time termination severance paymentsand other employee-related benefits, including approximately $1.0 million of stock-based compensation expense related to the acceleration of stockawards.(5)During the year ended December 31, 2016, we recorded income tax benefit of $0.8 million related to the change in the deferred tax liabilities balancesdue to the impairment of our intangible assets.(6)In April 2014, we repurchased 531,208 shares of Series A convertible preferred stock for $4.0 million. The difference between the repurchase price of$7.53 per share and original issuance price of $1.45 per share was recorded as a deemed dividend of $3.2 million to a preferred stockholder and effectedthe calculation of net loss attributable to common stockholders and net loss per share for the year ended December 31, 2014. 57Table of Contents As of December 31, (In thousands) 2018 2017 2016 2015 2014 Consolidated Balance Sheet Data: Cash and cash equivalents $154,949 $70,519 $222,170 $221,348 $159,404 Short-term investments 50,130 119,966 — 37,732 — Working capital 198,035 183,067 215,378 254,418 154,807 Total assets 213,495 201,905 234,583 264,319 161,906 Other non-current liabilities 243 481 386 — — Accumulated deficit (320,543) (254,062) (197,915) (84,168) (36,715)Total stockholders' equity 201,167 184,028 215,600 252,592 149,483 58Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsYou should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the relatednotes included elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that reflect our plans,estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause orcontribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Cautionary NoteRegarding Forward-Looking Statements” and “Risk Factors.”OverviewAdverum is a clinical-stage gene therapy company targeting unmet medical need in ocular and rare diseases. We develop gene therapy product candidatesdesigned to provide durable efficacy by inducing sustained expression of a therapeutic protein. Our core capabilities include clinical development, novelvector discovery, and in-house manufacturing expertise, specifically in scalable process development, assay development, and cGMP quality control.We are advancing our lead gene therapy product candidate ADVM-022 for the treatment of wet age-related macular degeneration (“wet AMD”). In September2018, we received Fast Track designation for ADVM-022 for the treatment of wet AMD from the U.S. Food and Drug Administration (“FDA”).Our IND application for ADVM-022 for the treatment of wet AMD became active in August 2018. We initiated the Phase 1 OPTIC trial for ADVM-022 inpatients with wet AMD, dosing our first subject in November 2018. The OPTIC trial is designed to be a multi-center, open-label, Phase 1, dose-escalationsafety trial in patients with wet AMD who have demonstrated responsiveness to anti-VEGF treatment. The OPTIC trial is expected to enroll 18 patients toevaluate three doses of ADVM-022 administered as a single intravitreal injection. We expect to provide an update on enrollment from the OPTIC trial in thefirst half of 2019. In addition, we expect to provide interim data from the OPTIC trial by the first quarter of 2020. Additionally, we are evaluating whetherother ocular diseases with approved anti-VEGF therapies might also be treated with ADVM-022.We have been developing ADVM‑043, an investigational gene therapy candidate for the treatment of alpha-1 antitrypsin (“A1AT”) deficiency. In December2017 we began enrolling patients in the ADVANCE trial, a multi-center, open-label, dose-escalation study of ADVM‑043 in patients with A1AT deficiency.In November 2018, we announced preliminary data from the ADVANCE trial, which showed that ADVM‑043 was safe and well tolerated at the doses tested,but A1AT protein expression did not reach a clinically meaningful level, nor was a dose response observed between the three cohorts. Based on data from theADVANCE trial, we discontinued the development of ADVM‑043 and are conducting additional preclinical studies to evaluate potential paths forward fordevelopment of a product candidate for the treatment of A1AT deficiency. We plan to provide an update on this program in the first half of 2019.We have also been developing ADVM‑053, our preclinical gene therapy product candidate for the treatment of hereditary angioedema (“HAE”). However,due to the lack of clinical efficacy that we observed in ADVM‑043, we are reviewing the results from the ADVANCE trial to inform further development ofgene therapy candidates for the treatment of systemic rare diseases, including ADVM‑053 for the treatment of HAE, and are conducting additional preclinicalstudies to evaluate potential paths forward for development of a product candidate for the treatment of HAE. We plan to provide an update on this program inthe first half of 2019.Our partnered programs include vectors we are developing under collaboration agreements. Under an agreement with Editas Medicine, Inc. (“Editas”) we areleveraging our AAV-vectors for use with Editas’ leading CRISPR-based genome editing technologies to treat up to five inherited retinal diseases. Ouragreement with Regeneron Pharmaceuticals, Inc. (“Regeneron”) provides for development of up to eight distinct ocular therapeutic targets, four of which arealready identified, including AVA-311 for the treatment of juvenile X-Linked Retinoschisis.In June 2018 we signed a lease with an initial 10-year term for a new facility in Redwood City, California which we plan to occupy by year end 2019. Thisfacility will serve as our new corporate headquarters and will include approximately 81,000 square feet of office, laboratory, and process development space.We believe this facility will enable us to increase our process development capabilities to the 1000-liter scale.Financial OverviewSummaryWe have not generated positive cash flow or net income from operations since our inception and, as of December 31, 2018, we had an accumulated deficit of$320.5 million. We expect to incur substantial expenses and increasing losses from operations in the foreseeable future as we continue our research anddevelopment efforts, advance our product candidates through preclinical and clinical development, manufacture clinical trial materials, seek regulatoryapproval, and prepare for and, if approved, proceed to59Table of Contents commercialization. We are at an early stage of development and may never be successful in developing or commercializing our product candidates.While we may in the future generate revenue from a variety of sources, including license fees, milestone and research and development payments inconnection with strategic partnerships, and potentially revenue from product sales if any of our product candidates are approved, to date we have notgenerated any revenue from product sales.We entered into our collaboration and license arrangements with Regeneron in May 2014 and Editas in August 2016. Both arrangements are revenue-generating arrangements. Refer to Note 2, Summary of significant accounting policies—Revenue Recognition – Collaboration and License Revenue, of thenotes to consolidated financial statements included in this Form 10-K for details. We have no clinical or commercial manufacturing facilities, and contractout all of our clinical manufacturing activities to third parties. Additionally, we use third-party clinical research organizations (“CROs”) to carry out ourclinical development and we do not have a sales organization.We expect to incur substantial and increasing expenditures in the foreseeable future for the development and potential commercialization of our productcandidates. We will need substantial additional funding in the future to support our operating activities as we advance our product candidates throughpreclinical and clinical development, seek regulatory approval and prepare for and, if approved, proceed to commercialization. Adequate funding may not beavailable to us on acceptable terms, or at all. If we are unable to raise capital, or to do so on acceptable terms, when needed, or to form additionalcollaboration partnerships to support our efforts, we could be forced to delay, reduce or eliminate our research and development programs or potentialcommercialization efforts.In August 2017, we entered into an at-the-market sales agreement with an agent for the sales of our common stock at market price (the “2017 stock offeringagreement”). Under the terms and conditions of the 2017 stock offering agreement, we may offer to sell our common stock for an aggregate offering price ofup to $50.0 million through the agent from time to time. In January 2018, we sold a total of 1,419,893 shares of our common stock at market prices under the2017 stock offering agreement and raised total net proceeds of $5.7 million, after issuance costs. Since then, during the year ended December 31, 2018, wesold no additional shares under the 2017 stock offering agreement. Under the 2017 stock offering agreement, we have sold a total of 6,550,232 shares of ourcommon stock at market prices, raising total net proceeds of $22.5 million, after issuance costs.In February 2018, we completed an underwritten public offering for the sale of 10,222,235 shares of our common stock and raised total net proceeds ofapproximately $64.3 million, after discounts and other issuance costs.As of December 31, 2018, we had $205.1 million in cash, cash equivalents and short-term investments. We currently expect this cash, cash equivalents andshort-term investments to fund our planned operations and capital expenditures into 2021.RevenueTo date we have not generated any revenue from the sale of our products. We generate revenue through research, collaboration and license arrangements withour strategic partners. As of December 31, 2018, we had no deferred revenue related to collaboration arrangements with our strategic partners . We recognized$1.6 million and $1.8 million of revenue associated with these collaboration arrangements during the years ended December 31, 2018 and 2017,respectively.Agreement with EditasIn August 2016, we entered into a collaboration, option and license agreement with Editas. Under the terms of the agreement, we received $1.0 million non-refundable upfront payment, with $0.5 million of such payment to be credited against Editas’ obligation to fund research and development costs. As theagreement provides for multiple deliverables, we accounted for this agreement as a multiple elements revenue arrangement. At the inception of theagreement, identified deliverables include research services, manufacturing of viral vectors for research, participation in the joint research committee andexclusivity during the option period. These deliverables did not appear to have a standalone value and were combined into one unit of accounting. Optionsfor each indication to license our AAV vector are considered substantive options and do not include significant incremental discounts. Therefore, they arenot considered as deliverables under the agreement. We allocated the $1.0 million received to a single unit of accounting identified in the arrangement. Werecognize $1.0 million ratably over the associated period of performance, which is the maximum research period of three years. As there is no discerniblepattern of performance and/or objectively measurable performance measures do not exist, we recognize revenue on a straight-line basis.In January 2018, we and Editas extended the collaboration, option and license agreement. In consideration for extending the agreement, Editas made a one-time payment to Adverum of $0.5 million in February 2018. In June 2018, we and Editas entered into a subsequent amendment to the agreement to extendthe Research Period and First Option Exercise Date (each as defined in the collaboration, option, and license agreement with Editas, as amended). Under theterms of the agreement, Editas had until November 2018 to exercise one option, which Editas declined to do. Editas has until August 2020 to exerciseadditional options, provided that60Table of Contents they exercise at least one option by August 2019. Refer to Note 6 of the notes to consolidated financial statements included in this Form 10-K for details.Agreement with RegeneronIn May 2014, we entered into a research, collaboration and license agreement with Regeneron. Under the terms of the agreement, we received initialpayments of $8.0 million that included payment for research license fees, prepaid collaboration research costs and the right of first negotiation for a potentiallicense to develop and commercialize AVA-101, a prior AMD gene therapy that is no longer in development. As the agreement provides for multipledeliverables, we account for this agreement as a multiple elements revenue arrangement. If deliverables do not appear to have a standalone fair value, theywere combined with other deliverables into a unit of accounting with standalone fair value. We allocated the $8.0 million received to the fair values of thetwo units of accounting identified in the arrangement. We recognize $6.5 million allocated to the first unit of accounting for research licenses and relatedresearch and development services ratably over the associated period of performance, which is the maximum research period of eight years. As there was nodiscernible pattern of performance and/or objectively measurable performance measures did not exist, revenue associated with the first unit of accounting isrecognized on a straight-line basis over the eight-year performance period. The remaining $1.5 million allocated to the second unit of accounting for thetime-limited right of first negotiation for AVA-101 was deferred. In November 2015, Regeneron notified us that it did not exercise its right of first negotiationand, as a result, we recognized the entire $1.5 million as revenue during the year ended December 31, 2015. In February 2017, Regeneron notified us thatpursuant to the terms of the research, collaboration and license agreement, it extended the initial research term for an additional three years, through May 1,2020.The portion of the upfront payment that was applied to the original research budget was fully used in the fourth quarter of 2015, and we and Regeneron,through a joint review committee, agree annually on an updated research and development services budget through the research period. We invoiceRegeneron quarterly for services performed in each prior quarter. These additional research fees are added to the research licenses and related research anddevelopment services unit of accounting, recorded as deferred revenue and recognized to revenue over the remaining maximum research term.Under our research, collaboration and license agreement with Regeneron, we are required to have a mutually agreed-on research plan with Regeneron in orderto invoice Regeneron for services performed. We do not currently have a research plan in place, and, consequently, we are not currently receiving anyreimbursements from Regeneron.Our ability to generate product revenue and become profitable depends upon our ability to successfully develop and commercialize our product candidates.Because of the numerous risks and uncertainties associated with product development, we are unable to predict the amount or timing of product revenue.Even if we are able to generate revenue from the sale of our products, we may be unable to continue our operations at planned levels and be forced to reduceour operations.Agreement with GenSightIn February 2014, we entered into an agreement with GenSight, in which we granted GenSight a non-exclusive license to our proprietary AAV.7m8 vector todevelop gene therapy products to deliver certain therapeutic transgenes. Under the agreement, we are eligible to receive development, regulatory andcommercial milestones. Also, we are eligible to receive low to mid-single digit royalties on sales of GenSight’s licensed products.During the year ended December 31, 2018, GenSight achieved a clinical development milestone pursuant to the agreement. This milestone was previouslyconstrained under Topic 606. We earned a $0.2 million milestone payment, which we recognized as revenue in the consolidated statement of operations andcomprehensive loss for the year ended December 31, 2018.Research and Development ExpensesConducting a significant amount of research and development is central to our business model. Research and development expenses include primarilypersonnel-related costs, stock-based compensation expense, laboratory supplies, consulting costs, external contract research and development expenses,including expenses incurred under agreements with CROs, the cost of acquiring, developing and manufacturing clinical trial materials, and overheadexpenses, such as rent, equipment depreciation, insurance and utilities.Research and development costs are expensed as incurred. Advance payments for goods or services for future research and development activities are deferredand expensed as the goods are delivered or the related services are performed.We estimate preclinical study and clinical trial expenses based on the services performed pursuant to contracts with research institutions and CROs thatconduct and manage preclinical studies and clinical trials on our behalf. In accruing service fees, we estimate the time period over which services will beperformed and the level of effort to be expended in each period. We estimate the amounts incurred through communications with third party service providersand our estimates of accrued expenses as of each balance sheet date are based on information available at the time. If the actual timing of the performance ofservices or the level of effort varies from the estimate, we will adjust the accrual accordingly.61Table of Contents At this time, we cannot reasonably estimate the nature, timing or aggregate costs of the efforts that will be necessary to complete the development of any ofour product candidates. The successful development and commercialization of a product candidate is highly uncertain, and clinical development timelines,the probability of success, and development and commercialization costs can differ materially from expectations.General and Administrative ExpensesGeneral and administrative expenses include primarily personnel-related costs, stock-based compensation, professional fees for legal, consulting, audit andtax services, overhead expenses, such as rent, equipment depreciation, insurance and utilities, and other general operating expenses not otherwise included inresearch and development expenses. Our general and administrative expenses may increase in future periods if and to the extent we elect to increase ourinvestment in infrastructure to support continued research and development activities and potential commercialization of our product candidates. We willcontinue to evaluate the need for such investment in conjunction with our ongoing consideration of our pipeline of product candidates. We anticipateincreased expenses related to audit, legal, regulatory, and investor relations functions associated with being a public reporting company.Impairment of Goodwill and Intangible AssetsIn the fourth quarter of 2017, we performed our annual impairment assessment of our intangible asset, ADVM-043, and concluded that our ADVM-043intangible asset was not impaired.In the third quarter of 2018, we identified an impairment indicator related to the intangible asset and performed an impairment analysis. On October 30, 2018,we decided to discontinue the development of ADVM-043. We recorded an impairment charge of $5.0 million on IPR&D assets related to our intangibleasset for ADVM-043. We recorded this amount in Impairment of intangible assets on our consolidated statements of operations and comprehensive loss.Other Income (Expense), NetOther income (expense), net primarily comprises of interest income on our cash equivalents and investments in marketable securities.Critical Accounting Policies, Significant Judgments and Use of EstimatesThis discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been preparedin accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect thereported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well asthe reported expenses incurred during the reporting periods. We base our estimates on our historical experience and on various other factors that we believeare reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are notreadily apparent from other sources. Actual results may differ from these estimates. We believe that the accounting policies discussed below are critical tounderstanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.Revenue RecognitionTo date we have not generated any revenue from the sale of our products. We generate revenue through research, collaboration and license arrangements withour strategic partners.Effective January 1, 2018, we adopted Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”) using themodified retrospective approach. Our collaboration agreements with Regeneron, Editas and GenSight were impacted by the adoption of the new revenuestandards under Topic 606. We present the results for reporting periods beginning after January 1, 2018 under Topic 606, while prior period results are notadjusted and continue to be reported in accordance with the revenue standards under Topic 605.Upon adoption of Topic 606, we recorded a net decrease of $6.1 million to our deferred revenue and opening accumulated deficit as of January 1, 2018 forthe cumulative effect of the adoption. The effect of the adoption is summarized for our license and collaboration agreements as follows:Collaboration Agreement with Regeneron—Under Topic 606, we determined the transaction price at contract inception to be $8.0 million, which was relatedto the non-refundable upfront payment for license and research services. The arrangement also provides for additional payments to us when we achievecertain development and regulatory milestones. Because these milestone payments are not within our control and we do not consider them probable of beingachieved until the events occur, we did not include them in the transaction price at contract inception. We allocated the transaction price of $8.0 million atcontract inception to two performance obligations. Our deferred revenue associated with Regeneron collaboration agreement as of December 31, 2017 underTopic 605 was $6.5 million. As a result of adopting Topic 606, we recorded a $6.5 million reduction to our deferred revenue and62Table of Contents opening accumulated deficit during the three months ended March 31, 2018 as the performance obligations associated with the Regeneron deferred revenuewere satisfied as of January 1, 2018. There was no outstanding deferred revenue associated with Regeneron as of December 31, 2018.Collaboration Agreement with Editas— Under Topic 606, the transaction price is $1.5 million related to the $1.0 million non-refundable upfront paymentfor license and research services at contract inception and the one-time, non-refundable cash payment of $0.5 million made by Editas in February 2018 inconsideration for extending the agreement. The arrangement provides for additional payments to us when we achieve certain development and regulatorymilestones. Because these milestone payments are not within our control and we do not consider them probable of being achieved until the events occur, wedid not include them in the transaction price. We allocated the transaction price of $1.5 million to a single performance obligation, research anddevelopment. Our deferred revenue associated with Editas collaboration agreement as of December 31, 2017 under Topic 605 was $0.5 million. As a result ofadopting Topic 606, we recorded an increase of $0.4 million to our deferred revenue and opening accumulated deficit during the three months ended March31, 2018 due to differences in the timing of recognition under Topic 606.During the year ended December 31, 2018, we recognized revenue of $1.4 million, associated with the Editas collaboration agreement. There was nooutstanding deferred revenue associated with Editas as of December 31, 2018.License Agreement with GenSight— On February 2014, we entered into an agreement with GenSight, where we granted GenSight a non-exclusive license toour proprietary AAV.7m8 vector. Under the agreement, we are eligible to receive development, regulatory and commercial milestones. Also, we are eligible toreceive low to mid-single digit royalties on sales of GenSight’s licensed products.During the year ended December 31, 2018, GenSight achieved a clinical development milestone pursuant to the agreement. This milestone was previouslyconstrained under Topic 606. We earned a $0.2 million milestone payment, which we recognized as revenue in the consolidated statement of operations andcomprehensive loss for the year ended December 31, 2018.Under Topic 605, our revenue for the year ended December 31, 2018 would have been $2.2 million.Accrued and Prepaid Research and Development ExpenseWe estimate our accrued and prepaid research and development expenses as of each balance sheet date. This process involves reviewing contracts andpurchase orders, reviewing the terms of our license agreements, communicating with our applicable personnel to identify services that have been performedon our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwisenotified of actual cost. The majority of our service providers invoice us monthly in arrears for services performed. Expenses that are paid in advance ofperformance are deferred as a prepaid expense and expensed as the services are provided.Examples of estimated accrued research and development expenses include fees to: •contract manufacturers in connection with the production of clinical trial materials; •CROs and other service providers in connection with clinical studies; •investigative sites in connection with clinical studies; •vendors in connection with preclinical development activities; and •services providers for professional service fees such as consulting and related services.Our understanding of the status and timing of services performed relative to the actual status and timing may vary and may result in our reporting changes inestimates in any particular period. To date, there have been no material differences from our estimates to the amount actually incurred. However, due to thenature of these estimates, we cannot assure you that we will not adjust our estimates in the future as we become aware of additional information about thestatus or conduct of our clinical studies or other research activities. For the years ended December 31, 2018 and 2017, there were no material changes fromour estimates of accrued research and development expenses.Stock-Based Compensation ExpenseWe recognize compensation costs related to stock-based awards granted to employees based on the estimated fair value of the awards on the date of grant. Weestimate the grant-date fair value, and the resulting stock-based compensation expense, using the Black‑Scholes valuation model for stock options, and usingintrinsic value, which is the closing price of our common stock on the date of the grant for the restricted stock units, or RSUs. We generally recognize thegrant date fair value of the stock-based awards on a straight-line basis over the requisite service period, which is generally the vesting period of the respectiveawards. We recognize stock-based compensation expense related to awards to non-employees based on the then-current fair value at each measurement dateover the associated service period of the award, which is generally the vesting term, using the accelerated attribution method. We use the Black-Scholesvaluation model to assist us in determining the fair value of our stock options, which includes our employee stock purchase plan. The Black-Scholesvaluation model requires the use of following assumptions:63Table of Contents Expected volatility. We estimate expected volatility based on the average historical volatility of a peer group of comparable publicly traded life sciences andbiotechnology companies with product candidates in similar stages of clinical development, as we do not have sufficient trading history for our commonstock. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomesavailable.Expected term. We derived the expected term using the “simplified” method (the expected term is determined as the average of the time-to-vesting and thecontractual life of the options), as we have limited historical information to develop expectations about future exercise patterns and post vesting employmenttermination behavior. We base the expected term for non-employee awards on the remaining contractual term of an option on each measurement date. Theexpected term of the Employee Stock Purchase Plan (“ESPP”) rights equals to the six-month look-back period.Risk-free interest rate. We base the risk-free interest rate on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on theoptions.Expected dividend yield. We have never paid any dividends and do not plan to pay dividends in the foreseeable future, and, therefore, used an expecteddividend yield of zero in the valuation model.Valuation of Long-Lived Assets and Purchased Intangible AssetWe evaluate the carrying value of amortizable long‑lived assets, whenever events, or changes in business circumstances or the planned use of long‑livedassets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. If these facts and circumstancesexist, we assess for recovery by comparing the carrying values of long‑lived assets with their future undiscounted net cash flows. If the comparison indicatesthat impairment exists, we write down long‑lived assets to their respective fair value based on discounted cash flows. Significant management judgment isrequired in the forecast of future operating results that we use in the preparation of expected undiscounted cash flows. If management’s assumptions aboutfuture operating results were to change as a result of events or circumstances, we may be required to record an impairment loss on these assets. No impairmentindicators were noted for our amortizable long-lived assets, fixed assets, in the periods presented.We also evaluate the carrying value of our intangible asset, not subject to amortization, related to in‑process research and development (“IPR&D”), which weconsider to be indefinite‑lived until the completion or abandonment of the associated research and development efforts. Accordingly, amortization of theIPR&D asset will not occur until the product reaches commercialization. During the period we consider the asset indefinite‑lived, we test it for impairment onan annual basis, as well as between annual tests if we become aware of any events occurring or changes in circumstances that would indicate that the fairvalue of the IPR&D asset is less than its carrying amount. We record impairment loss when fair value of an IPR&D asset is less than its carrying value. If therelated project is terminated or abandoned, we will also have an impairment related to the IPR&D asset.If and when development is complete, which generally occurs when regulatory approval to market the product is obtained, we would deem the associatedIPR&D asset definite‑lived and would then amortize it based on its estimated useful life at that point in time based on respective patent term and test it forimpairment only when impairment indicators are present as discussed above underlong-lived assets. Income Tax We recognize deferred income taxes for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. Weperiodically evaluate the positive and negative evidence bearing upon realizability of our deferred tax assets. Based upon the weight of available evidence,which includes our historical operating performance, reported cumulative net losses since inception and difficulty in accurately forecasting our future results,we maintained a full valuation allowance on the net deferred tax assets as of December 31, 2018 and 2017 of approximately $47.3 million and $35.5 million,respectively. We intend to maintain a full valuation allowance on the federal, state and foreign deferred tax assets until sufficient positive evidence exists tosupport reversal of the valuation allowance.As of December 31, 2018, we had U.S. federal net operating loss (“NOL”) carryforwards of approximately $100.0 million to offset future federal income.Approximately $57.0 million of NOLs expire at various years beginning with 2036. As of December 31, 2018, we also had U.S. state NOL carryforwards ofapproximately $61.1 million to offset future state income. U.S. State NOLs expire at various years beginning with 2036. At December 31, 2018, we also hadapproximately $65.0 million of foreign net operating loss carryforwards which may be available to offset future foreign income; these carryforwards do notexpire.Under Section 382 of the Code, our ability to utilize NOL carryforwards or other tax attributes such as research tax credits, in any taxable year may be limitedif we have experienced an “ownership change.” Generally, a Section 382 ownership change occurs if there is a cumulative increase of more than 50percentage points in the stock ownership of one or more stockholders or groups of stockholders who own at least 5% of a corporation’s stock within aspecified testing period. Similar rules may apply under state tax laws. Due to a May 11, 2016 ownership change, we determined that certain NOLs andresearch and development tax credits for both federal and state purposes are severely limited and therefore we removed a significant amount NOL andresearch and development tax credits from our deferred tax assets.64Table of Contents We record unrecognized tax benefits as liabilities and adjust these liabilities when our judgment changes as a result of the evaluation of new information notpreviously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially differentfrom our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in theperiod in which new information is available. Our policy is to recognize interest and penalties related to income taxes as a component of income tax expense.We have not recognized any interest and penalties related to income taxes in the consolidated statements of operations and comprehensive loss during theyears ended December 31, 2018 and 2017.Recent Accounting Standard Update In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-2, Leases, which amends the current guidance on leasingactivities to provide more transparency and comparability, and requires that all leases be recognized by lessees on their balance sheet as a right-of-use assetand corresponding lease liability, which are currently accounted for as operating leases. The new standard is effective for fiscal years and interim periodswithin those fiscal years beginning after December 15, 2018, with early adoption permitted. We adopted the new standard using the modified retrospectiveapproach as of January 1, 2019 and expect to record a lease liability in the range of $24.0 million to $27.0 million, and a right‑to‑use asset of approximately$23.0 million and $26.0 million, and no adjustment to the accumulated deficit. While we continue to evaluate the effect of the standard, we anticipate thatthe adoption will result in a material increase in assets and liabilities on our consolidated balance sheet and will not have a material impact on theconsolidated statement of operations or statement of cash flows.In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based PaymentAccounting” that expands the scope of ASC Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Anentity should apply the requirements of ASC Topic 718 to nonemployee awards except for certain exemptions specified in the amendment. The guidance iseffective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted, but noearlier than an entity’s adoption date of Topic 606. We are currently evaluating the impact of the guidance on our consolidated financial statements.Emerging Growth Company StatusWe are an “emerging growth company” as defined in the JOBS Act, and therefore we may take advantage of certain exemptions from various public companyreporting requirements. As an “emerging growth company,” •we avail ourselves of the exemption from the requirement to obtain an attestation and report from our auditors on the assessment of our internalcontrol over financial reporting pursuant to the Sarbanes-Oxley Act; •we provide less extensive disclosure about our executive compensation arrangements; and •we do not require stockholder non-binding advisory votes on executive compensation or golden parachute arrangements.We will remain an “emerging growth company” until December 31, 2019. Results of OperationsComparison of the Years Ended December 31, 2018 and 2017The following table summarizes our results of operations for the periods indicated: Years ended December 31, 2018 2017 Increase/(Decrease) (In thousands) Collaboration and license revenue $1,612 $1,849 $(237)Operating expenses: Research and development 50,133 39,839 10,294 General and administrative 24,560 20,857 3,703 Impairment of goodwill and intangible assets 5,000 — 5,000 Total operating expenses 79,693 60,696 18,997 Operating loss (78,081) (58,847) (19,234)Other income (expense), net 4,204 2,700 1,504 Net loss before income tax benefit (73,877) (56,147) (17,730)Income tax benefit 1,250 — 1,250 Net loss $(72,627) $(56,147) $(16,480)65Table of Contents RevenueOur revenue for the year ended December 31, 2018 related to research services under our collaboration agreement with Editas and milestone payment underthe license agreement with GenSight while our revenue for the year ended December 31, 2017 related to license and research services under our collaborationagreements with Regeneron and Editas. We recognized our collaboration and license revenue for the year ended December 31, 2018 under Topic 606, whichwe adopted effective January 1, 2018. We recognized our collaboration and license revenue for the year ended December 31, 2017 under Topic 605. UnderTopic 605, our revenue for the year ended December 31, 2018 would have been $2.2 million.Research and Development ExpenseResearch and development expense increased to $50.1 million for the year ended December 31, 2018, from $39.8 million for the year ended December 31,2017. This increase was primarily due to an overall increase in research and development activity, including $4.3 million of higher costs associated with theADVANCE trial for ADVM-043 for A1AT deficiency and start-up activities for the OPTIC trial for ADVM-022 for the treatment of wet AMD, $1.5 million ofhigher material production costs related to our wet AMD and rare disease programs to support clinical trials, $1.3 million of higher outside research anddevelopment services and $4.0 million in higher compensation and benefits.We expect that research and development expenses will increase in future periods as we continue to invest in advancing our gene therapy product candidate,ADVM-022 and earlier-stage research programs.General and Administrative ExpenseGeneral and administrative expense increased to $24.6 million for the year ended December 31, 2018, from $20.9 million for the year ended December 31,2017. The increase in general and administrative expense was primarily due to $5.8 million in severance-related expenses, predominantly stock-basedcompensation expenses as a result of the modification of the vesting and exercisability of stock awards associated with the departure of our previous chiefexecutive officer, and $0.4 million in increased compensation costs, and $0.3 million increase in rent expense, partially offset by $3.1 million lower legalexpenses as the year ended December 31, 2017 included settlement costs associated with the securities class action lawsuit and $2.0 million for thetermination of our master service agreement with Cornell.We expect that general and administrative expenses will increase in future periods as we continue to support advancing our gene therapy programs. Weanticipate increased expenses related to audit, legal, regulatory, and investor relations functions associated with being a public reporting company.Goodwill and Intangible Assets Impairment ChargeDuring the year ended December 31, 2018, we identified an impairment indicator related to the intangible asset for ADVM‑043 and performed an impairmentanalysis. In November 2018, we announced our decision to discontinue the development of ADVM-043. We recorded an impairment charge of $5.0 millionon IPR&D assets related to our intangible asset for ADVM-043. There were no impairment charges during the year ended December 31, 2017.Other Income, NetThe increase in other income, net was primarily due to higher interest income from our investments in marketable securities as we invested in higher yieldsecurities, as well as higher average invested balances.Income Tax BenefitIn connection with our impairment charge, we derecognized a deferred tax liability of $1.3 million related to the intangible asset for ADVM-043. There wasno income tax benefit during the year ended December 31, 2017.Liquidity, Capital Resources and Plan of OperationsWe have not generated positive cash flow or net income from operations since our inception and as of December 31, 2018, we had an accumulated deficit of$320.5 million. As of December 31, 2018, we had $205.1 million in cash, cash equivalents and short-term investments. We believe that our existing cash,cash equivalents, and short-term investments as of December 31, 2018 will be sufficient to fund our planned operations and capital expenditures into 2021.In August 2017, we entered into our 2017 stock offering agreement. Under the terms and conditions of the 2017 stock offering agreement, we may offer to sellour common stock for an aggregate offering price of up to $50.0 million through the agent from time to time. In January 2018, we sold a total of 1,419,893shares of our common stock at market prices under the 2017 stock offering agreement and raised total net proceeds of $5.7 million, net of issuance costs.During the year ended December 31, 2018, we sold no additional shares under the 2017 stock offering agreement. We have sold a total of 6,550,232 millionshares of our common stock at66Table of Contents market prices pursuant to the 2017 stock offering agreement and raised total net proceeds of approximately $22.5 million, net of issuance costs.In February 2018, we completed an underwritten public offering for the sale of 10,222,235 shares of our common stock and raised total net proceeds ofapproximately $64.5 million, after discounts and other issuance costs.In June 2018, we entered into a lease for a facility located in Redwood City, California, that will serve as our new corporate headquarters and will includeapproximately 81,000 square feet of office, manufacturing, and laboratory space. We believe this facility will enable us to expand our manufacturing processdevelopment activities at 1000‑liter scale.We expect to incur substantial expenditures in the foreseeable future for the development and potential commercialization of our product candidates andongoing internal research and development programs, and capital expenditures related to the build out of our new facility. At this time, we cannot reasonablyestimate the nature, timing or aggregate amount of costs for our development, potential commercialization, and internal research and development programs.However, to complete our planned preclinical trials and current and future clinical trials, and to complete the process of obtaining regulatory approval for ourproduct candidates, as well as to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our productcandidates, if approved, we will require substantial additional funding in the future.If and when we seek additional funding, we will do so through equity or debt financings, collaborative or other arrangements with corporate sources orthrough other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital in thefuture could have a negative impact on our financial condition and our ability to pursue our business strategies. To complete development andcommercialization of any of our product candidates, we anticipate that we will need to raise substantial additional capital, the requirements of which willdepend on many factors, including: •the initiation, progress, timing, costs and results of preclinical studies and any clinical trials for our product candidates; •the outcome, timing of and costs involved in, seeking and obtaining approvals from the FDA and other regulatory authorities, including thepotential for the FDA and other regulatory authorities to require that we perform more studies than those that we currently expect; •the ability of our product candidates to progress through clinical development activities successfully; •our need to expand our research and development activities; •the rate of progress and cost of our commercialization of our products; •the cost of preparing to manufacture our products on a larger scale; •the costs of commercialization activities including product sales, marketing, manufacturing and distribution; •the degree and rate of market acceptance of any products launched by us or future partners; •the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; •our need to implement additional infrastructure and internal systems; •our ability to hire additional personnel; •our ability to enter into additional collaboration, licensing, commercialization or other arrangements and the terms and timing of sucharrangements; and •the emergence of competing technologies or other adverse market developments.If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs andclinical trials. We may also be required to sell or license other technologies or clinical product candidates or programs that we would prefer to develop andcommercialize ourselves.Cash FlowsThe following table sets forth the primary sources and uses of cash for each of the periods presented below: Years ended December 31, 2018 2017 (In thousands) Net cash (used in) provided by: Operating activities $(53,964) $(45,421)Investing activities 69,444 (122,204)Financing activities 69,949 16,748 Effect of changes in foreign currency exchange rates — (774)Net increase (decrease) in cash and cash equivalents and restricted cash $85,429 $(151,651)Cash Used in Operating ActivitiesNet cash used in operating activities for the year ended December 31, 2018 was $54.0 million, primarily as a result of the net loss of $72.6 million mainlydriven by our continued research and development activities, partially offset by $20.3 million of non-cash67Table of Contents charges mainly related to stock-based compensation expense, impairment of intangible asset and depreciation and amortization expense, and $1.6 million ofnet decrease in operating assets and liabilities.Net cash used in operating activities for the year ended December 31, 2017, was $45.4 million, primarily as a result of the net loss of $56.1 million, mainlydriven by our continued research and development activities, and $0.8 million of net decrease in operating assets and liabilities, partially offset by $11.5million for non-cash charges.Cash (Used in) Provided by Investing ActivitiesNet cash provided by investing activities was $69.4 million for the year ended December 31, 2018 consisted of $149.0 million resulting from the maturitiesof marketable securities, partially offset by $78.7 million of purchases of marketable securities and $0.8 million of purchases of property and equipment.Purchases of property and equipment primarily consisted of the acquisition of laboratory equipment to support our research and development activities. Net cash used in investing activities was $122.2 million for the year ended December 31, 2017, which consisted of the purchases of marketable securities of$209.8 million and purchases of property and equipment of $1.0 million, partially offset by $87.6 million maturities of marketable securities and$1.0 million sales of marketable securities.Cash Provided by Financing ActivitiesNet cash provided by financing activities for year ended December 31, 2018 consisted of $70.2 million of the net proceeds from the sales of our commonstock, primarily our underwritten public offering of our common stock in February in which we raised net proceeds of $64.5 million, $1.0 million of theproceeds from the exercises of stock options and employee stock purchases and $0.1 million of the proceeds from our financing arrangement with the Alpha-1 Project, Inc., partially offset by $1.0 million in taxes paid relating to net share settlement of restricted stock units and $0.2 million repayment of our BanquePublique d’Investissement (“BPI France”) loan.Net cash provided by financing activities for the year ended December 31, 2017, of $16.7 million, which consisted of $16.5 million of net proceeds from thesales of our common stock under the 2017 stock offering agreement, net of issuance costs, $0.5 million from proceeds from the exercise of stock options andpurchases of common stock under employee stock purchase plan, partially offset by $0.3 million in taxes paid relating to net share settlement of restrictedstock units. Off Balance Sheet ArrangementsWe do not have any off-balance sheet arrangements as defined in Regulation S-K, Item 303(a)(4)(ii).Item 7A. Quantitative and Qualitative Disclosures about Market RiskUnder SEC rules and regulations, as a smaller reporting company, we are not required to provide the information required by this item. See Item 6, SelectedFinancial Data above. Item 8. Financial Statements and Supplementary Data.68Table of Contents ADVERUM BIOTECHNOLOGIES, INC.CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2018AND 2017AND FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 Index PAGESReport of Independent Registered Public Accounting Firm 70Consolidated Balance Sheets 72Consolidated Statements of Operations and Comprehensive Loss 73Consolidated Statements of Stockholders’ Equity 74Consolidated Statements of Cash Flows 75Notes to Consolidated Financial Statements 76 69Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and StockholdersAdverum Biotechnologies, Inc. Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheet of Adverum Biotechnologies, Inc. (the “Company”) as of December 31, 2018, the relatedconsolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year then ended, and the related notes(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all materialrespects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the year then ended, inconformity with U.S. generally accepted accounting principles.Adoption of Topic 606As discussed in Note 2 to the consolidated financial statements, the Company changed its method for recognizing revenue as a result of the adoption ofAccounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), using the modified retrospective method effectiveJanuary 1, 2018.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations ofthe Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, norwere we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding ofinternal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control overfinancial reporting. Accordingly, we express no such opinion.Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures inthe financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion./s/ Ernst & Young LLP We have served as the Company's auditor since 2018.San Jose, CaliforniaMarch 6, 2019 70Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Adverum Biotechnologies, Inc.Menlo Park, California Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheet of Adverum Biotechnologies, Inc. and its subsidiaries (the “Company”) as of December 31,2017, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended December 31, 2017,and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the year ended December 31, 2017, inconformity with accounting principles generally accepted in the United States of America (GAAP).Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations ofthe Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, norwere we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding ofinternal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control overfinancial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures inthe financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ Deloitte & Touche LLPSan Jose, CaliforniaMarch 6, 2018 We began serving as the Company’s auditor in 2013. In 2018 we became the predecessor auditor. 71Table of Contents ADVERUM BIOTECHNOLOGIES, INC.CONSOLIDATED BALANCE SHEETS(In thousands, except share and per share data) As of December 31, 2018 2017 Assets Current assets: Cash and cash equivalents $154,949 $70,519 Short-term investments 50,130 119,966 Prepaid expenses and other current assets 3,675 3,256 Total current assets 208,754 193,741 Property and equipment, net 3,586 3,024 Restricted cash 999 — Deposit and other non-current assets 156 140 Intangible asset — 5,000 Total assets $213,495 $201,905 Liabilities and stockholders’ equity Current liabilities: Accounts payable $1,707 $1,731 Accrued expenses and other current liabilities 8,784 6,964 Deferred rent, current portion 228 129 Deferred revenue, current portion — 1,850 Total current liabilities 10,719 10,674 Long-term liabilities: Deferred rent, net of current portion 1,366 222 Deferred revenue, net of current portion — 5,250 Deferred tax liability, non-current — 1,250 Other non-current liabilities 243 481 Total liabilities 12,328 17,877 Commitments and contingencies (Note 10) Stockholders’ equity: Preferred stock, $0.0001 par value, 5,000,000 shares authorized; no shares issued and outstanding — — Common stock, $0.0001 par value, 300,000,000 shares authorized at December 31, 2018 and 2017; 62,965,468 and 49,015,339 shares issued and outstanding at December 31, 2018 and 2017, respectively 6 5 Additional paid-in capital 522,503 439,048 Accumulated other comprehensive loss (799) (963)Accumulated deficit (320,543) (254,062)Total stockholders’ equity 201,167 184,028 Total liabilities and stockholders’ equity $213,495 $201,905 See accompanying notes to consolidated financial statements.72Table of Contents ADVERUM BIOTECHNOLOGIES, INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(In thousands, except per share data) Years ended December 31, 2018 2017 Collaboration and license revenue $1,612 $1,849 Operating expenses: Research and development 50,133 39,839 General and administrative 24,560 20,857 Impairment of goodwill and intangible assets 5,000 — Total operating expenses 79,693 60,696 Operating loss (78,081) (58,847)Other income: Other income, net 4,204 2,700 Net loss before income taxes (73,877) (56,147)Income tax benefit 1,250 — Net loss $(72,627) $(56,147)Other comprehensive loss: Net unrealized gain (loss) on marketable securities 168 (182)Foreign currency translation adjustment (4) (774)Comprehensive loss $(72,463) $(57,103)Net loss per share - basic and diluted $(1.18) $(1.29)Weighted-average common shares outstanding-basic and diluted 61,375 43,661 See accompanying notes to consolidated financial statements. 73Table of ContentsADVERUM BIOTECHNOLOGIES, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY(In thousands except share and per share data) COMMON STOCK$0.0001 PAR VALUE ADDITIONALPAID-IN ACCUMULATEDOTHERCOMPREHENSIVE ACCUMULATED TOTALSTOCKHOLDERS' Shares Amount CAPITAL INCOME (LOSS) DEFICIT EQUITY Balance at December 31, 2016 41,805,009 $4 $413,518 $(7) $(197,915) $215,600 Issuance of common stock, net of issuance costs of $230 5,130,339 1 16,518 — — 16,519 Remeasurement of contingent common stock warrant in consideration for services — — 60 — — 60 Stock-based compensation expense — — 8,723 — — 8,723 Common stock issued upon exercise of stock options 1,808,696 — 367 — — 367 Common stock issued under employee stock purchase plan 74,642 — 175 — — 175 Common stock issued upon release of restricted stock units 307,610 — — — — — Restricted stock surrendered for taxes (110,957) — (313) — — (313)Net unrealized loss on marketable securities — — — (182) — (182)Foreign currency translation adjustments — — — (774) — (774)Net loss — — — — (56,147) (56,147)Balance at December 31, 2017 49,015,339 5 439,048 (963) (254,062) 184,028 Issuance of common stock, net of issuance costs of $4,140 11,642,128 1 70,186 — — 70,187 Adoption of Topic 606 — — — — 6,146 6,146 Stock-based compensation expense — — 13,432 — — 13,432 Common stock issued upon exercise of stock options 1,606,137 — 688 — — 688 Common stock issued under employee stock purchase plan 120,475 — 340 — — 340 Common stock issued upon release of restricted stock units 773,965 — — — — — Restricted stock surrendered for taxes (192,576) — (1,191) — — (1,191)Net unrealized loss on marketable securities — — — 168 — 168 Foreign currency translation adjustments — — — (4) — (4)Net loss — — — — (72,627) (72,627)Balance at December 31, 2018 62,965,468 $6 $522,503 $(799) $(320,543) $201,167 See accompanying notes to consolidated financial statements. 74Table of ContentsADVERUM BIOTECHNOLOGIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Years ended December 31, 2018 2017 Cash flows from operating activities: Net loss $(72,627) $(56,147)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,750 2,096 Stock-based compensation expense 13,432 8,723 Amortization of premium on marketable securities 24 593 Accreted interest on BPI 95 — Impairment of goodwill and intangible assets 5,000 — Non-cash research and development expense — 60 Other (17) 10 Changes in operating assets and liabilities: Accounts receivable, net — 886 Prepaid expenses and other current assets (793) (491)Deposit and other long-term assets (16) — Accounts payable (67) 333 Accrued expenses and other current liabilities 215 487 Restructuring liabilities — (25)Deferred revenue (953) (1,849)Deferred rent 1,243 (97)Deferred tax liability (1,250) — Net cash used in operating activities (53,964) (45,421)Cash flows from investing activities: Purchases of marketable securities (78,726) (209,787)Sales of marketable securities — 1,003 Maturities of marketable securities 148,979 87,596 Purchases of property and equipment (809) (1,016)Net cash provided by (used in) provided by investing activities 69,444 (122,204) Cash flows from financing activities: Proceeds from offering of common stock, net of issuance costs 70,187 16,519 Proceeds from issuance of common stock pursuant to option exercises 688 367 Taxes paid related to net share settlement of restricted stock units (1,191) (313)Proceeds from employee stock purchase plan 340 175 Repayment of BPI loan (175) — Proceeds from a financing arrangement 100 — Net cash provided by financing activities 69,949 16,748 Effect of foreign currency exchange rate on cash and cash equivalents — (774)Net increase (decrease) in cash and cash equivalents and restricted cash 85,429 (151,651)Cash and cash equivalents and restricted cash at beginning of period 70,519 222,170 Cash and cash equivalents and restricted cash at end of period $155,948 $70,519 Supplemental schedule of noncash investing and financing information Fixed assets in accounts payable and current liabilities $1,616 $115 See accompanying notes to consolidated financial statements. 75Table of Contents ADVERUM BIOTECHNOLOGIES, INC.Notes to Consolidated Financial Statements 1. Description of the businessNature of Business—Adverum Biotechnologies, Inc. (the “Company” or “Adverum”) was incorporated in Delaware on July 17, 2006 and is headquartered inMenlo Park, California. The Company is a clinical-stage gene therapy company targeting unmet medical need in ocular and rare diseases. The Companydevelops gene therapy product candidates designed to provide durable efficacy by inducing sustained expression of a therapeutic protein. The Company’score capabilities include clinical development, novel vector discovery, and in-house manufacturing expertise, specifically in scalable process development,assay development, and current Good Manufacturing Practices (“cGMP”) quality control. Adverum is advancing a pipeline of gene therapy productcandidates designed to treat wet age-related macular degeneration (“AMD”) as well as rare diseases. Since the Company’s inception, it has devoted its effortsprincipally to performing research and development activities, including conducting preclinical studies, early clinical trials, filing patent applications,obtaining regulatory agreements, hiring personnel, and raising capital to support these activities.The Company has not generated any revenue from the sale of products since its inception. The Company has experienced net losses since its inception andhad an accumulated deficit of $320.5 million as of December 31, 2018. The Company expects to incur losses and have negative net cash flows fromoperating activities as it engages in further research and development activities. The Company believes that it has sufficient funds to continue operationsinto 2021.In May 2016, the Company completed the acquisition of all of the outstanding shares of Annapurna Therapeutics SAS (“Annapurna”), a privately-heldFrench gene therapy company, in accordance with the terms of the acquisition agreement (the “Annapurna acquisition”) dated as of January 29, 2016, asamended on April 6, 2016. As a result, Annapurna is now a wholly owned subsidiary of the Company.Upon completion of the Annapurna acquisition, the Company changed its name to “Adverum Biotechnologies, Inc.” The Company’s shares of commonstock listed on The Nasdaq Global Market, previously trading through the close of business on May 11, 2016 under the ticker symbol “AAVL,” commencedtrading on The Nasdaq Global Market under the ticker symbol “ADVM” on May 12, 2016. 2. Summary of significant accounting policiesBasis of Presentation and Principles of Consolidation— The Company’s consolidated financial statements have been prepared in accordance withaccounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities andExchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation.Use of Estimates—The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affectthe reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reportedamounts of income and expenses during the reporting period. The Company bases estimates and assumptions on historical experience when available and onvarious factors that it believes to be reasonable under the circumstances. On an ongoing basis, the Company evaluates its estimates and assumptions,including those related to research and development expense accruals, stock-based compensation expense, income taxes, intangible asset, fair values offinancial instruments and fair value of common stock warrants. The Company’s actual results may differ from these estimates under different assumptions orconditions. There have been no significant changes from the Company’s original estimates in any periods presented.Foreign Currency Translation—The Company’s consolidated financial statements are prepared in U.S. dollars. The Company’s foreign subsidiaries use theEuro and Australian dollar as their functional currencies and maintain their records in their local currencies, except its Ireland subsidiary that uses the U.S.dollar as its functional currency. Assets and liabilities are re-measured at exchange rates in effect at the end of the reporting period for the Company’s Frenchand Australian subsidiaries, and at historical exchange rates for its Irish subsidiary. Equity is measured at historical rates and income and expenses are re-measured at average exchange rates for the reporting period. The resulting foreign currency translation adjustment is recorded in accumulated othercomprehensive loss in the consolidated balance sheet. Transactions denominated in foreign currency are translated at exchange rates at the date oftransaction with foreign currency gains (losses) recorded in other income (expense), net in the consolidated statements of operations and comprehensive loss.Cash and Cash Equivalents—The Company considers all highly liquid investments purchased with original maturities of three months or less at the date ofpurchase to be cash equivalents. Cash and cash equivalents include cash held in banks, money market accounts and highly liquid debt securities. Cashequivalents are stated at fair value.76Table of Contents Restricted Cash—Restricted cash primarily consists of cash collateral to letter of credit provided to the landlord in relation to a lease agreement (see Note10).Short-Term Investments—All short-term investments, which consist of debt securities and certificates of deposit, have been classified as “available for sale”and are carried at fair value. Unrealized gains and losses, net of any related tax effects, are excluded from earnings and are included in other comprehensiveloss and reported as a separate component of stockholders’ equity until realized. Realized gains and losses and declines in value judged to be other thantemporary, if any, on available-for-sale securities are included in other income (expense), net in the Company’s consolidated statements of operations andcomprehensive loss. The cost of securities sold is based on the specific-identification method. The amortized cost of securities is adjusted for amortization ofpremiums and accretion of discounts to maturity. Interest on short-term investments is included in other income, net in the Company’s consolidatedstatements of operations and comprehensive loss. In accordance with the Company’s investment policy, management invests to diversify credit risk and onlyinvests in securities with high credit quality, including U.S. government securities.The Company periodically evaluates whether declines in the fair value of its investments below their cost are other than temporary. The evaluation includesconsideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, theseverity and duration of the unrealized losses, whether the Company has the intent to sell the securities, and whether it is more likely than not that theCompany will be required to sell the securities before the recovery of their amortized cost basis. If the Company determines that the decline in fair value of aninvestment is below its accounting basis and this decline is other than temporary, the Company would reduce the carrying value of the security it holds andrecords a loss for the amount of such decline. The Company has not recorded any realized losses or declines in value judged to be other than temporary on itsinvestments.Segment Reporting—The Company operates and manages its business as one reporting and operating segment, which is the business of developing andcommercializing gene therapeutics. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on anaggregate basis for purposes of allocating resources and evaluating financial performance.Concentrations of Credit Risk and Other Uncertainties—Financial instruments that potentially subject the Company to significant concentrations of creditrisk consists primarily of cash, cash equivalents and short-term investments. Risks associated with cash, cash equivalents, short-term investments aremitigated by the Company’s investment policy, which limits the Company’s investing to only those marketable securities rated at least A-1/P-1 Short TermRating and A/A2 Long Term Rating, as determined by independent credit rating agencies. Management believes that the Company is not exposed tosignificant credit risk.The Company is subject to certain risks and uncertainties, including, but not limited to changes in any of the following areas that the Company believescould have a material adverse effect on future financial position or results of operations: ability to obtain future financing; regulatory approval and marketacceptance of, and reimbursement for, the Company’s product candidates; performance of third-party clinical research organizations and manufacturers;development of sales channels; protection of the intellectual property; litigation or claims against the Company based on intellectual property, patent,product, regulatory or other factors; and the Company’s ability to attract and retain employees necessary to support the growth.Property and Equipment—Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation is recorded usingthe straight-line method over the estimated useful lives of the assets, generally three to five years. Leasehold improvements are capitalized and amortizedover the shorter period of their expected lives or the lease term. Major replacements and improvements are capitalized, while general repairs and maintenanceare expensed as incurred.Valuation of Long-Lived Assets and Purchased Intangible Assets—The Company evaluates the carrying value of amortizable long‑lived assets, wheneverevents, or changes in business circumstances or the planned use of long‑lived assets indicate that their carrying amounts may not be fully recoverable or thattheir useful lives are no longer appropriate. If these facts and circumstances exist, the Company assesses for recovery by comparing the carrying values oflong‑lived assets with their future undiscounted net cash flows. If the comparison indicates that impairment exists, long‑lived assets are written down to theirrespective fair values based on discounted cash flows. Significant management judgment is required in the forecasting of future operating results that is usedin the preparation of expected undiscounted cash flows. If management’s assumptions about future operating results were to change as a result of events orcircumstances, the Company may be required to record an impairment loss on these assets. There were no impairment indicators noted for the Company’samortizable long-lived assets, fixed assets, in the year ended December 31, 2017.The Company also evaluates the carrying value of intangible asset (not subject to amortization) related to in‑process research and development (“IPR&D”)asset, which is considered to be indefinite‑lived until the completion or abandonment of the associated research and development efforts. Accordingly,amortization of the IPR&D assets will not occur until the product reaches commercialization. During the period the intangible asset is consideredindefinite‑lived, it will be tested for impairment on an annual basis, as well as between annual tests if the Company becomes aware of any events occurring orchanges in circumstances that would77Table of Contents indicate that the fair value of the IPR&D asset is less than its carrying amount. If and when development is complete, which generally occurs when regulatoryapproval to market the product is obtained, the associated IPR&D asset would be deemed definite‑lived and would then be amortized based on its estimateduseful life at that point in time based on respective patent term. If a potential impairment exists, an impairment loss is measured as the excess of the asset’scarrying value over its fair value. During the year ended December 31, 2018, the Company recorded an impairment charge of $5.0 million related to itsintangible assets. (see Note 3).Financial Liabilities— During the year ended December 31, 2016, the Company entered into a sponsored research agreement with The Alpha-1 Project, Inc.(the “TAP”) with an embedded derivative, the Company elected to account for this financial liability at fair value and recorded as other non-current liabilitiesin its consolidated balance sheets (see Note 5). The change in fair value is recorded within other income, net in the Company’s consolidated statement ofoperations and comprehensive loss.Revenue Recognition—The Company has primarily generated revenue through license, research and collaboration arrangements with its strategic partners.Effective January 1, 2018, the Company adopted the new revenue standards under Topic 606 using the modified retrospective approach. Results for reportingperiods beginning after January 1, 2018 are presented under Topic 606, while prior period results are not adjusted and continue to be reported in accordancewith the revenue standards under Topic 605. Under Topic 606, the Company recognizes revenue when its customer obtains control of promised goods orservices, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenuerecognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify thecontract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price tothe performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception,once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determinesthose that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respectiveperformance obligation when (or as) the performance obligation is satisfied.The Company’s license and collaboration arrangements with Regeneron Pharmaceuticals, Inc. (“Regeneron”), Editas Medicine, Inc. (“Editas”), and GenSightBiologics (“GenSight”) are within the scope of Topic 606.Upon the adoption of Topic 606, the Company recorded a net decrease of $6.1 million to its deferred revenue and opening accumulated deficit as of January1, 2018 for the cumulative effect of the adoption. The effect of the adoption is summarized for the Company’s license and collaboration agreements asfollows:Collaboration and License RevenueCollaboration Agreement with Regeneron—Under Topic 606, the transaction price at contract inception was determined to be $8.0 million, which wasrelated to the non-refundable upfront payment for license and research services. The arrangement also provides for additional payments to the Companywhen certain development and regulatory milestones are achieved. Because these milestone payments are not within the control of the Company and are notconsidered probable of being achieved until the events occur, the Company did not include them in the transaction price at contract inception. Thetransaction price of $8.0 million at contract inception was allocated to two performance obligations. The Company’s deferred revenue associated with itsRegeneron collaboration agreement as of December 31, 2017 under Topic 605 was $6.5 million. As a result of adopting Topic 606, the Company recorded a$6.5 million reduction to its deferred revenue and opening accumulated deficit during the three months ended March 31, 2018 as the performanceobligations associated with the Regeneron deferred revenue were satisfied as of January 1, 2018. There was no outstanding deferred revenue associated withRegeneron as of March 31, 2018 or December 31, 2018.Collaboration Agreement with Editas—Under Topic 606, the transaction price at contract inception was determined to be $1.0 million, which was related tothe non-refundable upfront payment for license and research services. The arrangement provides for additional payments to the Company when certaindevelopment and regulatory milestones are achieved. Because these milestone payments are not within the control of the Company and are not consideredprobable of being achieved until the events occur, the Company did not include them in the transaction price at contract inception. The transaction price of$1.0 million at contract inception was allocated to a single performance obligation. The Company’s deferred revenue associated with its Editas collaborationagreement as of December 31, 2017 under Topic 605 was $0.5 million. As a result of adopting Topic 606, the Company recorded an increase of $0.4 millionto its deferred revenue and opening accumulated deficit during the three months ended March 31, 2018 due to differences in the timing of recognition underTopic 606.During the year ended December 31, 2018, the Company recognized revenue of $1.4 million associated with the Editas collaboration agreement. There wasno outstanding deferred revenue associated with Editas as of December 31, 2018.78Table of Contents License Agreement with GenSight— On February 2014, the Company entered into an agreement with GenSight, where the Company granted GenSight a non-exclusive license to its proprietary AAV.7m8 vector. Under the agreement, the Company is eligible to receive development, regulatory and commercialmilestones. Also, the Company is eligible to receive low to mid-single digit royalties on sales of GenSight’s licensed products.During the year ended December 31, 2018, GenSight achieved a clinical development milestone pursuant to the agreement. This milestone was previouslyconstrained under Topic 606. The Company earned a $0.2 million milestone payment, which was recognized as revenue in the consolidated statement ofoperations and comprehensive loss for the year ended December 31, 2018.Under Topic 605, the Company’s revenue for the year ended December 31, 2018 would have been $2.2 million.Research and Development Expenses—Research and development expenses are charged to expense as incurred. Research and development expensesinclude primarily personnel-related costs, stock-based compensation expense, laboratory supplies, consulting costs, external contract research anddevelopment expenses, including expenses incurred under agreements with CROs, the cost of acquiring, developing and manufacturing clinical trialmaterials, and overhead expenses, such as rent, equipment depreciation, insurance and utilities. Advance payments for goods or services for future researchand development activities are deferred and expensed as the goods are delivered or the related services are performed.The Company estimates preclinical studies and clinical trial expenses based on the services performed pursuant to contracts with research institutions andclinical research organizations that conduct and manage preclinical studies and clinical trials on the Company’s behalf. In accruing service fees, theCompany estimates the time period over which services will be performed and the level of effort to be expended in each period. These estimates are based oncommunications with the third-party service providers and the Company’s estimates of accrued expenses and on information available at each balance sheetdate. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Therehave been no significant changes from the Company’s original estimates in any of the periods presented.Fair Value Measurements—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions thatmarket participants would use in pricing an asset or liability. The carrying amounts of the Company’s financial instruments, including cash equivalents,prepaid and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair values due to their short-termmaturities. Refer to Note 5 for the methodologies and assumptions used in valuing financial instruments.Stock-Based Compensation Expense—Stock-based compensation expense related to stock awards to employees is measured at fair value of the award on thedate of the grant. The Company estimates the grant-date fair value, and the resulting stock-based compensation expense, using the Black-Scholes valuationmodel for stock options and using intrinsic value, which is the closing price of its common stock on the date of the grant, for the restricted stock units(“RSUs”). The fair value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period,which is generally the vesting period.The Black-Scholes valuation model requires the use of following assumptions:Expected Term—The expected term assumption represents the period that the Company’s stock-based awards are expected to be outstanding and isdetermined using the simplified method.Expected Volatility—Expected volatility is estimated using comparable public companies’ volatility for similar terms.Expected Dividend—The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company has never paiddividends and has no plans to pay dividends.Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury zero-coupon issues in effect at the time of grant for periodscorresponding with the expected term of option.Stock-based compensation expense related to awards granted to non-employees is recognized based on the then-current fair value at each measurement dateover the associated service period of the award, which is generally the vesting term, using the accelerated attribution method. The fair value of non-employeestock options is estimated using the Black-Scholes valuation model with assumptions generally consistent with those used for employee stock options, withthe exception of the expected term, which is the remaining contractual life at each measurement date. Refer to Note 12 for more information on assumptionsused in estimating stock-based compensation expense.Income Taxes—The Company accounts for income taxes using the asset and liability method. The Company recognizes deferred tax assets and liabilities forthe expected future tax consequences of events that have been included in the financial statements or tax79Table of Contents returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities usingenacted tax rates in effect for the year in which the differences are expected to reverse.In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including itsoperating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determinesthat it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to thevaluation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determinednot to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period when such determination is made. Asof December 31, 2018 and 2017, the Company has recorded a full valuation allowance on its deferred tax assets.Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Interest andpenalties related to unrecognized tax benefits are included within the provision for income tax.Comprehensive Loss—Comprehensive loss comprises net loss and other comprehensive income (loss). Other comprehensive income (loss) consists offoreign currency translation adjustments related to translation of the financial statements of the Company’s Australia and France subsidiaries and unrealizedgain (loss) on marketable securities. The Company did not have reclassifications from other comprehensive income (loss) to the income (loss) during theyears ended December 31, 2018 and 2017.Basic and Diluted Net Loss Per Share— Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of commonstock outstanding for the period. Diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents outstanding forthe period using the treasury stock method. Outstanding stock options, RSUs, ESPP and warrants are considered to be common stock equivalents and are onlyincluded in the calculation of diluted net loss per share when their effect is dilutive.Recent Accounting Standard Update Not Yet Effective— In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-2,Leases, which amends the current guidance on leasing activities to provide more transparency and comparability, and requires that all leases be recognizedby lessees on their balance sheet as a right-of-use asset and corresponding lease liability, which are currently accounted for as operating leases. The newstandard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018, with early adoption permitted. Weadopted the new standard using the modified retrospective approach as of January 1, 2019 and expect to record a lease liability in the range of $24.0 millionto $27.0 million, and a right‑to‑use asset of approximately $23.0 million to $26.0 million, and no adjustment to the accumulated deficit. While the Companycontinues to evaluate the effect of the standard, the Company anticipates that the adoption will result in a material increase in assets and liabilities on itsconsolidated balance sheet and will not have a material impact on the consolidated statement of operations or statement of cash flows.In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based PaymentAccounting” that expands the scope of ASC Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Anentity should apply the requirements of ASC Topic 718 to nonemployee awards except for certain exemptions specified in the amendment. The guidance iseffective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted, but noearlier than an entity’s adoption date of Topic 606. The Company is currently evaluating the impact of the guidance on its consolidated financial statements. 3. Impairment Evaluation for Goodwill and Intangible AssetsThe Company recorded In-process Research and Development (“IPR&D”) intangible assets upon the acquisition of Annapurna in May 2016. The carryingvalue of the IPR&D intangible asset was $5.0 million as of June 30, 2018. The Company evaluates indefinite lived intangible assets for impairment on anannual basis or more frequently if indicators of impairment exist. As the Company recorded goodwill and IPR&D intangible assets upon the Annapurnaacquisition, the Company is required to test goodwill and indefinite lived intangible assets for impairment on an annual basis or more frequently if indicatorsof impairment exist. The Company operates as one reporting unit and goodwill was allocated to this reporting unit.During the year ended December 31, 2018, the Company identified an impairment indicator related to the intangible asset and performed an impairmentanalysis. On October 30, 2018, the Company decided to discontinue the development of ADVM‑043. The Company recorded an impairment charge of $5.0million on IPR&D assets related to the Company’s intangible asset for ADVM‑043. This amount was recorded in Impairment of intangible assets on theCompany’s consolidated statements of operations and comprehensive loss.80Table of Contents 4. Cash Equivalents and Short-Term InvestmentsThe following is a summary of the Company’s cash equivalents and short-term investments (in thousands):December 31, 2018 AmortizedCost Basis UnrealizedGains UnrealizedLoses EstimatedFair Value Money market funds $126 $— $— $126 U.S. government and agency securities 25,792 1 (4) 25,789 Commercial paper 147,606 — — 147,606 Corporate bonds 27,778 5 (17) 27,766 Certificates of deposit 1,420 — — 1,420 Total cash equivalents and short-term investments 202,722 6 (21) 202,707 Less: Cash equivalents (152,577) — — (152,577)Total short-term investments $50,145 $6 $(21) $50,130 December 31, 2017 Money market funds $65 $— $— $65 U.S. government and agency securities 58,351 — (145) 58,206 Commercial paper 71,427 — — 71,427 Corporate bonds 38,354 1 (38) 38,317 Certificates of deposit 9,731 — — 9,731 Total cash equivalents and short-term investments 177,928 1 (183) 177,746 Less: Cash equivalents (57,780) — — (57,780)Total short-term investments $120,148 $1 $(183) $119,966 Management determined that the gross unrealized losses on the Company’s marketable securities as of December 31, 2018 were temporary in nature.Therefore, none of the Company’s marketable securities were other-than-temporarily impaired as of December 31, 2018.All investments as at December 31, 2018 have a remaining maturity of one year or less.5. Fair Value Measurements and Fair Value of Financial InstrumentsThe authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:Level 1: Quoted prices in active markets for identical assets or liabilities.Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, orother inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments andconsider factors specific to the asset or liability.The fair value of Level 1 securities is determined using quoted prices in active markets for identical assets. Level 1 securities consist of highly liquid moneymarket funds. Financial assets and liabilities are considered Level 2 when their fair values are determined using inputs that are observable in the market orcan be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flowmodels with yield curves, and benchmark securities. In addition, Level 2 financial instruments are valued using comparisons to like-kind financialinstruments and models that use readily observable market data as their basis. U.S. government and agency securities, commercial paper, corporate bond andcertificates of deposit are valued primarily using market prices of comparable securities, bid/ask quotes, interest rate yields and prepayment spreads and areincluded in Level 2.During the periods presented, the Company has not changed the manner in which it values liabilities that are measured at estimated fair value using Level 3inputs. There were no transfers within the hierarchy during the years ended December 31, 2018 and 2017.81Table of Contents The following table summarizes, for assets and liabilities recorded at fair value, the respective fair value and the classification by level of input within the fairvalue hierarchy as described above (in thousands): Quoted Prices Significant Other Significant Total In Active Markets Observable Inputs Unobservable Inputs December 31, 2018 Carrying Value (Level 1) (Level 2) (Level 3) Money market funds $126 $126 $— $— U.S. government and agency securities 25,792 — 25,792 — Commercial paper 147,606 — 147,606 — Corporate bonds 27,778 — 27,778 — Certificates of deposit 1,420 — 1,420 — Total cash equivalents and short-term investments $202,722 $126 $202,596 $— Other noncurrent liability: Financing arrangement $— $— $— $— December 31, 2017 Assets: Money market funds $65 $65 $— $— U.S. government and agency securities 58,206 — 58,206 — Commercial paper 71,427 — 71,427 — Corporate bonds 38,317 — 38,317 — Certificates of deposit 9,731 — 9,731 — Total cash equivalents and short-term investments $177,746 $65 $177,681 $— Other noncurrent liability: Financing arrangement $157 $— $— $157In August 2016, the Company entered into a financing arrangement with the TAP for a total amount of up to $0.3 million (the “TAP financing”), of which $0and approximately $0.2 million was outstanding as of December 31, 2018 and 2017, respectively (see Note 9). The Company elected the fair value option toaccount for this financing arrangement. The fair value of the financing arrangement was determined based on the expected value approach and is classified asLevel 3 within the fair value hierarchy. The Company determined that the changes in the fair value were immaterial during the years ended December 31,2018 and 2017. The key unobservable inputs in the valuation model include timing of milestones, probability of achievement of development andcommercial milestones, and a discount factor.The TAP financing liability was remeasured to $0 due to the Company’s decision to discontinue the A1AT program during the year ended December 31,2018.Non-financial assets such as intangible assets, property, plant, and equipment are evaluated for impairment and adjusted to their fair value using Level 3inputs, only when impairment is recognized. Fair values are considered Level 3 when management makes significant assumptions in developing a discountedcash flow model based upon a number of considerations, including projections of revenues, earnings and a discount rate.6. Significant AgreementsEditas —In January 2018, the Company entered into an agreement to amend its collaboration, option and license agreement with Editas. The Companyoriginally entered into an agreement with Editas in August 2016 pursuant to which the Company and Editas collaborate on certain studies using AAVvectors in connection with Editas’ genome editing technology and the Company grants to Editas an exclusive option to obtain certain exclusive rights to usethe Company’s proprietary vectors in up to five ophthalmic indications. In January 2018, the Company and Editas extended the research collaboration,option and license agreement. In consideration for extending the agreement, Editas made a one-time, non-refundable cash payment of $0.5 million to theCompany in February 2018. In June 2018, the Company and Editas entered into a subsequent amendment to the agreement to extend the Research Periodand First Option Exercise Date (each as defined in the collaboration, option, and license agreement with Editas, as amended).Under the terms of the agreement, as amended, Editas had until November 2018 to exercise the option with respect to a designated initial indication, whichEditas declined to do. With respect to the four other indications, Editas may exercise the option until August 2020, provided that the option will expire inAugust 2019 if Editas has not exercised one option with respect to any other indication by such date. Upon Editas’ timely exercise of the option with respectto the first additional indication for which Editas timely exercises its option, Editas will pay us a $1.5 million fee. Upon each subsequent exercise of theoption, Editas will pay us a $1.0 million fee per indication. If Editas elects to develop a product using certain of our proprietary vectors, we will be eligible toreceive up to82Table of Contents $15.5 million in development and commercialization milestone payments for such product, and tiered royalties between the mid-single digits and low teenson net sales of such product, subject to certain adjustments.Unless earlier terminated, the agreement will be in effect until the later of the expiration of the option exercise period or the expiration of the royalty term ofthe last product. At any time after the option is first exercised, Editas may terminate the agreement for convenience in its entirety or on an indication-by-indication or country-by-country basis, upon prior written notice to us. We may also terminate the agreement if Editas challenges our patents relating to ourproprietary vectors and does not withdraw such challenge within a defined period of time. In addition, either party may terminate the agreement with writtennotice upon a bankruptcy of the other party or upon an uncured material breach by the other party.Under Topic 606, the transaction price is $1.5 million related to the $1.0 million non-refundable upfront payment for license and research services at contractinception and the one-time, non-refundable cash payment of $0.5 million made by Editas in February 2018 in consideration for extending the agreement.The arrangement provides for additional payments to the Company when certain development and regulatory milestones are achieved. Because thesemilestone payments are not within the control of the Company and are not considered probable of being achieved until the events occur, the Company didnot include them in the transaction price. The transaction price of $1.5 million was allocated to a single performance obligation, research and developmentservices.During the year ended December 31, 2018, the Company recognized revenue of $1.4 million associated with the Editas collaboration agreement. TheCompany had no deferred revenue balance as of December 31, 2018.7. Property and Equipment, NetProperty and equipment, net consists of the following: December 31, 2018 2017 (In thousands) Computer equipment and software $646 $535 Laboratory equipment 5,470 4,956 Furniture and fixtures 678 552 Leasehold improvements 1,602 1,549 Construction in progress 1,612 105 Total property and equipment 10,008 7,697 Less accumulated depreciation and amortization (6,422) (4,673)Property and equipment, net $3,586 $3,024Depreciation and amortization expense related to property and equipment was $1.8 million and $2.1 million for the years ended December 31, 2018 and2017, respectively.8. Accrued Expenses and Other Current LiabilitiesAccrued expenses and other current liabilities consist of the following: December 31, 2018 2017 (In thousands) Compensation expense $2,944 $2,259 Accrued preclinical costs 289 1,255 Accrued professional fees 2,291 2,295 Accrued clinical and process development costs 1,561 910 Other 1,699 245 Total accrued expenses and other current liabilities $8,784 $6,964 83Table of Contents 9. Financing ArrangementsBanque Publique d’Investissement (“BPI France”) AgreementIn August 2015, BPI France granted Annapurna a €0.8 million interest-free conditional advance, of which €0.5 million was outstanding as of December 31,2016. Payments are scheduled in equal quarterly amounts of €25,000 from September 30, 2017 to June 30, 2022. This payment schedule will be modified ifthe Company will receive revenue from license or product sales before advances are paid in full. The Company calculated 7% imputed interest expense onthese advances that was recorded as a discount at the issuance date. The discount is amortized as an interest expense over the life of the advances. As ofDecember 31, 2018, the total carrying value, which approximates the fair value, of the conditional advance was $0.3 million, of which $0.2 million wasrecorded within other non-current liabilities and $0.1 million within accrued expenses and other current liabilities in the Company’s consolidated balancesheets. As of December 31, 2017, the total carrying value, which approximates the fair value, of the conditional advance was $0.4 million, of which$0.3 million was recorded within other non-current liabilities and $0.1 million within accrued expenses and other current liabilities in the Company’sconsolidated balance sheets.The TAP AgreementIn July 2016, the Company entered into a sponsored research agreement with The TAP in which the TAP will fund the Company’s A1AT research activities ofup to $0.3 million in cash in three different tranches. The Company may repay up to 4.5 times the received amount if and when certain product approval andsales milestones are achieved. In September 2016, the Company received $0.1 million and issued a warrant to purchase 10,000 shares of its common stockexercisable anytime during five years from the issuance date at an exercise price of $4.33 per share (the “TAP warrant). In December 2017, the Companyachieved a milestone which entitled the Company to receive $0.1 million. For the valuation details of the TAP financing, refer to Note 5. The following table presents the TAP financing activity: Years ended December 31, 2018 2017 (In thousands) Balance of TAP financing liability as of the beginning of the year (1) $157 $74 Funding (2) — 100 Gain on fair value of TAP financing liability (3) (157) (17)Balance of TAP financing liability as of the end of the year $— $157___________(1)Recorded within other non-current liabilities in the Company’s consolidated balance sheets.(2)Recorded as a receivable as of December 31, 2017. Payment was received in January 2018.(3)Recorded within other non-current liabilities in the Company’s consolidated balance sheet and other income, net in the Company consolidatedstatement of operations and comprehensive loss. 10. Commitments and ContingenciesFacility Lease AgreementOn June 28, 2018, the Company entered into a lease on a new facility with office, laboratory, and manufacturing space, which will serve as the Company’snew corporate headquarters. The term of the lease is ten years and also provides for two options to extend the lease term for a period of seven years each. TheCompany is obligated to make lease payments totaling approximately $49.3 million over the initial term of the lease.Under the lease, the Company will receive a tenant improvement allowance for the costs associated with the design, development and construction of tenantimprovements for the leased facility. The Company has provided the landlord with a letter of credit in the amount of $1.0 million. The security for the letterof credit of $1.0 million is classified as restricted cash under long term assets on the balance sheet.The Company leases its Menlo Park office building under a non-cancelable lease agreement, which expires on May 8, 2020. The Company may extend thislease for up to four years. The lease agreement provides for an escalation of rent payments each year. The Company records rent expense on a straight-linebasis over the term of the lease.As of December 31, 2018, future minimum commitments under the Company’s facility operating leases were as follows: 84Table of Contents Years ended December 31, FutureCommitments (In thousands) 2019 $3,344 2020 4,221 2021 4,683 2022 4,846 2023 5,016 Thereafter 28,837 Total minimum lease payments $50,947Rent expense recognized under the operating lease, including additional rent charges for utilities, parking, maintenance, and real estate taxes was $3.3million and $1.8 million for the years ended December 31, 2018 and 2017, respectively.Contractual ObligationsAs of December 31, 2018, the Company had a contractual obligation of approximately $0.7 million for a contract manufacturing with a vendor for materialsproduction related to ADVM‑022, ADVM‑043 and ADVM‑053.Collaborations and License AgreementsThe Company is a party to various agreements, principally relating to licensed technology that requires future payments relating to milestones or royalties onfuture sales of specified products. Through December 31, 2018, none of the goals had been achieved under the license agreements and no milestones wereaccrued or payable. Because the achievement of these milestones is not fixed and determinable, such commitments have not been included on theCompany’s consolidated balance sheets. Aggregate annual maintenance fees payments were approximately $0.1 million and $0.5 million for each of theyears ended December 31, 2018, and 2017.The Company was a party to a master services agreement (“MSA”) with Cornell University (“Cornell”) originally established in August 2014 and amended inDecember 2015. Under the MSA, Cornell provided assistance in regulatory affairs, overall project management, and parameter development. The MSA, asamended, provided for the Company to pay Cornell $13.3 million ratably over four years for these services as services were performed. In December 2016, theCompany informed Cornell that the Company decided to terminate the MSA for material breach, effective January 6, 2017. Subsequently, Cornell informedthe Company that it disputes the validity of the Company’s termination of the MSA. Although the Company intends to defend the validity of thetermination of the MSA, the Company recorded $2.0 million of estimated costs associated with the termination of the MSA during the year-ended December31, 2017. This MSA included services relating to gene therapy programs directed to A1AT deficiency, HAE and severe allergy. The Company’s licenseagreements with Cornell remained in effect despite the termination of the MSA.Guarantees and IndemnificationsIn the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide forindemnification for certain liabilities. The exposure under these agreements is unknown because it involves claims that may be made against the Company inthe future but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnificationobligations. However, the Company may record charges in the future as a result of these indemnification obligations. The Company also has indemnificationobligations to its directors and executive officers for specified events or occurrences, subject to some limits, while they are serving at the Company’s requestin such capacities. There have been no claims to date and the Company believes the fair value of these indemnification agreements is minimal. Accordingly,the Company has not recorded any liabilities for these agreements as of December 31, 2018 and 2017.Legal ProceedingsFrom time to time, the Company may become involved in litigation and other legal actions. The Company estimates the range of liability related to anypending litigation where the amount and range of loss can be estimated. The Company records its best estimate of a loss when the loss is considered probable.Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records a charge equal to at least theminimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financialstatements indicates that it is probable that a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonablyestimated.In July 2015, three securities class action lawsuits were filed against the Company and certain of its officers in the United States District Court for theNorthern District of California (“U.S. District Court”), each on behalf of a purported class of persons and entities85Table of Contents who purchased or otherwise acquired the Company’s publicly traded securities between July 31, 2014 and June 15, 2015. The lawsuits asserted claims underthe Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Securities Act of 1933, as amended (the “Securities Act”) and alleged that thedefendants who are no longer with the Company made materially false and misleading statements and omitted allegedly material information related to,among other things, the Phase 2a clinical trial for AVA-101, a product candidate which is no longer being developed, and the prospects of AVA-101. Thecomplaints sought unspecified damages, attorneys’ fees and other costs.In December 2015, a putative securities class action lawsuit was filed against the Company, the Company’s board of directors, underwriters of the Company’sJanuary 13, 2015, follow-on public stock offering, and two of the Company’s institutional stockholders, in the Superior Court of the State of California forthe County of San Mateo (“San Mateo Superior Court”). The complaint alleged that, in connection with the Company’s follow-on stock offering, the samedefendants violated the Securities Act by allegedly making materially false and misleading statements and by allegedly omitting material information relatedto the Phase 2a clinical trial for AVA- 101 and the prospects of AVA-101. The complaint sought unspecified compensatory and rescissory damages,attorneys’ fees and other costs. The plaintiff has dismissed the two institutional stockholder defendants.In March 2017, the Company reached an agreement to settle the asserted actions. The proposed aggregate amount of the settlement is $13.0 million, of which$1.0 million was contributed by the Company to cover its indemnification obligations to the underwriters, and the remainder was contributed by theCompany’s insurers. The Company and the defendants have denied and continue to deny each and all of the claims alleged in the actions, and the settlementdoes not assign or reflect any admission of fault, wrongdoing or liability as to any defendant. Notice of the settlement was provided to shareholders in the fallof 2017, and no shareholder objected to the settlement. In January 2018, the San Mateo Superior Court entered a judgment and order finally approving thesettlement. On February 5, 2018, the U.S. District Court entered an order dismissing the consolidated federal action with prejudice. The Company recorded$1.0 million as general and administrative expense during the three months ended March 31, 2017, when the amount and time of settlement becameestimable and probable.11. Common Stock WarrantsThe Lions Eye Institute (“LEI”) Warrants. In connection with the Company’s research and collaboration agreement, as amended, with LEI (the “LEIAgreement”), the Company agreed to issue a warrant to purchase a certain number of the Company’s common stock upon the achievement of each milestonesas set forth in the LEI Agreement.During the year ended December 31, 2015, the Company issued a warrant to purchase 40,000 shares of its common stock with an exercise price of $10.51 pershare to LEI. This common stock warrant is exercisable immediately, and expires on October 15, 2020. The estimated fair value of this warrant wasapproximately $0.2 million and was recorded within research and development expenses in the Company’s consolidated statement of operations andcomprehensive loss and additional paid-in capital in the Company’s balance sheet for the year ended December 31, 2015. The fair value of the warrant wascalculated using the Black-Scholes valuation model, and was based on the closing price of common stock on the issuance date of $8.35 per share, contractualterm of the warrant of 5 years, a risk-free interest rate of 1.34%, an expected volatility of 75% and a 0% expected dividend yield.Additionally, in September 2017, the Company issued a warrant to purchase 40,000 shares of its common stock with an exercise price of $3.65 per share toLEI. This common stock warrant is exercisable immediately, and expires on September 29, 2022. The estimated fair value of this warrant was approximately$0.1 million and the fair value of this warrant was recorded as research and development expenses in the Company’s consolidated statement of operationsand comprehensive loss and additional paid-in capital in the Company’s consolidated balance sheet for the year ended December 31, 2017. The fair value ofthe warrant was calculated using the Black-Scholes valuation model, and was based on the closing price of common stock on the issuance date of $3.65 pershare, contractual term of the warrant of 5 years, a risk-free interest rate of 1.89%, an expected volatility of 91% and a 0% expected dividend yield.TAP Warrant. In July 2016, in connection with the TAP financing agreement (see Note 9), the Company issued a warrant to purchase 10,000 shares of itscommon stock exercisable anytime during five years from the issuance date at an exercise price of $4.33 per share. The estimated fair value of this warrantwas $26,000 at the issuance date using the Black-Scholes valuation model with the following assumptions: exercise price of $4.33 per share, expected termof the warrant of 5 years, a risk-free interest rate of 1.07%, an expected volatility of 72% and a 0% expected dividend. The fair value of TAP warrant wasrecorded to other non-current liabilities and additional paid-in capital in the Company’s consolidated balance sheet for the year ended December 31, 2016.12. Stock PlansOn December 26, 2006, the Company adopted the 2006 Equity Incentive Plan, which was amended by the board of directors on November 15, 2012 (the“2006 Plan”). The 2006 Plan allowed for the granting of incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”) to the employees,members of the board of directors and consultants of the Company. ISOs were granted only86Table of Contents to the Company’s employees, including officers and directors who are also employees. NSOs were granted to the employees and consultants. In July 2014,the Company’s board of directors and its stockholders approved the establishment of the 2014 Equity Incentive Award Plan (the “2014 Plan”). Options mayno longer be issued under the 2006 Plan after July 30, 2014. In addition, the 2014 Plan provides for annual increases in the number of shares available forissuance thereunder on the first business day of each fiscal year, beginning with the year ended December 31, 2015, equal to four percent (4%) of the numberof shares of the Company’s common stock outstanding as of such date or a lesser number of shares as determined by the Company’s board of directors.In October 2017, the Company adopted the 2017 Inducement Plan (the “Inducement Plan”). The Company reserved 600,000 shares for issuance pursuant tostock options and RSUs under the Inducement Plan. The only persons eligible to receive grants of stock options and RSUs under Inducement Plan areindividuals who satisfy the standards for inducement grants under Nasdaq guidance that is, generally, a person not previously an employee or director ofAdverum, or following a bona fide period of non-employment, as an inducement material to the individual's entering into employment with Adverum.The 2006 Plan, 2014 Plan and Inducement Plan are referred to collectively as the Plans. As of December 31, 2018, a total of 19,353,469 shares of commonstock were reserved for issuance and 2,695,347 shares were available for future grants under the Plans.Stock OptionsStock options under the 2014 Plan and the Inducement Plan may be granted for periods of up to 10 years and at prices no less than 100% of the estimated fairvalue of the shares on the date of grant as determined by the board of directors, provided, however, that the exercise price of an ISO and NSO granted to a10% stockholder may not be less than 110% of the estimated fair value of the shares on the date of grant. Stock options granted to employees and non-employees generally vest ratably over four years.The following table summarizes stock option activity under the Company’s stock plans and related information:(In thousands, except exercise prices and years)OptionsOutstanding Weighted-AverageExercisePrice Weighted-AverageRemainingContractLife (in years) AggregateIntrinsic Value (a) Balance at December 31, 2016 7,449 $4.46 8.4 $11,837 Granted 1,989 2.85 Exercised (1,808) 0.20 Cancelled/forfeited (935) 8.87 Balance at December 31, 2017 6,695 $4.51 7.4 $9,539 Granted 2,049 5.94 Exercised (1,606) 0.43 Cancelled/forfeited (691) 5.90 Balance at December 31, 2018 6,447 $5.83 7.6 $3,594 Vested and expected to vest as of December 31, 2018 6,447 $5.83 7.6 $3,594 Exercisable at December 31, 2018 3,321 $6.63 6.7 $2,630(a)The aggregate intrinsic value is calculated as the difference between the stock option exercise price and the closing price of the Company’scommon stock of $3.15 per share as of December 31, 2018.In June 2017, the Company granted 150,000 stock options outside the Plans to its certain executive officers. The total intrinsic value of stock options exercised during the years ended December 31, 2018 and 2017 were $8.2 million and $4.8 million, respectively.Stock Options Granted to Employees. The fair value of each stock option issued to employees was estimated at the date of grant using the Black-Scholesvaluation model with the following weighted-average assumptions: Options Employee Stock Purchase Plan Years ended December 31, Years ended December 31, 2018 2017 2018 2017 Expected volatility 80% 82% 78% 52% Expected term (in years) 6.0 6.0 0.5 0.5 Expected dividend yield — — — — Risk-free interest rate 2.8% 1.9% 2.3% 1.3% 87Table of Contents The weighted-average fair values of options granted during the years ended December 31, 2018 and 2017, were $4.15 and $1.99, respectively.As of December 31, 2018, there was $6.5 million of unrecognized stock-based compensation expense related to employee stock options that is expected to berecognized over a weighted-average period of 2.2 years.Stock Options Granted to Non-Employees. Stock-based compensation expense related to stock options granted to non-employees is recognized as the stockoptions are earned. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the servicesrendered.The following table presents the weighted-average assumptions used in the Black-Scholes valuation model to estimate the fair value of non-employee stockoptions: Years ended December 31, 2018 2017 Expected volatility 77% 84% Expected term (in years) 7.7 8.8 Expected dividend yield — — Risk-free interest rate 2.7% 2.3%As of December 31, 2018, unrecognized stock-based compensation expense related to unvested non-employees stock options was approximately $0.1million, which is expected to be recognized over a weighted-average period of 1.1 years, based on the estimated fair value at December 31, 2018.RSUsRSUs are share awards that entitle the holder to receive freely tradable shares of the Company’s common stock upon vesting. The fair value of RSUs is basedupon the closing sales price of the Company’s common stock on the grant date. RSUs granted to employees generally vest over a two to four-year period.The following table summarizes the RSU activity under the Company’s stock plans and related information:(In thousands, except grant date fair value and years) Number ofUnits(in thousands) Weighted-AverageGrant DateFair Value(in dollars) Weighted-AverageRemainingContractual Term(in years) Balance at December 31, 2016 1,049 $5.47 1.7 Granted 2,543 2.81 Vested and released (307) 6.43 Forfeited (770) 3.58 Balance at December 31, 2017 2,515 $3.24 1.6 Granted 1,381 5.94 Vested and released (774) (3.46) Forfeited (725) (4.28) Balance at December 31, 2018 2,397 $9.23 4.8The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2018 and 2017, were $5.94 and $2.81, respectively. Duringthe years ended December 31, 2018 and 2017, total fair value of RSUs vested was $2.7 million and $2.0 million, respectively. The number of RSUs vestedincludes shares of common stock that the Company withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. As ofDecember 31, 2018, there was $7.4 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted-average period of 2.5 years.ESPPIn July 2014, the Company approved the establishment of the 2014 Employee Stock Purchase Plan (the “ESPP”). The Company reserved 208,833 shares ofits common stock for issuance and provided for annual increases in the number of shares available for issuance on the first business day of each fiscal year,beginning in 2015, equal to the lesser of one percent (1%) of the number of shares of the Company’s common stock outstanding as of such date or a numberof shares as determined by the Company’s board of directors. During the years ended December 31, 2018, 120,475 shares were issued under the ESPP. As ofDecember 31, 2018, a total88Table of Contents of 1,331,773 shares of common stock were available for future issuance under the ESPP. As of December 31, 2018, unrecognized compensation cost related tothe ESPP was immaterial.Stock-Based Compensation Recognized in the Consolidated Statement of Operations and Comprehensive LossThe following table presents, by operating expense, the Company’s stock-based compensation expense: Years ended December 31, 2018 2017 (In thousands) Research and development $4,820 $5,253 General and administrative 8,612 3,470 Total share-based compensation expense $13,432 $8,723During the year ended December 31, 2018, the Company recorded approximately $4.1 million of stock-based compensation expense as a result of themodification of the vesting and exercisability of stock awards associated with the departure of two of its executives. 13. 401(k) Savings PlanThe Company established a defined-contribution savings plan under Section 401(k) of the Code. The 401(k) Plan covers all employees who meet definedminimum age and service requirements, and allows participants to defer a portion of their annual compensation on a pretax basis. The amount ofcontributions that the Company made to the 401(k) Plan during the year ended December 31, 2018 and 2017 was $0.4 million and $0.3 million, respectively. 14. Income TaxesThe Company recorded $1.3 million income tax benefit related to the change in the deferred tax liabilities balance due to intangible assets impairmentrecognized in the third quarter of 2018 and no income tax benefit or expense were recorded for the year ended December 31, 2017.The following table presents domestic and foreign components of loss before provision for income taxes: Years ended December 31, 2018 2017 (In thousands) U.S. $(45,024) $(36,923)Foreign (28,853) (19,224)Loss before income taxes $(73,877) $(56,147) A reconciliation of income tax expense computed at the statutory federal income tax rate of 21% and 34% during the year ended December 31, 2018 and2017, respectively, to income taxes as reflected in the financial statements is as follows: Years ended December 31, 2018 2017 (In thousands) Federal income tax expense at statutory rate $(15,514) $(19,090)Non-deductible foreign research expenses — 19 Stock compensation (1,512) (76)Non-deductible expenses 75 61 Other 41 — Research and development tax credits (1,215) (507)Change in valuation allowance 11,219 7,935 Foreign rate differential (586) 1,495 Rate change — 10,163 Change in uncertain tax positions 6,242 — Total tax benefit $(1,250) $— 89Table of Contents Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. The following table presents significant components of the Company’s deferred tax assets: As of December 31, 2018 2017 (In thousands) Deferred tax assets: Net operating loss carryforwards $37,247 $27,142 Accruals, reserve and other 827 2,586 Stock-based compensation 4,549 3,623 Tax credit carryforwards 4,161 1,774 Property and equipment 310 274 Intangibles 38 64 Other 122 — Total deferred tax assets before valuation allowance 47,254 35,463 Valuation allowance (47,254) (35,463)Total deferred tax assets — — Deferred tax liabilities: IPR&D — (1,250)Total deferred tax liabilities $— $(1,250)Net deferred tax assets $— $— On December 22, 2017, the U.S. government enacted comprehensive tax legislation, commonly known as the Tax Cuts and Jobs Act of 2017 (the “Act”),which significantly reforms the Internal Revenue Code of 1986, as amended. The Act contains broad and complex changes to corporate taxation, includingin part reduction of the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreignsubsidiaries that were previously considered permanently reinvested, and creates new taxes on certain foreign sourced earnings.As of December 31, 2017, the Company was able to determine a reasonable estimate, namely the one-time transition tax and the remeasurement of deferredtax at the new tax rate. The Company did not recognize any provisional tax expense due to its significant operating losses. The effect on the Company’sdeferred tax balance due to the change of net tax rate was fully offset by its valuation allowance.On December 22, 2017 the SEC staff issued SAB 118, which allowed the Company to record provisional amounts during a measurement period not to extendbeyond one year of the enactment date. Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situationswhen a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete theaccounting for certain income tax effects of the Act. In accordance with SAB 118, the Company has completed its analysis during the fourth quarter of 2018noting no material adjustments from the provisional amounts recorded in the prior year. In addition, the guidance indicates that either accounting for deferredtaxes related to GILTI or to treat any taxes on future GILTI inclusions as period cost are both acceptable methods subject to an accounting policy election.The Company has elected to treat future GILTI inclusions if any as period costs.The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’s history ofoperating losses, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, theCompany has provided a full valuation allowance for deferred tax assets as of December 31, 2018 and 2017. The valuation allowance increasedapproximately $11.8 million and $12.0 million during the years ended December 31, 2018 and 2017, respectively.As of December 31, 2018, the Company had U.S. federal net operating losses (“NOLs”) carryforwards of approximately $100.0 million to offset any futurefederal income. Approximately $57.0 million of NOLs expire at various years beginning with 2036. As of December 31, 2018, the Company also had U.S.state NOL carryforwards of approximately $61.1 million to offset any future state income. U.S. state NOLs expire at various years beginning with 2036. AtDecember 31, 2018, the Company also had approximately $65.0 million of foreign net operating loss carryforwards which may be available to offset futureforeign income; these carryforwards do not expire.As of December 31, 2018, the Company had federal research and development tax credit carryforwards of approximately $3.2 million available to reducefuture tax liabilities which expire at various years beginning with 2036. As of December 31, 2018, the Company had state credit carryforwards ofapproximately $3.3 million available to reduce future tax liabilities which do not expire.90Table of Contents Under Section 382 of the Internal Revenue Code of 1986, as amended (Code), the Company’s ability to utilize NOL carryforwards or other tax attributes,such as research tax credits, in any taxable year may be limited if the Company experiences an “ownership change.” Generally, a Section 382 ownershipchange occurs if there is a cumulative increase of more than 50 percentage points in the stock ownership of one or more stockholders or groups ofstockholders who owns at least 5% of a corporation’s stock within a specified testing period. Similar rules may apply under state tax laws. The Companybelieves that it has experienced ownership changes under Section 382, which will result in limitations in the Company’s ability to utilize net operating lossesand credits. As a result, the amount of the NOLs and research and development credit carryforwards presented in the Company’s consolidated financialstatements are limited and will expire unutilized, and the Company removed a significant amount of NOLs and credits from its deferred taxes.The Company files income tax returns in the U.S. Federal, state, and foreign jurisdictions. The federal, state and foreign income tax returns are open under thestatute of limitations subject to tax examinations for the tax years ended December 31, 2013 through December 31, 2018. To the extent the Company has taxattribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state orforeign tax authorities to the extent utilized in a future period.The Company has total unrecognized tax benefits as of December 31, 2018 and 2017 of approximately $8.8 million and $2.7 million, respectively. Noamount of the unrecognized tax benefits, if recognized, would reduce the Company’s annual effective tax rate because the benefits are in the form of deferredtax assets for which a full valuation allowance has been recorded. The Company does not anticipate a significant change to its unrecognized tax benefits overthe next twelve months. A reconciliation of the unrecognized tax benefits is as follows: Years ended December 31, 2018 2017 (In thousands) Unrecognized tax benefits as of the beginning of the year $2,745 $2,157 Increase (decrease) related to prior year tax provisions 1,941 — Increase related to current year tax provisions 4,119 588 Unrecognized tax benefits as of the end of the year $8,805 $2,745 The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2018, and 2017, the Companyhad no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s consolidated statements ofoperations and comprehensive loss. There are no ongoing examinations by taxing authorities at this time.15. Net Loss per ShareThe following common stock equivalents outstanding at the end of the periods presented were excluded from the calculation of diluted net loss per share forthe periods indicated because including them would have had an anti-dilutive effect: As of December 31, 2018 2017 (In thousands) Stock options 6,447 6,695 Restricted stock units 2,397 2,515 ESPP 62 71 Warrants to purchase common stock 90 90 8,996 9,371 91Table of Contents 16. Selected Quarterly Financial Information (Unaudited)The Company’s quarterly consolidated results of operations are shown below:Quarterly Results of Operations Three Months Ended March 31,2018 June 30,2018 September 30,2018 December 31,2018 (In thousands, except per share amounts) Revenue $216 $493 $833 $70 Total operating expenses (1) (18,162) (20,396) (24,306) (16,829)Net loss (17,200) (18,810) (20,958) (15,659)Basic and diluted net loss per share $(0.30) $(0.30) $(0.34) $(0.25) Quarterly Results of Operations Three Months Ended March 31,2017 June 30,2017 September 30,2017 December 31,2017 (In thousands, except per share amounts) Revenue $462 $463 $463 $461 Total operating expenses (1) (17,050) (12,556) (15,034) (16,056)Net loss (16,099) (11,430) (13,829) (14,789)Basic and diluted net loss per share (0.38) (0.27) (0.32) (0.32) (1)During the year ended December 31, 2017, the Company recorded a total of $2.0 million of estimated costs associated with the termination of MSA withCornell University (see Note 10). During the three months ended March 31, 2017, the Company recorded a total of $2.3 million of these estimated costs,which was subsequently adjusted by $0.3 million during the three months ended June 30, 2017.Basic and diluted net loss per share is computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per shareamounts may not equal annual basic and diluted net loss per share amounts. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and ProceduresEvaluation of disclosure controls and proceduresManagement, including Ms. Patterson, our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controlsand procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2018. The evaluation of our disclosure controls andprocedures included a review of our processes and implementation and the effect on the information generated for use in this Annual Report on Form 10-K. Inthe course of this evaluation, we sought to identify any material weaknesses in our disclosure controls and procedures to determine whether we had identifiedany acts of fraud involving personnel who have a significant role in our disclosure controls and procedures, and to confirm that necessary corrective action,including process improvements, was taken. This type of evaluation is done quarterly so that our conclusions concerning the effectiveness of these controlscan be reported in our periodic reports filed with the SEC. The overall goals of these evaluation activities are to monitor our disclosure controls andprocedures and to make modifications as necessary. We intend to maintain these disclosure controls and procedures, modifying them as circumstanceswarrant.Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that as of December 31, 2018, our disclosure controls andprocedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under theExchange Act is (i) recorded, processed, summarized and reported as and when required and (ii) accumulated and communicated to our management,including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely discussion regarding required disclosure.Management’s Annual Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regardingthe reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples.92Table of Contents Management assessed our internal control over financial reporting as of December 31, 2018, the end of our fiscal year. Management based its assessment oncriteria established in “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.Management's assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, processdocumentation, accounting policies, and our overall control environment. This assessment is supported by testing and monitoring performed by our internalaccounting and finance organization.Based on our assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2018. The results ofmanagement's assessment were reviewed with the Audit Committee.Attestation Report of the Registered Public Accounting FirmThis Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm due to an exemption established by theJOBS Act for “emerging growth companies.”Changes in Internal Control over Financial ReportingThere were no changes in our internal control over financial reporting during the year ended December 31, 2018 that have materially affected or arereasonably likely to materially affect, our internal control over financial reporting.Inherent Limitations on Controls and ProceduresOur management, including the Principal Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures and ourinternal controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can only provide reasonable assurances thatthe objectives of the control system are met. The design of a control system reflects resource constraints; the benefits of controls must be considered relativeto their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issuesand instances of fraud, if any, within the Company have been or will be detected. As these inherent limitations are known features of the financial reportingprocess, it is possible to design into the process safeguards to reduce, though not eliminate, these risks. These inherent limitations include the realities thatjudgments in decision-making can be faulty and that breakdowns occur because of simple error or mistake. Controls can be circumvented by the individualacts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is based in partupon certain assumptions about the likelihood of future events. While our disclosure controls and procedures are designed to provide reasonable assurance ofachieving their objectives, there can be no assurance that any design will succeed in achieving its stated goals under all future conditions. Over time, controlsmay become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of theinherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.We intend to review and evaluate the design and effectiveness of our disclosure controls and procedures on an ongoing basis and to improve our controls andprocedures over time and to correct any deficiencies that we may discover in the future. While our Principal Executive Officer and Chief Financial Officerconcluded that, as of December 31, 2018, the design of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, waseffective, future events affecting our business may cause us to significantly modify our disclosure controls and procedures.Item 9B. Other Information.Not applicable. 93Table of Contents PART IIIItem 10. Directors, Executive Officers and Corporate Governance.The information required by this item will be contained in our definitive proxy statement to be filed with the Securities and Exchange Commission pursuantto Regulation 14A in connection with our 2019 Annual Meeting of Stockholders (the “Proxy Statement”), which is expected to be filed not later than 120days after the end of our fiscal year ended December 31, 2018, under the headings “Executive Officers,” “Election of Directors,” “Corporate Governance,”and “ Section 16(a) Beneficial Ownership Reporting Compliance,” and is incorporated herein by reference.We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executiveofficer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A current copy of the code is posted onthe Corporate Governance section of our website, which is located at www.adverum.com. If we make any substantive amendments to, or grant any waiversfrom, the code of business conduct and ethics for our principal executive officer, principal financial officer, principal accounting officer, controller or personsperforming similar functions, or any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form8-K.Item 11. Executive Compensation.The information required by this item will be contained in the Proxy Statement under the headings “Executive Compensation” and “Non-Employee DirectorCompensation,” and is incorporated herein by reference.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The information required by this item will be contained in the Proxy Statement under the headings “Security Ownership of Certain Beneficial Owners andManagement” and “Equity Compensation Plan Information,” and is incorporated herein by reference.Item 13. Certain Relationships and Related Transactions, and Director Independence.The information required by this item will be contained in the Proxy Statement under the headings “Certain Relationships and Related Party Transactions”and “Corporate Governance,” and is incorporated herein by reference.Item 14. Principal Accountant Fees and Services.The information required by this item will be contained in the Proxy Statement under the heading “Ratification of Selection of Independent RegisteredPublic Accounting Firm” and is incorporated herein by reference. 94Table of Contents PART IVItem 15. Exhibits, Financial Statement Schedules.(a) The financial statements schedules and exhibits filed as part of this Annual Report on Form 10-K are as follows:See Index to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K. No financial statement schedules are provided because theinformation called for is not required or is shown in the consolidated financial statements or related notes.(b) The following exhibits are included herein or incorporated by reference: 95Table of Contents EXHIBIT INDEX INCORPORATED BY REFERENCE EXHIBITNUMBER EXHIBIT DESCRIPTION FILENUMBERFORM DATE EXHIBITNUMBER PROVIDEDHEREWITH 2.1 Acquisition Agreement, dated as of January 29, 2016, by andamong Avalanche Biotechnologies, Inc., Annapurna TherapeuticsSAS, the Contributors identified therein, and ShareholderRepresentative Services LLC as the Contributors’ Representative. 001-365798-K February 1, 2016 2.1 2.2 Amendment No. 1 to the Acquisition Agreement, dated as of April6, 2016. 001-365798-K April 7, 2016 2.1 3.1 Amended and Restated Certificate of Incorporation. 001-3657910-K March 9, 2017 3.1 3.2 Amended and Restated Bylaws. 001-365798-K May 12, 2016 3.2 4.1 Reference is made to Exhibits 3.1 through 3.2. 4.2 Form of Common Stock Certificate. 333-197133S-1/A July 25, 2014 4.1 4.3 Amended and Restated Investor Rights Agreement, dated as of May11, 2016, by and between Avalanche Biotechnologies, Inc. andcertain of its stockholders. 001-365798-K May 12, 2016 4.1 10.1† Research Collaboration and License Agreement, dated as of May 1,2014, by and between Avalanche Biotechnologies, Inc. andRegeneron Pharmaceuticals, Inc. 333-197133S-1/A July 29, 2014 10.3 10.2† Amended and Restated Master Service Agreement by and betweenAnnapurna Therapeutics SAS and Cornell University, effective July15, 2014. 001-3657910-Q August 9, 2016 10.3 10.3† A1AT Deficiency License Agreement between AnnapurnaTherapeutics Limited and Cornell University, dated December 15,2015. 001-3657910-Q August 9, 2016 10.4 10.4† HAE License Agreement between Annapurna Therapeutics Limitedand Cornell University, dated December 15, 2015. 001-3657910-Q August 9, 2016 10.5 10.5† Allergy License Agreement between Annapurna TherapeuticsLimited and Cornell University, dated December 15, 2015. 001-3657910-Q August 9, 2016 10.6 10.6† License Agreement between AAVLife and Inserm Transfert, datedJuly 4, 2014. 001-3657910-Q August 9, 2016 10.9 10.7† Amendment No. 1 to License Agreement between AAVLife andInserm Transfert, dated October 5, 2015. 001-3657910-Q August 9, 2016 10.10 10.8† Collaboration, Option and License Agreement with EditasMedicine, Inc., dated August 8, 2016. 001-3657910-Q November 8, 2016 10.1 10.9† Amendment to Collaboration, Option and License Agreement withEditas Medicine, Inc., dated January 25, 2018. 001-3657910-K March 6, 2018 10.10 10.10(#) Avalanche Biotechnologies, Inc. Amended and Restated 2006Equity Incentive Plan. 333-197133S-1 June 30, 2014 10.4 10.11(#) Form of Stock Option Grant Notice and Stock Option Agreementunder the Amended and Restated 2006 Equity Incentive Plan. 333-197133S-1/A July 25, 2014 10.16 10.12(#) Adverum Biotechnologies, Inc. 2014 Equity Incentive Award Plan,as amended and restated. X 96Table of Contents INCORPORATED BY REFERENCE EXHIBITNUMBER EXHIBIT DESCRIPTION FILENUMBERFORM DATE EXHIBITNUMBER PROVIDEDHEREWITH 10.13(#) Form of Stock Option Grant Notice and Stock Option Agreementunder the 2014 Equity Incentive Award Plan. 333-19713310-K March 6, 2018 10.14 10.14(#) Form of Restricted Stock Award Grant Notice and Restricted StockAward Agreement under the 2014 Equity Incentive Award Plan. 333-197133S-1/A July 25, 2014 10.18 10.15(#) Form of Restricted Stock Unit Award Grant Notice and RestrictedStock Unit Award Agreement under the 2014 Equity IncentiveAward Plan. 001-3657910-K March 6, 2018 10.16 10.16(#) Adverum Biotechnologies, Inc. 2014 Employee Stock PurchasePlan, as amended and restated. X 10.17(#) Letter Agreement, dated as of June 3, 2013, by and betweenAvalanche Biotechnologies, Inc. and Mehdi Gasmi. 333-197133S-1 June 30, 2014 10.10 10.18(#) Offer Letter, dated November 19, 2015, by and between AvalancheBiotechnologies, Inc. and Paul Cleveland. 001-365798-K November 20, 2015 10.1 10.19(#) Offer Letter, dated January 29, 2016, by and between AvalancheBiotechnologies, Inc. and Amber Salzman. 001-365798-K February 1, 2016 10.2 10.20(#) Change in Control and Severance Agreement, dated January 29,2016, by and between Amber Salzman and AvalancheBiotechnologies, Inc. 001-365798-K February 1, 2016 10.3 10.21(#) Offer Letter, dated June 10, 2016, by and between AdverumBiotechnologies, Inc. and Leone Patterson 001-365798-K June 13, 2016 10.1 10.22(#) Amendment to Offer Letter, dated November 2, 2016, by andbetween Adverum Biotechnologies, Inc. and Amber Salzman. 001-3657910-K March 9, 2017 10.39 10.23(#) Amendment to Offer Letter, dated November 2, 2016, by andbetween Adverum Biotechnologies, Inc. and Paul Cleveland. 001-3657910-K March 9, 2017 10.40 10.24(#) Offer Letter, dated June 15, 2017, by and between AdverumBiotechnologies, Inc. and Athena Countouriotis, M.D. 001-365798-K June 20, 2017 10.1 10.25(#) Offer Letter, dated May 4, 2015, by and between AvalancheBiotechnologies, Inc. and Jennifer Cheng, Ph.D. 001-3657910-K March 6, 2018 10.30 10.26 Lease Agreement, dated as of December 20, 2013, by and betweenAvalanche Biotechnologies, Inc. and O’Brien Drive Portfolio,LLC. S-1 June 30, 2014 10.11 10.27 First Amendment to Lease, dated August 1, 2014, by and betweenO’Brien Drive Portfolio, LLC and Avalanche Biotechnologies, Inc. 001-365798-K September 12, 2014 10.1 10.28 Second Amendment to Lease, dated October 30, 2014, by andbetween O’Brien Drive Portfolio, LLC and AvalancheBiotechnologies, Inc. 001-365798-K November 4, 2014 10.1 10.29(#) Form of Indemnification Agreement for directors and executiveofficers. 333-197133S-1/A July 18, 2014 10.12 10.30(#) 2012 Change in Control Benefit Plan. 333-197133S-1/A July 18, 2014 10.13 10.31(#) Form of Change in Control Severance Agreement for executiveofficers other than the chief executive officer. 001-3657910-K March 6, 2018 10.36 10.32(#) Amendment to the Change in Control and Severance Agreementfor Mehdi Gasmi. X97Table of Contents INCORPORATED BY REFERENCE EXHIBITNUMBER EXHIBIT DESCRIPTION FILENUMBERFORM DATE EXHIBITNUMBER PROVIDEDHEREWITH 10.33(#) Form of Inducement Stock Option Agreement. 001-365798-K November 20, 2015 10.3 10.34(#) 2017 Inducement Plan, as amended and restated. X 10.35(#) Form of Stock Option Grant Notice and Option Agreement underthe 2017 Inducement Plan. 333-220894S-8 October 11, 2017 99.2 10.36(#) Form of Restricted Stock Award Grant Notice and Restricted StockAward Agreement under the 2017 Inducement Plan. 333-220894S-8 October 11, 2017 99.3 10.37 Sales Agreement, dated as of August 10, 2017, by and between theAdverum Biotechnologies, Inc. and Cowen and Company, LLC. 333-19890S-3 August 10, 2017 1.2 10.38 Release Agreement, dated as of October 3, 2017, by and betweenthe Company and Steven Schwartz, M.D. 001-3657910-K March 8, 2018 10.43 10.39(#) June 2018 Compensation Actions with Interim Chief ExecutiveOfficer and Chief Science and Technology Officer 001-365798-K June 15, 2018 Item 5.02 10.40 Lease dated as of June 28, 2018, between AdverumBiotechnologies, Inc. and HCP LS Redwood City, LLC 001-3657910-Q August 8, 2018 10.2 10.41 June 5, 2018, amendment to Editas Agreement. 001-3657910-Q August 8, 2018 10.3 10.42(#) Non-Employee Director Compensation Arrangements 001-3657910-Q August 8, 2018 10.4 10.43(#) Amber Salzman Separation Agreement 001-3657910-Q November 8, 2018 10.1 10.44(#) Athena Countouriotis Separation Agreement 001-3657910-Q November 8, 2018 10.2 10.45(#) Change in Compensation of Leone Patterson in connection withpromotion to Chief Executive Officer 001-365798-K October 24, 2018 Item 5.02 10.46† Exclusive License Agreement, between the Company and theRegents of the University of California (“UC”), dated June 17,2013 (the “UC License”) X 10.47† License Agreement, between the Company and Virovek, Inc.(“Virovek”), dated October 12, 2011 (the “Virovek License”) X10.48(#) Amended and Restated Offer Letter with Leone Patterson, datedOctober 24, 2018 X 10.49(#) Change in Control and Severance Agreement with LeonePatterson, dated October 24, 2018 X 21.1 List of subsidiaries 001-3657910-K March 6, 2018 21.1 23.1 Consent of Deloitte & Touche LLP Independent Registered PublicAccounting Firm X 23.2 Consent of Independent Registered Public Accounting Firm X 24.1 Power of Attorney (included on signature page hereto) X 31.1 Certification of Principal Executive Officer, as required by Rule13a-14(a) or Rule 15d-14(a). X 31.2 Certification of Chief Financial Officer, as required by Rule 13a-14(a) or Rule 15d-14(a). X 98Table of Contents INCORPORATED BY REFERENCE EXHIBITNUMBER EXHIBIT DESCRIPTION FILENUMBERFORM DATE EXHIBITNUMBER PROVIDEDHEREWITH 32.1 Certification pursuant to 18 U.S.C. section 1350, as adopted pursuantto section 906 of the Sarbanes-Oxley Act of 2002. X 101.INS XBRL Instance Document. X 101.SCH XBRL Taxonomy Extension Schema Document. X 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. X 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. X 101.LAB XBRL Taxonomy Extension Label Linkbase Document. X 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. X †Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and this exhibit has been filedseparately with the SEC.#Indicates management contract or compensatory plan.*The certification attached as Exhibit 32.1 that accompanies this Annual Report on Form 10-K is not deemed filed with the SEC and is not to beincorporated by reference into any filing of Adverum Biotechnologies, Inc. under the Securities Act of 1933, as amended, or the Securities ExchangeAct of 1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained insuch filing. Item 16. Form 10-K Summary None. 99 SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized.Date: March 6, 2019 ADVERUM BIOTECHNOLOGIES, INC. By: /s/ Leone Patterson Leone PattersonChief Executive Officer and Chief Financial Officer(Principal Executive and Financial Officer) Power of AttorneyEach person whose individual signature appears below hereby authorizes and appoints Leone Patterson, with full power of substitution and resubstitutionand full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in thename and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this annual report on Form 10-K,and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting untosaid attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all thatsaid attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this annual report on Form 10-K has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE /s/Leone Patterson Chief Executive Officer, Chief Financial Officer and Director March 06, 2019Leone Patterson (Principal Executive, Financial and Accounting Officer) /s/ Paul B. Cleveland Chairman of the Board March 06, 2019Paul B. Cleveland /s/ Mitchell H. Finer Director March 06, 2019Mitchell H. Finer, Ph.D. /s/ Thomas F. Woiwode Director March 06, 2019Thomas F. Woiwode, Ph.D. /s/ Eric G. Carter Director March 06, 2019Eric G. Carter, M.D., Ph.D. /s/ Patrick Machado Director March 06, 2019Patrick Machado /s/ Richard N. Spivey Director March 06, 2019Richard N. Spivey, Pharm. D. 100 Exhibit 10.12ADVERUM BIOTECHNOLOGIES, INC.2014 EQUITY INCENTIVE AWARD PLANAMENDED FEBRUARY 14, 2019 ARTICLE 1.PURPOSEThe purpose of the Adverum Biotechnologies, Inc. 2014 Equity Incentive Award Plan (asit may be amended from time to time, the “Plan”) is to promote the success and enhance the value of Adverum Biotechnologies,Inc. (the “Company”) by linking the individual interests of the members of the Board, Employees, and Consultants to those of theCompany’s stockholders and by providing such individuals with an incentive for outstanding performance to generate superiorreturns to the Company’s stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate,attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and specialeffort the successful conduct of the Company’s operation is largely dependent. ARTICLE 2. DEFINITIONS AND CONSTRUCTION Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the contextclearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates. 2.1“Administrator” shall mean the entity that conducts the general administration of the Plan as provided in Article 13 hereof. Withreference to the duties of the Administrator under the Plan which have been delegated to one or more persons pursuant to Section 13.6 hereof,or as to which the Board has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or the Board has revokedsuch delegation or the Board has terminated the assumption of such duties. 2.2“Affiliate” shall mean any Parent or Subsidiary. 2.3“Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in the United States, InternationalFinancial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements underUnited States federal securities laws from time to time. 2.4“Applicable Law” shall mean any applicable law, including without limitation,(i) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (ii) corporate, securities,tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (iii) rules of anysecurities exchange or automated quotation system on which the Shares are listed, quoted or traded. SV\1337167.3 Exhibit 10.122.5“Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a Performance Award, a DividendEquivalents award, a Deferred Stock award, a Deferred Stock Unit award, a Stock Payment award or a Stock Appreciation Right, which maybe awarded or granted under the Plan (collectively, “Awards”). 2.6“Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or other instrument or documentevidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as theAdministrator shall determine consistent with the Plan. 2.7“Board” shall mean the Board of Directors of the Company. 2.8“Cause” shall mean, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other writtenagreement between a Holder and the Company applicable to an Award, the occurrence of any of the following events: (i) conviction of anyfelony or crime involving moral turpitude or dishonesty; (ii) willful and material breach of the Holder’s duties that has not been cured within 30days after written notice from the Board of Directors; (iii) intentional and material damage to the Company’s property; or (iv) material breach ofthe Proprietary Information and Inventions Agreement executed by the Holder. 2.9“Change in Control” shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or more of thefollowing events: (a)A transaction or series of transactions (other than an offering of Common Stock to the general publicthrough a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as suchterms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan maintainedby the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under commoncontrol with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities ofthe Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or (b)During any period of two consecutive years, individuals who, at the beginning of such period,constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with theCompany to effect a transaction described in Section 2.9(a) or 2.9(c)) whose election by the Board or nomination for election by the Company’sstockholders was approved by a vote of at least two- thirds of the Directors then still in office who either were Directors at the beginning of the two- yearperiod or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or (c)The consummation by the Company (whether directly involving the Company or indirectlyinvolving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or otherdisposition SV\1337167.3 2 Exhibit 10.12of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition ofassets or stock of another entity, in each case other than a transaction: (i)which results in the Company’s voting securities outstandingimmediately before the transaction continuing to represent (either by remaining outstanding or by being converted into votingsecurities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns,directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (theCompany or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of theSuccessor Entity’s outstanding voting securities immediately after the transaction, and (ii)after which no person or group beneficially owns voting securitiesrepresenting 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shallbe treated for purposes of this Section 2.9(c)(ii) as beneficially owning 50% or more of the combined voting power of theSuccessor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or (d)The Company’s stockholders approve a liquidation or dissolution of theCompany. Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any portion of an Award thatprovides for the deferral of compensation and is subject to Section 409A of the Code, the transaction or event described insubsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) must also constitute a “change in control event,” asdefined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A. The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether aChange in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change inControl and any incidental matters relating thereto; provided that any exercise of authority is in conjunction with a determination ofwhether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall beconsistent with such regulation. 2.10“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and officialguidance promulgated thereunder, whether issued prior or subsequent to the grant of any Award. 2.11“Committee” shall mean the Compensation Committee of the Board, a subcommittee of the Compensation Committee of the Boardor another committee or subcommittee of the Board, appointed as provided in Section 13.1 hereof. 2.12“Common Stock” shall mean the common stock of the Company, par value$0.0001 per share. 2.13“Company” shall have the meaning set forth in Article 1 hereof. SV\1337167.3 3 Exhibit 10.122.14“Consultant” shall mean any consultant or advisor engaged to provide services to the Company or any Affiliate who qualifies as aconsultant or advisor under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8Registration Statement or any successor Form thereto or, prior to the Public Trading Date, under Rule 701 of the Securities Act. 2.15“Covered Employee” shall mean any Employee who is, or could be, a “covered employee” within the meaning of Section 162(m)of the Code. 2.16“Deferred Stock” shall mean a right to receive Shares awarded under Section10.4 hereof. 2.17“Deferred Stock Unit” shall mean a right to receive Shares awarded under Section 10.5 hereof. 2.18“Director” shall mean a member of the Board, as constituted from time to time. 2.19“Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paidon Shares, awarded under Section 10.2 hereof. 2.20“DRO” shall mean a “domestic relations order” as defined by the Code or Title I of the Employee RetirementIncome Security Act of 1974, as amended from time to time, or the rules thereunder. 2.21“Effective Date” shall mean immediately prior to the time at which the Company registration statement relatingto its initial public offering becomes effective, provided that the Board has adopted the Plan prior to or on such date,subject to approval of the Plan by the Company’s stockholders. 2.22“Eligible Individual” shall mean any person who is an Employee, a Consultant or a Non-Employee Director, asdetermined by the Administrator. 2.23“Employee” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of theCode and the Treasury Regulations thereunder) of the Company or any Affiliate. 2.24“Equity Restructuring” shall mean a nonreciprocal transaction between the Company and itsstockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cashdividend, that affects the number or kind of Shares (or other securities of the Company) or the share price of Common Stock (orother securities) and causes a change in the per share value of the Common Stock underlying outstanding stock-based Awards. 2.25“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time. 2.26“Fair Market Value” shall mean, as of any given date, the value of a Share determined as follows: SV\1337167.3 4 Exhibit 10.12(a)If the Common Stock is (i) listed on any established securities exchange (such as the New YorkStock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market system or (iii) listed, quoted ortraded on any automated quotation system, its Fair Market Value shall be the closing sales price for a Share as quoted on such exchange or system for suchdate or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding date for which suchquotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; (b)If the Common Stock is not listed on an established securities exchange, national market system orautomated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the highbid and low asked prices for such date or, if there are no high bid and low asked prices for a Share on such date, the high bid and low asked prices for aShare on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deemsreliable; or (c)If the Common Stock is neither listed on an established securities exchange, national market systemor automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in goodfaith. Notwithstanding the foregoing, with respect to any Award granted after the effectiveness of the Company’s registration statementrelating to its initial public offering and prior to the Public Trading Date, the Fair Market Value shall mean the initial public offeringprice of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities andExchange Commission. 2.27“Good Reason” shall mean, unless such term or an equivalent term is otherwise defined by the applicableAward Agreement or other written agreement between a Holder and the Company applicable to an Award, with respectto any particular Holder, the Holder’s resignation from all positions he or she then-holds with the Company if (A)without Holder’s written consent (I) there is a material reduction of the Holder’s base salary; provided, however, that amaterial reduction in the Holder’s base salary pursuant to a salary reduction program affecting all or substantially all ofthe employees of the Company and that does not adversely affect Holder to a greater extent than other similarly situatedemployees shall not constitute Good Reason; or (II) the Holder is required to relocate his or her primary work location toa facility or location that would increase the Holder’s one way commute distance by more than fifty (50) miles from theHolder’s primary work location as of immediately prior to such change, (B) the Holder provides written notice outliningsuch conditions, acts or omissions to the Company’s General Counsel within thirty (30) days immediately followingsuch material change or reduction, (C) such material change or reduction is not remedied by the Company within thirty(30) days following the Company’s receipt of such written notice and (D) the Holder’s resignation is effective not laterthan thirty (30) days after the expiration of such thirty (30) day cure period. SV\1337167.3 5 Exhibit 10.122.28“Greater Than 10% Stockholder” shall mean an individual then owning (within the meaning of Section 424(d)of the Code) more than ten percent (10%) of the total combined voting power of all classes of stock of the Company orany “parent corporation” or “subsidiary corporation” (as defined in Sections 424(e) and 424(f) of the Code,respectively). 2.29“Holder” shall mean a person who has been granted an Award. 2.30“Incentive Stock Option” shall mean an Option that is intended to qualify as an incentive stock option andconforms to the applicable provisions of Section 422 of the Code. 2.31“Non-Employee Director” shall mean a Director of the Company who is not an Employee. 2.32“Non-Employee Director Equity Compensation Policy” shall have the meaning set forth in Section 4.6 hereof. 2.33“Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option or which isdesignated as an Incentive Stock Option but does not meet the applicable requirements of Section 422 of the Code. 2.34“Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 6 hereof. AnOption shall be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Optionsgranted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options. 2.35“Option Term” shall have the meaning set forth in Section 6.4 hereof. 2.36“Parent” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain ofentities ending with the Company if each of the entities other than the Company beneficially owns, at the time of thedetermination, securities or interests representing more than fifty percent (50%) of the total combined voting power of allclasses of securities or interests in one of the other entities in such chain. 2.37“Performance Award” shall mean a cash bonus award, stock bonus award, performance award or incentiveaward that is paid in cash, Shares or a combination of both, awarded under Section 10.1 hereof. 2.38“Performance-Based Compensation” shall mean any compensation that is intended to qualify as “performance-based compensation” as described in Section 162(m)(4)(C) of the Code. 2.39“Performance Criteria” shall mean the criteria (and adjustments) that the Committee selects for an Award forpurposes of establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows: (a)The Performance Criteria that shall be used to establish Performance Goals are limited to thefollowing: (i) net earnings (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation, (D) amortization and (E) non-cashequity- SV\1337167.3 6 Exhibit 10.12based compensation expense); (ii) gross or net sales or revenue; (iii) net income (either before or after taxes); (iv) adjusted netincome; (v) operating income, earnings or profit (either before or after taxes); (vi) cash flow (including, but not limited to, cash flowreturn on investments, operating cash flow and free cash flow); (vii) return on assets; (viii) return on capital; (ix) return onstockholders’ equity; (x) total stockholder return; (xi) return on sales; (xii) gross or net profit or operating margin; (xiii) costs; (xiv)funds from operations; (xv) expenses; (xvi) working capital; (xvii) earnings per Share; (xviii) adjusted earnings per share; (xix)price per Share; (xx) regulatory body approval for commercialization of a product; (xxi) implementation or completion of criticalprojects; (xxii) market share; (xxiii) economic value; (xxiv) debt levels or reduction; (xxv) customer retention; (xxvi) sales-relatedgoals; (xxvii) comparisons with other stock market indices; (xxviii) operating efficiency; (xxix) customer satisfaction and/or growth;(xxx) employee satisfaction; (xxxi) research and development achievements; (xxxii) financing and other capital raising transactions;(xxxiii) recruiting and maintaining personnel; and (xxxiv) year-end cash, any of which may be measured either in absolute termsfor the Company or any operating unit of the Company or as compared to any incremental increase or decrease or as compared toresults of a peer group or to market performance indicators or indices. (b)The Administrator may, in its sole discretion, provide that one or more objectively determinableadjustments shall be made to one or more of the Performance Goals. Such adjustments may include, but are not limited to, one or more of the following: (i)items related to a change in accounting principle; (ii) items relating to financing activities;(iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items;(v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during thePerformance Period; (vii) items related to the sale or disposition of a business or segment of a business; (viii) items related todiscontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; (ix) itemsattributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) anyother items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual orextraordinary corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii)items that are outside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-processresearch and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnershiparrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration andcontractual settlements; or (xix) items relating to any other unusual or nonrecurring events or changes in Applicable Laws,accounting principles or business conditions. For all Awards intended to qualify as Performance-Based Compensation, suchdeterminations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code. 2.40“Performance Goals” shall mean, with respect to a Performance Period, one or more goalsestablished in writing by the Administrator for the Performance Period based upon one or more Performance Criteria. Dependingon the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms ofoverall Company performance or the performance of an Affiliate, a division, business unit or one or more individuals. Theachievement of each Performance Goal shall be determined, to the extent applicable, with reference to Applicable AccountingStandards. SV\1337167.3 7 Exhibit 10.122.41“Performance Period” shall mean one or more periods of time, which may be of varying and overlappingdurations, as the Administrator may select, over which the attainment of one or more Performance Goals will bemeasured for the purpose of determining a Holder’s right to, and the payment of, a Performance Award. 2.42“Performance Stock Unit” shall mean a Performance Award awarded under Section 10.1 hereof which isdenominated in units of value including dollar value of shares of Common Stock. 2.43“Permitted Transferee” shall mean, with respect to a Holder, (a) prior to the Public Trading Date, any “familymember” of the Holder, as defined under Rule 701 of the Securities Act and (b) on or after the Public Trading Date, any“family member” of the Holder, as defined under the General Instructions to Form S-8 Registration Statement under theSecurities Act or any successor Form thereto, or any other transferee specifically approved by the Administrator, aftertaking into account Applicable Law. 2.44“Plan” shall have the meaning set forth in Article 1 hereof. 2.45“Prior Plan” shall mean the Avalanche Biotechnologies, Inc. Amended and Restated 2006 Equity IncentivePlan, as such plan may be amended from time to time. 2.46“Program” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms andconditions intended to govern a specified type of Award granted under the Plan and pursuant to which such type ofAward may be granted under the Plan. 2.47“Public Trading Date” shall mean the first date upon which the Common Stock is listed (or approved for listing)upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuanceas a national market security on an interdealer quotation system. 2.48“Restricted Stock” shall mean an award of Shares made under Article 8 hereof that is subject to certainrestrictions and may be subject to risk of forfeiture or repurchase. 2.49“Restricted Stock Unit” shall mean a contractual right awarded under Article 9 hereof to receive in the future aShare or the Fair Market Value of a Share in cash. 2.50“Securities Act” shall mean the Securities Act of 1933, as amended. 2.51“Shares” shall mean shares of Common Stock. 2.52“Share Limit” shall have the meaning set forth in Section 3.1(a) hereof. 2.53“Stock Appreciation Right” shall mean a stock appreciation right granted under Article 11 hereof. 2.54“Stock Appreciation Right Term” shall have the meaning set forth in Section11.4 hereof. SV\1337167.3 8 Exhibit 10.122.55“Stock Payment” shall mean (a) a payment in the form of Shares, or (b) an option or other right to purchase Shares, as part of abonus, deferred compensation or other arrangement, awarded under Section 10.3 hereof. 2.56“Subsidiary” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entitiesbeginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of thedetermination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities orinterests in one of the other entities in such chain. 2.57“Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equityawards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination,consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer toan award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right. 2.58“Termination of Service” shall mean: (a)As to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or anAffiliate is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excludingterminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Affiliate. (b)As to a Non-Employee Director, the time when a Holder who is a Non- Employee Director ceasesto be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excludingterminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate. (c)As to an Employee, the time when the employee-employer relationship between a Holder and theCompany or any Affiliate is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement;but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate. The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to Terminations ofService, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and allquestions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect toIncentive Stock Options, unless the Administrator otherwise provides in the terms of the Program, the Award Agreement orotherwise, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change instatus or other change interrupts employment for the purposes of Section SV\1337167.3 9 Exhibit 10.12422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. For purposes of the Plan, aHolder’s employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that the Affiliateemploying or contracting with such Holder ceases to remain an Affiliate following any merger, sale of stock or other corporatetransaction or event (including, without limitation, a spin-off). ARTICLE 3. SHARES SUBJECT TO THE PLAN 3.1Number of Shares. (a)Subject to Sections 14.1, 14.2 and 3.1(b) hereof, the aggregate number of Shares which may beissued or transferred pursuant to Awards under the Plan shall be equal to the sum of (i) 2,088,332 Shares, (ii) any of the Shares which as of the Effective Dateare available for issuance under the Prior Plan, or are subject to awards under the Prior Plan that, on or after the Effective Date, terminate, expire or lapse forany reason without the delivery of Shares to the holder thereof, up to a maximum of 5,384,000 Shares, and (iii) an annual increase on the first day of eachyear beginning in 2015 and ending in 2024, equal to the lesser of (A) four percent (4%) of the Shares outstanding (on an as converted basis) on the last day ofthe immediately preceding fiscal year and (B) such smaller number of Shares as determined by the Board (such sum, the “Share Limit”); provided, however,no more than 10,441,663 Shares may be issued upon the exercise of Incentive Stock Options. Notwithstanding the foregoing, Shares added to the ShareLimit pursuant to Section 3.1(a)(ii) or Section 3.1(a)(iii) hereof shall be available for issuance as Incentive Stock Options only to the extent that making suchShares available for issuance as Incentive Stock Options would not cause any Incentive Stock Option to cease to qualify as such. Notwithstanding theforegoing, to the extent permitted under Applicable Law, Awards that provide for the delivery of Shares subsequent to the applicable grant date may begranted in excess of the Share Limit if such Awards provide for the forfeiture or cash settlement of such Awards to the extent that insufficient Shares remainunder the Share Limit in this Section 3.1 at the time that Shares would otherwise be issued in respect of such Award. As of the Effective Date, no furtherawards may be granted under the Prior Plan; however, any awards under the Prior Plan that are outstanding as of the Effective Date shall continue to besubject to the terms and conditions of the Prior Plan. (b)If any Shares subject to an Award are forfeited or expire or such Award is settled for cash (in whole orin part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awardsunder the Plan and shall be added back to the Share Limit. In addition, the following Shares shall be available for future grants of Awards under the Planand shall be added back to the Share Limit:(i)Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option; (ii) Shares tenderedby the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; and (iii) Sharessubject to Stock Appreciation Rights that are not issued in connection with the stock settlement of the Stock Appreciation SV\1337167.3 10 Exhibit 10.12Rights on exercise thereof. Notwithstanding anything to the contrary contained herein, Shares purchased on the open market withthe cash proceeds from the exercise of Options shall not be added back to the Share Limit and shall not be available for futuregrants of Awards. Any Shares repurchased by the Company under Section 8.4 hereof at the same price paid by the Holder or alower price so that such Shares are returned to the Company will again be available for Awards. The payment of DividendEquivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for issuanceunder the Plan. Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if suchaction would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code. (c)Substitute Awards shall not reduce the Shares authorized for grant under the Plan. Additionally, in theevent that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by its stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to theterms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in suchacquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination)may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such availableshares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition orcombination, and shall only be made to individuals who were not employed by or providing services to the Company or its Affiliates immediately prior tosuch acquisition or combination. 3.2Stock Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorizedand unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market. 3.3Limitation on Number of Shares Subject to Awards to Non-Employee Directors. The maximum aggregatevalue of Awards (with such value determined as of the date of grant under Applicable Accounting Standards) that maybe granted to any Non-Employee Director during any calendar year shall be $750,000. ARTICLE 4. GRANTING OF AWARDS 4.1Participation. The Administrator may, from time to time, select from among all Eligible Individuals, those towhom an Award shall be granted and shall determine the nature and amount of each Award, which shall not beinconsistent with the requirements of the Plan. Except as provided in Section 4.6 hereof regarding the grant of Awardspursuant to the Non- Employee Director Equity Compensation Policy, no Eligible Individual shall have any right to begranted an Award pursuant to the Plan. SV\1337167.3 11 Exhibit 10.124.2Award Agreement. Each Award shall be evidenced by an Award Agreement that sets forth the terms,conditions and limitations for such Award, which may include the term of the Award, the provisions applicable in theevent of the Holder’s Termination of Service, and the Company’s authority to unilaterally or bilaterally amend, modify,suspend, cancel or rescind an Award. Award Agreements evidencing Awards intended to qualify as Performance-BasedCompensation shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section162(m) of the Code. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions asmay be necessary to meet the applicable provisions of Section 422 of the Code. 4.3Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, andany Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subjectto any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (includingRule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application of suchexemptive rule. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall bedeemed amended to the extent necessary to conform to such applicable exemptive rule. 4.4At-Will Employment; Voluntary Participation. Nothing in the Plan or in any Program or Award Agreementhereunder shall confer upon any Holder any right to continue in the employ of, or as a Director or Consultant for, theCompany or any Affiliate, or shall interfere with or restrict in any way the rights of the Company and any Affiliate,which rights are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with orwithout cause, and with or without notice, or to terminate or change all other terms and conditions of employment orengagement, except to the extent expressly provided otherwise in a written agreement between the Holder and theCompany or any Affiliate. Participation by each Holder in the Plan shall be voluntary and nothing in the Plan shall beconstrued as mandating that any Eligible Individual shall participate in the Plan. 4.5Foreign Holders. Notwithstanding any provision of the Plan to the contrary, in order to complywith the laws in countries other than the United States in which the Company and its Affiliates operate or have Employees, Non-Employee Directors or Consultants, or in order to comply with the requirements of any foreign securities exchange, theAdministrator, in its sole discretion, shall have the power and authority to: (a) determine which Affiliates shall be covered by thePlan; (b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify theterms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreignlaws or listing requirements of any such foreign securities exchange; (d) establish subplans and modify exercise procedures andother terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modificationsshall be attached to the Plan as appendices); provided, however, that no such subplans and/or modifications shall increase theshare limitations contained in Sections 3.1 and 3.3 hereof; and (e) take any action, before or after an Award is made, that itdeems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals orlisting requirements of any such foreign securities exchange. Notwithstanding the foregoing, the Administrator may not take anyactions hereunder, and no Awards shall be granted, that would violate the Code, SV\1337167.3 12 Exhibit 10.12the Exchange Act, the Securities Act, any other securities law or governing statute, the rules of the securities exchange orautomated quotation system on which the Shares are listed, quoted or traded or any other Applicable Law. For purposes of thePlan, all references to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes of anyapplicable jurisdiction other than the United States or a political subdivision thereof. 4.6Non-Employee Director Awards. The Administrator may, in its discretion, provide that Awards granted toNon-Employee Directors shall be granted pursuant to a written non-discretionary formula established by theAdministrator (the “Non-Employee Director Equity Compensation Policy”), subject to the limitations of the Plan. TheNon-Employee Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors, the number of Shares to be subject to Non-Employee Director Awards, the conditions on whichsuch Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as theAdministrator shall determine in its discretion. The Non-Employee Director Equity Compensation Policy may bemodified by the Administrator from time to time in its discretion. 4.7Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the sole discretion of theAdministrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan.Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a differenttime from the grant of such other Awards. ARTICLE 5. PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASED COMPENSATION. 5.1Purpose. The Committee, in its sole discretion, may determine at the time an Award is granted or at any time thereafter whether anyAward is intended to qualify as Performance-Based Compensation. If the Committee, in its sole discretion, decides to grant such an Award toan Eligible Individual that is intended to qualify as Performance-Based Compensation, then the provisions of this Article 5 shall control overany contrary provision contained in the Plan. The Administrator may in its sole discretion grant Awards to other Eligible Individuals that arebased on Performance Criteria or Performance Goals but that do not satisfy the requirements of this Article 5 and that are not intended to qualifyas Performance-Based Compensation. Unless otherwise specified by the Committee at the time of grant, the Performance Criteria with respectto an Award intended to be Performance-Based Compensation payable to a Covered Employee shall be determined on the basis of ApplicableAccounting Standards. 5.2Applicability. The grant of an Award to an Eligible Individual for a particular Performance Period shall not require the grant of anAward to such Eligible Individual in any subsequent Performance Period and the grant of an Award to any one Eligible Individual shall notrequire the grant of an Award to any other Eligible Individual in such period or in any other period. SV\1337167.3 13 Exhibit 10.125.3Types of Awards. Notwithstanding anything in the Plan to the contrary, the Committee may grant any Award to an EligibleIndividual intended to qualify as Performance- Based Compensation, including, without limitation, Restricted Stock the restrictions with respectto which lapse upon the attainment of specified Performance Goals, Restricted Stock Units that vest and become payable upon the attainmentof specified Performance Goals and any Performance Awards described in Article 10 hereof that vest or become exercisable or payable uponthe attainment of one or more specified Performance Goals. 5.4Procedures with Respect to Performance-Based Awards. To the extent necessary to comply with the requirements of Section162(m)(4)(C) of the Code, with respect to any Award granted to one or more Eligible Individuals which is intended to qualify as Performance-Based Compensation, no later than ninety (90) days following the commencement of any Performance Period or any designated fiscal periodor period of service (or such earlier time as may be required under Section 162(m) of the Code), the Committee shall, in writing, (a) designateone or more Eligible Individuals, (b) select the Performance Criteria applicable to the Performance Period, (c) establish the Performance Goals,and amounts of such Awards, as applicable, which may be earned for such Performance Period based on the Performance Goals, and (d)specify the relationship between the Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to beearned by each Covered Employee for such Performance Period. Following the completion of each Performance Period, the Committee shallcertify in writing whether and the extent to which the applicable Performance Goals have been achieved for such Performance Period. Indetermining the amount earned under such Awards, unless otherwise provided in an applicable Program or Award Agreement, the Committeeshall have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additionalfactors that the Committee may deem relevant, including the assessment of individual or corporate performance for the Performance Period. 5.5Payment of Performance-Based Awards. Unless otherwise provided in the applicable Program or Award Agreement or pursuant toSection 14.2 hereof and only to the extent otherwise permitted by Section 162(m)(4)(C) of the Code, as to an Award that is intended to qualifyas Performance-Based Compensation, the Holder must be employed by the Company or an Affiliate throughout the applicable PerformancePeriod. Unless otherwise provided in the applicable Performance Goals, Program or Award Agreement, a Holder shall be eligible to receivepayment pursuant to such Awards for a Performance Period only if and to the extent the Performance Goals for such applicable PerformancePeriod are achieved. 5.6Additional Limitations. Notwithstanding any other provision of the Plan and except as otherwise determined by the Administrator,any Award which is granted to an Eligible Individual and is intended to qualify as Performance-Based Compensation shall be subject to anyadditional limitations set forth in Section 162(m) of the Code or any regulations or rulings issued thereunder that are requirements forqualification as Performance-Based Compensation, and the Plan, the Program and the Award Agreement shall be deemed amended to theextent necessary to conform to such requirements. SV\1337167.3 14 Exhibit 10.12ARTICLE 6. GRANTING OF OPTIONS 6.1Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to EligibleIndividuals from time to time, in its sole discretion, on such terms and conditions as it may determine which shall not beinconsistent with the Plan. 6.2Qualification of Incentive Stock Options. No Incentive Stock Option shall be granted to any person who is notan Employee of the Company or any subsidiary corporation (as defined in Section 424(f) of the Code) of the Company.No person who qualifies as a Greater Than 10% Stockholder may be granted an Incentive Stock Option unless suchIncentive Stock Option conforms to the applicable provisions of Section 422 of the Code. Any Incentive Stock Optiongranted under the Plan may be modified by the Administrator, with the consent of the Holder, to disqualify such Optionfrom treatment as an “incentive stock option” under Section 422 of the Code. To the extent that the aggregate fair marketvalue of stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code, butwithout regard to Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar yearunder the Plan, and all other plans of the Company and any subsidiary or parent corporation thereof (each as defined inSection 424(f) and (e) of the Code, respectively), exceeds $100,000, the Options shall be treated as Non-Qualified StockOptions to the extent required by Section 422 of the Code. The rule set forth in the preceding sentence shall be appliedby taking Options and other “incentive stock options” into account in the order in which they were granted and the FairMarket Value of stock shall be determined as of the time the respective options were granted. In addition, to the extentthat any Options otherwise fail to qualify as Incentive Stock Options, such Options shall be treated as NonqualifiedStock Options. 6.3Option Exercise Price. Except as provided in Article 14 hereof, the exercise price per Share subject to eachOption shall be set by the Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Valueof a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is modified,extended or renewed for purposes of Section 424(h) of the Code). In addition, in the case of Incentive Stock Optionsgranted to a Greater Than 10% Stockholder, such price shall not be less than one hundred ten percent (110%) of the FairMarket Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed forpurposes of Section 424(h) of the Code). 6.4Option Term. The term of each Option (the “Option Term”) shall be set by the Administrator in its solediscretion; provided, however, that the Option Term shall not be more than ten (10) years from the date the Option isgranted, or five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder. TheAdministrator shall determine the time period, including the time period following a Termination of Service, duringwhich the Holder has the right to exercise the vested Options, which time period may not extend beyond the last day ofthe Option Term. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations andrulings thereunder, the Administrator may extend the Option Term of any outstanding Option, may extend the time SV\1337167.3 15 Exhibit 10.12period during which vested Options may be exercised following any Termination of Service of the Holder, and may amend anyother term or condition of such Option relating to such a Termination of Service. 6.5Option Vesting. (a)The period during which the right to exercise, in whole or in part, an Option vests in the Holder shallbe set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it isgranted. Such vesting may be based on service with the Company or any Affiliate, any of the Performance Criteria, or any other criteria selected by theAdministrator. At any time after the grant of an Option, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects,accelerate the vesting of the Option, including following a Termination of Service; provided, that in no event shall an Option become exercisable followingits expiration, termination or forfeiture. (b)No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafterbecome exercisable, except as may be otherwise provided by the Administrator either in the Program, the Award Agreement or by action of theAdministrator following the grant of the Option. 6.6Substitute Awards. Notwithstanding the foregoing provisions of this Article 6 to the contrary, in the case of anOption that is a Substitute Award, the price per share of the shares subject to such Option may be less than the FairMarket Value per share on the date of grant; provided that the excess of: (a) the aggregate Fair Market Value (as of thedate such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exerciseprice thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding thetransaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of theshares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) theaggregate exercise price of such shares. 6.7Substitution of Stock Appreciation Rights. The Administrator may provide in the applicable Program or theAward Agreement evidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right tosubstitute a Stock Appreciation Right for such Option at any time prior to or upon exercise of such Option; provided thatsuch Stock Appreciation Right shall be exercisable with respect to the same number of Shares for which such substitutedOption would have been exercisable, and shall also have the same exercise price, vesting schedule and remaining OptionTerm as the substituted Option. ARTICLE 7. EXERCISE OF OPTIONS 7.1Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable withrespect to fractional Shares and the SV\1337167.3 16 Exhibit 10.12Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number ofShares. 7.2Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to theSecretary of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable: (a)A written or electronic notice complying with the applicable rules established by the Administratorstating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or suchportion of the Option; (b)Such representations and documents as the Administrator, in its sole discretion, deems necessary oradvisable to effect compliance with all Applicable Law. The Administrator may, in its sole discretion, also take whatever additional actions it deemsappropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents andregistrars; (c)In the event that the Option shall be exercised pursuant to Section 12.3 hereof by any person orpersons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of theAdministrator; and (d)Full payment of the exercise price and applicable withholding taxes to the stock administrator of theCompany for the shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 12.1 and 12.2 hereof. 7.3Notification Regarding Disposition. The Holder shall give the Company prompt written or electronic notice of anydisposition of Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two (2) years from the date of granting (including thedate the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) of such Option to such Holder, or (b) one (1) year after thetransfer of such shares to such Holder. ARTICLE 8. AWARD OF RESTRICTED STOCK 8.1Award of Restricted Stock. (a)The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determinethe terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent withthe Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate. (b)The Administrator shall establish the purchase price, if any, and form of payment for RestrictedStock; provided, however, that if a purchase price is charged, such SV\1337167.3 17 Exhibit 10.12purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by ApplicableLaw. In all cases, legal consideration shall be required for each issuance of Restricted Stock to the extent required by ApplicableLaw. 8.2Rights as Stockholders. Subject to Section 8.4 hereof, upon issuance of Restricted Stock, the Holder shall have,unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to therestrictions in the applicable Program or in each individual Award Agreement, including the right to receive all dividendsand other distributions paid or made with respect to the Shares; provided, however, that, in the sole discretion of theAdministrator, any extraordinary distributions with respect to the Shares shall be subject to the restrictions set forth inSection 8.3 hereof. In addition, with respect to a share of Restricted Stock with performance-based vesting, dividendswhich are paid prior to vesting shall only be paid out to the Holder to the extent that performance-based vestingconditions are subsequently satisfied and the share of Restricted Stock vests. 8.3Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof with respect toshares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in theterms of the applicable Program or in each individual Award Agreement, be subject to such restrictions and vestingrequirements as the Administrator shall provide. Such restrictions may include, without limitation, restrictions concerningvoting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuantto such circumstances or based on such criteria as selected by the Administrator, including, without limitation, criteriabased on the Holder’s duration of employment, directorship or consultancy with the Company, the Performance Criteria,Company or Affiliate performance, individual performance or other criteria selected by the Administrator. By actiontaken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to beappropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by theterms of the Program and/or the Award Agreement. Restricted Stock may not be sold or encumbered until all restrictionsare terminated or expire. 8.4Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by the Administrator at the timeof the grant of the Award or thereafter, if no price was paid by the Holder for the Restricted Stock, upon a Terminationof Service during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject torestrictions shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled withoutconsideration. If a price was paid by the Holder for the Restricted Stock, upon a Termination of Service during theapplicable restriction period, the Company shall have the right to repurchase from the Holder the unvested RestrictedStock then subject to restrictions at a cash price per share equal to the price paid by the Holder for such Restricted Stockor such other amount as may be specified in the Program or the Award Agreement. Notwithstanding the foregoing, theAdministrator in its sole discretion may provide that in the event of certain events, including a Change in Control, theHolder’s death, retirement or disability or any other specified Termination of Service or any other event, the Holder’srights in unvested Restricted Stock shall not lapse, such Restricted Stock shall vest and, if applicable, the Company shallnot have a right of repurchase. SV\1337167.3 18 Exhibit 10.128.5Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced in suchmanner as the Administrator shall determine. Certificates or book entries evidencing shares of Restricted Stock mustinclude an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. TheCompany may, in it sole discretion, (a) retain physical possession of any stock certificate evidencing shares of RestrictedStock until the restrictions thereon shall have lapsed and/or (b) require that the stock certificates evidencing shares ofRestricted Stock be held in custody by a designated escrow agent (which may but need not be the Company) until therestrictions thereon shall have lapsed, and that the Holder deliver a stock power, endorsed in blank, relating to suchRestricted Stock. 8.6Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code to be taxed with respectto the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which theHolder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy ofsuch election to the Company promptly after filing such election with the Internal Revenue Service. ARTICLE 9.AWARD OF RESTRICTED STOCK UNITS 9.1Grant of Restricted Stock Units. The Administrator is authorized to grant Awards of Restricted Stock Units toany Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions asdetermined by the Administrator. 9.2Term. Except as otherwise provided herein, the term of a Restricted Stock Unit award shall be set by theAdministrator in its sole discretion. 9.3Purchase Price. The Administrator shall specify the purchase price, if any, to be paid by the Holder to theCompany with respect to any Restricted Stock Unit award; provided, however, that value of the consideration shall notbe less than the par value of a Share, unless otherwise permitted by Applicable Law. 9.4Vesting of Restricted Stock Units. At the time of grant, the Administrator shall specify the date or dates onwhich the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions tovesting as it deems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to theCompany or any Affiliate, one or more Performance Criteria, Company performance, individual performance or otherspecific criteria, in each case on a specified date or dates or over any period or periods, as determined by theAdministrator. 9.5Maturity and Payment. At the time of grant, the Administrator shall specify the maturity date applicable to eachgrant of Restricted Stock Units which shall be no earlier than the vesting date or dates of the Award and may bedetermined at the election of the Holder (if permitted by the applicable Award Agreement); provided that, except asotherwise determined by the Administrator, set forth in any applicable Award Agreement, and subject to compliancewith Section 409A of the Code, in no event shall the maturity date relating to each Restricted Stock Unit occur followingthe later of (a) the fifteenth (15th) day of the third (3rd) month SV\1337167.3 19 Exhibit 10.12following the end of calendar year in which the Restricted Stock Unit vests; or (b) the fifteenth (15th) day of the third (3rd)month following the end of the Company’s fiscal year in which the Restricted Stock Unit vests. On the maturity date, theCompany shall, subject to Section 12.4(e) hereof, transfer to the Holder one unrestricted, fully transferable Share for eachRestricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or, in the sole discretion of theAdministrator, an amount in cash equal to the Fair Market Value of such shares on the maturity date or a combination of cashand Common Stock as determined by the Administrator. 9.6Payment upon Termination of Service. An Award of Restricted Stock Units shall only be payable while theHolder is an Employee, a Consultant or a member of the Board, as applicable; provided, however, that theAdministrator, in its sole and absolute discretion may provide (in an Award Agreement or otherwise) that a RestrictedStock Unit award may be paid subsequent to a Termination of Service in certain events, including a Change in Control,the Holder’s death, retirement or disability or any other specified Termination of Service. 9.7No Rights as a Stockholder. Unless otherwise determined by the Administrator, a Holder who is awardedRestricted Stock Units shall possess no incidents of ownership with respect to the Shares represented by such RestrictedStock Units, unless and until the same are transferred to the Holder pursuant to the terms of this Plan and the AwardAgreement. 9.8Dividend Equivalents. Subject to Section 10.2 hereof, the Administrator may, in its sole discretion, provide thatDividend Equivalents shall be earned by a Holder of Restricted Stock Units based on dividends declared on theCommon Stock, to be credited as of dividend payment dates during the period between the date an Award of RestrictedStock Units is granted to a Holder and the maturity date of such Award. ARTICLE 10. AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS,DEFERRED STOCK, DEFERRED STOCK UNITS 10.1Performance Awards. (a)The Administrator is authorized to grant Performance Awards, including Awards of PerformanceStock Units, to any Eligible Individual and to determine whether such Performance Awards shall be Performance-Based Compensation. The value ofPerformance Awards, including Performance Stock Units, may be linked to any one or more of the Performance Criteria or other specific criteriadetermined by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator. PerformanceAwards, including Performance Stock Unit awards may be paid in cash, Shares, or a combination of cash and Shares, as determined by the Administrator. (b)Without limiting Section 10.1(a) hereof, the Administrator may grant Performance Awards to anyEligible Individual in the form of a cash bonus payable upon the attainment of objective Performance Goals, or such other criteria, whether or not objective,which are established by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator. Anysuch bonuses paid to a Holder which SV\1337167.3 20 Exhibit 10.12are intended to be Performance-Based Compensation shall be based upon objectively determinable bonus formulas established inaccordance with the provisions of Article 5 hereof. 10.2Dividend Equivalents. (a)Dividend Equivalents may be granted by the Administrator based on dividends declared on theCommon Stock, to be credited as of dividend payment dates during the period between the date an Award is granted to a Holder and the date such Awardvests, is exercised, is distributed or expires, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional shares ofCommon Stock by such formula and at such time and subject to such limitations as may be determined by the Administrator. In addition, DividendEquivalents with respect to an Award with performance-based vesting that are based on dividends paid prior to the vesting of such Award shall only be paidout to Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the Award vests. (b)Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options orStock Appreciation Rights. 10.3Stock Payments. The Administrator is authorized to make Stock Payments to any EligibleIndividual. The number or value of Shares of any Stock Payment shall be determined by the Administrator and may be basedupon one or more Performance Criteria or any other specific criteria, including service to the Company or any Affiliate,determined by the Administrator. Shares underlying a Stock Payment which is subject to a vesting schedule or other conditionsor criteria set by the Administrator will not be issued until those conditions have been satisfied. Unless otherwise provided by theAdministrator, a Holder of a Stock Payment shall have no rights as a Company stockholder with respect to such Stock Paymentuntil such time as the Stock Payment has vested and the Shares underlying the Award have been issued to the Holder. StockPayments may, but are not required to, be made in lieu of base salary, bonus, fees or other cash compensation otherwise payableto such Eligible Individual. 10.4Deferred Stock. The Administrator is authorized to grant Deferred Stock to any EligibleIndividual. The number of shares of Deferred Stock shall be determined by the Administrator and may (but is not required to) bebased on one or more Performance Criteria or other specific criteria, including service to the Company or any Affiliate, as theAdministrator determines, in each case on a specified date or dates or over any period or periods determined by theAdministrator. Shares underlying a Deferred Stock award which is subject to a vesting schedule or other conditions or criteria setby the Administrator will be issued on the vesting date(s) or date(s) that those conditions and criteria have been satisfied, asapplicable. Unless otherwise provided by the Administrator, a Holder of Deferred Stock shall have no rights as a Companystockholder with respect to such Deferred Stock until such time as the Award has vested and any other applicable conditionsand/or criteria have been satisfied and the Shares underlying the Award have been issued to the Holder. 10.5Deferred Stock Units. The Administrator is authorized to grant Deferred Stock Units to any Eligible Individual.The number of Deferred Stock Units shall be determined by SV\1337167.3 21 Exhibit 10.12the Administrator and may (but is not required to) be based on one or more Performance Criteria or other specific criteria,including service to the Company or any Affiliate, as the Administrator determines, in each case on a specified date or dates orover any period or periods determined by the Administrator. Each Deferred Stock Unit shall entitle the Holder thereof to receiveone share of Common Stock on the date the Deferred Stock Unit becomes vested or upon a specified settlement date thereafter(which settlement date may (but is not required to) be the date of the Holder’s Termination of Service). Shares underlying aDeferred Stock Unit award which is subject to a vesting schedule or other conditions or criteria set by the Administrator will notbe issued until on or following the date that those conditions and criteria have been satisfied. Unless otherwise provided by theAdministrator, a Holder of Deferred Stock Units shall have no rights as a Company stockholder with respect to such DeferredStock Units until such time as the Award has vested and any other applicable conditions and/or criteria have been satisfied andthe Shares underlying the Award have been issued to the Holder. 10.6Term. The term of a Performance Award, Dividend Equivalent award, Stock Payment award, Deferred Stockaward and/or Deferred Stock Unit award shall be set by the Administrator in its sole discretion. 10.7Purchase Price. The Administrator may establish the purchase price of a Performance Award, Shares distributedas a Stock Payment award, shares of Deferred Stock or Shares distributed pursuant to a Deferred Stock Unit award;provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwisepermitted by Applicable Law. 10.8Termination of Service. A Performance Award, Stock Payment award, Dividend Equivalent award, DeferredStock award and/or Deferred Stock Unit award is distributable only while the Holder is an Employee, Director orConsultant, as applicable. The Administrator, however, in its sole discretion may provide that the Performance Award,Dividend Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award may bedistributed subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death,retirement or disability or any other specified Termination of Service. ARTICLE 11. AWARD OF STOCK APPRECIATION RIGHTS 11.1Grant of Stock Appreciation Rights. (a)The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from timeto time, in its sole discretion, on such terms and conditions as it may determine consistent with the Plan. (b)A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the StockAppreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to itsterms) and to receive from the Company an amount determined by multiplying the difference SV\1337167.3 22 Exhibit 10.12obtained by subtracting the exercise price per Share of the Stock Appreciation Right from the Fair Market Value on the date ofexercise of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right shall havebeen exercised, subject to any limitations the Administrator may impose. Except as described in (c) below or in Section14.2 hereof, the exercise price per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not beless than one hundred percent (100%) of the Fair Market Value on the date the Stock Appreciation Right is granted. (c)Notwithstanding the foregoing provisions of Section 11.1(b) hereof to the contrary, in the case of aStock Appreciation Right that is a Substitute Award, the price per Share of the Shares subject to such Stock Appreciation Right may be less than onehundred percent (100%) of the Fair Market Value per share on the date of grant; provided that the excess of: (i) the aggregate Fair Market Value (as of thedate such Substitute Award is granted) of the shares subject to the Substitute Award, over (ii) the aggregate exercise price thereof does not exceed the excessof: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to bedetermined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y)the aggregate exercise price of such shares. 11.2Stock Appreciation Right Vesting. (a)The period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests inthe Holder shall be set by the Administrator and the Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in partfor a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, any of the Performance Criteria or anyother criteria selected by the Administrator. At any time after grant of a Stock Appreciation Right, the Administrator may, in its sole discretion and subject towhatever terms and conditions it selects, accelerate the period during which a Stock Appreciation Right vests. (b)No portion of a Stock Appreciation Right which is unexercisable at Termination of Service shallthereafter become exercisable, except as may be otherwise provided by the Administrator either in the applicable Program or Award Agreement or by actionof the Administrator following the grant of the Stock Appreciation Right, including following a Termination of Service; provided, that in no event shall aStock Appreciation Right become exercisable following its expiration, termination or forfeiture. 11.3Manner of Exercise. All or a portion of an exercisable Stock Appreciation Right shall bedeemed exercised upon delivery of all of the following to the stock administrator of the Company, or such other person or entitydesignated by the Administrator, or his, her or its office, as applicable: (a)A written or electronic notice complying with the applicable rules established by the Administratorstating that the Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled toexercise the Stock Appreciation Right or such portion of the Stock Appreciation Right; SV\1337167.3 23 Exhibit 10.12(b)Such representations and documents as the Administrator, in its sole discretion, deems necessary oradvisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations. TheAdministrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance; and (c)In the event that the Stock Appreciation Right shall be exercised pursuant to this Section 11.3 hereofby any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right. 11.4Stock Appreciation Right Term. The term of each Stock Appreciation Right (the “Stock Appreciation RightTerm”) shall be set by the Administrator in its sole discretion; provided, however, that the term shall not be more than ten(10) years from the date the Stock Appreciation Right is granted. The Administrator shall determine the time period,including the time period following a Termination of Service, during which the Holder has the right to exercise thevested Stock Appreciation Rights, which time period may not extend beyond the expiration date of the StockAppreciation Right Term. Except as limited by the requirements of Section 409A of the Code and regulations andrulings thereunder or the first sentence of this Section 11.4, the Administrator may extend the Stock Appreciation RightTerm of any outstanding Stock Appreciation Right, may extend the time period during which vested Stock AppreciationRights may be exercised following any Termination of Service of the Holder, and may amend any other term orcondition of such Stock Appreciation Right relating to such a Termination of Service. 11.5Payment. Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this Article 11shall be in cash, Shares (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or acombination of both, as determined by the Administrator. ARTICLE 12. ADDITIONAL TERMS OF AWARDS 12.1Payment. The Administrator shall determine the methods by which payments by any Holder with respect to any Awards grantedunder the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise priceof an Award, Shares issuable pursuant to the exercise of the Award) or Shares held for such period of time as may be required by theAdministrator in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of delivery equal to theaggregate payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker withrespect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the netproceeds of the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then madeto the Company upon settlement of such sale, or (d) other form of legal consideration acceptable to the SV\1337167.3 24 Exhibit 10.12Administrator. The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be deliveredto Holders. Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executiveofficer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment withrespect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loanfrom the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act. 12.2Tax Withholding. The Company or any Affiliate shall have the authority and the right to deduct or withhold, orrequire a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder’s FICA oremployment tax obligation) required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan. TheAdministrator may in its sole discretion and in satisfaction of the foregoing requirement allow a Holder to satisfy such obligations by any payment meansdescribed in Section 12.1 hereof, including without limitation, by allowing such Holder to elect to have the Company withhold Shares otherwise issuableunder an Award (or allow the surrender of Shares). The number of Shares which may be so withheld or surrendered shall be limited to the number ofShares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimumstatutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxableincome. The Administrator shall determine the fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholdingobligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of Shares to pay the Optionor Stock Appreciation Right exercise price or any tax withholding obligation. 12.3Transferability of Awards. (a)Except as otherwise provided in Sections 12.3(b) and 12.3(c) hereof: (i)No Award under the Plan may be sold, pledged, assigned or transferred in anymanner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until suchAward has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed; (ii)No Award or interest or right therein shall be liable for the debts, contracts orengagements of the Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation,encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment,garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until such Award has been exercised, or the Shares underlyingsuch Award have been issued, and all restrictions applicable to such Shares have lapsed, and any attempted disposition of an Award prior to the satisfactionof these conditions shall be null and void and of no effect, except to the extent that such disposition is permitted by clause (i) of this provision; and SV\1337167.3 25 Exhibit 10.12(iii)During the lifetime of the Holder, only the Holder may exercise an Award (orany portion thereof) granted to such Holder under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Holder, any exercisableportion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, beexercised by the Holder’s personal representative or by any person empowered to do so under the deceased Holder’s will or under the then applicable lawsof descent and distribution. (b)Notwithstanding Section 12.3(a) hereof, the Administrator, in its sole discretion,may determine to permit a Holder or a Permitted Transferee of such Holder to transfer an Award other than an Incentive StockOption (unless such Incentive Stock Option is to become a Non-Qualified Stock Option) to any one or more Permitted Transferees,subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable ortransferable by the Permitted Transferee (other than to another Permitted Transferee of the applicable Holder) other than by will orthe laws of descent and distribution;(ii)an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award asapplicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder (or transferring PermittedTransferee) and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, withoutlimitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for anexemption for the transfer under applicable federal, state and foreign securities laws and (C) evidence the transfer. (c)Notwithstanding Section 12.3(a) hereof, a Holder may, in the manner determined bythe Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to anyAward upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant tothe Plan is subject to all terms and conditions of the Plan and any Program or Award Agreement applicable to the Holder, except tothe extent the Plan, the Program and the Award Agreement otherwise provide, and to any additional restrictions deemed necessaryor appropriate by the Administrator. If the Holder is married or a domestic partner in a domestic partnership qualified underApplicable Law and resides in a community property state, a designation of a person other than the Holder’s spouse or domesticpartner, as applicable, as his or her beneficiary with respect to more than fifty percent (50%) of the Holder’s interest in the Awardshall not be effective without the prior written or electronic consent of the Holder’s spouse or domestic partner, as applicable. If nobeneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to theHolder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed orrevoked by a Holder at any time; provided that the change or revocation is filed with the Administrator prior to the Holder’s death. 12.4Conditions to Issuance of Shares. (a)Notwithstanding anything herein to the contrary, the Company shall not be requiredto issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless anduntil the Board or the Committee has determined, with advice of counsel, that the issuance of such shares is in compliance with allApplicable Law, and SV\1337167.3 26 Exhibit 10.12the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms andconditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements,and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with Applicable Law. (b)All Share certificates delivered pursuant to the Plan and all Shares issued pursuant tobook entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary oradvisable to comply with Applicable Law. The Administrator may place legends on any Share certificate or book entry to referencerestrictions applicable to the Shares. (c)The Administrator shall have the right to require any Holder to comply with anytiming or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-periodlimitation, as may be imposed in the sole discretion of the Administrator. (d)No fractional Shares shall be issued and the Administrator shall determine, in its solediscretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated byrounding down. (e)Notwithstanding any other provision of the Plan, unless otherwise determined by theAdministrator or required by any Applicable Law, the Company shall not deliver to any Holder certificates evidencing Sharesissued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, itstransfer agent or stock plan administrator). 12.5Forfeiture and Claw-Back Provisions. Pursuant to its general authority to determine the terms and conditions applicable to Awardsunder the Plan, the Administrator shall have the right to provide, in an Award Agreement or otherwise, or to require a Holder to agree byseparate written or electronic instrument, that: (a)(i) Any proceeds, gains or other economic benefit actually or constructively receivedby the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, mustbe paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shallbe forfeited, if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt orexercise of the Award, or (y) the Holder at any time, or during a specified time period, engages in any activity in competition withthe Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or(z) the Holder incurs a Termination of Service for “cause” (as such term is defined in the sole discretion of the Administrator, or asset forth in a written agreement relating to such Award between the Company and the Holder); and (b)All Awards (including any proceeds, gains or other economic benefit actually orconstructively received by the Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Sharesunderlying the Award) shall be subject to the provisions SV\1337167.3 27 Exhibit 10.12of any claw-back policy implemented by the Company, including, without limitation, any claw- back policy adopted to complywith the requirements of Applicable Law, including, without limitation, the Dodd-Frank Wall Street Reform and ConsumerProtection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in theapplicable Award Agreement. 12.6Prohibition on Repricing. Subject to Section 14.2 hereof, the Administrator shall not, without the approval of the stockholders of theCompany, (i) authorize the amendment of any outstanding Option or Stock Appreciation Right to reduce its price per Share, or (ii) cancel anyOption or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right price per Shareexceeds the Fair Market Value of the underlying Shares. 12.7Leave of Absence. Unless the Administrator provides otherwise, vesting of Awards granted hereunder shall be suspended duringany unpaid leave of absence. A Holder shall not cease to be considered an Employee, Non-Employee Director or Consultant, as applicable, inthe case of any (a) leave of absence approved by the Company, (b) transfer between locations of the Company or between the Company andany of its Affiliates or any successor thereof, or (c) change in status (Employee to Director, Employee to Consultant, etc.), provided that suchchange does not affect the specific terms applying to the Holder’s Award. ARTICLE 13. ADMINISTRATION 13.1Administrator. The Committee (or another committee or a subcommittee of the Board or the Compensation Committee of the Board assuming the functions ofthe Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and, unless otherwise determined by the Board, shall consist solely of two or moreNon-Employee Directors appointed by and holding office at the pleasure of the Board, each of whom is intended to qualify as both a “non-employee director” as defined byRule 16b-3 of the Exchange Act or any successor rule, an “outside director” for purposes of Section 162(m) of the Code and an “independent director” under the rules of anysecurities exchange or automated quotation system on which the Shares are listed, quoted or traded; provided that any action taken by the Committee shall be valid and effective,whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 13.l orotherwise provided in any charter of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall beeffective upon acceptance of appointment. Committee members may resign at any time by delivering written or electronic notice to the Board. Vacancies in the Committeemay only be filled by the Board. Notwithstanding the foregoing, (a) the full Board, acting by a majority of its members in office, shall conduct the general administration of thePlan with respect to Awards granted to Non-Employee Directors and, with respect to such Awards, the terms “Administrator” and “Committee” as used in the Plan shall bedeemed to refer to the Board and (b) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 13.6 hereof. SV\1337167.3 28 Exhibit 10.1213.2Duties and Powers of Administrator. It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with its provisions. TheAdministrator shall have the power to interpret the Plan, the Program and the Award Agreement, and to adopt such rules for the administration, interpretation and application ofthe Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Program or Award Agreement; provided that the rights or obligations ofthe Holder of the Award that is the subject of any such Program or Award Agreement are not affected materially and adversely by such amendment, unless the consent of theHolder is obtained or such amendment is otherwise permitted under Section 14.10 hereof. Any such grant or award under the Plan need not be the same with respect to eachHolder. Any such interpretations and rules with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code. In its sole discretion, theBoard may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3under the Exchange Act or any successor rule, or Section 162(m) of the Code, or any regulations or rules issued thereunder, or the rules of any securities exchange or automatedquotation system on which the Shares are listed, quoted or traded are required to be determined in the sole discretion of the Committee. 13.3Action by the Committee. Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorumand the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Committee in lieu of ameeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to thatmember by any officer or other employee of the Company or any Affiliate, the Company’s independent certified public accountants, or any executive compensation consultantor other professional retained by the Company to assist in the administration of the Plan. 13.4Authority of Administrator. Subject to the Company’s Bylaws, the Committee’s Charter and any specific designation in the Plan, the Administrator has theexclusive power, authority and sole discretion to: (a)Designate Eligible Individuals to receive Awards; (b)Determine the type or types of Awards to be granted to each EligibleIndividual; (c)Determine the number of Awards to be granted and the number ofShares to which an Award will relate; (d)Determine the terms and conditions of any Award granted pursuant to thePlan, including, but not limited to, the exercise price, grant price, or purchase price, any performance criteria, any restrictionsor limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of anAward, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on anAward, based in each case on such considerations as the Administrator in its sole discretion determines; SV\1337167.3 29 Exhibit 10.12(e)Determine whether, to what extent, and pursuant to what circumstancesan Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property,or an Award may be canceled, forfeited, or surrendered; (f)Prescribe the form of each Award Agreement, which need not be identicalfor each Holder; (g)Decide all other matters that must be determined in connection with anAward; (h)Establish, adopt, or revise any rules and regulations as it may deemnecessary or advisable to administer the Plan; (i)Interpret the terms of, and any matter arising pursuant to, the Plan, anyProgram or any Award Agreement; (j)Make all other decisions and determinations that may be required pursuantto the Plan or as the Administrator deems necessary or advisable to administer the Plan; and (k)Accelerate wholly or partially the vesting or lapse of restrictions of anyAward or portion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects andSections 3.4 and 14.2(d) hereof. 13.5Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Program, any Award Agreement and all decisionsand determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties. 13.6Delegation of Authority. To the extent permitted by Applicable Law, the Board or Committee may from time to time delegate to a committee of one or moremembers of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to Article 13; provided,however, that in no event shall an officer of the Company be delegated the authority to grant awards to, or amend awards held by, the following individuals: (a) individuals whoare subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or Directors) to whom authority to grant or amend Awards has beendelegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under Section 162(m) of the Code andApplicable Law. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board mayat any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 13.6 hereof shall serve in such capacity at thepleasure of the Board and the Committee. SV\1337167.3 30 Exhibit 10.12ARTICLE 14. MISCELLANEOUS PROVISIONS 14.1Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section 14.1, thePlan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time totime by the Board or the Committee. However, without approval of the Company’s stockholders given within twelve (12) months before or after the action by the Administrator, no action of the Administrator may, except as provided in Section14.2 hereof, (a) increase the limits imposed in Section 3.1 hereof on the maximum number of shares which may be issued underthe Plan, or (b) reduce the price per share of any outstanding Option or Stock Appreciation Right granted under the Plan, or (c)cancel any Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock AppreciationRight price per share exceeds the Fair Market Value of the underlying Shares. Except as provided in Section 14.10 hereof, noamendment, suspension or termination of the Plan shall, without the consent of the Holder, materially and adversely affect anyrights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides.No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and in no event mayany Award be granted under the Plan after the tenth (10th) anniversary of the Effective Date.14.2Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and OtherCorporate Events. (a)In the event of any stock dividend, stock split, combination or exchange of shares, merger,consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of theCompany’s stock or the share price of the Company’s stock other than an Equity Restructuring, the Administrator may make equitable adjustments, if any,to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to,adjustments of the limitations in Section 3.1 hereof on the maximum number and kind of shares which may be issued under the Plan); (ii) the number andkind of shares of Common Stock (or other securities or property) subject to outstanding Awards; (iii) the number and kind of shares of Common Stock (orother securities or property) for which grants are subsequently to be made to new and continuing Non-Employee Directors pursuant to Section 4.6 hereof;(iv) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto);and (v) the grant or exercise price per share for any outstanding Awards under the Plan. Any adjustment affecting an Award intended as Performance-BasedCompensation shall be made consistent with the requirements of Section 162(m) of the Code. (b)In the event of any transaction or event described in Section 14.2(a) hereof or any unusual ornonrecurring transactions or events affecting the Company, any Affiliate of the Company, or the financial statements of the Company or any Affiliate, or ofchanges in Applicable Law, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of theAward or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby SV\1337167.3 31 Exhibit 10.12authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriatein order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or withrespect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulationsor principles: (i)To provide for either (A) termination of any such Award in exchange for anamount of cash and/or other property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of theHolder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 14.2 the Administratordetermines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’s rights, then such Awardmay be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator inits sole discretion having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of theHolder’s rights had such Award been currently exercisable or payable or fully vested; (ii)To provide that such Award be assumed by the successor or survivorcorporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivorcorporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; (iii)To make adjustments in the number and type of shares of the Company’s stock(or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock or Deferred Stock and/or in theterms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in thefuture; (iv)To provide that such Award shall be exercisable or payable or fully vested withrespect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement; and (v)To provide that the Award cannot vest, be exercised or become payable aftersuch event. (c)In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to thecontrary in Sections 14.2(a) and 14.2(b) hereof: (i)The number and type of securities subject to each outstanding Award and theexercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or (ii)The Administrator shall make such equitable adjustments, if any, as theAdministrator in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that maybe issued under the Plan SV\1337167.3 32 Exhibit 10.12(including, but not limited to, adjustments of the limitations in Section 3.1 hereof on the maximum number and kind of shareswhich may be issued under the Plan). The adjustments provided under this Section 14.2(c) shall be nondiscretionary and shall be final and binding on theaffected Holder and the Company. (d)Change in Control. (i)Notwithstanding any other provision of the Plan, in the event of a Change inControl, each outstanding Award shall be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of thesuccessor corporation, in each case, as determined by the Administrator. (ii)In the event that the successor corporation in a Change in Control and its parentsand subsidiaries refuse to assume or substitute for any Award in accordance with Section 14.2(d)(i) hereof, each such non-assumed/substituted Award,except for any Performance Awards, shall become fully vested and, as applicable, exercisable and shall be deemed exercised, immediately prior to theconsummation of such transaction, and all forfeiture restrictions on any or all such Awards shall lapse at such time. For the avoidance of doubt, the vesting ofany Performance Awards not assumed in a Change in Control will not be automatically accelerated pursuant to this Section 14.2(d)(ii) and will instead vestpursuant to the terms and conditions of the applicable Award Agreement upon a Change in Control where the successor corporation and its parents andsubsidiaries refuse to assume or substitute for any Award in accordance with Section 14.2(d)(i) hereof. If an Award vests and, as applicable, is exercised inlieu of assumption or substitution in connection with a Change in Control, the Administrator shall notify the Holder of such vesting and any applicableexercise period, and the Award shall terminate upon the Change in Control. For the avoidance of doubt, if the value of an Award that is terminated inconnection with this Section 14.2(d)(ii) is zero or negative at the time of such Change in Control, such Award shall be terminated upon the Change inControl without payment of consideration therefor. (iii)Notwithstanding anything to the contrary, in the event that, within the twelve(12) month period immediately following a Change in Control, a Holder experiences a Termination of Service by the Company for other than Cause or bya Holder for Good Reason, then the vesting and, if applicable, exercisability of that number of Shares equal to one hundred percent (100%) of the then-unvested Shares subject to the outstanding Awards held by such Holder shall accelerate upon the date of such Termination of Service. (e)The Administrator may, in its sole discretion, include such further provisions and limitations in anyAward, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan. (f)With respect to Awards which are granted to Covered Employees and are intended to qualify asPerformance-Based Compensation, no adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to theextent that such adjustment or action would cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administratordetermines that the Award should not so qualify. No SV\1337167.3 33 Exhibit 10.12adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that suchadjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or actionshall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 of theExchange Act or violate the exemptive conditions of Rule 16b-3 of the Exchange Act unless the Administrator determines that theAward is not to comply with such exemptive conditions. (g)The existence of the Plan, the Program, the Award Agreement and the Awards granted hereundershall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment,recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue ofstock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect theCommon Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, orany sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. (h)In the event of any pending stock dividend, stock split, combination or exchange of shares, merger,consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the Shares or theshare price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Company in its sole discretion mayrefuse to permit the exercise of any Award during a period of thirty (30) days prior to the consummation of any such transaction. 14.3Approval of Plan by Stockholders. The Plan will be submitted for the approval of the Company’s stockholderswithin twelve (12) months after the date of the Board’s initial adoption of the Plan. Awards may be granted or awardedprior to such stockholder approval; provided that such Awards shall not be exercisable, shall not vest and the restrictionsthereon shall not lapse and no Shares shall be issued pursuant thereto prior to the time when the Plan is approved by thestockholders; and provided, further, that if such approval has not been obtained at the end of said twelve (12) monthperiod, all Awards previously granted or awarded under the Plan shall thereupon be canceled and become null and void. 14.4No Stockholders Rights. Except as otherwise provided herein, a Holder shall have none of the rights of astockholder with respect to Shares covered by any Award until the Holder becomes the record owner of such Shares. 14.5Paperless Administration. In the event that the Company establishes, for itself or using the services of a thirdparty, an automated system for the documentation, granting or exercise of Awards, such as a system using an internetwebsite or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holdermay be permitted through the use of such an automated system. SV\1337167.3 34 Exhibit 10.1214.6Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect any othercompensation or incentive plans in effect for the Company or any Affiliate. Nothing in the Plan shall be construed tolimit the right of the Company or any Affiliate: (a) to establish any other forms of incentives or compensation forEmployees, Directors or Consultants of the Company or any Affiliate, or (b) to grant or assume options or other rights orawards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, thegrant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise,of the business, stock or assets of any corporation, partnership, limited liability company, firm or association. 14.7Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance anddelivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subjectto compliance with all Applicable Law, and to such approvals by any listing, regulatory or governmental authority asmay, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securitiesdelivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requestedby the Company, provide such assurances and representations to the Company as the Company may deem necessary ordesirable to assure compliance with all Applicable Law. To the extent permitted by Applicable Law, the Plan andAwards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such ApplicableLaw. 14.8Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of theSections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, ratherthan such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include anyamendment or successor thereto. 14.9Governing Law. The Plan and any agreements hereunder shall be administered, interpreted and enforced underthe internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction. 14.10Section 409A. To the extent that the Administrator determines that any Award granted under the Plan is subjectto Section 409A of the Code, the Program pursuant to which such Award is granted and the Award Agreementevidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extentapplicable, the Plan, the Program and any Award Agreements shall be interpreted in accordance with Section 409A ofthe Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including withoutlimitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding anyprovision of the Plan to the contrary, in the event that following the Effective Date the Administrator determines that anyAward may be subject to Section 409A of the Code and related Department of Treasury guidance (including suchDepartment of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt suchamendments to the Plan and the applicable Program and Award Agreement or adopt other policies and procedures(including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administratordetermines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or SV\1337167.3 35 Exhibit 10.12preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements ofSection 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxesunder such Section. 14.11No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted any Awardpursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders orany other persons uniformly. 14.12Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. Withrespect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or any Programor Award Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company orany Affiliate. 14.13Indemnification. To the extent allowable pursuant to Applicable Law, each member of the Committee or of theBoard and any officer or other employee to whom authority to administer any component of the Plan is delegated shallbe indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon orreasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to whichhe or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to thePlan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, orproceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle anddefend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right ofindemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitledpursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power thatthe Company may have to indemnify them or hold them harmless. 14.14Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining anybenefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of theCompany or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or anagreement thereunder. 14.15Expenses. The expenses of administering the Plan shall be borne by the Company and its Affiliates. SV\1337167.3 36 Exhibit 10.16ADVERUM BIOTECHNOLOGIES, INC.2014 EMPLOYEE STOCK PURCHASE PLANAMENDED AND RESTATED ON FEBRUARY 14, 2019 ARTICLE I.PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN 1.1 Purpose and Scope. The purpose of the Avalanche Biotechnologies, Inc. 2014 Employee Stock Purchase Plan, as it maybe amended from time to time, (the “Plan”) is to assist employees of Avalanche Biotechnologies, Inc., a Delaware corporation, (the“Company”) and its Designated Subsidiaries in acquiring a stock ownership interest in the Company pursuant to a plan which isintended to qualify as an “employee stock purchase plan” under Section 423 of the Code and to help such employees provide for theirfuture security and to encourage them to remain in the employment of the Company and its Subsidiaries.ARTICLE II.DEFINITIONS Whenever the following terms are used in the Plan, they shall have the meaning specified below unless the context clearly indicates tothe contrary. The singular pronoun shall include the plural where the context so indicates.2.1 “Agent” means the brokerage firm, bank or other financial institution, entity or person(s), if any, engaged, retained,appointed or authorized to act as the agent of the Company or an Employee with regard to the Plan.2.2 “Administrator” shall mean the Committee, or such individuals to which authority to administer the Plan has beendelegated under Section 7.1 hereof.2.3 “Board” shall mean the Board of Directors of the Company.2.4 “Code” shall mean the Internal Revenue Code of 1986, as amended.2.5 “Committee” shall mean the Compensation Committee of the Board.2.6 “Common Stock” shall mean the common stock of the Company.2.7 “Company” shall have such meaning as set forth in Section 1.1 hereof.2.8 “Compensation” of an Employee shall mean the regular straight-time earnings or base salary, bonuses and commissionspaid to the Employee from the Company on each Payday as compensation for services to the Company or any Designated Subsidiary,before deduction for any salary deferral contributions made by the Employee to any tax-qualified or nonqualified deferredcompensation plan, including overtime, shift differentials, vacation pay, salaried production schedule premiums, holiday pay, jury dutypay, funeral leave pay, paid time off, military pay, prior week adjustments and weekly bonus, but excluding education or tuitionreimbursements, imputed income arising under any group insurance or benefit program, travel1 Exhibit 10.16expenses, business and moving reimbursements, income received in connection with any stock options, restricted stock, restricted stockunits or other compensatory equity awards and all contributions made by the Company or any Designated Subsidiary for theEmployee’s benefit under any employee benefit plan now or hereafter established. Such Compensation shall be calculated beforededuction of any income or employment tax withholdings, but shall be withheld from the Employee’s net income.2.9 “Designated Subsidiary” shall mean each Subsidiary that have been designated by the Board or Committee from time totime in its sole discretion as eligible to participate in the Plan, including any Subsidiary in existence on the Effective Date and anySubsidiary formed or acquired following the Effective Date, in accordance with Section 7.2 hereof.2.10 “Effective Date” shall mean the date immediately preceding the date the Company’s registration statement relating to itsinitial public offering becomes effective, provided that the Board has adopted and the Company’s stockholders have approved the Planprior to or on such date.2.11 “Eligible Employee” shall mean an Employee who (a) is customarily scheduled to work at least twenty (20) hours perweek, (b) whose customary employment is more than five (5) months in a calendar year and (c) after the granting of the Option wouldnot be deemed for purposes of Section 423(b)(3) of the Code to possess five percent (5%) or more of the total combined voting poweror value of all classes of stock of the Company or any Subsidiary. For purposes of clause (c), the rules of Section 424(d) of the Codewith regard to the attribution of stock ownership shall apply in determining the stock ownership of an individual, and stock which anEmployee may purchase under outstanding options shall be treated as stock owned by the Employee. Notwithstanding the foregoing,the Administrator may exclude from participation in the Plan as an Eligible Employee (x) any Employee that is a “highly compensatedemployee” of the Company or any Designated Subsidiary (within the meaning of Section 414(q) of the Code), or that is such a “highlycompensated employee” (A) with compensation above a specified level, (B) who is an officer and/or (C) is subject to the disclosurerequirements of Section 16(a) of the Exchange Act and/or (y) any Employee who is a citizen or resident of a foreign jurisdiction(without regard to whether they are also a citizen of the United States or a resident alien (within the meaning of Section 7701(b)(1)(A)of the Code)) if either (i) the grant of the Option is prohibited under the laws of the jurisdiction governing such Employee, or (ii)compliance with the laws of the foreign jurisdiction would cause the Plan or the Option to violate the requirements of Section 423 ofthe Code; provided that any exclusion in clauses (x), and/or (y) shall be applied in an identical manner under each Offering Period toall Employees of the Company and all Designated Subsidiaries, in accordance with Treasury Regulation Section 1.423-2(e).2.12 “Employee” shall mean any person who renders services to the Company or a Designated Subsidiary in the status of anemployee within the meaning of Section 3401(c) of the Code. “Employee” shall not include any director of the Company or aDesignated Subsidiary who does not render services to the Company or a Designated Subsidiary in the status of an employee withinthe meaning of Section 3401(c) of the Code. For purposes of the Plan, the2 Exhibit 10.16employment relationship shall be treated as continuing intact while the individual is on military leave, sick leave or other leave ofabsence approved by the Company or Designated Subsidiary and meeting the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds three (3) months, or such other period specified in Treasury Regulation Section 1.421-1(h)(2),and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall bedeemed to have terminated on the first day immediately following such three (3)-month period, or such other period specified inTreasury Regulation Section 1.421-1(h)(2).2.13 “Enrollment Date” shall mean the first date of each Offering Period.2.14 “Exercise Date” shall mean the last Trading Day of each Offering Period, except as provided in Section 5.2 hereof.2.15 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.2.16 “Fair Market Value” shall mean, as of any date, the value of Common Stock determined as follows:(a) If the Common Stock is (i) listed on any established securities exchange (such as the New York StockExchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market systemor (iii) listed, quoted or traded on any automated quotation system, its Fair Market Value shall be the closing sales price for ashare of Common Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a shareof Common Stock on the date in question, the closing sales price for a share of Stock on the last preceding date for whichsuch quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;(b) If the Common Stock is not listed on an established securities exchange, national market system or automatedquotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall bethe mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a share ofCommon Stock on such date, the high bid and low asked prices for a share of Common Stock on the last preceding date forwhich such information exists, as reported in The Wall Street Journal or such other source as the Administrator deemsreliable; or(c) If the Common Stock is neither listed on an established securities exchange, national market system orautomated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be establishedby the Administrator in good faith.2.17 “Grant Date” shall mean the first Trading Day of an Offering Period.2.18 “New Exercise Date” shall have such meaning as set forth in Section 5.2(b) hereof.3 Exhibit 10.162.19 “Offering Period” shall mean such period of time, which shall be determined by the Committee, with respect to whichOptions are granted to Participants. The duration and timing of Offering Periods may be changed by the Board or Committee, in itssole discretion. In no event may an Offering Period exceed twenty-seven (27) months.2.20 “Option” shall mean the right to purchase shares of Common Stock pursuant to the Plan during each Offering Period.2.21 “Option Price” shall mean the purchase price of a share of Common Stock hereunder as provided in Section 4.2 hereof.2.22 “Parent” means any entity that is a parent corporation of the Company within the meaning of Section 424 of the Codeand the Treasury Regulations thereunder.2.23 “Participant” shall mean any Eligible Employee who elects to participate in the Plan.2.24 “Payday” shall mean the regular and recurring established day for payment of Compensation to an Employee of theCompany or any Designated Subsidiary.2.25 “Plan” shall have such meaning as set forth in Section 1.1 hereof.2.26 “Plan Account” shall mean a bookkeeping account established and maintained by the Company in the name of eachParticipant.2.27 “Section 423 Option” shall have such meaning as set forth in Section 3.1(b) hereof.2.28 “Subsidiary” shall mean any entity that is a subsidiary corporation of the Company within the meaning of Section 424of the Code and the Treasury Regulations thereunder. In addition, with respect to any sub-plans adopted under Section 7.1(d) hereofwhich are designed to be outside the scope of Section 423 of the Code, Subsidiary shall include any corporate or noncorporate entity inwhich the Company has a direct or indirect equity interest or significant business relationship.2.29 “Trading Day” shall mean a day on which the principal securities exchange on which the Common Stock is listed isopen for trading or, if the Common Stock is not listed on a securities exchange, shall mean a business day, as determined by theAdministrator in good faith.2.30 “Withdrawal Election” shall have such meaning as set forth in Section 6.1(a) hereof.ARTICLE III.PARTICIPATION 3.1 Eligibility.(a) Any Eligible Employee who shall be employed by the Company or a Designated Subsidiary on a givenEnrollment Date for an Offering Period shall be eligible to participate in the Plan during such Offering Period, subject to therequirements of Articles IV and V hereof, and the limitations imposed by Section 423(b) of the Code and the TreasuryRegulations thereunder.4 Exhibit 10.16(b) No Eligible Employee shall be granted an Option under the Plan which permits the Participant’s rights topurchase shares of Common Stock under the Plan, and to purchase stock under all other employee stock purchase plans ofthe Company, any Parent or any Subsidiary subject to the Section 423 of the Code (any such Option or other option, a“Section 423 Option”), to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined at the timethe Section 423 Option is granted) for each calendar year in which any Section 423 Option granted to the Participant isoutstanding at any time. For purposes of the limitation imposed by this subsection,(i) the right to purchase stock under a Section 423 Option accrues when the Section 423 Option (or anyportion thereof) first becomes exercisable during the calendar year,(ii) the right to purchase stock under a Section 423 Option accrues at the rate provided in the Section423 Option, but in no case may such rate exceed $25,000 of fair market value of such stock (determined at thetime such option is granted) for any one calendar year, and(iii) a right to purchase stock which has accrued under a Section 423 Option may not be carried over toany other Section 423 Option; provided that Participants may carry forward amounts so accrued that represent afractional share of stock and were withheld but not applied towards the purchase of Common Stock under anearlier Offering Period, and may apply such amounts towards the purchase of additional shares of Common Stockunder a subsequent Offering Period.The limitation under this Section 3.1(b) shall be applied in accordance with Section 423(b)(8) of the Code and the TreasuryRegulations thereunder.3.2 Election to Participate; Payroll Deductions.(a) Except as provided in Section 3.3 hereof, an Eligible Employee may become a Participant in the Plan only bymeans of payroll deduction. Each individual who is an Eligible Employee as of an Offering Period’s Enrollment Date mayelect to participate in such Offering Period and the Plan by delivering to the Company a payroll deduction authorization nolater such period of time prior to the applicable Enrollment Date as determined by the Administrator, in its sole discretion.(b) Subject to Section 3.1(b) hereof, payroll deductions (i) shall be equal to at least one percent (1%) of theParticipant’s Compensation as of each Payday of the Offering Period following the Enrollment Date, but not more than thelesser of fifteen percent (15%) of the Participant’s Compensation as of each Payday of the Offering Period following theEnrollment Date or $25,000 per Offering Period; and (ii) may be expressed either as (A) a whole number percentage, or (B)a fixed dollar amount. Amounts deducted from a Participant’s Compensation with respect to an Offering Period5 Exhibit 10.16pursuant to this Section 3.2 shall be deducted each Payday through payroll deduction and credited to the Participant’s PlanAccount.(c) Following at least one (1) payroll deduction, a Participant may decrease (to as low as zero) the amountdeducted from such Participant’s Compensation only once during an Offering Period upon ten (10) calendar days’ priorwritten notice to the Company. A Participant may not increase the amount deducted from such Participant’s Compensationduring an Offering Period.(d) Notwithstanding the foregoing, upon the termination of an Offering Period, each Participant in such OfferingPeriod shall automatically participate in the immediately following Offering Period at the same payroll deduction percentageor fixed amount as in effect at the termination of the prior Offering Period, unless such Participant delivers to the Company adifferent election with respect to the successive Offering Period in accordance with Section 3.1(a) hereof, or unless suchParticipant becomes ineligible for participation in the Plan.3.3 Leave of Absence. During leaves of absence approved by the Company meeting the requirements of TreasuryRegulation Section 1.421-1(h)(2) under the Code, a Participant may continue participation in the Plan by making cash payments to theCompany on his or her normal payday equal to his or her authorized payroll deduction. ARTICLE IV.PURCHASE OF SHARES 4.1 Grant of Option. Each Participant shall be granted an Option with respect to an Offering Period on the applicable GrantDate. Subject to the limitations of Section 3.1(b) hereof, the number of shares of Common Stock subject to a Participant’s Option shallbe determined by dividing (a) such Participant’s payroll deductions accumulated prior to such Exercise Date and retained in theParticipant’s Plan Account on such Exercise Date by (b) the applicable Option Price; provided that in no event shall a Participant bepermitted to purchase during each Offering Period more than 3,000 shares of Common Stock (subject to any adjustment pursuant toSection 5.2 hereof). The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximumnumber of shares of Common Stock that a Participant may purchase during such future Offering Periods. Each Option shall expire onthe Exercise Date for the applicable Offering Period immediately after the automatic exercise of the Option in accordance with Section4.3 hereof, unless such Option terminates earlier in accordance with Article 6 hereof.4.2 Option Price. The “Option Price” per share of Common Stock to be paid by a Participant upon exercise of theParticipant’s Option on the applicable Exercise Date for an Offering Period shall be equal to eighty five percent (85%) of the lesser ofthe Fair Market Value of a share of Common Stock on (a) the applicable Grant Date and (b) the applicable Exercise6 Exhibit 10.16Date; provided that in no event shall the Option Price per share of Common Stock be less than the par value per share of the CommonStock.4.3 Purchase of Shares.(a) On the applicable Exercise Date for an Offering Period, each Participant shall automatically and without anyaction on such Participant’s part be deemed to have exercised his or her Option to purchase at the applicable per shareOption Price the largest number of whole shares of Common Stock which can be purchased with the amount in theParticipant’s Plan Account. Any balance less than the per share Option Price that is remaining in the Participant’s PlanAccount (after exercise of such Participant’s Option) as of the Exercise Date shall be carried forward to the next OfferingPeriod, unless the Participant has elected to withdraw from the Plan pursuant to Section 6.1 hereof or, pursuant to Section6.2 hereof, such Participant has ceased to be an Eligible Employee. Any balance not carried forward to the next OfferingPeriod in accordance with the prior sentence promptly shall be refunded to the applicable Participant. For the avoidance ofdoubt, in no event shall an amount greater than or equal to the per share Option Price as of an Exercise Date be carriedforward to the next Offering Period.(b) As soon as practicable following the applicable Exercise Date, the number of shares of Common Stockpurchased by such Participant pursuant to Section 4.3(a) hereof shall be delivered (either in share certificate or book entryform), in the Company’s sole discretion, to either (i) the Participant or (ii) an account established in the Participant’s name ata stock brokerage or other financial services firm designated by the Company. If the Company is required to obtain from anycommission or agency authority to issue any such shares of Common Stock, the Company shall seek to obtain suchauthority. Inability of the Company to obtain from any such commission or agency authority which counsel for theCompany deems necessary for the lawful issuance of any such shares shall relieve the Company from liability to anyParticipant except to refund to the Participant such Participant’s Plan Account balance, without interest thereon.4.4 Transferability of Rights.(a) An Option granted under the Plan shall not be transferable, other than by will or the applicable laws of descentand distribution, and is exercisable during the Participant’s lifetime only by the Participant. No option or interest or right tothe Option shall be available to pay off any debts, contracts or engagements of the Participant or his or her successors ininterest or shall be subject to disposition by pledge, encumbrance, assignment or any other means whether such dispositionbe voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal orequitable proceedings (including bankruptcy), and any attempt at disposition of the option shall have no effect. 7 Exhibit 10.16ARTICLE V.PROVISIONS RELATING TO COMMON STOCK 5.1 Common Stock Reserved. Subject to adjustment as provided in Section 5.2 hereof, the maximum number of shares ofCommon Stock that shall be made available for sale under the Plan shall be the sum of (a) 208,833 shares of Common Stock and (b)an annual increase on the first day of each year beginning in 2015 and ending in 2024, equal to the lesser of (i) one percent (1%) of theshares of Common Stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) suchnumber of shares of Common Stock as determined by the Board; provided, however, no more than 3,000,000 shares of CommonStock may be issued under the Plan. Shares of Common Stock made available for sale under the Plan may be authorized but unissuedshares, treasury shares of Common Stock, or reacquired shares reserved for issuance under the Plan.5.2 Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.(a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number ofshares of Common Stock which have been authorized for issuance under the Plan but not yet placed under Option, as wellas the price per share and the number of shares of Common Stock covered by each Option under the Plan which has not yetbeen exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of CommonStock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock,or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by theCompany; provided, however, that conversion of any convertible securities of the Company shall not be deemed to havebeen “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determinationin that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company ofshares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment byreason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, theOffering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shallterminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise bythe Administrator. The New Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation.The Administrator shall notify each Participant in writing, at least ten (10) business days prior to the New Exercise Date, thatthe Exercise Date for the Participant’s Option has been changed to the New Exercise Date and that the Participant’s Optionshall be exercised automatically on the New8 Exhibit 10.16Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 6.1hereof.(c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of the Company, orthe merger of the Company with or into another corporation, each outstanding Option shall be assumed or an equivalentOption substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that thesuccessor corporation refuses to assume or substitute for the Option, any Offering Periods then in progress shall be shortenedby setting a New Exercise Date and any Offering Periods then in progress shall end on the New Exercise Date. The NewExercise Date shall be before the date of the Company’s proposed sale or merger. The Administrator shall notify eachParticipant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for theParticipant’s Option has been changed to the New Exercise Date and that the Participant’s Option shall be exercisedautomatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period asprovided in Section 6.1 hereof.5.3 Insufficient Shares. If the Administrator determines that, on a given Exercise Date, the number of shares of CommonStock with respect to which Options are to be exercised may exceed the number of shares of Common Stock remaining available forsale under the Plan on such Exercise Date, the Administrator shall make a pro rata allocation of the shares of Common Stock availablefor issuance on such Exercise Date in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to beequitable among all Participants exercising Options to purchase Common Stock on such Exercise Date, and unless additional sharesare authorized for issuance under the Plan, no further Offering Periods shall take place and the Plan shall terminate pursuant to Section7.5 hereof. If an Offering Period is so terminated, then the balance of the amount credited to the Participant’s Plan Account which hasnot been applied to the purchase of shares of Common Stock shall be paid to such Participant in one lump sum in cash within thirty(30) days after such Exercise Date, without any interest thereon.5.4 Rights as Stockholders. With respect to shares of Common Stock subject to an Option, a Participant shall not be deemedto be a stockholder of the Company and shall not have any of the rights or privileges of a stockholder. A Participant shall have therights and privileges of a stockholder of the Company when, but not until, shares of Common Stock have been deposited in thedesignated brokerage account following exercise of his or her Option. ARTICLE VI.TERMINATION OF PARTICIPATION 6.1 Cessation of Contributions; Voluntary Withdrawal.(a) A Participant may cease payroll deductions during an Offering Period and elect to withdraw from the Plan bydelivering written notice of such election to the9 Exhibit 10.16Company in such form and at such time prior to the Exercise Date for such Offering Period as may be established by theAdministrator (a “Withdrawal Election”). A Participant electing to withdraw from the Plan may elect to either (i) withdrawall of the funds then credited to the Participant’s Plan Account as of the date on which the Withdrawal Election is receivedby the Company, in which case amounts credited to such Plan Account shall be returned to the Participant in one (1) lump-sum payment in cash within thirty (30) days after such election is received by the Company, without any interest thereon,and the Participant shall cease to participate in the Plan and the Participant’s Option for such Offering Period shall terminate;or (ii) exercise the Option for the maximum number of whole shares of Common Stock on the applicable Exercise Date withany remaining Plan Account balance returned to the Participant in one (1) lump-sum payment in cash within thirty (30) daysafter such Exercise Date, without any interest thereon, and after such exercise cease to participate in the Plan. Upon receiptof a Withdrawal Election, the Participant’s payroll deduction authorization and his or her Option to purchase under the Planshall terminate.(b) A participant’s withdrawal from the Plan shall not have any effect upon his or her eligibility to participate inany similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence afterthe termination of the Offering Period from which the Participant withdraws.(c) A Participant who ceases contributions to the Plan during any Offering Period shall not be permitted to resumecontributions to the Plan during that Offering Period.6.2 Termination of Eligibility. Upon a Participant’s ceasing to be an Eligible Employee, for any reason, such Participant’sOption for the applicable Offering Period shall automatically terminate, he or she shall be deemed to have elected to withdraw from thePlan, and such Participant’s Plan Account shall be paid to such Participant or, in the case of his or her death, to the person or personsentitled thereto pursuant to applicable law, within thirty (30) days after such cessation of being an Eligible Employee, without anyinterest thereon. ARTICLE VII.GENERAL PROVISIONS 7.1 Administration.(a) The Plan shall be administered by the Committee, which shall be composed of members of the Board. TheCommittee may delegate administrative tasks under the Plan to the services of an Agent and/or Employees to assist in theadministration of the Plan, including establishing and maintaining an individual securities account under the Plan for eachParticipant.(b) It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance withthe provisions of the Plan. The Administrator shall have the power, subject to, and within the limitations of, the expressprovisions of the Plan:10 Exhibit 10.16(i) To establish Offering Periods;(ii) To determine when and how Options shall be granted and the provisions and terms of eachOffering Period (which need not be identical);(iii) To select Designated Subsidiaries in accordance with Section 7.2 hereof; and(iv) To construe and interpret the Plan, the terms of any Offering Period and the terms of theOptions and to adopt such rules for the administration, interpretation, and application of the Plan as are consistenttherewith and to interpret, amend or revoke any such rules. The Administrator, in the exercise of this power, maycorrect any defect, omission or inconsistency in the Plan, any Offering Period or any Option, in a manner and tothe extent it shall deem necessary or expedient to make the Plan fully effect, subject to Section 423 of the Codeand the Treasury Regulations thereunder. (c) The Administrator may adopt rules or procedures relating to the operation and administration of the Plan toaccommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, theAdministrator is specifically authorized to adopt rules and procedures regarding handling of participation elections, payrolldeductions, payment of interest, conversion of local currency, payroll tax, withholding procedures and handling of stockcertificates which vary with local requirements. In its absolute discretion, the Board may at any time and from time to timeexercise any and all rights and duties of the Administrator under the Plan.(d) The Administrator may adopt sub-plans applicable to particular Designated Subsidiaries or locations, whichsub-plans may be designed to be outside the scope of Section 423 of the Code. The rules of such sub-plans may takeprecedence over other provisions of this Plan, with the exception of Section 5.1 hereof, but unless otherwise superseded bythe terms of such sub-plan, the provisions of this Plan shall govern the operation of such sub-plan.(e) All expenses and liabilities incurred by the Administrator in connection with the administration of the Planshall be borne by the Company. The Administrator may, with the approval of the Committee, employ attorneys, consultants,accountants, appraisers, brokers or other persons. The Administrator, the Company and its officers and directors shall beentitled to rely upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations anddeterminations made by the Administrator in good faith shall be final and binding upon all Participants, the Company and allother interested persons. No member of the Board or Administrator shall be personally liable for any action, determination orinterpretation made in good faith with respect to the Plan or the options, and all members of the Board or Administrator shallbe fully protected by the Company in respect to any such action, determination, or interpretation.7.2 Designation of Subsidiary Corporations. The Board or Committee shall designate from among the Subsidiaries, asdetermined from time to time, the Subsidiary or Subsidiaries that shall constitute Designated Subsidiaries. The Board or Committeemay designate a11 Exhibit 10.16Subsidiary, or terminate the designation of a Subsidiary, without the approval of the stockholders of the Company.7.3 Reports. Individual accounts shall be maintained for each Participant in the Plan. Statements of Plan Accounts shall begiven to Participants at least annually, which statements shall set forth the amounts of payroll deductions, the Option Price, the numberof shares purchased and the remaining cash balance, if any.7.4 No Right to Employment. Nothing in the Plan shall be construed to give any person (including any Participant) the rightto remain in the employ of the Company, a Parent or a Subsidiary or to affect the right of the Company, any Parent or any Subsidiaryto terminate the employment of any person (including any Participant) at any time, with or without cause, which right is expresslyreserved.7.5 Amendment and Termination of the Plan.(a) The Board may, in its sole discretion, amend, suspend or terminate the Plan at any time and from time to time;provided, however, that without approval of the Company’s stockholders given within twelve (12) months before or afteraction by the Board, the Plan may not be amended to increase the maximum number of shares of Common Stock subject tothe Plan or change the designation or class of Eligible Employees; and provided, further that without approval of theCompany’s stockholders, the Plan may not be amended in any manner that would cause the Plan to no longer be an“employee stock purchase plan” within the meaning of Section 423(b) of the Code.(b) In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorablefinancial accounting consequences, the Administrator may, to the extent permitted under Section 423 of the Code, in itsdiscretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accountingconsequence including, but not limited to:(i) altering the Option Price for any Offering Period including an Offering Period underway atthe time of the change in Option Price;(ii) shortening any Offering Period so that the Offering Period ends on a new Exercise Date,including an Offering Period underway at the time of the Administrator action; and(iii) allocating shares of Common Stock. Such modifications or amendments shall not require stockholder approval or consent of any Participant.(c) Upon termination of the Plan, the balance in each Participant’s Plan Account shall be refunded as soon aspracticable after such termination, without any interest thereon.7.6 Use of Funds; No Interest Paid. All funds received by the Company by reason of purchase of Common Stock under thePlan shall be included in the general funds of the12 Exhibit 10.16Company free of any trust or other restriction and may be used for any corporate purpose. No interest shall be paid to any Participantor credited under the Plan.7.7 Term; Approval by Stockholders. No Option may be granted during any period of suspension of the Plan or aftertermination of the Plan. The Plan shall be submitted for the approval of the Company’s stockholders within twelve (12) months afterthe date of the Board’s initial adoption of the Plan. Options may be granted prior to such stockholder approval; provided, however, thatsuch Options shall not be exercisable prior to the time when the Plan is approved by the stockholders; provided, further that if suchapproval has not been obtained by the end of said twelve (12)-month period, all Options previously granted under the Plan shallthereupon terminate and be canceled and become null and void without being exercised.7.8 Effect Upon Other Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effectfor the Company, any Parent or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company, any Parent orany Subsidiary (a) to establish any other forms of incentives or compensation for Employees of the Company or any Parent or anySubsidiary, or (b) to grant or assume Options otherwise than under the Plan in connection with any proper corporate purpose,including, but not by way of limitation, the grant or assumption of options in connection with the acquisition, by purchase, lease,merger, consolidation or otherwise, of the business, stock or assets of any corporation, firm or association.7.9 Conformity to Securities Laws. Notwithstanding any other provision of the Plan, the Plan and the participation in thePlan by any individual who is then subject to Section 16 of the Exchange Act shall be subject to any additional limitations set forth inany applicable exemption rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act)that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan shall be deemedamended to the extent necessary to conform to such applicable exemptive rule.7.10 Notice of Disposition of Shares. Each Participant shall give the Company prompt notice of any disposition or othertransfer of any shares of Common Stock, acquired pursuant to the exercise of an Option, if such disposition or transfer is made (a)within two (2) years after the applicable Grant Date or (b) within one (1) year after the transfer of such shares of Common Stock tosuch Participant upon exercise of such Option. The Company may direct that any certificates evidencing shares acquired pursuant tothe Plan refer to such requirement.7.11 Tax Withholding. The Company or any Parent or any Subsidiary shall be entitled to require payment in cash ordeduction from other compensation payable to each Participant of any sums required by federal, state or local tax law to be withheldwith respect to any purchase of shares of Common Stock under the Plan or any sale of such shares.7.12 Governing Law. The Plan and all rights and obligations thereunder shall be construed and enforced in accordance withthe laws of the State of Delaware.13 Exhibit 10.167.13 Notices. All notices or other communications by a participant to the Company under or in connection with the Planshall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person,designated by the Company for the receipt thereof.7.14 Conditions To Issuance of Shares.(a) Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver anycertificates or make any book entries evidencing shares of Common Stock pursuant to the exercise of an Option by aParticipant, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of suchshares of Common Stock is in compliance with all applicable laws, regulations of governmental authorities and, ifapplicable, the requirements of any securities exchange or automated quotation system on which the shares of CommonStock are listed or traded, and the shares of Common Stock are covered by an effective registration statement or applicableexemption from registration. In addition to the terms and conditions provided herein, the Board or the Committee mayrequire that a Participant make such reasonable covenants, agreements, and representations as the Board or the Committee,in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements.(b) All certificates for shares of Common Stock delivered pursuant to the Plan and all shares of Common Stockissued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Committeedeems necessary or advisable to comply with federal, state, or foreign securities or other laws, rules and regulations and therules of any securities exchange or automated quotation system on which the shares of Common Stock are listed, quoted, ortraded. The Committee may place legends on any certificate or book entry evidencing shares of Common Stock to referencerestrictions applicable to the shares of Common Stock.(c) The Committee shall have the right to require any Participant to comply with any timing or other restrictionswith respect to the settlement, distribution or exercise of any Option, including a window-period limitation, as may beimposed in the sole discretion of the Committee.(d) Notwithstanding any other provision of the Plan, unless otherwise determined by the Committee or required byany applicable law, rule or regulation, the Company may, in lieu of delivering to any Participant certificates evidencingshares of Common Stock issued in connection with any Option, record the issuance of shares of Common Stock in thebooks of the Company (or, as applicable, its transfer agent or stock plan administrator).7.15 Equal Rights and Privileges. Except with respect to sub-plans designed to be outside the scope of Section 423 of theCode, all Eligible Employees of the Company (or of any Designated Subsidiary) shall have equal rights and privileges under this Planto the extent required under Section 423 of the Code or the regulations promulgated thereunder so that this14 Exhibit 10.16Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 of the Code or the Treasury Regulationsthereunder. Any provision of this Plan that is inconsistent with Section 423 of the Code or the Treasury Regulations thereunder shall,without further act or amendment by the Company or the Board, be reformed to comply with the equal rights and privilegesrequirement of Section 423 of the Code or the Treasury Regulations thereunder.****** 15 1035 O’Brien Drive, Menlo Park, CA 94025Tel +1-650-272-6269 Exhibit 10.32 AMENDMENT TOCHANGE IN CONTROL AND SEVERANCE AGREEMENT This Amendment (the “Amendment”) to that certain Change in Control and Severance Agreement, dated as of November 5, 2014 (the “Severance Agreement”), by and between Mehdi Gasmi, Ph.D. (“Executive”) andAvalanche Biotechnologies, Inc. (the “Company”) is made as of August 21, 2015 (the “Amendment Effective Date”). Any capitalizedterm not defined in this Amendment shall have the meaning set forth in the Severance Agreement. WHEREAS, the Company desires to modify the Severance Agreement to motivate Executive to workcooperatively through the leadership transition at the Company..NOW, THEREFORE, in consideration of the mutual agreements set forth herein, and for other good and valuableconsideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Limited Severance Enhancements. If Executive experiences a Covered Termination pursuant to Section 3 ofthe Severance Agreement prior to the second anniversary of the Amendment Effective Date, (i) the reference to “nine (9) months” in Section 3(a) of the Severance Agreement shall be replaced with “twelve(12) months” and (ii) if Executive delivers to the Company a Release of Claims, then in addition to the benefits provided in clauses(a) and (b) of Section 3 of the Severance Agreement, each outstanding equity award, including, without limitation, each stock optionand restricted stock unit award, granted on or prior to August 21, 2015 and held by Executive shall automatically become vestedand, if applicable, exercisable and any forfeiture restrictions or rights of repurchase thereon shall immediately lapse, in each case,with respect to that number of shares that would have vested and if, applicable, become exercisable in the twelve (12) monthsimmediately following Executive’s Covered Termination had Executive’s employment continued during such twelve (12)-monthperiod (the benefits in (i) and (ii), collectively, the “Limited Severance Enhancements”). For the avoidance of doubt, if Executiveexperiences a Covered Termination pursuant to Section 3 of the Severance Agreement on or after the second anniversary of theAmendment Effective Date, Executive shall not be entitled to the Limited Severance Enhancements. 2. Executive acknowledges and agrees that in connection with the employment of a permanent Chief ScientificOfficer of the Company, Executive shall be returned to his position of Senior Vice President, Manufacturing and that the assignmentof duties therewith shall not be deemed a material reduction in Executive’s duties (as compared to his duties as interim ChiefScientific Officer) for purposes of determining whether Executive has experienced a Constructive Termination pursuant to Sections 3or 4 of the Severance Agreement. 3.Governing Law.The validity, interpretation, construction andperformance of thisAgreement shall be governed by the laws of the State of California. 4. Executive’s Successors. The terms of this Amendment and all rights of Executive hereunder shall inure tothe benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs,distributees, devisees and legatees. 5. No Other Changes. Except as expressly set forth herein, all of the provisions of the Severance Agreementshall remain unchanged and in full force and effect. After the date hereof, any reference to the Severance Agreement shall mean theSeverance Agreement as amended or modified hereby. 6. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed anoriginal, but all of which together will constitute one and the same instrument. [Signature page follows.] 27819951.12 IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first above written. AVALANCHE BIOTECHNOLOGIES, INC. By:/s/ Hans Hull Name: Hans P. HullTitle: Chief Executive Officer and President MEHDI GASMI, PH.D./s/ Mehdi Gasmi27819951.13 Exhibit 10.34ADVERUM BIOTECHNOLOGIES, INC.2017 INDUCEMENT PLANADOPTED BY THE BOARD OF DIRECTORS: OCTOBER 6, 2017AMENDED FEBRUARY 14, 2019 1.GENERAL.(a)Eligible Award Recipients. The only persons eligible to receive grants of Awards under this Plan are individualswho satisfy the standards for inducement grants under NASDAQ Marketplace Rule 5635(c)(4) or 5635(c)(3), if applicable,and the related guidance under NASDAQ IM 5635-1. A person who previously served as an Employee or Director will notbe eligible to receive Awards under the Plan, other than following a bona fide period of non-employment. Persons eligible toreceive grants of Awards under this Plan are referred to in this Plan as “Eligible Employees.” These Awards must beapproved by either a majority of the Company’s “Independent Directors” (as such term is defined in NASDAQMarketplace Rule 5605(a)(2)) or the Company’s compensation committee, provided such committee comprises solelyIndependent Directors (the “Independent Compensation Committee”) in order to comply with the exemption from thestockholder approval requirement for “inducement grants” provided under Rule 5635(c)(4) of the NASDAQ MarketplaceRules. NASDAQ Marketplace Rule 5635(c)(4) and the related guidance under NASDAQ IM 5635-1 (and any analogousrules or guidance effective after the date hereof) are referred to in this Plan as the “Inducement Award Rules.”(b)AVAILABLE AWARDS. The Plan provides for the grant of Options and Restricted Stock Unit Awards. All Optionsshall be Nonstatutory Stock Options. Awards intended to qualify as stockholder-approved performance based compensationfor purposes of Section 162(m) of the Code may not be granted under this Plan.(c)Purpose. This Plan, through the granting of Awards, is intended to provide (i) an inducement material for certainindividuals to enter into employment with the Company within the meaning of Rule 5635(c)(4) of the NASDAQMarketplace Rules, (ii) incentives for such persons to exert maximum efforts for the success of the Company and anyAffiliate and (iii) a means by which Eligible Employees may be given an opportunity to benefit from increases in value ofthe Common Stock through the granting of Awards.2.ADMINISTRATION.(a)ADMINISTRATION BY BOARD. The Board will administer the Plan; provided, however, that Awards may only begranted by either (i) a majority of the Company’s Independent Directors or (ii) the Independent Compensation Committee.Subject to those constraints and the other constraints of the Inducement Award Rules, the Board may delegate some of itspowers of administration of the Plan to a Committee, as provided in Section 2(c).(b)Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisionsof the Plan and the Inducement Award Rules:1.Exhibit 10.34(i)To determine: (A) who will be granted Awards; (B) when and how each Award will begranted; (C) what type of Award will be granted; (D) the provisions of each Award (which need not be identical), including when aperson will be permitted to exercise or otherwise receive cash or Common Stock under the Award; (E) the number of shares ofCommon Stock subject to, or the cash value of, an Award; and (F) the Fair Market Value applicable to an Award; provided, however,that Awards may only be granted by either (i) a majority of the Company’s Independent Directors or (ii) the IndependentCompensation Committee.(ii)To construe and interpret the Plan and Awards granted under it, and to establish, amendand revoke rules and regulations for administration of the Plan and Awards. The Board, in the exercise of these powers, may correctany defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it will deem necessary orexpedient to make the Plan or Award fully effective.(iii)To settle all controversies regarding the Plan and Awards granted under it.(iv)To accelerate, in whole or in part, the time at which an Award may be exercised or vest(or at which cash or shares of Common Stock may be issued).(v)To suspend or terminate the Plan at any time. Except as otherwise provided in the Planor an Award Agreement, suspension or termination of the Plan will not materially impair a Participant’s rights under his or her then-outstanding Award without his or her written consent.(vi)To amend the Plan in any respect the Board deems necessary or advisable, including,without limitation, by adopting amendments relating to nonqualified deferred compensation under Section 409A of the Code and/or tobring the Plan or Awards granted under the Plan into compliance therewith, subject to the limitations, if any, of applicable law. Exceptas provided in Section 9(a) relating to Capitalization Adjustments, if required by applicable law or listing requirements, the Companyshall seek stockholder approval for any amendment of the Plan. Except as provided above, rights under any Award granted beforeamendment of the Plan shall not be impaired by any amendment of the Plan unless (1) the Company requests the consent of theaffected Participant, and (2) such Participant consents in writing.(vii)To submit any amendment to the Plan for stockholder approval, including, but notlimited to, amendments to the Plan intended to satisfy the requirements of Rule 16b-3 of Exchange Act or any successor rule.(viii)To approve forms of Award Agreements for use under the Plan and to amend theterms of any one or more outstanding Awards. Except as otherwise provided in the Plan or an Award Agreement, no amendment ofan outstanding Award will materially impair that Participant’s rights under his or her outstanding Award without his or her writtenconsent. To be clear, unless prohibited by applicable law, the Board may amend the terms of an Award without the affectedParticipant’s consent if necessary (A) to clarify the manner of exemption from, or to bring the Award into compliance with, Section409A of the Code, or (C) to comply with other applicable laws or listing requirements.2.Exhibit 10.34(ix)Generally, to exercise such powers and to perform such acts as the Board deemsnecessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan orAwards.(x)To adopt such procedures and sub-plans as are necessary or appropriate to permitparticipation in the Plan by individuals who are foreign nationals or employed outside the United States.(c)DELEGATION TO COMMITTEE. The Board may delegate some or all of the administration of the Plan to a Committeeor Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with theadministration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee,including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee isauthorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee). Anydelegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adoptedfrom time to time by the Board or Committee (as applicable). The Board may retain the authority to concurrently administerthe Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.(d)EFFECT OF BOARD’S DECISION. All determinations, interpretations and constructions made by the Board in good faithwill not be subject to review by any person and will be final, binding and conclusive on all persons.(e)REPRICING; CANCELLATION AND RE-GRANT OF AWARDS. Neither the Board nor any Committee will have theauthority to: (i) reduce the exercise, purchase or strike price of any outstanding Option, or (ii) cancel any outstanding Optionthat has an exercise price or strike price greater than the current Fair Market Value of the Common Stock in exchange forcash or other Awards under the Plan, unless the stockholders of the Company have approved such an action within twelve(12) months prior to such an event.3.SHARES SUBJECT TO THE PLAN.(a)SHARE RESERVE. Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares ofCommon Stock that may be issued pursuant to Awards from and after the Effective Date shall not exceed 1,500,000shares. Shares may be issued under the terms of this Plan in connection with a merger or acquisition as permitted byNASDAQ Marketplace Rule 5635(c)(3), NYSE Listed Company Manual Section 303A.08, AMEX Company GuideSection 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under thePlan. (b)REVERSION OF SHARES TO THE SHARE RESERVE. If an Award or any portion thereof (i) expires or otherwise terminateswithout all of the shares covered by such Award having been issued or (ii) is settled in cash (i.e., the Participant receivescash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of sharesof Common Stock that may be available for issuance under the Plan. If any shares of Common Stock issued pursuant to anAward are forfeited back to or repurchased by the Company because of the failure3.Exhibit 10.34to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeitedor repurchased will revert to and again become available for issuance under the Plan. Any shares reacquired by theCompany in satisfaction of tax withholding obligations on an Award or as consideration for the exercise or purchase price ofan Award will again become available for issuance under the Plan.(c)SOURCE OF SHARES. The stock issuable under the Plan will be shares of authorized but unissued or reacquiredCommon Stock, including shares repurchased by the Company on the open market or otherwise.4.ELIGIBILITY.(a)Eligibility for Awards. Awards may only be granted to persons who are Eligible Employees described in Section1(a) of the Plan, where the Award is an inducement material to the individual’s entering into employment with the Companyor an Affiliate within the meaning of Rule 5635(c)(4) of the NASDAQ Marketplace Rules or is otherwise permittedpursuant to Rule 5635(c) of the NASDAQ Marketplace Rules, provided however, that Awards may not be granted toEligible Employees who are providing Continuous Service only to any “parent” of the Company, as such term is defined inRule 405 of the Securities Act, unless (i) the stock underlying such Awards is treated as “service recipient stock” underSection 409A of the Code (for example, because the Awards are granted pursuant to a corporate transaction such as a spinoff transaction), or (ii) the Company, in consultation with its legal counsel, has determined that such Awards are otherwiseexempt from or comply with the distribution requirements of Section 409A of the Code.(b)APPROVAL REQUIREMENTS. All Awards must be granted either by a majority of the Company’s independentdirectors or the Independent Compensation Committee.5.PROVISIONS RELATING TO OPTIONS.Each Option will be in such form and will contain such terms and conditions as the Board deems appropriate. All Optionswill be Nonstatutory Stock Options. The provisions of separate Options need not be identical; provided, however, that each OptionAgreement will conform to (through incorporation of provisions hereof by reference in the applicable Option Agreement or otherwise)the substance of each of the following provisions:(a)Term. No Option will be exercisable after the expiration of 10 years from the date of its grant or such shorterperiod specified in the Option Agreement.(b)Exercise Price. The exercise or strike price of each Option will be not less than 100% of the Fair Market Value ofthe Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option maybe granted with an exercise price lower than 100% of the Fair Market Value of the Common Stock subject to the Option ifsuch Option is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant toa Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code.(c)PURCHASE PRICE FOR OPTIONS. The purchase price of Common Stock acquired pursuant to the exercise of anOption may be paid, to the extent permitted by applicable law and4.Exhibit 10.34as determined by the Board in its sole discretion, by any combination of the methods of payment set forthbelow. The Board will have the authority to grant Options that do not permit all of the following methods of payment (orotherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use aparticular method of payment. The permitted methods of payment are as follows:(i)by cash, check, bank draft or money order payable to the Company;(ii)pursuant to a program developed under Regulation T as promulgated by the FederalReserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by theCompany or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;(iii)by delivery to the Company (either by actual delivery or attestation) of shares ofCommon Stock;(iv)by a “net exercise” arrangement pursuant to which the Company will reduce thenumber of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that doesnot exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other payment from the Participantto the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares tobe issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A)shares issuable upon exercise are reduced to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to theParticipant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or(v)in any other form of legal consideration that may be acceptable to the Board andspecified in the applicable Award Agreement.(d)Transferability of Options. The Board may, in its sole discretion, impose such limitations on the transferability ofOptions as the Board will determine. In the absence of such a determination by the Board to the contrary, the followingrestrictions on the transferability of Options will apply:(i)RESTRICTIONS ON TRANSFER. An Option will not be transferable except by will or by thelaws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of theParticipant only by the Participant. The Board may permit transfer of the Option in a manner that is not prohibited by applicable taxand securities laws. Except as explicitly provided herein, an Option may not be transferred for consideration.(ii)DOMESTIC RELATIONS ORDERS. Subject to the approval of the Board or a duly authorizedOfficer, an Option may be transferred pursuant to the terms of a domestic relations order or official marital settlement agreement orother divorce or separation instrument.(iii)BENEFICIARY DESIGNATION. Subject to the approval of the Board or a duly authorizedOfficer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designatedbroker), designate a third party who, on the death of5.Exhibit 10.34the Participant, will thereafter be entitled to exercise the Option and receive the Common Stock or other consideration resulting fromsuch exercise. In the absence of such a designation, the executor or administrator of the Participant’s estate will be entitled to exercisethe Option and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibitdesignation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistentwith the provisions of applicable laws.(e)VESTING GENERALLY. The total number of shares of Common Stock subject to an Option may vest and thereforebecome exercisable in periodic installments that may or may not be equal. The Option may be subject to such other termsand conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction ofPerformance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options mayvary. The provisions of this Section are subject to any Option provisions governing the minimum number of shares ofCommon Stock as to which an Option may be exercised.(f)TERMINATION OF CONTINUOUS SERVICE. Except as otherwise provided in the applicable Award Agreement or otheragreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Causeand other than upon the Participant’s death or Disability), the Participant may exercise his or her Option (to the extent thatthe Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period oftime ending on the earlier of (i) the date three months following the termination of the Participant’s Continuous Service and(ii) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination of Continuous Service,the Participant does not exercise his or her Option within the applicable time frame, the Option will terminate.(g)EXTENSION OF TERMINATION DATE. If the exercise of an Option following the termination of the Participant’sContinuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited atany time solely because the issuance of shares of Common Stock would violate the registration requirements under theSecurities Act, then the Option will terminate on the earlier of (i) the expiration of a total period of three months (that neednot be consecutive) after the termination of the Participant’s Continuous Service during which the exercise of the Optionwould not be in violation of such registration requirements, and (ii) the expiration of the term of the Option as set forth in theapplicable Award Agreement. In addition, unless otherwise provided in a Participant’s Award Agreement, if the sale of anyCommon Stock received on exercise of an Option following the termination of the Participant’s Continuous Service (otherthan for Cause) would violate the Company’s insider trading policy, then the Option will terminate on the earlier of (i) theexpiration of a period of months (that need not be consecutive) equal to the applicable post-termination exercise period afterthe termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exerciseof the Option would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of theOption as set forth in the applicable Award Agreement.(h)DISABILITY OF PARTICIPANT. Except as otherwise provided in the applicable Award Agreement or other agreementbetween the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’sDisability, the Participant may exercise his or her Option (to the extent that the Participant was entitled to exercise suchOption as of the date of termination of Continuous Service), but only within such period of time ending6.Exhibit 10.34on the earlier of (i) the date 12 months following such termination of Continuous Service and (ii) the expiration ofthe term of the Option as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant doesnot exercise his or her Option within the applicable time frame, the Option (as applicable) will terminate.(i)DEATH OF PARTICIPANT. Except as otherwise provided in the applicable Award Agreement or other agreementbetween the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’sdeath, or (ii) the Participant dies within the period (if any) specified in the Award Agreement for exercisability after thetermination of the Participant’s Continuous Service for a reason other than death, then the Option may be exercised (to theextent the Participant was entitled to exercise such Option as of the date of death) by the Participant’s estate, by a personwho acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Optionupon the Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date ofdeath and (ii) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Participant’s death,the Option is not exercised within the applicable time frame, the Option will terminate.(j)TERMINATION FOR CAUSE. Except as explicitly provided otherwise in a Participant’s Award Agreement, if aParticipant’s Continuous Service is terminated for Cause, the Option will terminate upon the date on which the event givingrise to the termination for Cause first occurred, and the Participant will be prohibited from exercising his or her Option fromand after the date on which the event giving rise to the termination for Cause first occurred (or, if required by law, the date oftermination of Continuous Service).(k)Non-Exempt Employees. If an Option is granted to an Employee who is a non-exempt employee for purposes ofthe Fair Labor Standards Act of 1938, as amended, the Option will not be first exercisable for any shares of Common Stockuntil at least six (6) months following the date of grant of the Option (although the Award may vest prior to such date).Consistent with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers aDisability, (ii) upon a Corporate Transaction in which such Option is not assumed, continued, or substituted, (iii) upon aChange in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s AwardAgreement in another agreement between the Participant and the Company, or, if no such definition, in accordance with theCompany’s then current employment policies and guidelines), the vested portion of any Options may be exercised earlierthan six months following the date of grant. The foregoing provision is intended to operate so that any income derived by anon-exempt employee in connection with the exercise or vesting of an Option will be exempt from his or her regular rate ofpay. To the extent permitted and/or required for compliance with the Worker Economic Opportunity Act to ensure that anyincome derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under anyother Award will be exempt from the employee’s regular rate of pay, the provisions of this Section will apply to all Awardsand are hereby incorporated by reference into such Award Agreements.7.Exhibit 10.346.PROVISIONS RELATING TO RESTRICTED STOCK UNIT AWARDS.Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Boardwill deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and theterms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock Unit AwardAgreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substanceof each of the following provisions:(a)Consideration. At the time of grant of a Restricted Stock Unit Award, the Board willdetermine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to theRestricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to aRestricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion,and permissible under applicable law.(b)VESTING. At the time of the grant of a Restricted Stock Unit Award, the Board may imposesuch restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.(c)Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of CommonStock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and containedin the Restricted Stock Unit Award Agreement.(d)Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board,as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or theircash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.(e)DIVIDEND EQUIVALENTS. Dividend equivalents may be credited in respect of shares of CommonStock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit AwardAgreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stockcovered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by theRestricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions ofthe underlying Restricted Stock Unit Award Agreement to which they relate.(f)TERMINATION OF PARTICIPANT’S CONTINUOUS SERVICE. Except as otherwise provided in theapplicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will beforfeited upon the Participant’s termination of Continuous Service.7.COVENANTS OF THE COMPANY.(a)AVAILABILITY OF SHARES. The Company will keep available at all times the number of shares of Common Stockreasonably required to satisfy then-outstanding Awards.8.Exhibit 10.34(b)SECURITIES LAW COMPLIANCE. The Company will seek to obtain from each regulatory commission or agencyhaving jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of CommonStock upon exercise of the Awards; provided, however, that this undertaking will not require the Company to register underthe Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, afterreasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agencythe authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under thePlan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of suchAwards unless and until such authority is obtained. A Participant will not be eligible for the grant of an Award or thesubsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of anyapplicable securities law.(c)NO OBLIGATION TO NOTIFY OR MINIMIZE TAXES. The Company will have no duty or obligation to any Participant toadvise such holder as to the time or manner of exercising such Award. Furthermore, the Company will have no duty orobligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible periodin which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of anAward to the holder of such Award.8.MISCELLANEOUS.(a)USE OF PROCEEDS FROM SALES OF COMMON STOCK. Proceeds from the sale of shares of Common Stock pursuant toAwards will constitute general funds of the Company.(b)CORPORATE ACTION CONSTITUTING GRANT OF AWARDS. Corporate action constituting a grant by the Company of anAward to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined bythe Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actuallyreceived or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes)documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number ofshares) that are inconsistent with those in the Award Agreement as a result of a clerical error in the papering of the AwardAgreement, the corporate records will control and the Participant will have no legally binding right to the incorrect term inthe Award Agreement. (c)STOCKHOLDER RIGHTS. No Participant will be deemed to be the holder of, or to have any of the rights of a holderwith respect to, any shares of Common Stock subject to an Award unless and until (i) such Participant has satisfied allrequirements for exercise of, or the issuance of shares under, the Award pursuant to its terms, and (ii) the issuance of theCommon Stock subject to such Award has been entered into the books and records of the Company.(d)NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan, any Award Agreement or any other instrumentexecuted thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right tocontinue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or will affect theright of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice9.Exhibit 10.34and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreementwith the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate,and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as thecase may be.(e)CHANGE IN TIME COMMITMENT. In the event a Participant’s regular level of time commitment in the performanceof his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant isan Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee)after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (x) make acorresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled tovest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such areduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, theParticipant will have no right with respect to any portion of the Award that is so reduced.(f)INVESTMENT ASSURANCES. The Company may require a Participant, as a condition of exercising or acquiringCommon Stock under any Award, (i) to give written assurances satisfactory to the Company as to the Participant’sknowledge and experience in financial and business matters and/or to employ a purchaser representative reasonablysatisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she iscapable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Award; and(ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject tothe Award for the Participant’s own account and not with any present intention of selling or otherwise distributing theCommon Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if(A) the issuance of the shares upon the exercise or acquisition of Common Stock under the Award has been registered undera then currently effective registration statement under the Securities Act, or (B) as to any particular requirement, adetermination is made by counsel for the Company that such requirement need not be met in the circumstances under thethen applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stockcertificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicablesecurities laws, including, but not limited to, legends restricting the transfer of the Common Stock.(g)Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its solediscretion, satisfy any federal, state or local tax withholding obligation relating to an Award by any of the following meansor by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of CommonStock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award;provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of taxrequired to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Award as a liabilityfor financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from anyamounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.10.Exhibit 10.34(h)ELECTRONIC DELIVERY. Any reference herein to a “written” agreement or document will include any agreement ordocument delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on theCompany’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).(i)Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that thedelivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Awardmay be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals byParticipants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, theBoard may provide for distributions while a Participant is still an employee or otherwise providing services to theCompany. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages,Participants may receive payments, including lump sum payments, following the Participant’s termination of ContinuousService, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance withapplicable law.(j)COMPLIANCE WITH SECTION 409A. Unless otherwise expressly provided for in an Award Agreement, the Plan andAward Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awardsgranted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section409A of the Code. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject toSection 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditionsnecessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement issilent on terms necessary for compliance, such terms are hereby incorporated by reference into the AwardAgreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically providesotherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes“deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of theCode, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six (6)months following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death,unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and anyamounts so deferred will be paid in a lump sum on the day after such six (6) month period elapses, with the balance paidthereafter on the original schedule. (k)Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with anyclawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchangeor association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall StreetReform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback,recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including butnot limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property uponthe occurrence of Cause.11.Exhibit 10.349.ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.(a)CAPITALIZATION ADJUSTMENTS. In the event of a Capitalization Adjustment, the Board will appropriately andproportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a); and(ii) the class(es) and number of securities and price per share of stock subject to outstanding Awards. The Board will makesuch adjustments, and its determination will be final, binding and conclusive.(b)Dissolution or Liquidation. Except as otherwise provided in the Award Agreement, in the event of a dissolutionor liquidation of the Company, all outstanding Awards (other than Awards consisting of vested and outstanding shares ofCommon Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately priorto the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchaserights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that theholder of such Award is providing Continuous Service; provided, however, that the Board may, in its sole discretion, causesome or all Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extentsuch Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent onits completion.(c)Corporate Transaction. The following provisions will apply to Awards in the event of a Corporate Transactionunless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company orany Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award. Inthe event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board will take one or moreof the following actions with respect to Awards, contingent upon the closing or completion of the Corporate Transaction:(i)arrange for the surviving corporation or acquiring corporation (or the surviving oracquiring corporation’s parent company) to assume or continue the Award or to substitute a similar award for the Award (including,but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the CorporateTransaction);(ii)arrange for the assignment of any reacquisition or repurchase rights held by theCompany in respect of Common Stock issued pursuant to the Award to the surviving corporation or acquiring corporation (or thesurviving or acquiring corporation’s parent company);(iii)accelerate the vesting, in whole or in part, of the Award (and, if applicable, the time atwhich the Award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board will determine (or,if the Board will not determine such a date, to the date that is five days prior to the effective date of the Corporate Transaction), withsuch Award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction;(iv)arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights heldby the Company with respect to the Award;12.Exhibit 10.34(v)cancel or arrange for the cancellation of the Award, to the extent not vested or notexercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration, if any, as the Board, in itssole discretion, may consider appropriate; and(vi)make a payment, in such form as may be determined by the Board equal to the excess,if any, of (A) the value of the property the Participant would have received upon the exercise of the Award immediately prior to theeffective time of the Corporate Transaction, over (B) any exercise price payable by such holder in connection with such exercise. Forclarity, this payment may be zero ($) if the value of the property is equal to or less than the exercise price. Payments under thisprovision may be delayed to the same extent that payment of consideration to the holders of the Company’s Common Stock inconnection with the Corporate Transaction is delayed as a result of escrows, earn-outs, holdbacks or any other contingencies.The Board need not take the same action or actions with respect to all Awards or portions thereof or with respect to allParticipants.(d)CHANGE IN CONTROL. In the event of a Change in Control, the Board shall have the discretion to take any one ormore of the actions set forth in Section 9(c)(i)-(vi) with respect to Awards, contingent upon the closing or completion of theChange in Control; provided, however, that for such purpose, the term “Corporate Transaction” in Section 9(c)(i)-(vi) willmean “Change In Control.” An Award may be subject to additional acceleration of vesting and exercisability upon or after aChange in Control as may be provided in the Award Agreement for such Award or as may be provided in any other writtenagreement between the Company or any Affiliate and the Participant.10.TERMINATION OR SUSPENSION OF THE PLAN.The Board may suspend or terminate the Plan at any time. No Awards may be granted under the Plan while the Plan issuspended or after it is terminated.11.EFFECTIVE DATE OF THE PLAN.The Plan will come into existence on the Effective Date. No Award may be granted prior to the Effective Date.12.CHOICE OF LAW.The law of the State of Delaware will govern all questions concerning the construction, validity and interpretation of thisPlan, without regard to that state’s conflict of laws rules.13.DEFINITIONS. As used in the Plan, the following definitions will apply to the capitalized terms indicated below:(a)“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms aredefined in Rule 405 of the Securities Act. The Board will have the authority to determine the time or times at which“parent” or “subsidiary” status is determined within the foregoing definition.13.Exhibit 10.34(b)“Award” means a Nonstatutory Stock Option or a Restricted Stock Unit Award.(c)“Award Agreement” means a written agreement between the Company and a Participant evidencing the terms andconditions of an Award.(d)“Board” means the Board of Directors of the Company.(e)“Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, theCommon Stock subject to the Plan or subject to any Award after the Effective Date without the receipt of consideration bythe Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend inproperty other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares,exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used inStatement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successorthereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be treated asa Capitalization Adjustment.(f)“Cause” shall have the meaning ascribed to such term in any written agreement between the Participant and theCompany defining such term (and if there are multiple such agreements, the most recent) and, in the absence of suchagreement, such term means, with respect to a Participant, the occurrence of any of the following events: [(i) the Participant’scommission of any crime involving fraud, dishonesty or moral turpitude; (ii) the Participant’s attempted commission of orparticipation in a fraud or act of dishonesty against the Company that results in (or might have reasonably resulted in)material harm to the business of the Company; (iii) the Participant’s intentional, material violation of any contract oragreement between the Participant and the Company or any statutory duty that the Participant owes to the Company; or (iv)the Participant’s conduct that constitutes gross insubordination, incompetence or habitual neglect of duties and that results in(or might have reasonably resulted in) material harm to the business of the Company; provided, however, that the action orconduct described in clauses (iii) and (iv) above will constitute “Cause” only if such action or conduct continues after theCompany has provided the Participant with written notice thereof and thirty (30) days to cure the same]1.(g)“Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any oneor more of the following events:(i)any Exchange Act Person becomes the Owner, directly or indirectly, of securities of theCompany representing more than 50% of the combined voting power of the Company’s then outstanding securities other than byvirtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed tooccur (A) on account of the acquisition of securities of the Company directly from the Company; (B) on account of the acquisition ofsecurities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’ssecurities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company throughthe issuance of equity securities; or (C) solely because the level of Ownership held by any Exchange Act Person (the “SubjectPerson”) exceeds the designated percentage threshold of the 1 If the Company has a preferred/standard definition of Cause, it could be inserted here instead.14.Exhibit 10.34outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the numberof shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of theacquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of anyadditional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the thenoutstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will bedeemed to occur;(ii)there is consummated a merger, consolidation or similar transaction involving (directlyor indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, thestockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securitiesrepresenting more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similartransaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger,consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding votingsecurities of the Company immediately prior to such transaction;(iii)there is consummated a sale, lease, exclusive license or other disposition of all orsubstantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition ofall or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of thecombined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the sameproportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license orother disposition; or(iv)individuals who, on the date the Plan is adopted by the Board, are members of theBoard (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however,that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majorityvote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as amember of the Incumbent Board.For purposes of determining voting power under the term Change in Control, voting power shall be calculated by assumingthe conversion of all equity securities convertible (immediately or at some future time) into shares entitled to vote, but not assuming theexercise of any warrant or right to subscribe to or purchase those shares. In addition, (A) the term Change in Control will not include asale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the termChange in Control will not include a change in the voting power of any one or more stockholders as a result of the conversion of anyclass of the Company’s securities into another class of the Company’s securities having a different number of votes per share pursuantto the conversion provisions set forth in the Company’s Amended and Restated Certificate of Incorporation, and (C) the definition ofChange in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and theParticipant will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if nodefinition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition willapply. If required15.Exhibit 10.34for compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction isnot also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of theassets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definitionthereunder). The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” toconform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.(h)“Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidancethereunder.(i)“Committee” means a committee of one or more Independent Directors to whom authority has been delegated bythe Board in accordance with Section 2(c).(j)“Common Stock” means the common stock of the Company, par value $0.0001 per share, having one vote pershare.(k)“Company” means Adverum Biotechnologies, Inc., a Delaware corporation.(l)“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to renderconsulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors ofan Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for suchservice, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, aperson is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act isavailable to register either the offer or the sale of the Company’s securities to such person.(m)“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as anEmployee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant rendersservice to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which theParticipant renders such service, provided that there is no interruption or termination of the Participant’s service with theCompany or an Affiliate, will not terminate a Participant’s Continuous Service ; provided, however, that if the Entity forwhich a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, in its sole discretion,such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as anAffiliate. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s solediscretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absenceapproved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii)transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will betreated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’sleave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or asotherwise required by law. In addition, to the extent required for exemption from or compliance with Section 409A of theCode, the determination of whether there has been a termination of Continuous Service will be made, and such term will be16.Exhibit 10.34construed, in a manner that is consistent with the definition of “separation from service” as defined under TreasuryRegulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).(n)“Corporate Transaction” means the occurrence, in a single transaction or in a series of related transactions, of anyone or more of the following events:(i)the consummation of a sale or other disposition of all or substantially all, as determinedby the Board, in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;(ii)the consummation of a sale or other disposition of at least 50% of the outstandingsecurities of the Company;(iii)the consummation of a merger, consolidation or similar transaction following which theCompany is not the surviving corporation; or(iv)the consummation of a merger, consolidation or similar transaction following which theCompany is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidationor similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property,whether in the form of securities, cash or otherwise.To the extent required for compliance with Section 409A of the Code, in no event will an event be deemed a CorporateTransaction if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in theownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5)(without regard to any alternative definition thereunder).(o)“Director” means a member of the Board. Directors are not eligible to receive Awards under the Plan with respectto their service in such capacity.(p)“Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantialgainful activity by reason of any medically determinable physical or mental impairment that can be expected to result indeath or that has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Sections22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as theBoard deems warranted under the circumstances.(q)“Effective Date” means _______, 2017.(r)“Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director,or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.(s)“Entity” means a corporation, partnership, limited liability company or other entity.17.Exhibit 10.34(t)“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulationspromulgated thereunder.(u)“Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of theCompany, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or otherfiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) anunderwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned,directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stockof the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the ExchangeAct) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than50% of the combined voting power of the Company’s then outstanding securities.(v)“Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:(i)If the Common Stock is listed on any established stock exchange or traded on anyestablished market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by the Board, the closingsales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in theCommon Stock) on the date of determination, as reported in a source the Board deems reliable.(ii)Unless otherwise provided by the Board, if there is no closing sales price for theCommon Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date forwhich such quotation exists.(iii)In the absence of such markets for the Common Stock, the Fair Market Value will bedetermined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.(w)“Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company oran Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for servicesrendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would notbe required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does notpossess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, andis not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K;or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.(x)“Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan that does not qualify asan “incentive stock option” within the meaning of Section 422 of the Code.18.Exhibit 10.34(y)“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the ExchangeAct.(z)“Option” means a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.(aa)“Option Agreement” means a written agreement between the Company and an Optionholder evidencing the termsand conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.(bb)“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such otherperson who holds an outstanding Option.(cc)“Own,” “Owned,” “Owner,” “Ownership” A person or Entity will be deemed to “Own,” to have “Owned,” to bethe “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through anycontract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power tovote or to direct the voting, with respect to such securities.(dd)“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such otherperson who holds an outstanding Award.(ee)“Plan” means this Adverum Biotechnologies, Inc. 2017 Inducement Plan, as it may be amended.(ff)“Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to theterms and conditions of Section 6.(gg)“Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of aRestricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each RestrictedStock Unit Award Agreement will be subject to the terms and conditions of the Plan.(hh)“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effectfrom time to time.(ii)“Securities Act” means the Securities Act of 1933, as amended.(jj)“Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstandingcapital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective ofwhether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reasonof the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership,limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of votingor participation in profits or capital contribution) of more than 50%.19.[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separatelywith the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Exhibit 10.46 UNIVERSITY OF CALIFORNIA, BERKELEYOFFICE OF TECHNOLOGY LICENSING EXCLUSIVE LICENSE AND BAILMENT AGREEMENTBETWEENAVALANCHE BIOTECHNOLOGIES, INC.ANDTHE REGENTS OF THE UNIVERSITY OF CALIFORNIAFOR[*]UC Case Nos.: [*] UNIVERSITY OF CALIFORNIA, BERKELEYOFFICE OF TECHNOLOGY LICENSING EXCLUSIVE LICENSE and BAILMENT AGREEMENTFOR[*]UC Case Nos.: [*] This exclusive license agreement (“Agreement”) is effective June 17, 2013 (“Effective Date”), by and between THE REGENTS OFTHE UNIVERSITY OF CALIFORNIA, a California corporation, whose legal address is 1111 Franklin Street, 12th Floor, Oakland,California 94607- 5200, acting through its Office of Technology Licensing, at the University of California, Berkeley, 2150 ShattuckAvenue, Suite 510, Berkeley, CA 94704-1347 (“REGENTS”) and AVALANCHE BIOTECHNOLOGIES, INC., a Delawarecorporation having a principal place of business at 665 Third Street, Suite 250, San Francisco, CA 94107 (“LICENSEE”). The partiesagree as follows:1.BACKGROUND 1.1REGENTS has assignments to the following (collectively referred to as “INVENTIONS”): invention disclosuresentitled, [*] invented by [*] employed by the University of California, Berkeley, as described in REGENTS’ caseNo.: [*]; and [*] invented by [*] employed by the University of California, Berkeley, as described in REGENTS’case No.: [*] and to REGENTS’ PATENT RIGHTS, as hereinafter defined, which are directed to theINVENTIONS. 1.2LICENSEE entered into an option agreement with REGENTS effective [*], terminating on [*], for the purpose ofevaluating the INVENTIONS and granting LICENSEE an exclusive right to negotiate an exclusive license inREGENTS’ PATENT RIGHTS to the INVENTIONS, which Option Agreement covers LICENSEE’scommitment to reimburse REGENTS’ patent costs during the period.Page 2 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 1.3LICENSEE has provided REGENTS with a commercialization plan for the INVENTIONS and business strategyin order to evaluate its capabilities as a LICENSEE. 1.4The development of the INVENTIONS was sponsored in part by various grants by U.S. Government agencies,and as a consequence, REGENTS elected to retain title to the INVENTIONS subject to the rights of the U.S.Government under 35 USC 200-212 and implementing regulations, including that REGENTS, in turn, hasgranted back to the U.S. Government a non-exclusive, non-transferrable irrevocable, paid-up license to practice orhave practiced the INVENTIONS for or on behalf of the U.S. Government throughout the world. These U.S.Government grants are [*] 1.5REGENTS and LICENSEE wish to have the INVENTIONS perfected and marketed as soon as reasonablypracticable so that products resulting therefrom may be available for public use and benefit. 1.6LICENSEE wishes to acquire, and REGENTS wishes to grant to LICENSEE, an exclusive license underREGENTS’ PATENT RIGHTS and an exclusive bailment of the BIOLOGICAL MATERIAL under theREGENTS’ PROPERTY RIGHTS for the purpose of undertaking development and to make, have made, use,sell, offer for sale, import, and export LICENSED PRODUCTS as defined below.2.DEFINITIONS 2.1“REGENTS’ PATENT RIGHTS” means REGENTS’ rights in the following U.S. and foreign patentapplications: i.[*] Patent Application Number [*], entitled “[*]” (UC Case No. [*]), filed on [*] and assigned toREGENTS; ii.[*] Patent Application Number [*], entitled “[*]” (UC Case No. [*]), filed on [*] and assigned toREGENTS; iii.[*] Patent Application Number [*] entitled [*] filed on [*] and assigned to REGENTS;Page 3 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. iv.[*] Patent Application Number [*] entitled [*] filed on [*] and assigned to REGENTS, and v.All other international patents and patent applications, and/or any divisions, continuations, reissuesor continuations-in-part (only to the extent, however, that claims in the continuations-in-part areentitled to the priority filing date of the parent patent application) of any of the above-referencedU.S. or international patents or applications. 2.2“LICENSED PRODUCTS” means all kits, compositions of matter, articles of manufacture, materials, andproducts, the manufacture, use, SALE, offer for SALE, or import of which: a) requires the performance of theLICENSED METHOD; or b) but for the license granted pursuant to this Agreement, would infringe, orcontribute to or induce the infringement of, a VALID CLAIM under REGENTS’ PATENT RIGHTS. 2.3“LICENSED METHOD” means any process or method the use or practice of which, but for the license pursuantto this Agreement, would infringe, or contribute to or induce the infringement of a VALID CLAIM underREGENTS’ PATENT RIGHTS in that country in which the LICENSED METHOD is used or practiced. 2.4“LICENSED FIELD OF USE” means [*] 2.5“NET SALES” means the gross invoice price charged, and the value of non-cash consideration owed to,LICENSEE or a sublicensee for SALES of LICENSED PRODUCTS, LICENSED SERVICES, andLICENSED METHODS in the LICENSED TERRITORY, the less the sum of the following actual andcustomary deductions where applicable: cash, trade or quantity discounts; sales, use, tariff, import/export duties orother excise taxes when included in gross sales, Deductable Value-Added Tax, but excluding value-added taxesother than Deductable Value Added Tax or taxes assessed on income derived from sales: “Deductable Value-Added Tax” means value-added tax only to the extent that such value-added tax is actually incurred and is notreimbursable, refundable, or creditable under the tax authority of any country; freight, insurance, packaging costs,and transportationPage 4 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. charges; allowances or credits to customers because of rejections or returns, because of retroactive pricereductions, or due to recalls; provisions for actual uncollectible accounts determined in accordance with USGAAP; and discounts, rebates or similar payments granted or given to wholesalers or other distributors, buyinggroups, health care insurance carriers or other institutions or to the government, including Medicare/Medicaid andother government rebates/discounts. For purposes of calculating NET SALES, a SALE to a sublicensee for enduse by the sublicensee will be treated as a SALE at wholesale price. NET SALES shall exclude any disposition ofLICENSED PRODUCTS, LICENSED SERVICES and LICENSED METHODS in connection with clinicaltrials thereof and any disposition of LICENSED PRODUCTS distributed for promotional or charitable purposes,in reasonable quantities. 2.6“AFFILIATE” of LICENSEE means any entity that, directly or indirectly, Controls LICENSEE, is Controlled byLICENSEE, or is under common Control with LICENSEE. “Control” means (i) having the actual, presentcapacity to elect a majority of the directors of such affiliate, or (ii) having the power to direct at least [*] of thevoting rights entitled to elect directors, or (iii) in any country where the local law will not permit foreign equityparticipation of a majority, ownership or control, directly or indirectly, of the maximum percentage of suchoutstanding stock or voting rights permitted by local law. 2.7“LICENSED TERRITORY” means [*] 2.8“SALE” means, for LICENSED PRODUCTS and LICENSED SERVICES, the act of selling, leasing orotherwise transferring, providing, or furnishing such product or service, and for LICENSED METHOD the act ofperforming such method, for any use or for any consideration. Correspondingly, “SELL” means to make or causeto be made a SALE, and “SOLD” means to have made or caused to be made a SALE. 2.9“LICENSED SERVICE” means a service provided using LICENSED PRODUCTS or LICENSED METHOD.Page 5 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 2.10“SUBLICENSEE REVENUE” means any cash consideration, and of the cash equivalent of all otherconsideration, due to LICENSEE under each sublicense for the grant of rights under the REGENTS’ PATENTRIGHTS, but excluding: (a) any royalty payments on sales of LICENSED PRODUCTS, LICENSEDSERVICES and LICENSED METHODS by a sublicensee (which sales shall be included as NET SALES andshall give rise to royalty payments to REGENTS under section 6.1); (b) any amounts paid by a sublicensee asbona fide reimbursement for research and development costs at fair market value for materials and full timeequivalents; (c) bona fide loans or any payments in consideration for a grant of equity of the LICENSEE at fairmarket value; (d) amounts paid for supplies of product or other tangible materials; (e) amounts paid asreimbursement for expenses directly related to the pursuit, maintenance, and/or defense of REGENTS’ PATENTRIGHTS; (f) milestone payments by a sublicensee (which shall be give rise to the milestone payments toREGENTS under section 6.4); and (g) withholding taxes and any other amounts by a sublicensee from amountsotherwise payable to LICENSEE under such sublicense agreement other than past due payments. 2.11“PHASE IIB CLINICAL TRIAL” means a human clinical trial in any country that would satisfy the requirementsof 21 CFR 312.21(b) and that is designed to support and immediately precede the initiation of a Phase III ClinicalTrial without any further phase II trials by evaluating the dose-dependent effectiveness of a pharmaceuticalproduct for a particular indication or indications in patients with the disease or condition under study and todetermine the common side effects and risks associated with the pharmaceutical product. 2.12“PHASE III CLINICAL TRIAL” means a human clinical trial in any country that would satisfy the requirementsof 21 CFR 312.21(c). 2.13“VALID CLAIM” shall mean a claim in an issued, unexpired patent or in a pending patent application (whichclaim is pending for no more than [*] within licensed REGENTS’ PATENT RIGHTS that (a) has not beencancelled, withdrawn, abandoned or rejected by any administrative agency or other body of competent jurisdictionfrom which no appeal has or can be taken, (b) has not been revoked, held invalid, or declared unpatentable orunenforceable in a decision of a court or other body of competent jurisdiction that is unappealable or unappealedwithin the time allowed for appeal, (c) has not been rendered unenforceable through disclaimer or otherwise, and(d) is not lost through an interference proceeding. If aPage 6 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. claim is pending for more than [*] and latter issues in a patent, then as of the patent issue date, the claim againbecomes a VALID CLAIM. 2.14“FIRST COMMERCIAL SALE” shall mean the first SALE of a LICENSED PRODUCT, LICENSEDMETHOD or LICENSED SERVICE by LICENSEE or its sublicensees following regulatory approval in theapplicable country of sale. 2.15“REGENTS’ PROPERTY RIGHTS” means all of REGENTS’ personal property rights in the tangible propertyin INVENTIONS licensed here under. REGENTS’ PROPERTY RIGHTS do not include REGENTS’PATENT RIGHTS. 2.16“BIOLOGICAL MATERIAL” means REGENTS’:[*]3.GRANT 3.1(a)Subject to the limitations set forth in this Agreement, including the license granted to the U.S. Government andthe rights reserved in Paragraph 3.3, REGENTS hereby grants and LICENSEE hereby accepts an exclusivelicense under REGENTS’ PATENT RIGHTS to develop, make, have made, use, offer for SALE, import, export,and SELL LICENSED PRODUCTS and LICENSED SERVICES, and to practice the LICENSED METHOD,in the LICENSED FIELD OF USE in the LICENSED TERRITORY.(b)Subject to the limitations set forth in this Agreement and subject to the license granted to the U.S.Government, REGENTS hereby grants and LICENSEE hereby accepts an exclusive license under REGENTS’PROPERTY RIGHTS to possess, make and use, the BIOLOGICAL MATERIAL bailed to LICENSEE underthis Agreement. LICENSEE acknowledges that the REGENTS is and will remain the sole owner of theBIOLOGICAL MATERIAL and the title of the material is not transferred to LICENSEE under this Agreement.(c)REGENTS have provided the LICENSEE, one shipment of BIOLOGICAL MATERIAL in quantitiesthat are deemed appropriate [*]. No additional obligation is required of REGENTS’ with respect to bailment ofthe BIOLOGICAL MATERIAL.Page 7 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 3.2The license under Paragraph 3.1 will be exclusive for a term commencing on the Effective Date and ending on thedate of the last to expire patent under REGENTS’ PATENT RIGHTS. 3.3Nothing in this Agreement will be deemed to limit the right of REGENTS to publish any and all technical dataresulting from any research performed by REGENTS relating to the INVENTIONS and the BIOLOGICALMATERIAL. REGENTS expressly reserves the right to use the INVENTIONS, the BIOLOGICALMATERIAL and related technology for its educational and research purposes; to disseminate the BIOLOGICALMATERIAL and other tangible materials associated with, or required to practice the INVENTIONS and/or theREGENTS’ PATENT RIGHTS to researchers at nonprofit institutions for their educational and researchpurposes and to permit other nonprofit institutions to use such BIOLOGICAL MATERIAL to practice theREGENTS’ PATENT RIGHTS for education and research purposes. 3.4This Agreement will terminate immediately if LICENSEE files a claim that includes, in any way, the assertion thatany portion of the REGENTS’ PATENT RIGHTS is invalid or unenforceable where the filing is by theLICENSEE, a third party on behalf of the LICENSEE (and with the actual knowledge of the LICENSEE), or athird party at the written urging of the LICENSEE. 3.5LICENSEE will have a continuing responsibility to keep REGENTS informed of the large/small entity status, asdefined in 15 U.S.C. 632, of itself and its sublicensees. 3.6The INVENTIONS was funded in part by the U.S. Government. In accordance with PL 96-517 as amended byPL 98-620, to the extent required by law or regulation, any products covered by patent applications or patentsclaiming the INVENTIONS and sold in the United States will be substantially manufactured in the United States.4.SUBLICENSES 4.1REGENTS also grants to LICENSEE the right to sublicense to AFFILIATES and third parties the right todevelop, make, have made, use, offer for SALE, import, export, and SELL LICENSED PRODUCTS andLICENSED SERVICES, and to practice LICENSED METHOD, provided that LICENSEE has exclusive rightsPage 8 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. under this Agreement at the time of sublicensing. Every such sublicense will include: (a)a statement setting forth the date upon which LICENSEE’s exclusive rights, privileges, and licensehereunder will expire; (b)as applicable, all the rights of, and require the performance of all the obligations due to, REGENTS(and, if applicable, the United States Government) under this Agreement other than (i) any payment orreporting obligations (for which LICENSEE is directly responsible pursuant to Paragraph 4.6) and (ii)the indemnification obligation in Article 19 (which are addressed in Paragraph 4.1(d)); (c)a sublicensee shall have the right to grant further sublicense to its AFFILIATE and/or third parties to theextent sublicensee deems such sublicense is commercially reasonable, useful or necessary for thedevelopment and/or commercialization of LICENSED PRODUCT(S) or LICENSED METHOD(S) inaccordance with this AGREEMENT; provided that (i) such sublicense is subject to a written sublicenseagreement and is bound by all of the applicable terms, conditions, obligations, restrictions and othercovenants of this AGREEMENT that protect or benefit the REGENTS’(and, if applicable, the U.S.Government’s and other sponsors’) rights and interests and (ii) sublicensee shall, within thirty (30) daysafter issuing any further sublicense, furnish to LICENSEE for delivery to REGENTS, subject to anyconfidentiality provisions with third parties, all material terms of any such sublicenses, pertaining to theREGENTS interests, including the sublicensee name and address; and Indemnification of REGENTSas provided in this AGREEMENT; and (d)the same provision for indemnification of REGENTS as has been provided for in this Agreement. 4.2LICENSEE will pay to REGENTS [*] of SUBLICENSE REVENUE.In the event LICENSEE sublicenses the REGENTS’ PATENT RIGHTS along with its own patent rights orthose of other third parties, LICENSEE may reasonably determine in good faith the percentage of compensationreceived thereunder that represents consideration due for the grant of the rights under the REGENTS’ PATENTRIGHTS, which percentage will be based upon the value of thePage 9 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.REGENTS’ PATENT RIGHTS licensed to the sublicensee relative to the value of the other third party patentrights licensed to the sublicensee. When making payment under this Paragraph 4.2, LICENSEE shall provideREGENTS with all supporting information and documentation used to determine any such percentage (or shallreference previously provided supporting information and documentation). However, in no case will LICENSEEreduce the compensation to The REGENTS below [*] of the sublicensed patent rights.[*] 4.3LICENSEE will notify REGENTS of each sublicense granted hereunder and furnish to REGENTS a copy ofeach such sublicense agreement. Such copy may be redacted by LICENSEE to protect sensitive information.However, such copy shall contain sufficient information to assure REGENTS that the sublicense is consistentwith this Agreement, and under no circumstances shall any financial terms necessary to calculate payments due toREGENTS hereunder be redacted. 4.4AFFILIATES will have no licenses under REGENTS’ PATENT RIGHTS except as granted by sublicensepursuant to this Agreement. 4.5For the purposes of this Agreement, the operations of all sublicensees shall be deemed to be the operations ofLICENSEE, for which LICENSEE shall be responsible. 4.6LICENSEE will be responsible for payment of all monies and other consideration due REGENTS hereunder as aresult of the activities of sublicensees, and all reports due REGENTS hereunder will reflect such activities. 4.7Upon termination of this Agreement for any reason, all sublicenses that are granted by LICENSEE pursuant tothis Agreement where the sublicensee is in compliance with its sublicense agreement as of the date of suchtermination will survive such termination (as a direct license(s) from REGENTS), provided that (a) each suchdirect license shall be subject to the same non-financial terms and conditions as those in this Agreement, exceptthat REGENTS will not be bound to perform any duties or obligations set forth in any sublicenses that extendbeyond the duties and obligations of REGENTS set forth in this Agreement; (b) such sublicensee (or if there is atsuch time more than one such sublicensee, such sublicensees severally and jointly) shall be required to make anyannual maintenance payments due pursuant to Paragraph 5.2 or any minimum annual royalties due pursuant toPage 10 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Paragraph 6.7; and (c) and such sublicensee shall be required to make any other monetary payment(s) that, hadthis Agreement not been terminated, LICENSEE would have been required to make under this Agreement as aresult of the license to or activities of such sublicensee. 4.8If REGENTS (to the extent of the actual knowledge of the licensing professional responsible for administration ofthis case) or a third party discovers and notifies that licensing professional that the INVENTIONS are useful foran application covered by the LICENSED FIELD OF USE, but for which LICENSED PRODUCTS have notbeen developed or are not currently under development by LICENSEE, and provided that such application doesnot compete, directly with LICENSED PRODUCTS that have been developed or are currently underdevelopment by LICENSEE (such application, the “NEW APPLICATION”), then REGENTS, as representedby the Office of Technology Licensing, shall give written notice to LICENSEE, except for: 1) information that issubject to restrictions of confidentiality with third parties, and 2) information which originates with REGENTS’personnel who do not assent to its disclosure to LICENSEE.LICENSEE shall have [*] to give REGENTS written notice stating whether LICENSEE elects to developLICENSED PRODUCTS for the NEW APPLICATION.If LICENSEE elects to develop and commercialize the proposed LICENSED PRODUCTS for the NEWAPPLICATION, LICENSEE shall submit progress reports to REGENTS pursuant to Article 8.If LICENSEE elects not to develop and commercialize the proposed LICENSED PRODUCTS for use in theNEW APPLICATION, REGENTS may seek (a) third party(ies) to develop and commercialize the proposedLICENSED PRODUCTS for the NEW APPLICATION. If REGENTS is successful in finding a third party, itshall refer such third party to LICENSEE. If the third party requests a sublicense under this Agreement, thenLICENSEE shall report the request to REGENTS within [*] from the date of such written request. If the requestresults in a sublicense, then LICENSEE shall report it to REGENTS pursuant to Paragraph 4.3. LICENSEE shallhave no obligation to grant a sublicense to any third party under this Paragraph 4.8 (and, for clarity, thesubsequent paragraph shall not apply) if such third party fails to request such sublicense within [*] after theexpiration of the [*] period described above.Page 11 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.If LICENSEE refuses to grant a sublicense to the third party with respect to the NEW APPLICATION, thenwithin [*] after such refusal LICENSEE shall submit to REGENTS a report specifying the license terms proposedby the third party and a written justification for LICENSEE’s refusal to grant the proposed sublicense. If [*], thenREGENTS shall have the right to grant to the third party a license to make, have made, use, sell, offer for sale andimport products for use in the NEW APPLICATION [*].5.LICENSE ISSUE FEE 5.1LICENSEE will pay to REGENTS a non-creditable, non-refundable license issue fee of [*] due within thirty (30)days of the signing of the Agreement this fee is non-refundable and not an advance against royalties or otherpayments due under this Agreement. 5.2LICENSEE will also pay to REGENTS an annual license maintenance fee of [*] beginning on the firstanniversary of the Effective Date and on each anniversary of the Effective Date thereafter for the term of theAGREEMENT. Notwithstanding the foregoing, the license maintenance fee will not be due and payable on anyanniversary of the Effective Date following the first SALE of a LICENSED PRODUCT, LICENSEDMETHOD OR LICENSED SERVICE.6.ROYALTIES 6.1LICENSEE will pay to REGENTS earned royalties at the rate of [*] of NET SALES, subject to the following: (a)If LICENSEE is required to make any payment (including royalties or other license fees) to a third partyto obtain a patent license or other patent rights in the absence of which LICENSEE could not practiceREGENTS’ PATENT RIGHTS, such third party payments [*] creditable against royalties owedhereunder by LICENSEE to REGENTS, provided that in no one calendar year will the total of suchcredits reduce earned royalties owed by LICENSEE to REGENTS by [*] on NET SALES ofLICENSED PRODUCTS, LICENSED SERVICES and LICENSED METHODS. (b)In the event a LICENSED PRODUCT, LICENSED SERVICE and LICENSED METHODS is, orLICENSED PRODUCTS, LICENSEDPage 12 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. SERVICES and LICENSED METHODS are, combined with other licensed technologies for sales toend users by LICENSEE and the total combined royalty burden to LICENSEE on NET SALESexceeds [*], the earned royalty due to REGENTS will be adjusted, according to the following formula,where R is [*], C is [*] and B is the total combined royalty burden on LICENSEE:Adjusted royalty = R x (C/B)For example, if LICENSEE’s total combined royalty is [*], the adjusted royalty due from LICENSEEto REGENTS would be calculated as [*] Notwithstanding the foregoing, in no event will the royaltydue to REGENTS under this adjustment be less than [*]. (c)Only one royalty will be due on any given LICENSED PRODUCT, LICENSED METHOD andLICENSED SERVICE. 6.2Royalties accruing to REGENTS will be paid to REGENTS quarterly within [*] after the end of each calendarquarter. 6.3Royalties will be payable on SALES covered by a VALID CLAIM. 6.4LICENSEE will pay to REGENTS milestone payments as follows: i.For the first LICENSED PRODUCT or LICENSED METHOD, LICENSEE shall pay toREGENTS a milestone payment of [*] within [*] of the [*] and; ii.For the first LICENSED PRODUCT or LICENSED METHOD, LICENSEE shall pay toREGENTS a milestone payment of [*] within [*] of the [*] and; iii.LICENSEE will pay to REGENTS a milestone payment of [*] within [*] days of the [*] and; iv.LICENSEE will pay to REGENTS a milestone payment of [*] within [*] of [*] and; v.LICENSEE will pay to REGENTS a milestone payment of [*] within [*] of the [*] and; vi.LICENSEE will pay to REGENTS a milestone payment of [*] within [*] of the [*] up to amaximum of two (2) additional indications.Page 13 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. vii.[*] 6.5Beginning in the calendar year after the FIRST COMMERCIAL SALE and in each succeeding calendar yearthereafter LICENSEE will pay to REGENTS a minimum annual royalty of [*] for the life of this Agreement. Thisminimum annual royalty will be paid to REGENTS by [*] of each year and will be credited against the earnedroyalty due and owing for the calendar year in which the minimum payment is made. 6.6All payments due REGENTS will be payable in United States dollars. When LICENSED PRODUCTS,LICENSED SERVICES, or LICENSED METHOD are SOLD for monies other than United States dollars,earned royalties will first be determined in the foreign currency of the country in which the SALE was made andthen converted into equivalent United States dollars. The exchange rate will be that rate quoted in [*] on the lastbusiness day of the reporting period. 6.7Payments due for SALES occurring in any country outside the United States will not be reduced by any taxes,fees, or other charges imposed by the government of such country on the remittance of royalty income.LICENSEE will also be responsible for all bank transfer charges. 6.8LICENSEE will make all payments under this Agreement by check payable to “The Regents of the University ofCalifornia” and forward it to REGENTS at the address shown in Article 23 (Notices). 6.9If any patent or patent application, or any claim thereof, included within REGENTS’ PATENT RIGHTS expiresor is held invalid in a final decision by a court of competent jurisdiction and last resort and from which no appealhas been or can be taken, all obligation to pay royalties based on such patent, patent application or claim, or anyclaims patentably indistinct therefrom will cease as of the date of such expiration or final decision. LICENSEEwill not, however, be relieved from paying any royalties that accrued before such expiration or decision or that arebased on another valid patent or claim not expired or involved in such decision. 6.10No earned royalties will be collected or paid hereunder on SALES to, or for use by, the United StatesGovernment. LICENSEE will reduce the amount charged for such SALES by an amount equal to the earnedroyalty otherwise due REGENTS as provided herein.Page 14 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.7.DUE DILIGENCE 7.1LICENSEE, upon execution of this Agreement, will diligently proceed with the development, manufacture, andSALE of LICENSED PRODUCTS, LICENSED SERVICES, and LICENSED METHOD, and will diligentlymarket them in quantities sufficient to meet the market demand. 7.2In addition to its obligations under Paragraph 7.1, LICENSEE specifically commits to achieving the followingobjectives in its due diligence activities under this Agreement: (a)[*] 7.3If LICENSEE is unable to meet any of its diligence obligations set forth in Paragraphs 7.1 and 7.2, thenREGENTS will so notify LICENSEE of failure to perform. LICENSEE will have the right and option to extendthe target date of any such due diligence obligation [*] upon the payment of [*] within thirty (30) days of the dateto be extended for each such extension option exercised by LICENSEE. LICENSEE may further extend thetarget date of any diligence obligation for an additional [*] upon payment of an additional [*]. Additionalextensions may be granted only by mutual written agreement of the parties to this Agreement. These payments arein addition to the minimum royalty payments specified in Paragraph 6.5. Should LICENSEE opt not to extend theobligation or fail to meet it by the extended target date, then REGENTS will have the right and option either toterminate this Agreement or to reduce LICENSEE’s exclusive license to a non-exclusive royalty-bearing license,with all payments hereunder reduced to [*] of the royalties due under an exclusive license. This right, if exercisedby REGENTS, supersedes the rights granted in Article 3. The right to terminate this Agreement or reduceLICENSEE’s exclusive license granted hereunder to a non-exclusive license will be REGENTS’ sole remedy forbreach of Paragraph 7.1 or 7.2. 7.4At the request of either party, any controversy or claim arising out of or relating to the diligence provisions ofParagraphs 7.1 and 7.2 will be settled by arbitration conducted in [*] in accordance with the then current [*].Judgment upon the award rendered by the arbitrator(s) will be binding on the parties and may be entered by eitherparty in the court or forum having jurisdiction. In determination of due diligence, [*].Page 15 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 7.5To exercise either the right to terminate this Agreement or to reduce the license to a non-exclusive license for lackof diligence under Paragraph 7.1 or 7.2, REGENTS will give LICENSEE written notice of the deficiency.LICENSEE thereafter has [*] to cure the deficiency or to request arbitration. If REGENTS has not received awritten request for arbitration or satisfactory tangible evidence that the deficiency has been cured by the end of the[*] period, then REGENTS may, at its option, either terminate the Agreement or reduce LICENSEE’s exclusivelicense to a non-exclusive license, with all payments hereunder reduced to [*] of the royalties due under anexclusive license, by giving written notice to LICENSEE. These notices will be subject to Article 23 (Notices).8.PROGRESS AND ROYALTY REPORTS 8.1For the period beginning October 30, 2013, LICENSEE will submit to REGENTS a semi annual progress reportcovering LICENSEE’s activities related to the development and testing of all LICENSED PRODUCTS,LICENSED SERVICES and LICENSED METHOD and the obtaining of necessary governmental approvals, ifany, for marketing in the United States. These progress reports will be made for all development activities until theFIRST COMMERCIAL SALE occurs in the United States. 8.2Each progress report will be a sufficiently detailed summary of activities of LICENSEE and any sublicensees sothat REGENTS may evaluate and determine LICENSEE’s progress in development of LICENSEDPRODUCTS, LICENSED SERVICES, and LICENSED METHOD, and in meeting its diligence obligationsunder Article 7, and will include (but not be limited to) the following: summary of work completed and inprogress; current schedule of anticipated events and milestones, including diligence milestones under Paragraph7.2; anticipated market introduction dates for the licensed territories; and sublicensee’s activities during thereporting period. 8.3LICENSEE also will report to REGENTS in its immediately subsequent progress and royalty reports, the date ofFIRST COMMERCIAL SALE. 8.4After the FIRST COMMERCIAL SALE anywhere in the world, LICENSEE will make quarterly royalty reportsto REGENTS within [*] after the quarters ending March 31, June 30, September 30, and December 31, of eachyear. Each such royalty report will include at least the following:Page 16 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. (a)The number of LICENSED PRODUCTS manufactured and the number SOLD; (b)Gross revenue from SALE of LICENSED PRODUCTS, LICENSED SERVICES and LICENSEDMETHOD; (c)NET SALES pursuant to Paragraph 2.5; (d)Total royalties due REGENTS; and (e)Names and addresses of any new sublicensees along with a summary of the material terms of each newsublicense agreement entered into during the reporting quarter. 8.5If no SALES have occurred during the report period, a statement to this effect is required in the royalty report forthat period.9.BOOKS AND RECORDS 9.1LICENSEE will keep full, true, and accurate books and records containing all particulars that may be necessaryfor the purpose of showing the amount of royalties payable to REGENTS and LICENSEE’s compliance withother obligations under this Agreement. Said books and records will be kept at LICENSEE’s principal place ofbusiness or the principal place of business of the appropriate division of LICENSEE to which this Agreementrelates. Said books and records and the supporting data will be open at all reasonable times during normal businesshours upon reasonable notice, for [*] following the end of the calendar year to which they pertain, to theinspection and audit by representatives of REGENTS for the purpose of verifying LICENSEE’s royalty statementor compliance in other respects with this Agreement. Prior to any such inspection, such representatives will agreein a written agreement with LICENSEE to hold all information in confidence except as necessary to communicateLICENSEE’s non-compliance with this Agreement to REGENTS. 9.2The fees and expenses of REGENTS’ representatives performing such an examination will be borne byREGENTS. However, if an error in underpaid royalties to REGENTS of [*] is discovered, then the fees andexpenses of these representatives will be borne by LICENSEE.Page 17 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.10.LIFE OF THE AGREEMENT 10.1Unless otherwise terminated by the operation of law or by acts of the parties in accordance with the terms of thisAgreement, this Agreement will be in force from the Effective Date and will remain in effect for the life of thelast-to-expire patent or last-to-be-abandoned patent application licensed under this Agreement, whichever is later. 10.2Any termination of this Agreement shall not affect the rights and obligations set forth in the following articles:Article 2DefinitionsArticle 4SublicensesArticle 9Books and RecordsArticle 10Life of the AgreementArticle 13Disposition of Licensed Products On Hand UponTerminationArticle 16Use of Names and TrademarksArticle 17Limited WarrantiesArticle 19IndemnificationArticle 23NoticesArticle 24Late PaymentsArticle 26ConfidentialityArticle 29Applicable Law; Venue; Attorneys’ Fees 10.3Any termination of this Agreement will not relieve LICENSEE of its obligation to pay any monies due or owingat the time of such termination and will not relieve any obligations, of either party to the other party, establishedprior to termination.11.TERMINATION BY REGENTS 11.1If LICENSEE should violate or fail to perform any term of this Agreement, then REGENTS may give writtennotice of such default (“Notice of Default”) to LICENSEE. If LICENSEE should fail to repair such default withinsixty (60) days of the effective date of such notice, REGENTS will have the right to terminate this Agreement andthe licenses herein by a second written notice (“Notice of Termination”) to LICENSEE. If a Notice ofTermination is sent to LICENSEE, this Agreement will automatically terminate on the effective date of suchnotice. SuchPage 18 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. termination will not relieve LICENSEE of its obligation to pay any royalty or license fees owing at the time ofsuch termination and will not impair any accrued rights of REGENTS. These notices will be subject to Article 23(Notices).12.TERMINATION BY LICENSEE 12.1LICENSEE will have the right at any time to terminate this Agreement in whole or as to any portion ofREGENTS’ PATENT RIGHTS by giving notice in writing to REGENTS. Such notice of termination will besubject to Article 23 (Notices) and termination of this Agreement will be effective (30) days after the effective dateof such notice. 12.2Any termination pursuant to Paragraph 12.1 will not relieve LICENSEE of any obligation or liability accruedhereunder prior to such termination or rescind anything done by LICENSEE or any payments made toREGENTS hereunder prior to the time such termination becomes effective, and such termination will not affect inany manner any rights of REGENTS arising under this Agreement prior to such termination.13.DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION 13.1Upon termination of this Agreement, for a period of [*] days after the date of termination LICENSEE maycomplete and SELL any partially made LICENSED PRODUCTS and continue to render any previouslycommenced LICENSED SERVICES, and continue the practice of LICENSED METHOD only to the extentnecessary to do so; provided, however, that all such SALES will be subject to the terms of this Agreementincluding, but not limited to, the payment of royalties at the rate and at the time provided herein and the renderingof reports thereon. Upon termination of this Agreement by either party, LICENSEE shall return or destroy theBIOLOGICAL MATERIAL in its possession [*] following the effective date of termination, subject, however, toany continuing rights LICENSEE may have pursuant to any material transfer agreement between LICENSEE andREGENTS with respect to the BIOLOGICAL MATERIAL. Subject to such exception, LICENSEE shallprovide REGENTS [*] following said termination date with written notice that the BIOLOGICAL MATERIALhas been returned or destroyed.Page 19 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.14.PATENT PROSECUTION AND MAINTENANCE 14.1REGENTS will diligently prosecute and maintain the United States and foreign patent applications and patentsunder REGENTS’ PATENT RIGHTS, subject to LICENSEE’S reimbursement REGENTS’ out of pocket costsunder Article 14.3 below, and all patent applications and patents under REGENTS’ PATENT RIGHTS will beheld in the name of REGENTS. REGENTS will have sole responsibility for retaining and instructing patentcounsel, but continued use of such counsel at any point in the patent prosecution process subsequent to initialfiling of a U.S. patent application covering the INVENTIONS shall be subject to the approval of LICENSEE. IfLICENSEE rejects three of REGENTS’ choice of prosecution counsel, then REGENTS may select newprosecution counsel without LICENSEE’s consent. REGENTS shall promptly provide LICENSEE with copiesof all relevant documentation so that LICENSEE may be currently informed and apprised of the continuingprosecution and LICENSEE agrees to keep this documentation confidential in accordance with Article 26.LICENSEE may comment upon such documentation, provided, however, that if LICENSEE has not commentedupon such documentation in reasonable time for REGENTS to sufficiently consider LICENSEE’s commentsprior to the deadline for filing a response with the relevant government patent office, REGENTS will be free torespond appropriately without consideration of LICENSEE’s comments. LICENSEE and LICENSEE’s patentcounsel will have the right to consult with patent counsel chosen by REGENTS. 14.2REGENTS will use reasonable efforts to prepare or amend any patent application to include claims reasonablyrequested by LICENSEE to protect the LICENSED PRODUCTS contemplated to be SOLD or to be practicedunder this Agreement. 14.3Subject to Paragraph 14.4, all past, present, and future costs for preparing, filing, prosecuting, and maintaining allUnited States and foreign patent applications, and patents under REGENTS’ PATENT RIGHTS will be borne byLICENSEE, so long as the licenses granted to LICENSEE herein are exclusive. To date the remaining past patentcosts paid by REGENTS are about [*]. Payments are due within thirty (30) days after receipt of invoice fromREGENTS. If, however, REGENTS reduces the exclusive licenses granted herein to non-exclusive licensespursuant to Paragraphs 7.3, 7.4, or 7.5 and REGENTS grants additional license(s), the costs of preparing, filing,prosecuting and maintaining such patent applications and patentsPage 20 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. will be divided equally among the licensed parties from the effective date of each subsequently granted licenseagreement. 14.4LICENSEE’s obligation to underwrite and to pay all domestic and foreign patent filing, prosecution, andmaintenance costs will continue for so long as this Agreement remains in effect, provided, however, thatLICENSEE may terminate its obligations with respect to any given patent application or patent in any or alldesignated countries upon [*] written notice to REGENTS. REGENTS will use its best efforts to curtail patentcosts when such a notice is received from LICENSEE. REGENTS may continue prosecution and/or maintenanceof such applications or patents at its sole discretion and expense; provided, however, that LICENSEE will have nofurther right or licenses thereunder.15.MARKING 15.1Prior to the issuance of patents under REGENTS’ PATENT RIGHTS, LICENSEE agrees to mark LICENSEDPRODUCT(S) (or their containers or labels) made, sold, licensed or otherwise disposed of by it in the UnitedStates under the license granted in this Agreement with the words “Patent Pending,” and following the issuance inthe United States of one or more patents under REGENTS’ PATENT RIGHTS, with the numbers of theREGENTS’ PATENT RIGHTS. All LICENSED PRODUCTS shipped to, manufactured, or sold in othercountries will be marked in such manner as to conform with the patent laws and practice of such countries.16.USE OF NAMES AND TRADEMARKS 16.1Nothing contained in this Agreement will be construed as conferring any right to use in advertising, publicity orother promotional activities any name, trademark, trade name, or other designation of either party hereto by theother (including any contraction, abbreviation, or simulation of any of the foregoing). Unless required by law orconsented to in writing by REGENTS, the use by LICENSEE of the name “The Regents of the University ofCalifornia” or the name of any University of California campus in advertising, publicity or other promotionalactivities is expressly prohibited. Unless required by law or consented to in writing by LICENSEE, the use byREGENTS of the name “Avalanche Biotechnologies” in advertising, publicity or other promotional activities isexpressly prohibited.Page 21 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.17.LIMITED WARRANTIES 17.1REGENTS warrants to LICENSEE that it has the lawful right to grant this license. 17.2To the extent of the actual knowledge of the licensing professional responsible for administration of theAgreement as of the Effective Date, it is the owner of the REGENT’S PATENT RIGHTS, and it has not grantedany right, license or interest in or to the REGENT’S PATENT RIGHTS to any third party. 17.3Except as provided herein, this license, the BIOLOGICAL MATERIAL and the associated INVENTIONS areprovided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULARPURPOSE OR ANY OTHER WARRANTY, EXPRESSED OR IMPLIED. REGENTS MAKES NOREPRESENTATION OR WARRANTY THAT THE INVENTIONS, THE BIOLOGICAL MATERIAL,REGENTS’ PATENT RIGHTS, LICENSED PRODUCTS, LICENSED SERVICES OR LICENSEDMETHOD WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT. 17.4EXCEPT OF LICENSEE’S DUTIES FOR CLAIMS OF THIRD PARTIES UNDER ARTICLE 19, IN NOEVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, SPECIAL ORCONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OFTHE INVENTIONS, THE BIOLOGICAL MATERIAL, REGENTS’ PATENT RIGHTS, LICENSEDMETHOD, LICENSED SERVICES OR LICENSED PRODUCTS. 17.5Except as expressly provided in this Article 17, nothing in this Agreement is or will be construed as: (a)A warranty or representation by REGENTS as to the validity, enforceability or scope of anyREGENTS’ PATENT RIGHTS; or (b)A warranty or representation that anything made, used, or SOLD under any license granted in thisAgreement is or will be free from infringement of patents of third parties; or (c)An obligation to bring or prosecute actions or suits against third parties for patent infringement, exceptas provided in Article 18; or (d)Conferring by implication, estoppel, or otherwise any license or rights under any patents of REGENTSother than REGENTS’ PATENT RIGHTS as defined herein, regardless of whether such patents aredominant or subordinate to REGENTS’ PATENT RIGHTS; orPage 22 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. (e)An obligation to furnish any know-how not provided in the patents and patent applications underREGENTS’ PATENT RIGHTS, and REGENTS’ PROPERTY RIGHTS as defined herein.18.PATENT INFRINGEMENT 18.1In the event that a party (in the case of the REGENTS to the extent of the actual knowledge of the licensingprofessional responsible for the administration of this Agreement) learns of the substantial infringement of anyREGENTS’ PATENT RIGHTS under this Agreement, such party will promptly provide the other party withnotice and reasonable evidence of such infringement (“Infringement Notice”). During the period and in ajurisdiction where LICENSEE has exclusive rights under this Agreement, neither party will notify a third party,including the infringer, of the infringement without first obtaining consent of the other party, which consent willnot be unreasonably withheld. Both parties will use diligent efforts, in cooperation with each other, to terminatesuch infringement without litigation. 18.2LICENSEE shall have the first right to institute suit for patent infringement against the infringer [*] after theInfringement Notice in 18.1. REGENTS may voluntarily join such suit at its own expense, but may not thereaftercommence suit against the infringer for the acts of infringement that are the subject of LICENSEE’s suit or anyjudgment rendered in that suit. LICENSEE may not join REGENTS in a suit initiated by LICENSEE withoutREGENTS’ prior written consent. If, in a suit initiated by LICENSEE, REGENTS is involuntarily joined otherthan by LICENSEE, LICENSEE will pay any third party costs incurred by REGENTS arising out of such suit,including but not limited to, any legal fees of outside counsel that REGENTS selects and retains to represent it inthe suit.If, within [*] following the effective date of the Infringement Notice, the infringing activity of potentialcommercial significance has not been abated and if LICENSEE has not brought suit against the infringer,REGENTS may institute suit for patent infringement against the infringer. If REGENTS institutes such suit,LICENSEE may not join such suit without REGENTS’ consent and may not thereafter commence suit against theinfringer for the acts of infringement that are the subject of REGENTS’ suit or any judgment rendered in that suit. 18.3Such legal action as is decided upon will be at the expense of the party on account of whom suit is brought and allrecoveries recovered thereby will belong to suchPage 23 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. party, provided that legal action brought jointly by REGENTS and LICENSEE and participated in by both, willbe at the joint expense of the parties and all recoveries will be allocated in the following order: a) to each partyreimbursement in equal amounts of the attorney’s costs, fees, and other related expenses to the extent each partypaid for such costs, fees, and expenses until all such costs, fees, and expenses are consumed for each party; and b)any remaining amount shared jointly by them in proportion to the share of expenses paid by each party, but in noevent will REGENTS’ share be [*] of such remaining amount if REGENTS is a party. 18.4Each party will cooperate with the other in litigation instituted hereunder but at the expense of the party onaccount of whom suit is brought. Such litigation will be controlled by the party bringing the action, except thatREGENTS may be represented by counsel of its choice in any suit brought by LICENSE. 18.5Any agreement made by LICENSEE for the purposes of settling litigation or other dispute shall comply with therequirements of Article 4 (Sublicenses) of this Agreement.19.INDEMNIFICATION 19.1LICENSEE will, and will require its sublicensees to, indemnify, hold harmless, and defend REGENTS and itsofficers, employees, and agents; sponsor(s) of the research that led to the INVENTIONS; and BIOLOGICALMATERIAL covered by REGENTS’ PROPERTY RIGHTS; and the inventors of any patents and patentapplications under REGENTS’ PATENT RIGHTS and their employers against any and all claims, suits, losses,damages, costs, fees, and expenses resulting from or arising out of exercise of this license or any sublicense or anyuse or possession of the BIOLOGICAL MATERIAL. This indemnification will include, but not be limited to,any product liability. 19.2LICENSEE, at its sole cost and expense, will insure its activities in connection with any work performedhereunder and will obtain, keep in force, and maintain the following insurance: (a)Commercial Form General Liability Insurance (contractual liability included) with limits as follows:Each Occurrence[*]Products/Completed Operations Aggregate[*]Page 24 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Personal and Advertising Injury[*]General Aggregate[*]If the above insurance is written on a claims-made form, it shall continue for [*] years followingtermination or expiration of this Agreement. The insurance shall have a retroactive date of placementprior to or coinciding with the Effective Date of this Agreement; and (b)Worker’s Compensation as legally required in the jurisdiction in which LICENSEE is doing business. 19.3The coverage and limits referred to in Subparagraphs 19.2a and 19.2b above will not in any way limit the liabilityof LICENSEE under this Article. Upon the execution of this Agreement, LICENSEE will furnish REGENTSwith certificates of insurance evidencing compliance with all requirements. Such certificates will: (a)provide for [*] advance written notice to REGENTS of any cancellation of insurance coverages;LICENSEE will promptly notify REGENTS of any material modification of the insurance coverages; (b)indicate that REGENTS has been endorsed as an additional insured under the coverage describedabove in Subparagraph l9.2; and (c)include a provision that the coverage will be primary and will not participate with, nor will be excessover, any valid and collectable insurance or program of self-insurance maintained by REGENTS. 19.4REGENTS will promptly notify LICENSEE in writing of any claim or suit brought against REGENTS for whichREGENTS intends to invoke the provisions of this Article 19. LICENSEE will keep REGENTS informed of itsdefense of any claims pursuant to this Article 19.20.COMPLIANCE WITH LAWS 20.1LICENSEE will comply with all applicable international, national, state, regional, and local laws and regulationsin performing its obligations hereunder and in its use, manufacture, SALE or import of the LICENSEDPRODUCTS, LICENSED SERVICES, or practice of the LICENSED METHOD. LICENSEE understands thatREGENTS is subject to United States laws and regulations (including the ArmsPage 25 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Export Control Act, as amended, and the Export Administration Act of 1979), controlling the export of technicaldata, computer software, laboratory prototypes and other commodities, and REGENTS’ obligations under thisAgreement are contingent on compliance with such laws and regulations. The transfer of certain technical dataand commodities may require a license from the cognizant agency of the United States Government and/or writtenassurances by LICENSEE that LICENSEE will not export such technical data and/or commodities to certainforeign countries without prior approval of such agency. REGENTS neither represents that a license will not berequired nor that, if required, it will be issued.21.GOVERNMENT APPROVAL OR REGISTRATION 21.1If this Agreement or any associated transaction is required by the law of any nation to be either approved orregistered with any governmental agency, LICENSEE will assume all legal obligations to do so. LICENSEE willnotify REGENTS if it becomes aware that this Agreement is subject to a United States or foreign governmentreporting or approval requirement. LICENSEE will make all necessary filings and pay all costs including fees,penalties, and all other out-of-pocket costs associated with such reporting or approval process.22.ASSIGNMENT 22.1This Agreement is binding upon and shall inure to the benefit of REGENTS, its successors and assigns. ThisAgreement will be personal to LICENSEE and assignable by LICENSEE only with the written consent ofREGENTS, except that LICENSEE may freely assign this Agreement to an acquirer of all or substantially all ofLICENSEE’s stock, assets or business.23.NOTICES 23.1All notices under this Agreement will be deemed to have been fully given and effective when done in writing anddelivered in person, or mailed by registered or certified U.S. mail, or deposited with a carrier service requiringsignature by recipient, and addressed as follows: To REGENTS:Office of Technology Licensing2150 Shattuck Avenue, Suite 510Page 26 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Berkeley, CA 94704-1347Attn.: Director [*] To LICENSEE:Avalanche Biotechnologies, Inc665 Third Street, Suite 250San Francisco, CA 94107Attn.: Thomas W. Chalberg, Ph.D.Either party may change its address upon written notice to the other party.24.LATE PAYMENTS 24.1If monies owed to REGENTS under this Agreement are not received by REGENTS when due, LICENSEE willpay to REGENTS interest charges [*] on the date such payment is due, [*]. Such interest will be calculated fromthe date payment was due until actually received by REGENTS. Such accrual of interest will be in addition to,and not in lieu of, enforcement of any other rights of REGENTS related to such late payment. Acceptance of anylate payment will not constitute a waiver under Article 25 (Waiver) of this Agreement.25.WAIVER 25.1The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition ofthis Agreement will not constitute a waiver of that right or excuse a similar subsequent failure to perform any suchterm or condition by the other party. None of the terms and conditions of this Agreement can be waived except bythe written consent of the party waiving compliance.26.CONFIDENTIALITY 26.1Each party will hold the other party’s proprietary business and technical information, patent prosecution materialand other proprietary information, including the negotiated terms of this Agreement, in confidence and againstdisclosure to third parties with at least the same degree of care as it exercises to protect its own data and licenseagreements of a similar nature. This obligation will expire [*] years after the termination or expiration of thisAgreement.Page 27 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 26.2Nothing contained herein will in any way restrict or impair the right of LICENSEE or REGENTS to use,disclose, or otherwise deal with any information or data which: (a)at the time of disclosure to a receiving party is generally available to the public or thereafter becomesgenerally available to the public by publication or otherwise through no act of the receiving party; (b)the receiving party can show by written record was in its possession prior to the time of disclosure to ithereunder and was not acquired directly or indirectly from the disclosing party; or (c)is independently made available to the receiving party without restrictions as a matter of right by a thirdparty.In addition, nothing contained herein will in any way restrict or impair the right of LICENSEE or REGENTS tomake any disclosure required under the California Public Records Act or pursuant to other requirements of law. 26.3REGENTS will be free to release to the inventors and senior administrators employed by REGENTS the termsand conditions of this Agreement upon their request. If such release is made, REGENTS will inform suchemployees of the confidentiality obligations set forth above and will request that they do not disclose such termsand conditions to others. Should a third party inquire whether a license to REGENTS’ PATENT RIGHTS isavailable, REGENTS may disclose the existence of this Agreement and the extent of the grant in Articles 3 and 4to such third party, but will not disclose the name of LICENSEE unless LICENSEE has already made suchdisclosure publicly, except where REGENTS is required to release information under either the California PublicRecords Act or other applicable law, provided REGENTS gives prior written notice to LICENSEE of suchdisclosure. 26.4LICENSEE and REGENTS agree to destroy or return to the disclosing party proprietary information receivedfrom the other in its possession within fifteen (15) days following the effective date of termination of thisAgreement. However, each party may retain one copy of proprietary information of the other solely for archivalpurposes in non-working files for the sole purpose of verifying the ownership of the proprietary information,provided such proprietary information will be subject to the confidentiality provisions set forth in Article 26.1.LICENSEE and REGENTS agree to provide each other, within thirty (30) days followingPage 28 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. termination of this Agreement, with a written notice that proprietary information has been returned or destroyed.27.FORCE MAJEURE 27.1Except for LICENSEE’s obligation to make any payments to REGENTS hereunder, the parties to this Agreementshall be excused from any performance required hereunder if such performance is rendered impossible orunfeasible due to any catastrophes or other major events beyond their reasonable control, including, withoutlimitation, war, riot, and insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes, lockouts, orother serious labor disputes; and floods, fires, explosions, or other natural disasters. When such events haveabated, the parties’ respective obligations hereunder will resume.28.SEVERABILITY 28.1The provisions of this Agreement are severable, and in the event that any provision of this Agreement will bedetermined to be invalid or unenforceable under any controlling body of law, such invalidity or enforceability willnot in any way affect the validity or enforceability of the remaining provisions hereof.29.APPLICABLE LAW; VENUE; ATTORNEYS’ FEES 29.1THIS AGREEMENT WILL BE CONSTRUED, INTERPRETED, AND APPLIED IN ACCORDANCEWITH THE LAWS OF THE STATE OF CALIFORNIA, excluding any choice of law rules that would directthe application of the laws of another jurisdiction, but the scope and validity of any patent or patent applicationunder REGENTS’ PATENT RIGHTS will be determined by the applicable law of the country of such patent orpatent application. Any legal action brought by the parties relating to this Agreement will be conducted in [*]. Theprevailing party in any legal action under this Agreement will be entitled to recover its reasonable attorneys’ feesin addition to its costs and necessary disbursements.30.ELECTRONIC COPY 30.1The parties to this document agree that a copy of the original signature (including an electronic copy) may be usedfor any and all purposes for which the originalPage 29 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. signature may have been used. The parties further waive any right to challenge the admissibility or authenticity ofthis document in a court of law based solely on the absence of an original signature.31.SCOPE OF AGREEMENT 31.1This Agreement (except for the Confidentiality Agreement [*] which will continue to the extent it is notinconsistent with this Agreement) incorporates the entire agreement between the parties with respect to the subjectmatter hereof, and this Agreement may be altered or modified only by written amendment duly executed by theparties hereto.Page 30 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorizedofficers or representatives.THE REGENTS OF THE UNIVERSITY OF CALIFORNIABy /s/ Carol MimuraCarol Mimura, Ph.D.Assistant Vice ChancellorOffice of Technology LicensingDateAVALANCHE BIOTECHNOLOGIES, INC.By/s/ Thomas ChalbergThomas Chalberg, Ph.D.Chief Executive Officer DateJune 17, 2013 Page 31 of 31[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separatelywith the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Exhibit 10.47LICENSE AGREEMENTThis License Agreement (the “Agreement”) dated October 12, 2011 (the “Effective Date”), is between Virovek, Inc., aDelaware corporation (“Virovek”) with an address at 3521 Investment Boulevard, Suite 1, Hayward, California 94545, andAvalanche Biotechnologies, Inc., a Delaware corporation (“Avalanche”) with an address at 665 Third Street, Suite 250, SanFrancisco, California 94107. Virovek and Avalanche shall each be a “Party” and together shall be the “Parties”.RecitalsWhereas, Virovek has developed proprietary methods and materials for manufacturing adeno-associated virus (“AAV”)using baculovirus;Whereas, Avalanche is a drug delivery company that specializes in the development of novel therapeutics for the treatmentof ophthalmic diseases and conditions;Whereas, Virovek and Avalanche desire to enter into a license agreement pursuant to which Avalanche would receiverights to use and further develop Virovek’s proprietary technology for the production of clinical and commercial scale quantities ofAvalanche’s proprietary therapeutic products; andWhereas, Virovek will also grant to Avalanche the right to develop, use and commercialize, itself or with or through thirdparties, Virovek’s proprietary technology for the production of other therapeutic products at clinical and commercial scale;Now, Therefore, in consideration of the foregoing premises and the mutual covenants below, the Parties agree as follows:ARTICLE 1DEFINITIONSThe following terms, whenever used in this Agreement, shall have the following meanings:1.1“Affiliate” means any entity that directly or indirectly controls, is controlled by or is under common control with theParty and for this purpose “control” means the possession directly or indirectly of the power to direct or cause the direction of themanagement and policies of the entity whether through voting shares, securities or otherwise.1.2“Applicable Laws” shall mean all federal, state and local laws statutes, rules, regulations, and ordinances,applicable to the development, manufacture, distribution, use and1Avalanche ConfidentialCommercialization of Licensed Products throughout the world including without limitation, the applicable regulations and guidelinesof any governmental authority including the FDA and foreign counterparts and all applicable good manufacturing practices togetherwith amendments thereto.1.3“Audit Trigger” means the date upon which Avalanche becomes obligated to pay to Virovek pursuant to thisAgreement an aggregate of [*]1.4“Avalanche Product” means a Licensed Product, whether it is a Standard Product or an Improved Product, that (i)is developed in whole or in part by Avalanche or its Affiliates, alone or with their Sublicensees, and (ii) incorporates any compositionof matter potentially useful for the prevention, treatment or amelioration of a disease or condition, and/or is based on a method oftreatment or use, that is covered by intellectual property rights controlled by Avalanche or its Affiliates other than those licensed toAvalanche by Virovek pursuant to this Agreement.1.5“Calendar Quarter” means each three month period commencing on the first day of January, April, July andOctober in any given calendar year.1.6“Combination Product” means a product that includes an Avalanche Product and at least one (1) OtherComponent.1.7“Commercialize” means to use commercially, sell, have sold, offer for sale, market, promote, import, export orotherwise exploit a Licensed Product.1.8“Confidential Information” means all non-publicly available information provided by one Party to the other Party,including without limitation any information that relates to the Licensed Product, or any gene sequences, genetic mutations, variationsor polymorphisms, vectors, organisms, cells, cell lines, tissues, biochemical or physiological consequences of any genetic variation,research, technology, discoveries, data, inventions, assays, production processes, know-how, products, services, clients, partners,markets, employees, business plans and financial information.1.9“Control” or “Controlled” means, with respect to any designated item or intellectual property right with respect towhich a right or license is granted by a Party to the other hereunder, the ability and right (whether by ownership or license, other thanpursuant to this Agreement) of the Party to grant such right or license as provided for herein without violating the terms of anyagreement or other arrangement with any Third Party existing at the time such Party grants the other Party such right or license.1.10“FDA” means the U.S. Food and Drug Administration of the U.S. Department of Health and Human Services andany successor agencies.1.11“Field” means all fields of use.1.12“Improved Product” means any Licensed Product incorporating or otherwise produced utilizing (i) technology orintellectual property that is Controlled by Avalanche (other than a Virovek Improvement) in addition to [*] or (ii) any Improvementsconceived and reduced to practice in whole or in part by Avalanche following the Effective Date.2[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidential1.13“Improvements” means any modification, development, enhancement, derivative, variation or improvement to theVirovek Technology, including, without limitation, a composition of matter, a method of making or using, a formulation, aconfiguration or other attribute of the materials, organisms, methods, media, production process flow, downstream processing and/orscaleability, or other items used to practice the Virovek Technology as it exists as of the Effective Date or as it is improved in thecourse of the Parties’ activities under this Agreement that is made by either Party in performing activities under this Agreement.1.14“Know-How” shall mean any and all Confidential Information, trade secrets, technology, media, materials,samples, know-how, show-how, discoveries, algorithms, unpatented inventions, developments, improvements, techniques, methods,test methods, processes, protocols, recipes, data (including development data), instructions, formulae, drawings and specifications,whether or not patentable or protectable.1.15“Law” shall mean any federal, state or local law, statute or ordinance, or any rule, regulation, or publishedguidelines promulgated by any governmental or Regulatory Authority in any jurisdiction.1.16“Licensed Product” means any product that is made using or that incorporates the Virovek Technology (includingany Virovek know-how) and/or a Virovek Improvement. For the avoidance of doubt, Licensed Products include Standard Products orImproved Products that incorporate Virovek Technology and/or Virovek Improvements, but shall not include products that do notincorporate any Virovek Technology or Virovek Improvements.1.17“Net Sales” means the gross amount invoiced by or on behalf of Avalanche, its Affiliates and their respectiveSublicensees for sales of Avalanche Products in the Territory (other than sales among Avalanche, its Affiliates or Sublicensees forsubsequent resale, in which case the first sale to a Third Party that is not a Sublicensee or an Affiliate of a Sublicensee shall be used forcalculation of Net Sales), less the following deductions if and to the extent they are (i) included in the gross invoiced sales price ofAvalanche Products or otherwise directly incurred by Avalanche, its Affiliates and their respective Sublicensees with respect to the saleof Avalanche Products, and (ii) not otherwise deducted in computing other amounts hereunder: (a) Voluntary rebates, quantity andcash discounts, and other discounts to customers, [*] (b) taxes (except income taxes) and tariffs or duties paid, absorbed or allowedwhich are directly related to the sale of Avalanche Products, (c) credits, allowances, discounts and rebates to, and chargebacks for,spoiled, damaged, out-dated, rejected or returned Avalanche Products (including in connection with Avalanche Product withdrawals,expired Avalanche Product and Avalanche Product recalls), (d) actual freight and insurance costs, including without limitation thecosts of export licenses, shipping, postage and handling charges, incurred in transporting Avalanche Products to customers, (e)discounts, retroactive price reductions, rebates or other payments required by government entities, government regulations, orApplicable Law, including any governmental medical assistance programs, and (f) customs duties, surcharges and other governmentalcharges incurred in connection with the exportation or importation of Avalanche Products.In the case of any sale or other disposal of Product for non-cash consideration, Net Sales shall be calculated as the fairmarket price of Avalanche Products in the country of sale or disposal. Notwithstanding the foregoing, provision of Avalanche Productsfor the purpose of conducting3[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialpre-clinical or clinical research shall not be deemed to be a sale. For clarity, any Avalanche Products provided as free samples or ascharitable donations shall not give rise to any Net Sales. Net Sales shall be determined in accordance with GAAP.Notwithstanding the foregoing, in the event a Product is sold in a country in the Territory as a Combination Product, NetSales of the Combination Product will be calculated as follows:(i)If the Avalanche Product contained in the Combination Product and Other Component(s) contained in theCombination Product each are sold separately in such country, Net Sales will be calculated by multiplying the total Net Sales(as described above) of the Combination Product by the fraction A/(A+B), where A is the [*] in such country of theAvalanche Product sold separately in the same formulation and dosage, and B is the sum of the [*] in such country of suchOther Component(s) sold separately in the same formulation and dosage, during the applicable Calendar Year.(ii)If the Avalanche Product contained in the Combination Product is sold independently of the Other Component(s)contained in the Combination Product in such country, but the average gross selling price of such Other Component(s) insuch country cannot be determined, Net Sales will be calculated by multiplying the total Net Sales (as described above) ofthe Combination Product by the fraction A/C where A is the [*] in such country of such Avalanche Product soldindependently and C is the [*] in such country of the entire Combination Product, during the applicable Calendar Year.(iii)If the Other Component(s) contained in the Combination Product are sold independently of the Avalanche Productcontained in the Combination Product in such country, but the average gross selling price of such Avalanche Product in suchcountry cannot be determined, Net Sales will be calculated by multiplying the total Net Sales (as described above) of theCombination Product by the fraction (1-(B/C)), where B is the [*] in such country of such Other Component(s) and C is the[*] in such country of the entire Combination Product, during the applicable Calendar Year.(iv)If the Avalanche Product contained in the Combination Product and Other Component(s) contained in theCombination Product are not sold separately in such country, or if they are sold separately but the average gross selling priceof neither such Avalanche Product nor such Other Component(s) can be determined in such country, Net Sales of theCombination Product in such country will be [*]1.18“Other Component” means, for purposes of Section 1.16, any therapeutically active pharmaceutical ingredient ordelivery device other than an Avalanche Product.1.19“Other Products” means any Licensed Product, whether it is a Standard Product or an Improved Product, that isnot an Avalanche Product.1.20“Patents” means (a) unexpired letters patent (including without limitation inventor’s certificates), including withoutlimitation any substitution, extension, registration, confirmation, reissue, re-examination, renewal, or any like filing thereof (“IssuedPatents”), and (b) pending applications for letters patent, including without limitation any continuation,4[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialdivisional, or continuation-in-part thereof, and any provisional or non-provisional applications (“Patent Applications”).1.21“Regulatory Authority” means the FDA in the United States, and the equivalent regulatory authority orgovernmental entity having the responsibility, jurisdiction, and authority to approve the manufacture, use, importation, packaging,labeling, marketing, and sale of diagnostic products in any country or jurisdiction in the Territory other than the United States.1.22“Standard Product” means any Licensed Product incorporating or otherwise produced utilizing technologydisclosed in the Initial Patent Application as it exists as of the Effective Date, or any Virovek Improvement, but not any (i) technologyor intellectual property that is Controlled by Avalanche in addition to that disclosed in the Initial Patent Application (other than aVirovek Improvement), or (ii) any Improvements conceived and reduced to practice by Avalanche following the Effective Date.1.23“Sublicensee” means an Affiliate of Avalanche or a Third Party to which a sublicense is granted under the licensegranted to Avalanche in Section 2.1, in accordance with Section 2.3 and/or 2.4, including any Affiliate of Avalanche or Third Partythat receives a further sublicense from another such Affiliate or Third Party sublicense.1.24“Technology Transfer” means the transfer from Virovek to Avalanche, its Affiliates or its Sublicensees of theLicensed Know-How as provided in Section 7.1.1.25“Territory” means worldwide.1.26“Third Party Revenue” means all consideration received by Avalanche in consideration for the grant of asublicense under the rights granted to Avalanche pursuant to Section 2.1 with respect to Other Products, excluding (i) equityinvestments made by Sublicensees in Avalanche, to the extent such investments do not exceed the fair market value of such equity,(ii) payment by Sublicensees to Avalanche as reimbursement of patent expenses or expenses related to Technology Transfer ortechnical support, in each case related to Other Products, (iii) payments by Sublicensees to Avalanche for research, development, andpre-clinical and clinical studies undertaken by Avalanche on behalf of Sublicensees or financing of research and development atAvalanche’s expense related to Other Products, (iv) payments for the supply of Other Products, or components and materials used forthe production of Other Products, and (v) amounts received in consideration for intellectual property rights that are not VirovekPatents or Virovek Know-How, as reasonably determined by Avalanche.1.27“Third Party” means any entity other than Avalanche or Virovek, or an Affiliate of either of them.1.28“Valid Claim” means for any country, a claim of an Issued Patent that has not expired or been held unpatentable,invalid, or unenforceable by a court or other government agency of competent jurisdiction in an unappealed or unappealable decisionor has not been admitted to be invalid or unenforceable through reissue, re-examination, disclaimer, or otherwise, or a claim of a PatentApplication that has been filed in good faith and not abandoned or withdrawn, and which has not been pending before the applicablepatent office for a period [*] from the original5[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialdate of filing, provided that if a pending Patent Application becomes an Issued Patent at any time after the expiration of such [*]period, the claims of such Issued Patent shall be Valid Claims from the date upon which they issue.1.29“Virovek Improvement” means any Improvement created or reduced to practice (either actually or constructivelyin a Patent Application or Issued Patent) solely by Virovek.1.30“Virovek Know-How” means all Know-How Controlled by Virovek that is necessary or useful for thedevelopment, manufacture, use or Commercialization of Licensed Product, or otherwise for the practice of the Virovek Technology inthe Field, including without limitation any technical data and characterizing specifications for the Standard Product or any ImprovedProduct that is not publically available.1.31“Virovek Patents” means all Patents Controlled by Virovek claiming inventions that are necessary or useful forthe development, manufacture, use or Commercialization of Licensed Products, or otherwise for the practice of the VirovekTechnology in the Field, [*] (the “Initial Patent Application”) and foreign counterparts as further described at Exhibit A, anycontinuations, continuations-in-part or divisionals or other Patents claiming priority to the Initial Patent Application or foreigncounterparts thereto, and all Patents issuing from such Patents.1.32“Virovek Technology” means the invention disclosed in the Initial Patent Application.ARTICLE 2GRANT OF LICENSES2.1License to Avalanche. Subject to the terms and upon the conditions set forth in this Agreement, Virovek herebygrants, and Avalanche accepts, a royalty-bearing, non-exclusive, non-transferable, sublicensable license under the Virovek Patents andVirovek Know-How to develop, make, have made, use and Commercialize Licensed Products in the Field and in the Territory.2.2Sublicensing. Subject to the terms and upon the conditions of this Agreement, Avalanche shall have the right togrant Sublicenses to Third Parties, provided that such Sublicenses are consistent with the applicable terms of this Agreement. NoSublicense granted by Avalanche under this Section 2.2 shall relieve Avalanche of its obligations of performance under thisAgreement.2.3Right of Notice and First Negotiation. In the event that Virovek enters into discussions or negotiations withrespect to the terms under which Virovek may grant a license to any Third Party under the Virovek Patents and the Virovek Know-How (a “Third Party License”), Virovek will provide Avalanche with notice of such discussions or negotiations [*] Followingreceipt of such notice from Virovek, Avalanche shall have the first right to negotiate with Virovek terms and conditions for convertingthis license to an exclusive license [*] (an “Exclusive License”). If Avalanche desires to exercise such right, it shall so notify Virovekwithin [*] after receiving notice from Virovek. The Parties shall negotiate in good faith for a period of up6[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialto [*] (the “Negotiation Period”) after Avalanche receives notice of Virovek’s discussions or negotiations with a Third Party. Duringthe Negotiation Period, Virovek will suspend further discussions or negotiations with any Third Party in relation to a Third PartyLicense. The Parties may extend the Negotiation Period by mutual written agreement for a period of up to [*]. If the Parties fail toexecute an Exclusive License at the end of the Negotiation Period, [*]ARTICLE 3CONSIDERATION3.1License Issue Fee. Avalanche shall pay to Virovek a license issue fee of [*], payable in two installments, inconsideration for the rights granted to Avalanche under this Agreement:(a)A one-time payment of [*] within [*]; and(b)A one-time payment of [*] within [*]The license issue fee is non-refundable and non-creditable against any milestone payments or royalties payable under this Agreement.3.2Annual License Fee. Avalanche shall pay to Virovek an annual fee of [*] (the “Annual Fee”) to maintain therights granted to it herein. The Annual Fee shall be payable to Virovek’s nominated bank account within [*] days of Avalanche’sreceipt of a valid invoice from Virovek for the amount of the Annual Fee, which invoice shall be issued by Virovek following eachanniversary of the Effective Date, commencing with the first anniversary of the Effective Date.3.3Royalty Payments. In partial consideration for the license granted hereunder, and subject to the terms andconditions of this Agreement, subject to Section 3.9, Avalanche shall pay to Virovek during the Term a royalty (the “Royalty”) onincremental annual Net Sales of Avalanche Products by Avalanche, its Affiliates and Sublicensees, as follows:Portion of Annual Net Sales of AvalancheProductsRoyalty Percentage[*][*]>[*] ≤ [*][*]>[*] ≤ [*][*]>[*][*]By way of example, if Net Sales of Avalanche Products equals [*] in a calendar year, the royalty rate on the first [*] of Net Sales willbe [*] and the royalty rate on the remaining [*] of Net Sales will be [*]7[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidential3.4Royalty Term; Abatement.(a)Avalanche’s obligation to pay royalties with respect to each Avalanche Productpursuant to Section 3.3 in each country in the Territory shall apply and continue for so long as one or more Valid Claims of theVirovek Patents cover the manufacture, use or sale of such Avalanche Product in such country at the time when the AvalancheProduct is manufactured, used or sold in such country.(b)In the event that the total annual royalties (including the Royalty) thatAvalanche is required to pay to Virovek and all other royalties payable by Avalanche, its Affiliates and Sublicensees to any ThirdParties (together the “Royalty Recipients”) in connection with the development, manufacture or Commercialization of a givenAvalanche Product exceed [*] the royalties payable to each of the Royalty Recipients shall be reduced [*]3.5Royalty calculation and reporting. Royalty obligations under this Article 3 shall begin to accrue upon the firstdate upon which a Net Sale of an Avalanche Product occurs. All royalty payment obligations that have accrued on Net Sales madeduring a Calendar Quarter shall be due and payable to Virovek [*] after the end of the Calendar Quarter. Together with any paymentof such royalties, Avalanche shall send to Virovek a written report setting forth the following in detail information necessary to confirmthe calculation of Net Sales of Avalanche Products and the royalty payments payable during such Calendar Quarter. If no royalty shallbe due, Avalanche shall so report.3.6Revenue Allocation. The Parties agree that any Third Party Revenue received by Avalanche from any Sublicenseeswill be shared between the Parties as follows:(a)Third Party Revenue received with respect to Other Products that are StandardProducts shall be apportioned [*] to Virovek, and [*]to Avalanche;(b)Third Party Revenue received with respect to Other Products that are ImprovedProducts shall be apportioned [*] Virovek, and [*] to Avalanche.(c)Avalanche’s payment obligations under this Section 3.6 shall apply andcontinue for so long as one or more Valid Claims of the Virovek Patents cover the manufacture, use or sale of such Other Product insuch country at the time when the Other Product is manufactured, used or sold in such country.3.7Payment of Third Party Revenue. Avalanche shall account to Virovek and pay payments due to Virovek withrespect to Third Party Revenue owed to Virovek pursuant to Section 3.6 [*] Avalanche will provide a statement specifying the totalamount Avalanche received, the deductions from such revenues taken to calculate Third Party Revenue payments due pursuant toSection 3.6, and the net Third Party Revenue payable to Virovek. Avalanche shall pay all such amounts to Virovek’s nominated bankaccount.3.8Payment Mechanics. All monies due to Virovek shall be paid in United States dollars. In the event that anyLicensed Products shall be sold in a currency other than United States dollars, the Net Sales of Avalanche Products for the reportingperiod, or any other amounts upon8[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialwhich payments are due to Virovek, shall be converted for the purpose of calculation of such royalty or amount into its equivalentdollar value [*] Any amounts not paid by Avalanche when due under this Agreement will be subject to interest from and including thedate payment is due through and including the date upon which Virovek has collected the funds in accordance herewith [*] Virovekwill pay any and all taxes levied on account of any payments made to it under this Agreement. If any taxes are paid or required to bewithheld by Avalanche for the benefit of Virovek on account of any royalty or other payments to Virovek under this Agreement,Avalanche will (a) deduct such taxes from the amount of royalty or other payments otherwise due to Virovek, (b) timely pay the taxesto the proper taxing authority, and (c) send proof of payment to Virovek and certify its receipt by the taxing authority as promptly aspracticable following such payment.3.9Records. Avalanche shall keep and maintain full, true and accurate books of account containing all particulars thatmay be necessary for the purpose of confirming the amounts payable to Virovek pursuant to this Agreement. The books of accountshall be kept at Avalanche’s principal place of business. The books of account and the supporting data shall be made available to anindependent auditor reasonably acceptable to Virovek [*] starting in the year in which the Audit Trigger occurs, at reasonable timesduring normal business hours upon at least ten (10) days advance written notice. Such audit may be conducted as to Net Sales andpayment-related records until the expiration of the [*] period following the end of the calendar year to which they pertain and shall bemade available under this Section 3.9 for the sole purpose of verifying Avalanche’s royalty statement or compliance in other respectswith this Agreement. The costs and expenses relating to such inspection shall be borne by Virovek, except that if an audit reveals thatAvalanche’s royalties calculated for any quarter period were underpaid by more than [*], Avalanche shall bear the costs of such auditin full.ARTICLE 4DEVELOPMENT AND COMMERCIALIZATION4.1Development and Commercialization. Avalanche shall use commercially reasonable efforts to further developand Commercialize for use in connection with Licensed Products in the Field the Virovek Technology, itself or with or through ThirdParty Sublicensees. Virovek shall use commercially reasonable efforts to cooperate with Avalanche’s efforts to further develop andCommercialize for use in connection with Licensed Products in the Field the Virovek Technology.ARTICLE 5IP OWNERSHIP; PATENT PROSECUTION AND ENFORCEMENT5.1Limitation. Except as expressly set forth in this Agreement, neither Party is granted any license or other right withrespect to intellectual property rights Controlled by the other Party.5.2Ownership of Improvements. The Parties agree that ownership of all inventions and all intellectual property rightstherein, arising out of any use of the Virovek Technology conducted under this Agreement, including without limitation Improvementsand other inventions9[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialthat are made by employees, independent contractors, or agents of either Party shall be governed by US laws of inventorship. Inrelation to any jointly created Improvements, each Party shall own an equal undivided interest in such Improvements, with no duty ofaccounting to the other Party (subject to the remainder of this Section 5.2). The Parties agree that any Virovek Improvements, andVirovek’s ownership interest in any jointly created Improvements shall be included within the Virovek Patents or the Virovek Know-How and shall be subject to the terms of the licenses granted under this Agreement. For the avoidance of doubt, inventions developedsolely by Avalanche shall belong to Avalanche, and inventions developed solely by Virovek shall belong to Virovek.5.3Patent Prosecution. Virovek shall have the first right, at its sole cost and expense, to conduct and controlprosecution, maintenance, challenges against validity and unenforceability or patentability with respect to the Virovek Patents. AtVirovek’s reasonable request, Avalanche shall cooperate with and assist Virovek in connection with such activities. Virovek shall notabandon any of the Virovek Patents in the Territory without providing reasonable prior written notice to Avalanche of such intention tosurrender and providing Avalanche an opportunity to assume responsibility for prosecution of such Licensed Patent, at its sole cost. IfAvalanche elects to assume such responsibility, Virovek shall assign such Virovek Patent to Avalanche, and such Virovek Patent shallno longer be subject to this Agreement (and no claims of such Patent shall be eligible to be Valid Claims for purposes of Section 1.27).5.4Enforcement of Virovek Technology. If either Party should become aware of any actual or threatenedinfringement or misappropriation by a Third Party of any rights included in the Virovek Patents or Virovek Know-How (a “ProductInfringement”), it shall promptly notify the other Party in writing, and provide any available information relating to such allegedProduct Infringement. Avalanche shall have the first right, but not the obligation, to bring or control, at its own expense, anyenforcement action relating to such Product Infringement, but shall keep Virovek informed in relation to all significant decisions.Virovek shall reasonably cooperate in any such enforcement and as necessary, join or be joined as a party to such action, provided thatAvalanche agrees to reimburse Virovek for all of its out-of-pocket costs, damages and expenses, including reasonable attorneys’ feesthat Virovek may incur in relation to such assistance or joinder, including any award of costs against it in any judgment. If Avalancheelects not to bring a claim in relation to such Product Infringement, [*] Virovek shall then have the right, at its own expense, to enforcethe Virovek Patents or Virovek Know-How. In the event that Virovek brings such an action, Avalanche shall reasonably cooperate inany such enforcement and as necessary, agree to join or be joined as a party to such action, provided that Virovek agrees to reimburseAvalanche for all of its out-of-pocket costs, damages and expenses, including reasonable attorneys’ fees that Avalanche may incur inrelation to such assistance or joinder, including any award of costs against it in any judgment. In each case, any costs, expenses ordamages hereunder to be reimbursed by the Party bringing the enforcement action shall be paid by the owing Party to the other Party[*] or receipt of evidence in writing that the costs, damages and expenses have been incurred. Any amount recovered in an action orsuit to enforce the Virovek Patents or Virovek Know-How shall be returned to the Party bringing such action, after the reimbursementof each Party’s out-of-pocket costs, including reasonable attorneys’ fees, except that if Avalanche is the Party bringing such action,such amount shall be treated as Net Sales of Avalanche Products by Avalanche for the purposes of Section 3.3.10[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidential5.5Infringement of Third Party Intellectual Property Rights. If a Third Party brings a claim or allegation ofinfringement, by reason of the manufacture, use or sale of a Licensed Product in the Field and in the Territory, of such Third Party’sPatent rights, the Party first receiving notice of such claim or allegation shall notify the other Party in writing and shall shareinformation relating thereto with such other Party (if necessary, pursuant to a common interest agreement).ARTICLE 6CONFIDENTIALITY6.1Use, Nondisclosure. With respect to the Confidential Information of the other Party, each Party agrees, during theterm of this Agreement and for [*] after this Agreement is terminated, or, in the case of Confidential Information that is a trade secret,until such Confidential Information is no longer a trade secret, as follows:(a)Each Party shall hold the other Party’s Confidential Information in confidenceand take reasonable precautions to protect the same (including, without limitation, all precautions such Party employs with respect to itsown confidential information).(b)Each Party agrees not to divulge the other Party’s Confidential Information toany Third Party unless approved in writing by the other Party, provided that in each case, such Third Party agrees to be bound byconfidentiality provisions at least as restrictive as those contained in this Section 6;(c)Each Party agrees not to make any use whatsoever at any time of the otherParty’s Confidential Information, except for the purpose of performing the Party’s obligations under this Agreement;(d)Each Party agrees not to use the other Party’s Confidential Information as thebasis for beginning any new research and development programs; and(e)Each Party agrees not to copy or reverse engineer the other Party’s ConfidentialInformation.6.2At the conclusion of this Agreement, each Party shall [*] either return the other’s Confidential Information in itspossession (including all copies) or shall, at the disclosing Party’s direction, destroy such Confidential Information (including allcopies) and certify its destruction to the disclosing Party.6.3Exclusions. The term “Confidential Information” shall not include any information which: (a) is in the publicdomain at the time of disclosure or enters the public domain following disclosure through no fault of the receiving Party, (b) is alreadyin the receiving Party’s possession prior to disclosure hereunder (as reflected by such Party’s written records) or is subsequentlydisclosed to the receiving Party with no obligation of confidentiality by a third Party having the right to disclose it, (c) is independentlydeveloped by the receiving Party without reference to the disclosing Party’s Confidential Information, or (d) is required to be disclosed11[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialpursuant to an order of any competent court or government agency or rules of a securities exchange with prior notice to disclosingParty, or as required by any Regulatory Authority, but shall notify the other Party prior to disclosing such information, and shallcooperate with the other Party using its commercially reasonable efforts either to enable the disclosing Party to seek protectivemeasures for the Confidential Information, or to seek confidential treatment of such Confidential Information, and will usecommercially reasonable efforts to limit any disclosure required to be made to any such agency to the minimum required for to meet therequirements of such order.6.4Necessary disclosures: Each Party may disclose the Confidential Information it receives under this Agreement to (i)its employees, contractors and permitted Sublicensees, (ii) to a potential or actual acquirer of such Party or the assets of such Party towhich this Agreement relates, (iii) for the purposes of Patent filing, prosecution and enforcement and (iv) to its advisors, provided thatin each of (i), (ii) and (iv), the disclosure is limited to the extent required for the performance of either Party’s obligations under thisAgreement, and provided that in each such case the individuals are subject to obligations of confidentiality in relation to suchinformation no less stringent than those contained in this Agreement.6.5Publicity. The Parties agree that no publicity release or announcement concerning the transactions contemplatedhereby will be issued without the advance written consent of the other Parties, such consent not to be unreasonably withheld, except assuch release or announcement may be required (a) by applicable Laws, (b) for filings with governmental agencies, (c) for prosecutingor defending litigation, and (d) for complying with applicable governmental regulations, court orders, and legal requirements, includingfilings with the U.S. Securities Exchange Commission and with Regulatory Authorities, in each of which cases the Party required tomake such release or announcement will, to the extent reasonably practicable before making any such release or announcement, affordthe other Parties with a reasonable opportunity to review and comment upon such release or announcement and use reasonable effortsto seek confidential treatment of such information.ARTICLE 7ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES7.1Technology Transfer. As promptly as practicable but in any event no more than [*] after the Effective Date,Virovek shall make available to Avalanche any tangible copies of the Virovek Know-How in its Control (or copies thereof) that arenecessary for Avalanche to exercise its rights under this Agreement.7.2Compliance with Law. Each Party will comply in all material respects with all applicable Laws in performing itsobligations and exercising its rights under this Agreement.ARTICLE 8REPRESENTATIONS AND WARRANTIES8.1By Both Parties. Each Party represents and warrants the following:12[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidential(a)it is duly organized, validly existing, and in good standing under the laws of thestate and/or nation of its organization;(b)it has all requisite corporate power and authority to enter into this Agreementand perform its obligations hereunder and grant the rights it purports to grant hereunder, and it has taken all necessary corporate actionon its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder;(c)the Agreement has been duly executed and delivered on behalf of it, andconstitutes a legal, valid, and binding obligation of such Party and is enforceable against it in accordance with its terms;(d)the execution, delivery, and performance of this Agreement by it does not, andthe consummation of the transactions contemplated hereby will not, violate or conflict with any provisions of its organizationaldocuments, bylaws, any law or regulation applicable to it, or any agreement, instrument, order, judgment, or decree to which it is aParty or by which it is bound that would materially affect its ability to consummate the transaction contemplated hereby or impair therights being granted to the other Party; and(e)all necessary consents, approvals, and authorizations of all governmentalauthorities and other Third Parties required to be obtained by such Party in connection with the entry into this Agreement have beenobtained.8.2IMPLIED WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 8, NEITHERPARTY MAKES ANY REPRESENTATIONS OR WARRANTIES AS TO THE VIROVEK PATENTS OR VIROVEKKNOW-HOW OR ANY OTHER MATTER, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BYSTATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED ORSTATUTORY WARRANTIES, INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. NOTHING IN THISAGREEMENT SHALL BE CONSTRUED AS A WARRANTY OR REPRESENTATION BY VIROVEK AS TO THEVALIDITY OR SCOPE OF ANY OF THE VIROVEK PATENTS.ARTICLE 9INDEMNIFICATION9.1Indemnity by Avalanche. Avalanche shall indemnify Virovek and its directors, officers, employees and agentsfrom any costs, damages, liabilities or expenses (including reasonable legal fees and expenses) in connection with claims or actionsbrought by Third Parties (collectively, “Losses”) to the extent arising from the breach by or on behalf of Avalanche of itsrepresentations, warranties or obligations hereunder, or the negligence or willful misconduct of Avalanche, its Affiliates, independentcontractors or Sublicensees.9.2Indemnity by Virovek. Virovek shall indemnify Avalanche and its directors, officers, employees and agents fromany Losses to the extent arising from the breach by or on13[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialbehalf of Virovek of its representations, warranties or obligations hereunder, or the negligence or willful misconduct of Virovek, itsAffiliates or independent contractors.9.3Conditions of Indemnification. The Indemnifying Party’s indemnity obligations as provided for in this Article 9shall be conditioned upon the following:(a)the Indemnified Party providing prompt written notice of the applicable Claimto the Indemnifying Party;(b)the Indemnified Party permitting the Indemnifying Party to have sole controlover the investigation, defense, or settlement of the applicable Claim;(c)the Indemnified Party reasonably cooperating with the Indemnifying Party inthe investigation and defense of such Claim; and(d)the Indemnified Party’s agreement not to compromise or otherwise settle anysuch Claim without the Indemnifying Party’s prior written consent, which consent shall not be unreasonably withheld or delayed.9.4Insurance. Each Party shall maintain insurance in the amounts of [*].9.5Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANYSPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANYBREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 9.4 IS INTENDED TO LIMIT OR RESTRICTTHE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER ARTICLE 9, OR DAMAGESAVAILABLE FOR A BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 6.ARTICLE 10TERM AND TERMINATION10.1Term. This Agreement shall be effective as of the Effective Date and, unless earlier terminated by mutualagreement or in accordance with other provisions herein, shall remain in effect until the expiration or abandonment of the last of theVirovek Patents included in the Virovek Technology.10.2Termination. Anything herein to the contrary notwithstanding, this Agreement may be terminated as follows:(a)Avalanche Voluntary Termination. Avalanche may terminate thisAgreement at any time by giving [*] written notice to Virovek.(b)Termination For Default. Each Party shall have the right to terminate thisAgreement for default due to the other Party’s uncured failure to comply in any material respect with the terms and conditions of thisAgreement. At least [*] (or, in the case of Avalanche’s14[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialfailure to make any payment hereunder when due, [*]) prior to any such termination for default, the Party seeking to so terminate shallgive the other Party written notice of its intention to terminate this Agreement in accordance with the provisions of this Section 10.2(b),which notice shall set forth the default(s) which form the basis for such termination. If the defaulting Party fails to correct suchdefault(s) by the end of the applicable notice period, the other Party immediately may terminate this Agreement.10.3Consequences of Expiration or Termination.(a)In the event of expiration or any termination of this Agreement, all rights andobligations of the Parties under this Agreement shall terminate, except as set forth in this Section 10.3.(b)In the event of any termination (but not expiration) of this Agreement:(i)All rights to the Virovek Technology and any VirovekImprovements shall revert to Virovek;(ii)Avalanche shall immediately cease any use and/orexploitation of the Virovek Patents and Virovek Know-How and cease developing, using, manufacturing, selling, distributing and/orlicensing any Licensed Product, either directly or indirectly, and shall cause its Affiliates, and require its Sublicensees, to do the same;and(iii)Each Party shall, at its election, either deliver to the otherParty or destroy, and shall cause its agents, consultants and Sublicensees to deliver to the other Party or destroy, all embodiments of theother Party’s Confidential Information or any part thereof in their possession, power or control; provided, however, that such Party mayretain, and permit its Sublicensees to retain, one archival copy of such Confidential Information solely for purposes of monitoring itscompliance with Article 6 hereof.(c)Neither expiration of this Agreement, nor termination of this Agreement for anyreason, shall relieve the Parties of any obligation accruing prior thereto and shall be without prejudice to the rights and remedies ofeither Party with respect to any antecedent breach of the provisions of this Agreement. Without limiting the generality of the foregoing,no expiration or termination of this Agreement, whether by lapse of time or otherwise, shall serve to terminate the obligations of theParties hereto under Sections 8.3, 10.1 and 10.3, and Articles 1, 6, 9 (but as to Sections 9.1 through 9.4 solely as to claims arising fromactivities during the term of this Agreement) and 11 and such other Sections as by their nature should survive, and such obligationsshall survive any such expiration or termination.ARTICLE 11MISCELLANEOUS11.1Assignment. Neither Party may assign this Agreement without prior written consent from the other Party, exceptthat no such consent shall be required for either Party to assign its rights or transfer its obligations to its Affiliates or in connection withthe sale or transfer of the15[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialmajority of its stock or all or substantially all of its assets to which this Agreement relates, whether as part of a merger, acquisition, orasset sale. Any assignment in violation of this Agreement will be null and void. This Agreement benefits and binds the parties and theirrespective successors and permitted assigns.11.2Severability. If any provision or provisions of this Agreement shall, to any extent, be held to be invalid orunenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby and shall be valid andenforceable to the fullest extent permitted by law. However, in case such invalidation or unenforceability injures the rights and interestsof a Party, the Parties hereto shall renegotiate this Agreement in good faith to replace any invalid or unenforceable provision with avalid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.11.3Entirety of Agreement; Modification. This Agreement, together with all exhibits hereto, constitute the entire,final, and complete agreement and understanding between the Parties, and replace and supersede all prior discussions and agreementsbetween them with respect to the subject matter hereof, [*] No modification or amendment to this Agreement shall be valid or bindingupon the Parties hereto unless made in writing and duly executed on behalf of each of the Parties hereto.11.4Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State ofCalifornia without giving effect to any choice of law principles that would require the application of the laws of a different state orcountry.11.5Force Majeure. If a Party is prevented from complying, either totally or in part, with any of the terms or provisionsset forth herein by reason of force majeure, including, by way of example and not of limitation, fire, flood, explosion, storm,earthquake, strike, lockout or other labor dispute, riot, war, rebellion, terrorist act, accidents, acts of God, failure of suppliers or anyother similar cause, in each case to the extent beyond its reasonable control, said Party will promptly provide written notice of same tothe other Parties. Such notice will identify the requirements of this Agreement or such of its obligations as may be affected, and suchobligations will be suspended during the period of such disability, provided that the Party prevented from performing hereunder willuse reasonable efforts to remove such disability and will continue performance whenever such causes are removed. The Party soaffected will give to the other Party a good faith estimate of the continuing effect of the force majeure condition and the duration of theaffected Party’s nonperformance.11.6Notice. Any notice required to be given by a Party in connection with this Agreement shall be given in the Englishlanguage by prepaid airmail, express delivery service, or facsimile, and shall be deemed to have been given for all purposes (a) whenreceived, if sent by express delivery service, (b) three (3) business days after mailing, if mailed by airmail, or (c) when received byrecipient, if sent by facsimile transmission with electronic confirmation of transmission if transmission is confirmed during therecipient’s normal business hours, or otherwise on the recipient’s next business day. Unless otherwise specified in writing, the Parties’addresses for notice purposes are as follows:16[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche ConfidentialTo Virovek:3521 Investment Boulevard, Suite 1Hayward, CA 94545Attn: [*]With a copy to (which shall not constitutenotice):[*]To Avalanche:665 Third Street, Suite 250San Francisco, CA 94107Attn: [*]With a copy to (which shall not constitutenotice):[*] 11.7Dispute Resolution. If any dispute arises relating to this Agreement, prior to instituting any termination underSections 10.2(b) or any lawsuit or other dispute resolution process on account of such dispute, the Parties will attempt in good faith tosettle such dispute first by negotiation and consultation between themselves, including referral of such dispute to the CEOs of theParties. If the CEOs are unable to resolve such dispute or agree upon a mechanism to resolve such dispute [*] after such matter is firstsubmitted to them for resolution, then either Party may then submit such issue for resolution by a court of competent jurisdiction inCalifornia.11.8Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the eventthat an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties andno presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions ofthis Agreement. Except where the context otherwise requires, where used, the singular shall include the plural, the plural the singular,the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or). The captions of thisAgreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreementor the intent of any provision contained in this Agreement. The term “includes” and “including” as used herein means including, butnot limited to.11.9Use of Names. Neither Party will use the name or trademark of the other Party in relation to this Agreement in anyadvertising, press release or other form of publicity without the prior written consent of the other Party, such consent not to beunreasonably withheld. This restriction shall not apply to materials used by either Party solely for financing purposes or to documentsavailable to the public that identify the existence of the Agreement.11.10Counterparts; Facsimiles. This Agreement may be executed in one or more counterparts, each of which shall bean original and all of which shall constitute together the same document. For purposes of this Agreement and any other documentrequired to be delivered pursuant to this Agreement, facsimiles or electronic copies of signatures shall be deemed to be originalsignatures. In addition, if any of the Parties sign facsimile copies of this Agreement, such copies shall be deemed originals.11.11Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default orother matter shall not constitute a waiver of such Party’s rights17[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.Avalanche Confidentialto the future enforcement of its rights under this Agreement unless such Party provides an express written and signed waiver as to aparticular matter for a particular period of time.[Remainder of page intentionally left blank] 18[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. In Witness Whereof, the Parties have caused this Agreement to be executed by their duly authorized officers as of theEffective Date.Virovek, Inc. By:Name:Title:Date: Avalanche Biotechnologies, Inc. By:Name:Title:Date: 19[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. EXHIBIT AVirovek Patents Patent FilingTypeTerritoryFiling Date[*][*][*][*] 20[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Exhibit 10.48 October 24, 2018Leone Patterson337 Channing WayAlameda, California 94502Re: Amended and Restated Employment TermsDear Leone:This letter agreement (the “Agreement”) sets forth the amended and restated terms of your employment with AdverumBiotechnologies, Inc. (the “Company”). These terms became effective on October 18, 2018, and shall supersede and replace the termsset forth in your earlier offer letter from the Company dated May 31, 2016.1.RoleYou will serve as the President and Chief Executive Officer of the Company, reporting to the Board of Directors (the“Board”). During the period in which you are employed as the Company’s President and Chief Executive Officer, you will serve as amember of the Board, subject to any required Board and/or stockholder approval. Unless the Board provides otherwise, upon yourtermination of employment as the Company’s President and Chief Executive Officer for any reason, you will automatically andwithout further action immediately be deemed to have resigned from the Board. 2.Compensation and Benefits.Your current compensation is equal to an annual base salary of $371,300 (“Current Salary”), plus retention bonuses at therate of $300,000 per year, payable in equal quarterly installments at the beginning of each quarter. Effective as of January 1, 2019,your base salary will be increased to $515,000 annually (the “New Salary”), and the quarterly retention bonuses will cease. (For sakeof clarity, you will not receive a retention bonus for the first quarter of 2019.) Your salary will be paid in accordance with theCompany’s standard payroll schedule, subject to standard payroll deductions and withholdings.You will remain eligible for a 2018 bonus, with the target of such bonus to be equal to 40% of the Current Salary for theperiod of 2018 that you served as Chief Financial Officer (1/3 of the year), and 55% of $671,300 (the sum of Current Salary and totalannual retention bonuses) for the remainder of 2018 (2/3 of the year). For example, if you earn a bonus for 2018 at 100% of target, itwould be for 40%*$371,300*1/3 + 55%*$671,300*2/3, or $295,650. Your target bonus for 2019 will be equal to 55% of the NewSalary (or such higher amount if your salary is increased in the future). Annual bonuses are earned when paid, and thus you must beactively employed through and including the date the bonus is paid in order to earn the bonus. Your annual bonus1035 O’Brien Drive, Suite A, Menlo Park, CA 94025Tel +1-650-272-6269 will be calculated based on attainment of individual goals (including corporate and personal objectives) to be determined in the solediscretion of the Board each year. Bonus payments will be in the form of cash, and will be subject to applicable payroll deductions andall required withholdings.You will continue to be eligible to participate in the Company’s general employee benefits in accordance with the terms,conditions and limitations of any such benefit plans, as in effect from time to time.3.Stock Option and Restricted Stock Unit grants.As of the date of this Agreement, you have been granted certain options and restricted stock units, including an option topurchase 150,000 shares of the Company’s common stock that was granted on October 18, 2018 in connection with your promotion toPresident and Chief Executive Officer. Those options and previously granted options and restricted stock units will continue to begoverned in all respects by the terms of the applicable equity incentive plan and option or restricted stock unit agreements. 4.Confidentiality and Proprietary Information Obligations.(a)Company Policies and Proprietary Information Agreement. You will be required to remain incompliance with the terms of the Employee Proprietary Information and Invention Assignment Agreement that you previouslyexecuted, as well as the Company’s standard policies and procedures.(b)Adverse or Outside Business Activities. Throughout your employment with the Company, you mayengage in civic, academic teaching and lectures, and not-for-profit activities so long as such activities do not interfere with theperformance of your duties hereunder or present a conflict of interest with the Company. You may not engage in other employment orundertake any other commercial business activities unless you obtain the prior written consent of the Board. In addition, throughout theterm of your employment with the Company, you agree not to, directly or indirectly, without the prior written consent of the Company,own, manage, operate, join, control, finance or participate in the ownership, management, operation, control or financing of, or beconnected as an officer, director, executive, partner, employee, principal, agent, representative, consultant, licensor, licensee orotherwise with, any business or enterprise engaged in any business which is competitive with or which is reasonably anticipated to becompetitive with the Company's business; provided, however, that you may purchase or otherwise acquire up to (but not more than)1% of any class of securities of any enterprise (but without participating in the activities of such enterprise) if such securities are listedon any national or regional securities exchange. You hereby represent and warrant that you have disclosed previously to the Board allother employment or other commercial business activities that you already undertake, or intend to undertake (to the extent currentlyknown by you), during your period of employment with the Company.5.No Conflicts.By signing this Agreement you hereby represent to the Company that, except as previously disclosed to the Company: (a)your employment with the Company is not prohibited under anyPage 2employment agreement or other contractual arrangement; and (b) you do not know of any conflicts that would restrict youremployment with the Company. You hereby represent that you have disclosed to the Company any contract you have signed that mayrestrict your activities on behalf of the Company, and that you are presently in compliance with such contracts, if any.6.At Will Employment; Amended and Restated Change in Control and Severance Agreement.You will be eligible for severance benefits under the terms of the Amended and Restated Change in Control and SeveranceAgreement attached hereto as Exhibit A.Your employment relationship with the Company remains “at-will.” This means that either you or the Company mayterminate your employment at any time, with or without cause, and with or without advance notice. The Company also has the right toreassign you or change your compensation at any time, with or without cause or advance notice. This “at-will” employmentrelationship cannot be changed except in a written agreement approved by the Company and signed by you and by a duly authorizedmember of the Board.7.Miscellaneous.7.1Entire Agreement. This Agreement, together with any agreements referenced herein, forms the completeand exclusive statement of your employment agreement with the Company. The employment terms in this Agreement supersede anyother agreements or promises made to you by anyone, whether oral or written, concerning your employment terms (including, withoutlimitation, your previous offer letter from the Company dated May 31, 2016).7.2Succession and Assignment. This Agreement is personal to you and shall not be assigned by you. Anypurported assignment by you shall be null and void from the initial date of the purported assignment. The Company may assign thisAgreement to any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all orsubstantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and permittedsuccessors and assigns.7.3Enforceability. If any provision of this Agreement is determined to be invalid or unenforceable, in wholeor in part, this determination shall not affect any other provision of this Agreement and the provision in question shall be modified so asto be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law.7.4Governing law and Jurisdiction. This Agreement shall be construed and enforced in accordance withthe laws of the State of California without regard to conflicts of law principles. Any action or proceeding by either of the parties toenforce this Agreement shall be brought only in a state or federal court located in the state of California, county of San Mateo. Theparties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to themaintenance of any such action or proceeding in such venue.7.5Headings and Captions. The captions of the sections of this Agreement are for convenience of referenceonly and in no way define, limit or affect the scope or substance of any section of this Agreement.Page 37.6No Construction against Drafter. Any ambiguity in this Agreement shall not be construed against eitherparty as the drafter.7.7Waiver. Any waiver of a breach of this Agreement, or rights hereunder, shall be in writing and shall notbe deemed to be a waiver of any successive breach or rights hereunder.7.8Counterparts. This Agreement may be executed in counterparts, which shall be deemed to be part of oneoriginal, and facsimile signatures shall be equivalent to original signatures.8.Acknowledgement of Full Understanding. YOU ACKNOWLEDGE AND AGREE THAT YOU HAVE FULLYREAD, UNDERSTAND AND VOLUNTARILY ENTER INTO THIS AGREEMENT. YOU ACKNOWLEDGE AND AGREETHAT YOU HAVE HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF YOURCHOICE BEFORE SIGNING THIS AGREEMENT.Please sign and date this letter and return it to me to confirm your continued employment on the terms as set forth above.Sincerely,Adverum Biotechnologies, Inc./s/ Paul ClevelandPaul B. Cleveland, Chair of the Board of DirectorsUnderstood and Accepted:/s/ Leone PattersonLeone PattersonDate: October 24, 2018 Page 4 EXHIBIT A TO LETTER AGREEMENTAMENDED AND RESTATED CHANGE IN CONTROL AND SEVERANCE AGREEMENT EXHIBIT 10.49ADVERUM BIOTECHNOLOGIES, INC.CHANGE IN CONTROL AND SEVERANCE AGREEMENTThis Change in Control and Severance Agreement (the “Agreement”) is made and entered into by and between LeonePatterson (“Executive”) and Adverum Biotechnologies, Inc. (the “Company”), effective as of the latest date set forth by the signaturesof the parties hereto below (the “Effective Date”).RECITALSA.Executive and the Company are entering into an offer letter agreement (the “Offer Letter”) concurrentlywith the execution of this Agreement.B.It is expected that the Company from time to time will consider the possibility of an acquisition by anothercompany or other change in control. The Board of Directors of the Company (the “Board”) recognizes that such consideration as wellas the possibility of an involuntary termination or reduction in responsibility can be a distraction to Executive and can cause Executiveto consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and itsstockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding thepossibility, threat or occurrence of such an event.C.The Board believes that it is in the best interests of the Company and its stockholders to provide Executivewith an incentive to continue Executive’s employment and to motivate Executive to maximize the value of the Company upon aChange in Control (as defined below) for the benefit of its stockholders.D.The Board believes that it is imperative to provide Executive with severance benefits upon certainterminations of Executive’s service to the Company that enhance Executive’s financial security and provide incentive andencouragement to Executive to remain with the Company notwithstanding the possibility of such an event.E.Certain capitalized terms used in this Agreement are defined in Section 7 below.The parties hereto agree as follows:1.Term of Agreement. This Agreement shall become effective as of the Effective Date and terminate uponthe date that all obligations of the parties hereto with respect to this Agreement have been satisfied.2.At-Will Employment. The Company and Executive acknowledge that Executive’s employment is andshall continue to be “at-will,” as defined under applicable law. If Executive’s employment terminates for any reason, Executive shallnot be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement.13.Covered Termination Other Than During a Change in Control Period. If Executive experiences a CoveredTermination other than during a Change in Control Period, and if Executive delivers to the Company a general release of all claimsagainst the Company and its affiliates that becomes effective and irrevocable within sixty (60) days, or such shorter period of timespecified by the Company, following such Covered Termination (a “Release of Claims”), then in addition to any accrued but unpaidsalary, bonus, vacation and expense reimbursement payable in accordance with applicable law, the Company shall provide Executivewith the following:(a)Severance. Executive shall be entitled to receive an amount equal to twelve (12) monthsof Executive’s Base Salary, payable in substantially equal installments in accordance with the Company’s normal payroll policies, lessapplicable withholdings; provided, however, that no payments under this Section 3(a) shall be made prior to the first payroll dateoccurring on or after the sixtieth (60th) day following the date of the Covered Termination (such payroll date, the “First Payroll Date”),and any amounts otherwise payable prior to the First Payroll Date shall be paid on the First Payroll Date without interest thereon.(b)Continued Healthcare. If Executive elects to receive continued healthcare coveragepursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Companyshall directly pay, or reimburse Executive for, the premium for Executive and Executive’s covered dependents through the earlier of(i) the first anniversary of the date of Executive’s termination of employment and (ii) the date Executive and Executive’s covereddependents, if any, become eligible for healthcare coverage under another employer’s plan(s). Notwithstanding the foregoing, (i) ifany plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage tobe, exempt from the application of Section 409A of the Code under Treasury Regulation Section 1.409A-1(a)(5), or (ii) the Companyis otherwise unable to continue to cover Executive under its group health plans without penalty under applicable law (includingwithout limitation, Section 2716 of the Public Health Service Act), then, in either case, an amount equal to each remaining Companysubsidy shall thereafter be paid to Executive in substantially equal monthly installments. After the Company ceases to pay premiumspursuant to this Section 3(b), Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance theprovisions of COBRA.4.Covered Termination During a Change in Control Period. If Executive experiences a CoveredTermination during a Change in Control Period, and if Executive delivers to the Company a Release of Claims that becomes effectiveand irrevocable within sixty (60) days, or such shorter period of time specified by the Company, following such Covered Termination,then in addition to any accrued but unpaid salary, bonus, vacation and expense reimbursement payable in accordance with applicablelaw, the Company shall provide Executive with the following:(a)Severance. Executive shall be entitled to receive an amount equal to the sum of: (i)eighteen (18) months of Executive’s Base Salary at the rate in effect immediately before the date of the Covered Termination and (ii)Executive’s target annual bonus for the year in which Executive’s termination occurs. Such amount shall be payable in a cash lumpsum, less applicable withholdings, on the sixtieth (60th) day after the date of the Covered Termination.2(b)Equity Awards. Each outstanding equity award, including, without limitation, eachstock option and restricted stock award, held by Executive shall automatically become vested and, if applicable, exercisable and anyforfeiture restrictions or rights of repurchase thereon shall immediately lapse, in each case, with respect to one-hundred percent (100%)of the unvested shares of Company common stock subject to such equity award.(c)Continued Healthcare. If Executive elects to receive continued healthcare coveragepursuant to the provisions of COBRA, the Company shall directly pay, or reimburse Executive for, the premium for Executive andExecutive’s covered dependents through the earlier of (i) eighteen (18) months following the date of Executive’s termination ofemployment and (ii) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage underanother employer’s plan(s). Notwithstanding the foregoing, (i) if any plan pursuant to which such benefits are provided is not, orceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A of the Codeunder Treasury Regulation Section 1.409A-1(a)(5), or (ii) the Company is otherwise unable to continue to cover Executive under itsgroup health plans without penalty under applicable law (including without limitation, Section 2716 of the Public Health Service Act),then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equalmonthly installments. After the Company ceases to pay premiums pursuant to this Section 4(c), Executive may, if eligible, elect tocontinue healthcare coverage at Executive’s expense in accordance the provisions of COBRA.5.Other Terminations. If Executive’s service with the Company is terminated by the Company or byExecutive for any or no reason other than as a Covered Termination, then Executive shall not be entitled to any benefits hereunderother than accrued but unpaid salary, bonus, vacation and expense reimbursement in accordance with applicable law and to elect anycontinued healthcare coverage as may be required under COBRA or similar state law.6.Limitation on Payments. Notwithstanding anything in this Agreement to the contrary, if any payment ordistribution Executive would receive pursuant to this Agreement or otherwise (“Payment”) would (a) constitute a “parachute payment”within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) but for this sentence, besubject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall either be (i) delivered infull, or (ii) delivered as to such lesser extent which would result in no portion of such Payment being subject to the Excise Tax,whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, resultsin the receipt by Executive on an after-tax basis, of the largest payment, notwithstanding that all or some portion the Payment may betaxable under Section 4999 of the Code. The accounting firm engaged by the Company for general audit purposes as of the day priorto the effective date of the Change in Control shall perform the foregoing calculations. The Company shall bear all expenses withrespect to the determinations by such accounting firm required to be made hereunder. The accounting firm shall provide itscalculations to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment istriggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive. Anygood faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company andExecutive. Any reduction in payments and/or benefits pursuant to this3Section 6 will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awardsother than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits payable toExecutive.7.Definition of Terms. The following terms referred to in this Agreement shall have the following meanings:(a)Base Salary. “Base Salary” means Executive’s annual base salary in effect immediatelyprior to Executive’s termination (disregarding any reduction in base salary that would give rise to Executive’s right to a ConstructiveTermination).(b)Cause. “Cause” will be determined in the sole discretion of the Board and will meanmisconduct, including: (i) the Executive’s commission or the attempted commission of or participation in any crime involving fraud,dishonesty or moral turpitude that results in (or might have reasonably resulted in) material harm to the business of the Company; (ii)intentional and material damage to the Company’s property and/or misappropriation of Company funds; (iii) conduct that constitutesgross insubordination, incompetence or habitual neglect of duties that results in (or might have reasonably resulted in) material harm tothe business of the Company that has not been cured within 30 days after written notice from the Executive’s immediate supervisor orin the case of the chief executive officer, from the Board; or (iv) material breach of the Proprietary Information Agreement (as definedbelow).(c)Change in Control. “Change in Control” shall mean the occurrence, in a singletransaction or in a series of related transactions, of any one or more of the following events:(i)A transaction or series of transactions (other than an offering ofCommon Stock to the general public through a registration statement filed with the Securities and Exchange Commission) wherebyany “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of1934, as amended (the “Exchange Act”)) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by theCompany or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or isunder common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of theCompany’s securities outstanding immediately after such acquisition; or(ii)During any period of two consecutive years, individuals who, at thebeginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person whoshall have entered into an agreement with the Company to effect a transaction described in Section 7(c)(i) or 7(c)(ii)) whose election bythe Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors thenstill in office/who either were directors at the beginning of the two-year period or whose election or nomination for election waspreviously so approved, cease for any reason to constitute a majority thereof; or4(iii)The consummation by the Company (whether directly involving theCompany or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, orbusiness combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction orseries of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction: (A) whichresults in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remainingoutstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls,directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeedsto the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of thecombined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and (B) after whichno person or group beneficially owns voting securities representing 50% or more of the combined voting power of the SuccessorEntity; provided, however, that no person or group shall be treated for purposes of this clause (B) as beneficially owning 50% or moreof the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to theconsummation of the transaction; or(iv)The Company’s stockholders approve a liquidation or dissolution ofthe Company.Notwithstanding the foregoing, in no event shall a transaction constitute a Change in Control unless such transaction alsoconstitutes a “change in control event” within the meaning of Section 409A of the Code and the Treasury regulations promulgatedthereunder.(d)Change in Control Period. “Change in Control Period” means the period of timebeginning three (3) months prior to and ending twelve (12) months following a Change in Control.(e)Constructive Termination. “Constructive Termination” means any of the followingactions taken without Cause by the Company or a successor corporation or entity without Executive’s consent: (i) substantialreduction of Executive’s rate of compensation; (ii) material reduction in Executive’s duties, provided, however, that a change in jobposition (including a change in title) shall not be deemed a “material reduction” unless Executive’s new duties are substantially reducedfrom the prior duties; (iii) failure or refusal of a successor to the Company to assume the Company’s obligations under this Agreementin the event of a Change in Control; (iv) relocation of Executive’s principal place of employment or service to a place greater than 50miles from the Executive’s then current principal place of employment or service. Notwithstanding the foregoing, a resignation shallnot constitute a “Constructive Termination” unless the event or condition giving rise to such resignation continues more than thirty (30)days following Executive’s written notice of such condition provided to the Company within ninety (90) days of the first occurrence ofsuch event or condition and such resignation is effective within thirty (30) days following the end of such notice period.(f)Covered Termination. “Covered Termination” shall mean Executive’s ConstructiveTermination or the termination of Executive’s employment by the Company other than for Cause.58.Successors.(a)Company’s Successors. Any successor to the Company (whether direct or indirect andwhether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assetsshall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the samemanner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For allpurposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets whichexecutes and delivers the assumption agreement described in this Section 8(a) or which becomes bound by the terms of this Agreementby operation of law.(b)Executive’s Successors. The terms of this Agreement and all rights of Executivehereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators,successors, heirs, distributees, devisees and legatees.9.Notices. Notices and all other communications contemplated by this Agreement shall be in writing andshall be deemed to have been duly given when personally delivered or one day following mailing via Federal Express or similarovernight courier service. In the case of Executive, mailed notices shall be addressed to Executive at Executive’s home address thatthe Company has on file for Executive. In the case of the Company, mailed notices shall be addressed to its corporate headquarters,and all notices shall be directed to the attention of its Legal Department.10.Confidentiality; Non-Solicitation.(a)Confidentiality. Nothing herein modifies, supersedes, voids or otherwise altersExecutive’s pre-existing contractual obligations set forth in the Employee Proprietary Information and Invention AssignmentAgreement (“Proprietary Information Agreement”) entered into between Executive and the Company.(b)Interference with Business. Consistent with Executive’s obligations under theProprietary Information Agreement, Executive shall not for a period of one (1) year following Executive’s termination of employmentfor any reason, directly or indirectly solicit, induce, recruit or encourage any officer, director, employee, independent contractor orconsultant of the Company who was employed by or affiliated with the Company at the time of termination to leave the Company orterminate his or her employment or relationship with the Company. Executive agrees not to make, publish or communicate at any timeto any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning theCompany or its businesses, or any of its employees, officers, and existing and prospective customers, suppliers, investors and otherassociated third parties. Executive agrees not to use the Company’s Proprietary Information (as defined in Executive’s ProprietaryInformation Agreement) to directly or indirectly interrupt, disturb or interfere with the Company’s relationships with any customer,vendor, supplier, licensor, investor, consultant, independent contractor or other business partner, or to compete unfairly with theCompany.6(c)Survival of Provisions. The provisions of this Section 10 shall survive the termination orexpiration of the applicable Executive’s employment with the Company and shall be fully enforceable thereafter. If it is determined bya court of competent jurisdiction in any state that any restriction in this Section 10 is excessive in duration or scope or is unreasonableor unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by thecourt to render it enforceable to the maximum extent permitted by the law of that state.11.Miscellaneous Provisions.(a)Section 409A. (i)General. The payments and benefits under this Agreement areintended to qualify for exemptions from the application of Section 409A of the Code, and this Agreement will be construed to thegreatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitionshereunder) will be construed in a manner that complies with Section 409A of the Code to the extent necessary to avoid adversetaxation under Section 409A of the Code.(ii)Separation from Service. Notwithstanding any provision to thecontrary in this Agreement, no amount deemed deferred compensation subject to Section 409A of the Code shall be payable pursuantto Sections 3 or 4 unless Executive’s termination of employment constitutes a “separation from service” with the Company within themeaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder(“Separation from Service”) and, except as provided under Section 11(a)(iii) of this Agreement, any such amount shall not be paid, orin the case of installments, commence payment, until the sixtieth (60th) day following Executive’s Separation from Service. Anyinstallment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’sSeparation from Service but for the preceding sentence shall be paid to Executive on the sixtieth (60th) day following Executive’sSeparation from Service and the remaining payments shall be made as provided in this Agreement.(iii)Specified Employee. Notwithstanding any provision to the contraryin this Agreement, if Executive is deemed at the time of his or her separation from service to be a “specified employee” for purposes ofSection 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Executive isentitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, suchportion of Executive’s benefits shall not be provided to Executive prior to the earlier of (a) the expiration of the six (6)-month periodmeasured from the date of the Executive’s Separation from Service or (b) the date of Executive’s death. Upon the first business dayfollowing the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 11(a)(iii) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwiseprovided herein.(iv)Installment Payments. Each installment payment payable under thisAgreement will be treated as a separate payment for purposes of Section 409A of the Code.7(v)Expense Reimbursements. To the extent that any reimbursementspayable pursuant to this Agreement are subject to the provisions of Section 409A of the Code, any such reimbursements payable toExecutive pursuant to this Agreement shall be paid to Executive no later than December 31 of the year following the year in which theexpense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in anysubsequent year, and Executive’s right to reimbursement under this Agreement will not be subject to liquidation or exchange foranother benefit.(b)Waiver. No provision of this Agreement shall be modified, waived or discharged unlessthe modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company(other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of thisAgreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision atanother time.(c)Whole Agreement. This Agreement, the Offer Letter, and Executive’s ProprietaryInformation Agreement represent the entire understanding of the parties hereto with respect to the subject matter hereof and supersedeall prior arrangements and understandings regarding same, including but not limited to the Change in Control and SeveranceAgreement between the parties hereto, dated as of June 10, 2016, as amended as of January 29, 2018.(d)Choice of Law. The validity, interpretation, construction and performance of thisAgreement shall be governed by the laws of the State of California.(e)Severability. The invalidity or unenforceability of any provision or provisions of thisAgreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.(f)Counterparts. This Agreement may be executed in counterparts, each of which shall bedeemed an original, but all of which together will constitute one and the same instrument.8IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its dulyauthorized officer, as of the day and year set forth below.ADVERUM BIOTECHNOLOGIES, INC.By:/s/ PaulClevelandPaul Cleveland, Chair of the Board of DirectorsDate: October 24,2018EXECUTIVE/s/ LeonePattersonLeone PattersonDate: October 24,20189 Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statements No. 333-219890 on Form S-3 and No. 333-220894, No. 333-218465, No. 333-211439, No. 333-203398, No. 333-199296 on Form S-8 of our report dated March 6, 2018, relating to the 2017 consolidated financial statements of AdverumBiotechnologies, Inc. and its subsidiaries appearing in this Annual Report on Form 10-K of Adverum Biotechnologies, Inc. for the year ended December 31,2018./s/ Deloitte & Touche LLPSan Jose, CaliforniaMarch 6, 2019 Exhibit 23.2 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the following Registration Statements: (1)Registration Statements on Form S-8 No. 333-223894, No. 333-218465, No. 333-211439, No. 333-203398, and No. 333-199296 (2)Registration Statement on Form S-3 No. 333-219890 of our report dated March 6, 2019, with respect to the consolidated financial statements of Adverum Biotechnologies Inc. included in this AnnualReport (Form 10-K) of Adverum Biotechnologies Inc. for the year ended December 31, 2018. /s/ Ernst & Young LLP San Jose, CaliforniaMarch 6, 2019 Exhibit 31.1CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICERPURSUANT TO SECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002 I, Leone Patterson, certify that: 1.I have reviewed this Annual Report on Form 10-K of Adverum Biotechnologies, Inc.; 2.Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period coveredby this annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual report fairly present in all materialrespects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this annual report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on suchevaluation; and d.Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, oris reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.Date: March 6, 2019 By:/s/ Leone Patterson Name:Leone Patterson Title:Chief Executive Officer (Principal Executive Officer) Exhibit 31.2CERTIFICATION PURSUANT TO SECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002 I, Leone Patterson, certify that: 1.I have reviewed this Form 10-K of Adverum Biotechnologies, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.Date: March 6, 2019 By:/s/ Leone Patterson Name:Leone Patterson Title:Chief Financial Officer (Principal Financial and Accounting Officer) Exhibit 32.1 CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K of Adverum Biotechnologies, Inc. for the year ended December 31, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), Leone Patterson, as Chief Executive Officer and Chief Financial Officer, of AdverumBiotechnologies, Inc., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to thebest of her knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the informationcontained in the Report fairly presents, in all material respects, the financial condition and results of operations of Adverum Biotechnologies, Inc. Date:March 6, 2019 By:/s/ Leone Patterson Leone Patterson Chief Executive Officer, Chief Financial Officer(Principal Executive and Financial Officer)

Continue reading text version or see original annual report in PDF format above