Genocea Biosciences Inc Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549____________________________FORM 10-K____________________________x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018ORo TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number 001-36289___________________________________GENOCEA BIOSCIENCES, INC.(Exact name of registrant as specified in its charter)___________________________________Delaware 51-0596811(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)100 Acorn Park Drive, Cambridge, MA 02140(Address of principal executive offices) (Zip Code)(617) 876-8191(Registrant’s telephone number, including area code)___________________________________Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, $0.001 par value NASDAQ Capital MarketSecurities registered pursuant to Section12(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. o Yes x NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes x NoIndicate 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 thepreceding 12 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 90days. x Yes o NoIndicate 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 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o NoIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best ofregistrant’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. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growthcompany. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filero Accelerated fileroNon-accelerated filero Smaller reporting companyx Emerging growth companyxIf an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. xIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).. o Yes x NoThe aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price for such stock as reported onthe NASDAQ Global Market on June 30, 2018, the last business day of the registrant’s most recently completed second quarter, was: $52,786,883.The number of shares outstanding of the registrant’s common stock as of February 26, 2019 was 112,371,154.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant’s definitive proxy statement related to its 2019 annual meeting of stockholders to be filed subsequently are incorporated by reference into PartIII of this report. TABLE OF CONTENTSPART I Item 1.Business4Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments44Item 2.Properties44Item 3.Legal Proceedings45Item 4.Mine Safety Disclosures45 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuers Purchases of Equity Securities46Item 6.Selected Financial Data47Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations47Item 7A.Quantitative and Qualitative Disclosures About Market Risk58Item 8.Financial Statements and Supplementary Data58Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure58Item 9A.Controls and Procedures58Item 9B.Other Information59 PART III Item 10.Directors, Executive Officers and Corporate Governance60Item 11.Executive and Director Compensation60Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence60Item 14.Principal Accountant Fees and Services60 PART IV Item 15.Exhibits and Financial Schedules61Item 16.Form 10-K Summary612FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. Forward-looking statementsare neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding thefuture of our business, future plans and strategies, our clinical results and other future conditions. The words “anticipate”, “believe”, “contemplate”,“continue”, “could”, “estimate”, “expect”, “forecast”, “goal”, “intend”, “may”, “plan”, “potential”, “predict”, “project”, “should”, “target”, “will”, “would”,or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statementscontain these identifying words.The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements about:•our estimates regarding the timing and amount of funds we require to file our investigational new drug ("IND") application and initiate clinical trialsfor GEN-009 and to continue our investments in immuno-oncology;•our estimate for when we will require additional funding;•our plans to commercialize GEN-009 and our other product candidates, including GEN-010 and GEN-011;•the timing of, and our ability to, obtain and maintain regulatory approvals for our product candidates;•the rate and degree of market acceptance and clinical utility of any approved product candidate;•the potential benefits of strategic partnership agreements and our ability to enter into strategic partnership arrangements;•our ability to quickly and efficiently identify and develop product candidates;•our commercialization, marketing and manufacturing capabilities and strategy;•our intellectual property position; and•our estimates regarding expenses, future revenues, capital requirements, the sufficiency of our current and expected cash resources and our need foradditional financing.We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place unduereliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in theforward-looking statements we make. We have included important factors in the cautionary statements included in this Annual Report on Form 10-K,particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that wemake. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments wemay make or collaborations or strategic partnerships we may enter into.You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to the Annual Report on Form 10-K completelyand with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update anyforward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.3PART IItem 1. BusinessUnless the context requires otherwise, references in this Annual Report on Form 10-K to “Genocea”, “we”, “us” and “our” refer to GenoceaBiosciences, Inc.OverviewWe are a biopharmaceutical company that seeks to discover and develop novel cancer immunotherapies. We use our proprietary discovery platform, ATLAS,to profile CD4+ and CD8+ T cell (or cellular) immune responses to tumor antigens. We use insights arising from ATLAS to design novel cancerimmunotherapies. We believe that ATLAS, which recreates each individual's T cell immune responses to their tumor in the laboratory, affords Genoceaadvantages in the design of novel cancer immunotherapies relative to our peers, who we believe rely primarily on software and processes such as "machinelearning" to predict immunotherapy targets.Our most advanced program is GEN-009, a neoantigen (or personalized) cancer vaccine, for which we are conducting a Phase 1/2a clinical trial. The GEN-009program uses ATLAS to identify neoantigens, or tumor mutations unique to each patient, for inclusion in each patient's GEN-009 vaccine. We are alsoadvancing GEN-011, a neoantigen adoptive T cell therapy program as well as GEN-010, a next-generation neoantigen vaccine program.ATLAS PlatformHarnessing and directing the T cell arm of the immune system to kill tumor cells is increasingly viewed as having potential in the treatment of many cancers,and this approach has clearly shown efficacy in hematologic malignancies. Treatments arising from this approach must target specific differences present in atumor, such as genetic mutations. However, the discovery of such T cell targets, or antigens, has been particularly challenging for two reasons. First, thediversity of human T cell responses means that an effective T cell target for one person may be different from an effective T cell target for another person.Second, the number of candidate targets for T cell responses can be very large with up to thousands of candidate antigens per patient in some cancers. Thesecomplexities represent fundamental barriers that traditional cancer immunotherapy target discovery tools, which rely largely on computer modeling - so-called predictive algorithms - have, as yet, only poorly addressed.We have designed the ATLAS platform to overcome these T cell target discovery challenges. We believe that ATLAS represents the most comprehensive andaccurate high-throughput system for T cell immune response profiling in the biopharmaceutical industry. ATLAS is designed to mimic the T cell arm of thehuman immune system of each patient that it profiles in a laboratory setting. Using ATLAS, we are able to measure T cell responses to the entire set ofpotential T cell targets for an individual’s cancer. Using ATLAS, we can determine if these T cell responses are statistically above or below a baselinemeasurement and can develop immunotherapies using only those targets and T cells determined to be most likely to kill an individual’s cancer.We believe that we are a leader in the field of T cell-related immunotherapy discovery and development. Our management and scientific teams possessconsiderable experience in oncology, immunology, and vaccinology spanning research, manufacturing, clinical development and regulatory affairs. Our ProgramsOur cancer immunotherapies are designed to educate T cells to recognize and attack specific targets - or to introduce T cells already educated toattack these targets - and thereby kill cancer cells. We are first developing personalized cancer vaccines by applying ATLAS to identify patient neoantigensthat are associated with that individual's pre-existing immune responses to a tumor. Neoantigens are personalized tumor mutations that are seen as “foreign” by an individual’s immune system. Data published in recent years have indicatedthat an individual’s response to neoantigens drives immune checkpoint inhibitor ("ICI") efficacy and that it is possible to vaccinate an individual againsttheir own neoantigens. If approved, neoantigen vaccines could be used in combination with existing treatment approaches for cancer, including ICIs, topotentially direct and enhance an individual’s T cell response to the individual’s cancer, thereby potentially effecting better clinical outcomes. Data alsosupport the potential of isolating and expanding T cell populations targeting specific neoantigens for therapeutic benefit.4 Our lead immuno-oncology program, GEN-009, is an adjuvanted neoantigen peptide vaccine candidate designed to direct a patient’s immune system toattack their tumor. GEN-009’s neoantigens are identified by our proprietary ATLAS platform, which is designed to profile CD4+ and CD8+ cell immuneresponses to tumor antigens. Following ATLAS neoantigen identification, we manufacture a personalized vaccine for each patient using only thoseneoantigens determined to be stimulatory to the immune system by ATLAS. In June 2018, we initiated a Phase 1/2a clinical trial for GEN-009 in a range of tumor types in subjects with no evidence of disease but at high risk ofrelapse. In January 2019, we announced that we had commenced dosing patients and completed enrollment in this first part of the trial. We expect to reportimmunogenicity results from the initial patient cohort late in the second quarter or early in the third quarter of 2019. We have also initiated pre-clinical work on GEN-011, an adoptive T cell therapy to neoantigens identified by ATLAS. We currently expect to file anInvestigational New Drug Application (“IND”) with the U.S. Food and Drug Administration (“FDA”) for GEN-011 in the first half of 2020.Behind GEN-009, we also continue to explore GEN-010, our vaccine candidate employing next-generation antigen delivery technology, which couldprovide an opportunity for even better immunogenicity and/or efficiency of production.We are also using ATLAS to amass libraries of novel candidate antigens for non-personalized cancer immunotherapies. Such programs would target non-mutated, shared tumor-associated antigens and cancers of viral origin.For shared antigens, we have had and continue to conduct a number of research collaborations that provide blood and tumor samples to antigen discoveryand immune-response profiling as follows:•Dana Farber Cancer Institute (ongoing), Mayo Clinic (completed), and Checkmate Pharmaceuticals (completed)The Company is not dependent on these research collaborations to develop its product candidates and no material financial obligations exist as partof these collaborations.For cancers of viral origin, we have profiled the immune responses that several cohorts of patients made to Epstein-Barr Virus ("EBV"). EBVinfection has been linked to cancers with high unmet needs such as non-Hodgkin’s lymphoma, nasopharyngeal carcinoma and gastric carcinoma. We believethat ATLAS is highly suited to the creation of a new immunotherapy for EBV given that T cell responses are understood to be crucial for protection againstEBV. Furthermore, EBV is part of the herpes virus family in which we have deep experience through our previous development of GEN-003.Our Immuno-oncology Product Candidate PipelineThe following table describes our active programs in development:Vaccine Candidate Program Stage of Development Next Milestone Anticipated TimelineGEN-009 First generation neoantigencancer vaccine Phase 1/2a Immunogenicity data from the firstpatient cohort Late Q2/early Q3 2019GEN-010 Second generationneoantigen cancer vaccine Pre-clinical Select delivery technologyplatform OngoingGEN-011 Adoptive T cell therapy Pre-clinical IND filing First half of 2020In addition to our immuno-oncology programs, we also have an investigational immunotherapy for the treatment of genital herpes, GEN-003. To date, GEN-003 has completed three positive clinical trials. However, we have ceased substantially all activities under the GEN-003 program and are exploringalternatives to maximize shareholder value from GEN-003.CompetitionThe biotechnology and pharmaceutical industries are characterized by intense and rapidly changing competition to develop new technologies andproprietary products. Although we believe that our proprietary patent portfolio and T cell5vaccine expertise provide us with competitive advantages, we face potential competition from many different sources, including larger and better-fundedpharmaceutical companies. Not only must we compete with other vaccine companies but any products that we may commercialize will have to compete withexisting therapies and new therapies that may become available in the future. There are other organizations working to improve existing therapies or to develop new vaccines or therapies for our initially selected indications.Depending on how successful these efforts are, it is possible they may increase the barriers to adoption and success of our product candidates, including GEN-009, if approved.There are several companies attempting to develop new neoantigen cancer vaccines, including Advaxis Inc., Agenus Inc., BioNTech AG., CureVacAG., Gritstone Oncology Inc., Moderna Inc., and Neon Therapeutics Inc. We believe that GEN-009 has advantages against each of these product candidatesbased on the potential power of the ATLAS platform to comprehensively identify for each cancer patient the neoantigens to which such patient has a pre-existing immune response. We believe that selecting neoantigens for personal cancer vaccines using ATLAS will lead to more effective vaccines. However,there can be no assurance that one or more of these companies or other companies will not achieve similar or superior clinical results in the future ascompared to GEN-009 or that our future clinical trials will be successful.Similarly, there are other companies attempting to develop cellular therapies targeted towards neoantigens, either through transferring T cells thathave been transduced with T-cell Receptors ("TCR") that recognize tumor antigens, or T cells that have been enriched from tumors in a non-specific way(tumor infiltrating lymphocytes), or T cells from the peripheral blood that have been expanded on multiple tumor-specific antigens. These include AchillesTherapeutics Ltd., Adaptive Biotechnologies Corp., BioNTech AG., Bluebird Bio Inc., Cellular Biomedicine Group Inc., Eutilex Co., Ltd., IovanceBiotherapeutics Inc., Kite Pharma, Inc., Neon Therapeutics Inc., Oncotherapy Science Inc., PACT Pharma Inc., and Ziopharm Oncology Inc. We believe thatGenocea’s ATLAS true neoantigen selection will lead to better targeted and more effective cell therapy; however, there can be no assurance that one or moreof these companies, or other companies, will not achieve similar or superior clinical results in the future as compared to GEN-011, or that our future clinicaltrials will be successful.Many of our competitors, either alone or with their strategic partners, have substantially greater financial, technical and human resources than we doand significantly greater experience in the discovery and development of product candidates, obtaining FDA, and other regulatory approvals of vaccines andthe commercialization of those vaccines. Accordingly, our competitors may be more successful than us in obtaining approval for vaccines and achievingwidespread market acceptance. Our competitors’ vaccines may be more effective, or more effectively marketed and sold, than any vaccine we maycommercialize and may render our vaccines obsolete or non-competitive.Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smallernumber of our competitors. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel andestablishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, ourprograms. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large andestablished companies.We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available. Weexpect any vaccines that we develop and commercialize to compete based on, 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 payors.Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective,have fewer or less severe side effects, are more convenient, or are less expensive than any products that we may develop. Our competitors also may obtainFDA or other regulatory approval for their products more rapidly than we may obtain approval for our products, which could result in our competitorsestablishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers orother third-party payors seeking to encourage the use of generic products.Intellectual PropertyWe strive to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to our business,including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties. We also rely on trade secretsrelating 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 vaccine and cell therapy fields. We additionally rely on regulatory protection afforded through dataexclusivity, market6exclusivity, and patent term extensions where available. Still further, we utilize trademark protection for our company name, and expect to do so for productsand/or services as they are marketed.Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for commerciallyimportant technology, inventions and know-how related to our business; defend and enforce our patents; preserve the confidentiality of our trade secrets; andoperate without infringing the valid enforceable patents and proprietary rights of third parties. Our ability to stop third parties from making, using, selling,offering to sell or importing our products may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that coverthese activities. With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any ofour pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or anypatents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same.We have developed or in-licensed numerous patents and patent applications and possess substantial know-how and trade secrets relating to thedevelopment and commercialization of vaccine and cell therapy products. The term of individual patents depends upon the legal term of the patents in thecountries in which they are obtained. In most countries in which we file, the patent term is 20 years from the date of filing the non-provisional application. Inthe United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the United StatesPatent and Trademark Office ("U.S. PTO") in granting a patent, or may be shortened, if a patent is terminally disclaimed over an earlier-filed patent.The term of a patent that covers an FDA-approved drug may also be eligible for patent term extension, which permits patent term restoration of aUnited States patent as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a patent termextension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is underregulatory review. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval andonly one patent applicable to an approved drug may be extended. Moreover, a patent can only be extended once, and thus, if a single patent is applicable tomultiple products, it can only be extended based on one product. Similar provisions are available in Europe and other foreign jurisdictions to extend the termof a patent that covers an approved drug. When possible, depending upon the length of clinical trials and other factors involved in the filing of a biologicslicense application ("BLA"), we expect to apply for patent term extensions for patents covering our product candidates and their methods of use.As of the date of this Annual Report on Form 10-K, our patent portfolio includes the following:ATLASOur discovery platform patent portfolio includes three patent families, currently comprising five issued U.S. patents. We hold an exclusive licensefrom President and Fellows of Harvard College ("Harvard") to the first patent family, which covers methods related to the ATLAS discovery platform,including discovery of antigens expressed in neoplastic cells. This first patent family includes U.S. Patents 9,051,564 and 9,920,314, a pending U.S.application, issued patents in Europe, Canada, and Australia, and pending applications in Europe and Canada. Patents issuing from these applications areexpected to expire in 2027, with the exception of U.S. Patents 9,051,564 and 9,920,314, which include Patent Term Adjustments and extend until December2031 and June 2028, respectively. We wholly own a second patent family, which is specifically directed to the ATLAS platform as utilized by us, includingfor discovery of cancer- or tumor-related antigens. This second patent family includes U.S. Patents 8,313,894, 9,045,791, and 9,873,870, a pending U.S.patent application, issued patents in Europe, Canada, and Australia, and pending applications in Europe and Canada. Patents issuing from applications inthis family are expected to have a patent term until at least July 2029. U.S. Patents 8,313,894 and 9,045,791 have terms that include Patent Term Adjustmentsand extend until August 2030 and August 2029, respectively. U.S. Patent 9,873,870 has a term that extends until July 2029. We wholly own the third patentfamily, which is directed to methods for cancer diagnosis, prognosis, and patient selection, as well as related compositions. This third family currentlycomprises a pending PCT application and a pending U.S. application. We wholly own three further potential patent families, currently comprising sixprovisional applications filed in late 2018 and early 2019. The provisional applications are directed to ATLAS-based methods for further selection of cancer-or tumor-related antigens, and for redirecting immune responses.GEN-003 (Genital Herpes)We wholly own a portfolio of patent applications directed to herpes simplex virus-2, or HSV-2, vaccines, including GEN-003. This portfolioincludes two patent families covering HSV-2 vaccine compositions and methods for inhibiting or treating HSV-2 infections, and combination treatment withantiviral medications. The first patent family includes U.S. Patents78,617,564 and 9,895,436, a pending U.S. application, and patents granted in Australia, China, Indonesia, Israel, Japan, Korea, Mexico, Malaysia, NewZealand, Russia, Singapore, and South Africa. Applications in Europe, Canada, Brazil, India, China and Hong Kong are pending in the first patent family.Patents that issue from applications in the first family are expected to expire in 2030. The term for U.S. Patent 8,617,564 includes Patent Term Adjustmentand extends until at least November 2030. U.S. Patent 9,895,436 has a term that extends until May 2030. The second family includes a pending PCTapplication and a pending U.S. application. Patents that issue from applications in this family are expected to expire in 2037.We own two further patent families covering follow-on HSV-2 vaccine compositions. The first family includes U.S. Patent 9,782,474, with a termthat extends until 2031. The second family includes U.S. Patent 9,624,273, patents granted in Australia and Japan, and pending applications in Europe andCanada. U.S. Patent 9,624,273 has a term that extends until 2032; further patents that issue from applications in this family are expected to expire in 2032.We hold a license from Isconova AB (now Novavax, Inc.) to two patent families covering Matrix-M2, the adjuvant used in GEN-003. The first patentfamily includes a pending U.S. application and issued patents in Europe, Canada, Australia, Japan, Brazil, New Zealand and South Africa. The second patentfamily includes U.S. Patent 8,821,881 and issued patents in Europe, Canada, Australia, Japan, Brazil, New Zealand and South Africa. These issued patentshave patent terms until at least July 2023 and July 2024. The issued U.S. patent in the second patent family, U.S. Patent 8,821,881, has a term that extendsuntil August 2026 inclusive of Patent Term Adjustment.In addition to the above, we have established expertise and development capabilities focused in the areas of preclinical research and development,manufacturing and manufacturing process scale-up, quality control, quality assurance, regulatory affairs and clinical trial design and implementation. Webelieve that our focus and expertise will help us develop products based on our proprietary intellectual property.In-License AgreementsHarvard UniversityIn November 2007, we entered into an exclusive license agreement with Harvard University, granting us an exclusive, worldwide, royalty-bearing,sublicensable license to three patent families, to develop, make, have made, use, market, offer for sale, sell, have sold and import licensed products and toperform licensed services. This agreement was amended and restated in November 2012. The Harvard University intellectual property covers methods relatedto the ATLAS discovery platform, including discovery of antigens expressed in neoplastic cells, as well as certain chlamydia immunogenic compositions andmethods for inhibiting or treating chlamydia infections. Any patents within this portfolio that have issued or may be issued will expire normally in 2027 and2028. Harvard University retains the right to make and use, and to grant licenses to other not-for-profit research organizations to make and use, the licensedintellectual property for internal research, teaching and other educational purposes. We notified Harvard University of our partial termination of the licenseagreement with regard to intellectual property covering chlamydia antigens on December 8, 2014. Effective March 8, 2015, the license agreement withHarvard, regarding intellectual property covering chlamydia antigens, was terminated and we no longer hold a license to two of the three in-licensed Harvardpatent families, or to a chlamydia antigen covered by the remaining family. The remaining family covers certain aspects of the ATLAS platform, as well asone chlamydia antigen, and we continue to maintain exclusive rights to certain aspects of the ATLAS platform covered by this family.We are obligated to pay Harvard University an annual license maintenance fee ranging from the low five figures to the mid-five figures dependingon the type of product and the number of years after the effective date of the agreement. For products covered by the licensed patent rights, we are obligatedto pay Harvard milestone payments up to $1.8 million in the aggregate upon the achievement of certain development and regulatory milestones. For productsdiscovered using the licensed methods, we are obligated to pay Harvard milestone payments up to $600 thousand in the aggregate for each of the first threeproducts and up to $300 thousand in the aggregate for each additional product under the agreement upon the achievement of certain development andregulatory milestones. As of December 31, 2018, we incurred $231 thousand in aggregate milestone payments.Upon commercialization of our products covered by the licensed patent rights or discovered using the licensed methods, we are obligated to payHarvard royalties on the net sales of such products and services sold by us, our affiliates, and our sublicensees. This royalty varies depending on the type ofproduct or service but is in the low single digits. The sales-based royalty due by our sublicensees is the greater of the applicable royalty rate or a percentagein the high single digits or the low double digits of the royalties we receive from such sublicensee, depending on the type of product. Based on the type ofcommercialized product or service, royalties are payable until the expiration of the last-to-expire valid claim under the licensed8patent rights or for a period of 10 years from first commercial sale of such product or service. The royalties payable to Harvard University are subject toreduction, capped at a specified percentage, for any third-party payments required to be made. In addition to the royalty payments, if we receive anyadditional revenue (cash or non-cash) under any sublicense, we must pay Harvard a percentage of such revenue, excluding certain categories of payments,varying from the low single digits to up to the low double digits depending on the scope of the license that includes the sublicense.We are required to use commercially reasonable efforts to develop licensed products, introduce them into the commercial market, and market themin compliance with an agreed upon development plan. We are also obligated to achieve specified development milestones. If we are unable to meet ourdevelopment milestones for any type of product or service, absent any reasonable proposed extension or amendment thereof, Harvard has the right,depending on the type of product or service, to terminate this agreement with respect to such products or to convert the license to a non-exclusive, non-sublicensable license with respect to such products and services.Our agreement with Harvard University will expire on a product-by-product or service-by-service and country-by-country basis until the expirationof the last-to-expire valid claim under the licensed patent rights. We may terminate the agreement at any time by giving Harvard advance written notice.Harvard may also terminate the agreement in the event of a material breach by us that remains uncured; in the event of our insolvency, bankruptcy, or similarcircumstances; or if we challenge the validity of any patents licensed to us.Manufacture ContractsOncovirIn January 2018, we entered into a License and Supply Agreement with Oncovir, Inc. (“Oncovir”). The agreement provides the terms and conditionsunder which Oncovir will manufacture and supply an immunomodulator and vaccine adjuvant, Hiltonol® (poly-ICLC) (“Hiltonol”), to us for use inconnection with the research, development, use, sale, manufacture, commercialization and marketing of products combining Hiltonol with our technology(the “Combination Product”). Hiltonol is the adjuvant component of GEN-009, which will consist of synthetic long peptides or neoantigens identified usingour proprietary ATLAS platform, formulated with Hiltonol. When paired with synthetic long peptides, Hiltonol has shown the ability to induce T cellresponses, which we believe will be important for driving the clinical efficacy of GEN-009. Hiltonol is manufactured under good manufacturing practice("GMP") conditions, has an existing drug master file, and has an extensive tolerability record when used alone and in combination with vaccine antigens. Weare not required to purchase any minimum quantity of Hiltonol from Oncovir.Oncovir granted us a non-exclusive, assignable, royalty-bearing worldwide license, with the right to grant sublicenses through one tier, to certain ofOncovir’s intellectual property in connection with the research, development, or commercialization of Combination Products, including the use of Hiltonol,but not the use of Hiltonol for manufacturing or the use or sale of Hiltonol alone. The license shall become perpetual, fully paid-up, and royalty-free on thelater of January 25, 2028 or the date on which the last valid claim of any patent licensed to us under the agreement expires.Under this agreement, we are obligated to pay Oncovir (i) an up-front payment in the mid-six figures in consideration of the license granted to us andfor the initial supply of Hiltonol for the GEN-009 Phase 1/2 trial, (ii) a supply price for Hiltonol in the low-three figures per vial of Hiltonol for use in clinicaltrials or commercial use, (iii) a milestone payment in the low-six figures upon the achievement of certain clinical trial milestones for each CombinationProduct, (iv) a milestone payment in the mid-six figures upon the first marketing approval for each Combination Product in certain territories, and (v) tieredroyalties in the low-single digits on a product-by-product basis based on the net sales of Combination Products.We may terminate the agreement upon a decision to discontinue the development of the Combination Product or upon a determination by us or anapplicable regulatory authority that Hiltonol or a Combination Product is not clinically safe or effective. The agreement may also be terminated by eitherparty due to a material uncured breach by the other party, or due to the other party’s bankruptcy, insolvency, or dissolution.Trade SecretsWe may rely, in some circumstances, on trade secrets to protect our technology. However, trade secrets can be difficult to protect. We seek to protectour proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors andcontractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises andphysical and electronic security of our information technology systems. While we have confidence in these individuals, organizations, and systems,agreements or9security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or beindependently discovered by competitors. To the extent that our consultants, contractors, or collaborators use intellectual property owned by others in theirwork for us, disputes may arise as to the rights in related or resulting know-how and inventions.Government RegulationBiological products such as vaccines and adaptive cell therapies are subject to regulation under the Federal Food, Drug, and Cosmetic Act ("FD&CAct") and the Public Health Service Act ("PHS Act"), and other federal, state, local and foreign statutes and regulations. Both the FD&C and PHS Acts andtheir corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping,distribution, reporting, advertising and other promotional practices involving biological products. Clinical testing of biological products is subject to FDAreview before initiation. In addition, FDA approval must be obtained before marketing of biological products. The process of obtaining regulatory review andapproval and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial timeand financial resources and we may not be able to obtain the required regulatory approvals.United States Biological Products Development ProcessThe process required by the FDA before a biological product may be marketed in the United States generally involves the following process:•completion of nonclinical laboratory tests and animal studies according to good laboratory practices ("GLP") and applicable requirements forthe humane use of laboratory animals or other applicable regulations;•submission to the FDA of an application for an IND which must become effective before human clinical trials may begin;•performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinicalpractices ("GCP") and any additional requirements for the protection of human research subjects and their health information, to establish thesafety and efficacy of the proposed biological product for its intended use, including approval by an independent Institutional Review Board(“IRB”), representing each clinical site before each clinical trial may be initiated;•submission to the FDA of a BLA for marketing approval that includes substantive evidence of safety, purity, and potency from results ofnonclinical testing and clinical trials;•satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assesscompliance with GMPs to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength,quality and purity and, if applicable, the FDA’s current good tissue practices ("GTP") for the use of human cellular and tissue products;•potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the BLA; and•FDA review and approval, or licensure, of the BLA.Before testing any biological product candidate in humans, the product candidate enters the preclinical study stage. Preclinical studies, also referredto as nonclinical studies, include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potentialsafety and activity of the product candidate. The conduct of the preclinical studies must comply with federal regulations and requirements including GLPs.The clinical trial sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any availableclinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. Some preclinical studies may continue even after the IND issubmitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the clinical trial on a clinical hold within that30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA also mayimpose clinical holds on a biological product candidate at any time before or during clinical trials due to safety concerns or non-compliance. If the FDAimposes a clinical hold, studies may not recommence without FDA authorization and then only under terms authorized by the FDA. Accordingly, we cannotbe sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that suspend or terminatesuch studies.10Clinical trials involve the administration of the biological product candidate to healthy volunteers or patients under the supervision of qualifiedinvestigators, generally physicians not employed by or under the trial 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, and the parameters to be used to monitor subject safety,including stopping rules that assure a clinical trial will be stopped if certain adverse events ("AEs") should occur. Each protocol and any amendments to theprotocol must be submitted to the FDA as part of the IND. Clinical trials must be conducted and monitored in accordance with the FDA’s regulationscomprising the GCP requirements, including the requirement that all research subjects provide informed consent. Further, each clinical trial must be reviewedand approved by an IRB, at or servicing each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare andrights of trial participants and considers such items as whether the risks to individuals participating in the clinical studies are minimized and are reasonable inrelation to anticipated benefits. The IRB also approves the form and content of the informed consent that must be signed by each clinical trial subject or hisor her legal representative and must monitor the clinical trial until completed.Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:•Phase 1. The biological product is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption,metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially when the product may betoo inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.•Phase 2. The biological product is evaluated in a limited patient population to identify possible AEs and safety risks, to preliminarily evaluatethe efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule.•Phase 3. Clinical studies are undertaken to further evaluate safety, purity, and potential of biological product in an expanded patientpopulation at geographically dispersed clinical trial sites. These clinical studies are intended to establish the overall risk/benefit ratio of theproduct and provide an adequate basis for product approval and product labeling.Post-approval clinical studies, sometimes referred to as Phase 4 clinical studies, may be conducted after initial marketing approval. These clinicalstudies are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up.During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data andclinical trial investigators. Annual progress reports detailing the results of the clinical studies must be submitted to the FDA. Written IND safety reports mustbe promptly submitted to the FDA and the investigators for serious and unexpected AEs, any findings from other studies, tests in laboratory animals or invitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious suspected adverse reaction over thatlisted in the protocol or investigator brochure. The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that theinformation qualifies for reporting. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within sevencalendar days after the sponsor’s initial receipt of the information. Phase 1, Phase 2 and Phase 3 clinical studies may not be completed successfully withinany specified period, if at all. The FDA or the sponsor or its data safety monitoring board may suspend or terminate a clinical trial at any time on variousgrounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend orterminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the biologicalproduct has been associated with unexpected serious harm to patients. Sponsors of all controlled clinical trials, except for Phase 1 trials, are required tosubmit certain clinical trial information for inclusion in the public clinical trial registry and results data bank maintained by the National Institutes of Health,which are publicly available at http://clinicaltrials.gov.Concurrent with clinical studies, companies usually complete additional animal studies and must also develop additional information about thephysical characteristics of the biological product as well as finalize a process for manufacturing the product in commercial quantities in accordance withGMP requirements. To help reduce the risk of the introduction of adventitious agents with use of biological products, the PHS Act emphasizes the importanceof manufacturing control for products whose attributes cannot be precisely defined. The manufacturing process must be capable of consistently producingquality batches of the product candidate and, among other things, the sponsor must develop methods for testing the identity, strength, quality, potency andpurity of the final biological product. Additionally, appropriate packaging must be11selected and tested, and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptabledeterioration over its shelf life.United States Review and Approval ProcessesAfter the completion of clinical trials of a biological product, FDA approval of a BLA must be obtained before commercial marketing of thebiological product. The BLA must include results of product development, laboratory and animal studies, human studies, information on the manufactureand composition of the product, proposed labeling and other relevant information. In addition, under the Pediatric Research Equity Act, a BLA orsupplement to a BLA must contain data to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatricsubpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may grantdeferrals for submission of data or full or partial waivers. The testing and approval processes require substantial time and effort and there can be no assurancethat the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all, and for what indications will beapproved, if any.Under the Prescription Drug User Fee Act ("PDUFA"), as re-authorized for an additional five years in 2017, each BLA must be accompanied by asignificant user fee. PDUFA also imposes annual product fees based on each approved biologic. Fee waivers or reductions are available in certaincircumstances, including a waiver of the application fee for the first application filed by a small business.Within 60 days following submission of the application, the FDA reviews the BLA to determine if it is substantially complete before the agencyaccepts it for filing. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may requestadditional information. In this event, the BLA must be resubmitted with the additional information. The resubmitted application also is subject to reviewbefore the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the BLA. The FDA reviewsthe BLA to determine, among other things, whether the proposed product is safe and potent, or effective, for its intended use, and has an acceptable purityprofile, and whether the product is being manufactured in accordance with GMP regulations to assure and preserve the product’s identity, safety, strength,quality, potency and purity. The FDA may refer applications for novel biological products or biological products that present difficult questions of safety orefficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether theapplication should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers suchrecommendations carefully when making decisions. During the biological product approval process, the FDA also will determine whether a Risk Evaluationand Mitigation Strategy ("REMS"), is necessary to assure the safe use of the biological product. If the FDA concludes a REMS is needed, the sponsor of theBLA must submit a proposed REMS; the FDA will not approve the BLA without a REMS, if required.Before approving a BLA, the FDA will inspect the facilities at which the product is manufactured. The FDA will not approve the product unless itdetermines that the manufacturing processes and facilities are in compliance with GMP requirements and adequate to assure consistent production of theproduct within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that theclinical trials were conducted in compliance with IND study requirements and GCP requirements. To assure GMP, GTP and GCP compliance, an applicantmust incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control.Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the BLA does not satisfy its regulatorycriteria for approval and deny approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than weinterpret the same data. If the agency decides not to approve the BLA in its present form, the FDA will issue a complete response letter that usually describesall of the specific deficiencies in the BLA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or major,for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions that the applicant might take toplace the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the BLA, addressing all of thedeficiencies identified in the letter, or withdraw the application.If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use mayotherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings orprecautions be included in the product labeling. The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in theform of a REMS, or otherwise limit the scope of any approval. In addition, the FDA may require post marketing clinical trials, sometimes referred to asPhase 4 clinical trials, designed to further assess a biological product’s safety and effectiveness, and testing and surveillance programs to monitor the safetyof approved products that have been commercialized.12One of the performance goals agreed to by the FDA under the PDUFA is to review 90% of standard BLAs in 10 months from filing and 90% ofpriority BLAs in six months from filing, whereupon a review decision is to be made. The FDA does not always meet its PDUFA goal dates for standard andpriority BLAs and its review goals are subject to change from time to time. The review process and the PDUFA goal date may be extended by three months ifthe FDA requests or the BLA sponsor otherwise provides additional information or clarification regarding information already provided in the submissionwithin the last three months before the PDUFA goal date.United States Fraud and Abuse, Transparency and Privacy LawsIn the United States, our business activities are subject to numerous other federal, state and local laws designed to prevent fraud and abuse, promotetransparency in interactions with others in the healthcare industry or protect the privacy of individual information. These laws are enforced by various federaland state enforcement authorities, including but not limited to, the United States Department of Justice, and individual United States Attorney offices withinthe Department of Justice, the United States Department of Health and Human Services ("HHS"), HHS’ various divisions, including but not limited to, theCenters for Medicare & Medicaid Services ("CMS"), the Office of Inspector General, the Office for Human Research Protections, and the Office of ResearchIntegrity, and other state and local government agencies.Although we currently have no products approved for commercial sale, we may be subject to various federal and state laws pertaining to health care“fraud and abuse,” including anti-kickback laws and false claims laws, for activities related to future sales of any of our product candidates that may in thefuture receive regulatory and marketing approval. Anti-kickback laws generally prohibit a pharmaceutical manufacturer from soliciting, offering, receiving,or paying any remuneration to generate business, including the purchase, prescription or use of a particular drug. False claims laws generally prohibit anyonefrom knowingly and willingly presenting, or causing to be presented, any claims for payment for reimbursed drugs or services to third party payors (includingMedicare and Medicaid) that are false or fraudulent. Although the specific provisions of these laws vary, their scope is generally broad and there may not beregulations, guidance or court decisions that apply the laws to particular industry practices. There is therefore a possibility that our practices might bechallenged under such laws.Laws and regulations have been enacted by the federal government and various states to regulate the sales and marketing practices ofpharmaceutical manufacturers with marketed products. The laws and regulations generally limit financial interactions between manufacturers and health careproviders and/or require disclosure to the government and public of such interactions. Many of these laws and regulations contain ambiguous requirementsor require administrative guidance for implementation. Given the lack of clarity in laws and their implementation, any future activities (if we obtain approvaland/or reimbursement from federal healthcare programs for our product candidates) could be subject to challenge.If our operations are found to be in violation of any of the health regulatory laws described above, or any other laws that apply to us, we may besubject to penalties, including, without limitation, civil, criminal, and administrative penalties, damages, monetary fines, disgorgement, possible exclusionfrom participation in Medicare, Medicaid and other federal health care programs, contractual damages, reputational harm, diminished profits and futureearnings, and curtailment or restructuring of our operations.ReimbursementIn both domestic and foreign markets, the commercial success of any approved products will depend, in part, on the availability of coverage andadequate reimbursement for such products from third-party payors, such as government health care programs, commercial insurance, and managed careorganizations. Patients who are provided vaccinations, and providers providing vaccinations, generally rely on third-party payors to reimburse all or part ofthe associated health care costs. Sales of any approved vaccines will therefore depend substantially, both domestically and abroad, on the extent to which thecosts of our approved vaccines will be paid by third-party payors. These third-party payors are increasingly challenging the prices charged for medicalproducts and services and imposing controls to manage costs. The containment of health care costs has become a priority of federal and state governmentsand the prices of drugs have been a focus in this effort. Governments have shown significant interest in implementing cost-containment programs, includingprice controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containmentmeasures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. Third-party payors may limit coverage to specific products on an approved list or formulary, which might not include all of the FDA-approved products for aparticular indication. In addition, there is significant uncertainty regarding the reimbursement status of newly approved health care products. Third-partypayors are increasingly examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. Wemay need to conduct expensive pharmacoeconomic studies in order to demonstrate the cost-effectiveness of our products. If third-party payors do notconsider13our products to be cost-effective compared to other therapies, the payors may not cover our products after approval as a benefit under their plans or, if theydo, the level of payment may not be sufficient to allow us to sell our products on a profitable basis.Within the United States, if we obtain appropriate approval in the future to market any of our current product candidates, we may seek coverage forthose products under Medicaid, Medicare, and the 340B drug pricing programs. These programs are administered by various federal and state agencies andprovide prescription drug benefits to individuals who are age 65 and over, low income, or disabled or allow healthcare providers that serve vulnerablepopulations to purchase prescription drugs at discounted prices. In the future, we may also seek to sell any approved product candidates to governmentpurchasers. In order to obtain coverage for our products under government benefit programs, or to sell products to government purchasers, we may be requiredto track and report prices for our products, offer discounts to certain purchasers, or pay rebates on certain utilization.In the United States, federal and state governments continue to propose and pass legislation designed to reform delivery of, or payment for, healthcare, which include initiatives to reduce the cost of healthcare. For example, in March 2010, the United States Congress enacted the Patient Protection andAffordable Care Act and the Health Care and Education Reconciliation Act (the "Healthcare Reform Act") which expanded health care coverage throughMedicaid expansion and the implementation of the individual mandate for health insurance coverage and which included changes to the coverage andreimbursement of drug products under government healthcare programs. Under the Trump administration, there have been ongoing efforts to modify or repealall or certain provisions of the Healthcare Reform Act. For example, tax reform legislation was enacted at the end of 2017 that eliminates the tax penalty forindividuals who do not maintain sufficient health insurance coverage beginning in 2019 (the so-called “individual mandate”). In a May 2018 report, theCongressional Budget Office estimated that, compared to 2018, the number of uninsured will increase by 3 million in 2019 and 6 million in 2028, in part dueto the elimination of the individual mandate. The Healthcare Reform Act has also been subject to judicial challenge. In December 2018, a federal districtcourt judge, in a challenge brought by a number of state attorneys general, found the Healthcare Reform Act unconstitutional in its entirety because, onceCongress repealed the individual mandate provision, there was no longer a basis to rely on Congressional taxing authority to support enactment of the law.Pending appeals, which could take some time, the Healthcare Reform Act is still operational in all respects.There have been other reform initiatives under the Trump Administration, including initiatives focused on drug pricing. For example, in May of2018, President Trump and the Secretary of the Department of Health and Human Services released a “blueprint” to lower prescription drug prices and out-of-pocket costs. Certain proposals in the blueprint, and related drug pricing measures proposed since the blueprint, could cause significant operational andreimbursement changes for the pharmaceutical industry. As another example, in November of 2018, CMS issued an advance notice of proposed rulemakingthat proposed revisions to Medicare Part D to support health plans’ negotiation of lower drug prices with manufacturers and reduce health plan member’s out-of-pocket costs. The HHS Office of Inspector General issued a proposed rule in February of 2018 that would revise the federal anti-kickback statute to limitprotection for discounts offered by pharmaceutical manufacturers to pharmacy benefit managers (“PBMs”), Medicare Part D plans, and Medicaid managedcare plans that are not reflected in the price charged to the patient at the pharmacy counter and to provide protection only for certain types of service feespaid by pharmaceutical manufacturers to PBMs.There have also been other efforts by government officials or legislators to implement measures to regulate prices or payment for pharmaceuticalproducts, including legislation on drug importation. Recently, there has been considerable public and government scrutiny of pharmaceutical pricing andproposals to address the perceived high cost of pharmaceuticals. There have been recent state legislative efforts to address drug costs, which generally havefocused on increasing transparency around drug costs or limiting drug prices.Adoption of new legislation at the federal or state level could affect demand for, or pricing of, our product candidates if approved for sale. Wecannot, however, predict the ultimate content, timing, or effect of any changes to the Healthcare Reform Act or other federal and state reform efforts. There isno assurance that federal or state health care reform will not adversely affect our future business and financial results.Outside the United States, ensuring adequate coverage and payment for our products will face challenges. In international markets, reimbursementand health care payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. Pricingof prescription pharmaceuticals is subject to governmental control in many countries. Pricing negotiations with governmental authorities can extend wellbeyond the receipt of regulatory marketing approval for a product and may require us to conduct a clinical trial that compares the cost effectiveness of ourproduct candidates or products to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in ourcommercialization efforts. Third-party payors are challenging the prices charged for medical products and services, and many third-party payors limitreimbursement for newly-approved health care products. Recent budgetary14pressures in many European Union countries are also causing governments to consider or implement various cost-containment measures, such as pricefreezes, increased price cuts and rebates. If budget pressures continue, governments may implement additional cost-containment measures. Cost-controlinitiatives could decrease the price we might establish for products that we may develop or sell, which would result in lower product revenues or royaltiespayable to us. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allowfavorable reimbursement and pricing arrangements for any of our products.Foreign RegulationIn addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial salesand distribution of our product candidates. Whether or not we obtain FDA approval for a product candidate, we must obtain approval from the comparableregulatory authorities of foreign countries or economic areas, such as the European Union, before we may commence clinical trials or market products inthose countries or areas. The approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement varygreatly from place to place, and the time may be longer or shorter than that required for FDA approval.Certain countries outside of the United States have a process that requires the submission of a clinical trial application ("CTA") much like an INDprior to the commencement of human clinical trials. In Europe, for example, a CTA must be submitted to the competent national health authority and toindependent ethics committees in each country in which a company intends to conduct clinical trials. Once the CTA is approved in accordance with acountry’s requirements, clinical trial development may proceed in that country. In all cases, the clinical trials must be conducted in accordance with GCPsand other applicable regulatory requirements.Under European Union regulatory systems, a company may submit marketing authorization applications either under a centralized or decentralizedprocedure. The centralized procedure is compulsory for medicinal products produced by biotechnology or those medicinal products containing new activesubstances for specific indications such as the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, viral diseases and designated orphanmedicines, and optional for other medicines which are highly innovative. Under the centralized procedure, a marketing application is submitted to theEuropean Medicines Agency where it will be evaluated by the Committee for Medicinal Products for Human Use and a favorable opinion typically results inthe grant by the European Commission of a single marketing authorization that is valid for all European Union member states within 67 days of receipt of theopinion. The initial marketing authorization is valid for five years, but once renewed is usually valid for an unlimited period. The decentralized procedureprovides for approval by one or more “concerned” member states based on an assessment of an application performed by one-member state, known as the“reference” member state. Under the decentralized approval procedure, an applicant submits an application, or dossier, and related materials to the referencemember state and concerned member states. The reference member state prepares a draft assessment and drafts of the related materials within 120 days afterreceipt of a valid application. Within 90 days of receiving the reference member state’s assessment report, each concerned member state must decide whetherto approve the assessment report and related materials. If a member state does not recognize the marketing authorization, the disputed points are eventuallyreferred to the European Commission, whose decision is binding on all member states. In light of the United Kingdom’s vote in 2016 to leave the EuropeanUnion, the so-called Brexit vote, there may be changes forthcoming in the scope of the centralized approval procedure as the terms of that exit are negotiatedbetween the United Kingdom and the European Union.ManufacturingWe do not have any manufacturing facilities. We currently rely, and expect to continue to rely, on third parties for the manufacture of our productcandidates for non-clinical studies and clinical trials, as well as for commercial manufacture if our product candidates receive marketing approval.Executive Officers of the RegistrantThe following table sets forth the name, age and position of each of our executive officers as of February 28, 2019.15Name Age PositionWilliam Clark 50 President and Chief Executive OfficerGirish Aakalu, Ph.D. 45 Chief Business OfficerMichael Alfieri 54 Vice President, Finance and Principal Financial OfficerPamela Carroll, Ph.D. 55 Senior Vice President, Immuno-oncologyThomas Davis, M.D. 55 Chief Medical OfficerJessica Baker Flechtner, Ph.D. 47 Chief Scientific OfficerDerek Meisner 48 Senior Vice President, General CounselNarinder Singh 46 Senior Vice President, Pharmaceutical Sciences and ManufacturingWilliam "Chip" Clark. Chip has served as our President and Chief Executive Officer since February 2011 after serving as our Chief Business Officer fromAugust 2010 to February 2011. Chip has also served on our board of directors since February 2011. Prior to joining Genocea, he served as Chief BusinessOfficer at Vanda Pharmaceuticals, a biopharmaceutical company he co-founded in 2004. While at Vanda, he led the company’s strategic and businessdevelopment activities and played a central role in raising more than $400 million through business development deals and equity financings. Prior toVanda, Chip was a principal at Care Capital, a venture capital firm investing in biopharmaceutical companies, after serving in a variety of commercial andstrategic roles at SmithKline Beecham (now GlaxoSmithKline). Chip holds a B.A. from Harvard University and an M.B.A. from The Wharton School at theUniversity of Pennsylvania.Girish Aakalu, Ph.D. Girish joined Genocea in December 2018 as Chief Business Officer. In this role, he leads Genocea’s business development efforts. Hisbroad skill set spans business development, corporate and R&D strategy, product portfolio management, commercial planning, and alliance management.Prior to joining Genocea, Girish was employed by the Ipsen Group, from May 2015 until December 2018, where he was most recently Vice President: GlobalHead of External Innovation, and Pfizer, Inc., from October 2007 until May 2015, where he held the title of Executive Director: Head of Strategy, Innovation& Operations for Pfizer’s External R&D Innovation team prior to his departure. His previous roles also include business development and oncology pipelinemarket planning positions at Genentech, Inc. and life science consulting experience at L.E.K Consulting. He received a B.A. in Biophysics with General andDepartmental Honors from Johns Hopkins University, a Ph.D. in Cellular and Molecular Neurobiology following an M.S. in Biology from the CaliforniaInstitute of Technology and has completed executive education in Corporate Governance at Northwestern University - Kellogg School of Management.Michael Alfieri. Mike has served as our Vice President of Finance since joining Genocea in May 2018 and our Principal Financial Officer since June 2018.Prior to joining Genocea, Mike served as Vice President of Finance at Radius Health, Inc. from January 2017 through May 2018, Corporate Controller atMerrimack Pharmaceutical, Inc. from July 2014 through January 2017 and the Executive Director of Finance and Corporate Controller at Anika Therapeutics,Inc. from September 2010 through July 2014. Mike began his career as a staff accountant in the Boston office of Price Waterhouse and spent nearly eightyears in a regional public accounting firm prior to moving into industry. Mike holds a M.S. in Taxation and a B.S. in Accountancy, both from BentleyUniversity (College).Pamela Carroll, Ph.D. Pam has served as Senior Vice President of Immuno-oncology at Genocea since 2016. Prior to joining Genocea, Pam served as SeniorVice President of Research at Compass Therapeutics LLC. (2015-2016), Vice President of Janssen Oncology, Johnson and Johnson Innovation (2013-2015),and Vice President Oncology Discovery at Roche Pharma Research and Development (2011-2013). Earlier roles include Head of Research at the BelferInstitute for Applied Cancer Science at Dana Farber Cancer Institute and Director of Cancer Pathways at Merck Research Labs. Pam received her Ph.D. fromStony Brook University in Cell and Development Biology and performed postgraduate research at Stanford University.Thomas Davis, M.D. Tom joined Genocea in October 2018 as Chief Medical Officer with over 20 years of academic and industry experience in immuno-oncology and cancer drug development. Most recently, he served as Chief Medical Officer of Gadeta B.V., a Dutch cell therapy company pursuing novelcancer targets from October 2017 to April 2018, where he steered a novel cell therapy technology into first-in human clinical studies. Prior to Gadeta B.V., heserved as Chief Medical Officer of Celldex from 2006 to 2017, where he led all aspects of clinical and regulatory development including strategy, tactics, andexecution. While at Celldex, Tom actively built and oversaw Clinical Science, Medical Affairs, Safety, Clinical Operations, Statistics, Regulatory Affairs, andProject Management, managed collaborations with large global pharmaceutical partners, and participated in investor relations activities. He also served asChief Medical Officer at GenVec and as Senior Director of Clinical Science at Medarex.Prior to joining the industry, Tom supervised clinical efforts at theCancer Therapy Evaluation Program (CTEP) of the National Cancer Institute (NCI), and worked on the development of rituximab and idiotype vaccines atStanford University. Dr. Davis received his B.A. in Biophysics from Johns Hopkins, his M.S. in Physiology and his M.D. from Georgetown University, andcompleted a fellowship in medical oncology at Stanford University.16Jessica Baker Flechtner, Ph.D. Jess joined Genocea in 2007, soon after the company was founded, and has held multiple scientific roles since joiningGenocea. She has served as our Chief Scientific Officer since February 2016, Senior Vice President of Research from February 2014 to January 2016, VicePresident of Research from January 2010 to February 2014, and Senior Director, Research and Development from 2007 to 2010. Prior to joining Genocea,Dr. Flechtner was an Immunology Consultant at BioVest International, Inc. from June 2006 to March 2007, where she guided the development of assays toevaluate the success of the company’s autologous Follicular (Non-Hodgkin’s) Lymphoma vaccine in patients. As a researcher at Mojave Therapeutics, Inc., orMojave, and Antigenics Inc. (now Agenus), which acquired Mojave’s intellectual property, from 2001 to 2005, Dr. Flechtner developed protein and peptide-based vaccines and immunotherapies for cancer, infectious disease, autoimmunity and allergy. She is an inventor on various pending or issued patents andhas multiple peer-reviewed scientific publications. Dr. Flechtner performed her post-doctoral work in the laboratory of Dr. Harvey Cantor at the Dana FarberCancer Institute and Harvard Medical School and holds a Ph.D. in Cellular Immunology and B.S. in Animal Science from Cornell University. She is a memberof the American Association of Immunologists, American Association for Cancer Research, Society for the Immunotherapy of Cancer, the President’s Councilof Cornell Women, and Women in Bio.Derek Meisner. Derek joined Genocea in September 2018 as Senior Vice President and General Counsel. In this role, Derek manages Genocea's legal affairsand advises the company on business strategy and implementation. He has extensive experience as a corporate attorney, serving as the General Counsel toBoston-based financial services Quantopian, Inc. from 2016-2018, a prominent biotechnology investment firm (2015-2016) and alternative investment firm(2007-2014). Derek also previously served as Partner at the international law firm of K&L Gates, where he counseled various corporate clients on corporategovernance, regulatory, and compliance matters, and as a Branch Chief in the Division of Enforcement of the U.S. Securities and Exchange Commission.Derek earned a B.A. from the University of Michigan and a J.D. from the American University, Washington College of Law.Narinder Singh. Narinder joined Genocea in March 2018 as Senior Vice President, Pharmaceutical Sciences and Manufacturing. In this role, Narindermanages the manufacturing process development and manufacturing of Genocea’s products. Narinder has extensive experience in process development,scale-up, technical operations, and manufacturing supply chain of biopharmaceuticals. Prior to joining Genocea, Narinder served as Vice President of DrugProduct Development and Manufacturing at Momenta Pharmaceuticals from July 2015 to March 2018, responsible for process development andmanufacturing of drug products for Momenta’s biosimilars and novel product portfolio. Prior to Momenta, Narinder served as Director, Drug ProductTechnology at Amgen from June 2007 to July 2015, responsible for process development, commercialization, manufacturing and new technologydevelopment for drug products development of Amgen’s biologics-based portfolio. He began his career at Amgen functioning in various junior technicalroles, beginning in 1997. Narinder received an Integrated B.Tech/M.Tech. in Biochemical Engineering and Biotechnology from the Indian Institute ofTechnology, Delhi in 1995, an M.S. in Chemical Engineering from the University of Houston, and an M.B.A. from UCLA Anderson School of Management.EmployeesAs of December 31, 2018, we had 61 full-time employees, of which 44 were engaged in research and development and 17 were engaged in finance,legal, business development, human resources, facilities, information technology or other general and administrative functions. None of our employees isrepresented by a labor union or covered by a collective bargaining agreement and we have not experienced any work stoppages. We consider our relationswith our employees to be good.Corporate InformationWe were incorporated under the laws of the State of Delaware in August 2006. Our principal executive offices are located at 100 Acorn Park Drive,5th Floor, Cambridge, Massachusetts 02140 and our telephone number is (617) 876-8191. Genocea® and the Genocea logo are registered trademarks.Available InformationWe maintain an Internet website at http://www.genocea.com where our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, CurrentReports on Form 8-K and other documents and all amendments to those reports and documents are available without charge, as soon as reasonablypracticable following the time they are filed with, or furnished to, the Securities and Exchange Commission ("SEC"). The SEC also maintains an Internetwebsite that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically withthe SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov. References to our website address do not17constitute incorporation by reference of the information contained on the website, and the information contained on the website is not part of this document.Item 1A. Risk FactorsRisks Related to Our Financial Position and Need for Additional CapitalWe require additional financing to execute our operating plan and continue to operate as a going concern.Our audited financial statements for the year ended December 31, 2018 have been prepared assuming we will continue to operate as a going concern,but we believe that our continuing operating losses raise substantial doubt about our ability to continue as such. We plan to continue to fund our operationsthrough public or private equity offerings, strategic transactions, proceeds from sales of our common stock under our at-the-market equity offering program,our loan and security agreement with Hercules Capital, Inc. ("Hercules"), or by other means. However, adequate additional financing may not be available tous on acceptable terms, or at all. If we are unable to raise capital when needed, or on attractive terms, we may be forced to implement further cost reductionstrategies, including ceasing development of GEN-009 and/or other product candidates and other corporate activities.We have incurred significant losses since our founding in 2006 and anticipate that we will continue to incur significant losses for the foreseeable futureand may never achieve or maintain profitability.We are a clinical-stage biotechnology company, and we have not yet generated significant revenues. We have incurred net losses each year since ourinception, including net losses of $27.8 million and $56.7 million for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018and 2017, we had accumulated deficits of approximately $292.0 million and $264.2 million, respectively. To date, we have not commercialized any productsor generated any revenues from the sale of products and do not know whether or when we will generate product revenues or become profitable. To date, wehave financed our operations primarily through private placements of our common stock and preferred stock, debt financings, our initial public offering("IPO") completed in February 2014 and multiple public equity offerings.We have devoted most of our financial resources to research and development, including our clinical and non-clinical technology development anddevelopment activities. The amount of our future net losses will depend, in part, on the rate of our future expenditures and our ability to obtain fundingthrough equity or debt financings, strategic collaborations or additional grants. We have not completed pivotal clinical studies for any product candidate,other than GEN-003, which we have ceased developing, and it will be several years, if ever, before we have a product candidate ready for commercialization.Even if we obtain regulatory approval to market a product candidate, our future revenues will depend upon the size of any markets in which our productcandidates have received approval, our ability to achieve sufficient market acceptance, reimbursement from third-party payors and other factors. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses willincrease significantly if and as we:•continue clinical trials for GEN-009, our most advanced product candidate focused on neoantigen cancer vaccines, and initiate non-clinical orclinical studies for our other product candidates;•manufacture material for clinical trials and for commercial sale;•seek regulatory approvals for any product candidates that successfully complete clinical trials;•establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;•seek to discover and develop additional product candidates;•acquire or in-license other product candidates and technologies;•make royalty, milestone or other payments under any in-license agreements;•maintain, protect and expand our intellectual property portfolio;18•attract and retain skilled personnel; and•create additional infrastructure to support our operations as a public company and our product development and planned future commercializationefforts.The net losses that we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of ourresults of operations may not be a good indication of our future performance. In any particular quarter or quarters, our operating results could be below theexpectations of securities analysts or investors, which could cause our stock price to decline. To become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue. Thiswill require us to be successful in a range of challenging activities, including completing non-clinical studies and clinical trials of our product candidates,discovering additional product candidates, obtaining regulatory approval for these product candidates and manufacturing, marketing and selling anyproducts for which we may obtain regulatory approval. We are only in the preliminary stages of most of these activities. We may never succeed in theseactivities and, even if we do, may never generate revenues that are significant enough to achieve profitability. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict thetiming or amount of increased expenses or when, or if, we will be able to achieve profitability. If we are required by the FDA or the European MedicinesAgency to perform studies in addition to those currently expected, or if there are any delays in completing our clinical trials or the development of any of ourproduct candidates, our expenses could increase.Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become andremain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research anddevelopment efforts, diversify our product offerings or even continue our operations. A decline in the value of our company could also cause you to lose allor part of your investment.We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed would force us to delay,limit, reduce or terminate our product development or commercialization efforts.As of December 31, 2018, our cash and cash equivalents were $26.4 million. In February 2019, we raised approximately $14.2 million, afterdeducting approximately $0.8 million in placement agent fees, excluding offering costs, through a private placement with certain existing and new investors.We believe that we will continue to expend substantial resources for the foreseeable future developing GEN-009 and any other neoantigen cancer vaccineproduct candidates. These expenditures will include costs associated with research and development, potentially acquiring new technologies, potentiallyobtaining regulatory approvals and manufacturing products, as well as marketing and selling products approved for sale, if any. In addition, otherunanticipated costs may arise. Because the outcome of our planned and anticipated clinical trials is highly uncertain, we cannot reasonably estimate theactual amounts necessary to successfully complete the development and commercialization of our product candidates. Furthermore, because of thesignificant expense associated with conducting clinical trials, we cannot be certain we will have sufficient capital to complete such trials for a given productcandidate. Our future capital requirements depend on many factors, including:•the costs associated with conducting additional clinical trials for GEN-009;•the number and development requirements of other product candidates that we pursue, including the costs of filing an IND for GEN-011;•the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates if clinical trials are successful and the outcome ofregulatory review of our product candidates;•the cost and timing of future commercialization activities for our products, if any of our product candidates are approved for marketing, includingproduct manufacturing, marketing, sales and distribution costs;•the cost of our general and administrative functions;19•the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;•the cost of manufacturing our product candidates for clinical trials in preparation for regulatory approval and in preparation for commercialization;•our ability to establish and maintain strategic partnerships, licensing or other arrangements and the financial terms of such agreements;•the costs involved in preparing, filing, prosecuting patent applications, maintaining, defending and enforcing our intellectual property rights,including litigation costs and the outcome of such litigation;•the timing, receipt, and amount of sales of, or royalties or milestone payments on, our future products, if any; and•the extent to which we acquire or in-license other products or technologies.Based on our current operating plan, we believe that our existing cash and cash equivalents, inclusive of the approximately $14.2 million from theFebruary 2019 private placement, are sufficient to support our operating expenses and capital expenditure requirements into the first quarter of 2020. Our operating plan may change as a result of many factors currently unknown to us, and we may need additional funds sooner than planned. Inaddition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for ourcurrent or future operating plans. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds arenot available to us when needed, we would be required to delay, limit, reduce or terminate non-clinical studies, clinical trials or other development activitiesfor one or more of our product candidates or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that maybe necessary to commercialize our product candidates.We cannot be certain that we will be successful in advancing GEN-009, our lead product candidate, through clinical development, obtaining regulatoryapproval for it, or commercializing it or any of our future product candidates.At this time, GEN-009 is our most advanced product candidate and our future revenues, if any, will depend highly on the successful clinicalprogress, approval, and commercialization of GEN-009. GEN-009 and any future product candidate will require substantial clinical development, testing andregulatory approval before we are permitted to commence commercialization. This process can take many years and will require the expenditure ofsubstantial resources and we expect it will require that we obtain substantial additional funding.Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies orproduct candidates on unfavorable terms to us. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equityofferings, debt financings and license and development agreements with strategic partnerships with third parties. In 2015, we raised additional net capital ofapproximately $95.2 million through follow-on public offerings in March and August along with $4.7 million of net debt financing in December. In January2018, we raised additional net proceeds of approximately $51.7 million through concurrent public offerings of our common stock and warrants exercisablefor shares of our common stock and preferred stock and warrants exercisable for shares of our common stock (the "Concurrent Offerings"). In February 2019,we raised additional net proceeds of approximately $14.2 million, after deducting approximately $0.8 million in placement agent fees, excluding offeringcosts, through private placement. We have also periodically sold shares under our at-the-market equity offering program with Cowen and Company, LLC (the"ATM"). To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, andthe terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, may involve agreementsthat include covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures or declaringdividends. If we raise additional funds through strategic partnerships with third parties, we may have to relinquish valuable rights to our technologies orproduct candidates, future revenue streams, research programs or product candidates or grant licenses on terms that are not favorable to us. If we are unable toraise additional capital when needed, we would be required to delay, limit, reduce or terminate our product development or commercialization efforts forGEN-009, our immuno-oncology program, or our other product candidates. For example, in September 2017, we ceased substantially all spending andactivities related to GEN-003 and are currently exploring strategic alternatives for20advancing that product candidate. If we are unable to raise additional capital when needed, we may also be required to grant rights to develop and marketproduct candidates that we would otherwise prefer to develop and market ourselves. Our stockholders will experience substantial additional dilution if shares of our preferred stock are converted into, or outstanding options or warrants areexercised for, common stock.As of February 15, 2019 there were 1,635 shares of our Series A convertible preferred stock outstanding, which are convertible, without payment ofadditional consideration, into 1,635,000 shares of our common stock. As of February 15, 2019, there were 32,270,688 shares of common stock issuable uponthe exercise of warrants, having a weighted average exercise price of $1.14 per share, and 10,448,413 shares of common stock issuable upon the exercise ofstock options outstanding, having a weighted average exercise price of $1.77 per share. The conversion of the outstanding shares of our Series A convertiblepreferred stock into, or exercise of outstanding options or warrants for, common stock would be substantially dilutive to the outstanding shares of commonstock. Any dilution or potential dilution may cause our stockholders to sell their shares, which may contribute to a downward movement in the stock price ofour common stock.Risks Related to Clinical Development, Regulatory Review and Approval of Our Product Candidates We are substantially dependent on the success of the clinical development of GEN-009, our only product candidate currently in active clinical trials. Anyfailure to successfully develop or commercialize the GEN-009 vaccine, or any significant delays in doing so, will have a material adverse effect on ourbusiness, result of operations and financial condition. In September 2017, we ceased substantially all spending and activities related to GEN-003, our Phase 3-ready product candidate, and are currentlyexploring strategic alternatives for advancing that product candidate. We are now currently investing a significant portion of our efforts and financialresources in the development of the GEN-009, a neoantigen cancer vaccine which is currently in a Phase 1/2a clinical trial. Our ability to generate productrevenue depends heavily on the success of clinical trials for GEN-009 and the successful development and commercialization of GEN-009. The successfuldevelopment and commercialization of GEN-009 will depend on several factors, including the following:•successful completion of all required clinical trials of GEN-009;•obtaining marketing approvals from regulatory authorities for GEN-009;•establishing manufacturing and commercialization arrangements between ourselves and third parties;•establishing an acceptable safety and efficacy profile of GEN-009; and•the availability of reimbursement to patients from healthcare payors for GEN-009.Any failure to successfully develop or commercialize GEN-009 or any significant delays in doing so will have a material adverse effect on ourbusiness, results of operations and financial condition. Because our active product candidate is in an early stage of clinical development, there is a high risk of failure, and we may never succeed in developingmarketable products or generating product revenue. GEN-009 is currently in a Phase 1/2a clinical trial. The results from this trial may not be successful. Even if the results are successful, such resultsmay not be replicated in later and larger clinical trials. Among other reasons for the potential failure of earlier, smaller clinical trials to be replicated in later,larger clinical trials is the fact that manufacturing scale up is necessary to prepare for Phase 3 development and commercialization. Our product candidatesmay require complex manufacturing processes and scaling up these processes can cause changes in the product that may not be apparent until the product isfurther tested during Phase 3 trials. If the results of our future clinical trials are inconclusive with respect to the efficacy of our product candidates or if we do not meet our clinicalendpoints with statistical significance or if there are safety concerns or AEs associated with our product candidates, we may be prevented or delayed inobtaining marketing approval for our product candidates. Alternatively, even if we obtain regulatory approval, that approval may be for indications orpatient populations that are not as broad as intended or desired or may require labeling that includes significant use or distribution restrictions or safetywarnings. We may also be required to perform additional or unanticipated clinical trials to obtain approval or be subject to additional post-marketing testingrequirements to maintain regulatory approval. In addition, regulatory authorities may withdraw their approval of the product or impose restrictions on itsdistribution in the form of a modified risk evaluation and mitigation strategy.21 Furthermore, we need to develop the supply chain for any product candidates we identify. If we do not obtain regulatory approval for our current and future product candidates, our business will be adversely affected. Our product candidates are subject to extensive governmental regulations relating to, among other things, research, clinical trials, manufacturing,import, export and commercialization. In order to obtain regulatory approval for the commercial sale of any product candidate, we must demonstrate throughextensive non-clinical studies and clinical trials that the product candidate is safe and effective for use in each target indication. Clinical trials are expensive,time-consuming and uncertain as to outcome. We may gain regulatory approval for GEN-009 or our other current or potential future clinical and non-clinicalproduct candidates in some but not all of the territories available or some but not all of the target indications, resulting in limited commercial opportunity forthe approved vaccine or immunotherapy, or we may never obtain regulatory approval for these product candidates for any indication in any jurisdiction. We may find it difficult to enroll patients in our clinical trials, which could delay or prevent clinical trials of our product candidates. Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success. The timing of our clinical trialsdepends on the speed at which we can recruit patients to participate in testing our product candidates. If patients are unwilling to participate in our studiesbecause of negative publicity from AEs in the biotechnology industries or for other reasons, including competitive clinical trials for similar patientpopulations, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of potential products may be delayed or prevented.These delays could result in increased costs, delays in advancing our product development, delays in testing the effectiveness of our technology ortermination of the clinical trials altogether. We may not be able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics to achievediversity in a study, to complete our clinical trials in a timely manner. Patient enrollment is affected by factors including: •severity of the disease under investigation;•design of the study protocol;•size of the patient population;•eligibility criteria for the trial in question;•perceived risks and benefits of the product candidate under study;•proximity and availability of clinical trial sites for prospective patients;•availability of competing therapies and clinical trials;•efforts to facilitate timely enrollment in clinical trials;•patient referral practices of physicians; and•ability to monitor patients adequately during and after treatment.We may not be able to initiate or continue clinical trials if we cannot enroll a sufficient number of eligible patients to participate in the clinical trialsrequired by regulatory agencies. If we have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay,limit or terminate ongoing or planned clinical trials, any of which would have an adverse effect on our business. We may not be able to comply with requirements of foreign jurisdictions in conducting trials outside of the United States. 22To date, we have not conducted any clinical trials outside of the United States. Our ability to successfully initiate, enroll and complete a clinicaltrial in any foreign country, should we attempt to do so, is subject to numerous risks unique to conducting business in foreign countries, including:•difficulty in establishing or managing relationships with contract research organizations ("CROs") and physicians;•different standards for the conduct of clinical trials;•our inability to locate qualified local consultants, physicians and partners;•the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulationof pharmaceutical and biotechnology products and treatment; and•the acceptability of data obtained from studies conducted outside the United States to the FDA in support of a BLA.If we fail to successfully meet requirements for the conduct of clinical trials outside of the United States, we may be delayed in obtaining, or beunable to obtain, regulatory approval for our product candidates. We may encounter substantial delays in our clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatoryauthorities. Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials todemonstrate the safety and efficacy of the product candidates for the intended indications. Clinical testing is expensive, time-consuming and uncertain as tooutcome. We cannot guarantee that clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials canoccur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:•delays caused by us or third parties in conducting Part 1/2a or subsequent clinical trials for GEN-009;•delays by us in reaching a consensus with regulatory agencies on trial design, including the IND for GEN-011;•delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;•delays in obtaining required Institutional Review Board ("IRB") approval at each clinical trial site;•imposition of a clinical hold by regulatory agencies or an IRB for any reason, including safety concerns raised by other clinical trials ofsimilar vaccines that may reflect an unacceptable risk with GEN-009 or after an inspection of clinical operations or trial sites;•failure to perform in accordance with the FDA’s good clinical practices ("GCPs") or applicable regulatory guidelines in other countries;•delays in the testing, validation, manufacturing and delivery of the product candidates to the clinical sites;•delays caused by patients not completing participation in a trial or not returning for post-treatment follow-up;•clinical trial sites or patients dropping out of a trial or failing to complete dosing;•occurrence of serious AEs in clinical trials that are associated with the product candidates that are viewed to outweigh its potential benefits;or •changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.Delays, including delays caused by the above factors, can be costly and could negatively affect our ability to complete a clinical trial. We cannotgive any assurance that we will be able to resolve any delay caused by the factors described above or23any other factors, on a timely basis or at all. If we are not able to successfully initiate and complete subsequent clinical trials, we will not be able to obtainregulatory approval and will not be able to commercialize our product candidates. Our active product candidate, GEN-009, and our current and future potential product candidates arising out of our immuno-oncology program, are or willbe based on T cell activation, which is a novel approach for vaccines, immunotherapies and medical treatments. We have concentrated our research and development efforts on T cell vaccine and immunotherapy technology, which is a novel approach forvaccines, immuno-therapies and medical treatments, and our future success is highly dependent on the successful development of T cell immunotherapies ingeneral, and our active development product and current and future product candidates in particular. Consequently, it may be difficult for us to predict thetime and cost of product development. Unforeseen problems with the T cell approach to vaccines and immunotherapies may prevent further development orapproval of our current and future product candidates. There can be no assurance that any development problems we or others researching T cell vaccines andimmunotherapies may experience in the future will not cause significant delays or unanticipated costs, or that such development problems can be solved.Because of the novelty of this approach, there may be unknown safety risks associated with the vaccines and immunotherapies that we develop. Regulatoryagencies such as the FDA may require us to conduct extensive safety testing prior to approval to demonstrate a low risk of rare and severe AEs caused by thevaccines and immunotherapies. If approved, the novel mechanism of action of the vaccines may adversely affect physician and patient perception and uptakeof our products. Our active development product, GEN-009, includes a novel vaccine adjuvant and our other current and potential future product candidates may includeone or more novel adjuvants, which may make it difficult for us to predict the time and cost of product development as well as the requirements the FDA orother regulatory agencies may impose to demonstrate the safety of such product candidates. Novel vaccine adjuvants, included in some of our product candidates, may pose an increased safety risk to patients. Adjuvants are compounds thatare added to vaccine antigens to enhance the activation of the immune system and improve the immune response and efficacy of vaccines. Development ofvaccines with novel adjuvants requires evaluation in larger numbers of patients prior to approval than would be typical for therapeutic drugs. Guidelines forevaluation of vaccines with novel adjuvants have been established by the FDA and other regulatory bodies and expert committees. Our product candidates,including GEN-009, may include one or more novel adjuvants. Any neoantigen cancer vaccine, because of the presence of an adjuvant, may have side effectsconsidered to pose too great a risk to patients to warrant approval of the vaccine. If we fail to obtain regulatory approval in jurisdictions outside the United States, we will not be able to market our products in those jurisdictions. We intend to market our product candidates, if approved, in international markets. Such marketing will require separate regulatory approvals in eachmarket and compliance with numerous and varying regulatory requirements. The approval procedures vary among countries and may involve requirementsfor additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval. In addition, in many countries outsidethe United States, a vaccine must be approved for reimbursement before it can be approved for sale in that country. In some cases, the price that we intend tocharge for our vaccine is also subject to approval. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions,and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. The foreignregulatory approval process may include all of the risks associated with obtaining FDA approval. We may not obtain foreign regulatory approvals on a timelybasis, if at all. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our vaccines in any market. Even if we receive regulatory approval for our product candidates, such immunotherapies will be subject to ongoing regulatory review, which may resultin significant additional expense. Additionally, our product candidates, including our active development product, GEN-009, and any other current orpotential future immunotherapy product candidates, if approved, could be subject to labeling and other restrictions, and we may be subject to penalties ifwe fail to comply with regulatory requirements or experience unanticipated problems with our products. Any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indications for which theproduct may be marketed or to conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials,and surveillance to monitor the safety and efficacy of the vaccine or immunotherapy potentially over many years. In addition, if the FDA approves any of ourproduct candidates, the manufacturing processes, labeling, packaging, distribution, AE reporting, storage, advertising, promotion and recordkeeping for24the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketinginformation and reports, registration, as well as continued compliance with current good manufacturing practice (cGMP) and GCP, for any clinical trials thatwe conduct post-approval. Later discovery of previously unknown problems with an approved product, including AEs of unanticipated severity or frequency, or withmanufacturing operations or processes, or failure to comply with regulatory requirements, may result in, among other things:•restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatoryproduct recalls;•fines, warning letters, or holds on clinical trials;•refusal by the FDA to approve pending applications or supplements to approved applications filed by us, or suspension or revocation ofproduct license approvals;•product seizure or detention, or refusal to permit the import or export of products; and•injunctions or the imposition of civil, criminal and/or administrative penalties, damages, monetary fines, disgorgement, exclusion fromparticipation in Medicare, Medicaid and other federal health care programs, and curtailment or restructuring of our operations.The FDA’s policies may change and additional government regulations may be enacted that could affect regulatory approval that we have receivedfor our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation oradministrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of newrequirements or policies, or not able to maintain regulatory compliance, we may lose any marketing approval that may have been obtained and we may notachieve or sustain profitability, which would adversely affect our business. Risks Related to Our Reliance on Third Parties We rely on third parties to conduct non-clinical studies and clinical trials for our product candidates, including our active clinical development product,GEN-009, and any other current or future product candidates, and if they do not properly and successfully perform their obligations to us, we may not beable to obtain regulatory approvals for our product candidates. We rely, and intend to continue to rely on, on third party CROs and other third parties to assist in managing, monitoring and otherwise carrying outour GEN-009 clinical trials. We expect to continue to rely on third parties, such as CROs, clinical data management organizations, medical institutions andclinical investigators, to conduct our clinical trials. We compete with many other companies for the resources of these third parties. The third parties on whomwe rely generally may terminate their engagements at any time and having to enter into alternative arrangements would delay development andcommercialization of our product candidates. Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of ourresponsibilities. For example, the FDA and foreign regulatory authorities require compliance with regulations and standards, including GCP, for designing,conducting, monitoring, recording, analyzing, and reporting the results of clinical trials to assure that the data and results are credible and accurate and thatthe rights, integrity and confidentiality of trial participants are protected. Although we rely on third parties to conduct our clinical trials, we are responsiblefor ensuring that each of these clinical trials is conducted in accordance with its general investigational plan and protocol. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do notsuccessfully carry out their duties under their agreements, if the quality or accuracy of the data they obtain is compromised due to their failure to adhere toclinical trial protocols or to regulatory requirements, or if they otherwise fail to comply with clinical trial protocols or meet expected deadlines, the clinicaltrials of our product candidates may not meet regulatory requirements. If clinical trials do not meet regulatory requirements or if these third parties need to bereplaced, non-clinical development activities or clinical trials may be extended, delayed, suspended or terminated. If any of these events occur, we may notbe able to obtain regulatory approval of our product candidates on a timely basis or at all. 25We also expect to rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of ourdistributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, producing additionallosses and depriving us of potential product revenue. We rely on third parties to conduct some or all aspects of our product manufacturing, and these third parties may not perform satisfactorily. We do not have any manufacturing facilities or personnel. We do not expect to independently conduct all aspects of our product manufacturing. Weintend to rely on third parties with respect to manufacturing GEN-009. We have also relied on third party suppliers and manufacturers to manufacture andsupply vaccines for other clinical trials. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates orproducts or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts. Any of these third parties may terminate their engagement with us at any time. If we need to enter into alternative arrangements, it could delay ourproduct development activities. Our reliance on these third parties for manufacturing activities will reduce our control over these activities but will notrelieve us of our responsibility to ensure compliance with all required regulations regarding manufacturing. Reliance on third party manufacturers entails risks to which we would not be subject 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 all aspects of manufacturing activities, including regulatory complianceand quality assurance;•termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;•the unavailability of a manufacturer that is capable of, or that has the capacity to, manufacture our clinical supply that results in delays oradditional manufacturing costs;•the possible misappropriation of our proprietary information, including our trade secrets and know-how or infringement of third-partyintellectual property rights by our contract manufacturers; and•disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations,including the bankruptcy of the manufacturer or supplier.Any of these events could lead to clinical trial delays or failure to obtain regulatory approval or affect our ability to successfully commercializefuture products. Some of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of production. Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the United States. Ourfailure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinicalholds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates orproducts, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturingfacilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us. Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. We do notcurrently have arrangements in place for redundant supply or a second source for bulk drug substance. If our current contract manufacturers cannot perform asagreed, we may be required to replace such manufacturers. Although we believe that there are several potential alternative manufacturers who couldmanufacture our product candidates, we may incur added costs and delays in identifying and qualifying any such replacement. 26Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our futureprofit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis. If we are unable to manufacture our products in sufficient quantities, or at sufficient yields, or are unable to obtain regulatory approvals for amanufacturing facility for our products, we may experience delays in product development, clinical trials, regulatory approval and commercialdistribution. Completion of our clinical trials and commercialization of our product candidates require access to, or development of, facilities to manufacture ourproduct candidates at sufficient yields and at commercial-scale. We have no experience manufacturing, or managing third parties in manufacturing, any ofour product candidates in the volumes that will be necessary to support large-scale clinical trials or commercial sales. Efforts to establish these capabilitiesmay not meet initial expectations as to scheduling, scale-up, reproducibility, yield, purity, cost, potency or quality. We expect to rely on third-parties for the manufacture of clinical and, if necessary, commercial quantities of our product candidates. These third-party manufacturers must also receive FDA approval before they can produce clinical material or commercial products. Our products may be in competitionwith other products for access to these facilities and may be subject to delays in manufacture if third-parties give other products greater priority. We may notbe able to enter into any necessary third-party manufacturing arrangements on acceptable terms, or on a timely basis. In addition, we may have to enter intotechnical transfer agreements and share our know-how with the third-party manufacturers, which can be time-consuming and may result in delays. Our reliance on contract manufacturers may adversely affect our operations or result in unforeseen delays or other problems beyond our control.Because of contractual restraints and the limited number of third-party manufacturers with the expertise, required regulatory approvals and facilities tomanufacture our bulk vaccines on a commercial-scale, replacement of a manufacturer may be expensive and time-consuming and may cause interruptions inthe production of our vaccine. A third-party manufacturer may also encounter difficulties in production. These problems may include:•difficulties with production costs, scale-up and yields;•unavailability of raw materials and supplies;•insufficient quality control and assurance;•shortages of qualified personnel;•failure to comply with strictly enforced federal, state and foreign regulations that vary in each country where product might be sold; and•lack of capital funding.As a result, any delay or interruption could have a material adverse effect on our business, financial condition, results of operations and cash flows. We may not be successful in establishing and maintaining strategic partnerships, which could adversely affect our ability to develop and commercializeproducts. A part of our strategy is to evaluate and, as deemed appropriate, enter into partnerships in the future when strategically attractive, includingpotentially with major biotechnology or pharmaceutical companies. We face significant competition in seeking appropriate partners for our productcandidates, and the negotiation process is time-consuming and complex. In order for us to successfully partner our product candidates, potential partnersmust view these product candidates as economically valuable in markets they determine to be attractive in light of the terms that we are seeking and otheravailable products for licensing by other companies. Even if we are successful in our efforts to establish strategic partnerships, the terms that we agree uponmay not be favorable to us, and we may not be able to maintain such strategic partnerships if, for example, development or approval of a product is delayed orsales of an approved product are disappointing. Any delay in entering into strategic partnership agreements related to our product candidates could delay thedevelopment and commercialization of our product candidates and reduce their competitiveness even if they reach the market. 27In addition, our strategic partners may breach their agreements with us, and we may not be able to adequately protect our rights under theseagreements. Furthermore, our strategic partners will likely negotiate for certain rights to control decisions regarding the development and commercializationof our product candidates, if approved, and may not conduct those activities in the same manner as we would do so. If we fail to establish and maintain strategic partnerships related to our product candidates, we will bear all of the risk and costs related to thedevelopment of any such product candidate, and we may need to seek additional financing, hire additional employees and otherwise develop expertisewhich we do not have and for which we have not budgeted. This could negatively affect the development of any unpartnered product candidate. Forexample, in September 2017, we ceased substantially all spending and activities related to GEN-003 and are currently exploring strategic alternatives foradvancing that product candidate.In addition, we are currently seeking to establish strategic partnerships with companies with adjuvant and delivery technologies for our neoantigencancer vaccine candidates. If we are unable to successfully enter into these partnerships, our ability to develop our neoantigen cancer vaccine candidates maybe adversely affected. Risks Related to Our Intellectual Property If we are unable to obtain or protect intellectual property rights related to our product candidates, we may not be able to compete effectively in ourmarkets. We rely upon a combination of patents, patent applications, know-how and confidentiality agreements to protect the intellectual property related toour platform technology and product candidates. The patent position of biotechnology companies is generally uncertain because it involves complex legaland factual considerations. The standards applied by the United States Patent and Trademark Office ("U.S. PTO") and foreign patent offices in grantingpatents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scopeof claims allowable in biotechnology patents. The patent applications that we own or in-license may fail to result in issued patents with claims that cover ourdiscovery platform or product candidates in the United States or in other countries. There is no assurance that all potentially relevant prior art relating to ourpatents and patent applications or those of our licensors has been found, and prior art that we have not disclosed could be used by a third party to invalidate apatent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue and even if such patents cover our discoveryplatform or product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed orinvalidated. Furthermore, even if they are unchallenged, our patents and patent applications, or those of our licensors, may not adequately protect ourplatform technology, provide exclusivity for our product candidates, prevent others from designing around our patents with similar products, or preventothers from operating in jurisdictions in which we did not pursue patent protection. Any of these outcomes could impair our ability to prevent competitionfrom third parties, which may have an adverse impact on our business. If patent applications we hold or have in-licensed with respect to our platform or product candidates fail to issue, if their breadth or strength ofprotection is threatened, or if they fail to provide meaningful exclusivity for our product candidates or ATLAS discovery platform, it could dissuadecompanies from collaborating with us and could limit or destroy our ability to develop or commercialize one or more of our products, or even any product.We or our licensors have filed several patent applications covering aspects of our product candidates. We cannot offer any assurances about which, if any,patents will be issued, the breadth of any such patents or whether any issued patents will be found invalid and unenforceable or will be challenged by thirdparties. Any successful opposition to these patent applications, or patents that may issue from them, or to any other patent applications or patents owned byor licensed to us, could deprive us of rights necessary for the successful commercialization of any product candidate that we may develop. Since patentapplications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot becertain that we or our licensors were the first to file a patent application relating to any particular aspect of a product candidate. In the United States, for patent applications filed prior to March 16, 2013, assuming the other requirements for patentability are met, the first toinvent is entitled to the patent, while outside the United States, the first to file a patent application is entitled to the patent. On March 16, 2013, the UnitedStates transitioned to a ‘first to file’ system more like that in the rest of the world in that the first inventor to file a patent application is entitled to the patent.Under either the prior system or current one, third parties are allowed to submit prior art prior to the issuance of a patent. Furthermore, both the U.S. andforeign patent systems permit third parties or, in some cases, the patent authorities themselves, to initiate proceedings challenging the scope and / or validityof issued patents, including for example, opposition, derivation, reexamination, inter partes review or interference proceedings. An adverse determinationagainst our or our licensor's patent rights in any such submission,28proceeding or litigation could reduce the scope of, or invalidate, our patent rights, which could adversely affect our competitive position with respect to thirdparties. In addition, patents have a limited lifespan. In most countries, including the United States, the natural expiration of a patent is 20 years from thedate it is filed. Various extensions of patent term may be available in particular countries, however in all circumstances the life of a patent, and the protectionit affords, has a limited term. If we encounter delays in obtaining regulatory approvals, the period of time during which we could market a product underpatent protection could be reduced. We expect to seek extensions of patent terms where these are available in any countries where we are prosecuting patents.Such possible extensions include those permitted under the Drug Price Competition and Patent Term Restoration Act of 1984 in the United States, whichpermits a patent term extension of up to five years to cover an FDA-approved product. However, the applicable authorities, including the FDA in the UnitedStates, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and mayrefuse to grant extensions to our patents, or may grant more limited extensions than we request. If this occurs, our competitors may be able to take advantageof our investment in development and clinical trials by referencing our clinical and non-clinical data, and then may be able to launch their product earlierthan might otherwise be the case.Filing, prosecuting and enforcing patents on our platform or product candidates in all countries throughout the world would be prohibitivelyexpensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States. Inaddition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.Consequently, we may not be able to prevent third parties from infringing our patents in all countries outside the United States, or from selling or importingproducts that infringe our patents in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we havenot obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patentprotection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectualproperty rights may not be effective or sufficient to prevent them from competing. Any loss of, or failure to obtain, patent protection could have a material adverse impact on our business. We may be unable to prevent competitorsfrom entering the market with a product that is similar to or the same as our products. We may become involved in lawsuits to defend or enforce our intellectual property, which could be expensive, time consuming and unsuccessful. Competitors may infringe our patents or misappropriate or otherwise violate our intellectual property rights, and competitors or other third partiesmay challenge the validity or enforceability of those rights. To counter infringement or unauthorized use, or to defend against other challenges, litigationmay be necessary to enforce or defend our intellectual property rights, to protect our trade secrets and/or to determine the validity and scope of our ownintellectual property rights or the proprietary rights of others. Such litigation can be expensive and time consuming. Many of our current and potentialcompetitors have the ability to dedicate substantially greater resources to litigate intellectual property rights than we can. Accordingly, despite our efforts, wemay not be able to prevent third parties from infringing upon or misappropriating our intellectual property. Litigation could result in substantial costs anddiversion of management resources, which could harm our business and financial results. In addition, in contested proceedings, a court or agency may decidethat a patent owned by or licensed to us is invalid or unenforceable or may refuse to stop the other party from using the technology at issue on the groundsthat our patents do not cover the technology in question. An adverse result in any litigation proceeding could put one or more of our patents at risk of beinginvalidated, held unenforceable or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectualproperty litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. Third-party claims of intellectual property infringement or misappropriation may prevent or delay our development and commercialization efforts. Our commercial success depends in part on our ability to develop, manufacture, market and sell our product candidates, and to use our or ourlicensors’ proprietary technologies without infringing the patents and proprietary rights of third parties. There is a substantial amount of litigation, bothwithin and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, includingpatent infringement lawsuits, interferences, oppositions, reexamination, and inter partes review proceedings before the U.S. PTO and corresponding foreignpatent offices. Numerous U.S. and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we aredeveloping and may develop our product candidates. As the biotechnology and pharmaceutical industries29expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of thirdparties. Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patentapplications with claims for example to materials, formulations, methods of manufacture, methods of analysis, and/or methods for treatment related to the useor manufacture of our products or product candidates. In some cases, we may have failed to identify such relevant third-party patents or patent applications.For example, applications filed before November 29, 2000 and certain applications filed after that date that will not be filed outside the United States remainconfidential until patents issue. Except for the preceding exceptions, patent applications in the United States and elsewhere are generally published onlyafter a waiting period of approximately 18 months after the earliest filing. Therefore, patent applications covering our platform technology or our products orproduct candidates could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can,subject to certain limitations, be later amended in a manner that could cover our platform technologies, our products or product candidates and/or the use,analysis, and/or manufacture of our product candidates. If any third-party patents were held by a court of competent jurisdiction to cover aspects of our materials, formulations, methods of manufacture,methods of analysis, and/or methods for treatment, the holders of any such patents would be able to block our ability to develop and commercialize theapplicable product candidate until such patent expired or unless we obtain a license. Such licenses may not be available on acceptable terms, if at all. Even ifwe were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property.Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual orthreatened patent infringement claims, we are unable to enter into licenses on acceptable terms. Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop andcommercialize one or more of our product candidates. Defending against claims of patent infringement or misappropriation of trade secrets could be costlyand time consuming, regardless of the outcome. Thus, even if we were to ultimately prevail, or to settle at an early stage, such litigation could burden us withsubstantial unanticipated costs. In addition, litigation or threatened litigation could result in significant demands on the time and attention of ourmanagement team, distracting them from the pursuit of other company business. In the event of a successful claim of infringement against us, we may have topay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain oneor more licenses from third parties, which may be impossible or require substantial time and monetary expenditure. We may face a claim of misappropriation if a third party believes that we inappropriately obtained and used trade secrets of such third party. If we arefound to have misappropriated a third party’s trade secrets, we may be prevented from further using such trade secrets, limiting our ability to develop ourproduct candidates, and we may be required to pay damages. During the course of any patent or other intellectual property litigation, there could be publicannouncements of the results of hearings, rulings on motions, and other interim proceedings in the litigation. If securities analysts or investors regard theseannouncements as negative, the perceived value of our products, programs, or intellectual property could be diminished. Accordingly, the market price of ourcommon stock may decline. We have in-licensed a portion of our intellectual property, and, if we fail to comply with our obligations under these arrangements, or our licensors fail toobtain and maintain intellectual property rights, we could lose such intellectual property rights or owe damages to the licensor of such intellectualproperty. We are a party to a number of license and collaboration agreements that are important to our business, and we may enter into additional license orcollaboration agreements in the future. For example, our discovery platform is built, in part, around patents exclusively in-licensed from academic or researchinstitutions. See “Business - In-License Agreements” and “Business - Other Collaborations” for a description of our outstanding license and collaborationagreements with Oncovir and Harvard. These and other licenses may not provide exclusive rights to use such intellectual property and technology in allrelevant fields of use and in all territories in which we may wish to develop or commercialize our technology and product candidates in the future. It ispossible that we may be unable to obtain additional licenses at a reasonable cost or on reasonable terms, if at all. As a result, we may not be able to preventcompetitors from developing and commercializing competitive products in territories included in all of our licenses. In that event, we may be required toexpend significant time and resources to redesign our product candidates or to develop or license replacement technology, all of which may not be feasibleon a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which couldharm our business significantly. 30Our existing license agreements impose, and we expect that future license agreements will impose, various diligence, milestone payment, royaltyand other obligations on us. For example, in our existing license agreements, and we expect in our future agreements, patent prosecution of our licensedtechnology may be controlled by the licensor, and we may be required to reimburse the licensor for their costs of patent prosecution. If our licensors fail toobtain and maintain patent or other protection for the proprietary intellectual property we license from them, we could lose our rights to the intellectualproperty or our exclusivity with respect to those rights, and our competitors could market competing products covered by the intellectual property. Further,in our license agreements we may be responsible for bringing any actions against any third party for infringing the patents we have licensed. If there is anyconflict, dispute, disagreement or issue of non-performance between us and our licensing partners regarding our rights or obligations under the licenseagreements, including any such conflict, dispute or disagreement arising from our failure to satisfy payment obligations under any such agreement, we mayowe damages, our licensor may have a right to terminate the affected license, and our ability to utilize the affected intellectual property in our drug discoveryand development efforts, and our ability to enter into collaboration or marketing agreements for an affected product candidate, may be adversely affected. Forexample, disputes may arise regarding intellectual property subject to a licensing agreement, including the scope of rights granted under the licenseagreement and other interpretation-related issues; the extent to which our technology infringes the intellectual property of the licensor that is not subject tothe licensing agreement; the sublicensing of patent and other rights under any collaborative development relationships; our diligence obligations under thelicense agreement and what activities satisfy those diligence obligations; the inventorship or ownership of inventions and know-how resulting from the jointcreation or use of intellectual property by our licensors and us and our partners; and the priority of invention of patented technology. If disputes overintellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may beunable to successfully develop and commercialize the affected product candidates.Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of proprietary information. In addition to the protection afforded by patents, we rely on confidentiality agreements to protect proprietary know-how that may not be patentableor that we may elect not to patent, processes for which patents are difficult to enforce and any other elements of our platform technology and discovery anddevelopment processes that involve proprietary know-how, information or technology that is not covered by patents. We seek to protect our proprietarytechnology and processes, in part, by entering into confidentiality agreements with our employees, consultants, and outside scientific advisors, contractorsand collaborators. Although we use reasonable efforts to protect our know-how, our employees, consultants, contractors, or outside scientific advisors mightintentionally or inadvertently disclose our know-how information to competitors. In addition, competitors may otherwise gain access to our know-how orindependently develop substantially equivalent information and techniques. Enforcing a claim that a third party illegally obtained and is using any of our know-how is expensive and time consuming, and the outcome isunpredictable. In addition, courts outside the United States sometimes are less willing than U.S. courts to protect know-how. Misappropriation orunauthorized disclosure of our know-how could impair our competitive position and may have a material adverse effect on our business. Risks Related to Commercialization of Our Product Candidates Our future commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients,third-party payors and others in the medical community. Even if we obtain marketing approval for GEN-009 or any other products that we may develop or acquire in the future, the product may not gainmarket acceptance among physicians, third-party payors, patients and others in the medical community. In addition, market acceptance of any approvedproducts depends on a number of other factors, including:•the efficacy and safety of the product, as demonstrated in clinical trials;•the clinical indications for which the product is approved, and the label approved by regulatory authorities for use with the product,including any warnings that may be required on the label;•acceptance by physicians and patients of the product as a safe and effective treatment and the willingness of the target patient population totry new therapies and of physicians to prescribe new therapies;•the cost, safety and efficacy of treatment in relation to alternative treatments;31•the availability of adequate coverage and reimbursement by third-party payors and government authorities;•relative convenience and ease of administration;•the prevalence and severity of adverse side effects;•the effectiveness of our sales and marketing efforts; and•the restrictions on the use of our products together with other medications, if any.Market acceptance is critical to our ability to generate significant revenue. Any product candidate, if approved and commercialized, may beaccepted in only limited capacities or not at all. If any approved products are not accepted by the market to the extent that we expect, we may not be able togenerate significant revenue and our business would suffer. If we are unable to establish sales, marketing and distribution capabilities, we may not be successful in commercializing our product candidates if andwhen they are approved. We do not have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of pharmaceutical products. Toachieve commercial success for any product for which we have obtained marketing approval, we will need to establish a sales and marketing organization. In the future, we expect to build a focused sales and marketing infrastructure to market or co-promote some of our product candidates in the UnitedStates, if and when they are approved. There are risks involved with establishing our own sales, marketing and distribution capabilities. For example,recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidatefor which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely orunnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our salesand marketing personnel. Factors that may inhibit our efforts to commercialize our products on our own include:•our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;•the inability of sales personnel to obtain access to physicians;•the lack of adequate numbers of physicians to prescribe any future products;•the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companieswith more extensive product lines; and•unforeseen costs and expenses associated with creating an independent sales and marketing organization.If we are unable to establish our own sales, marketing and distribution capabilities, and instead enter into arrangements with third parties to performthese services, our product revenues and our profitability, if any, are likely to be lower than if we were to market, sell and distribute any products that wedevelop ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidatesor may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote thenecessary resources and attention to sell and market our products effectively. If we do not establish sales, marketing and distribution capabilities successfully,either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates. 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 products profitably. Market acceptance and sales of any approved products will depend significantly on the availability of adequate coverage and reimbursement fromthird-party payors and may be affected by existing and future health care reform measures. Third-party payors, such as government health care programs,private health insurers and health maintenance organizations, decide for which drugs they will provide coverage and establish reimbursement levels.Coverage and reimbursement decisions32by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is:•a covered benefit under its health plan;•safe, effective and medically necessary;•appropriate for the specific patient;•cost-effective; and•neither experimental nor investigational.Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controllinghealth care costs. Coverage and reimbursement can vary significantly from payor to payor. As a result, obtaining coverage and reimbursement approval for aproduct from each government and other third-party payor will require us to provide supporting scientific, clinical and cost-effectiveness data for the use ofour products to each payor separately, with no assurance that we will be able to provide data sufficient to gain acceptance with respect to coverage andreimbursement. We cannot be sure that coverage or adequate reimbursement will be available for any of our product candidates. Also, we cannot be sure thatcoverage determinations or reimbursement amounts will not reduce the demand for or require us to lower the price of or provide discounts on, our products. Ifreimbursement is not available or is available only to limited levels, we may not be able to commercialize certain of our products. In addition, in the UnitedStates, third-party payors are increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement of new drugs. Asa result, significant uncertainty exists as to whether and how much third-party payors will reimburse patients for their use of newly approved drugs, which inturn will put pressure on the pricing of drugs.Price controls may be imposed, which may adversely affect our future profitability. In international markets, reimbursement and health care payment systems vary significantly by country, and many countries have instituted priceceilings on specific products and therapies. In some countries, particularly member states of the European Union, the pricing of prescription pharmaceuticalsis subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt ofmarketing approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on coverage, prices andreimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricingnegotiations, and pricing negotiations may continue after coverage and reimbursement has been obtained. Reference pricing used by various EuropeanUnion member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. In some countries,we may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidates to other available vaccines inorder to obtain or maintain coverage, reimbursement or pricing approval. Publication of discounts by third-party payors or authorities may lead to furtherpressure on the prices or reimbursement levels within the country of publication and other countries. There can be no assurance that our vaccine candidateswill be considered cost-effective by third-party payors, that an adequate level of reimbursement will be available or that the third-party payors’reimbursement policies will not adversely affect our ability to sell our products profitably. If reimbursement of our products is unavailable or limited in scopeor amount, or if pricing is set at unsatisfactory levels, our business could be adversely affected. The impact of health care reform legislation and other changes in the health care industry and in health care spending on us is currently unknown andmay adversely affect our business model. In the United States, and in some foreign jurisdictions, the legislative landscape continues to evolve. Our revenue prospects could be affected bychanges in health care spending and policy in the United States and abroad. We operate in a highly regulated industry and new laws or judicial decisions, ornew interpretations of existing laws or decisions, related to health care availability, the method of delivery or payment for health care products and servicescould negatively impact our business, operations and financial condition. There is significant interest in promoting health care reform, as evidenced by theenactment in the United States of the Healthcare Reform Act, as well as ongoing efforts to eliminate or significantly modify the Healthcare Reform Act. Forexample, recent tax reform legislation eliminating the tax penalty for individuals who do not maintain sufficient health insurance coverage beginning in2019 is expected to increase significantly the number of uninsured. See “Business- Government Regulation-Reimbursement”. It is likely that federal andstate legislatures within the United States as well as foreign governments will continue to consider changes to existing health care legislation.33We cannot predict the ultimate content, timing or effect of any changes to the Healthcare Reform Act or other federal and state reform efforts withinthe United States or abroad. There is no assurance that health care reform will not adversely affect our business and financial results, and we cannot predicthow future legislative, judicial or administrative changes relating to healthcare reform will affect our business.The continuing efforts of the government, insurance companies, managed care organizations and other payors of health care services to contain orreduce costs of health care may adversely affect:•the demand for any drug products for which we may obtain regulatory approval;•our ability to set a price that we believe is fair for our products;•our ability to obtain coverage and reimbursement approval for a product;•our ability to generate revenues and achieve or maintain profitability; and•the level of taxes that we are required to pay.In addition, other broader legislative changes have been adopted that could have an adverse effect upon, and could prevent, our products’ or productcandidates’ commercial success. The Budget Control Act of 2011, as amended, or the Budget Control Act, includes provisions intended to reduce the federaldeficit, including reductions in Medicare payments to providers through 2027. Any significant spending reductions affecting Medicare, Medicaid, or otherpublicly funded or subsidized health programs, or any significant taxes or fees imposed as part of any broader deficit reduction effort or legislativereplacement to the Budget Control Act, or otherwise, could have an adverse impact on our anticipated product revenues.We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully, than we do. The development and commercialization of new drug products is highly competitive. Our future success depends on our ability to demonstrate andmaintain a competitive advantage with respect to the design, development and commercialization of our product candidates. Our objective is to design,develop and commercialize new products with superior efficacy, convenience, tolerability and safety. In many cases, the products that we commercialize willcompete with existing, market-leading products.Other companies that are seeking to identify antigens for the development of vaccines and T cell receptor therapies using predictive tools includeAchilles Therapeutics Ltd., Adaptive Biotechnologies Corp., BioNTech AG., Bluebird Bio Inc., Cellular Biomedicine Group Inc., Eutilex Co., Ltd., IovanceBiotherapeutics Inc., Kite Pharma, Inc., Neon Therapeutics Inc., Oncotherapy Science Inc., PACT Pharma Inc. and Ziopharm Oncology Inc. Many of our potential competitors have significantly greater financial, manufacturing, marketing, drug development, technical and human resourcesthan we do. Large pharmaceutical companies, in particular, have extensive experience in clinical testing, including recruiting patients, obtaining regulatoryapprovals, recruiting patients and in manufacturing pharmaceutical products. In particular, these companies have greater experience and expertise in securinggovernment contracts and grants to support their research and development efforts, conducting testing and clinical trials, obtaining regulatory approvals tomarket products, manufacturing such products on a broad scale and marketing approved products. These companies also have significantly greater researchand marketing capabilities than we do and may also have products that have been approved or are in late stages of development and have collaborativearrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies may also invest heavily toaccelerate discovery and development of novel compounds or to in-license novel compounds that could make the product that we develop obsolete. As aresult of all of these factors, our competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing andcommercializing products before we do. In addition, any new product that competes with an approved product must demonstrate compelling advantages inefficacy, convenience, tolerability, and safety to overcome price competition and to be commercially successful. If we are not able to compete effectivelyagainst potential competitors, our business will not grow and our financial condition and operations will suffer. Our products may cause undesirable side effects or have other properties that delay or prevent their regulatory approval or limit their commercialpotential. 34Undesirable side effects caused by our products or even competing products in development that utilize a common mechanism of action could causeus or regulatory authorities to interrupt, delay or halt clinical trials and could result in the denial of regulatory approval by the FDA or other regulatoryauthorities and potential product liability claims. Serious AEs deemed to be caused by our product candidates could have a material AE on the developmentof our product candidates and our business as a whole. We do not yet have any information related to whether GEN-009 may cause AEs or serious AEs. If we or others identify undesirable side effects caused by any of our product candidates either before or after receipt of marketing approval, anumber of potentially significant negative consequences could result, including:•our clinical trials may be put on hold;•we may be unable to obtain regulatory approval for our vaccine candidates;•regulatory authorities may withdraw approvals of our vaccines;•regulatory authorities may require additional warnings on the label;•a medication guide outlining the risks of such side effects for distribution to patients may be required;•we could be sued and held liable for harm caused to patients; and•our reputation may suffer.Any of these events could prevent us from achieving or maintaining market acceptance of our products and could substantially increasecommercialization costs. Risks Related to Our Indebtedness Our level of indebtedness and debt service obligations could adversely affect our financial condition and may make it more difficult for us to fund ouroperations. In December 2015, we entered into the First Amendment to the 2014 Term Loan with Hercules. The First Amendment required us to draw anadditional $5.0 million and permitted us to draw two additional $5.0 million tranches, which expired unused at December 15, 2016. On April 24, 2018 weentered into an amended and restated loan and security agreement with Hercules, which provided up to $14.0 million in debt financing in the form of a termloan (the "2018 Term Loan"). The proceeds from the 2018 Term Loan was used to refinance the 2014 Term Loan. As a result, at December 31, 2018, noamounts were outstanding under the 2014 Term Loan and $14.8 million was outstanding under the 2018 Term Loan. All obligations under our 2018 Term Loan are secured by substantially all of our existing property and assets, excluding our intellectual propertyand in-licensed technology. This indebtedness may create additional financing risk for us, particularly if our business or prevailing financial marketconditions are not conducive to paying off or refinancing our outstanding debt obligations at maturity. This indebtedness could also have importantnegative consequences, including the fact that:•we will need to repay our indebtedness by making payments of interest and principal, which will reduce the amount of money available to financeour operations, our research and development efforts and other general corporate activities; and•our failure to comply with the restrictive covenants in our 2018 Term Loan could result in an event of default that, if not cured or waived, wouldaccelerate our obligation to repay this indebtedness, and Hercules could seek to enforce its security interest in the assets securing such indebtedness.To the extent that additional debt is added to our current debt levels, the risks described above could increase. We may not have cash available to us in an amount sufficient to enable us to make interest or principal payments on our indebtedness when due. If we donot make scheduled payments when due, or otherwise materially breach or experience an event of default under our 2018 Term Loan, Hercules couldaccelerate our total loan obligation or enforce its security interest against us. 35Failure to satisfy our current and future debt obligations under our 2018 Term Loan could result in an event of default. In addition, other events,including certain events that are not entirely in our control, such as the occurrence of a material adverse event on our business, could cause an event ofdefault to occur. As a result of the occurrence of an event of default, Hercules could accelerate all of the amounts due. In the event of an acceleration ofamounts due under our 2018 Term Loan, we may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness. Inaddition, Hercules could seek to enforce its security interests in the assets securing such indebtedness. If we are unable to pay amounts due to Hercules uponacceleration of the 2018 Term Loan or if Hercules enforces its security interest against our assets securing our indebtedness to Hercules, our ability tocontinue to operate our business may be jeopardized. We are subject to certain restrictive covenants which, if breached, could result in the acceleration of our debt under the 2018 Term Loan and have amaterial adverse effect on our business and prospects. Our 2018 Term Loan imposes operating and other restrictions on us. Such restrictions will affect, and in many respects limit or prohibit, our abilityand the ability of any future subsidiary to, among other things:•dispose of certain assets;•change our lines of business;•engage in mergers or consolidations;•incur additional indebtedness;•create liens on assets;•pay dividends and make distributions or repurchase our capital stock; and•engage in certain transactions with affiliates.These restrictive covenants may prevent us from undertaking an action that we feel is in the best interests of our business. In addition, if we were to breachany of these restrictive covenants, Hercules could accelerate our indebtedness under the 2018 Term Loan or enforce its security interest against our assets,either of which would materially adversely affect our ability to continue to operate our business.Risks Related to Our Business and Industry If we fail to attract and keep senior management and key scientific personnel, we may be unable to successfully develop our products, conduct our clinicaltrials and commercialize our product candidates. We are highly dependent on members of our senior management, including William Clark, our President and Chief Executive Officer. The loss of theservices of any of these persons could impede the achievement of our research, development and commercialization objectives. We have employmentagreements with each of these members of senior management. Recruiting and retaining qualified scientific, clinical, manufacturing, sales and marketing personnel will also be critical to our success. The loss ofthe services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectivesand seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficultand may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required tosuccessfully develop, gain regulatory approval of and commercialize products. Competition to hire from this limited pool is intense, and we may be unable tohire, train, retain or motivate these key personnel on acceptable terms as a result of our recent workforce reduction, the status of our clinical developmentprograms and the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for thehiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientificand clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may beemployed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availabilityto us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.36Our employees, independent contractors, principal investigators, consultants, commercial partners, and vendors may engage in misconduct or otherimproper activities, including noncompliance with regulatory standards and requirements and insider trading. We are exposed to the risk of fraudulent or other illegal activity by our employees, independent contractors, principal investigators, consultants,commercial partners, and vendors. Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails: to comply with thelaws of the FDA and similar foreign regulatory bodies; provide true, complete and accurate information to the FDA and similar foreign regulatory bodies; tocomply with manufacturing standards we have established; to comply with federal, state and foreign health care fraud and abuse laws and regulations; toreport financial information or data accurately; or to disclose unauthorized activities to us. In particular, the promotion, sale and marketing of health careitems and services, as well as certain business arrangements in the health care industry are subject to extensive laws and regulations intended to preventmisconduct, including fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing,discounting, marketing, structuring and commission(s), certain customer incentive programs and other business arrangements. Activities subject to these lawsalso involve the improper use of information obtained in the course of patient recruitment for clinical trials. It is not always possible to identify and detersuch misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses orin protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Ifany such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significantimpact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusionfrom participation in Medicare, Medicaid and other federal health care programs, contractual damages, reputational harm, diminished profits and futureearnings, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results ofoperations. We may encounter difficulties in managing our growth and expanding our operations successfully. As we seek to advance our product candidates through clinical trials and commercialization, we will need to expand our development, regulatory,manufacturing, marketing and sales capabilities or contract with third parties to provide these capabilities for us. As our operations expand, we expect that wewill need to manage additional relationships with various strategic partners, suppliers and other third parties. Future growth will impose significant addedresponsibilities on members of management. Our future financial performance and our ability to commercialize our product candidates and to competeeffectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to manage our development efforts andclinical trials effectively and hire, train and integrate additional management, administrative and, if necessary, sales and marketing personnel. We may not beable to accomplish these tasks, and our failure to accomplish any of them could prevent us from successfully growing our company. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our productcandidates. 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 wecommercialize any products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable duringproduct testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, afailure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumerprotection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limitcommercialization of our product candidates. Even a successful defense would require significant financial and management resources. Regardless of themerits or eventual outcome, liability claims may result in:•decreased demand for any product candidates or products that we may develop;•injury to our reputation and significant negative media attention;•withdrawal of clinical trial participants;•significant costs to defend the related litigations;•a diversion of management’s time and our resources;•substantial monetary awards to trial participants or patients;37•product recalls, withdrawals, or labeling, marketing or promotional restrictions;•loss of revenue;•the inability to commercialize any product candidates that we may develop; and•a decline in our stock price.Failure to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims couldprevent or inhibit the commercialization of products we develop. We currently carry product liability insurance covering our clinical trials in the amount of$5.0 million in the aggregate. Although we maintain product liability insurance, any claim that may be brought against us could result in a court judgment orsettlement in an 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 insurancepolicies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amountsawarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or beable to obtain, sufficient capital to pay such amounts. We must comply with environmental laws and regulations, and failure to comply with these laws and regulations could expose us to significant liabilities. We use hazardous chemicals and radioactive and biological materials in certain aspects of our business and are subject to a variety of federal, stateand local laws and regulations governing the use, generation, manufacture, distribution, storage, handling, treatment and disposal of these materials. Wecannot eliminate the risk of accidental injury or contamination from the use, manufacture, distribution, storage, handling, treatment or disposal of hazardousmaterials. In the event of contamination or injury, or failure to comply with environmental, occupational health and safety and export control laws andregulations, we could be held liable for any resulting damages and any such liability could exceed our assets and resources. We are uninsured for third-partycontamination injury. We may not be able to win government, academic institution or non-profit contracts or grants. From time to time, we may apply for contracts or grants from government agencies, non-profit entities and academic institutions. Such grants havebeen our only source of revenue to date. Such contracts or grants can be highly attractive because they provide capital to fund the ongoing development ofour technologies and product candidates without diluting our stockholders. However, there is often significant competition for these contracts or grants.Entities offering contracts or grants may have requirements to apply for or to otherwise be eligible to receive certain contracts or grants that our competitorsmay be able to satisfy that we cannot. In addition, such entities may make arbitrary decisions as to whether to offer contracts or make grants, to whom thecontracts or grants will be awarded and the size of the contracts or grants to each awardee. Even if we are able to satisfy the award requirements, there is noguarantee that we will be a successful awardee. Therefore, we may not be able to win any contracts or grants in a timely manner, if at all. Risks Related to Our Common Stock We are eligible to be treated as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"), and wecannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive toinvestors. We are an “emerging growth company”, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may takeadvantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Theseexemptions include:•not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;•not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board providing forsupplemental auditor’s reports for additional information about the audit and the financial statements;•reduced disclosure obligations regarding executive compensation; and38•exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of anygolden parachute payments not previously approved.We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our commonstock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. In addition, theJOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accountingstandards. This allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to privatecompanies. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accountingstandards as other public companies that are not emerging growth companies. We could be an emerging growth company for up to five years, until December 31, 2019. Even after we no longer qualify as an emerging growthcompany, we may still qualify as a “smaller reporting company” if the market value of our common stock held by non-affiliates is below $250.0 million as ofJune 30 in any given year, or if we have less than $100.0 million in annual revenues and the market value of our common stock held by non-affiliates isbelow $700.0 million, which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosureobligations regarding executive compensation in our periodic reports and proxy statements. In addition, if the market value of our common stock held bynon-affiliates is below $75.0 million as of June 30 in any given year we would not be required to comply with the auditor attestation requirements of Section404 of the Sarbanes-Oxley Act for that year. Our largest stockholder, New Enterprise Associates (“NEA”), could exert significant influence over us and could limit your ability to influence theoutcome of key transactions, including any change of control. Our largest stockholder, NEA, beneficially owns, in the aggregate, shares representing approximately 31% of our outstanding common stock as ofFebruary 15, 2019. In addition, one member of our board of directors is associated with NEA. As a result, we expect that NEA will be able to exert significantinfluence over our business. NEA may have interests that differ from your interests, and it may vote in a way with which you disagree and that may be adverseto your interests. The concentration of ownership of our capital stock may have the effect of delaying, preventing or deterring a change of control of ourcompany, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and may adverselyaffect the market price of our common stock.We cannot predict what the market price of our common stock will be and, as a result, it may be difficult for you to sell your shares of our common stock. An inactive market may impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategicpartnerships or acquire companies or products by using our shares of common stock as consideration. We cannot predict the prices at which our commonstock will trade. It is possible that in one or more future periods our results of operations may be below the expectations of public market analysts andinvestors and, as a result of these and other factors, the price of our common stock may fall. If our stock price is volatile, our stockholders could incur substantial losses and we may become involved in securities-related litigation, includingsecurities class action litigation, that could divert management’s attention and harm our business and subject us to significant liabilities. Our stock price is likely to be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experiencedextreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, our stockholders couldincur substantial losses. The market price for our common stock may be influenced by many factors, including:•the success of competitive products or technologies;•results of clinical trials of our product candidates;•the timing of the release of results of our clinical trials;•results of clinical trials of our competitors’ products;•regulatory actions or legal developments with respect to our products or our competitors’ products;39•developments or disputes concerning patent applications, issued patents or other proprietary rights;•the results of our efforts to discover, develop, acquire or in-license additional product candidates or products;•actual or anticipated fluctuations in our financial condition and operating results;•publication of research reports by securities analysts about us or our competitors or our industry;•our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;•additions and departures of key personnel;•strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes inbusiness strategy;•the passage of legislation or other regulatory developments affecting us or our industry;•fluctuations in the valuation of companies perceived by investors to be comparable to us;•sales of our common stock by us, our insiders or our other stockholders;•speculation in the press or investment community;•announcement or expectation of additional financing efforts;•changes in accounting principles;•terrorist acts, acts of war or periods of widespread civil unrest;•natural disasters and other calamities;•changes in market conditions for biopharmaceutical stocks; and•changes in general market and economic conditions.In addition, the stock market has recently experienced significant volatility, particularly with respect to pharmaceutical, biotechnology and otherlife sciences company stocks. The volatility of pharmaceutical, biotechnology and other life sciences company stocks often does not relate to the operatingperformance of the companies represented by the stock. As we operate in a single industry, we are especially vulnerable to these factors to the extent that theyaffect our industry or our products, or to a lesser extent our markets.Beginning on October 31, 2017, three putative class action complaints were filed in the U.S. District Court for the District of Massachusetts (the“District of Massachusetts” or the “Court”), naming the Company, Chief Executive Officer William D. Clark, and former Chief Financial Officer JonathanPoole as defendants. The Court consolidated the three actions into one case, captioned Emerson et al. v. Genocea Biosciences, Inc., et al., Civil Action No.17-cv-12137-PBS (D. Mass.), and appointed the Genocea Investor Group (a group of five purported shareholders) as lead plaintiff. On March 29, 2018,counsel for the lead plaintiff filed an amended complaint in the District of Massachusetts that alleged violations of the Securities Exchange Act of 1934 andRule 10b-5 in connection with the Company’s disclosures from March 31, 2016 to September 25, 2017 concerning the development of GEN-003. Theamended complaint added Seth V. Hetherington, former Chief Medical Officer, to the original named defendants, and sought unspecified damages and costs.On December 6, 2018, the District of Massachusetts granted defendants’ motion to dismiss the amended complaint for failure to state a claim. On January 7,2019, the lead plaintiff filed a notice of appeal in the District of Massachusetts regarding the Court order dismissing the amended complaint. The appeal hasbeen docketed in the First Circuit under the caption Yuksel, et al. v. Genocea Biosciences, et al., Civil Action No. 19-1036 (1st Cir.). The Company is unableat this time to determine whether the outcome of the securities action litigation would have a material impact on its results of operations, financial conditionor cash flow. Beginning on January 31, 2018, two putative shareholder derivative actions were filed in the U.S. District Court for40the District of Delaware, naming certain of the Company’s officers and directors (including certain former directors and officers) as defendants, and namingthe Company as a nominal defendant. On August 24, 2018, the court consolidated the two actions into one case, captioned In re Genocea Biosciences, Inc.Derivative Litigation, Civil Action No. 18-cv-00186-MN (D. Del.). The operative complaint in the now-consolidated action alleges violations of theSecurities Exchange Act of 1934 and Rule 14a-9 in connection with disclosures made in the Company’s Schedule 14A Proxy Statement, filed with the SECon April 21, 2017. The complaint also alleges claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets. On August 10, 2018, theparties filed a joint stipulation and proposed order agreeing to stay the consolidated action until, inter alia, the entry of an order granting or denying anymotion to dismiss the action in the District of Massachusetts, and on August 24, 2018, the court entered the joint stipulation agreeing to stay theconsolidated action. In light of the December 6, 2018 order granting defendants’ motion to dismiss in the District of Massachusetts, the Company and theplaintiffs in the derivative action entered into joint stipulation on February 5, 2019 to stay the derivative action through the duration of the appeal in thesecurities action. The Company is unable at this time to determine whether the outcome of the derivative litigation would have a material impact on ourresults of operations, financial condition or cash flows.These lawsuits and this type of litigation could result in substantial costs and divert our management's attention and resources and could also requireus to make substantial payments to satisfy judgments or to settle litigation.Failure to comply with The NASDAQ Capital Market continued listing requirements may result in our common stock being delisted from The NASDAQCapital Market.If our stock price falls below $1.00 per share, we may not continue to qualify for continued listing on The NASDAQ Capital Market or NasdaqGlobal Market. To maintain listing, we are required, among other things, to maintain a minimum closing bid price of $1.00 per share. If the closing bid priceof our common stock is below $1.00 per share for 30 consecutive business days, we will receive a deficiency notice from Nasdaq advising us that we have acertain period of time, typically 180 days, to regain compliance by maintaining a minimum closing bid price of at least $1.00 for at least ten consecutivebusiness days, although Nasdaq could require a longer period.On June 15, 2018, we received a written notification from Nasdaq's Listing Qualifications Department that we had failed to comply with NasdaqListing Rule 5450(a)(1) because the bid price for our common stock over a period of 30 consecutive business days prior to such date had closed below theminimum $1.00 per share requirement for continued listing. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were afforded an initial period of 180calendar days, or until December 12, 2018, to regain compliance with Rule 5450(a)(1). We determined that we would not be in compliance with Rule 5450(a)(1) by December 12, 2018, and on November 19, 2018, submitted an application to transfer our common stock from listing on the Nasdaq Global Market tothe Nasdaq Capital Market. Doing so allowed us to become eligible for an additional 180 day compliance period provided for companies listed on theNasdaq Capital Market, provided that we met the continued listing requirements for market value of publicly held shares and all other initial listing standardsfor the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and provided written notice of our intention to cure the deficiencyduring the second compliance period by effecting a reverse stock split, if necessary. In accordance with the original notification, we indicated in our transferapplication that we met all of the other continuing listing requirements for the Nasdaq Capital Market, with the exception of the bid price requirement, andprovided written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. OnDecember 13, 2018, we received notice from Nasdaq that we were granted an additional 180 calendar days, or until June 11, 2019, to regain compliance withthe minimum $1.00 bid price per share requirement of the Nasdaq listing rules. Accordingly, at the opening of business on December 17, 2018, the listing ofthe shares of our common stock was transferred from the Nasdaq Global Market to the Nasdaq Capital Market. Our common stock continues to trade under thesymbol "GNCA."If at any time before June 10, 2019 the bid price of our common stock closes at or above $1.00 per share for a minimum of 10 consecutive businessdays, Nasdaq will provide written notice that we have achieved compliance with the Nasdaq listing rules. If the we do not regain compliance by June 10,2019, we expect that Nasdaq will provide written notice that our common stock will be delisted. At that time, we may appeal Nasdaq's determination to aNasdaq hearing panel. Even if we do regain compliance with minimum closing bid price of $1.00 per share by June 10, 2019, there is no guarantee that wewill remain in compliance thereafter. The delisting of our common stock would significantly affect the ability of investors to trade our common stock andnegatively impact the liquidity and price of our common stock. In addition, the delisting of our common stock could materially adversely impact our abilityto raise capital on acceptable terms or at all. Delisting from Nasdaq could also have other negative results, including the potential loss of confidence by ourcurrent or prospective third-party providers and collaboration partners, the loss of institutional investor interest, and fewer licensing and partneringopportunities.41Our failure to implement and maintain effective internal control over financial reporting could result in material misstatements in our financial statementswhich could require us to restate financial statements, cause investors to lose confidence in our reported financial information and have a negative effecton our stock price. We cannot assure you that any material weaknesses or significant deficiencies in our internal control over financial reporting will not be identifiedin the future. Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could resultin additional material weaknesses or significant deficiencies, cause us to fail to meet our periodic reporting obligations or result in material misstatements inour financial statements. Any such failure could also adversely affect the results of periodic management evaluations regarding the effectiveness of ourinternal control over financial reporting. The existence of a material weakness or significant deficiency could result in errors in our financial statements thatcould result in a restatement of financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reportedfinancial information, leading to a decline in our stock price. We incur significant costs as a result of being a public company and our management expects to devote substantial time to public company complianceprograms. As a public company, we incur significant legal, insurance, accounting and other expenses that we did not incur as a private company. In addition,our administrative staff are required to perform additional tasks. We invest resources to comply with evolving laws, regulations and standards, and thisinvestment could result in increased general and administrative expenses and may divert management’s time and attention from product developmentactivities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due toambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed. In the future, it may be moreexpensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs toobtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serveon our audit committee and compensation committee, and qualified executive officers. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. Anyfailure to develop or maintain effective controls could adversely affect the results of periodic management evaluations. In the event that we are not able todemonstrate compliance with the Sarbanes-Oxley Act, that our internal control over financial reporting is perceived as inadequate, or that we are unable toproduce timely or accurate financial statements, investors may lose confidence in our operating results and the price of our ordinary shares could decline. Inaddition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. We are required to comply with certain of the SEC’s rules that implement Section 404 of the Sarbanes-Oxley Act, which require management tocertify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internalcontrol over financial reporting commencing with our second annual report. This assessment must include the disclosure of any material weaknesses in ourinternal control over financial reporting identified by our management or our independent registered public accounting firm. To achieve compliance withSection 404 within the prescribed period, we engage in a process to document and evaluate our internal control over financial reporting, which is both costlyand challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed workplan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validatethrough testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control overfinancial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal controlover financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in thefinancial markets due to a loss of confidence in the reliability of our financial statement. Provisions in our charter documents and under Delaware law have anti-takeover effects that could discourage an acquisition of us by others, even if anacquisition would be beneficial to our stockholders and 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 by-laws contain provisions that may have the effect ofdiscouraging, delaying or preventing a change in control of us or changes in our management. These provisions could also limit the price that investorsmight be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because ourboard of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our42stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Amongother things, these provisions:•authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may containvoting, liquidation, dividend and other rights superior to our common stock;•create a classified board of directors whose members serve staggered three-year terms;•specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, ourchief executive officer or our president;•prohibit stockholder action by written consent;•establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, includingproposed nominations of persons for election to our board of directors;•provide that our directors may be removed only for cause;•provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than aquorum;•specify that no stockholder is permitted to cumulate votes at any election of directors;•expressly authorize our board of directors to modify, alter or repeal our by-laws; and•require supermajority votes of the holders of our common stock to amend specified provisions of our by-laws.These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law,which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after thedate of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in aprescribed manner. Any provision of our amended and restated certificate of incorporation, our amended and restated by-laws or Delaware law that has the effect ofdelaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock andcould also affect the price that some investors are willing to pay for our common stock. Our ability to use net operating losses to offset future taxable income may be subject to certain limitations. In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), a corporation that undergoes an “ownership change”is subject to limitations on its ability to utilize its pre-change net operating losses ("NOLs"), to offset future taxable income. Our existing NOLs are subject tolimitations arising from previous ownership changes, and if we undergo an ownership change in connection any follow-on offerings of our common orpreferred stock, our ability to utilize NOLs could be further limited by Section 382 of the Code. Our NOLs may also be impaired under state law. Accordingly,we may not be able to utilize a material portion of our NOLs. Furthermore, our ability to utilize our NOLs is conditioned upon our attaining profitability andgenerating U.S. federal taxable income. We have incurred net losses since our inception and anticipate that we will continue to incur significant losses for theforeseeable future; thus, we do not know whether or when we will generate the U.S. federal taxable income necessary to utilize our NOLs.Our amended and restated certificate of incorporation designates the state or federal courts located in the State of Delaware as the sole and exclusiveforum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain afavorable judicial forum for disputes with us or our directors, officers or employees. 43Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the state and federal courts located in the State ofDelaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach ofa fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arisingpursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated by-laws or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwiseacquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restatedcertificate of incorporation described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it findsfavorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers andemployees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable inrespect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in otherjurisdictions, which could adversely affect our business and financial condition. Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be the source ofgain for our stockholders. You should not rely on an investment in our common stock to provide dividend income. We do not anticipate that we will pay any cash dividendsto holders of our common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand our operations. In addition, ourability to pay cash dividends is currently prohibited by the terms of our debt financing arrangement, and any future debt financing arrangement may containterms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. Accordingly, investors must rely on sales of theircommon stock after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cashdividends should not purchase our common stock.The comprehensive tax reform bill passed in late 2017 could adversely affect our business and financial condition.On December 22, 2017, President Trump signed into law new legislation that significantly revises the Internal Revenue Code of 1986, asamended. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of thecorporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings(except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income in respect of net operatinglosses generated during or after 2018 and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless ofwhether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain newinvestments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. Notwithstandingthe reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain and our business and financial condition could beadversely affected. In addition, it is uncertain if and to what extent various states will conform to the newly enacted federal tax law. The impact of this taxreform on holders of our common stock is also uncertain and could be adverse. We urge you to consult with your legal and tax advisors with respect to thislegislation and the potential tax consequences of investing in or holding our common stock.Our effective tax rate may fluctuate, and we may incur obligations in tax jurisdictions in excess of accrued amounts.We are currently subject to taxation in the United States and Massachusetts. In preparing our financial statements, we estimate the amount of tax thatwill become payable in each of such places. Nevertheless, our effective tax rate may be different than experienced in the past due to numerous factors,including passage of the newly enacted federal income tax law, changes in the mix of our profitability from state to state, the results of examinations andaudits of our tax filings, our inability to secure or sustain acceptable agreements with tax authorities, changes in accounting for income taxes and changes intax laws. Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations andmay result in tax obligations in excess of amounts accrued in our financial statements.Item 1B. Unresolved Staff CommentsNone.Item 2. Properties44Our principal executive offices are located at 100 Acorn Park Drive, 5th floor, Cambridge, Massachusetts 02140. We have two leases at this address,and in aggregate, we occupy approximately 34,200 square feet of laboratory and office space. Both leases expire in February 2020. We believe that ourexisting facilities are sufficient for our present operations, but that in the near future our existing facility space will need to be expanded to meet the demandsof our future lab operations or we will have to move into a new facility.Item 3. Legal ProceedingsFrom time to time we are subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Although theresults of litigation and claims cannot be predicted with certainty, as of the date of this Annual Report on Form 10-K, except as discussed below, we do notbelieve we are party to any claim or litigation, the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonablyexpected to have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense andsettlement costs, diversion of management resources and other factors.Beginning on October 31, 2017, three putative class action complaints were filed in the U.S. District Court for the District of Massachusetts (the“District of Massachusetts” or the “Court”), naming the Company, Chief Executive Officer William D. Clark, and former Chief Financial Officer JonathanPoole as defendants. The Court consolidated the three actions into one case, captioned Emerson et al. v. Genocea Biosciences, Inc., et al., Civil Action No.17-cv-12137-PBS (D. Mass.), and appointed the Genocea Investor Group (a group of five purported shareholders) as lead plaintiff. On March 29, 2018,counsel for the lead plaintiff filed an amended complaint in the District of Massachusetts that alleged violations of the Securities Exchange Act of 1934 andRule 10b-5 in connection with the Company’s disclosures from March 31, 2016 to September 25, 2017 concerning the development of GEN-003. Theamended complaint added Seth V. Hetherington, former Chief Medical Officer, to the original named defendants, and sought unspecified damages and costs.On December 6, 2018, the District of Massachusetts granted defendants’ motion to dismiss the amended complaint for failure to state a claim. On January 7,2019, the lead plaintiff filed a notice of appeal in the District of Massachusetts regarding the Court order dismissing the amended complaint. The appeal hasbeen docketed in the First Circuit under the caption Yuksel, et al. v. Genocea Biosciences, et al., Civil Action No. 19-1036 (1st Cir.). The Company is unableat this time to determine whether the outcome of the securities action litigation would have a material impact on its results of operations, financial conditionor cash flow. Beginning on January 31, 2018, two putative shareholder derivative actions were filed in the U.S. District Court for the District of Delaware, naming certainof the Company’s officers and directors (including certain former directors and officers) as defendants, and naming the Company as a nominal defendant. OnAugust 24, 2018, the court consolidated the two actions into one case, captioned In re Genocea Biosciences, Inc. Derivative Litigation, Civil Action No. 18-cv-00186-MN (D. Del.). The operative complaint in the now-consolidated action alleges violations of the Securities Exchange Act of 1934 and Rule 14a-9 inconnection with disclosures made in the Company’s Schedule 14A Proxy Statement, filed with the SEC on April 21, 2017. The complaint also alleges claimsfor breach of fiduciary duty, unjust enrichment, and waste of corporate assets. On August 10, 2018, the parties filed a joint stipulation and proposed orderagreeing to stay the consolidated action until, inter alia, the entry of an order granting or denying any motion to dismiss the action in the District ofMassachusetts, and on August 24, 2018, the court entered the joint stipulation agreeing to stay the consolidated action. In light of the December 6, 2018order granting defendants’ motion to dismiss in the District of Massachusetts, the Company and the plaintiffs in the derivative action entered into jointstipulation on February 5, 2019 to stay the derivative action through the duration of the appeal in the securities action. The Company is unable at this time todetermine whether the outcome of the derivative litigation would have a material impact on our results of operations, financial condition or cash flows.The Company does not have contingency reserves established for any litigation liabilities.Item 4. Mine Safety DisclosuresNot applicable.45PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuers Purchases of Equity SecuritiesMarket InformationOur common stock has been publicly traded on The Nasdaq Capital Market under the symbol “GNCA” since February 5, 2014.HoldersAs of February 26, 2019, there were approximately 20 holders of record of our common stock. This number does not include beneficial owners whoseshares are held by nominees in street name.DividendsWe have never declared or paid cash dividends on our common stock, and we do not expect to pay any cash dividends on our common stock in theforeseeable future.Recent Sales of Unregistered SecuritiesIn February 2019, we entered into a private placement with certain existing and new investors providing for the purchase of up to approximately$39.2 million of our common stock and warrants to purchase shares of Genocea common stock, in two closings. The first closing occurred on February 14,2019 (the “Initial Closing”). We sold 25,599,979 shares of common stock and, to one purchaser and its affiliates in lieu of shares of common stock, a pre-funded warrant to purchase 4,250,000 shares of common stock (the “Pre-Funded Warrant”), and accompanying warrants (the “Warrants” and together with thecommon stock and Pre-Funded Warrants, the “Units”) to purchase an aggregate of 7,462,494 shares of common stock (the “Warrant Shares”) at a purchaseprice of $0.5026 per Unit. The Warrants expire five (5) years following the Initial Closing (subject to early termination as noted below), have an exerciseprice of $0.5656 per Warrant Share, and were immediately exercisable upon issuance. The Pre-Funded Warrants expire twenty (20) years following the InitialClosing, have an exercise price of $0.5026 per share ($0.5025 of which was prepaid at the Initial Closing, leaving a remaining exercise price $0.01 per share),and were immediately exercisable upon issuance. The exercise price and number of shares of common stock issuable upon the exercise of the Warrants andthe Pre-Funded Warrants will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization orsimilar transaction, as described in the Warrants and the Pre-Funded Warrants.Contingent upon satisfactory top-line results from Part A of our Phase 1/2a clinical trial for GEN-009 (the “Data”), we will have the option toconduct a second closing (the “Second Closing”) and offer up to an additional $24.2 million in shares of common stock to the purchasers at a purchase priceper share that is equal to the greater of $0.4713 per share and a per share price that is derived from the volume weighted average price of our common stockfrom the date we release the Data through the date we exercise our option to proceed with the Second Closing. If a purchaser does not purchase at least 50%of the shares of common stock that it specified to purchase in the Second Closing (each such purchaser, a “Non-Participating Purchaser”), it will forfeit anyunexercised Warrants purchased in the Initial Closing as our sole remedy for such failure. The other purchasers that are not Non-Participating Purchasers willhave the option, but not the obligation, to purchase the shares of common stock allocated to the Non-Participating Purchasers in the Second Closing.The securities sold in the offering were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered orsold in the United States absent registration or an applicable exemption from registration requirements. Genocea has agreed to file a resale registrationstatement with the SEC within 60 days of the Initial Closing to register the resale of the shares of common stock issued or issuable in connection with eachclosing.Purchase of Equity SecuritiesWe did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K.Securities Authorized for Issuance under Equity Compensation Plans46The following table contains information about our equity compensation plans as of December 31, 2018.Plan category Number of securitiesto be issued upon exerciseof outstanding stock optionsand warrants Weighted-averageexercise price ofoutstanding options andwarrants Number of securitiesremaining availablefor future issuanceunder equitycompensation plans Equity compensation plans approved by securityholders (1) 7,139,044 $2.35 1,977,407(2)(1) Includes information regarding our Amended and Restated 2014 Equity Incentive Plan.(2) Does not include 3,470,847 shares added to the Amended and Restated 2014 Equity Incentive Plan under the evergreen provision on January 1, 2019.Item 6. Selected Financial DataNot applicable.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsYou should read the following discussion and analysis of our financial condition and results of operations together with the section entitled“Selected Financial Data” and our financial statements and related notes appearing in this Annual Report on Form 10-K. Some of the informationcontained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans andstrategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors,including those factors set forth in the “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the resultsdescribed in or implied by the forward-looking statements contained in the following discussion and analysis.OverviewWe are a biopharmaceutical company that seeks to discover and develop novel cancer immunotherapies. We use our proprietary discovery platform, ATLAS,to profile CD4+ and CD8+ T cell (or cellular) immune responses to tumor antigens. We use insights arising from ATLAS to design novel cancerimmunotherapies. We believe that ATLAS, which recreates each individual's T cell immune responses to their tumor in the laboratory, affords Genoceaadvantages in the design of novel cancer immunotherapies relative to our peers, who we believe rely primarily on software and processes such as "machinelearning" to predict immunotherapy targets.Our most advanced program is GEN-009, a neoantigen (or personalized) cancer vaccine, for which we are conducting a Phase 1/2a clinical trial. The GEN-009program uses ATLAS to identify neoantigens, or tumor mutations unique to each patient, for inclusion in each patient's GEN-009 vaccine. We are alsoadvancing GEN-011, a neoantigen adoptive T cell therapy program as well as GEN-010, a next-generation neoantigen vaccine program.ATLAS PlatformHarnessing and directing the T cell arm of the immune system to kill tumor cells is increasingly viewed as having potential in the treatment of many cancers,and this approach has clearly shown efficacy in hematologic malignancies. Treatments arising from this approach must target specific differences present in atumor, such as genetic mutations. However, the discovery of such T cell targets, or antigens, has been particularly challenging for two reasons. First, thediversity of human T cell responses means that an effective T cell target for one person may be different from an effective T cell target for another person.Second, the number of candidate targets for T cell responses can be very large with up to thousands of candidate antigens per patient in some cancers. Thesecomplexities represent fundamental barriers that traditional cancer immunotherapy target discovery tools, which rely largely on computer modeling - so-called predictive algorithms - have, as yet, only poorly addressed.We have designed the ATLAS platform to overcome these T cell target discovery challenges. We believe that ATLAS47represents the most comprehensive and accurate high-throughput system for T cell immune response profiling in the biopharmaceutical industry. ATLAS isdesigned to mimic the T cell arm of the human immune system of each patient that it profiles in a laboratory setting. Using ATLAS, we are able to measure Tcell responses to the entire set of potential T cell targets for an individual’s cancer. Using ATLAS, we can determine if these T cell responses are statisticallyabove or below a baseline measurement and can develop immunotherapies using only those targets and T cells determined to be most likely to kill anindividual’s cancer.We believe that we are a leader in the field of T cell-related immunotherapy discovery and development. Our management and scientific teams possessconsiderable experience in oncology, immunology, and vaccinology spanning research, manufacturing, clinical development and regulatory affairs.Our ProgramsOur cancer immunotherapies are designed to educate T cells to recognize and attack specific targets - or to introduce T cells already educated toattack these targets - and thereby kill cancer cells. We are first developing personalized cancer vaccines by applying ATLAS to identify patient neoantigensthat are associated with that individual's pre-existing immune responses to a tumor. Neoantigens are personalized tumor mutations that are seen as “foreign” by an individual’s immune system. Data published in recent years have indicatedthat an individual’s response to neoantigens drives immune checkpoint inhibitor ("ICI") efficacy and that it is possible to vaccinate an individual againsttheir own neoantigens. If approved, neoantigen vaccines could be used in combination with existing treatment approaches for cancer, including ICIs, topotentially direct and enhance an individual’s T cell response to the individual’s cancer, thereby potentially effecting better clinical outcomes. Data alsosupport the potential of isolating and expanding T cell populations targeting specific neoantigens for therapeutic benefit. Our lead immuno-oncology program, GEN-009, is an adjuvanted neoantigen peptide vaccine candidate designed to direct a patient’s immune system toattack their tumor. GEN-009’s neoantigens are identified by our proprietary ATLAS platform, which is designed to profile CD4+ and CD8+ cell immuneresponses to tumor antigens. Following ATLAS neoantigen identification, we manufacture a personalized vaccine for each patient using only thoseneoantigens determined to be stimulatory to the immune system by ATLAS. In June 2018, we initiated a Phase 1/2a clinical trial for GEN-009 in a range of tumor types in subjects with no evidence of disease but at high risk ofrelapse. In January 2019, we announced that we had commenced dosing patients and completed enrollment in this first part of the trial. We expect to reportimmunogenicity results from the initial patient cohort late in the second quarter or early in the third quarter of 2019. We have also initiated pre-clinical work on GEN-011, an adoptive T cell therapy to neoantigens identified by ATLAS. We currently expect to file an INDwith the FDA for GEN-011 in the first half of 2020.Behind GEN-009, we also continue to explore GEN-010, our vaccine candidate employing next-generation antigen delivery technology, which couldprovide an opportunity for even better immunogenicity and/or efficiency of production.We are also using ATLAS to amass libraries of novel candidate antigens for non-personalized cancer immunotherapies. Such programs would target non-mutated, shared tumor-associated antigens and cancers of viral origin.For shared antigens, we have had and continue to conduct a number of research collaborations that provide blood and tumor samples to antigen discoveryand immune-response profiling as follows:•Dana Farber Cancer Institute (ongoing), Mayo Clinic (completed), and Checkmate Pharmaceuticals (completed)The Company is not dependent on these research collaborations to develop its product candidates and no material financial obligations exist as partof these collaborations.For cancers of viral origin, we have profiled the immune responses that several cohorts of patients made to EBV. EBV infection has been linked tocancers with high unmet needs such as non-Hodgkin’s lymphoma, nasopharyngeal carcinoma and gastric carcinoma. We believe that ATLAS is highly suitedto the creation of a new immunotherapy for EBV given that T cell responses are understood to be crucial for protection against EBV. Furthermore, EBV is partof the herpes virus family in which we have deep experience through our previous development of GEN-003.48The following table describes our active immuno-oncology programs in development:VaccineCandidateProgramStage of DevelopmentNext MilestoneAnticipated TimelineGEN-009First generation neoantigencancer vaccinePhase 1/2aImmunogenicity data from thefirst patient cohortLate Q2/early Q32019GEN-010Second generationneoantigen cancer vaccinePre-clinicalSelect delivery technologyplatformOngoingGEN-011Adoptive T cell therapyPre-clinicalIND filingFirst half of 2020In addition to our immuno-oncology programs, we also have an investigational immunotherapy for the treatment of genital herpes, GEN-003. To date, GEN-003 has completed three positive clinical trials. However, we have ceased substantially all activities under the GEN-003 program and are exploringalternatives to maximize shareholder value from GEN-003.Financing and business operationsWe commenced business operations in August 2006. To date, our operations have been limited to organizing and staffing our company, acquiringand developing our proprietary ATLAS technology, identifying potential product candidates, and undertaking preclinical studies and clinical trials for ourproduct candidates. All of our revenue to date has been grant revenue. We have not generated any product revenue and do not expect to do so for theforeseeable future. We have financed our operations primarily through the issuance of our equity securities, debt financings, and amounts received throughgrants. As of December 31, 2018, we had received an aggregate of $339.5 million in gross proceeds from the issuance of equity securities and gross proceedsfrom debt facilities and an aggregate of $7.9 million from grants. At December 31, 2018, our cash and cash equivalents were $26.4 million. Since inception, we have incurred significant operating losses. Our net losses were $27.8 million and $56.7 million for the years ended December 31,2018 and 2017, respectively, and our accumulated deficit was $292.0 million as of December 31, 2018. We expect to incur significant expenses andincreasing operating losses for the foreseeable future. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year. We will need togenerate significant revenue to achieve profitability, and we may never do so. In March 2015, we completed an underwritten public offering of 6.3 million shares of our common stock at a public offering price of $8.25 per sharefor an aggregate offering price of $51.7 million. In August 2015, we completed another underwritten public offering of 3.9 million shares of our commonstock at a public offering price of $13.00 per share for an aggregate offering price of $50.1 million. We received net proceeds from these offerings ofapproximately $95.7 million, after deducting approximately $6.1 million in underwriting discounts and commissions, excluding offering costs payable byus.In January 2018, we completed the Concurrent Offerings in which we sold (i) 53.4 million shares of our common stock and accompanying Class Awarrants to purchase up to 26.7 million shares of our common stock, at a combined price of $1.00 per share, and accompanying Class A warrant to purchase0.5 shares of common stock for aggregate gross proceeds of approximately $53.4 million, and (ii) 1,635 shares of our Series A convertible preferred stock,which are convertible into 1.6 million shares of our common stock, and accompanying Class A warrants to purchase up to 0.8 million shares of our commonstock for aggregate gross proceeds of approximately $1.6 million. Each Class A warrant has an exercise price of $1.20 per share and will expire five yearsfrom the date of issuance. We received net proceeds from these offerings of approximately $51.7 million, after deducting approximately $3.3 million inunderwriting discounts and commissions, excluding offering costs payable by us.In February 2019, the Company entered into a private placement with certain existing and new investors providing for the purchase of up toapproximately $39.2 million of the Company's common stock and warrants to purchase shares of the Company's common stock, in two closings. In the firstclosing, the Company sold 25.6 million shares of common stock and 4.25 million pre-funded warrants to purchase common stock, along with accompanyingwarrants to purchase 0.25 shares of common stock for each share of common stock or pre-funded warrant purchased, for net proceeds to the Company ofapproximately $14.2 million, after deducting approximately $0.8 million in placement agent fees, excluding offering costs. The first closing of the privateplacement occurred on February 14, 2019, while the second closing is contingent on satisfactory top-49line immunogenicity results from the ongoing Phase 1/2a clinical trial for GEN-009, expected in late second quarter or early third quarter of 2019.Contingent on satisfactory top-line immunogenicity results from the ongoing Phase 1/2a clinical trial for GEN-009, Genocea will have the option to conducta second closing and sell up to an additional $24.2 million of shares of common stock to the investors who participated in the first closing.We believe that our cash and cash equivalents at December 31, 2018, together with the proceeds from the 2019 private placement, are sufficient tosupport our operating expenses and capital expenditure requirements into the first quarter of 2020.Costs related to clinical trials can be unpredictable and there can be no guarantee that our current balances of cash, cash equivalents, andinvestments, combined with proceeds received from other sources, will be sufficient to fund our studies or operations through this period. These funds willnot be sufficient to enable us to conduct pivotal clinical trials for, seek marketing approval for, or commercially launch GEN-009 or any other productcandidate. Accordingly, to obtain marketing approval for and to commercialize these, or any other product candidates, we will be required to obtain furtherfunding through public or private equity offerings, debt financings, collaboration and licensing arrangements, or other sources. Adequate additionalfinancing may not be available to us on acceptable terms, or at all. Our failure to raise capital when needed would have a negative effect on our financialcondition and our ability to pursue our business strategy.Financial OverviewResearch and development expenses Research and development expenses consist primarily of costs incurred to advance our preclinical and clinical candidates, which include:•personnel-related expenses, including salaries, benefits, stock-based compensation expense, and travel;•expenses incurred under agreements with CROs, CMOs, consultants, and other vendors that conduct our clinical trials and preclinical activities;•costs of acquiring, developing, and manufacturing clinical trial materials and lab supplies; and•facility costs, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance,and other supplies. We expense internal research and development costs to operations as incurred. We expense third-party costs for research and development activities,such as conducting clinical trials, based on an evaluation of the progress to completion of specific performance or tasks such as patient enrollment, clinicalsite activations or information, which is provided to us by our vendors. The following table identifies research and development expenses on a program-specific basis for our product candidates (in thousands): Years ended December 31, Increase 2018 2017 (Decrease)Genital herpes (GEN-003)(1) $635 $22,493 $(21,858)Immuno-oncology program (2) 21,139 11,685 9,454Other research and development (3) 3,435 5,026 (1,591)Total research and development $25,209 $39,204 $(13,995)_________________________(1)Includes direct and indirect internal costs and external costs such as CMO and CRO costs.(2)Includes direct and indirect internal costs and external costs for our immuno-oncology research and development activities.(3) Includes costs that are not specifically allocated by project, including facilities costs, depreciation expense, and other costs. In addition, costs forprograms that were paused in 2016 or earlier are included in this line item.We expect our overall research and development expenses will increase due to our continued development of our clinical operations and our supplychain capabilities for our GEN-009 program, as well as our advancement of GEN-011 through preparation and submission of an IND and subsequentinitiation of a clinical trial.50 General and administrative expenses General and administrative expenses consist principally of salaries and related costs for personnel, including stock-based compensation and travelexpenses, in executive and other administrative functions. Other general and administrative expenses include facility-related costs, communication expenses,and professional fees associated with corporate and intellectual property legal expenses, consulting, and accounting services. We anticipate that our general and administrative expenses will increase in the future to support the continued research and development of ourproduct candidates and to operate as a public company. These increases will likely include higher costs for insurance, hiring activities, and professionalservices, such as outside consultants, lawyers and accountants, among other expenses. Additionally, if and when we believe a regulatory approval of our firstproduct candidate appears likely, we anticipate that we will increase our salary and personnel costs and other expenses as a result of our preparation forcommercial operations.Restructuring costsOn September 25, 2017, we announced a strategic shift to immuno-oncology and a focus on the development of neoantigen cancer vaccines,including GEN-009. We also announced that it is exploring strategic alternatives for GEN-003, its Phase 3-ready investigational immunotherapy for thetreatment of genital herpes. Consequently, substantially all GEN-003 spending and activities were ceased, and we reduced our workforce byapproximately 40 percent as of the quarter ended September 30, 2017. Pursuant to ASC 420, Exit or Disposal Cost Obligations, charges for employeeseverance, employee benefits, and contract terminations were recorded in the year ended December 31, 2017. Asset impairment charges, pursuant to ASC360, Property, Plant, and Equipment, were also recorded in the year ended December 31, 2017 and primarily related to fixed assets specific to GEN-003research and development activities. Other income (expense)Other income and expense consists of the change in warranty liability, interest expense, net of interest income, and other income (expense) formiscellaneous items, such as the transaction expenses associated with the allocation of proceeds from the Concurrent Offerings.Critical Accounting Policies and Significant Judgments and EstimatesOur management’s discussion and analysis of our financial position and results of operations is based on our consolidated financial statements,which have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of consolidated financial statementsin conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements andaccompanying notes. On an ongoing basis, we evaluate estimates, which include prepaid and accrued research and development expenses, stock-basedcompensation expense, and warrants to purchase redeemable securities. We base our estimates on historical experience and other market-specific or otherrelevant assumptions that we believe to be reasonable under the circumstances. Warrants to purchase redeemable securities are valued utilizing an option-based methodology to value the Warrants combined with a multi-scenario model, specifically a Monte Carlo simulation, to model the future movement of thestock price throughout the term of the Warrants. In addition, the valuation model considers the probability of the Company being acquired during eachannual period within the Warrant term, as an acquisition event can potentially impact the settlement of the Warrants. Actual results may differ materially fromthose estimates or assumptions.While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere inthis Annual Report on Form 10-K, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation ofour consolidated financial statements.Prepaid and Accrued Research and Development ExpensesAs part of the process of preparing our consolidated financial statements, we are required to estimate our prepaid and accrued research anddevelopment expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that havebeen performed for us, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced orotherwise notified of the51actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We makeestimates of our prepaid and accrued research and development expenses as of each balance sheet date in our consolidated financial statements based on factsand circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments, ifnecessary. Examples of estimated prepaid and accrued research and development expenses include fees paid to CROs in connection with clinical trials,CMOs with respect to pre-clinical and clinical materials and intermediaries, and vendors in connection with preclinical development activities.We base our expenses related to clinical trials on our estimates of the services performed pursuant to contracts with clinical sites that conductclinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in unevenpayment flows. Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of required datasubmission. In recording service fees, we make estimates based upon the time period over which services will be performed or other observable andmeasurable progress points as defined in the contracts, such as number of subjects enrolled, number of sites, or quantity of services performed in each period.The calculated amount of service fee expense is compared to the actual payments made pursuant to the contract's billing schedule to determine the resultingprepaid or accrual position. Additionally, for each clinical site, we accrue 10% of the earned patient visits amounts which are payable upon completion of therequired data submission for the clinical trial. If our estimates of the status and timing of services performed differs from the actual status and timing ofservices performed, we may report amounts that are too high or too low in any particular period. To date, there has been no material differences from ourestimates to the amount incurred.Stock-Based CompensationWe have applied the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC"),Topic 718, Compensation — Stock Compensation ("ASC 718"), to account for stock-based compensation for employees and ASC 718 and FASB ASC Topic505, Equity ("ASC 505"), for non-employees. We recognize compensation costs related to stock options granted to employees based on the estimated fairvalue of the awards on the date of grant. Stock compensation related to non-employee awards is re-measured at each reporting period until the awards arevested.Determining the amount of stock-based compensation to be recorded requires us to develop estimates of the fair value of stock-based awards as oftheir measurement date. We recognize stock-based compensation expense over the requisite service period, which is the vesting period of the award.Calculating the fair value of stock-based awards requires that we make subjective assumptions. We use the Black-Scholes option pricing model to value ourstock option awards. Use of this valuation methodology requires that we make assumptions as to the volatility of our common stock, the expected term of ourstock options, the risk-free interest rate for a period that approximates the expected term of our stock options, and our expected dividend yield. Because ofour limited operating history as a publicly-traded entity, we incorporate data from a representative group of publicly-traded companies to estimate expectedstock price volatility. We selected representative companies from the biopharmaceutical industry with characteristics similar to us. We use the simplifiedmethod as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment, as we do not have sufficient historical stock option activity datato provide a reasonable basis upon which to estimate the expected term of stock options granted to employees. For non-employee grants, we use an expectedterm equal to the remaining contractual term of the award. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends andhave no current intention of paying cash dividends. The risk-free interest rate used for each grant is based on the U.S. Treasury yield curve in effect at the timeof grant for instruments with a similar expected life.We recognize forfeitures as they occur. Stock-based compensation expense recognized in the consolidated financial statements is based on awardsthat ultimately vest.Stock-based compensation expense has been reported in our statements of operations and comprehensive loss as follows (in thousands): Years ended December 31, 2018 2017Research and development $620 $1,310General and administrative 1,533 2,924Total $2,153 $4,23452We estimated the fair value of stock options of each employee stock award at the grant date using the following assumptions: Years ended December 31, 2018 2017Expected volatility 77.6% - 79.3% 74.6% - 90.1%Risk-free interest rate 2.61% - 3.10% 1.85% - 2.18%Expected term (in years) 5.5 - 6.08 5.5 - 9.88Expected dividend yield 0% 0%At December 31, 2018, we had approximately $3.5 million of total unrecognized compensation expense, which we expect to recognize over aweighted-average remaining vesting period of approximately three years. Our stock-based compensation expense for stock options has increased primarilybased upon headcount growth and the related number of stock option awards granted to new and existing employees.Warrants to Purchase Redeemable SecuritiesWe have warrants to purchase redeemable securities as a liability on our balance sheets, in accordance with ASC 480, Distinguishing Liabilities fromEquity (“ASC 480”). As the Warrants are liability-classified, the Company remeasures the fair value of the Warrants at each reporting date. The Companyutilized an option-based methodology to value the Warrants combined with a multi-scenario model, specifically a Monte Carlo simulation, to model thefuture movement of the stock price throughout the term of the Warrants. In addition, the valuation model considers the probability of the Company beingacquired during each annual period within the Warrant term, as an acquisition event can potentially impact the settlement of the Warrants.The assumptionsused in calculating the estimated fair value of the Warrants represent the Company’s best estimates and include probabilities of settlement scenarios, futurechanges in the Company’s stock price, risk-free interest rates and volatility.The Warrants are exercisable at any time, or from time-to-time during the period beginning on the date of issuance and expiring on the five-yearanniversary of such issuance. In the event of an “Acquisition,” defined generally to include a merger or consolidation resulting in the sale of 50% or more ofthe voting securities of the Company, the sale of all, or substantially all, of the assets or voting securities of the Company, or other change of controltransaction, as defined in the Warrants, the Company will be obligated to use its best efforts to ensure that the holders of the Warrants receive new warrantsfrom the surviving or acquiring entity (the “Acquirer”). The new warrants to purchase shares in the Acquirer shall have the same expiration date as theWarrants and a strike price that is based on the proportion of the value of the Acquirer’s stock to the Company’s common stock. If the Company is unable,despite its best efforts, to cause the Acquirer to issue new warrants in the Acquisition as described above, then, if the Company’s stockholders are to receivecash in the Acquisition, the Company will settle the Warrants in cash and if the Company’s stockholders are to receive stock in the Acquisition, the Companywill issue shares of its common stock to each Warrant holder.53Results of OperationsComparison of the Years Ended December 31, 2018 and December 31, 2017 Years Ended December 31, Increase(in thousands) 2018 2017 (Decrease)Operating expenses: Research and development $25,209 $39,204 $(13,995)General and administrative 14,309 13,433 876Restructuring costs — 2,618 (2,618)Total operating expenses 39,518 55,255 (15,737)Loss from operations (39,518) (55,255) (15,737)Other income (expense): Change in fair value of warrant 14,757 — 14,757Interest expense, net (1,021) (1,441) (420)Other income (expense) (2,029) (14) 2,015Total other income (expense) 11,707 (1,455) 13,162Net loss $(27,811) $(56,710) $(28,899) Research and development expensesResearch and development ("R&D") expenses decreased approximately $14.0 million to $25.2 million for the year ended December 31, 2018 from$39.2 million for the same period ended December 31, 2017. The decrease was due largely to reduced headcount-related costs of approximately $4.8 million,decreased external manufacturing costs of approximately $5.3 million, decreased clinical costs of approximately $1.5 million, and decreased consulting andprofessional services costs of approximately $1.3 million. The remaining decrease in year-over-year expenses was comprised of decreased lab-related costs ofapproximately $0.3 million, office and facility related costs of approximately $0.3 million and other R&D costs of approximately $0.4 million.On a program basis, GEN-003 costs decreased $21.9 million in the year ended December 31, 2018, driven by reduced headcount-related costs ofapproximately $8.7 million, decreased external manufacturing related expenses of approximately $6.7 million, decreased consulting and professional servicerelated costs of approximately $2.0 million and decreased clinical and lab related costs of approximately $3.9 million, following the September 2017strategic pivot. GEN-009 and other immuno-oncology programs costs increased $9.5 million in the year ended December 31, 2018, driven by increasedheadcount, clinical, and consulting costs of approximately $7.1 million and increased external manufacturing and lab related costs of approximately $2.2million to support the Phase 1/2a clinical trial for GEN-009. Increased spending on these programs was offset by lower costs on deprioritized infectiousdisease programs.General and administrative expenses General and administrative expense increased approximately $0.9 million to $14.3 million for the year ended December 31, 2018 from $13.4million for the year ended December 31, 2017. The increase was primarily due to increased consulting and professional services costs of approximately $2.3million, offset by reduced compensation and benefits costs of approximately $1.2 million, and depreciation costs of approximately $0.3 million, as comparedto the prior year.Restructuring costsOn September 25, 2017, the Company announced a strategic shift to immuno-oncology and a focus on the development of neoantigen cancervaccines, including GEN-009. As a result, the Company incurred charges of approximately $1.1 million for employee severance and related costs,approximately $0.5 million related to contract termination clauses, and approximately $1.0 million in non-cash asset impairment charges.Change in fair value of warrants54Change in fair value of warrants reflects the non-cash change in fair value of Class A warrants issued in connection with the Concurrent Offerings.The warrants were recorded at their fair value on the date of issuance and are remeasured as of any warrant exercise date and at the end of each reportingperiod. The decrease in the fair value of the warrants is primarily due to the decrease in our stock price in 2018.Interest expense, netInterest expense, net decreased by $0.4 million for the year ended December 31, 2018, as compared to the year ended December 31, 2017. Thedecrease reflects the lower outstanding principal balance on our debt facility, combined with increased interest income earned on our cash and cashequivalents in the current year.Other income (expense)Other income (expense) decreased $2.0 million for the year ended December 31, 2018, as compared to the year ended December 31, 2017. Thedecrease in other income (expense) for the year ended December 31, 2018 was primarily due to a $2.0 million expense in the first quarter of 2018 related tothe Concurrent Offerings for the portion of issuance costs that were allocated to the warrants and were required to be immediately expensed.Liquidity and Capital ResourcesOverviewAs of December 31, 2018, we had an accumulated deficit of approximately $292.0 million. We had cash and cash equivalents of $26.4 million atDecember 31, 2018.Since our inception through December 31, 2018, we have received an aggregate of $339.5 million in gross proceeds from the issuance of equitysecurities and gross proceeds from debt facilities and an aggregate of $7.9 million from grants.In February 2014, we completed an IPO of 5.5 million shares of our common stock at a price of $12.00 per share for an aggregate offering price of$66.0 million. We received net proceeds from the offering of approximately $61.4 million, after deducting approximately $4.6 million in underwritingdiscounts and commission, excluding offering costs payable by us. In March 2015, we completed an underwritten public offering of 6.3 million shares of our common stock at a public offering price of $8.25 per sharefor an aggregate offering price of $51.7 million. In August 2015, we completed another underwritten public offering of 3.9 million shares of our commonstock at a public offering price of $13.00 per share for an aggregate offering price of $50.1 million. We received net proceeds from these offerings ofapproximately $95.7 million, after deducting approximately $6.1 million in underwriting discounts and commissions, excluding offering costs payable byus.In January 2018, we completed the Concurrent Offerings in which we sold (i) 53.4 million shares of our common stock and accompanying warrantsto purchase up to 26.7 million shares of our common stock for aggregate gross proceeds of approximately $53.4 million and (ii) 1,635 shares of our Series Aconvertible preferred stock, which are convertible into 1.6 million shares of our common stock and accompanying warrants to purchase up to 0.8 millionshares of our common stock for aggregate gross proceeds of approximately $1.6 million.In February 2019, we entered into a private placement with certain existing and new investors providing for the purchase of up to approximately$39.2 million of our common stock and warrants to purchase shares of our common stock, in two closings. In the first closing, we sold 25.6 million shares ofcommon stock and 4.25 million pre-funded warrants to purchase common stock, along with accompanying warrants to purchase 0.25 shares of common stockfor each share of common stock or pre-funded warrant purchased, for net proceeds of approximately $14.2 million, after deducting approximately $0.8million in placement agent fees, excluding offering costs. The first closing of the private placement occurred on February 14, 2019, while the second closingis contingent on satisfactory top-line immunogenicity results from the ongoing Phase 1/2a clinical trial for GEN-009, expected in late second quarter or earlythird quarter of 2019. Contingent on satisfactory top-line immunogenicity results from the ongoing Phase 1/2a clinical trial for GEN-009, we will have theoption to conduct a second closing and sell up to an additional $24.2 million of shares of common stock to the investors who participated in the first closing.Debt Financings55On April 24, 2018 (the “Closing Date”), we entered into an amended and restated loan and security agreement (the “2018 Loan Agreement”) with Hercules(renamed to Hercules Capital, Inc.), which provided up to $14.0 million in debt financing in the form of a term loan funded on the Closing Date (the “2018Term Loan”). The 2018 Loan Agreement amended and restated the 2014 Loan Agreement.The 2018 Term Loan will mature on May 1, 2021 and accrues interest at a floating rate per annum equal to the greater of (i) 7.75%, or (ii) the sum of 7.75%plus the prime rate minus 5.0%. The 2018 Loan Agreement provides for interest-only payments until June 1, 2019, which may be extended to December 1,2019 if certain performance milestones are met before May 31, 2019 and no event of default has occurred or is continuing. Interest-only payments may befurther extended to June 1, 2020 if certain additional performance milestones are met before November 30, 2019. Thereafter, amortization payments will bepayable monthly in equal installments of principal and interest (subject to recalculation upon a change in prime rates) upon expiration of the interest onlyperiod through maturity.The 2018 Term Loan may be prepaid in whole or in part upon seven business days’ prior written notice to Hercules, subject to a prepayment charge of 3.0%,if such advance is prepaid in any of the first twelve months following the Closing Date, 2.0%, if such advance is prepaid after twelve months following theClosing Date but on or prior to 24 months following the Closing Date, and 1.0% thereafter. We paid an end of term charge of $0.8 million in connection withthe 2014 Loan Agreement on January 1, 2019 and we are obligated to pay an additional end of term charge of 6.70% of the Term Loan when the Term Loanis repaid (the “End of Term Charges”).The 2018 Term Loan is secured by a lien on substantially all of our assets, other than intellectual property, provided that such lien on substantially all assetsincludes any rights to payments and proceeds from the sale, licensing, or disposition of intellectual property. The Loan Agreement contains non-financialcovenants and representations, including a financial reporting covenant, and limitations on dividends, indebtedness, collateral, investments, distributions,transfers, mergers or acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries. There are no financial covenants.Contemporaneously with the 2018 Loan Agreement, we also entered into an amendment to the equity rights letter agreement, dated November 20, 2014 (the“Amended Equity Rights Letter Agreement”). Pursuant to the Amended Equity Rights Letter Agreement, we had already issued to Hercules 223,463 shares ofthe Company’s Common Stock for an aggregate purchase price of approximately $2.0 million at a price per share equal to the closing price of our commonstock as reported on The Nasdaq Global Market on November 19, 2014. The shares will be subject to resale limitations and may be resold only pursuant to aneffective registration statement or an exemption from registration.Additionally, under the Amended Equity Rights Letter Agreement, Hercules has the right to participate in any one or more subsequent private placementequity financings of up to $2.0 million on the same terms and conditions as purchases by the other investors in each subsequent equity financing. TheAmended Equity Rights Letter Agreement, and all rights and obligations thereunder, will terminate upon the earlier of (1) such time when Hercules haspurchased $2.0 million of subsequent equity financing securities in the aggregate, or (2) the later of (a) the repayment of all indebtedness under the LoanAgreement, and (b) the expiration or termination of the exercise period for the warrant issued in connection with the Loan Agreement.In connection with the 2014 Term Loan, we issued a common stock warrant to Hercules on November 20, 2014 (the “First Warrant”). The First Warrant isexercisable for 73,725 shares of the Company’s Common Stock (equal to $607,500 divided by the exercise price of $8.24). The exercise price and the numberof shares is subject to adjustment upon a merger event, reclassification of the shares of Common Stock, subdivision or combination of the shares of CommonStock, or certain dividends payments. The First Warrant is exercisable until November 20, 2019 and will be exercised automatically on a net issuance basis ifnot exercised prior to the expiration date and if the then-current fair market value of one share of Common Stock is greater than the exercise price then ineffect. The First Warrant has been classified as equity for all periods it has been outstanding.In connection with the 2018 Loan Agreement, we issued a common stock warrant to Hercules on April 24, 2018, (the "Second Warrant"). The Second Warrantis exercisable for 329,411 shares of the Company’s common stock. The exercise price and the number of shares are subject to adjustment upon a mergerevent, reclassification of the shares of common stock, subdivision or combination of the shares of common stock, or certain dividends payments. The SecondWarrant is exercisable until April 24, 2023 and will be exercised automatically on a net-issuance basis if not exercised prior to the expiration date and if thethen-current fair market value of one share of common stock is greater than the exercise price then in effect.56Operating Capital RequirementsOur primary uses of capital are for compensation and related expenses, manufacturing costs for pre-clinical and clinical materials, third party clinicaltrial R&D services, laboratory and related supplies, clinical costs, legal and other regulatory expenses, and general overhead costs. We expect these costs willcontinue to be the primary operating capital requirements for the near future.We expect that our existing cash and cash equivalents, together with the approximately $14.2 million of net proceeds received from the February2019 private placement, are sufficient to support our operating expenses and capital expenditure requirements into the first quarter of 2020. As reflected inthe consolidated financial statements, we had available cash and cash equivalents of $26.4 million at December 31, 2018 and generated an additionalapproximately $14.2 million of net proceeds pursuant to the February 2019 private placement. In addition, we had a loss from operations of approximately$39.5 million and cash used in operating activities of $41.2 million for the year ended December 31, 2018. These factors, combined with our forecast of cashrequired to fund operations for a period of at least one year from the date of issuance of these financial statements, raise substantial doubt about our ability tocontinue as a going concern. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may useall of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development andcommercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future fundingrequirements will depend on many factors, including, but not limited to:•the timing and costs of our planned clinical trials for GEN-009;•the progress, timing, and costs of manufacturing GEN-009 for planned clinical trials;•the initiation, progress, timing, costs, and results of preclinical studies and clinical trials for our other product candidates and potential productcandidates;•the outcome, timing, and costs of seeking regulatory approvals, including an IND for GEN-011;•the costs of commercialization activities for GEN-009 and other product candidates, if we receive marketing approval, including the costs andtiming of establishing product sales, marketing, distribution, and manufacturing capabilities;•the receipt of marketing approval;•revenue received from commercial sales of our product candidates;•the terms and timing of any future collaborations, grants, licensing, consulting, or other arrangements that we may establish;•the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing,prosecution, defense and enforcement of any patents, or other intellectual property rights, including milestone payments, royalty payments, andpatent prosecution fees that we are obligated to pay pursuant to our license agreements;•the costs of preparing, filing, and prosecuting patent applications, maintaining and protecting our intellectual property rights, and defendingagainst intellectual property related claims; and•the extent to which we in-license or acquire other products and technologies.We will need to obtain substantial additional funding in order to complete clinical trials for GEN-009 and our other product candidates in order toreceive regulatory approval. To the extent that we raise additional capital through the sale of our common stock, convertible securities, or other equitysecurities, the ownership interests of our existing stockholders may be materially diluted and the terms of these securities could include liquidation or otherpreferences that could adversely affect the rights of our existing stockholders. In addition, debt financing, if available, would result in increased fixedpayment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additionaldebt, making capital expenditures, or declaring dividends, that could adversely affect our ability to conduct our business. If we are unable to raise capitalwhen needed or on attractive terms, we could be forced to significantly delay, scale back, or discontinue the development of GEN-009 or our other productcandidates, seek collaborators at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available, andrelinquish or license,57potentially on unfavorable terms, our rights to GEN-003, GEN-009, or our other product candidates that we otherwise would seek to develop orcommercialize ourselves.Cash FlowsThe following table summarizes our sources and uses of cash for the years ended December 31, 2018 and 2017 (in thousands): Years ended December 31, Increase 2018 2017 (Decrease)Net cash used in operating activities $(41,235) $(47,599) $(6,364)Net cash (used in) provided by investing activities (131) 34,909 (35,040)Net cash provided by (used in) financing activities 55,455 (2,461) 57,916Net increase (decrease) in cash and cash equivalents $14,089 $(15,151) $29,240Operating ActivitiesNet cash used in operations decreased $6.4 million to $41.2 million for the year ended December 31, 2018 from $47.6 million for the year endedDecember 31, 2017. The decrease in net cash used was due primarily to a lower net loss of approximately $28.9 million, as well as an increase in non-cashitems attributable to the change in fair value of the warrants of $14.8 million, partially offset by $2.1 million of non-cash expense associated with theallocation of proceeds from the Concurrent Offerings to transaction expenses. Other fluctuations included a decrease in depreciation of $0.4 million, adecrease in stock-based compensation of $2.1 million, a decrease in other non-current assets of $1.0 million, and a decrease in accounts payable and accruedexpenses of $5.9 million.Investing ActivitiesNet cash provided by investing activities decreased $35.0 million to $0.1 million of cash used in investing activities for the year endedDecember 31, 2018 compared to $34.9 million of cash provided by investing activities for the year ended December 31, 2017. The decrease in cash providedby investing activities was due to the receipt of proceeds from maturities of investments, net of investments made, of approximately $36.1 million for the yearended December 31, 2017, partially offset by a decrease in cash used to purchase capital equipment, as compared to the prior year.Financing ActivitiesNet cash provided by (used in) financing activities increased $58.0 million to $55.5 million for the year ended December 31, 2018 from net cashused by financing activities of $2.5 million of cash used in financing activities for the year ended December 31, 2017, primarily as a result of the proceedsfrom the Concurrent Offerings and the proceeds from the shares of common stock issued pursuant to our ATM facility.Off-Balance Sheet ArrangementsWe do not have any off-balance sheet arrangements.Net Operating Loss CarryforwardsAt December 31, 2018, we had United States federal and state net operating loss carryforwards of approximately $184.8 million and $171.1 million,respectively, which may be available to offset future income tax liabilities and expire at various dates through 2037. The federal net operating lossesgenerated in 2018 can be carried forward indefinitely. At December 31, 2018, we had federal and state R&D tax credit carryforwards of approximately $7.8million and $3.2 million available, respectively, to reduce future tax liabilities which expire at various dates through 2038.Net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state taxauthorities and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholdersover a three-year period in excess of 50%, as defined under Sections 382 and 383 of the United States Internal Revenue Code of 1986, as amended, as well assimilar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. Theamount of the annual limitation is determined based on the value of our company immediately prior to the ownership change. Subsequent ownership changesmay further affect the limitation in future years. At December 31, 2018, we recorded a 100% valuation allowance against our net operating loss and R&D taxcredit carryforwards, as we believe it is more likely than not that the tax benefits will not be fully realized. In the future, if we determine that a portion or all ofthe tax benefits associated with our tax carryforwards will be realized, net income would increase in the period of determination.JOBS ActIn April 2012, the JOBS Act was enacted in the United States. Section 107 of the JOBS Act provides that an “emerging growth company” can takeadvantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to privatecompanies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accountingstandards on the relevant dates on which adoption of such standards is required for non-emerging growth public companies.Item 7A. Qualitative and Quantitative Disclosures About Market RiskNot applicable.Item 8. Financial Statements and Supplementary DataOur consolidated financial statements, together with the report of our independent registered public accounting firm, appear beginning on page F-1of this Annual Report on Form 10-K.Item 9. Changes in and Disagreements with Accountants and Accounting and Financial DisclosureNot applicable.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file orsubmit under the Securities and Exchange Act of 1934 (the "Exchange Act") is (1) recorded, processed, summarized, and reported within the time periodsspecified in the SEC’s rules and forms, and (2) accumulated and communicated to our management, including our principal executive officer and principalfinancial officer, to allow timely decisions regarding required disclosure.Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of ourdisclosure controls and procedures as of December 31, 2018 (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our managementrecognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives,and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our principal executiveofficer and principal financial officer have concluded, based upon the evaluation described above that, as of December 31, 2018, our disclosure controls andprocedures were effective at the reasonable-assurance level.Management’s Annual Report on Internal Controls Over Financial Reporting58Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control overfinancial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our ChiefExecutive Officer, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of ourfinancial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles("GAAP"), and includes those policies and procedures that:(1)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;(2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance withGAAP, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and(3)provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets thatcould have a material effect on our financial statements.Under the supervision and with the participation of our management, including our Chief Executive Officer, we conducted an evaluation of theeffectiveness of our internal control over financial reporting based on the framework provided in Internal Control - Integrated Framework (2013) issued bythe Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this evaluation, our management concluded that our internalcontrol over financial reporting was effective as of December 31, 2018.Changes in Internal Control Over Financial ReportingDuring the quarter ended December 31, 2018, there have been no changes in our internal control over financial reporting, as such term is defined inRules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internalcontrol over financial reporting.Item 9B. Other InformationNone.59PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceOther than the information regarding our executive officers provided in Part I of this report under the heading“Business—Executive Officers of the Registrant,” the information required to be furnished pursuant to this item isincorporated herein by reference to our definitive proxy statement for the 2019 Annual Meeting of the Stockholders.Item 11. Executive and Director CompensationThe information required by this Item 11 is incorporated herein by reference from our definitive proxy statementfor the 2019 Annual Meeting of Stockholders.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe information required by this Item 12 is incorporated herein by reference from our definitive proxy statementfor the 2019 Annual Meeting of Stockholders.Item 13. Certain Relationships and Related Party Transactions and Director IndependenceThe information required by this Item 13 is incorporated herein by reference from our definitive proxy statementfor the 2019 Annual Meeting of Stockholders.Item 14. Principal Accountant Fees and ServicesThe information required by this Item 14 is incorporated herein by reference from our definitive proxy statementfor the 2019 Annual Meeting of Stockholders.60PART IVItem 15. Exhibits and Financial Statement SchedulesFinancial StatementsThe following financial statements and supplementary data are filed as a part of this Annual Report on Form 10-K.Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets as of December 31, 2018 and 2017Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2018 and 2017Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2018 and 2017Consolidated Statements of Cash Flows for each of the years ended December 31, 2018 and 2017Notes to Consolidated Financial StatementsItem 16. Form 10-K SummaryNone.Financial Statement SchedulesAll financial statement schedules are omitted because they are not applicable or the required information is included in the financial statements ornotes thereto.ExhibitsThose exhibits required to be filed by Item 601 of Regulation S-K are listed in the Exhibit Index immediately preceding the exhibits hereto and suchlisting is incorporated herein by reference.61Genocea Biosciences, Inc.Index to Financial Statements PagesReport of Independent Registered Public Accounting FirmF-2Consolidated Balance Sheets as of December 31, 2018 and 2017F-3Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2018 and 2017F-4Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2018 and 2017F-5Consolidated Statements of Cash Flows for each of the years ended December 31, 2018 and 2017F-6Notes to Consolidated Financial StatementsF-7F-1Report of Independent Registered Public Accounting FirmThe Board of Directors and Stockholders ofGenocea Biosciences, Inc.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Genocea Biosciences, Inc. (the Company) as of December 31, 2018 and 2017, the relatedconsolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for the years ended December 31, 2018 and2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all materialrespects, the consolidated financial position of the Company at December 31, 2018 and 2017, and the consolidated results of its operations and its cash flowsfor the years ended December 31, 2018 and 2017, in conformity with U.S. generally accepted accounting principles.The Company's Ability to Continue as a Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note1 to the financial statements, the Company has suffered recurring losses from operations, has a working capital deficiency, and has stated that substantialdoubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plansregarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from theoutcome of this uncertainty.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 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/ Ernst & Young LLPWe have served as the Company’s auditor since 2009Boston, MassachusettsFebruary 28, 2019F-2Genocea Biosciences, Inc.Consolidated Balance Sheets(In thousands, except per share data) December 31, 2018 December 31, 2017Assets Current assets: Cash and cash equivalents$26,361 $12,273Prepaid expenses and other current assets696 808Total current assets27,057 13,081Property and equipment, net2,582 3,460Restricted cash316 316Other non-current assets1,160 631Total assets$31,115 $17,488 Liabilities and stockholders’ equity (deficit) Current liabilities: Accounts payable$1,659 $3,516Accrued expenses and other current liabilities3,816 5,604Current portion of long-term debt5,257 6,659Total current liabilities10,732 15,779Non-current liabilities: Long-term debt, net of current portion and discount9,565 7,652Warrant liability3,472 —Other non-current liabilities11 107Total liabilities23,780 23,538Commitments and contingencies (Note 8) Stockholders’ equity (deficit): Preferred stock701 —Common stock, $0.001 par value;87 29Authorized – 250,000 shares; Issued – 86,771 and 28,735 shares at December 31, 2018 and December 31, 2017, respectively;outstanding – 86,771 and 28,735 at December 31, 2018 and December 31, 2017, respectively Additional paid-in-capital298,551 258,114Accumulated deficit(292,004) (264,193)Total stockholders’ equity (deficit)7,335 (6,050)Total liabilities and stockholders’ equity (deficit)$31,115 $17,488See accompanying notes to consolidated financial statements.F-3Genocea Biosciences, Inc.Consolidated Statements of Operations and Comprehensive Loss(In thousands, except per share data) Years Ended December 31, 2018 2017Operating expenses: Research and development$25,209 $39,204General and administrative14,309 13,433Restructuring costs— 2,618Total operating expenses39,518 55,255Loss from operations(39,518) (55,255)Other income (expense): Change in fair value of warrant14,757 —Interest expense, net(1,021) (1,441)Other income (expense)(2,029) (14)Total other income (expense)11,707 (1,455)Net loss$(27,811) $(56,710) Comprehensive loss$(27,811) $(56,710)Net loss per share - basic and diluted$(0.34) $(1.98)Weighted-average number of common shares used in computing net loss per share82,561 28,603See accompanying notes to consolidated financial statements.F-4Genocea Biosciences, Inc.Consolidated Statements of Stockholders’ Equity (Deficit)(In thousands) Total Preferred Additional Other Stockholders’ Common Shares Shares Paid-In Comprehensive Accumulated Equity Shares Amount Amount Capital Loss Deficit (Deficit)Balance at December 31, 201628,445 28 — 252,996 — (207,483) 45,541Issuance of common stock, net of issuancecosts of $152 1 — 245 — — 246Issuance of common Stock; ESPP purchase73 — — 180 — — 180Exercise of stock options163 — — 459 — — 459Vesting of restricted stock2 — — — — — —Stock-based compensation expense— — — 4,234 — — 4,234Net loss— — — — — (56,710) (56,710)Balance at December 31, 201728,735 29 — 258,114 — (264,193) (6,050)Issuance of common stock, net of issuancecosts of $157,849 58 701 38,027 — — 38,786Issuance of common stock; ESPP purchase187 — — 67 — — 67Stock-based compensation expense— — — 2,153 — — 2,153Issuance of warrants in connection with debtmodification———190——190Net loss— — — — — (27,811) (27,811)Balance at December 31, 201886,771 $87 $701 $298,551 $— $(292,004) $7,335See accompanying notes to consolidated financial statements.F-5Genocea Biosciences, Inc.Consolidated Statements of Cash Flows(In thousands) Years Ended December 31, 2018 2017Operating activities Net loss$(27,811) $(56,710)Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization1,088 1,516Stock-based compensation2,153 4,234Allocation of proceeds to transaction expenses2,115 —Change in fair value of warrant liability(14,757) —Gain on sale of equipment(78) (22)Write-off of deferred financing fees355 —Non-cash interest expense643 502Asset impairment— 1,028Changes in operating assets and liabilities Prepaid expenses and other current assets53 12Other non-current assets(989) (14)Accounts payable(2,103) 491Accrued expenses and other liabilities(1,904) 1,364Net cash used in operating activities(41,235) (47,599)Investing activities Purchases of property and equipment(241) (1,178)Proceeds from sale of equipment110 150Proceeds from maturities of investments— 36,090Purchases of investments— (153)Net cash (used in) provided by investing activities(131) 34,909Financing activities Proceeds from equity offerings, net of issuance costs2,920 246Proceeds from underwritten public offering, net of issuance costs52,538 —Payment of deferred financing costs(127) (197)Proceeds from long-term debt592 —Repayment of long-term debt(535) (3,149)Proceeds from exercise of stock options— 459Proceeds from the issuance of common stock under ESPP67 180Net cash provided by (used in) financing activities55,455 (2,461)Net increase (decrease) in cash and cash equivalents$14,089 $(15,151)Cash, cash equivalents and restricted cash at beginning of period12,589 27,740Cash, cash equivalents and restricted cash at end of period$26,678 $12,589Supplemental cash flow information Cash paid for interest$1,074 $1,189Warrants issued in connection with debt modification$190 $—See accompanying notes to consolidated financial statements.F-6Genocea Biosciences, Inc.Notes to Consolidated Financial Statements1. Organization and operationsThe CompanyGenocea Biosciences, Inc. (the “Company”) is a biopharmaceutical company that was incorporated in Delaware on August 16, 2006 and has aprincipal place of business in Cambridge, Massachusetts. The Company seeks to discover and develop novel cancer immunotherapies through its AnTigenLead Acquisition System ("ATLAS"TM) proprietary discovery platform. The ATLAS platform is designed to recall a patient's pre-existing CD4+ and CD8+ Tcell immune responses to their tumor to identify neoantigens and antigens for inclusion in vaccines that are designed to act through T cell (or cellular)immune responses. The Company believes that using ATLAS to identify neoantigens and antigens for inclusion in cancer vaccines could lead to moreimmunogenic and efficacious cancer immunotherapies relative to the Company's peers, who rely on software and processes such as "machine learning" topredict immunotherapy targets.The Company’s most advanced program is GEN-009, a neoantigen (or personalized) cancer vaccine, for which it is conducting a Phase 1/2a clinicaltrial. The GEN-009 program uses ATLAS to identify neoantigens, or newly formed tumor mutations unique to each patient, for inclusion in each patient'sGEN-009 vaccine. The Company is also advancing GEN-011, a neoantigen adoptive T cell therapy program as well as GEN-010, a next-generationneoantigen vaccine program.The Company is devoting substantially all of its efforts to product research and development, initial market development, and raising capital. TheCompany has not generated any product revenue related to its primary business purpose to date and is subject to a number of risks similar to those of otherpreclinical stage companies, including dependence on key individuals, competition from other companies, the need and related uncertainty associated to thedevelopment of commercially viable products, and the need to obtain adequate additional financing to fund the development of its product candidates. TheCompany is also subject to a number of risks similar to other companies in the life sciences industry, including the uncertainty of success of its preclinicaland clinical trials, regulatory approval of products, uncertainty of market acceptance of products, competition from substitute products and larger companies,the need to obtain additional financing, compliance with government regulations, protection of proprietary technology, dependence on third-parties, productliability, and dependence on key individuals.Operating Capital RequirementsUnder Accounting Standards Update ("ASU"), 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), also referred to asAccounting Standards Update 205-40 (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantialdoubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. Asrequired by ASC 205-40, this evaluation shall initially not take into consideration the potential mitigating effects of plans that have not been fullyimplemented as of the date the financial statements are issued. Management has assessed the Company’s ability to continue as a going concern in accordancewith the requirement of ASC 205-40.As reflected in the consolidated financial statements, the Company had available cash and cash equivalents of $26.4 million at December 31, 2018.In addition, the Company had a loss from operations of approximately $39.5 million and cash used in operating activities of $41.2 million for the year endedDecember 31, 2018. These factors, combined with the Company’s forecast of cash required to fund operations for a period of at least one year from the date ofissuance of these consolidated financial statements, raise substantial doubt about the Company’s ability to continue as a going concern.In February 2019, the Company entered into a private placement with certain existing and new investors providing for the purchase of up toapproximately $39.2 million of the Company's common stock and warrants to purchase shares of the Company's common stock, in two closings. In the firstclosing, the Company sold 25.6 million shares of common stock and 4.25 million pre-funded warrants to purchase common stock, along with accompanyingwarrants to purchase 0.25 shares of common stock for each share of common stock or pre-funded warrant purchased, for net proceeds to the Company ofapproximately $14.2 million, after deducting approximately $0.8 million in placement agent fees, excluding offering costs. The first closing of the privateplacement occurred on February 14, 2019, while the second closing is contingent on satisfactory top-line immunogenicity results from the ongoing Phase1/2a clinical trial for GEN-009, expected in late second quarter or early third quarter of 2019. Contingent on satisfactory top-line immunogenicity resultsfrom the ongoing Phase 1/2a clinical trial forF-7GEN-009, Genocea will have the option to conduct a second closing and sell up to an additional $24.2 million of shares of common stock to the investorswho participated in the first closing..The Company plans to continue to fund its operations through public or private equity offerings, strategic transactions, proceeds from sales of itscommon stock under its at-the-market equity offering program, its loan and security agreement with Hercules Capital, Inc. ("Hercules"), or by other means.However, adequate additional financing may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital whenneeded, or on attractive terms, it may be forced to implement further cost reduction strategies, including ceasing development of GEN-009 and othercorporate activities.The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets andsatisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to therecoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of thisuncertainty.2. Summary of significant accounting policiesPrinciples of ConsolidationThe consolidated financial statements include the accounts of Genocea Biosciences, Inc., and a wholly-owned subsidiary. All inter-companyaccounts and transactions have been eliminated.Basis of presentation and use of estimatesThe accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States ofAmerica (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accountingprinciples as found in the Accounting Standards Codification and Accounting Standards Update of the Financial Accounting Standards Board (“FASB”). Thepreparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in thefinancial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limitedto, estimates related to clinical trial accruals, estimates related to prepaid and accrued research and development expenses, stock-based compensationexpense, and warrants to purchase redeemable securities. The Company bases its estimates on historical experience and other market-specific or otherrelevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.Segment informationOperating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chiefoperating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company and the Company’schief operating decision maker view the Company’s operations and manage its business in one operating segment, which is the business of developing andcommercializing cancer vaccines. The Company operates in only one geographic segment.Cash, cash equivalents and investments The Company determines the appropriate classification of its investments at the time of purchase. All liquid investments with original maturities of90 days or less from the purchase date are considered to be cash equivalents.Concentrations of credit risk and off-balance sheet riskFinancial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company’scash and cash equivalents are held in accounts with financial institutions that management believes are credit-worthy. The Company’s investment policyincludes guidelines on the quality of the institutions, financial instruments, and defines allowable investments that the Company believes minimizes theexposure to concentration of credit risk. These amounts at times may exceed federally insured limits. The Company has not experienced any credit losses insuch accounts and does not believe it is exposed to any significant credit risk on these funds. The Company has no financial instruments with off-balancesheet risk of loss. Deferred financing costsF-8Offering costs related to debt and equity financing primarily consist of direct and incremental external expenses. In accordance with ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), the Company presents debtissuance costs related to a recognized debt liability in the balance sheet as a direct deduction of the carrying value of the debt liability, consistent with theaccounting treatment of debt discounts. The amortization of deferred debt financing costs follows the effective interest rate method.Offering costs related to registration statements and the initiation of the at-the-money ("ATM") equity offering program are recorded as an asset andare reclassified to equity on a pro-rata basis based upon the successful selling of common shares compared to the available limits in either equity program.The costs are reviewed for impairment and will be recorded to expense if, or when, the Company determines that future equity offerings are not probable ofoccurring. In the second quarter, the Company evaluated the deferred financing costs remaining from the May 2015 S-1 and determined the costs to beimpaired, and thus the costs were expensed accordingly. At December 31, 2018 and 2017, the Company had $110 thousand and $571 thousand of deferredoffering costs, respectively, recorded as Other non-current assets.Fair value of financial instrumentsThe Company is required to disclose information on all assets and liabilities reported at fair value that enable an assessment of the inputs used indetermining the reported fair values. FASB ASC Topic 820, Fair Value Measurement and Disclosures (“ASC 820”), established a hierarchy of inputs used inmeasuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs beused when available. Observable inputs are inputs that market participants would use in pricing the financial instrument based on market data obtained fromsources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants woulduse in pricing the financial instrument and are developed based on the best information available in the circumstances. The fair value hierarchy applies onlyto the valuation inputs used in determining the reported or disclosed fair value of the financial instruments and is not a measure of the investment creditquality. Fair value measurements are classified and disclosed in one of the following three categories:•Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the abilityto access at the measurement date.•Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputsare observable, either directly or indirectly.•Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurementand unobservable.To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair valuerequires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized inLevel 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair valuemeasurement.Financial instruments measured at fair value on a recurring basis include cash equivalents and investments (Note 3).An entity may elect to measure many financial instruments and certain other items at fair value at specified election dates. Subsequent unrealizedgains and losses on items for which the fair value option has been elected will be reported in net loss. The Company did not elect to measure any additionalfinancial instruments or other items at fair value. The Company is also required to disclose the fair value of financial instruments not carried at fair value. Thefair value of the Company’s long-term debt (Note 6) is determined using current applicable rates for similar instruments as of the balance sheet dates andassessment of the credit rating of the Company. The carrying value of the Company’s long-term debt approximates fair value because the Company’s interestrate yield is near current market rates. The Company’s long-term debt is considered a Level 3 liability within the fair value hierarchy.There have been no changes to the valuation methods utilized by the Company during the years ended December 31, 2018 and 2017.Derivative InstrumentsThe Company occasionally issues financial instruments in which a derivative instrument is “embedded”. Upon issuing the financial instrument, theCompany assesses whether the economic characteristics of the embedded derivative are clearlyF-9and closely related to the economic characteristics of the remaining component of the financial instrument (i.e., the host contract) and whether a separate,non-embedded instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When it is determined that(1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract,and (2) a separate, stand-alone instrument with the same terms would qualify as a derivative instrument, the embedded derivative is separated from the hostcontract and carried at fair value with any changes in fair value recorded in current period earnings.In connection with the 2014 Loan Agreement, as amended, and the amended and restated 2018 Loan Agreement (Note 6), the Company assessed allterms and features of the agreement that may required bifurcation. The Company determined that all features of the agreements either did not requirebifurcation as required under FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”), or the fair value of the feature was immaterial to the Company'sfinancial statements.Property and equipmentProperty and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs that do not improve or extend the lives of therespective assets are expensed to operations as incurred, while costs of major additions and betterments are capitalized. Upon disposal, the related cost andaccumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statements of operations and comprehensive loss.Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are as follows:Asset Estimated useful lifeLaboratory equipment 5Furniture and office equipment 5Computer hardware and software 3-5 yearsLeasehold improvements Shorter of the useful life or remaining lease termDevelopment of Software for Internal UseThe Company accounts for the costs of software developed or obtained for internal use in accordance with ASC 350-40, Internal-Use Software.Costs of materials, consultants, payroll, and payroll-related costs for employees incurred in developing internal-use software are capitalized as incurred.These costs are included in property and equipment, net on the consolidated balance sheet. Costs incurred during the preliminary project and post-implementation stages are charged to expense. Amortization is recorded using the straight-line method over the estimated useful lives of the respective assetwhich is three to five years.Impairment of long-lived assetsThe Company evaluates long-lived assets for potential impairment when events or changes in circumstances indicate the carrying value of the assetsmay not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that theassets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the bookvalue of the assets exceed their fair value. The Company recognized no asset impairment losses in the year ended December 31, 2018. The Companyrecognized $1.0 million of asset impairment losses in the year ended December 31, 2017 related to the September 2017 announcement of its strategic shift toimmuno-oncology and a focus on the development of neoantigen cancer vaccines.Revenue recognitionThe Company has generated revenue solely through research and development grants with private not-for-profit organizations and federal agenciesfor the development and commercialization of product candidates.Periodically, the Company receives grants from private not-for-profit organizations and federal agencies to conduct vaccine development research.Funds received in advance of services being performed are recorded as deferred revenue. Revenue under these grants is recognized as research services areperformed.Research and development expensesF-10Research and development costs are charged to expense as incurred in performing research and development activities. The costs include employeecompensation costs, facilities and overhead, clinical study and related clinical manufacturing costs, regulatory and other related costs.Nonrefundable advanced payments for goods or services to be received in the future for use in research and development activities are deferred andcapitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.Stock-based compensation expenseThe Company accounts for its stock-based compensation awards to employees and directors in accordance with FASB ASC Topic 718,Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, including grants of employee stock options andrestricted stock, to be recognized in the statements of operations and comprehensive loss based on their grant date fair values. Compensation expense relatedto awards to employees is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which isgenerally the vesting term. Share-based payments issued to non-employees are recorded at their fair values and are periodically revalued as the equityinstruments vest and are recognized as expense over the related service period in accordance with the provisions of ASC 718 and FASB ASC Topic 505,Equity, and are expensed using an accelerated attribution model.The Company estimates the fair value of its stock options using the Black-Scholes option pricing model, which requires the input of subjectiveassumptions, including (a) the expected volatility of the Company’s stock price, (b) the expected term of the award, (c) the risk-free interest rate, (d) expecteddividends, and (e) the estimated fair value of the Company’s common stock on the measurement date. Due to the limited operating history of the Company asa public entity and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on thehistorical volatility of a group of similar companies that are publicly traded. When selecting these public companies on which it has based its expected stockprice volatility, the Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, position within the industry,and with historical share price information sufficient to meet the expected term of the stock-based awards. The Company computes historical volatility datausing the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. TheCompany will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomesavailable. Due to the lack of Company-specific historical option activity, the Company has estimated the expected term of its employee stock options usingthe “simplified” method, whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the option. Theexpected term for non-employee awards is the remaining contractual term of the option. The risk-free interest rates are based on the U.S. Treasury securitieswith a maturity date commensurate with the expected term of the associated award. The Company has never paid, and does not expect to pay dividends in theforeseeable future.The Company recognizes forfeitures as they occur. Stock-based compensation expense recognized in the consolidated financial statements is basedon awards that ultimately vest.Income taxesIncome taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an assetand liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and thetax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences areexpected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likelythan not that the deferred tax assets will be realized. The Company has evaluated available evidence and concluded that the Company may not realize thebenefit of its deferred tax assets; therefore, a valuation allowance has been established for the full amount of the deferred tax assets.The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Companyrecognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefitwill more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.As of December 31, 2018 and 2017, the Company does not have any significant uncertain tax positions. The Company’s policy is to recognize interestand/or penalties related to income tax matters in income tax expense.Earnings per shareF-11The Company computes basic and diluted earnings (loss) per share using a methodology that gives effect to the impact of outstanding participatingsecurities (the “two-class method”). For the years ended December 31, 2018 and 2017, there is no income allocation required under the two-class method ordilution attributed to weighted average shares outstanding in the calculation of diluted loss per share.Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding during the period, withoutconsideration for common stock equivalents.Diluted earnings (loss) per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalentsoutstanding for the period, determined using the treasury-stock and if-converted methods. For purposes of the diluted net income (loss) per share calculation,preferred stock, stock options, unvested restricted stock, and warrants are considered to be common stock equivalents but have been excluded from thecalculation of diluted net income (loss) per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per sharewere the same for all periods presented.The following common stock equivalents, presented on an as converted basis, were excluded from the calculation of net loss per share for theperiods presented, due to their anti-dilutive effect (in thousands): Years ended December 31, 2018 2017Stock options 7,139 4,129Preferred stock 2 —Restricted stock units — 24Warrants 29,343 78Outstanding ESPP 2,313 —Total 38,797 4,231Comprehensive lossComprehensive loss consists of net loss and changes in equity during a period from transactions and other events and circumstances generated fromnon-owner sources. For all periods presented other comprehensive income (loss), if any, consists of unrealized gains and losses on the Company’sinvestments.F-12Recently Adopted Accounting StandardsStandard Description Effect on the financial statementsASU No. 2014-09, Revenuefrom Contracts withCustomers (Topic 606)In May 2014, the FASB issued new revenue guidance under ASUNo. 2014-09, Revenue from Contracts with Customers (Topic606). The standard replaces existing revenue recognitionstandards and significantly expand the disclosure requirements forrevenue arrangements. It may be adopted either retrospectively oron a modified retrospective basis to new contracts and existingcontracts with remaining performance obligations as of theeffective date.ASU No. 2014-09 is effective for annual reporting periods, andinterim periods therein, beginning after December 15, 2017. The Company adopted ASU No. 2014-09 asof January 1, 2018. The adoption of ASUNo. 2014-09 did not impact the Company'sconsolidated financial statements as theCompany does not currently have anycontracts with customers.ASU No. 2016-15, Statementof Cash Flows: Classificationof Certain Cash Receipts andCash Payments In August 2016 the FASB issued ASU No. 2016-15, Statement ofCash Flows: Classification of Certain Cash Receipts and CashPayments (“ASU No. 2016-15”). This guidance addresses thepresentation and classification of certain cash receipts and cashpayments in the statement of cash flows.The standard is effective for annual periods beginning afterDecember 15, 2017 and for interim periods within those fiscalyears. Early adoption is permitted. The Company adopted ASU No. 2016-15effective January 1, 2018. The adoption ofASU No. 2016-15 did not have a materialimpact on the Company’s consolidatedfinancial statements.ASU No. 2016-18, Statementof Cash Flows (Topic 230):Restricted Cash In November 2016, the FASB issued ASU 2016-18, which requiresadditional disclosures related to restricted cash. The new standardrequires that amounts generally described as restricted cash andrestricted cash equivalents be included with cash and cashequivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.ASU No. 2016-18 is effective for fiscal years, and interim periodswithin those years, beginning after December 15, 2017. The Company adopted the standard onJanuary 1, 2018 and reclassified $0.3million of restricted cash to be includedwith cash and cash equivalents on theconsolidated statement of cash flows.ASU No. 2017-09,Compensation-StockCompensation (Topic 718) In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of ModificationAccounting (“ASU No. 2017-09”). This update clarifies thechanges to terms or conditions of a share-based payment awardthat require an entity to apply modification accounting.ASU No. 2017-09 is effective for annual reporting periods, andinterim periods therein, beginning after December 15, 2017. Earlyapplication is permitted, and prospective application is required. The Company adopted ASU No. 2017-09effective January 1, 2018. The adoption ofASU No. 2017-09 did not have a materialimpact on the Company’s consolidatedfinancial statements.F-13Recently issued accounting standardsStandard Description Effect on the financial statementsASU No. 2016-02, Leases (Topic 842) In February 2016, the FASB established Topic 842, Leases, byissuing ASU No. 2016-02, which requires lessees to recognizeleases on-balance sheet and disclose key information about leasingarrangements. Topic 842 was subsequently amended by ASU No.2018-01, Land Easement Practical Expedient for Transition toTopic 842; ASU No. 2018-10, Codification Improvements to Topic842, Leases; and ASU No. 2018-11, Targeted Improvements. Thenew standard establishes a right-of-use model ("ROU") that requiresa lessee to recognize a ROU asset and lease liability on the balancesheet for all leases with a term longer than 12 months. Leases willbe classified as finance or operating, with classification affectingthe pattern and classification of expense recognition in the incomestatement.The new standard is effective for us on January 1, 2019, with earlyadoption permitted. We expect to adopt the new standard on itseffective date. A modified retrospective transition approach isrequired, applying the new standard to all leases existing at the dateof initial application. An entity may choose to use either (1) itseffective date or (2) the beginning of the earliest comparativeperiod presented in the financial statements as its date of initialapplication. If an entity chooses the second option, the transitionrequirements for existing leases also apply to leases entered intobetween the date of initial application and the effective date. Theentity must also recast its comparative period financial statementsand provide the disclosures required by the new standard for thecomparative periods. We expect to adopt the new standard onJanuary 1, 2019 and use the effective date as our date of initialapplication. Additionally, consistent with the prospective methodof adoption, we will apply the transition provisions beginning withthe period of adoption (January 1, 2019). We will continue to applythe ASC 840 legacy guidance, including disclosure requirements,in the comparative periods presented in the year of adoption.The new standard provides a number of optional practicalexpedients in transition. The Company generally does not financepurchases of equipment, but it does lease officeand lab facilities. The Company is finalizing itsassessment of effects of adoption of Topic 842,and believes the most significant effects will relateto (1) the recognition of new ROU assets and leaseliabilities on the balance sheet for operatingleases; and (2) providing significant newdisclosures about our leasing activities.The new standard provides practical expedientsfor an entity's ongoing accounting. The Companyexpects to elect the short-term lease recognitionexemption for all leases that qualify and thepractical expedient to not separate lease and non-lease components for all leases. The Companyalso expects to elect the 'package of practicalexpedients', which permits the Company not toreassess under the new standard the priorconclusions about lease identification, leaseclassification and initial direct costs.On adoption, the Company currently expects torecognize ROU assets and related liabilitiesranging from $1.5 million to $2.0 million.ASU No. 2018-07,Compensation-StockCompensation (Topic 718):Improvements to NonemployeeShare-Based PaymentAccounting In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to NonemployeeShare-Based Payment Accounting. The new standard largely alignsthe accounting for share-based payment awards issued toemployees and nonemployees by expanding the scope of ASC 718to apply to nonemployee share-based transactions, as long as thetransaction is not effectively a form of financing.The new guidance will be effective for the Company on January 1,2019. The Company is currently evaluating thepotential impact that this guidance may have onits consolidated financial statements.F-14ASU 2018-13,Fair Value Measurement (Topic820): Disclosure Framework—Changes to the DisclosureRequirements for Fair ValueMeasurement In August 2018, the FASB issued ASU 2018-13,Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair ValueMeasurement which requires public entities to disclose certain newinformation and modifies some disclosure requirements.The new guidance will be effective for fiscal years beginning after15 December 2019 and for interim periods within those fiscal years. The Company is currently evaluating thepotential impact that this guidance may have onits consolidated financial statements.ASU 2018-15, Intangibles -Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting forImplementation Costs Incurredin a Cloud ComputingArrangement That Is a ServiceContract. In August 2018, the FASB issued ASU 2018-15, Intangibles -Goodwill and Other - Internal-Use Software (Subtopic 350-40):Customer’s Accounting for Implementation Costs Incurred in aCloud Computing Arrangement That Is a Service Contract. ASU2018-15 requires a customer in a cloud computing arrangement thatis a service contract to follow the internal-use software guidance inAccounting Standards Codification 350-40 to determine whichimplementation costs to defer and recognize as an asset.The new guidance will be effective for annual periods, and interimperiods within those annual periods, beginning after 15 December2019. The Company is currently evaluating thepotential impact that this guidance may have onits consolidated financial statements.3. Cash and cash equivalentsAs of December 31, 2018 and 2017, cash and cash equivalents was comprised of funds in depositary and money market funds. The following table presents cash equivalents carried at fair value in accordance with the hierarchy defined in Note 2 (in thousands): Total Quoted pricesin activemarkets(Level 1) Significantotherobservableinputs(Level 2) Significantunobservableinputs(Level 3)December 31, 2018 Money market funds, included in cash equivalents$24,651 $24,651 $— $—Total$24,651 $24,651 $— $— December 31, 2017 Money market funds, included in cash equivalents$11,528 $11,528 $— $—Total$11,528 $11,528 $— $—Cash equivalents have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. The Company validates the prices provided by its third-party pricing services byreviewing their pricing methods and obtaining market values from other pricing sources. After completing its validation procedures, the Company did notadjust any fair value measurements provided by the pricing services as of December 31, 2018 and 2017.In connection with an underwritten public offering of common and preferred stock in January 2018 (see Note 7), the Company issued Class Awarrants (the “Warrants”) to purchase shares of the Company’s common stock, classified as liabilities in the consolidated balance sheets. The Warrants wererecorded at their fair value on the date of issuance and are remeasured as of any Warrant exercise date and at the end of each reporting period. Decreases in fairvalue of the warrant liability are recorded in the statement of operations as income, while increases in fair value of the warrant liability are recorded in thestatement of operations as expense.F-15As of the issuance dates of the Warrants, as well as at December 31, 2018, the Company utilized an option-based methodology to value the Warrantscombined with a multi-scenario analysis, specifically a Monte Carlo simulation, to model the future movement of the stock price throughout the term of theWarrants. In addition, the valuation model considers the probability of the Company being acquired during each annual period within the Warrant term, as anacquisition event can potentially impact the settlement of the Warrants.The assumptions used in calculating the estimated fair value of the Warrants represent the Company’s best estimates and include probabilities ofsettlement scenarios, future changes in the Company’s stock price, risk-free interest rates and volatility. The estimates are based, in part, on subjectiveassumptions and could differ materially in the future.The following table details the assumptions used in the Monte Carlo simulation models used to estimate the fair value of the Warrants at issuanceand as of December 31, 2018: Issuance Date December 31, 2018Stock Price $0.89 $0.29Volatility 111.5% 111.3%Remaining term (years) 5 4.1Expected dividend yield —% —%Risk-free rate 2.4% - 2.5% 2.4% - 2.5%Range of annual acquisition event probability 0.0% - 30.0% 0.0% - 30.0%The following table reflects the change in the Company’s Level 3 Warrants from issuance through December 31, 2018 Common Stock Warrant LiabilitiesIssuance of Warrants $18,231Change in fair value (14,757)Warrants exercised (2)Balance at December 31, 2018 $3,472In connection with the underwritten public offering, the Company also granted the underwriters a 30-day option to purchase additional shares ofcommon stock and/or additional Warrants (the "Overallotment Option"). The Company’s Overallotment Option is also a Level 3 liability.The following table reflects the change in the fair value of the Overallotment Option liability from issuance through the date of expiration: Overallotment Option LiabilityIssuance of Overallotment Option $2,441Change in fair value 194Exercise of Overallotment Option (877)Expiration of Overallotment Option in March 2018 (1,758)Balance at December 31, 2018 $—Given the short-term duration of the Overallotment Option, the Company estimated its fair value was representative of the intrinsic value of therelated Warrants, based on the estimated fair value of the Warrants at issuance and the exercise price of the Overallotment Option.4. Property and equipment, netProperty and equipment, net consist of the following (in thousands):F-16 December 31, 2018 2017Laboratory equipment$3,761 $3,771Furniture office equipment447 447Computer hardware338 315Leasehold improvements1,524 1,524Internally developed software1,970 1,970Total property and equipment8,040 8,027Accumulated depreciation(5,458) (4,567)Property and equipment, net$2,582 $3,460Depreciation expense was $0.7 million and $1.2 million, for the years ended December 31, 2018 and 2017, respectively. A portion of the Company'sinternally developed computer software was placed into service during 2017 and $288 thousand of amortization was recorded for the year endedDecember 31, 2017. For the year ended December 31, 2018, $399 thousand of amortization was recorded.5. Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2018 2017Payroll and employee-related costs$2,147 $1,830Restructuring costs— 44Research and development costs759 2,886Other current liabilities910 844Total$3,816 $5,6046. Long-term debt On April 24, 2018 (the “Closing Date”), the Company entered into an amended and restated loan and security agreement (the “2018 LoanAgreement”) with Hercules Capital, Inc. (f/k/a Hercules Technology Growth Capital, Inc.) (“Hercules”), which provided up to $14.0 million in debt financingin the form of a term loan funded on the Closing Date (the “2018 Term Loan”). The 2018 Loan Agreement amended and restated the Company’s loan andsecurity agreement (as amended, the “2014 Loan Agreement”) with Hercules, which had provided up to $27.0 million in debt financing (the “2014 TermLoan”). The Company accounted for the amendment as a modification to the loan.The 2018 Term Loan will mature on May 1, 2021 and accrues interest at a floating rate per annum equal to the greater of (i) 7.75%, or (ii) the sum of7.75% plus the prime rate minus 5.0%. The 2018 Loan Agreement provides for interest-only payments until June 1, 2019, which may be extended toDecember 1, 2019 if certain performance milestones are met before May 31, 2019 and no event of default has occurred or is continuing. Interest-onlypayments may be further extended to June 1, 2020 if certain additional performance milestones are met before November 30, 2019. Thereafter, amortizationpayments will be payable monthly in equal installments of principal and interest (subject to recalculation upon a change in prime rates) upon expiration ofthe interest only period through maturity.The 2018 Term Loan may be prepaid in whole or in part upon seven business days’ prior written notice to Hercules,subject to a prepayment charge of 3.0%, if such advance is prepaid in any of the first twelve months following the Closing Date, 2.0%, if such advance isprepaid after twelve months following the Closing Date but on or prior to 24 months following the Closing Date, and 1.0% thereafter. The Company paid anend-of-term charge of $0.8 million in connection with the 2014 Loan Agreement on January 1, 2019 and is obligated to pay an additional end of term chargeof 6.70% of the Term Loan when the Term Loan is repaid (the “End of Term Charges”). The 2018 Term Loan is secured by a lien on substantially all assets of the Company, other than intellectual property,provided that such lien on substantially all assets includes any rights to payments and proceeds from the sale, licensing ordisposition of intellectual property. The Loan Agreement contains non-financial covenants and representations, including aF-17financial reporting covenant, and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions, taxes,corporate changes, deposit accounts, and subsidiaries. There are no financial covenants. As of December 31, 2018, the Company was in compliance with allcovenants of the 2018 Loan Agreement.Under the provisions of the 2014 Loan Agreement and the 2018 Loan Agreement, the Company has also entered intoaccount control agreements ("ACAs") with Hercules and certain of the Company's financial institutions in which cash, cashequivalents, and investments are held. These ACAs grant Hercules a perfected first-priority security interest in the subjectaccounts. The ACAs do not restrict the Company's ability to utilize cash, cash equivalents, or investments to fund operations and capital expenditures unlessthere is an event of default and Hercules activates its rights under the ACAs.The 2018 Loan Agreement contains a material adverse effect ("Material Adverse Effect") provision that requires all material adverse effects to bereported under the financial reporting covenant. Loan advances are subject to a representation that no event that has had, or could reasonably be expected tohave, a Material Adverse Effect has occurred and is continuing. Under the Loan Agreement, a Material Adverse Effect means a material adverse effect upon:(i) the business, operations, properties, assets, or condition (financial or otherwise) of the Company; or (ii) the ability of the Company to perform the securedobligations in accordance with the terms of the loan documents, or the ability of agent or lender to enforce any of its rights or remedies with respect to thesecured obligations; or (iii) the collateral or agent’s liens on the collateral or the priority of such liens. Any event that has a Material Adverse Effect or wouldreasonably be expected to have a Material Adverse Effect is an event of default under the Loan Agreement and repayment of amounts due under the LoanAgreement may be accelerated by Hercules under the same terms as an event of default. As of December 31, 2018 no such events had occurred that wouldotherwise qualify to be reported, per the terms of the Material Adverse Effect provision.Events of default under the Loan Agreement include failure to make any payments of principal or interest as due on any outstanding indebtedness,breach of any covenant, any false or misleading representations or warranties, insolvency or bankruptcy, any attachment or judgment on the Company’sassets of at least $100 thousand, or the occurrence of any material default of the Company involving indebtedness in excess of $100 thousand. If an event ofdefault occurs, repayment of all amounts due under the Loan Agreement may be accelerated by Hercules, including the applicable prepayment charge.The 2018 Term Loan is automatically redeemable upon a change in control. The Company must prepay the outstanding principal and any accruedand unpaid interest through the prepayment date and the applicable prepayment charge. If a change in control occurs, repayment of amounts due under theLoan Agreement may be accelerated by Hercules. The Company believes acceleration of the repayment of amounts outstanding under the loan is remote, andtherefore the debt balance is classified according to the contractual payment terms at December 31, 2018.In connection with the 2014 Term Loan, the Company issued a common stock warrant to Hercules on November 20, 2014 (the “First Warrant”). TheFirst Warrant is exercisable for 73,725 shares of the Company’s Common Stock (equalto $607,500 divided by the exercise price of $8.24). The exercise price and the number of shares are subject to adjustment upon a merger event,reclassification of the shares of Common Stock, subdivision or combination of the shares of Common Stock orcertain dividends payments. The First Warrant is exercisable until November 20, 2019 and will be exercised automatically on a net issuance basis if notexercised prior to the expiration date and if the then-current fair market value of one share of Common Stock is greater than the exercise price then in effect.The First Warrant has been classified as equity for all periods it has beenoutstanding.In connection with the 2018 Loan Agreement, the Company issued a common stock warrant to Hercules on April 24, 2018 (the "Second Warrant").The Second Warrant is exercisable for 329,411 shares of the Company’s common stock at an initial excise price of $0.85 per share. The exercise price and thenumber of shares are subject to adjustment upon a merger event, reclassification of the shares of common stock, subdivision or combination of the shares ofcommon stock or certain dividends payments. The Second Warrant is exercisable until April 24, 2023 and will be exercised automatically on a net issuancebasis if not exercised prior to the expiration date and if the then-current fair market value of one share of common stock is greater than the exercise price thenin effect.In connection with the 2018 Loan Agreement, on April 24, 2018, the Company also entered into an amendment to the equity rights letter agreement,dated November 20, 2014 (the “Amended Equity Rights Letter Agreement”). Pursuant to the Amended Equity Rights Letter Agreement, the Company hadalready issued to Hercules 223,463 shares (the “Shares”) of the Company’s Common Stock for an aggregate purchase price of approximately $2.0 million onNovember 20, 2014 at a price per share equal to the closing price of the Company’s Common Stock as reported on The Nasdaq Global Market on November19, 2014. The Shares were issued pursuant to an exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).Accordingly, the Shares will be subject to resale limitations and may be resold only pursuant to an effective registration statement or an exemption fromregistration.F-18Additionally, under the Amended Equity Rights Letter Agreement, Hercules has the right to participate in any one or more subsequent privateplacement equity financings of up to $2.0 million on the same terms and conditions as purchases by the other investors in each subsequent equity financing.The Amended Equity Rights Letter Agreement, and all rights and obligations thereunder, will terminate upon the earlier of (1) such time when Hercules haspurchased $2.0 million of subsequent equity financing securities in the aggregate, and (2) the later of (a) the repayment of all indebtedness under the LoanAgreement, or (b) the expiration or termination of the exercise period for the warrant issued in connection with the Loan Agreement. The Company allocated$36 thousand of financing costs to additional paid-in capital for issuance costs that were reimbursed to Hercules.The Company accounted for the April 2018 amendment to the Term Loan as a modification pursuant to ASC 470-50. The remaining balance ofunamortized debt financing costs of $0.3 million and $0.1 million of fees associated with the 2018 Term Loan that met the criteria to be capitalized are beingamortized through the maturity date of the 2018 Term Loan, accordingly. The End of Term Charges from the 2014 Term Loan and the 2018 Term Loan arebeing amortized to interest expense over the life of the 2018 Term Loan using the effective interest method. At December 31, 2018 the 2018 Term Loan bearsan effective interest rate of 12.4%.As of December 31, 2018, the Company had outstanding borrowings under the 2018 Loan Agreement of $14.8 million. At December 31, 2017, theCompany had outstanding borrowings under the 2014 Term Loan of $14.3 million. Interest expense was $1.7 million and $1.7 million for the years endedDecember 31, 2018 and 2017, respectively.As of December 31, 2018, future principal payments, including the End of Term Charge, on the 2018 Term Loan are as follows (in thousands): December 31, 20182019$4,67820207,03120214,071Total$15,7807. WarrantsAs of December 31, 2018 and December 31, 2017, the Company had warrants outstanding that represent the right to acquire 29,342,564 and 77,603shares of common stock, respectively. As of December 31, 2018, the common stock underlying the warrants consist of 28,935,550 shares of common stockreserved for issuance upon exercise of the warrants (with an exercise price of $1.20 and an expiration date of January 18, 2023), 403,136 shares of commonstock reserved for issuance upon the exercise of warrants issued to Hercules (73,725 with an exercise price of $8.24 and an expiration date of November 20,2019, and 329,411 with an exercise price of $0.85 and an expiration date of April 24, 2023) and 3,878 shares of common stock reserved for the issuance uponthe exercise of warrants issued in periods prior to the Company's initial public offering ("IPO") (with an exercise price of $7.74 and an expiration date ofFebruary 11, 2019).In accordance with ASC Topic No. 815, “Derivatives and Hedging”, the Company determined the common stock warrants issued to Hercules andwarrants issued in the periods prior to the Company's IPO to be equity classified.8. Commitments and contingenciesLease commitmentsIn February 2014, the Company signed an operating lease for office and laboratory space that commenced in March 2014 and was set to expire inFebruary 2017 (the "2014 Lease"). In May 2016, the Company entered into a lease amendment (the "2016 Lease") for office and laboratory space currentlyoccupied under the 2014 Lease. The 2016 Lease extends the 2014 Lease by an additional three years through February 2020.F-19In June 2015, the Company signed a second operating lease for office space in the same building as the 2014 Lease, which was also set to expire inFebruary 2017 (the "2015 Lease"). In August 2016, the Company exercised a three-year renewal option extending the 2015 Lease to February 2020. Rentexpense for the years ended December 31, 2018 and 2017 was $1.5 million.The minimum future lease payments under both the 2016 Lease and the 2015 Lease are as follows (in thousands):December 31, 201820191,6372020274Total$1,911At December 31, 2018 and 2017, the Company has an outstanding letter of credit of $316 thousand with a financial institution related to a securitydeposit for the 2016 Lease, which is secured by cash on deposit and expires on February 29, 2020. An additional unsecured deposit was required for the 2015Lease.Significant Contracts and AgreementsIn addition to lease commitments, the Company enters into contractual arrangements that obligate it to make payments to the contractualcounterparties upon the occurrence of future events. In the normal course of operations, the Company enters into license and other agreements and intends tocontinue to seek additional rights relating to compounds or technologies in connection with its discovery, manufacturing and development programs. Theseagreements may require payments to be made by the Company upon the occurrence of certain development milestones and certain commercializationmilestones for each distinct product covered by the licensed patents (in addition to certain royalties to be paid on marketed products or sublicense income)contingent upon the occurrence of future events that cannot be reasonably estimated.The Company relies on research institutions, contract research organizations, and clinical investigators, as well as clinical and commercial materialmanufacturers, for its product candidates. Under the terms of these agreements, the Company is obligated to make milestone payments upon the achievementof manufacturing or clinical milestones defined in the contracts. In some cases, monthly service fees for project management services are charged over theduration of the arrangement. In addition, clinical and manufacturing contracts generally require reimbursement to suppliers for certain set-up, production,travel, and other related costs as they are incurred. In some manufacturing contracts, the Company also may be responsible for the payment of a reservationfee, which will equal a percentage of the expected production fees, to reserve manufacturing slots in the production timeframe. Generally, the Company isliable for actual effort expended by these organizations at any point in time during the contract through the notice period. To the extent amounts paid to asupplier exceed the actual efforts expended, the Company records a prepaid asset, and to the extent actual efforts expended exceed amounts billed or billableunder a contract, an accrual for the estimate of services rendered is recorded.In February 2014, the Company entered into a supply agreement with FUJIFILM Diosynth Biotechnologies U.S.A., Inc. (“Fujifilm”) for themanufacture and supply of antigens for future GEN-003 clinical trials. Under the agreement, the Company was obligated to pay Fujifilm manufacturingmilestones, in addition to reimbursement of certain material production-related costs. Additionally, the Company was responsible for the partial payment ofmanufacturing fees to reserve manufacturing slots in the production timeframe. In June and September 2016, the Company entered into new statements ofwork under the agreement with Fujifilm for the manufacture and supply of antigens for the Company's Phase 3 clinical trials for GEN-003. In September 2017,the Company notified Fujifilm to cease all manufacturing activities of antigens for GEN-003.Amounts recorded as of December 31, 2017 represent liabilities for all manufacturing services complete or in process prior to the notification date,materials purchased which cannot be re-used or re-purposed by Fujifilm, and charges for terminating services within a certain time frame of the anticipatedstart dates. We incurred expenses under this agreement of $3.6 million for the year ended December 31, 2017, of which $526 thousand are included inRestructuring costs in the Consolidated Statements of Operations and Comprehensive Loss. Subsequent to 2017 we did not incur additional expenses underthis agreement.In January 2018, we entered into a License and Supply Agreement with Oncovir, Inc. (“Oncovir”). The Agreement relates to the manufacture andsupply of Hiltonol® (poly-ICLC) (“Hiltonol”), an immunomodulator and vaccine adjuvant. Hiltonol is the adjuvant component of GEN-009, ourinvestigational personal neoantigen cancer vaccine. Under thisF-20Agreement, we are obligated to pay Oncovir (i) an up-front payment in the mid-six figures in consideration of the license granted to us and for the initialsupply of Hiltonol for the planned GEN-009 Phase 1/2 trial, (ii) a supply price for Hiltonol in the low-three figures per vial of Hiltonol for use in clinical trialsor commercial use, (iii) a milestone payment in the low-six figures upon the achievement of certain clinical trial milestones for each Combination Product,(iv) a milestone payment in the mid-six figures upon the first marketing approval of commercial sales for each Combination Product in certain territories, and(v) tiered royalties in the low-single digits on a product-by-product basis based on the net sales of Combination Products. We may terminate the Agreementupon a decision to discontinue the development of the Combination Product or upon a determination by us, or an applicable regulatory authority, thatHiltonol or Combination Product is not clinically safe or effective. The Agreement may also be terminated by either party due to a material uncured breachby the other party, or due to the other party’s bankruptcy, insolvency or dissolution.LitigationBeginning on October 31, 2017, three putative class action complaints were filed in the U.S. District Court for the District of Massachusetts (the“District of Massachusetts” or the “Court”), naming the Company, Chief Executive Officer William D. Clark, and former Chief Financial Officer JonathanPoole as defendants. The Court consolidated the three actions into one case, captioned Emerson et al. v. Genocea Biosciences, Inc., et al., Civil Action No.17-cv-12137-PBS (D. Mass.), and appointed the Genocea Investor Group (a group of five purported shareholders) as lead plaintiff. On March 29, 2018,counsel for the lead plaintiff filed an amended complaint in the District of Massachusetts that alleged violations of the Securities Exchange Act of 1934 andRule 10b-5 in connection with the Company’s disclosures from March 31, 2016 to September 25, 2017 concerning the development of GEN-003. Theamended complaint added Seth V. Hetherington, former Chief Medical Officer, to the original named defendants, and sought unspecified damages and costs.On December 6, 2018, the District of Massachusetts granted defendants’ motion to dismiss the amended complaint for failure to state a claim. On January 7,2019, the lead plaintiff filed a notice of appeal in the District of Massachusetts regarding the Court order dismissing the amended complaint. The appeal hasbeen docketed in the First Circuit under the caption Yuksel, et al. v. Genocea Biosciences, et al., Civil Action No. 19-1036 (1st Cir.). The Company is unableat this time to determine whether the outcome of the securities action litigation would have a material impact on its results of operations, financial conditionor cash flow. Beginning on January 31, 2018, two putative shareholder derivative actions were filed in the U.S. District Court for the District of Delaware, naming certainof the Company’s officers and directors (including certain former directors and officers) as defendants, and naming the Company as a nominal defendant. OnAugust 24, 2018, the court consolidated the two actions into one case, captioned In re Genocea Biosciences, Inc. Derivative Litigation, Civil Action No. 18-cv-00186-MN (D. Del.). The operative complaint in the now-consolidated action alleges violations of the Securities Exchange Act of 1934 and Rule 14a-9 inconnection with disclosures made in the Company’s Schedule 14A Proxy Statement, filed with the SEC on April 21, 2017. The complaint also alleges claimsfor breach of fiduciary duty, unjust enrichment, and waste of corporate assets. On August 10, 2018, the parties filed a joint stipulation and proposed orderagreeing to stay the consolidated action until, inter alia, the entry of an order granting or denying any motion to dismiss the action in the District ofMassachusetts, and on August 24, 2018, the court entered the joint stipulation agreeing to stay the consolidated action. In light of the December 6, 2018order granting defendants’ motion to dismiss in the District of Massachusetts, the Company and the plaintiffs in the derivative action entered into jointstipulation on February 5, 2019 to stay the derivative action through the duration of the appeal in the securities action. The Company is unable at this time todetermine whether the outcome of the derivative litigation would have a material impact on our results of operations, financial condition or cash flows.The Company does not have contingency reserves established for any litigation liabilities.9. Stockholders' equity (deficit) At December 31, 2018, the Company authorized 250,000,000 shares of common stock at $0.001 par value per share, of which 86,771,175 shares ofcommon stock were issued and outstanding.At-the-market equity offering programOn March 2, 2015, the Company entered into a Sales Agreement with Cowen and Company, LLC (the "Sales Agreement") to establish an at-the-market equity offering program (“ATM”) pursuant to which it was able to offer and sell up to $40.0 million of its common stock at prevailing market pricesfrom time to time. On May 8, 2015, the Sales Agreement was amended to increase the offering amount under the ATM to $50.0 million of its common stock.In April 2018, the Company sold 3.5 million shares and received $2.9 million in net proceeds after deducting commissions. In January 2017, the Companysold 52 thousand shares and received $0.2 million in net proceeds after deducting commissions.F-21Restricted stockAt December 31, 2018 the Company had no restricted stock outstanding. At December 31, 2017, the Company had 23,810 units of restricted stockoutstanding.In May 2017, the Company granted an officer 47,620 units of Restricted Stock ("RSUs") in accordance with the Amended and Restated 2014 EquityIncentive Plan (the "2014 Equity Plan") and subject to a Restricted Stock Unit Award Agreement with the Company. On the date of grant, 7,937 units ofRSUs vested immediately, and another 23,810 units of RSUs were to vest on the eighteen month anniversary of the grant date, subject to the continuedemployment of the officer. The remaining 15,873 RSUs, which contained a performance condition of completing a material financing event on or beforeSeptember 30, 2017, were canceled as the performance criterion was not achieved. Upon the resignation of the officer in March 2018, the remaining 23,810RSUs were forfeited.10. Stock and employee benefit plansThe Company’s board of directors adopted the 2014 Equity Plan which was approved by its stockholders and became effective prior to thecommencement of the Company's IPO.The 2014 Equity Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock, and other awards to keyemployees and directors of, and consultants and advisors to, the Company. The maximum number of shares of common stock that may be delivered insatisfaction of awards under the 2014 Equity Plan is 903,494 shares, plus 219,765 shares that were available for grant under the 2007 Equity Incentive Plan(the "2007 Equity Plan") on the date the 2014 Equity Plan was adopted. The 2014 Equity Plan provides that the number of shares available for issuance willautomatically increase annually on each January 1, from January 1, 2015 through January 1, 2024, in amount equal to the lesser of 4.0% of the outstandingshares of the Company’s outstanding common stock as of the close of business on the immediately preceding December 31 or the number of sharesdetermined the Company’s board of directors. On January 1, 2019, the total number of shares available for issuance under the 2014 Equity Plan increased by3,470,847 for shares under this provision.Outstanding option awards granted from the 2007 Equity Plan, at the time of the adoption of the 2014 Equity Plan, remain outstanding andeffective. The shares of common stock underlying awards that are canceled, forfeited, repurchased, expire, or are otherwise terminated under the 2007 EquityPlan are added to the shares of common stock available for issuance under the 2014 Equity Plan. At December 31, 2018, 8,924,388 option awards arereserved for issuance under the Company's equity plans and 1,977,407 awards remain available for future grants.Stock options issued to non-employees are accounted for using the fair value method of accounting, and are periodically revalued as the optionsvest, and are recognized as expense over the related service period. The total expense related to all non-employee options for the years ended December 31,2018 and 2017 was $279 thousand and $338 thousand, respectively.Stock-Based Compensation ExpenseTotal stock-based compensation expense is recognized for stock options granted to employees and non-employees and has been reported in theCompany’s Statements of Operations as follows (in thousands): Years ended December 31, 2018 2017Research and development $620 $1,310General and administrative 1,533 2,924Total $2,153 $4,234F-22Stock OptionsThe following table summarizes stock option activity for employees and nonemployees (shares in thousands): Shares Weighted-AverageExercisePrice Weighted-AverageRemainingContractualTerm (years) AggregateIntrinsicValueOutstanding at December 31, 2017 4,129 $5.48 7.07 $—Granted 5,259 $0.87 Exercised — $— Canceled (2,249) $4.63 Outstanding at December 31, 2018 7,139 $2.35 7.80 $—Exercisable at December 31, 2018 2,562 $4.26 5.31 $—During the years ended December 31, 2018 and 2017, the Company granted stock options to purchase an aggregate of 5,259,000 and 1,474,800shares of its common stock, respectively, with weighted-average grant date fair values of $0.87 and $3.16, respectively.The total intrinsic value of options exercised was $0 and $442 thousand in the years ended December 31, 2018 and 2017, respectively. As ofDecember 31, 2018, there was $3.5 million of total unrecognized compensation cost, related to employee stock options granted under the Company’s equityplans.The total unrecognized compensation costs, related to non-employee stock options was $168 thousand and $228 thousand for the years endedDecember 31, 2018 and 2017, respectively.The Company expects to recognize that cost over a remaining weighted-average period of 2.96 years.The Company estimates the fair value of each employee stock award on the grant date using the Black-Scholes option-pricing model based on thefollowing assumptions: Years ended December 31, 2018 2017Expected volatility 77.6% - 79.3% 74.6% - 90.1%Risk-free interest rate 2.61% - 3.10% 1.85% - 2.18%Expected term (in years) 5.5 - 6.08 5.5 - 9.88Expected dividend yield 0% 0%Performance-Based Stock OptionsThe Company granted stock options to certain employees, executive officers, and consultants, which contain performance-based vesting criteria.Milestone events are specific to the Company’s corporate goals, which include, but are not limited to, certain clinical development milestones, businessdevelopment agreements, and capital fundraising events. Stock-based compensation expense associated with these performance-based stock options isrecognized if the performance conditions are considered probable of being achieved, using management’s best estimates. During the years endedDecember 31, 2018 and 2017, the Company recorded no stock-based compensation expense related to the 56,336 performance-based common stock optionsthat remain outstanding for which the probability of achievement was not deemed probable at both December 31, 2018 and 2017.F-23Employee Stock Purchase PlanOn February 10, 2014, the Company’s board of directors adopted the 2014 Employee Stock Purchase Plan (the “2014 ESPP”). The 2014 ESPPauthorizes the initial issuance of up to a total of 200,776 shares of common stock to participating eligible employees. The 2014 ESPP provides for six-monthoption periods commencing on January 1 and ending June 30 and commencing July 1 and ending December 31 of each calendar year. The first offeringunder the 2014 ESPP began on July 1, 2014. For the year ended December 31, 2018, the Company incurred $42 thousand in stock-based compensationexpense and 187,332 shares were issued. For the year ended December 31, 2017, the Company incurred $121 thousand in stock-based compensation expenseand 73,461 shares were issued. There were 2,312,675 shares remaining for future issuance under the plan as of December 31, 2018.401(k) Savings planIn 2007, the Company established a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code (“401(k) Plan”). The401(k) Plan covers all employees who meet defined minimum age and service requirements, and allows participants to defer a portion of their annualcompensation on a pretax basis. Beginning January 1, 2015, the Company began making matching contributions to participants in this plan. The Companymade matching contributions to participants in this plan which totaled $138 thousand and $224 thousand for the years ended December 31, 2018 and 2017,respectively.11. Income taxesFor the years ended December 31, 2018 and 2017, the Company did not record a current or deferred income tax expense or benefit. The Company’slosses before income taxes consist solely of domestic losses. The significant components of the Company’s deferred tax assets are comprised of the following: December 31, 2018 2017Deferred tax assets: U.S. and state net operating loss carryforwards$49,614 $42,895Capitalized R&D25,366 21,924Research and development credits10,445 8,582Stock-based compensation1,989 1,808Accrued expenses450 474Depreciation and amortization640 761Other temporary differences85 116Total deferred tax assets88,589 76,560Less valuation allowance(88,589) (76,560)Net deferred tax assets$— $—The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’shistory of operating 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, the Company has provided a full valuation allowance for deferred tax assets as of December 31, 2018 and 2017. The valuation allowanceincreased approximately $12.0 million during the year ended December 31, 2018 due primarily to the generation of net operating losses. The valuationallowance decreased approximately $7.1 million during the year ended December 31, 2017, due primarily to the adjustment in the corporate tax rate from34% to 21% enacted for 2018, partially offset by the generation of net operating losses.A reconciliation of income tax expense computed at the statutory federal income tax rate to income taxes as reflected in the consolidated financialstatements is as follows:F-24 Years ended December 31, 2018 2017Federal income tax expense at statutory rate 21.0 % 34.0 %State income tax, net of federal benefit 8.9 % 5.1 %Permanent differences 9.0 % (1.2)%Research and development credit 6.7 % 2.9 %Change in tax rate 0.0 % (52.8)%Change in valuation allowance (43.1)% 12.5 %Other, net (2.5)% (0.5)%Effective tax rate 0.0 % 0.0 %As of December 31, 2018 and 2017, the Company had U.S. federal net operating loss carryforwards of approximately $184.8 million and $160.6million, respectively, which may be available to offset future income tax liabilities and expire at various dates through 2037. The federal net operating lossesgenerated in 2018 can be carried forward indefinitely. As of December 31, 2018 and 2017, the Company also had U.S. state net operating loss carryforwardsof approximately $171.1 million and $145.1 million, respectively, which may be available to offset future income tax liabilities and expire at various datesthrough 2038. For the years ended December 31, 2018 and 2017, deductions related to the excess tax benefit from stock option exercises are recognized inthe federal and state net operating loss carryforwards as a component of the tax provision.As of December 31, 2018 and 2017, the Company had federal research and development tax credit carryforwards of approximately $7.8 million and$6.1 million, respectively, available to reduce future tax liabilities which expire at various dates through 2038. As of December 31, 2018 and 2017, theCompany had state research and development tax credit carryforwards of approximately $3.2 million and $2.9 million, respectively, available to reducefuture tax liabilities which expire at various dates through 2033.Under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the net operating loss and tax credit carryforwards are subjectto review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may becomesubject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period inexcess of 50%, as defined under Sections 382 and 383 of the Code, respectively, as well as similar state provisions. This could limit the amount of taxattributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the valueof the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Companyhas completed several financings since its inception which may have resulted in a change in control as defined by Sections 382 and 383 of the Code, orcould result in a change in control in the future.The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2018 and 2017, theCompany had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statements ofoperations and comprehensive loss.For all years through December 31, 2018, the Company generated research credits but has not conducted a study to document the qualifiedactivities. This study may result in an adjustment to the Company’s research and development credit carryforwards. However, until a study is completed andany adjustment is known, no amounts are being presented as an uncertain tax position for these years. A full valuation allowance has been provided againstthe Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax assetestablished for the research and development credit carryforwards and the valuation allowance.The Company files income tax returns in the United States and the Commonwealth of Massachusetts. The federal and state income tax returns aregenerally subject to tax examinations for the tax years ended December 31, 2014 through December 31, 2018. To the extent the Company has tax attributecarryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state, or foreign taxauthorities to the extent utilized in a future period.12. Restructuring costsF-25On September 25, 2017, the Company announced a strategic shift to immuno-oncology and a focus on the development of neoantigen cancer vaccines,including GEN-009. The Company also announced that it is exploring strategic alternatives for GEN-003, its Phase 3-ready investigational immunotherapyfor the treatment of genital herpes. Consequently, substantially all GEN-003 spending and activities were ceased and the Company reduced its workforce byapproximately 40 percent as of the quarter ended September 30, 2017. Pursuant to ASC 420, Exit or Disposal Cost Obligations, charges for employeeseverance, employee benefits, and contract terminations were recorded in the year ended December 31, 2017. Asset impairment charges, pursuant to ASC 360,Property, Plant, and Equipment, were also recorded in the year ended December 31, 2017 and primarily related to fixed assets specific to GEN-003 researchand development activities.The following table summarizes the impact of the September 2017 restructuring activities: Chargesincurred duringthe year endedDecember 31,2017 Amount paidthroughDecember 31,2017 Less non-cashcharges duringthe year endedDecember 31,2017 Remainingliability atDecember 31,2017 Amount paidduring 2018 Remainingliability atDecember 31,2018Employee severance, benefitsand related costs$1,064 $(1,050) $— $14 $(14) $—Contract terminations526 — — 526 (526) —Asset impairments1,028 — (1,028) — — —Total$2,618 $(1,050) $(1,028) $540 $(540) $—13. Quarterly financial information (unaudited, in thousands, except per share data) Three Months Ended, March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018Operating expenses $10,384 9,788 10,460 $8,886Net income (loss) (15,890) (4,438) (7,833) 350Net loss per share - basic and diluted $(0.22) $(0.05) $(0.09) $0.00Weighted-average number of common shares used incomputing net loss per share - basic and diluted 71,238 85,538 86,626 86,771 Three Months Ended, March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017Operating expenses $13,376 14,998 16,496 $10,385Net loss (13,735) (15,375) (16,868) (10,732)Net loss per share - basic and diluted $(0.48) $(0.54) $(0.59) $(0.37)Weighted-average number of common shares used incomputing net loss per share - basic and diluted 28,496 28,541 28,666 28,70514. Subsequent eventIn February 2019, the Company entered into a private placement with certain existing and new investors providing for the purchase of up toapproximately $39.2 million of the Company's common stock and warrants to purchase shares of the Company's common stock, in two closings. In the firstclosing, the Company sold 25.6 million shares of common stock and 4.25 million pre-funded warrants to purchase common stock, along with accompanyingwarrants to purchase 0.25 shares of common stock for each share of common stock or pre-funded warrant purchased, for net proceeds to the Company ofapproximately $14.2 million, after deducting approximately $0.8 million in placement agent fees, excluding offering costs. The first closing of the privateplacement occurred on February 14, 2019, while the second closing is contingent on satisfactory top-line immunogenicity results from the ongoing Phase1/2a clinical trial for GEN-009, expected in late second quarter or early third quarter of 2019. Contingent on satisfactory top-line immunogenicity resultsfrom the ongoing Phase 1/2a clinical trial for GEN-009, Genocea will have the option to conduct a second closing and sell up to an additional $24.2million of shares of common stock to the investors who participated in the first closing.F-26SIGNATURESPursuant 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 on February 28, 2019. GENOCEA BIOSCIENCES, INC. By:/s/ William Clark William Clark President and Chief Executive OfficerPursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant in thecapacities and on the dates indicated.Signature Title Date /s/ William Clark President and Chief Executive Officer and Director William Clark (Principal Executive Officer) February 28, 2019 /s/ Michael Alfieri Vice President, Finance Michael Alfieri (Principal Financial Officer and Principal Accounting Officer) February 28, 2019 /s/ Kenneth Bate Kenneth Bate Director February 28, 2019 /s/ Ali Behbahani Ali Behbahani Director February 28, 2019 /s/ Katrine Bosley Katrine Bosley Director February 28, 2019 /s/ Ronald Cooper Ronald Cooper Director February 28, 2019 /s/ Michael Higgins Michael Higgins Director February 28, 2019 /s/ Howard Mayer Howard Mayer, M.D. Director February 28, 2019 /s/ George Siber George Siber, M.D. Director February 28, 2019ExhibitNumber Exhibit 3.1 Fifth Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s CurrentReport on Form 8-K, File No. 001-36289, filed on February 12, 2014) 3.2 Amended and Restated By-laws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, FileNo. 001-36289, filed on February 12, 2014) 3.3 Certificate of Amendment to Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company'sCurrent Report on Form 8-K, File No. 001-36289, filed on June 25, 2018) 4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1, File No. 333-193043, filed on December 23, 2013) 4.2 Fourth Amended and Restated Registration Rights Agreement (incorporated by reference to Exhibit 4.5 to the Company’sRegistration Statement on Form S-1, File No. 333-193043, filed on December 23, 2013) 4.3 Warrant Agreement between the Company and Hercules Technology Growth Capital, Inc., dated November 20, 2014(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, File No. 001-36289, filed onNovember 21, 2014) 4.4 Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated byreference to Exhibit 4.1 to the Company's Current Report on Form 8-K, File No. 001-36289 filed on January 19, 2018) 4.5 Form of Class A Warrant to Purchase Shares of Common Stock of Genocea Biosciences, Inc. (incorporated by reference to Exhibit4.5 to the Company's Annual Report on Form 8-K, File No. 001-36289, filed on February 16, 2018) 4.6 Warrant Agreement between the Company and Hercules Capital, Inc., dated April 24, 2018 (incorporated by reference to Exhibit4.1 to the Company's Current Report on Form 8-K, File No. 001-36289, filed on April 30, 2018) 4.7 Form of Pre-Funded Warrant to Purchase Shares of Common Stock of Genocea Biosciences, Inc. (incorporated by reference toExhibit 4.1 to the Company's Form 8-K, File No. 001-36289, filed on February 12, 2019) 4.8* Form of Class B Warrant to Purchase Shares of Common Stock of Genocea Biosciences, Inc. 10.1 Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statementon Form S-1, File No. 333-193043, filed on December 23, 2013) 10.2+ Amended and Restated License Agreement between Genocea Biosciences, Inc. and President and Fellows of Harvard College,dated November 19, 2012 (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q, File No.001-36289, datedNovember 4, 2016) 10.3+ License and Collaboration Agreement between Genocea Biosciences, Inc. and Isconova AB, dated August 5, 2009, as amendedon March 19, 2010, June 18, 2010, August 17, 2010, October 19, 2011 and February 6, 2012 (incorporated by reference toExhibit 10.3 to the Company’s Form 10-Q, File No.001-36289, dated November 4, 2016 10.4+ Exclusive License Agreement for Escherichia Coli K12 to Deliver Protein to the Macrophage Cytosol between GenoceaBiosciences, Inc. and The Regents of the University of California, dated August 18, 2006 (incorporated by reference toExhibit 10.5 to the Company’s Registration Statement on Form S-1, File No. 333-193043, as amended on January 13, 2014) 10.5 Lease, dated as of July 3, 2012 between TBCI, LLC and Genocea Biosciences, Inc. (incorporated by reference to Exhibit 10.8 tothe Company’s Registration Statement on Form S-1, File No. 333-193043, dated December 23, 2013) 10.6 Agreement Regarding Sublease, dated as of July 9, 2012, by TBCI, LLC, FoldRx Pharmaceuticals, Inc., Pfizer Inc. and GenoceaBiosciences, Inc. (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1, File No. 333-193043, filed on December 23, 2013) ExhibitNumber Exhibit 10.7† Genocea Biosciences, Inc. Amended and Restated 2007 Equity Incentive Plan, as amended on June 24, 2013 (incorporated byreference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1, File No. 333-193043, filed on December 23,2013) 10.8† Consulting Agreement between Genocea Biosciences, Inc. and George Siber, dated May 16, 2007, as amended on June 30, 2009,December 16, 2010, June 15, 2011 and June 5, 2013 (incorporated by reference to Exhibit 10.11 to the Company’s RegistrationStatement on Form S-1, File No. 333-193043, filed on December 23, 2013) 10.9† Amended and Restated Employment Letter Agreement between William Clark and Genocea Biosciences, Inc., dated January 16,2014 (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1, File No. 333-193043, asamended on January 23, 2014) 10.10† Letter Agreement, dated April 7, 2014, between the Company and Jonathan Poole (incorporated by referenced to Exhibit 10.1 tothe Company’s Current Report on Form 8-K, File No. 001-36289, filed on April 8, 2014) 10.11† Genocea Biosciences, Inc. 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.15 to the Company’s RegistrationStatement on Form S-1, File No. 333-193043, as amended on January 13, 2014) 10.12† Genocea Biosciences, Inc. Cash Incentive Plan (incorporated by reference to Exhibit 10.16 to the Company’s RegistrationStatement on Form S-1, File No. 333-193043, as amended on January 13, 2014) 10.13† Form of Nonstatutory Stock Option Granted under the Genocea Biosciences, Inc. Amended and Restated 2007 Equity IncentivePlan (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-1, File No. 333-193043,filed on December 23, 2013) 10.14† Form of Incentive Stock Option Granted under the Genocea Biosciences, Inc. Amended and Restated 2007 Equity Incentive Plan(incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1, File No. 333-193043, filed onDecember 23, 2013) 10.15† Form of Incentive Stock Option under the Genocea Biosciences, Inc. 2014 Equity Incentive Plan (incorporated by reference toExhibit 10.22 to the Company’s Registration Statement on Form S-1, File No. 333-193043, as amended on January 13, 2014) 10.16† Form of Nonstatutory Stock Option under the Genocea Biosciences, Inc. 2014 Equity Incentive Plan (incorporated by reference toExhibit 10.23 to the Company’s Registration Statement on Form S-1, File No. 333-193043, as amended on January 13, 2014) 10.17† Restricted Stock Agreement between Genocea Biosciences, Inc. and Katrine Bosley, dated November 7, 2013 (incorporated byreference to Exhibit 10.25 to the Company’s Registration Statement on Form S-1, File No. 333-193043, as amended onJanuary 13, 2014) 10.18† Genocea Biosciences, Inc. 2014 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.26 to the Company’sRegistration Statement on Form S-1, File No. 333-193043, as amended on January 23, 2014) 10.19† Nonstatutory Stock Option granted under the Genocea Biosciences, Inc. Amended and Restated 2007 Equity Incentive Plan toKatrine Bosley, dated May 13, 2013 (incorporated by reference to Exhibit 10.27 to the Company’s Registration Statement onForm S-1, File No. 333-193043, as amended on January 13, 2014) 10.20† Nonstatutory Stock Option granted under the Genocea Biosciences, Inc. Amended and Restated 2007 Equity Incentive Plan toKatrine Bosley, dated November 5, 2013 (incorporated by reference to Exhibit 10.28 to the Company’s Registration Statement onForm S-1, File No. 333-193043, as amended on January 13, 2014) 10.21 Loan and Security Agreement between the Company and Hercules Technology Growth Capital, Inc., dated November 20, 2014(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, File No. 001-36289, filed onNovember 21, 2014) ExhibitNumber Exhibit 10.22 Equity Rights Letter Agreement between the Company and Hercules Technology Growth Capital, Inc., dated November 20, 2014(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, File No. 001-36289, filed onNovember 21, 2014) 10.23† Fifth Amendment to the Consulting Agreement between Genocea Biosciences, Inc. and George Siber, dated June 15, 2015(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, File No. 001-36289, filed on June 19,2015) 10.24 Amendment No. 1 to Loan and Security Agreement between the Company and Hercules Technology Growth Capital, Inc., datedDecember 17, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K File No. 001-36289,filed on December 18, 2015) 10.25 Sublease Agreement between the Company and the Smithsonian Institution, dated June 15, 2015 (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8-K, File No. 001-36289, filed on June 19, 2015) 10.26 First Amendment to Lease, dated May 16, 2016, between 100 Discovery Park DE, LLC, a Delaware limited liability company (assuccessor in interest to TBCI, LLC, as Trustee of 100 Discovery Park Realty Trust) and Genocea Biosciences, Inc. (incorporatedby reference to Exhibit 10.30 to the Company’s Form 10-Q, filed on August 5, 2016, File No. 001-36289) 10.27† Sixth Amendment to the Consulting Agreement between Genocea Biosciences, Inc. and George Siber, dated June 13, 2017(incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K, File No. 001-36289, filed onFebruary 16, 2018) 10.28* Amendment No. 2 to the Loan and Security Agreement between the Company and Hercules Technology Growth Capital, Inc.,dated January 19, 2018 10.29+ License and Supply Agreement, between the Company and Oncovir, Inc., dated January 26, 2018 (incorporated by reference toExhibit 10.32 to the Company's Annual Report on Form 10-K, File No. 001-36289, filed on February 16, 2018). 10.30+ Amended and Restated Loan and Security Agreement between the Company, the several banks and other financial institutions orentities from time to time parties thereto and Hercules Capital, Inc., dated April 24, 2018 (incorporated by reference to Exhibit10.4 to the Company's Quarterly Report on Form 10-Q, File No. 001-36289, filed on August 3, 2018) 10.31 Amendment to Equity Rights Letter Agreement between the Company, Hercules Capital, Inc. (f/k/a Hercules Technology GrowthCapital, Inc.), dated April 24, 2018 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, FileNo. 001-36289, filed on April 30, 2018) 21.1 List of Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the Company's Form 10-K, filed on February 17,2016, File No. 001.36289) 23.1* Consent of Ernst & Young LLP 31.1* Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002 by Chief Executive Officer 31.2* Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002 by Principal Financial Officer 32.1** Certification of periodic financial report pursuant to Section 906 of Sarbanes Oxley Act of 2002 by Chief Executive Officer 32.2** Certification of periodic financial report pursuant to Section 906 of Sarbanes Oxley Act of 2002 by Principal Financial Officer 101. INS* XBRL Instance Document 101. SCH* XBRL Taxonomy Extension Schema 101. CAL* XBRL Taxonomy Extension Calculation Linkbase 101. DEF* XBRL Taxonomy Extension Definition Linkbase ExhibitNumber Exhibit 101. LAB* XBRL Taxonomy Extension Label Linkbase 101. PRE* XBRL Taxonomy Extension Presentation Linkbase_________________________*Filed herewith.**Furnished herewith.†Indicates a management contract or compensatory plan.+Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and this exhibit has beensubmitted separately to the Securities and Exchange Commission.NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEENREGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OFANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPTPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TOAN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIESLAWS.CLASS B WARRANT NO. 2019-[______] NUMBER OF SHARES: [_______]DATE OF ISSUANCE: February 14, 2019 (subject to adjustment hereunder)EXPIRATION DATE: February 14, 2024CLASS B WARRANT TO PURCHASE SHARESOF COMMON STOCK OFGENOCEA BIOSCIENCES, INC.This Class B Warrant (the “Warrant”) is issued by Genocea Biosciences, Inc., a Delaware corporation (the “Company”), to[________], or its registered assigns (including any successors or assigns, the “Holder”), and is subject to the terms and conditions setforth below. The Warrant is being issued pursuant to a Warrant Agreement between the Company and Computershare Inc., aDelaware corporation (“Computershare”), and its fully owned subsidiary Computershare Trust Company, N.A., a national bankingassociation (collectively with Computershare, the “Warrant Agent”).1.EXERCISE OF WARRANT.(a) Number and Exercise Price of Warrant Shares; Expiration Date. Subject to the terms and conditions set forth herein,the Holder is entitled to purchase from the Company up to [______] shares of the Company’s Common Stock, $0.001 par value pershare (the “Common Stock”) (as adjusted from time to time pursuant to the provisions of this Warrant) (the “Warrant Shares”), at apurchase price of $0.5656 per share (the “Exercise Price”), on or before the earlier of (i) 5:00 p.m. New York City time on February14, 2024, and (ii) the Second Closing Date, if the Holder becomes a Non-Participating Purchaser (the “Expiration Date”). Capitalizedterms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement dated as ofFebruary 11, 2019, among the Company and the purchasers signatory thereto.(b) Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 1(a) above,the Holder may exercise this Warrant in whole or in part in accordance with Section 5 by either:(1) wire transfer to the Company or cashier’s check drawn on a United States bank made payable to the order of theCompany, or(2) exercising of the right to credit the Exercise Price against the Fair Market Value (as defined below) of theWarrant Shares (as defined below) at the time of exercise (the “Net Exercise”) pursuant to Section 1(c).(c) Net Exercise. If at any time after the Effectiveness Date (as defined in the that certain Purchase Agreement, by andamong the Company, the Holder and certain other purchasers of shares and warrants listed on the schedules thereto (the “PurchaseAgreement”)) there is no effective Resale Registration Statement registering the resale of the Warrant Shares by the Holder, then theHolder may elect to exercise this Warrant by Net Exercise pursuant to this Section 1(c). At any time that this Warrant may be exercisedby Net Exercise pursuant to this Section 1(c), if the Company shall receive written notice from the Holder at the time of exercise of thisWarrant that the Holder elects to Net Exercise the Warrant, the Company shall deliver to such Holder (without payment by the Holderof any exercise price in cash) that number of Warrant Shares computed using the following formula:WhereX =The number of Warrant Shares to be issued to the Holder.Y =The number of Warrant Shares purchasable under this Warrant or, if only a portion of the Warrant is beingexercised, the portion of the Warrant being cancelled (at the date of such calculation).A =The Fair Market Value of one share of Common Stock (at the date of such calculation).B =The Exercise Price (as adjusted to the date of such calculations).The “Fair Market Value” of one share of Common Stock shall mean (x) the last reported sale price and, if there are nosales, the last reported bid price, of the Common Stock on the last trading day prior to the date of exercise on the trading market onwhich the Common Stock is listed as reported by Bloomberg Financial Markets (or a comparable reporting service of nationalreputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reportingsales prices of the Common Stock) (collectively, “Bloomberg”), or (y) if the foregoing does not apply, the last sales price of suchsecurity in the over-the-counter market on the pink sheets by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.) (the“pink sheets”) or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported, the last bid price of theCommon Stock as reported by Bloomberg or (z) if the fair market value cannot be calculated on any of the foregoing bases, the fairmarket value determined by the Company’s Board of Directors in good faith.(d) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of theWarrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed.(e) Deemed Exercise. In the event that immediately prior to the close of business on the Expiration Date, the Fair MarketValue of one share of Common Stock (as determined in accordance with Section 1(c) above) is greater than the then applicableExercise Price, this Warrant shall be deemed to be automatically exercised on a net exercise issue basis pursuant to Section 1(c) above,and the Company shall deliver the applicable number of shares of Common Stock to the Holder pursuant to the provisions of Section1(c) above and this Section 1(e).2. CERTAIN ADJUSTMENTS.(a)Adjustment of Number of Warrant Shares and Exercise Price. The number and kind of Warrant Sharespurchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:(1) Subdivisions, Combinations and Other Issuances. If the Company shall at any time after the Date of Issuancebut prior to the Expiration Date subdivide its shares of capital stock of the same class as the Warrant Shares, by split-up or otherwise,or combine such shares of capital stock, or issue additional shares of capital stock as a dividend with respect to any shares of suchcapital stock, the number of Warrant Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in thecase of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall alsobe made to the Exercise Price payable per share, but the aggregate Exercise Price payable for the total number of Warrant Sharespurchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 2(a)(1) shall become effective atthe close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in theevent that no record date is fixed, upon the making of such dividend.(2) Reorganizations or Mergers. In case of any reclassification, capital reorganization or change in the capital stockof the Company (other than as a result of a subdivision, combination or stock dividend provided for in Section 2(a)(1) above) thatoccurs after the Date of Issuance, then, as a condition of such reclassification, reorganization or change, lawful provision shall bemade, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so thatthe Holder shall thereafter have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to thatpayable upon the exercise of this Warrant, the kind and amount of shares of stock and/or other securities or property (including, ifapplicable, cash) receivable in connection with such reclassification, reorganization or change by a holder of the same number and typeof securities as were purchasable as Warrant Shares by the Holder immediately prior to such reclassification, reorganization or change.In any such case, appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereofshall thereafter be applicable with respect to any shares of stock or other securities or property deliverable upon exercise hereof, andappropriate adjustments shall be made to the Exercise Price payable hereunder, provided the aggregate Exercise Price shall remain thesame (and, for the avoidance of doubt, this Warrant shall be exclusively exercisable for such shares of stock and/or other securities orproperty from and after the consummation of such reclassification or other change in the capital stock of the Company).(3) Rights Upon Distribution of Assets. If the Company shall declare or make any dividend, other distribution of itsassets (or rights to acquire its assets) or evidences of its indebtedness to holders of shares of Common Stock generally (which dividendor other distribution has not already been given to the Holder with respect to the Warrant Shares), by way of return of capital orotherwise not addressed by this Section 2 above (including, without limitation, any distribution of cash, stock or other securities,property or options by way of a dividend, spin off, subdivision, reclassification, corporate rearrangement, scheme of arrangement orother similar transaction) (a “Distribution”), at any time after the issuance of this Warrant and prior to the Expiration Date, then, in eachsuch case the Holder shall be entitled (subject to the following proviso) to participate in such Distribution to the same extent that theHolder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon completeexercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including, without limitation, theBeneficial Ownership Limitation) immediately before the date on which a record is taken for such Distribution, or, if no such record istaken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in suchDistribution; provided, however, that the Holder shall only be permitted to take delivery of such Distribution if and to the extent theHolder exercises some or all of the Warrant (the portion of delivery of the Distribution shall be based on the pro rata portion of theWarrant Shares issuable upon the portion of the Warrant exercised as compared to the maximum number of Warrant Shares issuableupon complete exercise of the Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including, withoutlimitation, the Beneficial Ownership Limitation)), provided that, to the extent that the Warrant has not been partially or completelyexercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder untilthe Holder has exercised the Warrant, at which time the Company shall issue to the Holder the pro-rata portion of such Distributionequivalent to that portion of this Warrant then exercised. Notwithstanding anything to the contrary contained herein, to the extent thatthe Holder’s right to participate in any such Distribution would result in the Holder and its affiliates exceeding the BeneficialOwnership Limitation, if applicable pursuant to Section 5(c) herein, then the Holder shall not be entitled to participate in suchDistribution to the extent of the Beneficial Ownership Limitation (and shall not be entitled to beneficial ownership of such shares ofCommon Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of suchDistribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not resultin the Holder and its affiliates exceeding the Beneficial Ownership Limitation, at which time or times the Holder shall be granted suchDistribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly inabeyance) to the same extent as if there had been no such limitation).(b)Notice of Adjustment. When any adjustment is required to be made in the number or kind of sharespurchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and ofthe number of Warrant Shares or other securities or property thereafter purchasable upon exercise of this Warrant.(c)Calculations. No adjustment in the Exercise Price shall be required unless such adjustment would require anincrease or decrease of at least $0.01 in such price; provided, however, that any adjustment which by reason of this Section 2(c) is notrequired to be made shall be carried forward and taken into account in any subsequent adjustments under this Section 2. Allcalculations under this Section 2 shall be made by the Company in good faith and shall be made to the nearest cent or to the nearestone hundredth of a share, as applicable. No adjustment need be made for a change in the par value or no par value of the Company’sCommon Stock.(d)Treatment of Warrant upon a Change of Control.(1)If, at any time while this Warrant is outstanding, there is a Change of Control (as definedbelow), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities,cash or property as it would have been entitled to receive upon the occurrence of such Change of Control if it had been, immediatelyprior to such Change of Control, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the“Alternate Consideration”). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjustedto apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of CommonStock in such Change of Control, and the Company shall apportion the Exercise Price among the Alternate Consideration in areasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of CommonStock are given any choice as to the securities, cash or property to be received in a Change of Control, then the Holder shall be giventhe same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Change of Control. Anysuccessor to the Company or surviving entity in such Change of Control shall issue to the Holder a new warrant substantially in theform of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the AlternateConsideration for the aggregate Exercise Price upon exercise thereof.(2)Notice of a Change of Control. The Company shall provide written notice to the Holder of aChange of Control reasonably promptly after public announcement thereof (and, in any event, not less than twenty (20) trading daysprior to the consummation of such Change of Control) and such notice shall include (i) the projected date of consummation of theChange of Control to the extent known at the time such notice is delivered and (ii) the expected consideration to be received by theCompany’s stockholders in such Change of Control.(3)As used in this Warrant, a “Change of Control” shall mean (i) a merger or consolidation of theCompany with another entity, in which the Company is not the survivor or the stockholders of the Company immediately prior to suchmerger or consolidation do not own, directly or indirectly, at least 50% of the voting securities of the surviving entity, (ii) the sale,assignment, transfer, conveyance or other disposal of all or substantially all of the properties or assets or all or a majority of theoutstanding voting securities of the Company, (iii) a purchase, tender or exchange offer accepted by the holders of a majority of theoutstanding voting shares of capital stock of the Company directly or indirectly, in one or more related transactions, (iv) a “person” or“group” (as these terms are used for purposes of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the“Exchange Act”)) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,of at least a majority of the outstanding shares of Common Stock of the Company through a stock purchase agreement or otherbusiness combination (including, without limitation, a reorganization, reclassification, spin off or scheme of arrangement) with anotherperson, or (v) the Company has elected to reorganize, recapitalize or reclassify its Common Stock (other than to change domicile).3. NO STOCKHOLDER RIGHTS. Until the exercise of this Warrant, the Holder shall not have, nor exercise, any rights as astockholder of the Company (including without limitation the right to notification of stockholder meetings or the right to receive anynotice or other communication concerning the business and affairs of the Company), except as provided in Section 8 below.4. COVENANT TO PERFORM; NON-CIRCUMVENTION. The Company hereby covenants and agrees that the Companywill at all times in good faith carry out all the provisions of this Warrant and will not, by amendment of its certificate of incorporation,bylaws or other organizational documents or through a Change of Control, dissolution, sale of assets or any other voluntary action,avoid or seek to avoid the observance or performance of any of the terms of this Warrant. Without limiting the generality of theforegoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of thisWarrant above the Exercise Price then in effect, (ii) shall take such actions as may be necessary or appropriate in order that theCompany may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and(iii) shall, so long as this Warrant is outstanding, take action necessary to reserve and keep available out of its authorized and unissuedshares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, 100% of the number of shares of CommonStock issuable upon exercise of this Warrant then outstanding.5. MECHANICS OF EXERCISE.(a)Delivery of Warrant Shares Upon Exercise. This Warrant may be exercised by the Holder hereof upon thedelivery of a Notice of Exercise (the “Exercise Notice”) attached hereto as Exhibit A properly completed and duly executed by theHolder hereof, at the office of the Warrant Agent designated for such purpose together with this Warrant and payment in full of theExercise Price (unless the Holder has elected to Net Exercise) then in effect with respect to the number of Warrant Shares as to whichthe Warrant is being exercised. This Warrant shall be deemed to have been exercised immediately prior to the close of business on thedate of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exerciseshall be treated for all purposes as the holder of such shares of record as of the close of business on such date. Notwithstandinganything herein to the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, theCompany), the Holder shall not be required to physically surrender this Warrant to the Company or the Warrant Agent until the Holderhas purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shallsurrender this Warrant to the Company or Warrant Agent for cancellation within three (3) trading days of the date the final ExerciseNotice is delivered to the Company. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Sharesavailable hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amountequal to the applicable number of Warrant Shares purchased. On or before the second (2nd) trading day following the date on whichthe Warrant Agent has received each of the Exercise Notice, this Warrant and the aggregate Exercise Price (or confirmation from theCompany of the number of shares of Warrant Shares issuable in connection with a duly executed and delivered notice of NetExercise), the Warrant Agent shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to theCompany’s transfer agent (“Transfer Agent”). The Company shall deliver any objection to the Exercise Notice on or before the secondtrading day following the date on which the Company has received the Exercise Notice. On or before the second (2nd) trading dayfollowing the date on which the Warrant Agent has received the Exercise Notice and the aggregate Exercise Price (the “Share DeliveryDate”), the Warrant Agent shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) FastAutomated Securities Transfer Program and either (i) there is an effective registration statement permitting the issuance of the WarrantShares to or resale of the Warrant Shares by the Holder or (ii) this Warrant is being exercised via cashless exercise and Rule 144 isavailable, upon the request of the Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant tosuch exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system,or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, and (y) there is not aneffective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (z) thisWarrant is being exercised via cashless exercise and Rule 144 is not available, upon the request of the Holder, issue and dispatch byfirst class mail, postage prepaid, to the address as specified in the Exercise Notice, a certificate, registered in the Company’s shareregister in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuantto such exercise. Upon delivery of the Exercise Notice and the payment of the aggregate Exercise Price (or a duly executed anddelivered notice of Net Exercise), the Holder shall be deemed for all corporate purposes to have become the holder of record of theWarrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to theHolder’s DTC account or the date of delivery of the certificates or book-entry position evidencing such Warrant Shares, as the casemay be. The Company shall pay any and all taxes (other than taxes based upon the income of the Holder) which may be payable withrespect to the issuance and delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be requiredto pay any tax that may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in anyname other than that of the Holder, in either case with respect to any income or transfer tax due by the Holder with respect to suchshares of Common Stock issued upon exercise of this Warrant. The Warrant Agent shall not have any duty or obligation to take anyaction under any section of this Agreement that requires the payment of taxes and/or charges unless and until it is satisfied that all suchpayments have been made.(b)Company’s Failure to Timely Deliver Securities. If the Company shall fail for any reason or for no reasonto issue to the Holder by the Share Delivery Date in compliance with the terms of this Section 5, a certificate or book entry position forthe number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’sshare register or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder isentitled upon the Holder’s exercise of this Warrant, and if on or after such trading day the Holder purchases (in an open markettransaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stockissuable upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within three (3) tradingdays after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s totalpurchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased less the Exercise Price (the“Buy-In Price”), at which point the Company’s obligation to deliver such certificate or evidence of book entry position (and to issuesuch Warrant Shares) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates orevidence of book entry position representing such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any)of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the closing bid price on the date ofexercise. The Warrant Agent shall have no responsibility for any amounts that may be payable or paid to any Holder, person or entityunder this Warrant for any such failure by the Company (or the Warrant Agent on the Company’s behalf) and the Company shallindemnify and hold harmless the Warrant Agent against all claims made against the Warrant Agent for any such failure.(c)[Holder’s Exercise Limitation. Notwithstanding anything to the contrary contained in this Warrant, thisWarrant shall not be exercisable by the Holder pursuant to Section 1 or otherwise, to the extent (but only to the extent) that after givingeffect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s affiliates,and any other persons acting as a group together with the Holder or any of the Holder’s affiliates (such person, “Attribution Parties”)),would beneficially own in excess of [4.99]% of the number of shares of Common Stock outstanding immediately after giving effect tothe issuance of shares of Common Stock issuable upon exercise of this Warrant (the “Beneficial Ownership Limitation”); [provided,that notwithstanding anything herein to the contrary, this limitation on exercise shall not be applicable to any person that beneficiallyowns 10.0% or more of the Company’s outstanding Common Stock immediately prior to the exercise of this Warrant, but withoutgiving effect to any shares of Common Stock underlying this Warrant]. Notwithstanding the forgoing, the Holder shall have the rightto increase or decrease the Beneficial Ownership Limitation (to an amount not to exceed [19.99]% of the number of shares of CommonStock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant [ifexceeding that limit would result in a change of control as set forth in Nasdaq Listing Rule 5635(b))], with any increase to be effectiveonly upon the Holder providing the Company with prior written notice of such increase, which shall be effective 61 days after deliveryof such notice to the Company. To the extent the above limitation applies, the determination of whether this Warrant shall beexercisable (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its Attribution Parties)and of which such securities shall be exercisable (as among all such securities owned by the Holder or any of its Attribution Parties)shall, subject to such Beneficial Ownership Limitation, be determined by the Holder, and the Company shall have no responsibility fordetermining the accuracy of the Holder’s determination. No prior inability to exercise this Warrant pursuant to this paragraph shall haveany effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. Forpurposes of the calculation of the Beneficial Ownership Limitation, the aggregate number of shares of Common Stock beneficiallyowned by the Holder and its Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of thisWarrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock whichwould be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any ofits Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company(including, without limitation, any other convertible notes or convertible preferred stock or warrants) subject to a limitation onconversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Attribution Parties.Except as set forth in the preceding sentence, for purposes of this section, beneficial ownership shall be calculated in accordance withSection 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that theCompany is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and theHolder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination as to any groupstatus as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulationspromulgated thereunder. For purposes of this Section 5(c), in determining the number of outstanding shares of Common Stock, theHolder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic orannual report filed with the Securities and Exchange Commission, as the case may be, (B) a more recent public announcement by theCompany or (C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares ofCommon Stock outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect tothe conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Attribution Parties since the dateas of which such number of outstanding shares of Common Stock was reported. The provisions of this paragraph shall be construedand implemented in a manner otherwise than in strict conformity with the terms of this Section 5(c) to correct this paragraph (or anyportion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to makechanges or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraphshall apply to a successor holder of this Warrant. Upon the reasonable written request of the Holder, the Company shall within three(3) trading days confirm orally or in writing to the Holder the number of shares of Common Stock then outstanding, including byvirtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including, without limitation,pursuant to this Warrant or securities issued pursuant to the Purchase Agreement.]6. CERTIFICATE OF ADJUSTMENT. Whenever the Exercise Price or number or type of securities issuable upon exercise ofthis Warrant is adjusted, as herein provided, the Company shall, at its expense, promptly deliver to the Holder and the Warrant Agent acertificate of an officer of the Company setting forth the nature of such adjustment and showing in detail the facts upon which suchadjustment is based. The Warrant Agent shall be fully protected in relying on such a certificate and shall have not be deemed to haveany knowledge of the occurrence of an adjustment unless and until it has received such a certificate. In no event shall the WarrantAgent have any obligation to calculate any of the adjustments, all such calculations being the responsibility of the Company. 7. NOTICES. In the event of:(a)any taking by the Company of a record of the holders of any class of securities for the purpose ofdetermining the holders thereof who are entitled to receive any dividend (other than a cash dividend payable out of earned surplus ofthe Company) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or anyother securities or property, or to receive any other right; or(b)any voluntary or involuntary dissolution, liquidation or winding-up of the Company,then and in each such event the Company will promptly mail or cause to be delivered to the Warrant Agent and Holder (or a permittedtransferee) a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution orright, and stating the amount and character of such dividend, distribution or right, and (ii) the date on which any such dissolution,liquidation or winding-up is to take place, and the time, if any, as of which the holders of record of Common Stock (or other securities)shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon suchdissolution, liquidation or winding-up. Such notice shall be delivered at least twenty (20) days prior to the date therein specified.(c)Whenever any other notice is required to be given under this Warrant, unless otherwise provided herein, theCompany shall provide prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a descriptionof such action and the reason therefore.8. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably satisfactory to the Company and Warrant Agent ofthe loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, ondelivery of an indemnity agreement reasonably satisfactory in form and amount to the Company and Warrant Agent or, in the case ofany such mutilation, on surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieuthereof, a new Warrant of like tenor.9. ISSUANCE OF NEW WARRANTS. Whenever the Company is required to issue a new Warrant pursuant to the terms ofthis Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such newWarrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuantto Sections 8 or 9, the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stockunderlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares thenunderlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as theIssuance Date, and (iv) shall have the same rights and conditions as this Warrant.10. NO FRACTIONAL SHARES. No fractional Warrant Shares or scrip representing fractional shares will be issued uponexercise of this Warrant. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay cash equal to theproduct of such fraction multiplied by the Fair Market Value of one Warrant Share.11. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amendedand the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if theCompany has obtained the written consent of the Holder.12. TRADING DAYS. If the last or appointed day for the taking of any action or the expiration of any right required orgranted herein shall be other than a day on which the Common Stock is traded (which for the avoidance of doubt includes a Saturday,Sunday or a legal U.S. holiday) on the Nasdaq Capital Market, or, if the Nasdaq Capital Market is not the principal trading market forthe Common Stock or other such securities, as applicable, then on the principal securities exchange or securities market on which theCommon Stock is then traded, then such action may be taken or such right may be exercised on the next succeeding day on which theCommon Stock is so traded.13. TRANSFERS; EXCHANGES.(a)Subject to compliance with applicable federal and state securities laws and Section 7 hereof, this Warrantmay be transferred by the Holder with respect to all of the Warrant Shares purchasable hereunder. For a transfer of this Warrant as anentirety by Holder, upon surrender of this Warrant to the Warrant Agent, together with the Notice of Assignment in the form attachedhereto as Exhibit B properly completed and duly executed by the Holder, the Company shall issue a new Warrant of the samedenomination to the assignee. Upon surrender of this Warrant to the Warrant Agent, together with the Notice of Assignment in theform attached hereto as Exhibit B properly completed and duly executed by the Holder accompanied by a signature guarantee from aneligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association (a“signature guarantee”), for transfer of this Warrant with respect to a portion of the Warrant Shares purchasable hereunder, theCompany will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 9), registered as theHolder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less thanthe total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 9) tothe Holder representing the right to purchase the number of Warrant Shares not being transferred.(b)This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation andsurrender hereof to the Warrant Agent for other warrants of different denominations entitling the holder thereof to purchase in theaggregate the same number of shares of Common Stock purchasable hereunder. This Warrant may be combined with other warrantsthat carry the same rights upon presentation hereof at the office of the Warrant Agent designated for such purpose together with awritten notice specifying the denominations in which new warrants are to be issued to the Holder and signed by the Holder hereof. Theterm “Warrants” as used herein includes any warrants into which this Warrant may be divided or exchanged. All Warrant Certificatessurrendered for the purpose of transfer, split up, combination or exchange, when surrendered to the Warrant Agent shall beaccompanied by a signature guarantee.(c)If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer ofthis Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and underapplicable state securities or blue sky laws or (ii) eligible for resale pursuant to Rule 144, the Company may require, as a condition ofallowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provide to the Company an opinion of counselselected by the Holder and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonablysatisfactory to the Company, to the effect that such transfer does not require registration of such transferred Warrant under theSecurities Act.(d)The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, uponany exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or fordistributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law,except pursuant to sales registered or exempted under the Securities Act.14. GOVERNING LAW; VENUE. All questions concerning the construction, validity, enforcement and interpretation of thisWarrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, withoutregard to the principles of conflicts of law thereof. With respect to any disputes arising out of or related to this Warrant, the partiesconsent to the exclusive jurisdiction of, and venue in, the state courts in the State of New York (or in the event of exclusive federaljurisdiction, the courts of the District of New York). Each party hereby irrevocably waives personal service of process and consents toprocess being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnightdelivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that suchservice shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit inany way any right to serve process in any other manner permitted by law. EACH OF THE COMPANY AND THE HOLDERHEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANYAND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TOTHIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.15. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the arithmetic calculationof the Warrant Shares or under Sections 2 or 6, the disputing party shall submit the disputed determinations or arithmetic calculations tothe other party. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or theWarrant Shares within three (3) trading days of such disputed determination or arithmetic calculation being submitted to the non-disputing party, then the Company shall, within two (2) trading days submit the dispute to an independent, reputable accountant. TheCompany shall cause, at the expense of the prevailing party, the accountant to perform the determinations or calculations and notify theCompany and the Holder of the results no later than ten (10) trading days from the time it receives the disputed determinations orcalculations. Such accountant’s determination or calculation shall be binding upon all parties absent demonstrable error.16. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in thisWarrant shall be cumulative and in addition to all other remedies available under this Warrant, at law or in equity (including a decree ofspecific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages forany failure by the Company to comply with the terms of this Warrant.17. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder andshall not be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shallnot form part of, or affect the interpretation of, this Warrant.18. SUCCESSORS AND ASSIGNS. Subject to applicable securities laws, this Warrant and the rights and obligationsevidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and thesuccessors and permitted assigns of the Holder. The provisions of this Warrant are intended to be for and the benefit of any Holderfrom time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.19. RESTRICTIONS. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if notregistered, must comply with the applicable restrictions upon resale imposed by state and federal securities laws.20. MISCELLANEOUS. All notices, requests, consents and other communications hereunder shall be in writing, shall be sentby confirmed electronic mail, or mailed by first-class registered or certified airmail, or nationally recognized overnight express courier,postage prepaid, and shall be deemed given when so sent in the case of electronic mail transmission, or when so received in the case ofmail or courier, and addressed as follows: (a) if to the Company, at Cambridge Discovery Park, 100 Acorn Park Drive, 5th Floor,Cambridge, MA 02140, Attention: Finance Department; with a copy to (which shall not constitute notice) Ropes & Gray LLP,Prudential Tower, 800 Boylston StreetBoston, MA 02199-3600, Attention: Marc Rubenstein and (b) if to the Holder, at such address or addresses (including copies tocounsel) as may have been furnished by the Holder to the Company in writing. The invalidity or unenforceability of any provisionhereof shall in no way affect the validity or enforceability of any other provisions.[Signature Page Follows]IN WITNESS WHEREOF, this Common Stock Purchase Warrant is issued effective as of the date first set forth above.GENOCEA BIOSCIENCES, INC.By: Name: Title: EXHIBIT ANOTICE OF INTENT TO EXERCISE(To be signed only upon exercise of Warrant)To: Genocea Biosciences, Inc.The undersigned, the Holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented bysuch Warrant for, and to purchase thereunder, __________________________ shares of Common Stock of Genocea Biosciences,Inc., a Delaware corporation (the “Company”), and (choose one)__________ herewith makes payment of USD ___________________________ thereofor__________ elects to Net Exercise the Warrant pursuant to Section 1(b)(2) thereof.The undersigned requests that the certificates or book entry position evidencing the shares to be acquired pursuant to suchexercise be issued in the name of, and delivered to __________________________________________, whose address is____________________________________________________________________________________________________.By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to theexercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (as determined inaccordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 5(c) of theWarrant to which this notice relates.By its signature below the undersigned hereby represents and warrants that it is an “accredited investor” as defined in Rule501(a) of Regulation D promulgated under the Securities Act of 1933, as amended, and agrees to be bound by the terms andconditions of the attached Warrant as of the date hereof, including Section 7 thereof.DATED: (Signature must conform in allrespects to name of the Holderas specified on the face of theWarrant) [Holder Name]Address: EXHIBIT BNOTICE OF ASSIGNMENT FORMFOR VALUE RECEIVED, [Holder Name] (the “Assignor”) hereby sells, assigns and transfers all of the rights of theundersigned Assignor under the attached Warrant with respect to the number of shares of common stock of Genocea Biosciences, Inc.,a Delaware corporation (the “Company”), covered thereby set forth below, to the following “Assignee” and, in connection with suchtransfer, represents and warrants to the Company that the transfer is in compliance with Section 7 of the Warrant and applicable federaland state securities laws:NAME OF ASSIGNEEADDRESS Number of shares: Dated: Signature: ASSIGNEE ACKNOWLEDGMENTThe undersigned Assignee acknowledges that it has reviewed the attached Warrant and by its signature below it herebyrepresents and warrants that it is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the SecuritiesAct of 1933, as amended, and agrees to be bound by the terms and conditions of the Warrant as of the date hereof, including Section 7thereof.Signature: By: Its: Address: [Signature guarantee]1Exhibit 10.30 SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENTTHIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is dated as ofJanuary 22, 2018 (the “Second Amendment Date”) is entered into by and among GENOCEA BIOSCIENCES, INC., a Delawarecorporation (“Borrower”), HERCULES CAPITAL, INC., a Maryland corporation (“HC”), in its capacity as administrative agentfor itself and Lender (in such capacity, “Agent”), the Lenders otherwise a party hereto from time to time including HC in its capacity asa Lender, and HERCULES CAPITAL FUNDING TRUST 2014-1(“2014 Trust”), assignee of HC (2014 Trust and HCcollectively, referred to as “Lender”).RECITALSA. Borrower, Lender and Agent entered into that certain Loan and Security Agreement, dated as of November 20, 2014, asamended by that certain First Amendment to Loan and Security Agreement, dated as of December 17, 2015 (as may be furtheramended, modified or restated from time to time, the “Loan Agreement”). Capitalized terms used herein without definition shall havethe same meanings given them in the Loan Agreement.B. Borrower has requested that the parties hereto amend the Loan Agreement as set forth herein.C. Borrower, Lender and Agent have agreed to amend the Loan Agreement upon the terms and conditions more fully setforth herein.AGREEMENTNOW, THEREFORE, the parties hereto agree as follows:1.AMENDMENTS. Subject to the satisfaction of the conditions set forth in Section 3 of this Amendment, the LoanAgreement is amended in the following respects:1.1 Section 1.1 (Definitions and Rules of Construction). The Loan Agreement is amended by inserting thefollowing new definitions to appear alphabetically in Section 1.1 thereof:“ “Deferred Payment” and “Deferred Payments” are defined in Section 2.1(d).“ “Equity Event” means confirmation by Agent, that Borrower has received, after January 1, 2018 but on or beforethe Second Amendment Date, unrestricted and unencumbered (including, not subject to any redemption, clawback,escrow or similar restriction or encumbrance) gross cash proceeds in the minimum amount of at least Fifty MillionDollars ($50,000,000.00) from the issuance and sale by Borrower of its equity securities.”“ “Second Amendment” means that certain Second Amendment to the Loan and Security Agreement by and betweenBorrower, Agent and Lender dated as of January 22, 2018.”“ “Second Amendment Date” is defined in the Second Amendment.”1.2 Section 2.1(d) (Payment). Section 2.1 is amended by inserting the following to new provision to appear as thesecond paragraph in subsection (d) thereof:Notwithstanding the foregoing, provided that no Event of Default has occurred or is continuing (after givingeffect to the Second Amendment), upon the occurrence of the Equity Event, the scheduled principal payments due onthe first (1st) Business Day of each month, for the three (3) consecutive months commencing on February 1, 2018through and including April 1, 2018 (each, a “Deferred Payment” and collectively, the “Deferred Payments”) shall bedeferred (not waived). Borrower shall continue to make monthly payments of interest as set forth herein. Commencingon May 1, 2018, and continuing on the first (1st) Business Day of each month thereafter, Borrower shall repay theaggregate Term Loan Advances, including the Deferred Payments, in equal monthly installments of principal andinterest (mortgage style) based upon an amortization schedule equal to thirty (30) consecutive months. The entireprincipal balance of the Term Loan Advances, including Deferred Payments and all accrued but unpaid interesthereunder, and all other Secured Obligations with respect to the Term Loan Advances, shall be due and payable onTerm Loan Maturity Date.2.BORROWER’S REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that:(a) Immediately upon giving effect to this Amendment (i) the representations and warranties contained in the LoanDocuments are true and correct in all material respects as of the date hereof (except to the extent such representations and warrantiesrelate to an earlier date, in which case they are true and correct as of such date), and (ii) no Event of Default has occurred and iscontinuing with respect to which Borrower has not been notified in writing by Lender.(b) The certificate of organization, operating agreement and other organizational documents of Borrower previouslydelivered to Lender remain true, accurate and complete and have not been amended, supplemented or restated and are and continue tobe in full force and effect.(c) The execution and delivery by Borrower of this Amendment and the performance by Borrower of all of itsagreements and obligations under the Loan Agreement and other Loan Documents, as amended by this Amendment, have been dulyauthorized by all necessary company action on the part of Borrower. With respect to Borrower, the execution and delivery byBorrower of this Amendment does not and will not require any registration with, consent or approval of, or notice to any Person(including any governmental authority).(d) This Amendment, the Loan Agreement and the other Loan Documents, as amended hereby, constitute the legal,valid and binding obligations of Borrower enforceable againstBorrower in accordance with their terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium,general equitable principles or other laws relating to or affecting generally the enforcement of, creditors’ rights and except to the extentthat availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which anyproceeding therefor may be brought.(e) Immediately after giving effect to this Amendment (i) no fact or condition exists that would (or would, with thepassage of time, the giving of notice, or both) constitute an Event of Default, and (ii) no event that has had or could reasonably beexpected to have a Material Adverse Effect has occurred and is continuing.3.EFFECTIVENESS. This Amendment shall become effective upon the satisfaction of all the following conditionsprecedent:3.1 Amendment. Borrower, Agent and Lender shall have duly executed and delivered to Lender (i) this Amendment,and (ii) all other documents and instruments reasonably required by Lender to effectuate the transactions contemplated hereby, in allcases in form and substance reasonably acceptable to Lender.3.2 Equity Event. Confirmation by Agent that the Equity Event has occurred.3.3 No Default. As of the Second Amendment Date, no fact or condition exists that would (or would, with thepassage of time, the giving of notice, or both) constitute an Event of Default.3.4 Fees and Expenses. Borrower shall have paid to Agent an amount equal to the documented out-of-pocket costsand expenses and reasonable attorneys’ fees and documented expenses that Lender and Agent have incurred in connection with thisAmendment.4.COUNTERPARTS. This Amendment may be signed in any number of counterparts (including by facsimile orother electronic transmission), with the same effect as if the signatures to each such counterpart were upon a single instrument. Allcounterparts shall be deemed an original of this Amendment.5.MISCELLANEOUS. Lender and Borrower agree that:5.1 THIS AMENDMENT AND ALL MATTERS RELATING THERETO OR ARISING THEREFROMSHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THESTATE OF CALIFORNIA, EXCLUDING CONFLICT OF LAWS PRINCIPLES THAT WOULD CAUSE THEAPPLICATION OF LAWS OF ANY OTHER JURISDICTION.5.2 This Amendment expresses the entire understanding of the parties with respect to the transactions contemplatedhereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof, and no extrinsic evidencemay be introduced in any judicial or arbitration proceeding, if any, involving this Amendment.5.3 Any determination that any provision of this Amendment or any application hereof is invalid, illegal orunenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any otherinstance, or the validity, legality or enforceability of any other provisions of this Amendment.5.4 The captions in this Amendment are for convenience of reference only and shall not define or limit the provisionshereof.[Signature page follows]IN WITNESS WHEREOF, the parties have duly authorized and caused this Amendment to be executed as of the SecondAmendment Date.BORROWER:GENOCEA BIOSCIENCES, INC.Signature: _/s/ Jonathan Poole_______Print Name: _Jonathan Poole _________Title: _Chief Financial Officer___AGENT:HERCULES CAPITAL, INC.Signature: _/s/ Jennifer Choe________Print Name: _Jennifer Choe ______ ___Title: _Assistant General Counsel_LENDER:HERCULES CAPITAL, INC.Signature: _/s/ Jennifer Choe________Print Name: _Jennifer Choe ______ ___Title: _Assistant General Counsel_HERCULES CAPITAL FUNDING TRUST 2014-1By: HERCULES CAPITAL, INC., its servicerSignature: _/s/ Jennifer Choe________Print Name: _Jennifer Choe ______ ___Title: _Assistant General Counsel_Exhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statements:(1)Registration Statement (Form S-8 No. 333-226655) pertaining to the Amended and Restated 2014 Equity Incentive Plan, 2014 Employee StockPurchase Plan, and Narinderjeet Singh Inducement Stock Option Agreement of Genocea Biosciences, Inc.,(2)Registration Statement (Form S-8 No. 333-223129) pertaining to the 2014 Equity incentive Plan of Genocea Biosciences, Inc., and(3)Registration Statement (Form S-3 No. 333-225086) of Genocea Biosciences, Inc.;of our report dated February 28, 2019, with respect to the consolidated financial statements of Genocea Biosciences, Inc. included in this Annual Report(Form 10-K) of Genocea Biosciences, Inc. for the year ended December 31, 2018. /s/ Ernst & Young LLPBoston, MassachusettsFebruary 28, 2019Exhibit 31.1CERTIFICATION PURSUANT TOSECURITIES EXCHANGE ACT RULES 13a-14 and 15d-14AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, William D. Clark, Chief Executive Officer, certify that: 1. I have reviewed this Annual Report on Form 10-K of Genocea Biosciences, 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 this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct 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 registrantand have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; b) Designed such internal control over financial, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith 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 most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’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 are reasonablylikely 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 internal controlover financial reporting. /s/ WILLIAM D. CLARK William D. Clark President & Chief Executive Officer Date:February 28, 2019Exhibit 31.2CERTIFICATION PURSUANT TOSECURITIES EXCHANGE ACT RULES 13a-14 and 15d-14AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Michael Alfieri, Vice President, Finance (Principal Financial and Accounting Officer), certify that: 1. I have reviewed this Annual Report on Form 10-K of Genocea Biosciences, 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 this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct 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 registrantand have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; b) Designed such internal control over financial, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith 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 most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’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 are reasonablylikely 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 internal controlover financial reporting. /s/ MICHAEL ALFIERI Michael Alfieri Vice President, Finance (Principal Financial and Accounting Officer) Date:February 28, 2019Exhibit 32.1CERTIFICATION 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 Genocea Biosciences, Inc. (the “Company”) for the period ended December 31, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, the undersigned, William D. Clark, as the President & Chief Executive Officer ofthe Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the bestof my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ WILLIAM D. CLARK William D. Clark* President &Chief Executive Officer Date:February 28, 2019____________________________________ * A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnishedto the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350,Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-K or as a separate disclosure document.Exhibit 32.2CERTIFICATION 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 Genocea Biosciences, Inc. (the “Company”) for the period ended December 31, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, the undersigned, Michael Alfieri, as the Principal Financial Officer of theCompany, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best ofmy knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ MICHAEL ALFIERI Michael Alfieri Vice President, Finance (Principal Financial and Accounting Officer) Date:February 28, 2019 ____________________________________*A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnishedto the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350,Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-K or as a separate disclosure document.

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