UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-38915
IDEAYA Biosciences, Inc.
(Exact name of Registrant as specified in its Charter)
Delaware
47-4268251
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
5000 Shoreline Court, Suite 300
South San Francisco, California
94080
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (650) 443-6209
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, $0.0001 par value per share
IDYA
Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☒ NO ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 90 days. YES ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during
the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price of the shares of common stock on the Nasdaq Global
Select Market on June 28, 2024, the last business day of the registrant’s most recently completed second fiscal quarter, of $35.11 per share, was $2.7 billion. Shares of common stock held by each
executive officer and director and by each other person who may be deemed to be an affiliate of the registrant, have been excluded from this computation. The determination of affiliate status for
this purpose is not necessarily a conclusive determination for other purposes.
As of February 14, 2025, the registrant had 87,537,391 shares of common stock, $0.0001 par value per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement relating to the 2025 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to
the extent stated herein. The proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2024.
i
TABLE OF CONTENTS
Page
PART I
Item 1.
Business
1
Item 1A.
Risk Factors
44
Item 1B.
Unresolved Staff Comments
104
Item 1C.
Cybersecurity
104
Item 2.
Properties
105
Item 3.
Legal Proceedings
105
Item 4.
Mine Safety Disclosures
105
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities
106
Item 6.
Reserved
106
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
107
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
121
Item 8.
Financial Statements and Supplementary Data
121
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
121
Item 9A.
Controls and Procedures
122
Item 9B.
Other Information
122
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
123
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
124
Item 11.
Executive Compensation
124
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
124
Item 13.
Certain Relationships and Related Transactions, and Director Independence
124
Item 14.
Principal Accounting Fees and Services
124
PART IV
Item 15.
Exhibits, Financial Statement Schedules
125
Item 16.
Form 10-K Summary
130
ii
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
All statements other than statements of historical facts contained in this Form 10-K, including statements regarding our future results of operations and
financial position, business strategy, prospective products, product approvals, research and development costs, timing and likelihood of success, plans and
objectives of management for future operations and future results of anticipated products, are forward-looking statements. These statements involve known
and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,”
“target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions.
The forward-looking statements in this Annual Report on Form 10-K are only predictions. We have based these forward-looking statements largely on our
current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of
operations. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K and are subject to a number of risks,
uncertainties and assumptions described under the sections in this Annual Report on Form 10-K entitled “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K. These forward-looking statements are
subject to numerous risks, including, without limitation, the following:
•
the scope, progress, results and costs of developing our product candidates or any other future product candidates, and conducting preclinical
studies and clinical trials, including our darovasertib Phase 2/3 clinical trials, IDE397 Phase 1/2 clinical trials, IDE849 Phase 1 clinical trial,
IDE161 Phase 1 clinical trial, IDE705 (GSK101) clinical trial, IDE275 (GSK959) clinical trial, as well as the potential clinical utility and
tolerability of our product candidates;
•
our clinical and regulatory development plans;
•
the scope, progress, results and costs related to the research and development of our precision medicine target and biomarker discovery
platform, including costs related to the development of our proprietary libraries and database of tumor genetic information and specific
cancer-target dependency networks;
•
our expectations about the impact of macroeconomic developments, such as health epidemics or pandemics, macro-economic uncertainties,
social unrest, geopolitical hostilities, natural disasters or other catastrophic events, on our business, and operations, including clinical trials,
manufacturing suppliers and collaborators, and on our results of operations and financial condition;
•
the availability of companion diagnostics for biomarkers associated with our product candidates and any future product candidates, or the
cost of coordinating and/or collaborating with certain diagnostic companies for the manufacture and supply of companion diagnostics;
•
the timing of and costs involved in obtaining and maintaining regulatory approval (or certification in certain foreign jurisdictions) for any
current or future product candidates and companion diagnostics, and any related restrictions, limitations, and/or warnings in the label of an
approved product candidate;
•
our expectations regarding the potential market size and size of the potential patient populations for darovasertib, IDE397, IDE849, IDE161,
IDE705, IDE275, our other product candidates and any future product candidates, if approved for commercial use;
•
the timing and amount of any option exercised, milestone, royalty or other payments we may or may not receive pursuant to any current or
future collaboration or license agreement, including under the Collaboration, Option and License Agreement with an affiliate of GSK plc,
GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4) LIMITED, or GSK;
•
our ability to maintain existing, and establish new, strategic collaborations, licensing or other arrangements and the financial terms of any
such agreements, including our Collaboration, Option and License Agreement with GSK, our Clinical Study Collaboration and Supply
Agreement with Gilead Sciences, Inc., our Clinical Trial Collaboration and Supply Agreement with MSD International Business GmbH, our
Clinical Trial Collaboration and Supply Agreements with Pfizer Inc., our Clinical Trial Collaboration and Supply Agreement with Amgen
iii
Inc., our License Agreement with Novartis, our Option and License Agreement with Cancer Research Technologies Ltd. and the University
of Manchester, our Option and License Agreement with Biocytogen Pharmaceuticals (Beijing) Co., Ltd and our License Agreement with
Jiangsu Hengrui Pharmaceuticals Co., Ltd.;
•
the timing of commencement of future nonclinical studies and clinical trials and research and development programs;
•
our ability to acquire, discover, develop and advance product candidates into, and successfully complete, clinical trials;
•
our intentions and our ability to establish collaborations and/or partnerships;
•
the timing or likelihood of regulatory filings and approvals for our product candidates;
•
our commercialization, marketing and manufacturing capabilities and expectations;
•
our intentions with respect to the commercialization of our product candidates;
•
the pricing and reimbursement of our product candidates, if approved;
•
the implementation of our business model and strategic plans for our business, product candidates and technology platforms, including
additional indications for which we may pursue;
•
the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates, including the
projected terms of patent protection;
•
our potential involvement in lawsuits in connection with enforcing our intellectual property rights;
•
our potential involvement in third party interference, opposition, derivation or similar proceedings with respect to our patent rights and other
challenges to our patent rights and patent infringement claims;
•
estimates of our expenses, future revenue, capital requirements, our needs for additional financing and our ability to obtain additional capital;
•
our future financial performance; and
•
developments and projections relating to our competitors and our industry, including competing therapies and procedures, as well as the
competitive position of our product candidates.
Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management
to predict all risk factors and uncertainties.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which
are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in
our forward-looking statements may not occur or be achieved, and actual results could differ materially from those projected in the forward-looking
statements. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to
publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed
circumstances or otherwise.
SUMMARY OF PRINCIPAL RISKS ASSOCIATED WITH OUR BUSINESS
Our business is subject to numerous risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-
K. You should carefully consider these risks and uncertainties when investing in our securities. The principal risks and uncertainties affecting our business
include the following:
•
We are a clinical-stage biopharmaceutical company with a limited operating history and no products approved for commercial sale. We have
incurred significant losses since our inception, and we anticipate that we will
iv
continue to incur significant losses for the foreseeable future, which, together with our limited operating history, makes it difficult to assess
our future viability;
•
We are early in our development efforts. Our business is dependent on the successful development of our product candidates, future product
candidates, and companion diagnostics for biomarkers associated with our product candidates and future product candidates;
•
In connection with the Collaboration, Option and License Agreement with GSK, if GSK terminates any development program under its
collaborations with us, whether as a result of our inability to meet milestones or otherwise, any potential revenue from those collaborations
will be significantly reduced or non-existent, and our results of operations and financial condition will be materially and adversely affected;
•
As an organization, we have never completed a clinical trial, and may be unable to do so for any of our product candidates;
•
The successful development of targeted therapeutics, including therapeutics involving direct targeting of an oncogenic pathway and synthetic
lethality therapeutics, including our portfolio of synthetic lethality small molecule inhibitors, as well as any related diagnostics, is highly
uncertain;
•
Preclinical and clinical drug development is a lengthy and expensive process with an uncertain outcome. We may incur additional costs or
experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product candidates,
which could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our business, financial
condition, results of operations and prospects. Furthermore, results of earlier studies and trials may not be predictive of future trial results;
•
We may find it difficult to enroll patients in our clinical trials given the limited number of patients who have the diseases for which our
product candidates are being developed. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities
could be delayed or otherwise adversely affected;
•
If we are unable to successfully develop molecular diagnostics for biomarkers that enable patient selection and/or that demonstrate drug-
target interaction, or experience significant delays in doing so, we may not realize the full commercial potential of our product candidates;
•
We rely on third parties for the manufacture of our product candidates for preclinical and clinical development and expect to continue to do
so for the foreseeable future. This reliance on third parties increases the risk that we will not have sufficient quantities of our product
candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization
efforts;
•
We face significant competition in an environment of rapid technological and scientific change, and our failure to effectively compete may
prevent us from achieving significant market penetration. Most of our competitors have significantly greater resources than we do and we
may not be able to successfully compete;
•
If we fail to attract and retain senior management and key scientific and commercial personnel, our business may be materially and adversely
affected;
•
Our success depends on our ability to obtain and maintain protection for our intellectual property and our proprietary technologies and to
avoid infringing the rights of others; and
•
Our stock price may be volatile and you may not be able to resell shares of our common stock at or above the price you paid.
1
PART I
Item 1. Business.
Company Overview
We are a precision medicine oncology company committed to the discovery and development of targeted therapeutics for patient populations selected using
molecular diagnostics. Our approach integrates small molecule drug discovery with extensive capabilities in identifying and validating translational
biomarkers to develop targeted therapies for select patient populations that are most likely to benefit from these targeted therapies. Our small molecule drug
discovery expertise includes discovery and development of small molecule therapeutics. We are applying these capabilities and approach to develop a
robust pipeline in precision medicine oncology.
Pipeline – Overview and Program Goals
Our clinical pipeline includes six potential first-in-class clinical-stage product candidates – darovasertib (PKC), IDE397 (MAT2A), IDE849 (DLL3),
IDE275 / GSK959 (Werner Helicase), IDE161 (PARG), and IDE705 / GSK101 (Pol Theta Helicase). We own or control all commercial rights of three of
these product candidates: darovasertib, IDE397, and IDE161, and own or control all commercial rights outside of greater China for IDE849. We are also
advancing several development candidates, including IDE892, a potential best-in-class MTA-cooperative PRMT5 inhibitor for which we are targeting an
investigational new drug, or IND, filing in mid-year 2025; IDE034, a potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-payload bispecific
antibody drug conjugate, or BsADC, program for which we are targeting an IND filing in the second half of 2025; and IDE251, a potential first-in-class
KAT6/7 dual inhibitor program for which we are targeting an IND filing in the second half of 2025. We also have multiple earlier-stage preclinical
programs. We have established selective, value-accretive collaborations with leading pharmaceutical companies to support our clinical development
activities.
2
(1)
Pursuant to Pfizer Agreements
(2)
Pursuant to Gilead CSCSA
(3)
Pursuant to Hengrui Pharma License Agreement
(4)
Pursuant to GSK Collaboration, Option and License Agreement
(5)
Pursuant to Merck CTCSA
(6)
Pursuant to Biocytogen Option and License Agreement
All data and the status of each program are summarized below as of February 1, 2025, unless otherwise noted.
Darovasertib (GNAQ or GNA11 Mutations)
•
Darovasertib (IDE196) is our most advanced clinical-stage product candidate, which we in-licensed from Novartis. Darovasertib is a potent,
selective small molecule inhibitor of protein kinase C, or PKC, which we are developing for genetically defined cancers having GNAQ or
GNA11 gene mutations. PKC is a protein kinase that functions downstream of the GTPases GNAQ and GNA11.
•
We have enrolled over 230 patients as of February 7, 2025, and have opened multiple clinical sites, including international sites, in our
potential registration-enabling Phase 2/3 clinical trial, designated as IDE196-002. The purpose of the clinical trial is to evaluate darovasertib
in combination with crizotinib, Pfizer’s investigational cMET inhibitor, in patients having metastatic uveal melanoma, or MUM, with human
leukocyte antigen-, or HLA-A*02:01 negative, or HLA-A2(-), serotype, as part of a second Clinical Trial Collaboration and Supply
Agreement, or the Second Pfizer Agreement, with Pfizer.
•
In December 2024, we announced the recommendation of a move-forward dose and the completion of the Part 2a dose optimization for the
potential registration-enabling Phase 2/3 trial evaluating the combination of darovasertib and crizotinib in the first-line, or 1L, setting in
patients with HLA-A2(-) MUM. We are targeting a median progression free survival, or PFS, readout for the Phase 2/3 registration-enabling
trial of the darovasertib and crizotinib combination in 1L HLA-A2-negative MUM by year-end 2025.
•
We are enrolling additional HLA-A*02:01 positive, or HLA-A2(+), patients as an independent clinical strategy to address HLA-A2(+) MUM
patients, in our ongoing Phase 2 clinical trial, designated as IDE196-001.
•
We are targeting a median overall survival, or OS, readout from our Phase 2 clinical trial, designated as IDE196-001, in approximately 40 1L
MUM patients in 2025.
•
We have enrolled 95 patients as of December 31, 2024 in our Phase 2 clinical trial, designated as IDE196-009, evaluating darovasertib as
single-agent neoadjuvant and adjuvant therapy in patients having primary uveal melanoma, or UM, with ongoing enrollment and multiple
clinical sites open. We are targeting a clinical data update in over 75 patients and regulatory update(s) in the first half of 2025, including
vision data in plaque brachytherapy patients.
•
In September 2024, we announced interim clinical data from the ongoing Phase 2 Company-sponsored trial and provided a regulatory update
on a potential Phase 3 registration-enabling clinical trial in neoadjuvant UM patients based on a Type C meeting held with the U.S. Food and
Drug Administration, or FDA. Based on the FDA meeting, we currently project approximately 400 patients will be randomized for treatment
with darovasertib in the treatment arm or the control arm, with potential modifications pending further feedback from the FDA. We are
currently finalizing the trial protocol for neoadjuvant UM and are targeting to initiate the study in the first half of 2025.
•
We are also supporting evaluation of darovasertib as single-agent neoadjuvant and adjuvant therapy in primary UM in an ongoing
investigator-sponsored clinical trial, or IST, captioned as “Neoadjuvant / Adjuvant trial of Darovasertib in Ocular Melanoma,” or NADOM,
led by St. Vincent’s Hospital in Sydney with the participation of Alfred Health and the Royal Victorian Eye and Ear Hospital in Melbourne.
3
•
In June 2024, we announced interim clinical data from the ongoing investigator-sponsored Phase 2 trial of darovasertib as
neoadjuvant/adjuvant treatment in UM, which was included in an oral presentation at the American Society of Clinical Oncology, or ASCO,
2024 Annual Meeting, and preliminary clinical data from our Phase 2 trial of darovasertib for neoadjuvant UM.
IDE397 (MTAP Gene Deletion)
•
IDE397, our small molecule methionine adenosyltransferase 2a, or MAT2A, inhibitor, is being evaluated in a Phase 1/2 clinical trial. We
have selected a move-forward Phase 2 expansion dose for IDE397 monotherapy, based on adverse event, or AE, profile and preliminary
clinical efficacy observed, including multiple partial responses by RECIST 1. We are enrolling patients with an initial focus in MTAP-
deletion urothelial cancer, or UC, and non-small cell lung cancer, or NSCLC.
•
In July 2024, we announced clinical data for the IDE397 Phase 2 monotherapy expansion dose demonstrating preliminary clinical efficacy in
heavily pre-treated MTAP-deletion UC and NSCLC patients.
•
We are collaborating with Gilead Sciences, Inc., or Gilead, to clinically evaluate IDE397 in combination with Trodelvy (sacituzumab-
govitecan-hziy), Gilead’s Trop-2 directed antibody drug conjugate, or ADC, in patients having MTAP-deletion UC, in our Phase 1 clinical
trial pursuant to a Clinical Study Collaboration and Supply Agreement, or Gilead CSCSA, with Gilead. A first patient was dosed for the
Phase 1 trial in June 2024.
•
In October 2024, we reported the first preliminary clinical case study of the IDE397 and Trodelvy combination in MTAP-deletion UC at
ENA 2024, including a partial response by RECIST 1.1 in a patient case report with a genetic co-alteration of MTAP-deletion and a FGFR3-
TACC3 fusion, and rapid and deep first-evaluation molecular responses, or MRs, with ctDNA reduction of greater than 95% observed. The
partial response reported at ENA 2024 has confirmed by RECIST 1.1. We are targeting a Phase 1/2 expansion in the first quarter of 2025 and
a clinical data update for the Phase 1 trial in MTAP-deletion UC in 2025.
•
In February 2025, we expanded our clinical study collaboration and entered into a Clinical Study Collaboration and Supply Agreement, or
the Second Gilead CSCSA, to evaluate the IDE397 and Trodelvy combination in MTAP-deletion NSCLC.
•
We were collaborating with Amgen to clinically evaluate IDE397 in combination with AMG 193, the Amgen investigational MTA-
cooperative PRMT5 inhibitor, in patients having tumors with MTAP-deletion, in an Amgen-sponsored clinical trial pursuant to our Clinical
Trial Collaboration and Supply Agreement with Amgen, or the Amgen CTCSA. We and Amgen mutually agreed to wind down the IDE397
and AMG 193 clinical combination study in February 2025 and will not pursue dose expansion.
•
In October 2024, we presented a preclinical poster presentation on the antitumor activity by combinatorial inhibition of MAT2A and PRMT5
in MTAP-deleted tumors at the EORTC-NCI-AACR Symposium, or ENA 2024. We are targeting to enable our wholly-owned clinical
combination of IDE397 and IDE892, our potential best-in-class MTA-cooperative PRMT5 inhibitor development candidate, in the second
half of 2025 in MTAP-deletion NSCLC.
IDE849 / SHR-4849 (DLL3 ADC program)
•
In December 2024, we entered into an exclusive License Agreement, or the Hengrui Pharma License Agreement, with Jiangsu Hengrui
Pharmaceuticals Co., Ltd., or Hengrui Pharma, pursuant to which Hengrui Pharma granted us an exclusive worldwide license outside of
Greater China for IDE849 (SHR-4849), a potential first-in-class Phase 1 DLL3 TOP1i ADC. Under the terms of the Hengrui Pharma License
Agreement, Hengrui Pharma is eligible to receive upfront and milestone payments totaling $1.045 billion, including a $75.0 million upfront
fee, up to $200.0 million in development and regulatory milestone payments, plus commercial success-based milestones. Hengrui Pharma is
also eligible to receive mid-single to low-double digit royalties on net sales outside of Greater China.
4
•
IDE849 is currently being evaluated by Hengrui Pharma in an ongoing Phase 1 trial in China in small cell lung cancer, or SCLC, patients. In
preliminary results from the trial, 8 out of 11 evaluable patients achieved partial response by RECIST 1.1. In January 2025, Hengrui Pharma
selected expansion doses for the Phase 1 trial.
•
We are planning on submitting a U.S. IND for the evaluation of IDE849 as a monotherapy in SCLC in the first half of 2025. We are also
targeting to initiate the evaluation of IDE849 in combination with IDE161 and in neuroendocrine tumors, or NETs in the second half of 2025.
A clinical data update is targeted in 2025.
IDE275 / GSK959 (WRN Program - High Microsatellite Instability)
•
In October 2024, GSK initiated a Phase 1 clinical trial for IDE275 (GSK959), following the submission of the GSK-sponsored IND and FDA
allowance to proceed with the clinical trial. IDE275 (GSK959) targets the helicase domain of the Werner, or WRN, protein, for patients
having tumors with high microsatellite instability, or MSI-High. GSK will lead clinical development for the Werner Helicase program.
•
We earned a $7.0 million milestone payment for the IND clearance of IDE275 (GSK959) in October 2024. We previously earned an earlier
milestone of $3.0 million in October 2023 in connection with IND-enabling studies. We have the potential to earn up to an additional $10.0
million milestone payment upon initiation of Phase 1 clinical dose expansion.
IDE161 (HRD, including BRCA)
•
IDE161 is our potential first-in-class, small molecule poly (ADP-ribose) glycohydrolase, or PARG, inhibitor. We are progressing with
enrollment of patients having tumors with homologous recombination deficiency, or HRD, into the Phase 1 expansion portion of the Phase
1/2 clinical trial. We selected an initial Phase 1/2 monotherapy expansion dose for IDE161 in endometrial cancer, based on AE profile and
preliminary efficacy observed. In parallel, we are also continuing with Phase 1 dose optimization to confirm a move-forward expansion dose
for the planned Phase 2 portion of the clinical trial.
•
In March 2024, we entered into a Clinical Trial Collaboration and Supply Agreement, or the Merck CTCSA, with Merck (known as MSD
outside of the United States and Canada). We are evaluating IDE161 in combination with Merck's anti-PD-1 therapy, KEYTRUDA®
(pembrolizumab), in patients with MSI-High, and microsatellite stable, or MSS, endometrial cancer.
•
In December 2024, the first patient was dosed with IDE161 in combination with KEYTRUDA in the Company-sponsored Phase 1 clinical
trial. We are targeting a Phase 1 expansion in MSI-High and MSS endometrial cancer in 2025.
•
In October 2024, we presented preclinical results on the IDE161 and ADC combination rationale as a poster at ENA 2024. We are targeting
clinical combination(s) of IDE161 with TOP1i-ADCs in solid tumors in 2025.
•
We received Fast Track Designations from the FDA in September 2023 for IDE161, specifically for the treatment of (i) adult, pretreated,
platinum-resistant advanced or metastatic ovarian cancer patients having tumors with BRCA1/2 mutations and (ii) adult, pretreated, advanced
or metastatic hormone receptor positive, or HR+, Her2- and BRCA1/2 mutant breast cancer patients.
IDE705 / GSK101 (Pol Theta Program - HR mutations, including BRCA, or HRD)
•
Enrollment is ongoing in the Phase 1 dose escalation portion of the GSK-sponsored study. IDE705 (GSK101) targets the helicase domain of
the Pol Theta protein for patients having solid tumors with BRCA or other mutations associated with HRD. GSK is leading clinical
development of IDE705 (GSK101). GSK is clinically evaluating IDE705(GSK101) in a GSK-sponsored dose escalation trial in combination
with niraparib, the GSK small molecule inhibitor of poly-(ADP-ribose) polymerase, or PARP, in solid tumors.
5
•
In August 2023, we earned a $7.0 million payment for a milestone based on acceptance of the IND by the FDA. An earlier preclinical
development $3.0 million milestone payment from GSK was achieved in August 2022 in connection with ongoing IND-enabling studies to
support the evaluation of IDE705 (GSK101).
•
We have the potential to receive an additional $10.0 million milestone payment upon initiation of Phase 1 clinical dose expansion.
IDE892 (MTA-cooperative PMRT5 inhibitor)
•
In December 2024, we selected IDE892, a potential best-in-class MTA-cooperative PRMT5 inhibitor, as a development candidate. IDE892 is
a potent and selective MTA-cooperative PRMT5 inhibitor with favorable ADME properties, demonstrating robust MTAP deletion-specific
pathway suppression and highly durable antitumor activity in combination with IDE397 IND-enabling studies.
•
Subject to successful completion of ongoing IND-enabling studies for IDE892, we are targeting an IND submission in mid-year 2025. We
are also targeting to enable our wholly-owned clinical combination of IDE397 and IDE892 in the second half of 2025 in MTAP-deletion
NSCLC.
IDE034 (B7H3 / PTK7 BsADC program)
•
In July 2024, we entered into an Option and License Agreement, or the Biocytogen Option and License Agreement, with Biocytogen
Pharmaceuticals (Beijing) Co., Ltd., (Biocytogen, HKEX: 02315), or Biocytogen, pursuant to which Biocytogen granted us an option for an
exclusive worldwide license for a potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-payload bispecific antibody drug conjugate,
or BsADC, program, or the Option.
•
In November 2024, we announced the selection of IDE034, a potential first-in-class B7H3/PTK7 topo-I-payload BsADC, as a development
candidate and the exercise of the Option. Pursuant to the Biocytogen Option and License Agreement, we paid Biocytogen an upfront fee and
exercise fee for the Option totaling $6.5 million.
•
Subject to the successful completion of ongoing IND-enabling studies for IDE034, we are targeting an IND submission in the second half of
2025.
•
Biocytogen is eligible to receive total potential upfront, option exercise and milestone payments equal an aggregate of $406.5 million,
including development and regulatory milestones of $100.0 million.
IDE251 (KAT6/7 inhibitor)
•
In December 2024, we selected IDE251, a potential first-in-class KAT6/7 inhibitor, as a development candidate. IDE251 is an equipotent,
highly selective, small molecule dual inhibitor of the lysine acetyltransferase (KAT) 6 and 7, both of which have been shown to support
cancer cell survival.
•
Subject to the successful completion of ongoing IND-enabling studies for IDE251, we are targeting an IND submission in the second half of
2025.
Precision Medicine Research Platform
•
We have established a robust precision medicine research platform with capabilities for identification and validation of new targets and
biomarkers, drug discovery and translational biology. Our approach integrates small molecule drug discovery with extensive capabilities in
identifying and validating translational biomarkers to develop targeted therapies for select patient populations that are most likely to benefit
from these targeted therapies.
•
We own or control all commercial rights in programs directed to targets identified in on our new target and biomarker discovery platform.
•
The drug discovery platform includes our proprietary chemical library, INQUIRE™, structure-based drug design enabled by extensive
structural biology and crystallography capabilities, and our proprietary content-based machine-learning engine, HARMONY™, providing
effective and efficient molecular design and structure-activity-relationship, or SAR, cycles.
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Other Pipeline Programs (Defined Biomarkers)
•
We have initiated early preclinical research programs focused on pharmacological inhibition of several new targets, or NTs, for patients with
solid tumors characterized by defined biomarkers based on genetic mutations and/or molecular signatures. We believe these research
programs have the potential for discovery and development of first-in-class or unique-in-class or best-in-class therapeutics.
•
We own or control all commercial rights in our next-generation programs.
New Target and Biomarker Discovery Platform
•
We have invested significantly and continue to invest in capabilities for identification and validation of new precision medicine targets and
biomarkers for patient selection. For targets of interest, we advance our research to discover therapeutic drugs and to further qualify relevant
biomarkers.
•
We own or control all commercial rights in programs directed to targets identified in on our new target and biomarker discovery platform.
Scientific Rationale – Synthetic Lethality
Synthetic lethality is emerging as an important therapeutic paradigm in the treatment of cancer. It was first defined by Calvin Bridges in 1922 based on the
observation that certain combinations of gene mutations resulted in lethality despite the fact the single mutations in either gene were viable.
Cancer cells often contain genetic changes that lead to alterations in pathways such as DNA repair and metabolism. These changes endow the cancer cells
with certain properties such as the ability to replicate by bypassing normal control mechanisms. However, removing these important regulators of cell
function may also make these cancer cells more dependent on backup pathways that can then be targeted to achieve a therapeutic effect. We are using small
molecule inhibitors against targets in DNA damage repair, or DDR, pathways or in tumor metabolism pathways, that have potentially less effects on the
viability of normal cells, but are designed to result in lethality in cancer cells having specific underlying genetic alterations. Cancer targets based on
synthetic lethality are ideal for precision medicine approaches because each product candidate inherently has a tumor-associated genetic biomarker to
facilitate patient selection.
Darovasertib – PKC Inhibitor Clinical Candidate in Uveal Melanoma
Darovasertib (IDE196) is our most advanced clinical-stage product candidate, which we in-licensed from Novartis. Darovasertib is a potent, selective small
molecule inhibitor of PKC, which we are developing for genetically defined cancers having GNAQ or GNA11 gene mutations. PKC is a protein kinase that
functions downstream of the GTPases GNAQ and GNA11.
We have enrolled over 230 patients as of February 7, 2025 and have opened multiple clinical sites, including international sites, in our potential
registration-enabling Phase 2/3 clinical trial, designated as IDE196-002. The purpose of the clinical trial is to evaluate darovasertib in combination with
crizotinib, Pfizer’s investigational cMET inhibitor, in patients having MUM with human leukocyte antigen-, or HLA-A*02:01 negative, or HLA-A2(-),
serotype, as part of the Second Pfizer Agreement with Pfizer.
In December 2024, we announced the recommendation of a move-forward dose and the completion of the Part 2a dose optimization for the potential
registration-enabling Phase 2/3 trial evaluating the combination of darovasertib and crizotinib in the first-line, or 1L setting in patients with HLA-A2(-)
MUM.
We are enrolling additional HLA-A*02:01 positive, or HLA-A2(+), patients as an independent clinical strategy to address HLA-A2(+) MUM patients, in
our ongoing Phase 2 clinical trial, designated as IDE196-001.
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We are targeting a median OS readout from our Phase 2 clinical trial, designated as IDE196-001, in approximately 40 1L MUM patients in 2025.
We are also supporting evaluation of darovasertib as single-agent neoadjuvant and adjuvant therapy in primary UM in an IST, captioned as “Neoadjuvant /
Adjuvant trial of Darovasertib in Ocular Melanoma,” or NADOM, led by St. Vincent’s Hospital in Sydney with the participation of Alfred Health and the
Royal Victorian Eye and Ear Hospital in Melbourne.
We have enrolled 95 patients as of December 31, 2024 in our Phase 2 clinical trial, designated as IDE196-009, evaluating darovasertib as single-agent
neoadjuvant and adjuvant therapy in patients having primary UM with ongoing enrollment and multiple clinical sites open. In September 2024, we
announced interim clinical data from the ongoing Phase 2 Company-sponsored trial and provided a regulatory update on a registrational trial based on a
Type C meeting held with the FDA.
In June 2024, we announced interim clinical data from the ongoing investigator-sponsored Phase 2 trial of darovasertib as neoadjuvant/adjuvant treatment
in UM, which was included in an oral presentation at the American Society of Clinical Oncology, or ASCO, 2024 Annual Meeting, and preliminary clinical
data from our Phase 2 trial of darovasertib for neoadjuvant UM.
ASCO 2024 Clinical Data from Investigator-Sponsored Phase 2 Trial
In our ongoing investigator-sponsored Phase 2 trial of darovasertib as neoadjuvant/adjuvant treatment in UM, 15 patients planned for enucleation with
localized UM were treated twice daily with a 300 mg dose of darovasertib in the Phase 2 investigator-sponsored clinical trial as of May 14, 2024. An initial
safety cohort of three patients was treated for one month, and the remaining 12 patients were treated in an expansion cohort for up to six months with
darovasertib as neoadjuvant treatment prior to their primary intervention (enucleation, plaque brachytherapy or external beam radiotherapy, or EBRT)
across three Australian centers. As of May 14, 2024, 13 patients had completed neoadjuvant darovasertib treatment, 11 patients received adjuvant
darovasertib treatment after primary treatment of UM, with five patients completing the planned six months of therapy. As of May 14, 2024, 75% (nine out
of 12 enucleation patients) had confirmed preservation of the eye, by conversion from planned enucleation to plaque brachytherapy or EBRT, and
approximately 67% (eight out of 12 enucleation patients) observed greater than 30% tumor shrinkage (maximum tumor volume change) after six months.
Median tumor shrinkage (maximum tumor volume change) in the 12 enucleation patients was approximately 47% after six months. The darovasertib
monotherapy neoadjuvant treatment had a manageable AE profile with no drug-related serious adverse events, or SAEs, observed in the investigator-
sponsored Phase 2 trial. Drug-related AEs in the trial were predominantly Grade 1 or Grade 2, and 20% of patients reported at least one drug-related Grade
3 AE.
Company-Sponsored Phase 2 Trial
In September 2024, we provided a clinical data update in which we observed encouraging clinical activity in our Phase 2 Company-sponsored trial.
Collectively with the IST trial, the clinical efficacy data from the Phase 2 Company-sponsored trial substantiate clinical proof of concept for the use of
darovasertib in the neoadjuvant uveal melanoma setting. The Phase 2 Company-sponsored trial used a data cutoff date of August 15, 2024, with an
enrollment cutoff date of May 13, 2024.
We evaluated 31 enucleation and 18 plaque brachytherapy UM patients who were treated with darovasertib neoadjuvant therapy in the Phase 2 Company-
sponsored and IST trials. We observed approximately 59%, or 29 of the 49 total evaluable patients, with greater than or equal to 20% ocular tumor
shrinkage by product of diameters and approximately 49%, or 24 of the 49 total evaluable patients, with greater than or equal to 30% ocular tumor
shrinkage by product of diameters. We also observed an approximately 61% eye preservation rate in enucleation patients. We found evidence predicting
visual preservation by reducing the amount of radiation associated with plaque brachytherapy. We observed a manageable AE profile from the Phase 2
Company-sponsored trial. In 38 patients, 11% of patients experienced a Grade 3 or higher AE and 5% of patients experienced a serious AE rate. We also
observed a discontinuation rate of 3%. The most common AEs observed included diarrhea, nausea, vomiting and fatigue.
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We are pursuing a clinical strategy for darovasertib to broadly address UM, alternatively referred to as ocular melanoma, in both primary and metastatic
settings. Greater than 90% of UM patients have tumors harboring GNAQ or GNA11 mutations. There are no FDA-approved systemic therapies for primary
UM, as either neoadjuvant or adjuvant therapies. There are likewise no FDA-approved therapies for patients having MUM with HLA-A*02:01 negative, or
HLA-A2(-), serotype. These primary UM patients and HLA-A2(-) MUM patients collectively represent approximately 85% of all ocular melanoma
patients. We have a separate, independent clinical strategy to address HLA-A*02:01 positive, or HLA-A2(+), MUM patients.
The potentially addressable patient population for MUM is estimated to include an annual incidence of approximately 4,500 patients across the United
States and Europe. (Neo)Adjuvant UM represents a significant expansion opportunity for darovasertib – with a potential annual incidence of approximately
12,000 patients aggregate in North America, Europe and Australia.
We own or control all commercial rights in our darovasertib program in UM, including in MUM and in primary UM, subject to certain economic
obligations pursuant to our exclusive, worldwide license to darovasertib with Novartis.
Darovasertib – Potential Registration-Enabling Clinical Trial in First-Line HLA-A2(-) MUM
The protocol of the Phase 2/3 clinical trial design incorporates guidance and feedback following our Type C meeting with the FDA in March 2023. This
protocol includes an integrated Phase 2/3 open-label study-in-study design in first-line MUM patients with an HLA-A2(-) serotype. The clinical trial design
employs a Phase 2 portion with median progression free survival, or PFS, as a primary endpoint for potential accelerated approval. Patients enrolled in
Phase 2 will continue on treatment within the same study and will be considered, together with additional enrolled patients, to evaluate OS as the primary
endpoint of the Phase 3 confirmatory portion of the clinical trial to support a potential full approval.
In the Phase 2 portion of the clinical trial, approximately 230 patients will be randomized on a 2:1 basis for treatment with the darovasertib and crizotinib
combination in the treatment arm or investigators choice in the control arm, selected from (a) a combination of ipilimumab (ipi) and nivolumab (nivo), (b)
PD1-targeted monotherapy or (c) dacarbazine. The treatment arm of the Phase 2 portion of the clinical trial includes a nested study to confirm the move
forward combination dose for the integrated Phase 2/3 clinical trial – including cohorts at the Phase 2 expansion doses of (i) darovasertib 300 mg BID +
crizotinib 200 mg BID and (ii) darovasertib 200 mg BID + crizotinib 200 mg BID. Under the nested study design, patients enrolled in the cohort at the
move forward dose will be included within the Phase 2/3 registrational clinical trial. The Phase 2 portion of the clinical trial contemplates an efficacy and
safety data set of approximately 200 patients randomized 2:1 with the treatment arm at the move forward dose to support a potential accelerated approval
based on median PFS by blinded independent central review, or BICR, as a primary endpoint. Accelerated approval is intended to allow for earlier approval
of drugs that treat serious conditions and fill an unmet medical need based on a demonstration of effectiveness on a surrogate endpoint.
Patients enrolled in Phase 2 at the selected dose would continue on treatment and be included in the Phase 3 study analysis, supplemented by enrollment of
approximately 120 additional patients into the Phase 3 portion of the clinical trial, with 2:1 randomization on the same basis as the Phase 2 portion.
Efficacy data from the Phase 3 could support potential full approval using median OS as a primary endpoint.
In December 2024, we announced the recommendation of a move-forward dose and the completion of the Part 2a dose optimization for the potential
registration-enabling Phase 2/3 trial evaluating the combination of darovasertib and crizotinib in the 1L setting in patients with HLA-A2(-) MUM.
In May 2023, we expanded our relationship with Pfizer to support the Phase 2/3 registrational trial to evaluate darovasertib and crizotinib as a combination
therapy in MUM by entering into Amendment No. 1 to the Second Pfizer Agreement. Under Amendment No. 1 to the Second Pfizer Agreement, Pfizer
will provide us with a first defined quantity of crizotinib at no cost, as well as an additional second defined quantity of crizotinib at a lump-sum cost.
Prevalence of HLA-A2*02:01 Negative Serotype in MUM
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Data from darovasertib clinical trials in MUM demonstrate that approximately 70% of MUM patients with known HLA-A*02:01, or HLA-A2 status were
HLA-A2(-). As reported at ESMO 2023, the HLA-A2 status was known in subsets of patients enrolled in clinical trials evaluating darovasertib. Prevalence
of HLA-A2(+) and HLA-A2(-) in MUM patients was determined from a first data set of n=149 MUM patients treated with darovasertib as monotherapy or
in a combination arm of a clinical trial, and separately in a second data set of n=118 MUM patients treated with the darovasertib and crizotinib
combination. These data include 102 of 149 (68%) of patients in the all-treatment subset and 81 of 118 (69%) patients in the darovasertib and crizotinib
combination treatment subset.
Darovasertib – Strategy for HLA-A*02:01 Positive MUM
Based on clinical data from the Phase 2 clinical trial evaluating darovasertib and crizotinib in MUM as reported at ESMO 2023, and based on the
darovasertib mechanism of action, we anticipate darovasertib will have clinical activity independent of HLA-A2 status in GNAQ/11-mutation cancers.
We are enrolling additional HLA-A2(+) MUM patients as an independent clinical strategy to address HLA-A2(+) MUM patients, in our ongoing Phase 2
clinical trial, designated as IDE196-001. This strategy demonstrates our commitment to fully address the high unmet medical need in MUM. Such clinical
trial data from darovasertib and crizotinib combination treatment in HLA-A2(+) MUM could support publication and potential inclusion in NCCN Clinical
Practice Guidelines in Oncology.
Darovasertib – Orphan Drug Designation in UM and Fast Track Designation in MUM
In April 2022, the FDA designated darovasertib as an Orphan Drug in UM, including primary and metastatic disease. Under an Orphan Drug designation,
darovasertib may be entitled to certain tax credits for qualifying clinical trial expenses, exemption from certain user fees and, subject to FDA approval of a
New Drug Application, or NDA, for darovasertib in UM, eligibility for seven years of statutory marketing exclusivity during which the FDA is prohibited
from approving a subsequent same drug for the same rare disease or condition except in limited circumstances, such as a subsequent drug that demonstrates
clinical superiority. As an FDA-designated Orphan Drug, darovasertib may also be excluded from certain mandatory price negotiation provisions of the
2022 Inflation Reduction Act, if approved for a single indication only.
In November 2022, the FDA granted Fast Track designation to our development program investigating darovasertib in combination with crizotinib in adult
patients being treated for MUM. The Fast Track designation makes our darovasertib and crizotinib development program eligible for various expedited
regulatory review processes, including generally more frequent FDA interactions, such as meetings and written communications, potential eligibility for
rolling review of a future NDA and potential accelerated approval and priority review of an NDA.
Darovasertib – Phase 2 Trials in Neoadjuvant and Adjuvant Therapy in Uveal Melanoma (UM)
We are clinically evaluating the potential for darovasertib as neoadjuvant or adjuvant therapy, or both, also referred to as (neo)adjuvant therapy, in primary,
non-metastatic UM patients. We previously reported preliminary clinical data in the neoadjuvant setting showing evidence of anti-tumor activity that we
believe supports further clinical evaluation of darovasertib to determine its potential as a neoadjuvant therapy to either save the eye by avoiding
enucleation, or to reduce the tumor thickness in the eye, enabling treatment with less radiation to preserve vision, and as an adjuvant therapy, to potentially
extend relapse free survival.
We have enrolled 95 patients as of December 31, 2024 in our Phase 2 clinical trial, designated as IDE196-009, evaluating darovasertib as single-agent
neoadjuvant and adjuvant therapy in patients having primary UM with ongoing enrollment and multiple clinical sites open. The purpose of the clinical trial
is to evaluate single-agent darovasertib as neoadjuvant treatment of primary UM prior to primary interventional treatment of enucleation or radiation
therapy and also as adjuvant therapy following the primary treatment. An amendment to the study protocol was submitted to the FDA in July 2024 to
enable dosing of darovasertib therapy up to 12 months.
We are additionally supporting evaluation of darovasertib as (neo)adjuvant therapy in primary UM in the ongoing NADOM IST. Pursuant to an as-
amended protocol for
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the NADOM study, UM patients who would otherwise undergo enucleation are instead treated with single agent darovasertib as neoadjuvant treatment for
up to six months or maximum benefit. This reflects an increase in potential treatment duration versus the initial approach of one month neoadjuvant
therapy, following which these patients will undergo a primary interventional treatment. Patients will subsequently be treated with darovasertib for up to
six months as follow-up adjuvant therapy after the primary interventional treatment.
Darovasertib – Potential Registration-Enabling Clinical Trial in Neoadjuvant UM
A Type C meeting was held with the FDA for the clinical trial design of a potential Phase 3 registration-enabling clinical trial in neoadjuvant UM patients.
For the potential Phase 3 clinical trial, we currently project approximately 400 patients will be randomized for treatment with darovasertib in the treatment
arm or the control arm, with potential modifications pending further feedback from the FDA. Based on the currently targeted clinical trial design, there will
be two cohorts enrolled, including plaque brachytherapy eligible UM patients and enucleation eligible UM patients. For the plaque brachytherapy cohort,
the randomization will be darovasertib followed by plaque brachytherapy versus plaque brachytherapy alone. For the enucleation cohort, the randomization
will be with or without darovasertib as neoadjuvant therapy.
Based on FDA guidance and information provided in our FDA briefing book, we expect that time to vision loss will be the primary endpoint for plaque
brachytherapy UM patients. Eye preservation rate will be the primary endpoint for enucleation UM patients for the target registrational trial design in
neoadjuvant UM. The FDA briefing book noted an objective to exceed lower bound of 10% eye preservation rate with a 95% confidence interval for this
primary endpoint. No detriment to Event-Free-Survival, or EFS, in the treatment arms will be a secondary endpoint.
Pending ongoing discussions with the FDA, we are evaluating potential surrogate and composite endpoints to support earlier approval scenarios. The
registrational study will enroll UM patients with a high risk for metastatic disease. Based on the FDA meeting, there is a potential for consideration of a
broad indication label in neoadjuvant UM for subjects with low, intermediate and high risk for metastatic disease. We anticipate approximately two years
of data maturity to initial readout for no detriment to EFS in the treatment arms for this high-risk patient population based on preliminary projections.
300mg BID darovasertib was noted in the FDA briefing book as the move-forward dose for the registrational trial. We are currently finalizing the trial
protocol and are targeting to initiate the study in the first half of 2025.
IDE397 – MAT2A Inhibitor in Tumors with MTAP Deletion
IDE397 is a clinical-stage, potent, selective small molecule inhibitor of methionine adenosyltransferase 2a, or MAT2A, which we are developing for
patients having solid tumors with MTAP deletion. The prevalence of methylthioadenosine phosphorylase, or MTAP, gene deletion is estimated to be
approximately 15% of human solid tumors. MTAP deletion in patient tumors is identified by commercial or institutional next generation sequencing, or
NGS, panels or by MTAP immunohistochemistry, or IHC, assay with confirmation by NGS.
MTAP-null cells lack the ability to metabolize 5-methylthioadenosine, or MTA, which is an essential step in a biochemical pathway involved in salvaging
the metabolite S-adenosyl methionine, or SAM. Increased levels of MTA partially inhibit the methyltransferase PRMT5 for which SAM is the methyl-
donor substrate for methylation of various proteins. This partial inhibition of PRMT5 by increased levels of MTA renders MTAP-null cells more dependent
on the activity of MAT2A, an enzyme that is responsible for the synthesis of SAM. Because of this enhanced dependence, loss of MTAP results in
synthetic lethality when MAT2A is pharmacologically inhibited.
We are enrolling patients into a Phase 1/2 clinical trial, designated as IDE397-001, to evaluate IDE397 for patients having certain tumors with MTAP gene
deletion. We are proceeding with enrollment of MTAP-deletion patients into a monotherapy Phase 1/2 expansion cohort with an initial focus on high
priority solid tumor types, including UC and NSCLC. We have selected a move-forward Phase 2 expansion dose for IDE397 monotherapy in MTAP-
deletion UC and NSCLC, based on AE profile and preliminary clinical efficacy observed, including multiple partial responses by RECIST 1.1.
Company-Sponsored Phase 1/2 Monotherapy Expansion in MTAP-Deletion Urothelial and Lung Cancer
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In July 2024, we announced clinical data for the IDE397 Phase 1/2 monotherapy expansion dose demonstrating preliminary clinical efficacy in heavily pre-
treated MTAP-deletion UC and NSCLC patients. The patients evaluated had a median of two prior lines of therapy, ranging from one to seven prior lines
of treatment. The reported Phase 1/2 clinical data were based on 18 evaluable MTAP-deletion patients, including seven UC patients, four adenocarcinoma
squamous NSCLC patients, and seven squamous NSCLC patients at the expansion dose of 30 mg once-a-day, or QD, of IDE397. In the interim update for
18 evaluable patients, with a data analysis cutoff date of June 21, 2024, we reported an overall response rate of approximately 39% (one complete response
and six partial responses by RECIST 1.1 evaluation), which included two unconfirmed partial responses (one UC patient that had a 100% tumor reduction
in the target lesion at the last CT-scan assessment and one adenocarcinoma squamous NSCLC patient which were both confirmed in our October 2024
update). We also observed a disease control rate of 94%, including one complete response, six partial responses and ten stable disease by RECIST 1.1
evaluation. In addition, we observed tumor shrinkage in 14 of the 18 evaluable patients. 11 of the evaluable patients are still on treatment and five of the
seven responses by RECIST 1.1 evaluation remain in response. We also reported a ctDNA molecular response, or MR, rate of 81%, representing 13 of 16
reportable patients with 50% or greater ctDNA reduction (several quality control failures of patient samples precluded the other patients from MR
analysis).
Regarding safety data, we also reported a favorable AE profile at the 30 mg QD expansion dose. Approximately 5.6% of patients experienced a Grade 3 or
higher drug-related AE at the 30 mg QD dose, represented by one instance of Grade 3 asthenia, and no drug-related SAEs were observed. We observed no
drug-related AEs leading to discontinuations, and one non-evaluable patient discontinued due to rapid clinical progression of cancer fatigue and drug-
unrelated AEs in the first cycle of treatment. We anticipate that the favorable AE profile and dosing convenience of a 30 mg QD tablet has the potential to
enable long-term dosing and combination development.
In October 2024, we announced Phase 1 expansion data for IDE397 in MTAP-deletion UC and NSCLC patients in a late breaker abstract oral presentation
at the 36th edition of the EORTC-NCI-AACR Symposium, or ENA 2024, in Barcelona, Spain. The patients evaluated had a median of two to three prior
lines of therapy, ranging from one to seven prior lines of treatment. The reported clinical data were based on 27 evaluable MTAP-deletion patients,
including 10 UC patients, nine adenocarcinoma NSCLC patients, and eight squamous NSCLC patients at the expansion dose of 30 mg QD of IDE397. In
the update of 27 evaluable patients, with a data analysis cutoff date of August 22, 2024, we reported an overall response rate of approximately 33% (one
complete response and eight partial responses by RECIST 1.1 evaluation). Nine of nine responses were confirmed by RECIST 1.1, including four UC
patients, of which one was a complete response, three squamous NSCLC patients, and two adenocarcinoma NSCLC patients. Two patients were confirmed
after the data cutoff date. We also observed an overall response rate by RECIST 1.1 evaluation by solid tumor type. For MTAP-deletion UC patients, the
confirmed overall response rate was 40%, or 4 out of 10 patients, for MTAP-deletion squamous NSCLC patients, the confirmed overall response rate was
approximately 38%, or 3 out of 8 patients, and for MTAP-deletion adenocarcinoma NSCLC patients, the confirmed overall response rate was
approximately 22%, or 2 out of 9 patients. In addition, we observed a disease control rate of 93%, including one complete response, eight partial responses
and 16 stable disease by RECIST 1.1 evaluation, reflecting 25 of 27 evaluable patients with stable disease or better. Of the 27 evaluable patients, 15 are still
on treatment. The median duration of treatment has not been reached and is greater than 6.2 months. The median time to response is approximately 2.7
months. The median duration of response and median progression free survival data is still immature. Three UC patients were on treatment greater than 250
days, four squamous NSCLC patients were on treatment greater than 200 days, and three adenocarcinoma NSCLC patients were on treatment greater than
200 days. We also reported a ctDNA MR rate of 81%, representing 17 of 21 reportable patients with 50% or greater ctDNA reduction and approximately
33%, representing 7 of 21 reportable patients, with a deep 90% or greater ctDNA reduction (several quality control failures of patient samples precluded
the other patients from MR analysis). All 17 MRs were rapid occurring at the first ctDNA sample analysis.
We continued to report favorable AE profile at the 30 mg QD expansion dose. Approximately 18% of patients experienced a Grade 3 or higher drug-related
AE at the 30 mg QD dose, and no drug-related SAEs were observed. No drug-related AEs leading to discontinuations were observed. We anticipate that the
favorable AE profile and dosing convenience of a 30 mg QD tablet has the potential to enable long-term dosing and combination development, including
with MTA-cooperative PRMT5 inhibitors and topoisomerase payload ADCs.
We are collaborating with Gilead to clinically evaluate IDE397 and Trodelvy (sacituzumab-govitecan-hziy), Gilead’s Trop-2 directed ADC combination, in
patients having MTAP-deletion UC, in our Phase 1 clinical trial pursuant to the Gilead CSCSA, with Gilead.
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A first patient was dosed for the Phase 1 trial in June 2024. The Phase 1 clinical trial is evaluating the safety, tolerability, pharmacokinetics,
pharmacodynamics and efficacy of IDE397 in combination with Trodelvy in MTAP-deletion UC patients (NCT04794699). Pursuant to the Gilead CSCSA,
we and Gilead retain the commercial rights to our respective compounds, including with respect to use as a monotherapy or combination agent. We are the
study sponsor and Gilead will provide the supply of Trodelvy. IDE397 monotherapy or in combination with Trodelvy has not been approved by any
regulatory agency, and the efficacy and safety of this combination has not been established.
In October 2024, we reported the first preliminary clinical case study of the IDE397 and Trodelvy combination in MTAP-deletion UC at ENA 2024,
including a partial response by RECIST 1.1 in a patient case report with a genetic co-alteration of MTAP-deletion and a FGFR3-TACC3 fusion, and rapid
and deep first-evaluation MRs with ctDNA reduction of greater than 95% observed. The partial response reported at ENA 2024 has confirmed by RECIST
1.1. We are targeting a Phase 1/2 expansion in the first quarter of 2025 and a clinical data update for the Phase 1 trial in MTAP-deletion UC in 2025.
In February 2025, we expanded our clinical study collaboration and entered into the Second Gilead CSCSA to evaluate the IDE397 and Trodelvy
combination in MTAP-deletion NSCLC.
We were collaborating with Amgen to clinically evaluate IDE397 in combination with AMG 193, the Amgen investigational MTA-cooperative PRMT5
inhibitor, in patients having tumors with MTAP deletion, in an Amgen-sponsored clinical trial pursuant to the Amgen CTCSA. We and Amgen mutually
agreed to wind down the IDE397 and AMG 193 clinical combination study in February 2025 and will not pursue dose expansion.
In October 2024, we presented a preclinical poster presentation on the antitumor activity by combinatorial inhibition of MAT2A and PRMT5 in MTAP-
deleted tumors at the EORTC-NCI-AACR Symposium, or ENA 2024. We are targeting to enable our wholly-owned clinical combination of IDE397 and
IDE892, our potential best-in-class MTA-cooperative PRMT5 inhibitor development candidate, in the second half of 2025 in MTAP-deletion NSCLC.
There are currently no FDA-approved therapies for patients with MTAP-deletion solid tumors, highlighting the unmet medical need. The priority MTAP-
deletion solid tumor types for the IDE397 Phase 1/2 monotherapy program are UC and NSCLC. MTAP-deletion prevalence has been reported at over 15%
in NSCLC and over 25% in UC, based on The Cancer Genome Atlas, or TCGA, database. We estimate that the MTAP-deletion annual incidence in the
United States in NSCLC and UC is approximately 48,000 patients, based on the 2024 Surveillance, Epidemiology, and End Results database. In addition,
there are several potential expansion MTAP-deletion solid tumor types that are also being considered for monotherapy and combination development,
including pancreatic, head and neck, gastric, and squamous esophageal cancer, among others. Based on the TCGA database, MTAP-deletion prevalence in
pancreatic, head and neck, gastric and squamous esophageal cancer represents an aggregate U.S. annual incidence of approximately 27,000 patients.
We own all rights, title, and interest in and to IDE397 and IDE892, including all worldwide commercial rights thereto.
IDE849 (DLL3) Program with Hengrui Pharma
In December 2024, we entered into the Hengrui Pharma License Agreement, pursuant to which Hengrui Pharma granted us an exclusive worldwide license
outside of Greater China, for IDE849 (SHR-4849), a potential first-in-class Phase 1 DLL3 TOP1i ADC. DLL3 has been reported to be expressed in
multiple solid tumor types, including in SCLC and Neuroendocrine Tumors at approximately 85% and 20-40%, respectively. DLL3 has limited
extracellular expression in normal tissues, making it a promising therapeutic target in these tumor types, for which there remains significant unmet medical
need.
IDE849 has shown promising antitumor activity in preclinical studies, including tumor regression as a monotherapy in multiple models. IDE849 is
currently being evaluated by Hengrui Pharma in an ongoing Phase 1 trial in China in SCLC patients. In the ongoing Phase 1 dose escalation, IDE849 has
reached therapeutic dose levels where multiple partial responses have been observed as of the data cut-off date of December 10, 2024. Among 11 evaluable
SCLC subjects treated at therapeutic dose
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levels, 8 partial responses by RECIST 1.1 were observed, resulting in an overall response rate of ~73% (including both confirmed and unconfirmed
responses, with all unconfirmed responses pending further evaluation). As of the data cut-off date, treatment related adverse events, or TRAEs were
predominantly Grade 1 or 2. The Phase 1 dose escalation is ongoing with no reported drug-related discontinuations, and the maximum tolerated dose has
not yet been reached. The most common TRAEs observed were white blood cell count decreased, anemia, neutrophil count decreased, nausea and platelet
count decreased. In January 2025, Hengrui Pharma selected expansion doses for their Phase 1 trial.
We are planning on submitting a U.S. IND for the evaluation of IDE849 as a monotherapy in SCLC in the first half of 2025. We are also targeting to
initiate the evaluation of IDE849 in combination with IDE161 and in NETs in the second half of 2025. A clinical data update is targeted in 2025.
Under the terms of the Hengrui Pharma License Agreement, Hengrui Pharma is eligible to receive upfront and milestone payments totaling $1.045 billion,
including a $75.0 million upfront fee, up to $200.0 million in development and regulatory milestone payments, plus commercial success-based milestones.
Hengrui Pharma is also eligible to receive mid-single to low-double digit royalties on net sales outside of Greater China.
IDE275 (GSK959) – WRN Inhibitor in Tumors with High Microsatellite Instability
We discovered IDE275 (GSK959), our Werner, or WRN, Helicase inhibitor clinical development candidate and evaluated IDE275 (GSK959) in preclinical
studies in collaboration with GSK. IDE275 (GSK959) targets WRN for patients having tumors with MSI-High.
WRN protein is a RecQ enzyme involved in the maintenance of genome integrity. Germline loss of function mutations in WRN lead to premature aging
and pre-disposition to cancer. Microsatellite instability is a change in the DNA content of a tumor cell in which the number of repeats of microsatellites,
short repeated sequences of DNA, differ as cells divide. MSI-High is present in about 15% of gastrointestinal tumor cancers, including in approximately
22% of stomach adenocarcinoma and 16% of colorectal cancer. Tumors with MSI-High are routinely assessed in multiple diagnostic profiling tests.
WRN is a protein having several functional domains, and we have shown that the helicase functional domain of WRN is responsible for this synthetic
lethal interaction, as reflected in our publication in Cell Press – iScience, Werner Syndrome Helicase is Required for the Survival of Cancer Cells with
Microsatellite Instability (March 2019).
We have demonstrated preclinical in vivo efficacy with tumor regression and PD response in a relevant MSI-High model. We have observed selectivity of
our Werner Helicase inhibitor and validation of the synthetic lethal relationship to tumors with MSI-High over tumors with MSS based on a lack of in vivo
pharmacological response in relevant MSS xenograft models.
We, in collaboration with GSK, received IND clearance for IDE275 (GSK959), a potential first-in-class WRN inhibitor, in October 2024 to enable first-in-
human clinical evaluation of IDE275 (GSK959) for patients having tumors with MSI-High. GSK will lead clinical development for the Werner Helicase
program. GSK is responsible for 80% of global research and development costs, and we are responsible for 20% of such costs. GSK holds a global,
exclusive license to develop and commercialize the Werner Helicase Inhibitor DC.
In October 2023, we achieved and earned a $3.0 million milestone in connection with IND-enabling studies. In October 2024, we earned a $7.0 million
milestone payment for the IND clearance of IDE275 (GSK 959). We have the potential to earn up to an additional $10.0 million milestone payment upon
initiation of Phase 1 clinical dose expansion. We are also eligible to receive further aggregate late-stage development and regulatory milestones of up to
$465.0 million. Upon commercialization, we will be eligible to receive up to $475.0 million of commercial milestones, 50% of U.S. net profits and tiered
royalties on global non-U.S. net sales of the Werner Helicase Inhibitor DC – ranging from high single-digit to sub-teen double-digit percentages, subject to
certain customary reductions.
IDE161 – PARG Inhibitor in Tumors with Homologous Recombination Deficiency
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We are evaluating IDE161, a small molecule inhibitor of PARG, in a Phase 1/2 clinical trial, designated as IDE161-001 for patients having tumors with
HRD and potentially other genetic and/or molecular signatures. PARG is a novel target in a clinically validated biological pathway. PARG functions as a
regulator of DNA repair in the same biochemical pathway as PARP. PARG hydrolyzes PAR chains that are polymerized by PARP enzymes, completing
the PAR cycle. Small molecule inhibitors of PARG result in a dose dependent increase in cellular PAR after DNA damage. PARG is a mechanistically
distinct target relative to PARP.
We are progressing with enrollment of patients having tumors with HRD into the Phase 1 expansion portion of the Phase 1/2 clinical trial. The selection of
an initial Phase 1/2 monotherapy expansion dose has been made in endometrial cancer. In parallel, we are also continuing with Phase 1 dose optimization
to confirm a move-forward expansion dose for the planned Phase 2 portion of the clinical trial.
In September 2023, we received Fast Track Designation from the FDA for IDE161 for the treatment of adult patients having advanced or metastatic
ovarian cancer with germline or somatic BRCA 1/2 mutations who are platinum resistant and have received prior antiangiogenic and PARP inhibitor
therapies and for the treatment of adult patients having advanced or metastatic HR+, Her2- breast cancer with germline or somatic BRCA 1/2 mutations
who have progressed following treatment with at least one line of a hormonal therapy, a CDK4/6 inhibitor therapy and a PARP inhibitor therapy.
Under each Fast Track designation, the IDE161 development program in BRCA1/2 mutant (m) breast and ovarian cancers is eligible for various expedited
regulatory review processes, including generally more frequent FDA interactions (e.g., meetings, written communications), potential eligibility for rolling
review, accelerated approval, and priority review of a future NDA.
In March 2024, we entered into the Merck CTCSA with Merck (known as MSD outside of the United States and Canada). We are evaluating the
combination of IDE161 and Merck’s anti-PD-1 therapy KEYTRUDA® (pembrolizumab) in patients with MSI-High and MSS endometrial cancer. Under
the Merck CTCSA, Merck will provide KEYTRUDA® to us, and we will sponsor the Phase 1 clinical combination trial.
In December 2024, the first patient was dosed with IDE161 in combination with KEYTRUDA in the Company-sponsored Phase 1 clinical trial. The safety,
tolerability, pharmacokinetics, pharmacodynamics and efficacy of IDE161 in combination with KEYTRUDA is being evaluated as an arm in IDE161-001
(NCT05787587), a Company-sponsored Phase 1 trial of IDE161 in solid tumors. We are targeting a Phase 1 expansion in MSI-High and MSS endometrial
cancer in 2025.
In October 2024, we presented preclinical results on the IDE161 and ADC combination rationale as a poster at ENA 2024. We are targeting clinical
combination(s) of IDE161 with TOP1i-ADCs in 2025.
We entered into an exclusive license under the Evaluation, Option and License Agreement with Cancer Research Technologies Ltd., also known as Cancer
Research United Kingdom, or CRT, and the University of Manchester, pursuant to which we hold exclusive worldwide license rights covering a broad
class of PARG inhibitors.
In April 2023, we incurred an obligation to pay milestone payments in an aggregate amount of £750,000 to CRT based upon the achievement of certain
milestones relating to first and second tumor histologies in connection with the Phase 1 portion of the IDE161-001 Phase 1/2 clinical trial in oncologic
diseases. We will be obligated to make additional payments to CRT aggregating up to £18.75 million upon the achievement of specific development and
regulatory approval events for development of a PARG inhibitor in oncologic diseases, including an aggregate of up to £1.5 million and up to £2.25 million
for the achievement of certain Phase 2 and Phase 3 development milestones, respectively, in each case as relating to first and second tumor histologies.
We own or control all commercial rights in our PARG program, subject to certain economic obligations pursuant to our exclusive, worldwide license to
certain PARG inhibitors, including IDE161, with CRT and University of Manchester.
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IDE705 (GSK101) – Pol Theta Helicase Inhibitor in tumors with Homologous Recombination Deficiency
We discovered IDE705 (GSK101), our DNA Polymerase Theta, or Pol Theta, Helicase inhibitor clinical development candidate, and evaluated
IDE705(GSK101) in preclinical studies in collaboration with GSK. IDE705 (GSK101) targets the helicase domain of the Pol Theta protein for patients
having solid tumors with BRCA or other mutations associated with HRD.
Pol Theta is involved in a DNA repair process called microhomology mediated end joining, or MMEJ, that is utilized when homologous recombination
mediated repair is compromised, as happens in the case of certain BRCA1 or BRCA2 mutations. The expression of Pol Theta is largely absent in normal
cells, but tumor cells harboring double strand break repair defects, such as BRCA1 or BRCA2 mutations, show higher Pol Theta expression and synthetic
lethality when Pol Theta is inhibited. Pol Theta is a large protein with two functional domains: a DNA polymerase domain and an ATP-dependent DNA
helicase domain, sometimes referred to as an ATPase domain, linked by a RAD51 central region.
GSK is evaluating IDE705 (GSK101) in combination with niraparib, the GSK small molecule inhibitor of PARP for the treatment of patients having
tumors with BRCA or other HRD, in a GSK-sponsored Phase 1 clinical trial. GSK has dosed the first patient, and enrollment is ongoing in the dose
escalation portion of this study.
GSK is leading clinical development of IDE705 (GSK101) pursuant to the Collaboration, Option and License Agreement with GSK, or GSK Collaboration
Agreement. GSK is responsible for all research and development costs for the Pol Theta program.
We have the potential to earn up to an additional $10.0 million milestone payment upon initiation of Phase 1 clinical dose expansion. In August 2023, we
achieved and earned a $7.0 million milestone based on acceptance of the IND by the FDA, for which payment was received in October 2023. An earlier
preclinical development $3.0 million milestone payment from GSK was achieved in August 2022 in connection with ongoing IND-enabling studies to
support evaluation of IDE705 (GSK101).
We have the potential to earn further aggregate late-stage development and regulatory milestones of up to $465.0 million. Upon commercialization, we will
be eligible to receive up to $475.0 million of commercial milestones, and tiered royalties on global net sales of GSK101 – ranging from high single-digit to
sub-teen double-digit percentages, subject to certain customary reductions.
IDE892 – MTA-cooperative PMRT5 inhibitor
In December 2024, we announced the selection of IDE892, a potential best-in-class MTA-cooperative PRMT5 inhibitor. IDE892 was discovered through
our iterative physics-based ligand design and optimization platform, and is a highly potent and selective MTA-cooperative PRMT5 inhibitor with best-in-
class potential and favorable drug-like properties. IDE892 has demonstrated exceptionally selective antiproliferative activity in MTAP-deleted tumor cell
models and durable complete responses in combination with MAT2A inhibitor IDE397 in challenging MTAP-deletion preclinical models.
IDE892 enables a wholly-owned clinical combination between the PRMT5 and MAT2A mechanisms and delivers potentially greater efficacy in MTAP-
deletion solids tumors through this rational combination approach, including favorable potency, selectivity, and synergistic combination potential with
MAT2A inhibitor IDE397.
Development of IDE892 is ongoing to support an IND filing to the FDA in mid-year 2025, subject to satisfactory completion of ongoing preclinical and
IND-enabling studies.
IDE034 (B7H3/PTK7) program with Biocytogen
In July 2024, we entered into the Biocytogen Option and License Agreement, pursuant to which Biocytogen granted us an option for an exclusive
worldwide license
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from Biocytogen to develop and commercialize products in connection with a potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-payload
BsADC program, or the Option. B7H3/PTK7 has been found to be co-expressed in multiple solid tumor types, including double-digit percent prevalence in
lung, colorectal, and head and neck cancers, among others. Based on preclinical data, the potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-
payload BsADC program has the potential to be developed as a monotherapy agent and used in combination with multiple programs in our pipeline
targeting DDR-based therapies, including our PARG inhibitor IDE161.
In November 2024, we announced the selection of IDE034, a potential first-in-class B7H3/PTK7 topo-I-payload BsADC, as a development candidate and
the exercise of the Option. Under the terms of the Biocytogen Option and License Agreement, we paid Biocytogen an upfront fee and an exercise fee for
the Option totaling $6.5 million.
We are targeting an IND submission to the FDA in the second half of 2025 for IDE034, subject to satisfactory completion of ongoing preclinical and IND-
enabling studies.
Pursuant to our exercise of the Option, Biocytogen is eligible to receive additional development and regulatory milestone payments and commercial
milestone payments, as well as low to mid single-digit royalties on net sales. Total potential milestone payments equal an aggregate of $400.0 million,
including development and regulatory milestone payments of up to $100.0 million. Our royalty obligations continue with respect to each country and each
product until the later of (i) the date on which such product is no longer covered by certain intellectual property rights in such country and (ii) the 10th
anniversary of the first commercial sale of such product in such country.
IDE251 - KAT6/7 inhibitor
In December 2024, we announced the selection of IDE251, a potential first-in-class KAT6/7 inhibitor. IDE251 is an equipotent, highly selective, small
molecule dual inhibitor of the lysine acetyltransferase (KAT) 6 and 7, both of which have been shown to support cancer cell survival. IND-enabling studies
to support the potential clinical evaluation of IDE251 monotherapy in patients with breast and lung cancers with 8p11 amplification are ongoing, as well as
additional opportunities in the setting of lineage addiction. Based on our biomarker evaluation, 8p11 amplification prevalence is projected to be
approximately 15% in breast cancer and 17.5% in squamous NSCLC.
IDE251 selectively inhibits both KAT6 and KAT7 while sparing other structurally similar KAT molecules. KAT6 and KAT7 are mechanistically
intertwined epigenetic modulators of cell identity and lineage commitment programs corrupted by oncogenic transformation. Dual KAT6/7 inhibition with
IDE251 delivers robust and durable anti-tumor activity, superior to KAT6 inhibition alone, in preclinical tumor models with 8p11 amplifications, as well as
in biomarker selected indications dependent upon lineage-specific transcription factor activity.
We are targeting an IND submission to the FDA in the second half of 2025 for IDE251, subject to satisfactory completion of ongoing preclinical and IND-
enabling studies.
Next-Generation Precision Medicine Pipeline Programs
We have initiated early preclinical research programs focused on pharmacological inhibition of several new targets, or NTs, for patients with solid tumors
characterized by defined biomarkers based on genetic mutations and/or molecular signatures. We believe these research programs have the potential for
discovery and development of first-in-class or unique-in-class or best-in-class therapeutics. Collectively, we believe these efforts will further advance our
multi-pronged clinical and business strategy. We own or control all commercial rights in our next-generation NT programs.
New Target and Biomarker Discovery Platform
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Since inception of the company, our core research has and continues to be focused on precision medicine oncology, with synthetic lethality as a central
tenet. We have invested significantly and continue to invest in capabilities for identification and validation of new precision medicine targets and
biomarkers for patient selection. For targets of interest, we advance our research to discover therapeutic drugs and to further qualify relevant biomarkers.
Precision Medicine Research Platform
We have established a robust precision medicine research platform with capabilities for identification and validation of new targets and biomarkers, drug
discovery and translational biology. Our approach integrates small molecule drug discovery with extensive capabilities in identifying and validating
translational biomarkers to develop targeted therapies for select patient populations that are most likely to benefit from these targeted therapies. Our small
molecule drug discovery expertise includes discovery and development of small molecule therapeutics.
The drug discovery platform includes our proprietary chemical library, INQUIRE™, structure-based drug design enabled by extensive structural biology
and crystallography capabilities with over 200,000 chemical compounds, and our proprietary content-based machine-learning engine, HARMONY™,
providing effective and efficient molecular design and structure-activity-relationship, or SAR, cycles. We have deep research and development expertise in
synthetic lethality – which represents an emerging class of precision medicine targets. We are applying these capabilities to develop a robust pipeline in
precision medicine oncology.
DECIPHER™ Dual CRISPER Synthetic Lethality Library – UCSD
We have constructed our DECIPHER Dual CRISPR library for synthetic lethality target and biomarker discovery in collaboration with the University of
California, San Diego, and bioinformatics analysis and validation are ongoing. The DECIPHER 1.0 library is focused on DNA Damage Repair targets
across various
tumor suppressor genes and oncogenes of interest that were selected based on their known prevalence and role in solid tumors, enabling evaluation of
approximately 50,000 independent gene knockout combinations of DDR pathway related drug targets across known tumor suppressor genes.
PAGEO™ Paralogous Gene Evaluation in Ovarian Cancer and Dep Map Consortium – Broad Institute
We have an ongoing strategic collaboration with the Broad Institute focused on synthetic lethality target and biomarker discovery. This collaboration will
use the large-scale CRISPR paralog screening platform developed at the laboratory of William R. Sellers, M.D., Core Institute Member, Broad Institute, to
evaluate functionally redundant paralogous genes across ovarian cancer subtypes and to generate novel target and biomarker hypotheses. Dr. Sellers, who
also serves on our Scientific Advisory Board, is the principal investigator for the strategic collaboration. We have also become a member of the Broad
DepMap (Cancer Dependency Map) consortium led by the Broad Institute to further enhance our efforts in bioinformatics and cell-based screening for
synthetic lethality target and biomarker discovery and validation.
Small and Medium Enterprise Status from the European Medicines Agency
In June 2024, we were granted Small and Medium Enterprise, or SME, status by the European Medicines Agency, or EMA. This enables us to have access
to administrative, regulatory and financial support, including fee reductions for scientific advice and regulatory procedures across all our programs.
Drug Discovery and Program Biomarker Discovery Platform
We are also continuing to invest in our capabilities to advance our research on newly identified synthetic lethality targets of interest, including to enable
discovery of therapeutic drugs and program relevant biomarkers. These investments include both additional research personnel and capital investments,
which will enhance our
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capabilities broadly, including in target validation, biological assay development, protein synthesis, structural biology, computational chemistry, and
analytical chemistry, among other core functional areas.
As examples of aspects of our drug discovery platform, we use our INQUIRE™ Chemical Library to enhance our synthetic lethality drug discovery
platform. INQUIRE is a proprietary, expert-curated small-molecule library of over 200,000 chemical compounds, which we believe will enhance our hit
discovery capabilities across a broad range of novel synthetic lethality targets and historically difficult-to-drug target classes, such as helicases and
endonucleases.
We use our HARMONY ™ machine-learning engine to empower evaluation and decisions related to structure-activity-relationships analyses, empowering
our drug-discovery platform.
Strategy
Our objective is to develop and commercialize innovative precision medicine drugs that indirectly or directly target the genetic drivers of cancer in order to
provide therapies for defined patient populations. The principal components of our strategy are to:
Continue to efficiently develop our clinical-stage product candidates: darovasertib, IDE397, IDE849, IDE161, IDE275 (GSK959) and IDE705 (GSK101).
We are evaluating darovasertib in combination with crizotinib in a potential registrational clinical trial in patients having MUM. We are also evaluating
darovasertib as monotherapy in a Phase 2 clinical trial in primary UM and plan to initiate a Phase 3 potential registrational clinical trial in neoadjuvant UM
in the first half of 2025. We are currently evaluating IDE397 in a Phase 2 monotherapy expansion cohort in patients with MTAP-deletion solid tumor
types, including UC, and NSCLC. We are also evaluating IDE397 in combinations with PRMT5 inhibitors and with Trodelvy (sacituzumab-govitecan-
hziy), Gilead’s Trop-2 directed ADC. We plan to evaluate IDE849 in a Phase clinical trial as a monotherapy and in combination with IDE161 in SCLC and
NETs. We are currently evaluating IDE161 in a Phase 1 expansion trial in HRD, endometrial cancer and in combination with KEYTRUDA®, Merck’s anti-
PD-1 therapy in MSI-High and MSS endometrial cancer.
Advance our preclinical pipeline of small molecule product candidates into clinical development. Our pipeline includes multiple preclinical research
programs, including IDE892, a potential best-in-class MTA-cooperative PRMT5 inhibitor development candidate, IDE034, a potential first-in-class
B7H3/PTK7 topo-I-payload BsADC development candidate, and IDE251, a potential first-in-class KAT6/7 inhibitor development candidate. We are
continuing to invest in our earlier-stage preclinical programs and have established selective, value-accretive collaborations with leading pharmaceutical
companies to support our clinical development activities.
Broaden our pipeline of targeted therapies and apply our core capabilities to establish a leading franchise in the field of synthetic lethality. We are
continuing our target identification and validation activities for advancing new synthetic lethality targets and associated biomarkers, with active programs
for several next-generation synthetic lethality targets. We continue to invest in core functional capabilities, including in drug discovery, bioinformatics and
translational biology.
Collaborate with leaders in the field of diagnostics to enable the identification of defined patient populations for our product candidates. Our precision
medicine approach leverages the availability or development of companion diagnostics to identify patients for which our product candidates will be most
effective.
Collaborate under our existing strategic partnerships and identify additional strategic collaborations to accelerate development timelines and maximize
the commercial potential of our targeted product candidates. We have established selective, value-accretive collaborations with leading pharmaceutical
companies to support our clinical development activities. We have entered into the Pfizer Agreements, as defined below, for the evaluation of darovasertib
in combination with crizotinib in MUM. We are collaborating with Gilead to clinically evaluate IDE397 and Trodelvy (sacituzumab-govitecan-hziy),
Gilead’s Trop-2 directed ADC combination, in patients having MTAP-deletion UC and NSCLC, in our Phase 1 clinical trial. We entered into the Merck
CTCSA with Merck (known as MSD outside of the United States and Canada) to evaluate the combination of IDE161 with KEYTRUDA®
(pembrolizumab) in patients with MSI-High and MSS endometrial cancer in a Phase 1 clinical trial. We have entered into a strategic partnership and
collaboration with GSK for our synthetic lethality programs targeting Pol Theta and Werner Helicase pursuant to the GSK Collaboration Agreement. We
also entered into two in-licensing agreements for ADCs with topoisomerase-I-inhibitor-payloads to enable combinations with our synthetic
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lethality programs with Hengrui Pharma for IDE849 and Biocytogen for IDE034. We will selectively evaluate strategic collaborations for our targeted
product candidates with biopharmaceutical partners whose research, development, commercial, marketing, and geographic capabilities complement our
own.
Competition
Our industry is very competitive and subject to change based on ongoing advances in technology. Although we believe that our approach, strategy,
scientific capabilities, knowledge and experience provide us with competitive advantages, we expect to have substantial competition from major
pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Many of our competitors have significantly
greater financial, technical and human resources. Smaller and early-stage companies may also prove to be significant competitors, particularly through
collaborative arrangements with large and established companies.
As a result, our competitors may discover, develop, license or commercialize products before or more successfully than we do. We face competition with
respect to product candidates in our pipeline, and will face competition with respect to future product candidates, from segments of the pharmaceutical,
biotechnology and other related markets that pursue targeted approaches to addressing activating genetic and other molecular alterations in cancer.
For darovasertib, we are not aware of other companies actively developing clinical-stage therapeutics directed to PKC as a target for solid tumors.
Exscientia is developing a PKC theta inhibitor in inflammatory diseases in Phase 1 studies. Varsity Pharma is preclinically evaluating a PKC inhibitor in
CLL. Additionally, Windtree Therapeutics is advancing a preclinical-stage atypical PCK iota inhibitor, including both topical and oral formulations, for
potential treatment of Basal Cell Carcinoma, or BCC. We are aware of other companies that are conducting research and development of potential therapies
for primary UM or for MUM based on other targets and approaches. For example, Aura Biosciences is developing AU-011, a virus-like drug conjugate
(VDC), as local treatment for early-stage choroidal melanoma. Immunocore is developing and commercializing Tebentafusp, also known under its branded
name as Kimmtrak, for the treatment of adult patients with HLA-A*02:01-positive unresectable or MUM. iOnctura has initiated a Phase 2 trial for
Roginolisib, an allosteric PI3K delta inhibitor, in 2L+ MUM. Novartis is developing DYP688, an ADC, with a GNAQ-11 inhibitor payload in a Phase 1/2
clinical trial in MUM. Additionally, Replimune has initiated a potentially registration-enabling trial for RP-2, an oncolytic immunotherapy.
For IDE397, Servier Pharmaceuticals, LLC, or Servier, is evaluating a small molecule MAT2A inhibitor, designated as S95035, in a Phase 1 trial. Insilico
Medicine and Beigene have also initiated Phase 1 trials for their small molecule MAT2A inhibitors called ISM3412 and SYH2039, respectively.
Additionally, Anagenex, Genhouse Bio, Hanmi, ScinnoHub and SK Biopharma have small molecule MAT2A inhibitors in preclinical development.
For IDE849, our competitors include companies developing DLL3-targeting therapies using various therapeutic modalities, including bispecific T-cell
engagers (BiTEs), antibody-drug conjugates (ADCs), chimeric antigen receptor (T-cell) therapies, and radiopharmaceuticals. Amgen received accelerated
approval from the FDA in May 2024 for Tarlatamab (branded name Imdelltra), a DLL3-CD3 BiTE. Boehringer Ingelheim and Daiichi Sankyo are
developing drugs with a similar mechanism of action, both in Phase 2 studies. We are aware of several companies developing DLL3 ADCs with
topoisomerase-I-inhibitor-payloads in Phase 1 studies, including Zai Lab, Roche, Zhang Jiang, and Baili. In radiopharmaceuticals, Abdera initiated a Phase
1 clinical trial for ABD-147 at the end of 2024, and several other companies are pursuing preclinical development of DLL3-targeting radiotherapies.
For IDE161, 858 Therapeutics has initiated a Phase 1 clinical trial for its small molecule PARG inhibitor, ETX-19477. Danatlas received IND clearance for
its PARG inhibitor, DAT-2645, in August 2024, and Evopoint received clearance from the NMPA in December 2024. Additionally, several companies are
conducting preclinical research to develop PARG inhibitors, including Alivexis, Azkarra, FoRx, Nodus Oncology, Satya Pharma Innovations and SynRx.
For GSK101 (IDE705), Artios Pharma is developing a Pol Theta inhibitor, designated as ART-6043, in a Phase 1/2 study. Several other companies have
initiated Phase 1 studies for Pol Theta inhibitors, including Moma Therapeutics, Repare Therapeutics, Varsity Therapeutics, Simcere, and SynRx.
Additionally, Breakpoint Therapeutics and Danatlas have Pol Theta inhibitors in IND-enabling studies.
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For GSK959 (IDE275), Novartis is evaluating a non-covalent Werner Helicase (WRN) inhibitor called HRO-761 in a Phase 1 trial. Roche is developing a
covalent WRN inhibitor, designated as RG6457, in a Phase 1 trial. Additionally, several companies are conducting preclinical research to develop WRN
inhibitors, including Eikon, Genhouse, Insilico, Nimbus, Puhe and Ryvu, among others.
For IDE892, we are aware of many companies developing PRMT5 inhibitors in both clinical and preclinical stages. The most advanced assets are currently
in Phase 1/2 studies, including BMS-986504 from BMS, AMG-139 from Amgen, TNG462 from Tango, AZD-3470 from AstraZeneca, and BGB-58067
from Beigene. At least nine other companies have initiated Phase 1 clinical trials and more than fifteen companies are advancing preclinical PRMT5
inhibitors.
For BCG034, we are not aware of any other companies developing bispecific ADCs targeting both B7-H3 and PTK7; however, many companies are
developing mono-antigen ADCs targeting either B7-H3 or PTK7. Merck and Hansoh are both evaluating B7-H3 ADCs in Phase 3 clinical trials. Several
other companies have B7-H3 ADCs in earlier phases of clinical development, including Beigene, Duality, GSK, Innovent, Mabwell, MacroGenics,
MediLink, and Minghui. Furthermore, Genmab, Kelun, and Day One are evaluating PTK7 ADCs in Phase 1 studies, and Lilly is advancing a preclinical
PTK7 ADC.
For IDE251, we are not aware of other companies developing therapeutics directed to both KAT6 and KAT7; however, there are several companies
developing drugs directed to KAT6. Pfizer is developing a KAT6A inhibitor, designated as PF-07248144, in a Phase 1 trial. Menarini also recently initiated
a Phase 1 study for a KAT6A inhibitor called MEN-2312. Olema Oncology received IND clearance for a KAT6A/B inhibitor in December 2024 and is
expected to begin a Phase 1 trial soon. Additionally, Isoterix and Qubit are developing preclinical KAT6A inhibitors.
For our preclinical pipeline of synthetic lethality therapeutics, potential competition includes established companies, as well as earlier-stage emerging
biotechnology companies. Multiple established companies have been involved with research and development in synthetic lethality, such as AstraZeneca
(Lynparza), Pfizer (Talzenna), GSK (Zejula) and Roche. Additionally, several other early-stage companies are developing synthetic lethality therapeutics,
including 858 Therapeutics, Artios, Breakpoint Therapeutics, Eikon, FoRx Therapeutics, Repare Therapeutics, Ryvu Therapeutics, Tango, Vividion and
Xpose.
Intellectual Property
Intellectual property, including patents, trade secrets, trademarks and copyrights, is important to our business. We endeavor to establish, maintain and
enforce intellectual property rights that protect our business interests.
Our patent portfolio, including patents owned by or exclusively licensed to us, is built on a program-by-program basis with a goal of establishing broad
protection that generally includes, for each product candidate compound and for selected alternative back-up compounds, claims directed to composition of
matter, pharmaceutical compositions, and methods of treatment using such pharmaceutical compositions. For some programs, our portfolio may also
include claims directed to methods of treatment involving biomarker-enabled patient identification or selection, methods of treatment involving particular
dosing approaches, polymorphs, formulations and/or methods of synthesis. We are seeking and maintaining patent protection in the United States and key
foreign jurisdictions.
As of January 26, 2025, we own or exclusively in-license patents and patent applications, comprising approximately 59 distinct patent families, protecting
our technology across our pipeline. Excluding applications that we are not currently prosecuting, our portfolio consists of approximately 18 issued U.S.
patents, approximately 35 pending U.S. applications, 22 pending applications under the Patent Cooperation Treaty, or PCT, 55 issued foreign patents and
approximately 203 pending foreign applications in approximately 50 foreign jurisdictions, including without limitation countries included in major markets
in North America, Europe, and Asia, each having expiration dates ranging from 2035 to 2045. The nominal expiration of our patents and patent
applications does not account for any applicable patent term adjustments or extensions.
As of January 26, 2025, as relating to our PKC program, including darovasertib, we own or have exclusively in-licensed from Novartis patents and patent
applications comprising approximately six issued U.S. patents, approximately 33 issued foreign patents, approximately nine pending U.S. applications,
approximately four pending
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PCT application, and approximately 33 pending applications in approximately 18 foreign jurisdictions which we are currently prosecuting, including
without limitation countries included in major markets in North America, Europe, and Asia. These in-licensed patents and applications are directed to
composition of matter, pharmaceutical compositions and methods of treatment, including treatment of UM. These solely owned or in-licensed patent
applications, if granted, would expire between 2035 and 2045, without taking into account any applicable patent term adjustments or extensions. In
addition, the PKC program portfolio includes two U.S. patent application and two PCT applications which are jointly owned with Pfizer directed to
methods of treatment for certain combination treatments.
As of January 26, 2025, as relating to our MAT2A program, including IDE397, we own patents and patent applications comprising approximately four
issued U.S. patents, approximately four issued foreign patent, approximately eight pending U.S. applications, approximately five pending PCT applications
and approximately 50 pending foreign applications in approximately 28 foreign jurisdictions which we are currently prosecuting, including without
limitation countries included in major markets in North America, Europe, and Asia. These solely owned or in-licensed patent applications, if granted,
would expire between 2039 and 2044, without taking into account any applicable patent term adjustments or extensions. In addition, the MAT2A program
portfolio also includes one pending PCT application directed to methods of treatment of cancer which is jointly owned with GSK pursuant to the GSK
Collaboration Agreement; one pending US application, one pending PCT application, and two foreign applications directed to methods of treatment of
cancer which is jointly owned with Amgen pursuant to the Amgen CTCSA; and one pending US application directed to methods of treatment of cancer
which is jointly owned with Gilead pursuant to the Gilead CSCSA.
As of January 26, 2025, as relating to our PARG program, including IDE161, we own or have exclusively in-licensed from Cancer Research UK and
University of Manchester, patents and patent applications comprising approximately three issued U.S. patents, approximately 14 issued foreign patents,
approximately three pending U.S. application, and approximately 61 pending foreign applications in approximately 37 foreign jurisdictions which we are
currently prosecuting, including without limitation countries included in major markets in North America, Europe, and Asia. These solely owned or in-
licensed patent applications, if granted, would expire between 2035 and 2044, without taking into account any applicable patent term adjustments or
extensions.
As of February 3, 2024, as relating to our Pol Theta program, GSK holds a global, exclusive license to develop and commercialize Pol Theta products
arising out of the Pol theta program.
Our patent portfolio also supports programs in our synthetic lethality preclinical pipeline, including U.S. patent applications directed to composition of
matter, pharmaceutical compositions and/or methods of treatment of cancer for each of our Pol Theta (HR), WRN (MSI-High), PRMT5, KAT6A/7, and
certain next-generation SLT programs.
Strategic Relationships
We own or control all commercial rights in our three most advanced programs, each of which are clinical-stage programs – darovasertib, IDE397 and
IDE161. We have entered into strategic relationships for these programs – for example, to in-license certain intellectual property rights or to enable
evaluation of combination therapies, such as through combination drug supply or clinical trial collaborations to evaluate combinations. For darovasertib,
we have an exclusive license agreement with Novartis and separately, we have established clinical trial collaboration and supply agreements with Pfizer in
support of our clinical evaluation of darovasertib in combination with crizotinib in MUM. For IDE397, we entered into the Gilead CSCSA and the Second
Gilead CSCSA to clinically evaluate IDE397 in combination with Trodelvy, the Gilead Trop-2 directed ADC, in patients having MTAP-deletion UC and
NSCLC, respectively. For IDE161, we have an exclusive in-license agreement with Cancer Research UK and University of Manchester, and we entered
into the Merck CTCSA to clinically evaluate IDE161 in combination with KEYTRUDA, the Merck anti-PD-1 therapy, in patients with endometrial cancer.
We have entered into a strategic partnership and collaboration with GSK for our synthetic lethality programs targeting Pol Theta and Werner Helicase,
pursuant to the GSK Collaboration Agreement. We own all commercial rights to our earlier next-generation synthetic lethality programs, including IDE892
and IDE251, for which our small molecule compounds are being discovered and/or developed internally with our own resources, supplemented by certain
service providers, such as CROs.
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Additionally, in 2024, we entered into two in-licensing agreements for ADCs with topoisomerase-I-inhibitor-payloads to enable combinations with our
synthetic lethality programs. Pursuant to the Biocytogen Option and License Agreement, we obtained an option to in-license IDE034, a preclinical
B7H3/PTK7 bispecific ADC, and we subsequently exercised the option to obtain worldwide commercial rights to the molecule. We also entered into the
Hengrui Pharma License Agreement for global development and commercial rights to IDE849, a DLL3-targeting ADC, outside of Greater China. Under
the terms of the Biocytogen Option and License Agreement and the Hengrui Pharma License Agreement, Biocytogen and Hengrui Pharma provide
development manufacturing services for the ADCs.
We have established collaborative relationships with other companies for access to their proprietary database of patient samples, and/or for their genetic
screening services on their proprietary platform. We have established certain development manufacturing and service relationships with CMOs for
darovasertib, IDE397, and IDE161, as well as our preclinical candidates IDE892 and IDE251. We have an agreement with STA Pharmaceutical Hong
Kong Limited, or STA Pharmaceutical, and Yuhan Corporation for the synthesis of the API for darovasertib, and agreements with STA Pharmaceutical and
Patheon Inc. for formulation and manufacturing of darovasertib drug product. We have an agreement with STA Pharmaceutical for the synthesis of the
API, formulation and manufacturing of IDE397 drug product. We have an agreement with Pharmaron for the synthesis of the API, and with STA
Pharmaceutical for the formulation and drug product manufacturing of IDE161, IDE892 and IDE251. We have established arrangements with CMOs as
well for packaging, labeling and distribution of darovasertib, IDE397, and IDE161. We also have established clinical services relationship with CROs to
support our conduct of clinical trials for our darovasertib, IDE397, and IDE161 programs.
In addition to these existing strategic license relationships, existing and planned development manufacturing and service arrangements, and existing and
planned clinical services arrangements, we have various existing agreements and relationships with service providers, such as CROs, which are enabling
execution of various research and development activities for each of our pipeline programs. In particular, such agreements are directed to chemistry and
compound synthesis, compound analysis and characterization, structural biology, computational biology, biological assay and model development, in vitro
screening, in vivo screening, translational biomarker diagnostic development, bioinformatics, toxicology and formulation, among other activities.
We may also evaluate future strategic opportunities to accelerate development timelines and maximize the commercial potential of our product candidates.
We plan to selectively evaluate strategic collaborations with biopharmaceutical partners whose research, development, commercial, marketing, and
geographic capabilities complement our own.
Agreements
Clinical Trial Collaboration and Supply Agreements with Pfizer for Darovasertib
In March 2020, we entered into a Clinical Trial Collaboration and Supply Agreement with Pfizer, Inc., as amended in September 2020, April 2021,
September 2021 and May 2023, or the Pfizer Agreement. Pursuant to the Pfizer Agreement, Pfizer supplies us with their MEK inhibitor, binimetinib, and
their cMET inhibitor, crizotinib, to evaluate combinations of darovasertib independently with each of the Pfizer compounds, in patients with tumors
harboring activating GNAQ or GNA11 mutations. Under the Pfizer Agreement, we are the sponsor of the combination studies and will provide
darovasertib and pay for the costs of the combination studies. Pfizer will provide binimetinib and crizotinib for use in the clinical trial at no cost to us. The
Pfizer Agreement provides that we and Pfizer will jointly own clinical data generated from the clinical trial and will also jointly own inventions, if any,
relating to the combined use of darovasertib and binimetinib, or independently, to the combined use of darovasertib and crizotinib. We and Pfizer have
formed a joint development committee responsible for coordinating all regulatory and other activities under the agreement.
In March 2022, we and Pfizer entered into a Second Clinical Trial Collaboration and Supply Agreement (as amended in May 2023), or the Second Pfizer
Agreement, pursuant to which we are evaluating darovasertib and crizotinib as a combination therapy in MUM in a planned Phase 2/3 potential
registration-enabling clinical trial. Pursuant to the Second Pfizer Agreement, we are the sponsor of the combination trial and we will provide darovasertib
and pay for the costs of the combination trial; Pfizer will provide crizotinib for the planned combination trial at no cost to us for up to an agreed-upon
number of MUM patients. We and Pfizer will jointly own clinical data from the planned combination trial and all inventions relating to the combined use
of darovasertib and crizotinib. We and Pfizer have formed a joint development committee responsible for coordinating all regulatory and other activities
under the Second Pfizer Agreement.
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Separately, in March 2022, we and Pfizer also entered into a Third Clinical Trial Collaboration and Supply Agreement, or the Third Pfizer Agreement,
pursuant to which we could, subject to preclinical validation and FDA feedback and guidance, evaluate darovasertib and crizotinib, as a combination
therapy in cMET-driven tumors such as NSCLC and/or HCC in a Phase 1 clinical trial. Pursuant to the Third Pfizer Agreement, we would have been the
sponsor of the planned combination trial, and we would provide darovasertib and pay for the costs of the combination trial; Pfizer would provide crizotinib
for the planned combination trial at no cost to us. Pursuant to Amendment No. 1 to the Second Pfizer Agreement, as described below, we and Pfizer
terminated the Third Pfizer Agreement.
In May 2023, we continued our relationship with Pfizer by entering into Amendment No. 4 to the Pfizer Agreement relating to the supply of crizotinib in
support of this Phase 2 clinical trial, pursuant to which Pfizer will continue to provide us with an additional defined quantity of crizotinib at no cost.
We also expanded our relationship with Pfizer in May 2023 under an Amendment No. 1 to the Second Pfizer Agreement to support the Phase 2/3
registrational trial to evaluate darovasertib and crizotinib as a combination therapy in MUM. Under the as-amended Second Pfizer Agreement, Pfizer will
provide us with a first defined quantity of crizotinib at no cost, as well as an additional second defined quantity of crizotinib at a lump-sum cost. The Third
Pfizer Agreement has been terminated by us and Pfizer under Amendment No. 1 to the Second Pfizer Agreement.
In December 2024, we entered into Amendment No. 5 to the Pfizer Agreement for the supply of crizotinib in the Phase 1/2 clinical trial for Pfizer to
provide us a defined quantity of crizotinib at defined costs.
Exclusive License Agreement with Novartis for Darovasertib
In September 2018, we entered into a license agreement with Novartis to develop and commercialize Novartis’ LXS196 (also known as IDE196), a Phase 1
PKC inhibitor, for the treatment of cancers having GNAQ and GNA11 mutations. We renamed Novartis’ LXS196 oncology as IDE196, and which has a
non-proprietary name of darovasertib. Under the license agreement, Novartis granted to us a worldwide, exclusive, sublicensable license to research,
develop, manufacture, and commercialize certain defined compounds and products, including IDE196 and certain other PKC inhibitors, as well as
companion diagnostic products, collectively referred to as the licensed products, for any purpose.
All inventions, know-how, data and results resulting from our activities under the license agreement, including activities relating to our own clinical trials,
will be exclusively owned by us. All inventions, know-how, data and results resulting from Novartis’ activities connected with Novartis’ ongoing Phase 1
clinical trial for IDE196 will be exclusively owned by Novartis, and subject to the license to us. Ownership of all other inventions and know-how will be
determined according to U.S. patent law, with Novartis’ interest subject to the license to us.
We control the prosecution and maintenance of the patents exclusively licensed to us, with Novartis retaining step-in rights if we do not continue such
prosecution and maintenance. If we fail to maintain or prosecute any exclusively licensed patent and Novartis exercises this step-in right, our license to the
relevant patents will terminate in the relevant country. We have the first right to enforce any exclusively licensed patents, while Novartis retains the right to
representation. If we do not bring an action to enforce any exclusively licensed patent, Novartis has the right to bring such action, and we will have the
right to representation.
We paid Novartis an upfront payment of $2.5 million and issued 263,615 shares of our Series B redeemable convertible preferred stock concurrently with
the execution of the license agreement. Subject to completion of certain clinical and regulatory development milestones, we agreed to make milestone
payments in the aggregate of up to $9.0 million, and subject to achievement of certain commercial sales milestones, we agreed to make milestone payments
in the aggregate of up to $20.0 million. We also agreed to pay mid to high single-digit tiered royalty payments based on annual worldwide net sales of
licensed products, payable on a licensed product-by-licensed product and country by country basis until the latest of the expiration of the last to expire
exclusively licensed patent, the expiration of regulatory exclusivity, and the ten year anniversary of the first commercial sale of such product in such
country. The royalty payments are subject to reductions for lack of patent coverage, loss of market exclusivity, and payment obligations for third-party
licenses.
Clinical Trial Collaboration and Supply Agreement with Amgen for IDE397
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In July 2022, we entered into the Amgen CTCSA to clinically evaluate IDE397 in combination with AMG 193, the Amgen investigational MTA-
cooperative PRMT5 inhibitor, in patients having MTAP-null solid tumors, in a Phase 1/2 clinical trial. We and Amgen mutually agreed to wind down the
IDE397 and AMG 193 clinical combination study in February 2025 and will not pursue dose expansion.
Clinical Study Collaboration and Supply Agreement with Gilead for IDE397
In November 2023, we entered into the Gilead CSCSA to clinically evaluate IDE397 in combination with Trodelvy (sacacituzumab-govitecan-hziy), a
Trop-2 directed ADC, in patients having MTAP-deletion UC, in a Phase 1 clinical trial. Under the mutually non-exclusive Gilead CSCSA, we will receive
Trodelvy drug supply from Gilead and will sponsor the Phase 1 clinical combination trial evaluating ID397 and Trodelvy. Gilead will bear internal or
external costs incurred in connection with its supply of Trodelvy. We will bear all internal and external costs and expenses associated with the conduct of
the combination study. We and Gilead will jointly oversee clinical development of the combination therapy through a Joint Steering Committee responsible
for coordinating all regulatory and other activities under the Gilead CSCSA. We and Gilead each retain commercial rights to its respective compounds,
including with respect to use as a monotherapy agent or combination agent.
On February 12, 2025, we entered into the Second Gilead CSCSA with Gilead pursuant to which we and Gilead will collaborate on a portion of our Phase
1 study for the clinical evaluation of IDE397 in combination with Trodelvy, or the Combination Study, in certain patients with advanced solid tumors in
lungs. Pursuant to the Second Gilead CSCSA, we are the sponsor of the Combination Study, and we will provide the IDE397 compound and pay for the
costs of the Combination Study. Gilead will provide Trodelvy for the Combination Study at no cost to us. We and Gilead will jointly own clinical data
from the Combination Study and all inventions relating to the combined use of IDE397 and Trodelvy. Each party retains commercial rights to its respective
compounds, including with respect to use as a monotherapy or combination agent. We and Gilead will form a joint steering committee responsible for
coordinating all regulatory and other activities under the Second Gilead CSCSA.
Clinical Trial Collaboration and Supply Agreement with Merck for IDE161
In March 2024, we entered into the Merck CTCSA with Merck (known as MSD outside of the United States and Canada) to evaluate the combination of
IDE161 with Merck’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab), in patients with MSI-High and MSS endometrial cancer. Pursuant to the Merck
CTCSA, we are the sponsor of the combination study, and we will provide the IDE161 compound and pay for the costs of the combination study. Merck
will provide KEYTRUDA at no cost to us. We and Merck will jointly own clinical data from the combination. Each party retains commercial rights to its
respective compounds, including with respect to use as a monotherapy or combination agent.
Exclusive Option and License Agreement with Cancer Research UK and University of Manchester for IDE161
In April 2017, we entered into the CRUK/Manchester Agreement with Cancer Research UK and University of Manchester, which was amended on April
24, 2019 and on March 3, 2020, for the development and commercialization of licensed products comprising pharmaceutical preparations of PARG
inhibitors for all therapeutic uses.
Under this agreement, Cancer Research UK and University of Manchester have granted to us, and we have in turn granted to Cancer Research UK and
University of Manchester, non-exclusive, sublicensable, royalty-free licenses to carry out non-clinical research during the research term, which ended with
our exercise of our option described below. The non-clinical research was governed by a joint research committee comprised of representatives from each
party. During the research term, no party was to undertake a drug discovery program in PARG inhibitors other than under this agreement.
Cancer Research UK also granted us the exclusive option to obtain an exclusive, sublicensable, worldwide, royalty-bearing license, under certain Cancer
Research UK background intellectual property and Cancer Research UK’s interest in any intellectual property jointly developed under the agreement, to
research, develop, manufacture, and commercialize licensed products, as well as a non-exclusive, sublicensable, royalty-free, freedom-to-operate license
under related intellectual property. Cancer Research UK and University of Manchester retain certain rights under the licensed intellectual property for
academic, non-commercial research and teaching.
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In January 2022, we exercised our option for an exclusive worldwide license covering a broad class of PARG inhibitors from Cancer Research Technology
Ltd., or CRT, and the University of Manchester, and in connection therewith, paid a one-time option exercise fee of £250,000.
Following our option exercise, we gained sole control and responsibility for the research, development, manufacture, and commercialization of the licensed
PARG inhibitors. Cancer Research UK also transferred its know how relating to the research, development or manufacturing of the licensed PARG
inhibitors to us. We are obligated to develop a PARG inhibitor for the treatment of a cancer indication now that we exercised the option.
Each party is the sole owner of any intellectual property it develops solely under the agreement, and the parties will be joint owners of any jointly
developed intellectual property. Each party grants the other a non-exclusive, fully-paid, royalty free, irrevocable, sublicensable, perpetual license to its
rights in such jointly created intellectual property to make, use and sell inventions claimed in the joint patents, except for those joint patents exclusively
licensed to us under the agreement following our exercise of the option.
We will be obligated to make payments to CRT aggregating up to a total of £19.5 million upon the achievement of specific development and regulatory
approval events for development of a PARG inhibitor in oncologic diseases. We will also pay low single-digit tiered royalties, and potentially also sales-
based milestones, to CRT based on net sales of licensed products. In addition, in the event we sublicense the intellectual property, we will also be obligated
to pay CRT a specified percentage of any sublicense revenue.
In April 2023, we incurred an obligation to pay milestone payments in an aggregate amount of £750,000 to CRT based upon the achievement of certain
milestones relating to first and second tumor histologies in connection with the Phase 1 portion of the Phase 1/2 clinical trial in oncologic diseases.
Certain of the clinical and regulatory milestones are related to and may be due and payable by us if certain milestones are achieved in connection with the
IDE161-001 Phase 1/2 clinical trial. We will be obligated to make additional payments to CRT aggregating up to £18.75 million upon the achievement of
specific development and regulatory approval events for development of a PARG inhibitor in oncologic diseases, including an aggregate of up to £1.5
million and up to £2.25 million for the achievement of certain Phase 2 and Phase 3 development milestones, respectively, in each case as relating to first
and second tumor histologies.
Collaboration, Option and License Agreement with GSK for Pol Theta and Werner Helicase
In June 2020, we entered into the GSK Collaboration Agreement with GSK, pursuant to which we and GSK have entered into a collaboration for its
synthetic lethality programs targeting MAT2A, Pol Theta and WRN. On July 27, 2020, we and GSK received Hart-Scott-Rodino Antitrust Improvements
Act clearance, and the GSK Collaboration Agreement became effective.
Pursuant to the GSK Collaboration Agreement, GSK paid us $100.0 million on July 31, 2020. As of December 31, 2024, GSK has made aggregate
payments in the amount of $20.0 million for the achievement of certain development and regulatory milestones with respect to Pol Theta and WRN
products.
GSK Collaboration - Pol Theta Program
Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize Pol Theta products arising out of the
Pol Theta program. We and GSK collaborated on preclinical research for the Pol Theta program, and GSK is leading clinical development for the Pol Theta
program. GSK is responsible for all research and development costs for the Pol Theta program.
We will be eligible to receive total development and regulatory milestones of up to $485.0 million, with respect to each Pol Theta product, including as
applicable, for multiple Pol Theta products that target certain alternative protein domains or are based on alternative modalities. Additionally, we will be
eligible to receive up to $475.0
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million of commercial milestones with respect to each Pol Theta product. We are also entitled to receive tiered royalties on global net sales of Pol Theta
products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double-digit percentages, subject to certain customary
reductions.
In June 2022, we announced the nomination of a Pol Theta Helicase Inhibitor development candidate, or DC, and in August 2022, we announced the
achievement of an initial preclinical development milestone in connection with ongoing investigational new drug, or IND-enabling studies to support
evaluation of Pol Theta Helicase Inhibitor DC, triggering a $3.0 million milestone payment, which we received in October 2022. An IND was submitted
and was cleared by the FDA in August 2023 to enable clinical evaluation in combination with niraparib, triggering a $7.0 million milestone payment.
We have the potential to achieve an additional $10.0 million development milestone upon initiation of Phase 1 clinical dose expansion, as well as potential
further aggregate late-stage development and regulatory milestones of up to $465.0 million.
GSK Collaboration - Werner Helicase Program
Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize WRN products arising out of the
WRN program. We and GSK are collaborating on ongoing preclinical research for the WRN program, and GSK will lead clinical development for the
WRN program, with us responsible for 20% and GSK responsible for 80% of such global research and development costs. The cost-sharing percentages
will be adjusted based on the actual ratio of U.S. to global profits for WRN products, as measured three and six years after global commercial launch
thereof.
We will be eligible to receive total development milestones of up to $485.0 million, with respect to each WRN product, including as applicable, for
multiple WRN products that are based on alternative modalities. Additionally, we will be eligible to receive up to $475.0 million of commercial milestones
with respect to each WRN product. We will be entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of WRN
products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double-digit percentages, subject to certain customary
reductions. We will have a right to opt-out of the 50% U.S. net profit share and corresponding research and development cost share for the WRN program,
and would be eligible to receive tiered royalties on U.S. net sales of WRN products by GSK, its affiliates and their sublicensees at the same royalty rates as
for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the WRN program at the time of opt-out.
In October 2023, we earned a $3.0 million milestone from GSK in connection with IND-enabling studies for the Werner Helicase Inhibitor DC. In October
2024, we earned a $7.0 million milestone payment for the IND clearance of IDE275 (GSK 959). We have the potential to earn up to an additional $10.0
million milestone payment upon initiation of Phase 1 clinical dose expansion. We are also eligible to receive further aggregate late-stage development and
regulatory milestones of up to $465.0 million.
GSK Collaboration - General
Under the terms of the GSK Collaboration Agreement, subject to certain exceptions, we and GSK will not, directly or through third parties, develop or
commercialize other products whose primary and intended mechanism of action is the modulation of WRN or Pol Theta for an agreed upon period of time.
We and GSK have formed a joint steering committee, joint development committees, and joint commercialization committees responsible for coordinating
all activities under the GSK Collaboration Agreement. Ownership of intellectual property developed under the GSK Collaboration Agreement is allocated
between or shared by the parties depending on development and subject matter.
GSK’s royalty obligations continue with respect to each country and each product until the later of (i) the date on which such product is no longer covered
by certain intellectual property rights in such country and (ii) the 10th anniversary of the first commercial sale of such product in such country.
Each party has the right to sublicense its rights under the GSK Collaboration Agreement subject to certain conditions.
The GSK Collaboration Agreement will continue in effect on a product-by-product and country-by-country basis until the expiration of the obligation to
make payments under the GSK Collaboration Agreement with respect to such product in each country, unless earlier terminated by either party pursuant to
its terms. Either party may
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terminate the GSK Collaboration Agreement for the other party’s insolvency or certain uncured breaches. We may terminate the GSK Collaboration
Agreement if GSK or any of its sublicensees or affiliates challenge certain patents of ours. GSK may terminate the GSK Collaboration Agreement in its
entirety or on a target-by-target basis upon 90-day notice to us.
Option and License Agreement with Biocytogen for IDE034
In July 2024, we entered into the Biocytogen Option and License Agreement with Biocytogen, pursuant to which Biocytogen granted us an option for an
exclusive worldwide license to develop and commercialize products in connection with a potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-
payload BsADC program, or the Option. Under the terms of the Biocytogen Option and License Agreement, we paid Biocytogen an upfront fee and, upon
our exercise of the Option, an exercise fee totaling up to $6.5 million.
In November 2024, we announced the selection of IDE034, a potential first-in-class B7H3/PTK7 topo-I-payload BsADC, as a development candidate and
the exercise of the Option. Pursuant to our exercise of the Option, Biocytogen is eligible to receive additional development and regulatory milestone
payments and commercial milestone payments, as well as low to mid single-digit royalties on net sales. Total potential milestone payments equal an
aggregate of $400.0 million, including development and regulatory milestone payments of up to $100.0 million. Our royalty obligations continue with
respect to each country and each product until the later of (i) the date on which such product is no longer covered by certain intellectual property rights in
such country and (ii) the 10th anniversary of the first commercial sale of such product in such country.
We will have the right to terminate the Biocytogen Option and License Agreement for any reason or no reason upon ninety (90) days written notice to
Biocytogen. Upon any termination of the Biocytogen Option and License Agreement after the exercise of the Option, the license granted to us will
automatically terminate. We will have the right to sell any or all of the inventory of Licensed Products held by us as of the date of termination for a period
of 12 months following such termination.
License Agreement with Hengrui Pharma for IDE849 (SHR-4849)
In December 2024, we entered into the Hengrui Pharma License Agreement with Hengrui Pharma, pursuant to which Hengrui Pharma granted us an
exclusive worldwide license outside of Greater China to develop and commercialize SHR-4849, a novel DLL3-targeting topo-I-payload antibody drug
conjugate.
Pursuant to the Hengrui Pharma License Agreement, Hengrui Pharma is eligible to receive upfront and milestone payments totaling $1.045 billion,
including a $75.0 million upfront fee, up to $200.0 million in development and regulatory milestone payments, plus commercial success-based milestones.
Hengrui Pharma is also eligible to receive mid-single to low-double digit royalties on net sales outside of Greater China.
The Hengrui Pharma License Agreement will continue in effect on a product-by-product and country-by-country basis until the expiration of the obligation
to make payments under the Hengrui Pharma License Agreement with respect to such product in each country, unless earlier terminated by either party
pursuant to its terms. Either party may terminate the Hengrui Pharma License Agreement upon mutual agreement or for the other party’s insolvency or
certain uncured material breaches. We may terminate the Hengrui Pharma License Agreement for any reason upon certain notice to Hengrui Pharma.
Sales and Marketing
We intend to become a fully integrated, commercial stage biopharmaceutical company. This will enable us to realize our goal of delivering transformative
medicines to patients in need. We currently hold worldwide commercialization rights for darovasertib, IDE397, and IDE161 and own or control all
commercial rights outside of greater China for IDE849. We intend to retain significant rights in key markets. Considering our stage of development, we
have not yet fully built our commercialization capabilities. We have begun planning for potential commercial operations, including for sales and marketing
capabilities, subject to the results of our Phase 2/3 clinical trial for darovasertib.
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We expect to initiate commercial readiness activities in anticipation of regulatory approvals. To enable our delivery of any approved medicines to patients,
we plan to build our own sales force to commercialize them in the United States and potentially in Europe and other selected foreign countries. We believe
a moderately sized specialty sales force, supported by effective marketing and sales management organizations, would enable us to reach healthcare
practitioners who specialize in the care of the patient populations for darovasertib and our other product candidates. We may also enter into distribution and
other marketing arrangements with third parties for any of our approved medicines to support their safe and effective use.
Manufacturing
We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates and our biomarker diagnostics for
preclinical and clinical testing, as well as for future commercial manufacture of any drugs and diagnostics that we may commercialize. We do not own or
operate, and currently have no plans to establish, any manufacturing facilities.
In general, we plan to establish agreements with contract manufacturing organizations, or CMOs, for synthesis of the active pharmaceutical ingredient, or
API, manufacturing of drug product comprising such API, as well as packaging, labeling and distribution.
We have also established supply arrangements with one or more CMOs for each of our small molecule development programs and with Biocytogen and
Hengrui Pharma for our in-licensed ADCs in support of our current clinical development needs.
Our lead product candidates darovasertib, IDE397, IDE275 (GSK 959), IDE161, IDE705 (GSK 101) are each small molecules that can be manufactured in
reliable and reproducible synthetic processes from readily available starting materials. We believe the synthetic chemistry is amenable to scale-up using
standard manufacturing equipment and processes. We expect that the compounds being discovered and developed for our other pipeline programs and
other future programs, can be produced at contract manufacturing facilities.
In many cases, we anticipate that the biomarker diagnostic may be commercially available on an existing third-party diagnostic panel or assay. In cases
where such biomarker diagnostic is not already commercially available, we generally expect to establish agreements with strategic partners for clinical
supply of companion diagnostics for biomarkers associated with the targeted therapeutics we are developing.
Government Regulation
Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the
research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution,
marketing and export and import of products such as those we are developing. A new drug must be approved by the FDA through the NDA process before
it may be legally marketed in the United States.
U.S. Drug Development Process
In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations. The
process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require
the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product
development process, approval process or after approval may subject an applicant to administrative or judicial sanctions. These sanctions could include the
FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial
suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any
agency or judicial enforcement action could have a material adverse effect on us.
The process required by the FDA before a drug may be marketed in the United States generally involves the following:
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•
completion of preclinical laboratory tests, animal studies and formulation studies in accordance with good laboratory practice, or GLP,
regulations and other applicable regulations;
•
submission to the FDA of an IND, which must become effective before clinical trials in humans may begin;
•
approval by an independent institutional review board, or IRB, at each clinical site before each clinical trial may be initiated;
•
performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, regulations to establish
the safety and efficacy of the proposed drug for its intended use;
•
submission to the FDA of an NDA;
•
satisfactory completion of an FDA advisory committee review, if applicable;
•
satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance
with current good manufacturing practice, or cGMP, regulations to assure that the facilities, methods and controls are adequate to preserve
the drug’s identity, strength, quality and purity; and
•
FDA review and approval of the NDA.
Once a pharmaceutical product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations
of product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit the results of the preclinical tests, together with
manufacturing information and analytical data, to the FDA as part of the IND. The sponsor will also include a protocol detailing, among other things, the
objectives of the first phase clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the first phase
lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30
days after receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsor
and the FDA must resolve any outstanding concerns before the clinical trial can begin. A clinical hold also may be imposed by the FDA at any time during
a clinical trial due to safety concerns or non-compliance with specific FDA requirements, and the clinical trial may not continue until the FDA notifies the
sponsor that the hold has been lifted.
All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations, which include the
requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. They must be conducted under
protocols detailing the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to
be evaluated. Each protocol must be submitted to the FDA as part of the IND. An IRB at each institution participating in the clinical trial must review and
approve each protocol before a clinical trial commences at that institution and must also approve the information regarding the clinical trial and the consent
form that must be provided to each clinical trial subject or his or her legal representative, monitor the clinical trial until completed and otherwise comply
with IRB regulations.
Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:
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Phase 1: The product candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption,
metabolism, distribution and excretion and, if possible, to gain an early indication of its effectiveness. In the case of some products for severe
or life-threatening diseases, such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy
volunteers, the initial human testing is often conducted in patients. Sponsors sometimes designate their Phase 1 clinical trials as Phase 1a or
Phase 1b. Phase 1b clinical trials are typically aimed at confirming dosing, pharmacokinetics and safety in a larger number of patients. Some
Phase 1b studies evaluate biomarkers or surrogate markers that may be associated with efficacy in patients with specific types of diseases.
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Phase 2: This phase involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to
preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and appropriate dosage.
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Phase 3: Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population, generally at
geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk-benefit ratio of the product candidate
and provide, if appropriate, an adequate basis for product labeling.
Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These clinical trials are used to gain
additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of
Phase 4 clinical trials as a condition of approval of an NDA.
The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being
exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not
being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. In addition, some
clinical trials are overseen by an independent group of qualified experts organized by the sponsor, known as a data safety monitoring board or committee.
Depending on its charter, this group may determine whether a clinical trial may move forward at designated check points based on access to certain data
from the clinical trial.
During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may be prior to submission of
an IND, at the end of Phase 2, and before an NDA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for
the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement on the
next phase of development. Sponsors typically use the meetings at the end of the Phase 2 clinical trial to discuss Phase 2 clinical results and present plans
for the pivotal Phase 3 clinical trials that they believe will support approval of the new drug.
Concurrent with clinical trials, companies may conduct additional animal studies and also develop additional information about the chemistry and physical
characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The
manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must
develop methods for testing the identity, strength, quality and purity of the final drug. In addition, appropriate packaging must be selected and tested, and
stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
While the IND is active and before approval, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last
progress report must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious
and unexpected suspected AEs, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from
animal or laboratory testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse
reaction compared to that listed in the protocol or investigator brochure.
There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries. Sponsors of certain
clinical trials of FDA-regulated products are required to register and disclose specified clinical trial information, which is publicly available at
www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, clinical trial sites and investigators and other aspects
of the clinical trial is then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion.
Disclosure of the results of these clinical trials can be delayed until the new product or new indication being studied has been approved.
U.S. Review and Approval Process
The results of product development, preclinical and other non-clinical studies and clinical trials, along with descriptions of the manufacturing process,
analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA
requesting approval to market the product. The submission of an NDA is subject to the payment of substantial user fees; a waiver of such fees may be
obtained under certain limited circumstances. The FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its
intended use and whether its manufacturing is cGMP-compliant to
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assure and preserve the product’s identity, strength, quality and purity. The FDA conducts a preliminary review of all NDAs within the first 60 days after
submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request
additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information. The resubmitted
application also is subject to review before the FDA accepts it for filing. Under the Prescription Drug User Fee Act, or PDUFA, the FDA has agreed to
certain performance goals in the review of NDAs through a two-tiered classification system, standard review and priority review. According to the current
PDUFA performance goals for new molecular entity NDAs, the FDA endeavors to review and act on applications within ten months of the 60-day filing
date under standard review, and within six months of the 60-day filing date under priority review.
The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including
clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under
what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making
decisions. Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured. The FDA will not approve an
application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure
consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial
sites to assure compliance with GCP requirements.
After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the
drug with prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and
the application will not be approved in its present form. A Complete Response Letter usually describes the specific deficiencies in the NDA identified by
the FDA and may require additional clinical data, such as an additional pivotal Phase 3 clinical trial or other significant and time-consuming requirements
related to clinical trials, nonclinical studies or manufacturing. If a Complete Response Letter is issued, the sponsor must resubmit the NDA, addressing all
of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the NDA
does not satisfy the criteria for approval.
If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may
otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor to conduct Phase 4 testing,
which involves clinical trials designed to further assess a drug’s safety and effectiveness after NDA approval, and may require testing and surveillance
programs to monitor the safety of approved products which have been commercialized. The FDA may also place other conditions on approval including the
requirement for a risk evaluation and mitigation strategy, or REMS, to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor
of the NDA must submit a proposed REMS. The FDA will not approve the NDA without an approved REMS, if required. A REMS could include
medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk
minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of
products. Marketing approval may be withdrawn for non-compliance with regulatory requirements or if problems occur following initial marketing.
Pediatric Use
Even when not pursuing a pediatric indication, under the Pediatric Research Equity Act, or PREA, an NDA or supplement thereto must contain data that is
adequate to assess the safety and effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing
and administration for each pediatric subpopulation for which the product is safe and effective. In addition, any sponsor planning to submit an NDA or
supplement subject to PREA must submit an initial pediatric study plan, or iPSP, to the IND early in development. The iPSP must contain an outline of the
proposed pediatric trials the sponsor plans to conduct, including trial objectives and design, any deferral or waiver requests, and other information required
by regulation. The FDA must then review the information submitted, consult with the sponsor, and agree upon a final plan. The FDA or the sponsor may
request an amendment to the plan at any time. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some
or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.
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Separately, the FDA may issue a Written Request for pediatric studies relating to a drug product if it has determined that information related to the use of
the drug in the pediatric population may produce health benefits. If the sponsor conducts the studies pursuant to the Written Request and submits the study
reports within the specified timeline, the drug may be entitled to pediatric exclusivity. Pediatric exclusivity is a type of non-patent marketing exclusivity
which, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing exclusivity. Sponsors may
submit a proposal asking the FDA to issue a Written Request for this purpose.
U.S. Orphan Drug Designation
Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is a disease or
condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no
reasonable expectation that the cost of developing and making the drug product available in the United States for the disease or condition will be recovered
from sales of the product in the United States. Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug
designation, the identity of the therapeutic agent and its designated orphan use are disclosed publicly by the FDA. Orphan drug designation conveys certain
financial incentives, including opportunities for grant funding, tax credits for certain clinical trial costs and certain user-fee waivers. Orphan designation
does not convey any advantage in or shorten the duration of the regulatory review and approval process.
If a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation,
the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other application to market the same drug for the same
indication for seven years, except in limited circumstances, such as a subsequent product demonstration of clinical superiority to the product with orphan
drug exclusivity. Competitors may receive approval of different drugs for the indication for which the orphan product has exclusivity or obtain approval for
the same drug but for a different indication from that for which the orphan product has exclusivity. Our product candidates could also be blocked from
approval if a competitor obtains approval of the same drug for the same rare disease or condition before we do.
A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan
designation. In addition, exclusive marketing rights in the United States may also be lost if the FDA later determines that the request for designation was
materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or
condition.
In April 2022, the FDA designated darovasertib as an orphan drug for the treatment of UM, including MUM, and we may seek orphan drug designation for
additional product candidates in the future. Orphan drug designation does not guarantee that any product candidate will be approved for the designated rare
disease or condition, if at all.
U.S. Expedited Development and Review Programs
The FDA offers a number of expedited development and review programs for qualifying product candidates intended to treat serious or life-threatening
diseases or conditions.
New drug products are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the
potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product and the specific
indication for which it is being studied. The sponsor of a fast track product has opportunities for frequent interactions with the review team during product
development and, once an NDA is submitted, the product may be eligible for priority review. A fast track product may also be eligible for rolling review,
where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a
schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and
the sponsor pays any required user fees upon submission of the first section of the NDA.
A product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its
development and review. A product can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product may
demonstrate substantial improvement
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over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The
designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an
organizational commitment to expedite the development and review of the product, including involvement of senior managers.
After an NDA is submitted for a product, including a product with a fast track designation and/or breakthrough therapy designation, the NDA may be
eligible for priority review. A product is eligible for priority review if it has the potential to provide a significant improvement in the treatment or
prevention of a serious disease or condition compared to marketed products. If the drug contains a new molecular entity, priority review designation means
the FDA’s goal is to take an action on the marketing application within six months of the 60-day filing date, compared with ten months under standard
review.
Additionally, products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated
approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical
endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or
mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative
treatments. As a condition of accelerated approval, the FDA will require the sponsor to perform one or more adequate and well-controlled post-marketing
confirmatory trials to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. In addition, the FDA
currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the
commercial launch of the product. The FDA may withdraw approval of a drug or indication approved under the accelerated approval pathway if a trial
required to verify the predicted clinical benefit fails to verify such benefit or if the applicant fails to conduct any required post-approval trial with due
diligence. Recently, the Food and Drug Omnibus Reform Act, or FDORA, enacted as part of the year-end omnibus spending bill in December 2022,
included several reforms intended to expand the FDA’s ability to regulate products receiving accelerated approval, including by increasing the FDA’s
oversight over the conduct of confirmatory trials.
Even if a product qualifies for one or more of these expedited development and review programs, the FDA may later decide that the product no longer
meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. In November 2022, the FDA granted
fast track designation to darovasertib in combination with crizotinib for treatment of adult patients with MUM, and in September 2023, the FDA granted
two fast track designations to IDE161 for specific ovarian and breast cancer indications. We also expect to pursue breakthrough therapy designation and
accelerated approval for darovasertib and may explore some of these opportunities for our other product candidates as appropriate.
U.S. Post-approval Requirements
Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory standards is not maintained or if problems occur after the
product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product or even complete
withdrawal of the product from the market. After approval, some types of changes to the approved product, such as adding new indications, certain
manufacturing changes and additional labeling claims, are subject to further FDA review and approval. Drug manufacturers and other entities involved in
the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies, and are subject to
periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP regulations and other laws and regulations. In
addition, the FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-
marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after
commercialization.
Any drug products manufactured or distributed by us or our partners pursuant to FDA approvals will be subject to continuing regulation by the FDA,
including, among other things, record-keeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety and
efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying
with FDA promotion and advertising requirements. The FDA strictly regulates labeling, advertising, promotion and other types of information on products
that are placed on the market and imposes requirements and restrictions on drug manufacturers, such as those related to direct-to-consumer advertising, the
prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”),
industry-sponsored scientific and educational activities, and promotional activities involving the internet. Discovery of previously unknown problems or
the failure to comply with the applicable regulatory requirements may result in
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restrictions on the marketing of a product or withdrawal of the product from the market, as well as possible civil or criminal sanctions. Failure to comply
with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant or
manufacturer to administrative or judicial civil or criminal sanctions and adverse publicity. FDA sanctions could include refusal to approve pending
applications, withdrawal of an approval, clinical holds on post-approval clinical trials, warning or untitled letters, product recalls, product seizures, total or
partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications
with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties.
U.S. Marketing Exclusivity
Market exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications. The FDCA provides a five-year
period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity, or NCE.
A drug is a new chemical entity if the FDA has not previously approved any other drug containing the same active moiety, which is the molecule or ion
responsible for the action of the drug substance. During the exclusivity period, the FDA may not approve or even accept for review an abbreviated new
drug application, or ANDA, or an NDA submitted under Section 505(b)(2) of the FDCA, or 505(b)(2) NDA, submitted by another company for another
drug that contains the same active moiety. However, an application may be submitted after four years if it contains a certification of patent invalidity or
non-infringement to one of the patents listed with the FDA by the NCE NDA holder.
The FDCA alternatively provides three years of marketing exclusivity for a change to a previously approved drug, such as a new indication or condition of
use, submitted in an NDA, or supplement to an existing NDA, if one or more new clinical investigations, other than bioavailability or bioequivalence
studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application. This three-year
exclusivity covers only the modification for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA
from approving ANDAs or 505(b)(2) NDAs for drugs containing the active agent for the original indication or condition of use.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be
required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate
safety and effectiveness.
Other types of non-patent exclusivity include seven-year orphan drug exclusivity and six-month pediatric exclusivity (each discussed above).
FDA Regulation of Companion Diagnostics
We are collaborating or expect to collaborate with strategic partners or CMOs to manufacture and supply in vitro diagnostics to identify patients with
biomarkers associated with the targeted therapeutics we are developing. These diagnostics, often referred to as companion diagnostics, are regulated as
medical devices. In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other
things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing,
labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance.
Under the FDCA, medical devices are classified into one of three classes – Class I, Class II or Class III – depending on the degree of risk associated with
each medical device and the extent of control needed to provide reasonable assurances with respect to safety and effectiveness. Class I devices are those for
which safety and effectiveness can be reasonably assured by adherence to a set of regulations, referred to as General Controls, which require compliance
with the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of AEs and malfunctions,
and appropriate, truthful and non-misleading labeling and promotional materials. Class II devices are those that are subject to General Controls, as well as
Special Controls, which can include performance standards, guidelines and postmarket surveillance. Most Class II devices are subject to premarket review
and clearance by the FDA under Section 510(k) of the FDCA. Under the 510(k) process, the manufacturer must submit to the FDA a premarket
notification, demonstrating that the device is “substantially equivalent” to a predicate device. To be “substantially equivalent,” the proposed device must
have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different
technological characteristics that do not raise different questions of safety or effectiveness than the predicate device. Class III devices
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include devices deemed by the FDA to pose the greatest risk such as life-supporting or life-sustaining devices, or implantable devices, in addition to new
devices deemed not substantially equivalent following the 510(k) process. The safety and effectiveness of Class III devices cannot be reasonably assured
solely by General Controls and Special Controls. Therefore, these devices are generally subject to the premarket approval, or PMA, application process,
which is generally more costly and time-consuming than the 510(k) process.
Alternatively, a device might be the subject of a de novo classification request, which seeks marketing authorization and reclassification as a lower-risk
Class I or Class II device for a new device that otherwise would automatically be regulated as a Class III device requiring a PMA approval. Specifically,
medical device types that the FDA has not previously classified as Class I, II or III are automatically classified into Class III regardless of the level of risk
they pose. The Food and Drug Administration Modernization Act of 1997 established a new route to market for low to moderate risk medical devices that
are automatically placed into Class III due to the absence of a predicate device, called the “Request for Evaluation of Automatic Class III Designation,” or
the de novo classification procedure. This procedure allows a manufacturer whose novel device is automatically classified into Class III to request down-
classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission
and approval of a PMA application.
If the use of a companion diagnostic is essential to the safe and effective use of a drug product, then the FDA generally will require approval or clearance
of the diagnostic contemporaneously with the approval of the therapeutic product. In July 2014, the FDA issued a final guidance document addressing the
development and approval process for in vitro companion diagnostic devices. According to the guidance, for novel product candidates such as ours, a
companion diagnostic device and its corresponding drug candidate should be approved or cleared contemporaneously by the FDA for the use indicated in
the therapeutic product labeling. The guidance also explains that a companion diagnostic device used to make treatment decisions in clinical trials of a drug
generally will be considered an investigational device, unless it is employed for an intended use for which the device is already approved or cleared. If used
to make critical treatment decisions, such as patient selection, the diagnostic device generally will be considered a significant risk device under the FDA’s
Investigational Device Exemption, or IDE, regulations. Thus, the sponsor of the diagnostic device will be required to submit an IDE application for clinical
testing of the device and comply with the applicable IDE requirements. According to the guidance, if a diagnostic device and a drug are to be studied
together to support their respective approvals, both products can be studied in the same investigational study, if the study meets both the requirements of
the IDE regulations and the IND regulations. The guidance provides that depending on the details of the study plan and subjects, a sponsor may seek to
submit an IND alone, or both an IND and an IDE. In July 2016, the FDA issued a draft guidance document intended to further assist sponsors of
therapeutic products and sponsors of in vitro companion diagnostic devices on issues related to co-development of these products. In December 2018, the
FDA issued another draft guidance document to facilitate class labeling on in vitro companion diagnostic devices for oncology therapeutic products, under
which a companion diagnostic’s labeling may identify a specific group or class of therapeutic products, rather than specific products, where scientifically
appropriate.
The FDA generally requires sponsors developing companion diagnostics intended to select patients who will respond to a specific cancer treatment to
obtain approval of a PMA for that diagnostic contemporaneously with approval of the therapeutic, though 510(k) clearance or de novo classification are
also possible. The FDA’s review of an in vitro companion diagnostic in conjunction with its review of a cancer therapeutic involves coordination between
the FDA’s Center for Drug Evaluation and Research and the FDA’s Center for Devices and Radiological Health. The PMA process, including the
gathering of clinical and preclinical data and the submission to and review by the FDA, can take several years or longer than the 510(k) or de novo
processes. PMAs must generally include the results from extensive preclinical and adequate and well-controlled clinical trials to establish the safety and
effectiveness of the device for each indication for which FDA approval is sought. In particular, for a diagnostic, the applicant must demonstrate that the
diagnostic produces reproducible results when the same sample is tested multiple times by multiple users at multiple laboratories. As part of the PMA
review, the FDA will typically inspect the manufacturer’s facilities for compliance with the QSR, which imposes elaborate testing, control, documentation
and other quality assurance requirements.
If the FDA evaluations of both the PMA application and the manufacturing facilities are favorable, the FDA will either issue an approval letter or an
approvable letter, which usually contains a number of conditions that must be met in order to secure the final approval of the PMA, such as changes in
labeling, or specific additional information, such as submission of final labeling, in order to secure final approval of the PMA. If the FDA concludes that
the applicable criteria have been met, the FDA will issue a PMA for the approved indications, which can be more limited than those originally sought by
the applicant. The PMA can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device,
including, among other things, restrictions on labeling, promotion, sale and distribution.
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If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter. A
not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable. The
FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the
clinical trials are conducted and then the data submitted in an amendment to the PMA. Once granted, PMA approval may be withdrawn by the FDA if
compliance with post approval requirements, conditions of approval or other regulatory standards is not maintained or problems are identified following
initial marketing. PMA approval is not guaranteed, and the FDA may ultimately respond to a PMA submission with a not approvable determination based
on deficiencies in the application and require additional clinical trials or other data that may be expensive and time-consuming to generate and that can
substantially delay approval.
If a companion diagnostic is the subject of a de novo classification request in lieu of a PMA, the FDA is required to classify the device within 120 days
following receipt of the de novo submission. If the manufacturer seeks reclassification into Class II, the manufacturer must include a draft proposal for
special controls sufficient to ensure a reasonable assurance of the safety and effectiveness of the medical device. The FDA may reject the reclassification
petition if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or determines that the device is not low to moderate risk
or that general controls would be inadequate to control the risks and special controls cannot be developed. If the de novo request is granted, the new device
may be legally marketed (in compliance with applicable regulatory controls), a new classification regulation for the device type will be established, and the
device may serve as a predicate device for 510(k) submissions for future devices of the same type.
After a device is placed on the market, it remains subject to significant regulatory requirements. Medical devices may be marketed only for the uses and
indications for which they are cleared or approved. Device manufacturers must also establish registration and device listings with the FDA. A medical
device manufacturer’s manufacturing processes and those of its suppliers are required to comply with the applicable portions of the QSR, which cover the
methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices.
Domestic facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA. The FDA also may inspect foreign
facilities that export products to the United States.
Regulation Outside the United States
To the extent that any of our product candidates, once approved, are sold in a foreign country, we would be subject to numerous and varying foreign laws
and regulations regarding safety and efficacy and governing, among other things, clinical trials, marketing authorization, or MA, commercial sales and
distribution of our products, and may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws
and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals. The foreign
regulatory approval process includes all of the risks associated with FDA approval set forth above, as well as additional country-specific regulation.
Whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of foreign countries
before we can commence clinical trials or marketing of the product in those countries. Approval by one regulatory authority does not ensure approval by
regulatory authorities in other jurisdictions. The approval process varies from country to country, can involve additional testing beyond that required by
FDA, and may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing,
pricing, promotion, and reimbursement vary greatly from country to country.
Non-clinical Studies and Clinical Trials
Similarly to the United States, the various phases of non-clinical and clinical research in the European Union, or EU, are subject to significant regulatory
controls.
Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical (pharmaco-
toxicological) studies must be conducted in compliance with the principles of good laboratory practice, or GLP, as set forth in EU Directive 2004/10/EC
(unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes). In particular, non-
clinical studies, both in vitro and in vivo, must be planned, performed, monitored, recorded, reported and archived in accordance with the GLP principles,
which define a set of rules and criteria for a quality system for the organizational process and the conditions for non-clinical studies. These GLP standards
reflect the Organization for Economic Co-operation and Development requirements.
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Clinical trials of medicinal products in the EU must be conducted in accordance with EU and national regulations and the International Council for
Harmonization of Technical Requirements for Pharmaceuticals for Human Use, or ICH, guidelines on Good Clinical Practices, or GCP, as well as the
applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. If the sponsor of the clinical trial is not
established within the EU, it must appoint an EU entity to act as its legal representative. The sponsor must take out a clinical trial insurance policy, and in
most EU member states, the sponsor is liable to provide ‘no fault’ compensation to any study subject injured in the clinical trial.
The regulatory landscape related to clinical trials in the EU has been subject to recent changes. The EU Clinical Trials Regulation, or CTR, which was
adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. Unlike directives, the CTR is directly
applicable in all EU member states without the need for member states to further implement it into national law. The CTR notably harmonizes the
assessment and supervision processes for clinical trials throughout the EU via a Clinical Trials Information System, which contains a centralized EU portal
and database.
While the EU Clinical Trials Directive required a separate clinical trial application, or CTA, to be submitted in each member state in which the clinical trial
takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR
introduces a centralized process and only requires the submission of a single application for multi-center trials. The CTR allows sponsors to make a single
submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state. The CTA must
include, among other things, a copy of the trial protocol and an investigational medicinal product dossier containing information about the manufacture and
quality of the medicinal product under investigation. The assessment procedure of the CTA has been harmonized as well, including a joint assessment by
all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including
ethics rules. Each member state’s decision is communicated to the sponsor via the centralized EU portal. Once the CTA is approved, clinical study
development may proceed.
The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR.
Medicines used in clinical trials must be manufactured in accordance with Good Manufacturing Practice, or GMP. Other national and EU-wide regulatory
requirements may also apply.
Marketing Authorization
In order to market our future products in the EU and many other foreign jurisdictions, we must obtain separate regulatory approvals. More concretely, in
the EU, medicinal product candidates can only be commercialized after obtaining a MA. To obtain regulatory approval of a product candidate under EU
regulatory systems, we must submit a MA application, or MAA. There are two types of MAs:
•
“Centralized MAs” are issued by the European Commission through the centralized procedure based on the opinion of the Committee for
Medicinal Products for Human Use, or CHMP of the European Medicines Agency, or EMA, and are valid throughout the entire territory of
the EU. The centralized procedure is mandatory for certain types of medicinal products, such as (i) medicinal products derived from
biotechnological processes, (ii) designated orphan medicinal products, (iii) advanced therapy medicinal products, or ATMPs (such as gene
therapy, somatic cell therapy and tissue engineered products) and (iv) medicinal products containing a new active substance indicated for the
treatment of certain diseases, such as AIDS/HIV, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases and other
immune dysfunctions. The centralized procedure is optional for products containing a new active substance not yet authorized in the EEA, or
for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU;
and
•
“National MAs” are issued by the competent authorities of the EU member states, only cover their respective territory, and are available for
products not falling within the mandatory scope of the centralized procedure. Where a product has already been authorized for marketing in
an EU member states, this national MA can be recognized in another member state through the mutual recognition procedure. If the product
has not received a national MA in any member state at the time of application, it can be approved simultaneously in various member state
through the decentralized procedure. Under the
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decentralized procedure an identical dossier is submitted to the competent authorities of each of the member states in which the MA is
sought, one of which is selected by the applicant as the reference member state.
Under the centralized procedure the maximum timeframe for the evaluation of an MAA by the EMA is 210 days, excluding clock stops.
In exceptional cases, the CHMP might perform an accelerated review of a MAA in no more than 150 days (not including clock stops). Innovative products
that target an unmet medical need and are expected to be of major public health interest may be eligible for a number of expedited development and review
programs, such as the PRIority MEdicines, or PRIME, scheme, which provides incentives similar to the breakthrough therapy designation in the United
States. In March 2016, the EMA launched an initiative, the PRIME scheme, a voluntary scheme aimed at enhancing the EMA’s support for the
development of medicines that target unmet medical needs. It is based on increased interaction and early dialogue with companies developing promising
medicines, to optimize their product development plans and speed up their evaluation to help them reach patients earlier. Product developers that benefit
from PRIME designation can expect to be eligible for accelerated assessment but this is not guaranteed. Many benefits accrue to sponsors of product
candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical
trial designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted. Importantly, a dedicated
contact and rapporteur from the CHMP is appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s committee
level. An initial meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall
development and regulatory strategies.
Moreover, in the EU, a “conditional” MA may be granted in cases where all the required safety and efficacy data are not yet available. The conditional MA
is subject to conditions to be fulfilled for generating the missing data or ensuring increased safety measures. It is valid for one year and has to be renewed
annually until fulfillment of all the conditions. Once the pending studies are provided, it can become a “standard” MA. However, if the conditions are not
fulfilled within the timeframe set by the EMA, the MA ceases to be renewed. Furthermore, MA may also be granted “under exceptional circumstances”
when the applicant can show that it is unable to provide comprehensive data on the efficacy and safety under normal conditions of use even after the
product has been authorized and subject to specific procedures being introduced. This may arise in particular when the intended indications are very rare
and, in the present state of scientific knowledge, it is not possible to provide comprehensive information data on the efficacy and safety under normal
conditions of use even after the product has been authorized and subject to specific procedures being introduced. This may arise in particular when the
intended indications are very rare and, in the present state of scientific knowledge, it is not possible to provide comprehensive information, or when
generating data may be contrary to generally accepted ethical principles. This MA is close to the conditional MA as it is reserved to medicinal products to
be approved for severe diseases or unmet medical needs and the applicant does not hold the complete data set legally required for the grant of a MA.
However, unlike the conditional MA, the applicant does not have to provide the missing data and will never have to. Although the MA “under exceptional
circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annually and the MA is withdrawn in case the risk-
benefit ratio is no longer favorable.
Under the above described procedures, before granting the MA, the EMA or the competent authorities of the EU member states make an assessment of the
risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy. MAs have an initial duration of five years.
After these five years, the authorization may be renewed on the basis of a reevaluation of the risk-benefit balance.
Data and Marketing Exclusivity
In the EU, new products authorized for marketing, or reference products, generally receive eight years of data exclusivity and an additional two years of
market exclusivity upon MA. If granted, the data exclusivity period prevents generic or biosimilar applicants from relying on the preclinical and clinical
trial data contained in the dossier of the reference product when applying for a generic or biosimilar MA in the EU during a period of eight years from the
date on which the reference product was first authorized in the EU. The market exclusivity period prevents a successful generic or biosimilar applicant
from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU. The overall 10-year market
exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those 10 years, the MA holder obtains an authorization
for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit
in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new
chemical or biological entity, and products may not qualify for data exclusivity.
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Pediatric Development
In the EEA, MAAs for new medicinal products have to include the results of studies conducted in the pediatric population, in compliance with a pediatric
investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO. The PIP sets out the timing and measures proposed to generate data to
support a pediatric indication of the drug for which MA is being sought. The PDCO can grant a deferral of the obligation to implement some or all of the
measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide pediatric
clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in
children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant
therapeutic benefit over existing treatments for pediatric patients. Once the MA is obtained in all EU member states and study results are included in the
product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension (if any is in effect at the
time of approval) or, in the case of orphan pharmaceutical products, a two year extension of the orphan market exclusivity is granted.
Orphan Medicinal Products
The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the United States. A medicinal product can be
designated as an orphan if its sponsor can establish that: (1) the product is intended for the diagnosis, prevention or treatment of a life-threatening or
chronically debilitating condition; (2) either (a) such condition affects not more than five in ten thousand persons in the EU when the application is made,
or (b) the product, without the benefits derived from the orphan status, would not generate sufficient return to justify the necessary investment; and (3)
there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized for marketing in the EU or, if
such method exists, the drug will be of significant benefit to those affected by that condition.
In the EU, an application for designation as an orphan product can be made any time prior to the filing of a MAA. An EU orphan designation entitles a
party to incentives such as reduction of fees or fee waivers, protocol assistance, and access to the centralized procedure. Upon grant of a MA, orphan
medicinal products are entitled to a ten-year period of market exclusivity for the approved indication. During this market exclusivity period, competent
authorities cannot accept another MAA, or grant a MA, or accept an application to extend a MA for a similar medicinal product for the same indication.
The period of market exclusivity is extended by two years for orphan medicines that have also complied with an agreed PIP. No extension to any
supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications. Orphan designation does not convey any
advantage in, or shorten the duration of, the regulatory review and approval process.
The orphan exclusivity period may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the
criteria for orphan designation, for example because the product is sufficiently profitable not to justify market exclusivity, or where the prevalence of the
condition has increased above the threshold. Additionally, MA may be granted to a similar product for the same indication at any time if (i) the applicant
consents to a second orphan medicinal product application, (ii) the applicant cannot supply sufficient quantities of the product, or (iii) the second applicant
can establish that its product, although similar, is safer, more effective or otherwise clinically superior.
The aforementioned EU rules are generally applicable in the European Economic Area, or EEA, which consists of the 27 EU member states plus Norway,
Liechtenstein and Iceland.
Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and
marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-
corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties. These penalties could include delays or
refusal to authorize the conduct of clinical trials, or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of
the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses,
fines and criminal penalties.
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Regulation of Companion Diagnostics
In the EU, in vitro diagnostic medical devices, or IVD MDs, were regulated by the EU Directive on in vitro diagnostic medical devices (Directive No.
98/79/EC, as amended), or IVDD, which regulated the placing on the market, the CE marking, the essential requirements, the conformity assessment
procedures, the registration obligations for manufacturers and devices, as well as the vigilance procedure. IVD MDs had to comply with the requirements
provided for in the IVDD, and with further requirements implemented at national level (as the case may be).
The regulation of companion diagnostics is subject to further requirements since Regulation (EU) No 2017/746, or IVDR, became applicable on May 26,
2022 but there is a tiered system extending the grace period for many devices (depending on their risk classification) before they have to be fully compliant
with the Regulation. The IVDR introduced a new classification system for companion diagnostics which are now specifically defined as diagnostic tests
that support the safe and effective use of a specific medicinal product, by identifying patients that are suitable or unsuitable for treatment. Companion
diagnostics will have to undergo a conformity assessment by a notified body. Before it can issue an EU certificate, the notified body must seek a scientific
opinion from the EMA on the suitability of the companion diagnostic to the medicinal product concerned if the medicinal product falls exclusively within
the scope of the centralized procedure for the authorization of medicines, or the medicinal product is already authorized through the centralized procedure,
or a MAA for the medicinal product has been submitted through the centralized procedure. For other substances, the notified body can seek the opinion
from a national competent authorities or the EMA.
The aforementioned EU rules are generally applicable in the EEA.
Healthcare Reform
In the United States and certain foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory
changes to the healthcare system that could affect our future results of operations as we begin to directly commercialize our products. In March 2010, the
Patient Protection and Affordable Care Act, or ACA, was signed into law which substantially changed the way healthcare is financed by both governmental
and private insurers in the United States and significantly affected the pharmaceutical industry. The ACA contains a number of provisions, including those
governing enrollment in federal healthcare programs, reimbursement adjustments and fraud and abuse changes. Additionally, the ACA increases the
minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1%; requires collection of rebates for drugs paid by
Medicaid managed care organizations; imposes a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded prescription
drugs” to specified federal government programs, implemented a new methodology by which rebates owed by manufacturers under the Medicaid Drug
Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected, expands of eligibility criteria for Medicaid programs,
creates a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research,
along with funding for such research and establishes a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service
delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme
Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers,
which will remain in effect through 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional
Congressional action is taken. In addition, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory
Medicaid drug rebate cap, beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s average manufacturer price.
Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which
has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to product
pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for
drug products. On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA requires manufacturers
of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize
price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (which
began in 2025). The IRA permits the Secretary of the Department of Health
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and Human Services to implement many of these provisions through guidance, as opposed to regulation, for the initial years. CMS has published the
negotiated prices for the initial ten drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject to
negotiation, although the drug price negotiation program is currently subject to legal challenges. For that and other reasons, it is currently unclear how the
IRA will be effectuated. Individual states in the United States have also become increasingly active in implementing regulations designed to control
pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost
disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and
state governments will pay for healthcare product candidates and services, which could result in reduced demand for our product candidates once approved
or additional pricing pressures.
In the EU, similar developments may affect our ability to profitably commercialize our products, if approved. On December 13, 2021, Regulation No
2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted. The Regulation entered into force in January 2022
and has been applicable since January 2025, with phased implementation based on the type of product, i.e. oncology and advanced therapy medicinal
products as of 2025, orphan medicinal products as of 2028, and all other medicinal products by 2030. The Regulation intends to boost cooperation among
EU member states in assessing health technologies, including new medicinal products, as well as certain high-risk medical devices, and provide the basis
for cooperation at the EU level for joint clinical assessments in these areas. It will permit EU member states to use common HTA tools, methodologies, and
procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the highest
potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health
technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU member states will continue to be
responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement.
Other Healthcare Laws
Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and
foreign jurisdictions in which they conduct their business. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false
claims, and transparency laws and regulations with respect to drug pricing and payments and other transfers of value to physicians and other healthcare
providers, as well as similar foreign laws in the jurisdictions outside the United States. If their operations are found to be in violation of any of such laws or
any other governmental regulations that apply, they may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines,
additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-
compliance with these laws, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and
imprisonment.
Data Privacy and Security Laws
Pharmaceutical companies may be subject to numerous federal, state, and foreign laws, regulations and standards which govern the collection, use,
disclosure and protection of health-related and other personal information, and could apply now or in the future to our operations or the operations of our
partners. In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and
security laws and consumer protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal
information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data. Privacy and security laws,
regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations,
proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
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Coverage and Reimbursement
Sales of any product depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state and foreign
government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product by third-
party payors. Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. These third-party
payors are increasingly reducing reimbursements for medical products, drugs and services. In addition, the U.S. government, state legislatures and foreign
governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and
requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in
jurisdictions with existing controls and measures, could further limit sales of any product. Decreases in third-party reimbursement for any product or a
decision by a third-party payor not to cover a product could reduce physician usage and patient demand for the product and also have a material adverse
effect on sales.
In addition, in many countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug
pricing and reimbursement vary widely from country to country. In the EU, governments influence the price of products through their pricing and
reimbursement rules and control of national healthcare systems that fund a large part of the cost of those products to consumers. Member states are free to
restrict the range of pharmaceutical products for which their national health insurance systems provide reimbursement, and to control the prices and
reimbursement levels of pharmaceutical products for human use. Some jurisdictions operate positive and negative list systems under which products may
only be marketed once a reimbursement price has been agreed to by the government. Member states may approve a specific price or level of reimbursement
for the pharmaceutical product, or alternatively adopt a system of direct or indirect controls on the profitability of the company responsible for placing the
pharmaceutical product on the market, including volume-based arrangements, caps and reference pricing mechanisms. To obtain reimbursement or pricing
approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particular product to currently
available therapies. Other member states allow companies to fix their own prices for medicines, but monitor and control company profits. There can be no
assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing
arrangements for any of our products. The downward pressure on healthcare costs in general, particularly prescription products, has become very intense.
As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross border imports from low-priced
markets exert a commercial pressure on pricing within a country.
We may face competition for our product candidates from lower-priced products in foreign countries that have placed price controls on pharmaceutical
products. In addition, there may be importation of foreign products that compete with our own products, which could negatively impact our profitability.
Furthermore, there can be no assurance that our products will be considered medically reasonable and necessary for a specific indication, that our products
will be considered cost-effective by third-party payors, that an adequate level of reimbursement will be established even if coverage is available or that the
third-party payors’ reimbursement policies will not adversely affect our ability to sell our products profitably.
Human Capital
At IDEAYA, we view our employees as among our most valuable assets. Our ability to hire and retain highly skilled professionals remains an important
element to our success in discovering and developing targeted therapeutics. Our employees are at the heart of our values of passionate commitment,
fearless innovation, courageous integrity, respectful teamwork, objective decision-making and empowered accountability. We offer our employees a
challenging work environment, ongoing skills development, attractive career advancement, and a culture that rewards entrepreneurial initiative and
exceptional execution.
We have assembled a team of cancer biologists, drug discovery chemists, translational biologists and drug development professionals with broad
experience at leading oncology organizations. Our team is led by our Chief Executive Officer, Yujiro S Hata. We are also guided by a renowned scientific
advisory board made up of key scientific and clinical thought leaders.
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We established an internal human resources departments as part of our commitment to our human resources programs and our employee work experience,
and we seek to hire and retain a highly qualified workforce in compliance with applicable federal and other laws and regulations. We draw from the largest
pools of talent to help find the best people for our company. We believe the variety of experiences and perspectives of our employees bring to their work
every day makes us stronger and more successful. As of December 31, 2024, females make up 45% of our workforce, 25% of our executive team, and
37.5% of our board of directors.
As of December 31, 2024, we had a total of 131 employees. Of these employees, 104 were primarily engaged in research and development activities and 27
were primarily engaged in general and administrative activities. Of our total employees, 98 hold biology, chemistry or other relevant scientific degrees,
including 57 Ph.D’s. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship
with our employees to be good.
Corporate Information
We were founded in June 2015 as a Delaware corporation. Our principal executive offices are located at 5000 Shoreline Court, Suite 300, South San
Francisco, California 94080, and our telephone number is (650) 443-6209. Our website address is www.ideayabio.com.
We file electronically with the Securities and Exchange Commission (SEC) our annual reports on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. Our SEC filings are available to the public on
the SEC’s website at www.sec.gov. At our corporate website, www.ideayabio.com, we make available free of charge a variety of information for investors,
including copies of these reports, and any amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or
furnish it to, the SEC. The information on, or that can be accessed through, our website is not part of this report and is not incorporated by reference herein.
We have included our website address as an inactive textual reference only. We also use our website as a means of disclosing material non-public
information and for complying with our disclosure obligations under Regulation FD.
We use IDEAYA Biosciences, Inc.®, the IDEAYA logo, and other marks as trademarks in the United States and other countries. This Annual Report on
Form 10-K contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade
names referred to in this Annual Report on Form 10-K, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but
such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the
applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to
imply a relationship with, or endorsement or sponsorship of us by any other entity.
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Item 1A. Risk Factors.
Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in
this Annual Report on Form 10-K, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” before deciding whether to invest in our common stock. The occurrence of any of the events or developments
described below could harm our business, financial condition, results of operations, growth prospects and stock price. In such an event, the market price of
our common stock could decline, and you may lose all or part of your investment. Many of the following risks and uncertainties are, and will be,
exacerbated by the ongoing Ukraine-Russia conflict, the Israel Hamas conflict, or banking sector volatility and any worsening of the global business and
economic environment as a result. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our
business operations.
Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements
We are a clinical-stage biopharmaceutical company with a limited operating history and no products approved for commercial sale. We have incurred
significant losses since our inception, and we anticipate that we will continue to incur significant losses for the foreseeable future, which, together with
our limited operating history, makes it difficult to assess our future viability.
Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We are an early-stage
biopharmaceutical company, and we have only a limited operating history upon which you can evaluate our business and prospects. We currently have no
products approved for commercial sale, have not generated any revenue from sales of products and have incurred losses in each year since our inception in
June 2015. In addition, we have limited experience as a company and have not yet demonstrated an ability to successfully overcome many of the risks and
uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical industry. Six of our product
candidates, IDE397, darovasertib (IDE196), IDE161, IDE705/GSK101 and IDE275/GSK959 (both being developed by GSK under the GSK Collaboration
Agreement), and IDE849/SHR-4849 (licensed from Hengrui Pharma) are currently in ongoing clinical trials.
We have had significant operating losses since our inception. Our net losses for the twelve months ended December 31, 2024 and 2023 were $274.5 million
and $113.0 million, respectively. As of December 31, 2024, we had an accumulated deficit of $622.8 million. Substantially all of our losses have resulted
from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our
operations. One of our product candidates is in late-phase clinical trials, two product candidates are in mid-phase clinical trials, and five product candidates
are in early-stage clinical trials being conducted by us. We have multiple other product candidates in preclinical development, as well as early-stage
research programs. Our product candidates will require substantial additional development time and resources before we will be able to apply for or receive
regulatory approvals and, if approved, begin generating revenue from product sales. Furthermore, we expect to continue to incur additional costs associated
with operating as a public company. We also do not yet have a sales organization or commercial infrastructure and, accordingly, we will incur significant
expenses to develop a sales organization or commercial infrastructure in advance of regulatory approval and generating any commercial product sales. We
expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue to develop our product candidates
and any future product candidates, conduct clinical trials and pursue research and development activities. Even if we achieve profitability in the future, we
may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, have had and will continue to have
an adverse effect on our stockholders’ deficit and working capital.
Our operating results may fluctuate significantly, which will make our future results difficult to predict and could cause our results to fall below
expectations.
Our quarterly and annual operating results may fluctuate significantly, which will make it difficult for us to predict our future results. These fluctuations
may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including:
•
the timing and cost of, and level of investment in, research, development and commercialization activities, which may change from time to
time;
•
the timing and status of enrollment for our clinical trials;
•
the timing of regulatory approvals, if any, in the United States and internationally;
•
the cost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity of productions, and the terms
of any agreements we enter into with third-party suppliers;
45
•
timing and amount of any option exercise, milestone, royalty or other payments we may or may not receive pursuant to any current or future
collaboration or license agreement, including under the GSK Collaboration Agreement;
•
timing and amount of any milestone, royalty or other payments due under any current or future collaboration or license agreement, including
the License Agreement with Novartis, the Option and License Agreement with CRT and University of Manchester, the Option and License
Agreement with Biocytogen Pharmaceuticals Co., Ltd.; and the License Agreement with Jiangsu Hengrui Pharmaceuticals Co., Ltd;
•
coverage and reimbursement policies with respect to any future approved products, and potential future drugs that compete with our
products;
•
expenditures that we may incur to acquire, develop or commercialize additional products and technologies;
•
the level of demand for any future approved products, which may vary significantly over time;
•
future accounting pronouncements or changes in our accounting policies; and
•
the timing and success or failure of preclinical studies and clinical trials for our product candidates or competing product candidates, or any
other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration partners.
The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result,
comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as an indication of our
future performance.
This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If
our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts
we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price
decline could occur even when we have met any previously publicly stated revenue or earnings guidance we may provide.
We will require substantial additional financing to achieve our goals, and failure to obtain additional capital when needed on acceptable terms, or at
all, could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations.
Since our inception, we have invested a significant portion of our efforts and financial resources in research and development activities for our precision
medicine target and biomarker discovery platform and our initial preclinical and clinical product candidates. Preclinical studies and clinical trials and
additional research and development activities will require substantial funds to complete. As of December 31, 2024, we had cash, cash equivalents and
marketable securities of $1.1 billion.
We believe that we will continue to expend substantial resources for the foreseeable future in connection with the research and development of our
precision medicine target and biomarker discovery platform, clinical and preclinical product candidates, and any other future product candidates we may
choose to pursue, and commercialization of potentially approved drug products, as well as other corporate uses. Specifically, in the near term, we expect to
incur substantial expenses as we advance our synthetic lethality product candidates through preclinical studies, advance darovasertib, IDE397, IDE161 and
IDE849/SHR-4849 through clinical development, seek regulatory approval, prepare for and, if approved, proceed to commercialization, and continue our
research and development efforts. These expenses will include our cost sharing obligations with GSK for research and development for our WRN program.
These expenditures will include costs associated with conducting preclinical studies and clinical trials, obtaining regulatory approvals, and manufacturing
and supply, as well as marketing and selling any products approved for sale. In addition, other unanticipated costs may arise. Because the outcome of any
preclinical study or clinical trial is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully develop and
commercialize our product candidates or any future product candidates.
We believe that our existing cash, cash equivalents and marketable securities will allow us to fund our planned operations for at least 12 months from the
date of the issuance of the financial statements included in this Form 10-K. However, our operating plans and other demands on our capital resources may
change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity
or debt financings or other sources, such as strategic collaborations. In addition, we may seek additional capital due to favorable market conditions or
strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Such financing may result in dilution to
stockholders, imposition of burdensome debt covenants and repayment obligations, or other restrictions that may adversely affect our business. If we raise
additional funds through licensing or collaboration
46
arrangements with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us.
Attempting to secure additional financing may also divert our management from our day-to-day activities, which may adversely affect our ability to
develop our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us,
if at all.
Our future capital requirements will depend on many factors, including:
•
the scope, progress, results and costs of developing our product candidates or any other future product candidates, and conducting preclinical
studies and clinical trials, including our ongoing clinical trials for IDE397, darovasertib, IDE161, and IDE849/SHR-4849;
•
the scope, progress, results and costs related to the research and development of our precision medicine target and biomarker discovery
platform, including costs related to the development of our proprietary libraries and database of tumor genetic information and specific
cancer-target dependency networks;
•
the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates or any future product candidates, or any
applicable diagnostics;
•
the number and characteristics of any additional product candidates we develop or acquire;
•
the cost of coordinating and/or collaborating with certain diagnostic companies for manufacturing and supply of companion diagnostics for
biomarkers associated with our product candidates and any future product candidates;
•
the timing and amount of any milestone, royalty or other payments we are required to make pursuant to any current or future collaboration or
license agreement, including under the License Agreement with Novartis or the Option and License Agreement with CRT and University of
Manchester; Option and License Agreement with Biocytogen Pharmaceuticals Co., Ltd.; and License Agreement with Jiangsu Hengrui
Pharmaceuticals Co., Ltd.;
•
the timing and amount of any option exercise, milestone, royalty or other payments we may or may not receive pursuant to any current or
future collaboration or license agreement, including under the GSK Collaboration Agreement;
•
the timing and amount of any milestone, royalty or other payments we are required to make pursuant to any current or future collaboration or
license agreement, including under the License Agreement with Novartis or the Option and License Agreement with CRT and University of
Manchester;
•
potential delays in our ongoing clinical programs as a result of any public health outbreaks, epidemics or pandemics (such as the COVID-19
pandemic);
•
the cost of manufacturing our product candidates and any future products we successfully commercialize;
•
the cost of commercialization activities, including the cost of building a sales force in anticipation of product commercialization and
distribution costs;
•
any product liability or other lawsuits related to our product candidates or future approved products;
•
the expenses needed to attract, hire and retain skilled personnel;
•
the costs associated with being a public company;
•
the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing our intellectual property portfolio; and
•
the timing, receipt and amount of sales of any future approved products, if any.
Our ability to raise additional funds will depend on financial, economic and other factors, including the ongoing effects of the COVID-19 pandemic, the
Ukraine-Russia conflict, the Israel-Hamas conflict, and closure of or liquidity issues at financial institutions, many of which are beyond our control.
Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. Furthermore, we maintain the majority of our cash
and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured
limits. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash
and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. If adequate funds are not
available to us on a timely basis, we may be required to:
•
delay, limit, reduce or terminate preclinical studies, clinical trials or other research and development activities or eliminate one or more of our
development programs altogether; or
47
•
delay, limit, reduce or terminate our efforts to establish manufacturing and sales and marketing capabilities or other activities that may be
necessary to commercialize darovasertib, if approved, IDE397, if approved, IDE161, if approved, or any other future approved products, or
reduce our flexibility in developing or maintaining our sales and marketing strategy.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies.
To date, we have primarily financed our operations through the sale of equity securities and payments received under our collaboration agreements. We
will be required to seek additional funding in the future and currently intend to do so through collaborations, public or private equity offerings or debt
financings, credit or loan facilities or a combination of one or more of these funding sources. If we raise additional funds by issuing equity securities, our
stockholders may suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing
additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, is
likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be
repaid before holders of our equity securities received any distribution of our corporate assets. We also could be required to seek funds through
arrangements with collaborators or others that may require us to relinquish rights or jointly own some aspects of our technologies or product candidates that
we would otherwise pursue on our own.
Risks Related to Our Business
We are early in our development efforts. Our business is dependent on the successful development of our product candidates, future product
candidates, and companion diagnostics for biomarkers associated with our product candidates and future product candidates.
Our current product candidates are in various stages of development and we are further developing our precision medicine target and biomarker discovery
platform. We have no products approved for sale and our product candidates, IDE397, darovasertib and IDE161, are in various stages of clinical
development and will require additional clinical development, regulatory review and approval in each jurisdiction in which we intend to market them,
access to sufficient commercial manufacturing capacity, and significant sales and marketing efforts before we can generate any revenue from product sales.
Our other product candidates have not been tested in clinical trials. The success of our business, including our ability to finance our company and generate
revenue in the future, will primarily depend on the successful development, regulatory approval and commercialization of our product candidates, which
may never occur. In the future, we may also become dependent on other product candidates that we may develop or acquire; however, given the current
stages of development for our product candidates, it may be several years, if at all, before we have demonstrated the safety and efficacy of a product
candidate sufficient to support approval for commercialization.
We have not previously submitted a new drug application, or NDA, to the FDA or similar approval filings to a comparable foreign regulatory authority, for
any product candidate. An NDA or other relevant regulatory filing must include extensive preclinical and clinical data and supporting information to
establish that the product candidate is safe and effective for each desired indication. The NDA or other relevant regulatory filing must also include
significant information regarding the chemistry, manufacturing and controls for the product. We cannot be certain that our current or future product
candidates will be successful in clinical trials or receive regulatory approval. Further, even if they are successful in clinical trials, our product candidates or
any future product candidates may not receive regulatory approval. If we do not receive regulatory approvals for current or future product candidates, we
may not be able to continue our operations. Even if we successfully obtain regulatory approval to market a product candidate, our revenue will depend, in
part, upon the size of the markets in the territories for which we gain regulatory approval and have commercial rights, as well as the availability of
competitive products, whether there is sufficient third-party reimbursement and adoption by physicians.
We plan to seek regulatory approval to commercialize our product candidates both in the United States and in select foreign countries. While the scope of
regulatory approval generally is similar in other countries, in order to obtain separate regulatory approval in other countries we must comply with numerous
and varying regulatory requirements of such countries regarding safety and efficacy. Other countries also have their own regulations governing, among
other things, clinical trials and commercial sales, as well as pricing and distribution of drugs, and we may be required to expend significant resources to
obtain regulatory approval and to comply with ongoing regulations in these jurisdictions.
48
The clinical and commercial success of our current and any future product candidates will depend on a number of factors, including the following:
•
our ability to raise any additional required capital on acceptable terms, or at all;
•
our ability to develop and successfully utilize our precision medicine target and biomarker discovery platform;
•
timely and successful completion of our preclinical studies and clinical trials, which may be significantly slower or cost more than we
currently anticipate and will depend substantially upon the performance of third-party contractors;
•
acceptance of INDs by the FDA, or similar regulatory filing by a comparable foreign regulatory authority for the conduct of clinical trials of
our product candidates and our proposed design of future clinical trials;
•
whether we are required by the FDA or a comparable foreign regulatory agency to conduct additional clinical trials or other studies beyond
those planned to support approval of our product candidates;
•
our ability to timely execute our ongoing clinical trials and enroll a sufficient number of patients on a timely basis to evaluate our product
candidates in clinical development;
•
acceptance of our proposed indications and primary endpoint assessments of our product candidates by the FDA and comparable foreign
regulatory authorities;
•
the availability or successful development of companion diagnostics for biomarkers associated with our product candidates or any other
future product candidates;
•
our ability to make arrangements with third-party manufacturers for, or establish, commercial manufacturing capabilities, and to consistently
manufacture our product candidates on a timely basis;
•
our ability, and the ability of any third parties with whom we contract, to remain in good standing with regulatory agencies and develop,
validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices, or cGMPs,
or similar foreign requirements;
•
our ability to demonstrate to the satisfaction of the FDA and comparable foreign regulatory authorities the safety, efficacy and acceptable
risk-benefit profile of our product candidates;
•
the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates, either as
monotherapy or in combination with other drugs, or future approved products, if any;
•
the timely receipt of necessary marketing approvals from the FDA and comparable foreign regulatory authorities;
•
achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our
contractual obligations and with all regulatory requirements applicable to our current product candidates or any future product candidates or
approved products, if any;
•
the willingness of physicians, operators of hospitals and clinics and patients to use or adopt any approved products, as well as the willingness
of physicians and other health-care providers to incorporate molecular diagnostics or genetic sequencing into their clinical practice;
•
our ability to successfully develop a commercial strategy and thereafter commercialize any approved products in the United States and
internationally, whether alone or in collaboration with others;
•
the availability and level of coverage and adequate reimbursement from managed care plans, private insurers, government payors, such as
Medicare and Medicaid, and other third-party payors for any of our product candidates that may be approved;
•
the convenience of our treatment or dosing regimen;
•
our ability to compete with other approved therapies, if any;
•
acceptance by physicians, payors and patients of the benefits, safety and efficacy of our product candidates or any future product candidates,
if approved, including relative to alternative and competing treatments;
•
patient demand for any approved products;
•
our ability to establish and enforce intellectual property rights in and to our product candidates; and
49
•
our ability to avoid third-party patent interference, opposition, derivation, intellectual property challenges, intellectual property infringement
claims or similar proceedings with respect to our intellectual property rights.
These factors, many of which are beyond our control, could cause us to experience significant delays or an inability to obtain regulatory approvals or
commercialize our current or future product candidates. Even if regulatory approvals are obtained, we may never be able to successfully commercialize any
products. Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of products to continue our
business or achieve profitability.
In connection with the GSK Collaboration Agreement, if GSK terminates any development program under its collaborations with us, whether as a
result of our inability to meet milestones or otherwise, any potential revenue from those collaborations will be significantly reduced or non-existent,
and our results of operations and financial condition will be materially and adversely affected.
We have invested a significant portion of our time and financial resources in the development of multiple product candidates that are included in our
strategic partnership and collaboration with GSK, under the GSK Collaboration Agreement entered into on June 15, 2020, or the GSK Collaboration
Agreement. The programs currently included in the GSK Collaboration Agreement are the Pol Theta and WRN programs.
Under the GSK Collaboration Agreement, we will be eligible to receive from GSK future development and regulatory milestones of up to $475.0 million
for the Pol Theta and $475.0 million for the WRN product, and commercial milestones of up to $475.0 million, with respect to the Pol Theta and WRN
product. Additionally, we are entitled to receive 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of WRN products by GSK, its
affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. We are entitled
to receive tiered royalties on global net sales of Pol Theta products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen
double digit percentages, subject to certain customary reductions. We have a right to opt-out of the 50% U.S. net profit share and corresponding
development cost share for the WRN program, and would be eligible to receive tiered royalties on U.S. net sales of WRN products by GSK, its affiliates
and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with potential positive economic adjustments based on the stage
of the WRN program, as applicable, at the time of opt-out. There is no guarantee that we will be able to successfully continue to advance the Pol Theta and
WRN programs and receive regulatory filing milestone payments related to any Pol Theta or WRN product. GSK may terminate the entire GSK
Collaboration Agreement or any collaboration program on a target-by-target basis for any or no reason upon written notice to us after expiration of a
defined notice period. The GSK Collaboration Agreement or any program under the GSK Collaboration Agreement may also be terminated by either party
for the other party’s insolvency or certain uncured breaches. We may terminate the GSK Collaboration Agreement if GSK or any of its sublicensees or
affiliates challenge certain of our patents. Depending on the timing of any such termination we may not be entitled to receive the option exercise fees, or
potential milestone payments, as these payments terminate with termination of the GSK Collaboration Agreement.
If GSK terminates its rights and obligations with respect to a program or the entire GSK Collaboration Agreement, then depending on the timing of such
event:
•
the development of our product candidates subject to the GSK Collaboration Agreement may be terminated or significantly delayed;
•
our cash expenditures could increase significantly if it is necessary for us to hire additional employees and allocate scarce resources to the
development and commercialization of product candidates that were previously funded by GSK;
•
we would bear all of the risks and costs related to the further development and commercialization of product candidates that were previously
the subject of the GSK Collaboration Agreement, including the reimbursement of third parties; and
•
in order to fund further development and commercialization, we may need to seek out and establish alternative collaboration arrangements
with third-party collaboration partners; this may not be possible, or we may not be able to do so on terms which are acceptable to us, in which
case it may be necessary for us to limit the size or scope of one or more of our programs or increase our expenditures and seek additional
funding by other means.
Any of these events would have a material adverse effect on our results of operations and financial condition.
50
As an organization, we have never completed a clinical trial, and may be unable to do so for any of our product candidates.
We will need to successfully initiate and complete our own Phase 1 clinical trials and later-stage and pivotal clinical trials in order to obtain FDA or a
comparable foreign regulatory body’s approval to market our product candidates. Carrying out clinical trials and the submission of regulatory filings is a
complicated process. As an organization, we have not yet completed any clinical trials for any of our product candidates. We have limited experience in
preparing, submitting and prosecuting regulatory filings, and have not previously submitted any NDA or other comparable foreign regulatory submission
for any product candidate. In addition, we have had limited interactions with the FDA and cannot be certain how many additional clinical trials of
darovasertib, IDE397 or IDE161 or how many clinical trials of any of our other product candidates will be required or whether the FDA will agree with the
design or implementation of our clinical trials. We are required to comply with certain regulatory requirements, and the FDA may identify specific clinical
or other development-related requirements that we must satisfy, as a condition to initiating or continuing our clinical trials; if we fail to meet such a
requirement, the FDA may issue a clinical hold or designate other conditions on our clinical trials. Consequently, we may be unable to successfully and
efficiently execute and complete necessary clinical trials in a way that leads to regulatory submission of a marketing application for, and approval of,
darovasertib, IDE397, IDE161, or any of our other product candidates. We may require more time and incur greater costs than our competitors and may not
succeed in obtaining regulatory approvals of product candidates that we develop. Failure to commence or complete, or delays in, our planned clinical trials,
could prevent us from or delay us in commercializing darovasertib, IDE397, IDE161, or any other product candidate.
The successful development of targeted therapeutics, including therapeutics involving direct targeting of an oncogenic pathway and synthetic lethality
therapeutics, including our portfolio of synthetic lethality small molecule inhibitors, as well as any related diagnostics, is highly uncertain.
Successful development of targeted therapeutics, including therapeutics involving direct targeting oncogenic pathways and synthetic lethality therapeutics,
such as our portfolio of synthetic lethality small molecule inhibitors, as well as any related diagnostics, is highly uncertain and is dependent on numerous
factors, many of which are beyond our control. Our precision medicine target and biomarker discovery platform is based on new technologies and methods
relating to drug target and biomarker identification, screening and validation, including Dual CRISPR genetic screening and bioinformatics and we have
not, to date, sought regulatory approval for any therapeutics developed through our precision medicine target and biomarker discovery platform. As such, it
is difficult to accurately predict the developmental challenges we or our collaboration partners may incur for our current and future product candidates as
we proceed through product discovery, identification, preclinical studies and clinical trials.
Our precision medicine target and biomarker discovery platform is novel and may not be effective at identifying targets and/or biomarkers for product
candidates. We therefore cannot provide any assurance that we will be able to successfully identify additional product candidates or biomarkers, advance
any of these additional product candidates or diagnostics for their associated biomarkers through the development process.
Additionally, particular patient genetic alterations, such as mutations, deletions or fusions may not be functionally active genetic drivers of the disease.
Further, whether a genetic alteration is functionally active may be difficult to ascertain from preclinical cancer models, may be tissue-type dependent and
may vary from patient to patient within a specific indication. If that was the case, we would need to functionally validate such genetic alterations, for
example, using in vitro and in vivo models, potentially across more than one tumor-tissue type and across multiple cell lines. If some of the genetic
alterations are not functionally validated, this would reduce the size of our addressable patient population. Even if genetic alterations are preclinically
validated, the relevance of these alterations may not translate into a human clinical setting, which could adversely impact our clinical trial results and our
commercial opportunities.
Targeted therapeutics that appear promising in the early phases of development may fail to reach the market for several reasons, including:
•
research or preclinical studies may show our targeted small molecule inhibitors or antagonists to be less effective than desired or to have
harmful or problematic side effects or toxicities;
•
failure to accurately identify, validate or develop clinically relevant biomarkers for our targeted therapeutic product candidates;
51
•
clinical trial results may show our targeted therapeutic small molecule inhibitors to be less effective than expected based on preclinical
studies (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities;
•
failure to receive the necessary regulatory approvals or a delay in receiving such approvals. Among other things, such delays may be caused
by slow enrollment in clinical trials, patients dropping out of trials, length of time to achieve trial endpoints, additional time requirements for
data analysis, IND preparation, discussions with the FDA or similar foreign regulatory authorities, an FDA or similar foreign regulatory
authority request for additional preclinical or clinical data, or unexpected safety or manufacturing issues;
•
manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that may make our targeted therapeutic small
molecule inhibitors uneconomical; and
•
proprietary rights of others and their competing products and technologies that may prevent our targeted therapeutic small molecule
inhibitors, or the diagnostics for biomarkers associated with such small molecule inhibitors, from being commercialized.
As a result of these factors, it is more difficult for us to predict the time and cost of product candidate development, and we cannot predict whether the
application of our precision medicine target and biomarker discovery platform will result in the identification, development, and regulatory approval of any
products. The length of time necessary to complete clinical trials and to submit an application for marketing approval for a decision by a regulatory
authority may be difficult to predict for targeted therapeutic small molecule inhibitors, in large part because of the limited regulatory history associated
with them. The clinical trial requirements of the FDA and other comparable foreign regulatory authorities and the criteria these regulators use to determine
the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the product
candidate. The regulatory approval process for product candidates based on synthetic lethality is uncertain and may be more expensive and take longer than
the approval process for product candidates based on other, better known or more extensively studied technologies. It is difficult to determine how long it
will take or how much it will cost to obtain regulatory approvals for our product candidates in either the United States or other comparable regions of the
world or how long it will take to commercialize our product candidates. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval
necessary to bring a potential product candidate to market would adversely affect our business, financial condition, results of operations and prospects.
Even if we are successful in obtaining regulatory approval, commercial success of any approved products will also depend in large part on the availability
of insurance coverage and adequate reimbursement from third-party payors, including government payors, such as the Medicare and Medicaid programs,
and managed care organizations, which may be affected by existing and future healthcare reform measures designed to reduce the cost of healthcare. Third-
party payors could require us to conduct additional studies, including post-marketing studies related to the cost-effectiveness of a product, to qualify for
reimbursement, which could be costly and divert our resources. If government and other healthcare payors were not to provide adequate insurance coverage
and reimbursement levels for one any of our products once approved, market acceptance and commercial success would be limited.
In addition, if any of our products is approved for marketing, we will be subject to significant regulatory obligations regarding the submission of safety and
other post-marketing information and reports and registration, and will need to continue to comply (or ensure that our third-party providers comply) with
cGMPs, or similar applicable foreign requirements and GCPs for any clinical trials that we conduct post-approval. In addition, there is always the risk that
we or a regulatory authority might identify previously unknown problems with a product post-approval, such as AEs, of unanticipated severity or
frequency. Compliance with these requirements is costly and any failure to comply or other post-approval issues with our product candidates could have a
material adverse effect on our business, financial condition, results of operations and prospects.
Preclinical and clinical drug development is a lengthy and expensive process with an uncertain outcome. We may incur additional costs or experience
delays in completing, or ultimately be unable to complete, the development and commercialization of any product candidates, which could result in
increased costs to us, delay or limit our ability to generate revenue and adversely affect our business, financial condition, results of operations and
prospects. Furthermore, results of earlier studies and trials may not be predictive of future trial results.
Before we can initiate clinical trials for our product candidates, we must submit the results of preclinical studies to the FDA or a comparable foreign
regulatory authority along with other information, including information about product candidate chemistry, manufacturing and controls, diagnostics for
biomarkers for our product candidates and our proposed clinical trial protocol, as part of an IND application or similar regulatory filing.
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Before obtaining marketing approval from regulatory authorities for the sale of any products, we, or our collaboration partners must conduct extensive
clinical trials to demonstrate the safety and efficacy of the product candidates in humans. Clinical trials are expensive and can take many years to complete,
and their outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. In addition, we may rely in part on preclinical,
clinical and quality data generated by contract research organizations, or CROs, and other third parties for regulatory submissions for our product
candidates. While we have or will have agreements governing these third parties’ services, we have limited influence over their actual performance.
Further, pursuant to our license agreement with Novartis, we have a right of reference to certain data from Novartis’ Phase 1 clinical trial data for our
regulatory filings for darovasertib.
If these third parties, including Novartis, fail to make data available to us, or, if applicable, make regulatory submissions in a timely manner, in each case
pursuant to our agreements with them, our development programs may be significantly delayed and we may need to conduct additional studies or trials or
collect additional data independently. In either case, our development costs would increase.
Our clinical trial collaboration and supply agreements with Pfizer, Gilead and Merck for the supply of crizotinib, Trodelvy and KEYTRUDA respectively,
support our plans to evaluate the safety and efficacy of darovasertib in combination with crizotinib, IDE397 in combination with Trodelvy, and IDE161 in
combination with KEYTRUDA. If any of these strategic collaborators delay or fail to supply their compound in support of these combination trials, fail to
sponsor or appropriately conduct the combination trial (in the case of Amgen), or we fail to reach an agreement with any of these strategic collaborators for
the continued supply of their compound beyond the terms of the current supply agreements, the development programs as pertaining to these combinations
may be significantly delayed, and our development costs may increase. In each case, this may require us to establish additional supply agreements and rely
upon third parties for supply of such combination agents, or if such combination agents are commercially available, in the absence of a supply agreement,
we may incur the cost of purchasing such combination agents and may be at risk of having insufficient supply. We may initiate clinical trials in which our
product candidates, including darovasertib, IDE397 or IDE161, are combined with one or more other pharmaceutical agents that have not yet been
approved by the FDA or comparable foreign regulatory authorities; in such situations, we may be relying on third parties for obtaining appropriate
regulatory approvals and we may have no or limited influence over whether or not such regulatory approvals are achieved for such combination agents.
We and our strategic collaborators also may experience numerous unforeseen events during, or as a result of, any preclinical studies or clinical trials that
could delay or prevent us or our strategic collaborators from successfully developing our product candidates, including:
•
we may be unable to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of clinical trials;
•
the FDA or a comparable foreign regulatory authority disagreeing as to the design or implementation of our clinical trials;
•
delays in obtaining regulatory authorization to commence a clinical trial;
•
reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive
negotiation and may vary significantly among different CROs and clinical trial sites;
•
obtaining IRB or ethics committee approval or positive opinion at each clinical trial site;
•
recruiting an adequate number of suitable patients to participate in a clinical trial, particularly if any public health outbreak, epidemic or
pandemic leads to clinical site closures;
•
having patients complete a clinical trial or return for post-treatment follow-up;
•
clinical sites deviating from clinical trial protocol or dropping out of a clinical trial;
•
addressing subject safety concerns that arise during the course of a clinical trial;
•
adding a sufficient number of clinical trial sites;
•
obtaining sufficient quantities of product candidate for use in preclinical studies or clinical trials from third-party suppliers; or
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•
accessing third-party products or product candidates for use in combination with our product candidates in preclinical studies or clinical
trials, including third-party product candidates that have not yet been approved by the FDA or comparable foreign regulatory authorities.
We and our strategic collaborators may experience numerous adverse or unforeseen events during, or as a result of, preclinical studies and clinical trials
that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:
•
we may receive feedback from regulatory authorities that requires us to modify the design of our clinical trials;
•
clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to
conduct additional clinical trials or abandon our development programs;
•
the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials
may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;
•
we or our third-party contractors may fail to comply with regulatory requirements, fail to maintain adequate quality controls, or be unable to
produce sufficient product supply to conduct and complete preclinical studies or clinical trials of our product candidates in a timely manner,
or at all;
•
we or our investigators might have to suspend or terminate clinical trials of our product candidates for various reasons, including non-
compliance with regulatory requirements, a finding that our product candidates have undesirable side effects or other unexpected
characteristics, or a finding that the participants are being exposed to unacceptable health risks;
•
the cost of clinical trials of our product candidates may be greater than we anticipate;
•
the quality of our product candidates or other materials necessary to conduct preclinical studies or clinical trials of our product candidates
may be insufficient or inadequate;
•
regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; and
•
collaborators may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us.
If we or our strategic collaborators are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently
contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not
positive or are only moderately positive or if there are safety concerns, we may:
•
incur unplanned costs;
•
be delayed in obtaining marketing approval for our product candidates or not obtain marketing approval at all;
•
obtain marketing approval in some countries and not in others;
•
obtain marketing approval for indications or patient populations that are not as broad as intended or desired;
•
obtain marketing approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed
warnings;
•
be subject to additional post-marketing testing requirements, which could be expensive and time-consuming; or
•
have the treatment removed from the market after obtaining marketing approval.
We and our strategic collaborators could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which
such trials are being conducted, by the Data Safety Monitoring Board, or DSMB, for such trial or by the FDA or another comparable foreign regulatory
authority. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance
with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities
resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product
candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in
regulatory requirements and policies may occur, and we may need to amend clinical trial
54
protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to IRBs or other foreign regulatory authorities
or ethics committees for reexamination, which may impact the costs, timing or successful completion of a clinical trial. For example, in recent years the
FDA has issued draft guidance and launched programs aiming to reform and modernize the dose optimization procedures used by clinical trial sponsors
during the development of oncology drugs. Although these efforts have not yet resulted in any formal changes to the FDA’s regulations or policies,
changes in the FDA’s thinking with respect to dose selection and optimization could require us to change the design of our planned or ongoing clinical
trials or otherwise conduct additional preclinical, clinical or manufacturing studies beyond those we currently anticipate, which could increase our costs
and/or delay the development of our product candidates.
As another example, the regulatory landscape related to clinical trials in the EU recently evolved. The EU Clinical Trials Regulation, or CTR, which was
adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. While the EU Clinical Trials Directive required
a separate clinical trial application, or CTA, to be submitted in each member state in which the clinical trial takes place, to both the competent national
health authority and an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application for
multi-center trials. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state,
leading to a single decision per member state. The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all
member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics
rules. Each member state’s decision is communicated to the sponsor via the centralized EU portal. Once the CTA is approved, clinical study development
may proceed. The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions
of the CTR. Compliance with the CTR requirements by us and our third-party service providers, such as CROs, may impact our developments plans.
Further, conducting clinical trials in foreign countries, as we may do for certain of our product candidates, presents additional risks that may delay
completion of our clinical trials. These risks include the possibility that we could be required to conduct additional preclinical studies before initiating any
clinical trials, the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural
customs, managing additional administrative burdens associated with comparable foreign regulatory schemes, as well as political and economic risks
relevant to such foreign countries.
Principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash or equity
compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or a
regulatory authority concludes that the financial relationship may have affected the interpretation of the clinical trial, the integrity of the data generated at
the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection
of the marketing application we submit. Any such delay or rejection could prevent or delay us from commercializing our current or future product
candidates.
If any of our preclinical studies or clinical trials of our product candidates are delayed or terminated, the commercial prospects of our product candidates
may be harmed, and our ability to ultimately generate revenues from any of these product candidates will be delayed or not realized at all. In addition, any
delays in completing our clinical trials may increase our costs, slow down our product candidate development and regulatory approval process and
jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may significantly harm our business, financial
condition, results of operations and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical
trials may also ultimately lead to the denial of regulatory approval of our product candidates. If our product candidates and any future product candidates
prove to be ineffective, unsafe or commercially unviable, our entire platform and approach would have little, if any, value, which would have a material
adverse effect on our business, financial condition, results of operations and prospects.
Furthermore, the results of preclinical studies and clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials.
Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through preclinical studies and
initial clinical trials. Furthermore, for some of our programs, in the future we intend to conduct basket trials, which will be designed to include multiple
clinically defined populations under one investigational protocol, although each population is enrolled and analyzed separately. A basket trial design could
potentially decrease the time to study new populations by decreasing administrative burden, however, these trials may not provide opportunities for
accelerated regulatory pathways, and do not overcome limitations to extrapolating data from the experience in one disease to other diseases, because safety
and efficacy results in each indication are analyzed separately. Accordingly, clinical success in a basket trial, or any trial in one indication, may not predict
success in another indication. In contrast, in the event of an adverse safety issue, clinical hold, or other adverse finding in one or more indications being
tested, such event
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could adversely affect our trials in the other indications and may delay or prevent completion of the clinical trials. A number of companies in the
pharmaceutical, biopharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials for similar indications that we
are pursuing due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies, and we cannot be certain that we will not
face similar setbacks. Even if our clinical trials are completed, the results may not be sufficient to obtain regulatory approval of any products.
Synthetic lethality represents an emerging class of precision medicine targets, and negative perceptions of the efficacy, safety or tolerability of this class
of targets, including any that we develop, could adversely affect our ability to conduct our business, advance our product candidates or obtain
regulatory approvals.
Aside from PARP inhibitors, such as Lynparza, Rubraca, Zejula and Talzenna, no synthetic lethality small molecule inhibitor therapeutics have been
approved to date by the FDA or other comparable regulators. AEs in future clinical trials of our product candidates or in clinical trials of others developing
similar products and the resulting publicity, as well as any other AEs in the field of synthetic lethality, or other products that are perceived to be similar to
synthetic lethality, such as those related to gene therapy or gene editing, could result in a decrease in the perceived benefit of one or more of our programs,
increased regulatory scrutiny, decreased confidence by patients and CROs in our product candidates, and less demand for any product that we may develop.
Our substantial pipeline of synthetic lethality small molecule inhibitor product candidates could result in a greater quantity of reportable AEs or other
reportable negative clinical outcomes, manufacturing reportable events or material clinical events that could lead to clinical delays or holds by the FDA or
applicable regulatory authority or other clinical delays, any of which could negatively impact the perception of one or more of our synthetic lethality
programs, as well as our business as a whole. In addition, responses by U.S. federal, state or foreign governments to negative public perception may result
in new legislation or regulations that could limit our ability to develop any product candidates or commercialize any approved products, obtain or maintain
regulatory approval, or otherwise achieve profitability. More restrictive statutory regimes, government regulations, or negative public opinion would have
an adverse effect on our business, financial condition, results of operations, and prospects, and may delay or impair the development of our product
candidates and commercialization of any approved products or demand for any products we may develop.
Tissue-type agnostic basket trials are an emerging clinical approach that may result in delays in clinical development, additional regulatory
requirements and delays in, or the prevention of, our ability to obtain regulatory approval or commercialize our product candidates.
We initiated a Phase 1/2 tissue-type agnostic basket trial with darovasertib in June 2019, and may also utilize a basket trial approach in clinical trials for
other product candidates. Basket trials allow us to evaluate the safety and efficacy of a product candidate in a variety of tumor types with a specific
molecular profile. We believe that this clinical approach provides many benefits, however, there are limited precedents, and as a result, there a number of
inherent risks.
There is limited precedent for the FDA and foreign regulatory authorities to review and grant tissue-type agnostic approvals. Furthermore, as clinical trials
increasingly use classification of tumors by molecular profiling, the FDA or other regulatory authority may change or issue guidance or adopt a policy that
adversely affects requirements for basket trials. In the event that such guidance or policy has an effect on any of our protocols or trials, as the case may be,
it may result in the delay of clinical development, or require us to conduct additional preclinical studies or clinical trials.
Even if we obtain a tissue-type agnostic approval for one or more of our product candidates, there is limited precedent for obtaining reimbursement. Third-
party payors may reimburse at different levels across tumor tissue types and indicates, or not at all.
We may find it difficult to enroll patients in our clinical trials given the limited number of patients who have the diseases for which our product
candidates are being developed. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed
or otherwise adversely affected.
The timely completion of clinical trials in accordance with their protocols depends, among other things, on our and our collaboration partners’ ability to
enroll a sufficient number of patients who remain in the clinical trial until its conclusion. We may experience difficulties in patient enrollment in our
clinical trials for a variety of reasons. The enrollment of patients depends on many factors, including:
•
the patient eligibility and exclusion criteria defined in the protocol;
•
the size and nature of the patient population required for analysis of the clinical trial’s primary endpoints;
•
the proximity of patients to clinical trial sites;
56
•
the design of the clinical trial;
•
the risk that enrolled patients will not complete a clinical trial;
•
our ability to recruit clinical trial investigators with the appropriate competencies and experience;
•
clinical trial investigators’ willingness to continue enrolling patients and patients’ willingness to complete protocol assessments during any
public health outbreak, epidemic or pandemic;
•
clinicians’ and patients’ perceptions as to the safety of the product candidate;
•
clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available
therapies, including any new therapies that may be approved for the indications we are investigating as well as any drugs under development;
and
•
our ability to obtain and maintain patient consents.
We will be required to identify and enroll a sufficient number of patients for each of our clinical trials. Potential patients for any planned clinical trials may
not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for such trials. We also may encounter
difficulties in identifying and enrolling patients with a stage of disease appropriate for our planned clinical trials and monitoring such patients adequately
during and after treatment. We may not be able to initiate or continue clinical trials if we are unable to locate a sufficient number of eligible patients to
participate in the clinical trials required by the FDA or a comparable foreign regulatory authority. In addition, the process of finding and diagnosing
patients may prove costly.
In addition, our clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates,
and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may
instead opt to enroll in a trial being conducted by one of our competitors. As a result of any public health outbreak, competition for potential patients in our
trials may be further exacerbated as a result of any clinical site closures. Since the number of qualified clinical investigators is already limited, we may
conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are
available for our clinical trials in such clinical trial site.
Furthermore, certain conditions for which we plan to evaluate our current development candidates are rare diseases, such as MUM, with limited patient
pools from which to draw for clinical trials. For example, one of our product candidates, darovasertib, is currently being evaluated in a Phase 1/2 basket
trial that we initiated in June 2019 to evaluate darovasertib in solid tumors harboring GNAQ/GNA11 hotspot mutations in MUM. The timing of our clinical
trials depends, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods. The
eligibility criteria of our clinical trials, once established, will further limit the pool of available trial participants.
In addition, our clinical trials may be affected by any public health outbreak, epidemic or pandemic. Clinical site initiation and patient enrollment may be
delayed. For example, as a result of the COVID-19 pandemic, several of our sites halted new enrollment for several months in 2020 before resuming
enrollment. Some patients may not be able or willing to comply with clinical trial protocols, and data collected may be incomplete, if quarantines impede
patient movement or interrupt healthcare services. Similarly, the ability to recruit and retain patients, and principal investigators and site staff who, as
healthcare providers, may have heightened exposure to infectious diseases, may be delayed or disrupted, which may adversely impact our clinical trial
operations.
If patients are unwilling to participate in our clinical trials for any reason, including the existence of other approved therapies or concurrent clinical trials
for similar patient populations, if they are unwilling to enroll in a clinical trial with a placebo-controlled design, or we otherwise have difficulty enrolling a
sufficient number of patients, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of our product candidates may be
delayed. Our inability to enroll a sufficient number of patients for any of our future clinical trials would result in significant delays or may require us to
abandon one or more clinical trials altogether. In addition, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our
future clinical trials and, while we intend to enter into agreements governing their services, we will have limited influence over their actual performance.
We cannot assure you that we will not experience delays in enrollment, which would result in the delay of completion of such trials beyond our expected
timelines.
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Our product candidates or any future product candidates may be associated with undesirable side effects or AEs that could delay or prevent their
regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if
any.
As with most pharmaceutical products, use of our product candidates could be associated with side effects or AEs which can vary in severity from minor
reactions to death and in frequency from infrequent to prevalent. Undesirable side effects or unacceptable toxicities caused by our product candidates could
cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory
approval by the FDA or a comparable foreign regulatory authority. Results of our clinical trials could reveal a high and unacceptable severity and
prevalence of these or other side effects. Furthermore, certain of our product candidates may be co-administered with third-party approved or experimental
therapies, such as darovasertib with crizotinib in the combination arms of our Phase 1/2 clinical trial or IDE397 with PRMT5 inhibitors in the combination
arms of our Phase 1/2 clinical trial. These combinations may have additional side effects. The uncertainty resulting from the use of our product candidates
in combination with other therapies may make it difficult to accurately predict side effects in future clinical trials.
To date, only three of our product candidates, IDE397, darovasertib, and IDE161 have been tested in clinical trials, and they have been observed to be
generally well tolerated, with certain drug-related SAEs and AEs being reported for darovasertib, as monotherapy and in combination with crizotinib, for
IDE397, and for IDE161.
If unacceptable side effects arise in the further development of our product candidates, we, the FDA or comparable foreign regulatory authorities, or the
IRBs at the institutions in which the clinical trials are being conducted could suspend or terminate our clinical trials or the FDA or a comparable foreign
regulatory authority could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications. Treatment related
side effects could also affect patient recruitment or the ability of enrolled patients to complete any of our clinical trials or result in potential product liability
claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. Potential side effects of our product
candidates could result in patient injury or death. Any of these occurrences may harm our business, financial condition, results of operations and prospects
significantly.
In addition, even if we successfully advance our product candidates or any future product candidates into and through clinical trials, such trials will likely
only include a limited number of patients and limited duration of exposure to our product candidates. Some adverse effects of our product candidates will
not be uncovered until a significantly larger number of patients are exposed to the product candidate. Further, any clinical trials may not be sufficient to
determine the effect and safety consequences of taking our product candidates over a multi-year period.
If any of our product candidates receives marketing approval and we or others later identify undesirable side effects caused by such products, a number of
potentially significant negative consequences could result, including:
•
regulatory authorities may withdraw their approval of the product;
•
we may be required to recall a product or change the way such product is administered to patients;
•
additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any
component thereof;
•
regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;
•
we may be required to restrict the use of the product, including implementing a Risk Evaluation and Mitigation Strategy, or REMS, or to
create a Medication Guide outlining the risks of such side effects for distribution to patients or similar risk management measures;
•
we could be sued and held liable for harm caused to patients;
•
the product may become less competitive; and
•
our reputation may suffer.
Any of the foregoing events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and result
in the loss of significant revenues to us, which would adversely affect our business, financial condition, results of operations and prospects. In addition, if
one or more of our product candidates prove to be unsafe, our entire technology platform and pipeline could be affected, which would have a material
adverse effect on our business, financial condition, results of operations and prospects.
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If we are unable to successfully develop molecular diagnostics for biomarkers that enable patient selection and/or that demonstrate drug-target
interaction, or experience significant delays in doing so, we may not realize the full commercial potential of our product candidates.
A key component of our strategy includes the use of molecular diagnostics to guide patient selection and/or to confirm target engagement of our product
candidates. In some cases, a diagnostic may be commercially available, for example, on a tumor-profiling panel. If not already commercially available, we
may collaborate with diagnostic companies for the development of biomarkers associated with our product candidates. We may have difficulty in
establishing or maintaining such development relationships, and we will face competition from other companies in establishing these collaborations.
There are also several risks associated with biomarker identification and validation. We, in collaboration with any diagnostic partners, may not be able to
identify predictive biomarkers or pharmacodynamic biomarkers for one or more of our programs. We may not be able to validate potential biomarkers
(e.g., certain genetic mutations) or their functional relevance preclinically in relevant in vitro or in vivo models. Data analytics and information from
databases that we rely on for identifying or validating some of our biomarker-target relationships may not accurately reflect potential patient populations.
Potential biomarkers, even if validated preclinically, may not be functionally effective or validated in human clinical trials.
If we, in collaboration with these parties, are unable to successfully develop companion diagnostics for our product candidates, or experience delays in
doing so, the development of our product candidates may be adversely affected. The development of companion diagnostic products requires a significant
investment of working capital, and may not result in any future income. This could require us to raise additional funds, which could dilute our current
investors or impact our ability to continue our operations in the future.
There are also risks associated with diagnostics that are commercially available, including that we may not have access to reliable supply for such
diagnostics.
The failure to obtain required regulatory approvals or certification for any companion diagnostic tests that we may pursue may prevent or delay
approval of our product candidates. Moreover, the commercial success of any of our product candidates may be tied to the regulatory approval or
certification, market acceptance and continued availability of a companion diagnostic.
The FDA regulates in vitro companion diagnostics as medical devices that will likely be subject to and require prospective validation in clinical trials in
conjunction with the clinical trials for our product candidates, and which will require regulatory clearance or approval prior to commercialization. We plan
to collaborate with third parties for the development, testing and manufacturing of these companion diagnostics, the application for and receipt of any
required regulatory clearances or approvals, and the commercial supply of these companion diagnostics. Our third-party collaborators may fail to obtain the
required regulatory clearances or approvals, which could prevent or delay approval of our product candidates. In addition, the commercial success of any of
our product candidates may be tied to and dependent upon the receipt of required regulatory clearances or approvals of the companion diagnostic.
Even if a companion diagnostic is approved, we will rely on the continued ability of any third-party collaborator to make the companion diagnostic
commercially available to us on reasonable terms in the relevant geographies. Furthermore, if commercial tumor profiling panels are not able to be updated
to include additional tumor-associated genes, or if clinical oncologists do not incorporate molecular or genetic sequencing into their clinical practice, we
may not be successful in developing or commercializing our existing product candidates or any future product candidates.
Further, approval, clearance or certification of companion diagnostics may be subject to further legislative or regulatory reforms notably in the EU. On
May 25, 2017, the new In Vitro Medical Devices Regulation, or IVDR, entered into force. The IVDR repeals and replaces the EU In Vitro Diagnostic
Medical Devices Directive. Unlike directives, which must be implemented into the national laws of the EU member states, regulations are directly
applicable, i.e., without the need for adoption of EU member states laws implementing them, in all EU member states and are intended to eliminate current
differences in the regulation of medical devices among EU member states. The IVDR, among other things, is intended to establish a uniform, transparent,
predictable and sustainable regulatory framework across the EU for in vitro diagnostic medical devices and ensure a high level of safety and health while
supporting innovation. The IVDR became applicable on May 26, 2022. Following subsequent legislative changes, European institutions adopted a
“progressive” roll-out of the IVDR to prevent disruption in the supply of in vitro diagnostic medical devices. Therefore, the IVDR applies since May 26,
2022
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but there is a tiered system extending the grace period for many in vitro diagnostic medical devices (depending on their risk classification) before they have
to be fully compliant with the Regulation.
The regulation of companion diagnostics is subject to further requirements since the IVDR became applicable as it introduced a new classification system
for companion diagnostics which are now specifically defined as diagnostic tests that support the safe and effective use of a specific medicinal product, by
identifying patients that are suitable or unsuitable for treatment. Companion diagnostics will have to undergo a conformity assessment by a notified body.
Before it can issue an EU certificate, the notified body must seek a scientific opinion from the EMA on the suitability of the companion diagnostic to the
medicinal product concerned if the medicinal product falls exclusively within the scope of the centralized procedure for the authorization of medicines, or
the medicinal product is already authorized through the centralized procedure, or a marketing authorization application for the medicinal product has been
submitted through the centralized procedure. For other substances, the notified body can seek the opinion from a national competent authorities or the
EMA. These modifications may make it more difficult and costly for us to obtain regulatory clearances, approvals or certifications for our companion
diagnostics or to manufacture, market or distribute our products after clearance, approval or certification is obtained.
Interim, “topline” and preliminary data from our clinical trials may differ materially from the final data.
From time to time, we may publicly disclose preliminary or “topline” data from our clinical trials, which are based on a preliminary analysis of then-
available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the
particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received
or had the opportunity to fully and carefully evaluate all data. As a result, the topline results that we report may differ from future results of the same
clinical trials, or different conclusions or considerations may qualify such topline results, once additional data have been received and fully evaluated.
Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data
we previously published. As a result, topline data should be viewed with caution until the final data is available. From time to time, we may also disclose
interim data from our clinical trials. Interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change
as patient enrollment continues and more patient data become available. Adverse differences between preliminary or interim data and final data could
significantly harm our business, financial condition, results of operations and prospects.
Others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or
weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular
product candidate or product and the value of our company in general. In addition, the information we choose to publicly disclose regarding a particular
study or clinical trial is typically a summary of extensive information, and you or others may not agree with what we determine is the material or otherwise
appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to
future decisions, conclusions, views, activities or otherwise regarding a particular product, product candidate or our business. If the topline data that we
report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and
commercialize, our product candidates may be harmed, which could harm our business, financial condition, operating results and prospects.
We may be unable to obtain regulatory approval for our product candidates or any future product candidates. The denial or delay of such approval
would prevent or delay commercialization of our product candidates and adversely impact our business, financial condition, operating results and
prospects.
The process of obtaining regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially
based upon the type, complexity and novelty of the product candidates involved, as well as the target indications and patient population. Approval policies
or regulations may change, and the FDA or comparable foreign regulatory authorities have substantial discretion in the drug approval process, including the
ability to delay, limit or deny approval of a product candidate for many reasons. Despite the time and expense invested in clinical development of product
candidates, regulatory approval is never guaranteed. Neither we nor any collaborator or any future collaborator, is permitted to market any of our product
candidates in the United States or abroad until we receive approval of an NDA from the FDA or similar regulatory approvals from comparable foreign
regulatory authorities.
Prior to obtaining approval to commercialize a product candidate in the United States, we or our collaborators must demonstrate with substantial evidence
from adequate and well-controlled clinical trials, and to the satisfaction of the FDA, that such product candidates are safe and effective for their intended
uses. Foreign regulatory authorities may require a similar demonstration before we can obtain approval to commercialize a product candidate abroad.
Results from preclinical
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studies and clinical trials can be interpreted in different ways. Even if we believe the preclinical or clinical data for our product candidates are promising,
such data may not be sufficient to support approval by the FDA or comparable foreign regulatory authorities. The FDA or a comparable foreign regulatory
authority, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-
approval, or may object to elements of our clinical development program.
The FDA or a comparable foreign regulatory authority can delay, limit or deny approval of a product candidate for many reasons, including, but not limited
to:
•
such authorities may disagree with the design or implementation of our clinical trials;
•
negative or ambiguous results from our clinical trials, or results may not meet the level of statistical significance required by the FDA or a
comparable foreign regulatory agency for approval;
•
serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar
to our product candidates;
•
the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we
seek approval;
•
such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is
potentially different from that of the United States;
•
we are unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
•
the FDA’s or the applicable comparable foreign regulatory agency’s non-approval of the formulation, labeling or specifications of our
product candidates or any of our future product candidates;
•
such authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
•
such authorities could question the integrity of data obtained in our current or future clinical trials, for example, due to missed protocol
procedures;
•
such authorities may not agree that the data collected from clinical trials of our product candidates are acceptable or sufficient to support the
submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may
impose requirements for additional preclinical studies or clinical trials;
•
such authorities may disagree regarding the formulation, labeling and/or the specifications of our product candidates;
•
such authorities may only approve indications that are significantly more limited than what we apply for and/or with other significant
restrictions on distribution and use;
•
such authorities may find deficiencies in the manufacturing processes or facilities of our third-party manufacturers with which we or any of
our collaborators or any potential future collaborators, contract for clinical and commercial supplies; and
•
the approval policies or regulations of such authorities may significantly change in a manner rendering our or any of our collaborators’
clinical data insufficient for approval.
With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing,
administrative review periods and agreements with pricing authorities. In addition, events raising questions about the safety of certain marketed
pharmaceuticals may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing new drugs based on safety,
efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals. Any delay in obtaining, or inability to
obtain, applicable regulatory approvals would prevent us or any of our collaborators or any potential future collaborators, from commercializing any
products.
Of the large number of drugs in development, only a small percentage successfully complete the FDA or comparable foreign regulatory approval processes
and are commercialized. The lengthy approval process, as well as the unpredictability of future clinical trial results may result in our failing to obtain
regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.
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Even if we eventually complete clinical trials and receive approval of an NDA or foreign marketing application for a product, the FDA or a comparable
foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials, including Phase 4 clinical trials, and/or
the implementation of a REMS, which may be required to ensure safe use of the drug after approval. The FDA or a comparable foreign regulatory authority
also may approve a product candidate for a more limited indication or patient population than we originally requested, and the FDA or a comparable
foreign regulatory authority may not approve the labeling that we believe is necessary or desirable for the successful commercialization of a product
candidate. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate
and would materially adversely impact our business and prospects.
We may develop our product candidates and future product candidates in combination with other therapies, and safety or supply issues with
combination-use products may delay or prevent development and approval of our product candidates.
We may develop our product candidates in combination with one or more cancer therapies, both approved and unapproved. Even if any product candidate
we develop were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject
to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the therapy used in combination with our
product candidates or that safety, efficacy, manufacturing or supply issues could arise with these existing therapies. Combination therapies are commonly
used for the treatment of cancer, and we would be subject to similar risks if we develop any of our product candidates for use in combination with other
drugs or for indications other than cancer. Similarly, if the therapies we use in combination with our product candidates are replaced as the standard of care
for the indications we choose for any of our product candidates, the FDA or similar regulatory authorities outside of the United States may require us to
conduct additional clinical trials. The occurrence of any of these risks could result in our own products, if approved, being removed from the market or
being less successful commercially.
We may also evaluate our product candidates in combination with one or more cancer therapies that have not yet been approved for marketing by the FDA
or a similar regulatory authority outside of the United States. We may be unable to effectively identify and collaborate with third parties for the evaluation
of our product candidates in combination with their therapies. We will not be able to market and sell any product candidate we develop in combination with
any such unapproved cancer therapies that do not ultimately obtain marketing approval. The regulations prohibiting the promotion of products for
unapproved uses are complex and subject to substantial interpretation by the FDA and other foreign government agencies. In addition, there are additional
risks similar to the ones described for our products currently in development and clinical trials that result from the fact that such cancer therapies are
unapproved, such as the potential for serious adverse effects, delay in their clinical trials and lack of FDA or comparable foreign regulatory authorities
approval.
If the FDA or a similar regulatory authority outside of the United States does not approve these other drugs or revokes approval of, or if safety, efficacy,
manufacturing, or supply issues arise with, the drugs we choose to evaluate in combination with any product candidate we develop, we may be unable to
obtain approval of or market such product.
Although we may apply for orphan drug designation for our product candidates, we may not receive the designation or we may be unable to obtain the
benefits associated with such designation, including the potential for marketing exclusivity
Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan
drugs. In the United States, the FDA may designate a drug as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally
defined as a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 in the United States
where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the United States, orphan
drug designation entitles a party to financial incentives such as opportunities for grant funding, tax credits for certain clinical trial costs and user-fee
waivers. If a drug with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation,
the drug is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for the same drug and
indication for seven years, except in limited circumstances.
In the EU, the European Commission grants orphan designation on the basis of the EMA’s Committee for Orphan Medicinal Products opinion. A
medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating
condition; (2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the
benefits derived from orphan status, would not generate sufficient return in the EU to justify investment; and (3) there exists no satisfactory method of
diagnosis, prevention or treatment, of such condition authorized for marketing in the EU, or if such a method exists, the product will be
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of significant benefit to those affected by the condition. In the EU, orphan designation entitles a party to financial incentives such as reduction of fees or fee
waivers, protocol assistance, and access to the centralized marketing authorization procedure. Moreover, upon grant of a marketing authorization and
assuming the requirement for orphan designation are also met at the time the marketing authorization is granted, orphan medicinal products are entitled to a
ten-year period of market exclusivity for the approved therapeutic indication. The period of market exclusivity is extended by two years for orphan
medicinal products that have also complied with an agreed Pediatric Investigation Plan, or PIP.
Although we may apply for orphan drug designation for our product candidates, we may not receive the designation we apply for. Even if we received
orphan drug designation for one or more of our product candidates, which we have received for darovasertib in UM, there is no guarantee that we will
obtain approval or orphan drug exclusivity for the product. Even if we obtain approval and orphan drug exclusivity for any of our product candidates, that
exclusivity may not effectively protect the product candidate from competition because different therapies can be approved for the same condition and the
same therapy could be approved for different conditions. Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the
same condition if the FDA concludes that the later drug is clinically superior in that it is shown to provide greater safety, greater effectiveness or a major
contribution to patient care. In addition, a designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the
indication for which it received orphan designation. Moreover, orphan drug exclusive marketing rights in the United States may be lost if the FDA later
determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the
needs of patients with the rare disease or condition. In the EU, during the exclusivity period, marketing authorizations may be granted to a similar
medicinal product with the same orphan indication if: (i) the applicant can establish that the second medicinal product, although similar to the orphan
medicinal product already authorized is safer, more effective or otherwise clinically superior to the orphan medicinal product already authorized; (ii) the
marketing authorization holder for the orphan medicinal product grants its consent; or (iii) if the marketing authorization holder of the orphan medicinal
product is unable to supply sufficient quantities of product. The European exclusivity period can be reduced to six years, if, at the end of the fifth year a
drug no longer meets the criteria for orphan drug designation (i.e. the prevalence of the condition has increased above the orphan designation threshold or it
is judged that the product is sufficiently profitable so as not to justify maintenance of market exclusivity). Orphan drug designation neither shortens the
development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. While we may seek
additional orphan drug designations for applicable indications for our current and any future product candidates, we may never receive such designations.
Even if we do receive such designations, there is no guarantee that we will enjoy the benefits of those designations.
We may seek and fail to obtain fast track or breakthrough therapy designations for our current or future product candidates. Even if we are successful,
these programs may not lead to a faster development or regulatory review process, and they do not guarantee we will receive approval for any product
candidate.
If a product is intended for the treatment of a serious or life-threatening condition and preclinical or clinical data demonstrate the potential to address an
unmet medical need for this condition, the product sponsor may apply for fast track designation. The sponsor of a fast track product candidate has
opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA is submitted, the product
candidate may be eligible for priority review. A fast track product candidate may also be eligible for rolling review, where the FDA may consider for
review sections of the NDA on a rolling basis before the complete application is submitted. The FDA has broad discretion whether or not to grant fast track
designation, so even if we believe a particular product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it.
Although the FDA has granted fast track designation to darovasertib in combination with crizotinib for treatment of adult patients with MUM and to
IDE161 for treatment of adult patients with specific breast cancer or ovarian cancers and we may seek additional designation for other product candidates
in the future, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may rescind
the fast track designation if it believes that the designation is no longer supported by data from our clinical development program.
We may also seek breakthrough therapy designation for any product candidate that we develop. A breakthrough therapy is defined as a drug that is
intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence
indicates that the drug may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints, such as
substantial treatment effects observed early in clinical development. For product candidates that have been designated as breakthrough therapies,
interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while
minimizing the number of patients placed in ineffective control regimens. Product candidates designated as breakthrough therapies by the FDA may also be
eligible for priority review. Like fast track designation, breakthrough therapy designation is within the discretion of the FDA. Accordingly, even if we
believe a product candidate we develop
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meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the
receipt of breakthrough therapy designation for a product candidate may not result in a faster development process, review or approval compared to drugs
developed under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if a product candidate we develop
qualifies as a breakthrough therapy, the FDA may later decide that the drug no longer meets the conditions for qualification and rescind the designation.
We may attempt to secure approval from the FDA through the use of the accelerated approval pathway. If we are unable to obtain such approval, we
may be required to conduct additional preclinical studies or clinical trials beyond those that we contemplate, which could increase the expense of
obtaining, and delay the receipt of, necessary marketing approvals. Even if we receive accelerated approval from the FDA, if our confirmatory trials do
not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw any accelerated approval
we have obtained.
We may in the future seek accelerated approval for our one or more of our product candidates. Under the accelerated approval program, the FDA may grant
accelerated approval to a product candidate designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over
available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably
likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a
given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory
measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit.
An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably
likely to predict an effect on irreversible morbidity or mortality or other clinical benefit.
The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic
advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is contingent on the
sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. If
such post-approval studies fail to confirm the drug’s clinical benefit or are not completed in a timely manner, the FDA may withdraw its approval of the
drug on an expedited basis. In addition, in December 2022, President Biden signed an omnibus appropriations bill to fund the U.S. government through
fiscal year 2023 which included the Food and Drug Omnibus Reform Act of 2022, or FDORA. Among other things, the legislation introduced reforms
intended to expand the FDA’s ability to regulate products receiving accelerated approval, including by increasing the FDA’s oversight over the conduct of
confirmatory trials.
Prior to seeking accelerated approval for any of our product candidates, we intend to seek feedback from the FDA and will otherwise evaluate our ability to
seek and receive accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or
submit an NDA for accelerated approval or any other form of expedited development, review or approval. Furthermore, if we decide to submit an
application for accelerated approval for our product candidates, there can be no assurance that such application will be accepted or that any expedited
review or approval will be granted on a timely basis, or at all. The FDA or other comparable foreign regulatory authorities could also require us to conduct
further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval or any other form of expedited
development, review or approval for a product candidate would result in a longer time period to commercialization of such product candidate, if any, could
increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
We face significant competition in an environment of rapid technological and scientific change, and our failure to effectively compete may prevent us
from achieving significant market penetration. Most of our competitors have significantly greater resources than we do and we may not be able to
successfully compete.
The biotechnology and pharmaceutical industries in particular are characterized by rapidly advancing technologies, intense competition and a strong
emphasis on developing proprietary therapeutics. We compete with a variety of multinational biopharmaceutical companies and specialized biotechnology
companies, as well as technology being developed at universities and other research institutions. Our competitors have developed, are developing or will
likely develop product candidates and processes competitive with our product candidates. Competitive therapeutic treatments include those that have
already been approved and accepted by the medical community and any new treatments that enter the market. We believe that a significant number of
product candidates are currently under development, and may become commercially available in the future, for the treatment of diseases and other
conditions for which we may try to develop product candidates. Our competitors may obtain regulatory approval of their products more rapidly than we
may or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates. We
believe that
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while our precision medicine target and biomarker discovery platform and our scientific and technical know-how give us a competitive advantage in this
space, competition from many sources remains. Our competitors include larger and better funded biopharmaceutical, biotechnological and oncology
therapeutics companies, as well as universities and other research institutions.
Our commercial opportunity and success will be reduced or eliminated if competing products emerge that are safer, more effective, or less expensive than
the therapeutics we develop. Our competitors may develop drugs that are more effective, more convenient, more widely used and less costly or have a
better safety profile than our products and these competitors may also be more successful than us in manufacturing and marketing their products.
For darovasertib, we are not aware of other companies actively developing clinical-stage therapeutics directed to PKC as a target for solid tumors.
Exscientia is developing a PKC theta inhibitor in inflammatory diseases in Phase 1 studies. Varsity Pharma is preclinically evaluating a PKC inhibitor in
CLL. Additionally, Windtree Therapeutics is advancing a preclinical-stage atypical PCK iota inhibitor, including both topical and oral formulations, for
potential treatment of Basal Cell Carcinoma, or BCC. We are aware of other companies that are conducting research and development of potential therapies
for primary UM or for MUM based on other targets and approaches. For example, Aura Biosciences is developing AU-011, a virus-like drug conjugate
(VDC), as local treatment for early-stage choroidal melanoma. Immunocore is developing and commercializing Tebentafusp, also known under its branded
name as Kimmtrak, for the treatment of adult patients with HLA-A*02:01-positive unresectable or MUM. iOnctura has initiated a Phase 2 trial for
Roginolisib, an allosteric PI3K delta inhibitor, in 2L+ MUM. Novartis is developing DYP688, an ADC, with a GNAQ-11 inhibitor payload in a Phase 1/2
clinical trial in MUM. Additionally, Replimune has initiated a potentially registration-enabling trial for RP-2, an oncolytic immunotherapy.
For IDE397, Servier Pharmaceuticals, LLC, or Servier, is evaluating a small molecule MAT2A inhibitor, designated as S95035, in a Phase 1 trial. Insilico
Medicine and Beigene have also initiated Phase 1 trials for their small molecule MAT2A inhibitors called ISM3412 and SYH2039, respectively.
Additionally, Anagenex, Genhouse Bio, Hanmi, ScinnoHub and SK Biopharma have small molecule MAT2A inhibitors in preclinical development.
For IDE849, our competitors include companies developing DLL3-targeting therapies using various therapeutic modalities, including bispecific T-cell
engagers (BiTEs), antibody-drug conjugates (ADCs), chimeric antigen receptor (T-cell) therapies, and radiopharmaceuticals. Amgen received accelerated
approval from the FDA in May 2024 for Tarlatamab (branded name Imdelltra), a DLL3-CD3 BiTE. Boehringer Ingelheim and Daiichi Sankyo are
developing drugs with a similar mechanism of action, both in Phase 2 studies. We are aware of several companies developing DLL3 ADCs with
topoisomerase-I-inhibitor-payloads in Phase 1 studies, including Zai Lab, Roche, Zhang Jiang, and Baili. In radiopharmaceuticals, Abdera initiated a Phase
1 clinical trial for ABD-147 at the end of 2024, and several other companies are pursuing preclinical development of DLL3-targeting radiotherapies.
For IDE161, 858 Therapeutics has initiated a Phase 1 clinical trial for its small molecule PARG inhibitor, ETX-19477. Danatlas received IND clearance for
its PARG inhibitor, DAT-2645, in August 2024, and Evopoint received clearance from the NMPA in December 2024. Additionally, several companies are
conducting preclinical research to develop PARG inhibitors, including Alivexis, Azkarra, FoRx, Nodus Oncology, Satya Pharma Innovations and SynRx.
For GSK101 (IDE705), Artios Pharma is developing a Pol Theta inhibitor, designated as ART-6043, in a Phase 1/2 study. Several other companies have
initiated Phase 1 studies for Pol Theta inhibitors, including Moma Therapeutics, Repare Therapeutics, Varsity Therapeutics, Simcere, and SynRx.
Additionally, Breakpoint Therapeutics and Danatlas have Pol Theta inhibitors in IND-enabling studies.
For GSK959 (IDE275), Novartis is evaluating a non-covalent Werner Helicase (WRN) inhibitor called HRO-761 in a Phase 1 trial. Roche is developing a
covalent WRN inhibitor, designated as RG6457, in a Phase 1 trial. Additionally, several companies are conducting preclinical research to develop WRN
inhibitors, including Eikon, Genhouse, Insilico, Nimbus, Puhe and Ryvu, among others.
For IDE892, we are aware of many companies developing PRMT5 inhibitors in both clinical and preclinical stages. The most advanced assets are currently
in Phase 1/2 studies, including BMS-986504 from BMS, AMG-139 from Amgen, TNG462 from Tango, AZD-3470 from AstraZeneca, and BGB-58067
from Beigene. At least nine other companies have initiated Phase 1 clinical trials and more than fifteen companies are advancing preclinical PRMT5
inhibitors.
For BCG034, we are not aware of any other companies developing bispecific ADCs targeting both B7-H3 and PTK7; however, many companies are
developing mono-antigen ADCs targeting either B7-H3 or PTK7. Merck and Hansoh are both
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evaluating B7-H3 ADCs in Phase 3 clinical trials. Several other companies have B7-H3 ADCs in earlier phases of clinical development, including Beigene,
Duality, GSK, Innovent, Mabwell, MacroGenics, MediLink, and Minghui. Furthermore, Genmab, Kelun, and Day One are evaluating PTK7 ADCs in
Phase 1 studies, and Lilly is advancing a preclinical PTK7 ADC.
For IDE251, we are not aware of other companies developing therapeutics directed to both KAT6 and KAT7; however, there are several companies
developing drugs directed to KAT6. Pfizer is developing a KAT6A inhibitor, designated as PF-07248144, in a Phase 1 trial. Menarini also recently initiated
a Phase 1 study for a KAT6A inhibitor called MEN-2312. Olema Oncology received IND clearance for a KAT6A/B inhibitor in December 2024 and is
expected to begin a Phase 1 trial soon. Additionally, Isoterix and Qubit are developing preclinical KAT6A inhibitors.
For our preclinical pipeline of synthetic lethality therapeutics, potential competition includes established companies, as well as earlier-stage emerging
biotechnology companies. Multiple established companies have been involved with research and development in synthetic lethality, such as AstraZeneca
(Lynparza), Pfizer (Talzenna), GSK (Zejula) and Roche. Additionally, several other early-stage companies are developing synthetic lethality therapeutics,
including 858 Therapeutics, Artios, Breakpoint Therapeutics, Eikon, FoRx Therapeutics, Repare Therapeutics, Ryvu Therapeutics, Tango, Vividion and
Xpose.
Development decisions and data from clinical trials of our competitors may adversely impact clinical development of our product candidates, and may
additionally or alternatively have a material adverse impact on our financial condition or business prospects.
Furthermore, we also face competition more broadly across the market for cost-effective and reimbursable cancer treatments. The most common methods
of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy and targeted drug therapy or a
combination of such methods. There are a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in
combination to enhance efficacy. Some of these drugs are branded and subject to patent protection, and others are available on a generic basis. Insurers and
other third-party payors may also encourage the use of generic products or specific branded products. We expect that if our product candidates are
approved, they will be priced at a significant premium over competitive generic, including branded generic, products. As a result, obtaining market
acceptance of, and a gaining significant share of the market for, any of our product candidates that we successfully introduce to the market will pose
challenges. In addition, many companies are developing new therapeutics, and we cannot predict what the standard of care will be as our product
candidates progress through clinical development.
In some cases, we may also develop diagnostics to enable relevant biomarker screening for clinical and commercial purposes in connection with our
product candidates. If not already commercially available, we anticipate working in collaboration with diagnostic companies for this development, and we
will face competition from other companies in establishing these collaborations. Our competitors will also compete with us in recruiting and retaining
qualified scientific, management and commercial personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring
technologies complementary to, or necessary for, our programs.
Many of our competitors have significantly greater financial, technical, manufacturing, marketing, sales and supply resources or experience than we do. If
we successfully obtain approval for any product candidate, we will face competition based on many different factors, including the safety and effectiveness
of our products, the ease with which our products can be administered and the extent to which patients accept relatively new routes of administration, the
timing and scope of regulatory approvals for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, coverage,
reimbursement and patent position. Competing products could present superior treatment alternatives, including by being more effective, safer, less
expensive or marketed and sold more effectively than any products we may develop. Competing products may make any products we develop obsolete or
noncompetitive before we recover the expense of developing and commercializing our product candidates. Such competitors could also recruit our
employees, which could negatively impact our level of expertise and our ability to execute our business plan.
We expect to expand our development and regulatory capabilities and potentially implement sales and distribution capabilities, and as a result, we will
need to increase the size of our organization, and we may experience difficulties in managing growth.
As of December 31, 2024, we had 131 employees. We will need to continue to expand our managerial, operational, finance and other resources in order to
manage our operations and clinical trials, continue our development activities, submit for regulatory approval and, if approved, commercialize our product
candidates or any future product candidates. Our
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management and personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively execute our
growth strategy requires that we:
•
manage our preclinical studies and clinical trials effectively;
•
identify, recruit, retain, incentivize and integrate additional employees, including sales personnel;
•
manage our internal development and operational efforts effectively while carrying out our contractual obligations to third parties; and
•
continue to improve our operational, financial and management controls, reports systems and procedures.
There is no assurance that any of these increases in scale, expansion of personnel, equipment, software and computing capacities, or process enhancements
will be successfully implemented, or that we will have adequate space in our laboratory facilities to accommodate such required expansion.
We currently have no sales organization. If we are unable to establish sales capabilities on our own or through third parties, we may not be able to
market and sell any products effectively, if approved, or generate product revenue.
While we have filled the Chief Commercial Officer position in the fourth quarter of 2024, we currently do not have a marketing or sales organization. In
order to commercialize any product, if approved, in the United States and foreign jurisdictions, we must build our marketing, sales, distribution, managerial
and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. In
advance of any of our product candidates receiving regulatory approval, we expect to establish a sales organization with technical expertise and supporting
distribution capabilities to commercialize each such product candidate, which will be expensive and time-consuming. We have no prior experience in the
marketing, sale and distribution of pharmaceutical products, and there are significant risks involved in building and managing a sales organization,
including our ability to hire, retain, and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing
personnel, and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales,
marketing and distribution capabilities would adversely impact the commercialization of these products. Under our GSK Collaboration Agreement, GSK
will be responsible for commercialization of any Pol Theta or WRN products. We may choose to collaborate with additional third parties that have direct
sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and
distribution systems. If we are unable to enter into such arrangements on acceptable terms or at all, we may not be able to successfully commercialize our
product candidates. If we are not successful in commercializing products, either on our own or through arrangements with one or more third parties, we
may not be able to generate any future product revenue and we would incur significant additional losses.
If we fail to attract and retain senior management and key scientific and commercial personnel, our business may be materially and adversely affected.
Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical, scientific and commercial
personnel. We are highly dependent upon our senior management, particularly our President and Chief Executive Officer, as well as our senior scientists
and other members of our senior management team. The loss of services of any of these individuals could delay or prevent the successful development of
any products, initiation or completion of our planned clinical trials or the commercialization of our product candidates or any other product candidates.
Competition for qualified personnel in the biotechnology and biopharmaceutical fields is intense due to the limited number of individuals who possess the
skills and experience required by our industry. We will need to hire additional personnel as we expand our clinical development and if we initiate
commercial activities. We may not be able to attract and retain quality personnel on acceptable terms, or at all. In addition, to the extent we hire personnel
from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential
information, or that their former employers own their research output.
Our employees and independent contractors, including principal investigators, consultants, collaborators, service providers and other vendors may
engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have an adverse
effect on our results of operations.
We are exposed to the risk that our employees and independent contractors, including principal investigators, consultants, collaborators, service providers
and other vendors may engage in misconduct or other illegal activity. Misconduct by these
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parties could include intentional, reckless and/or negligent conduct or other unauthorized activities that violate: the laws and regulations of the FDA and
other similar regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies;
manufacturing standards; U.S. federal and state healthcare fraud and abuse laws, data privacy and security laws and other similar non-U.S. laws; or laws
that require the true, complete and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use or
misrepresentation of information obtained in the course of clinical trials, the creation of fraudulent data in our preclinical studies or clinical trials, or illegal
misappropriation of product, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and
deter misconduct by employees and other third-parties, and the precautions we take to detect and prevent this activity may not be effective in controlling
unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in
compliance with such laws or regulations. In addition, we are subject to the risk that a person or government could allege such fraud or other misconduct,
even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions
could have a significant impact on our business and financial results, including, without limitation, the imposition of significant civil, criminal and
administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other U.S. federal
healthcare programs or healthcare programs in other jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance,
individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations,
any of which could adversely affect our business, financial condition, results of operations and prospects.
Our business involves the use of hazardous materials and we and our third-party manufacturers and suppliers must comply with environmental laws
and regulations, which can be expensive and restrict how we do business.
Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use and disposal of
hazardous materials owned by us, including the components of our product candidates and other hazardous compounds. We and any third-party
manufacturers and suppliers we engage are subject to numerous federal, state and local environmental, health and safety laws, regulations and permitting
requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment, and disposal of hazardous and regulated
materials and wastes; the emission and discharge of hazardous materials into the ground, air and water; and employee health and safety. Our operations
involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials. Our operations also produce
hazardous waste. In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’ facilities
pending their use and disposal. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of
contamination, which could cause an interruption of our research and development efforts, commercialization efforts and business operations,
environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of
these materials and specified waste products.
Although we believe that the safety procedures utilized by our third-party manufacturers for handling and disposing of these materials generally comply
with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or
injury from these materials. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past
facilities and at third-party facilities. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and
state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental
laws and regulations are complex, change frequently and have tended to become more stringent. We cannot predict the impact of such changes and cannot
be certain of our future compliance.
Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair
our research, product development and manufacturing efforts. In addition, we cannot entirely eliminate the risk of accidental injury or contamination from
these materials or wastes. Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our
employees resulting from the use of hazardous materials and pollution insurance to cover us for certain biological or hazardous waste exposure and
contamination situations, this insurance may not provide adequate coverage against potential liabilities. Accordingly, in the event of contamination or
injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals
could be suspended, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
We attempt to distribute our technology, biology, execution and financing risks across a range of therapeutic classes, disease states, programs and
technologies. Due to the significant resources required for the development of our broad portfolio of programs, and depending on our ability to access
capital, we must make certain risk assessments and prioritize
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development of certain product candidates. Moreover, we may expend our limited resources to pursue a particular product candidate and fail to
capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
Our organization is committed to a broad approach to precision medicine that seeks to maximize our integrated biomarker and small molecule drug
discovery capabilities. Our current portfolio consists of multiple programs, extending across multiple classes of precision medicine, including direct
targeting of oncogenic pathways and synthetic lethality. Together, these programs require significant capital investment. The directly targeted therapy
programs are at various stages of preclinical and clinical development, and our synthetic lethality programs are in the target identification, validation, lead
optimization, and clinical stages of development. We seek to maintain a process of prioritization and resource allocation to maintain an optimal balance
between advancing and expanding our synthetic lethality and direct targeting programs. Because we have limited financial and managerial resources, we
focus on specific product candidates, indications and discovery programs. As a result, we may forgo or delay pursuit of opportunities with other product
candidates that could have had greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial
products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific
indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular
product candidate, we may relinquish valuable rights to that product candidate through collaborations, licenses and other similar arrangements in cases in
which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
Furthermore, as our programs progress, we or others may determine: that certain of our risk allocation decisions were incorrect or insufficient; that we
made platform level technology mistakes; that individual programs or our approach to synthetic lethality or precision medicine in general has technology or
biology risks that were unknown or underappreciated; that our choices on how to build our organizational infrastructure to drive our expansion will result
in an inability to manufacture our products for clinical trials or otherwise impede our manufacturing capabilities; or that we have allocated resources in
such a way that large investments are not recovered and capital allocation is not subject to rapid re-direction. All of these risks may relate to our current or
future precision medicine programs or companion diagnostics, and in the event material decisions in any of these areas turn out to have been incorrect or
under-optimized, we may experience a material adverse impact on our business, financial condition, results of operations and prospects.
Public health outbreaks, epidemics or pandemics (such as the COVID-19 pandemic) may materially and adversely affect our business and operations.
The COVID-19 pandemic previously adversely affected, and the COVID-19 pandemic or other actual or threatened public health outbreaks, epidemics, or
pandemics may in the future adversely affect, among other things, our research and development efforts, clinical trial operations, manufacturing and supply
chain operations, administrative personnel, third-party service providers, and business partners. While the COVID-19 pandemic did not materially
adversely affect our business operations during the twelve months ended December 31, 2024, economic and health conditions in the United States and
across most of the globe continue to change rapidly and may materially affect us economically. A continuing widespread pandemic could result in
significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In
addition, a recession or market correction resulting from a future public health outbreak could materially affect our business and the value of our common
stock.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain,
or deploy key leadership and other personnel, or otherwise prevent products from being developed, approved, or commercialized in a timely manner or
at all, which may adversely affect our business.
The ability of the FDA and other government agencies to review and approve new products can be affected by a variety of factors, including government
budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.
Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of other
government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Disruptions at the FDA and other agencies, including a prolonged government shutdown, or such as the European Medicines Agency following its
relocation to Amsterdam and resulting staff changes, may cause significant regulatory delays and, therefore, delay our efforts to seek approvals and
adversely affect our business, financial condition, results of operations, or cash flows. For example, over
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the last several years, the U.S. government has shut down several times, and certain regulatory agencies, such as the FDA, have had to furlough critical
employees and stop critical activities.
Additionally, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various
points. Even though the FDA has since resumed standard inspection operations, any resurgence of the virus or emergence of new variants or other health
outbreaks may lead to inspectional or administrative delays. If a prolonged government shutdown occurs, or if global health concerns continue to prevent
the FDA other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the
ability of the FDA and other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on
our business.
We or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters and our business continuity and
disaster recovery plans may not adequately protect us from a serious disaster.
Our corporate headquarters is located in the San Francisco Bay Area, which in the past has experienced both severe earthquakes and wildfires. We do not
carry earthquake insurance. Earthquakes, wildfires or other natural disasters could severely disrupt our operations, and have a material adverse effect on our
business, results of operations, financial condition and prospects.
If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters or other facilities,
that damaged critical infrastructure, such as our enterprise financial systems or manufacturing resource planning and enterprise quality systems, or that
otherwise disrupted operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. The
disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or
similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularly
when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.
Furthermore, the third parties on which we depend, including suppliers, contract manufacturers and CROs are similarly vulnerable to natural disasters or
other sudden, unforeseen and SAEs. If such an event were to affect our supply chain, manufacturing arrangements or interfere with a preclinical study or
clinical trial, it could have a material adverse effect on our business.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical
instability due to the ongoing military conflict between Russia and Ukraine, potential changes in global trade policies, including tariffs, and other
geopolitical tensions. Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the
global economy and capital markets resulting from the conflict in Ukraine, potential changes in global trade policies, including tariffs, or any other
geopolitical tensions.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the ongoing military conflict
between Russia and Ukraine. In February 2022, a military invasion of Ukraine by Russian troops was reported. Following the invasion, the U.S. and global
financial markets experienced volatility, which has led to disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity
globally. In response to the invasion, the United States, United Kingdom and European Union, along with others, imposed significant new sanctions and
export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in
the future. The full economic and social impact of the sanctions imposed on Russia (as well as possible future punitive measures that may be implemented),
as well as the counter measures imposed by Russia, in addition to the ongoing military conflict between Ukraine and Russia and related sanctions, which
could conceivably expand into the surrounding region, remains uncertain; however, both the conflict and related sanctions have resulted and could continue
to result in disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity in both Europe and globally, and has introduced
significant uncertainty into global markets. Such risks and disruptions may negatively impact our supply chain, manufacturing arrangements, preclinical
studies, clinical trials and our access to capital markets and ability to finance operations, which could have a materially adverse impact on our results of
operations, financial condition and prospects.
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Moreover, during the last few years, there have also been significant changes to U.S. and other countries’ trade policies, export control laws, sanctions,
legislation, treaties and tariffs, including, but not limited to, U.S. trade policies and tariffs affecting China. There is significant uncertainty about the future
of trade relationships around the world, including potential changes to trade laws and regulations, trade policies, and tariffs. As an example, on February 1,
2025, the U.S. government announced a 25% tariff on product imports from certain countries, including Mexico and Canada, and 10% tariffs on product
imports from certain countries, including China. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods and
have indicated a willingness to impose additional tariffs on U.S. products. Other countries, including Mexico, have threatened retaliatory tariffs on certain
U.S. products. We cannot predict what additional actions may ultimately be taken by the United States or other governments with respect to tariffs or trade
relations, what products may be subject to such actions (including subject to U.S. export control restrictions), or what actions may be taken by the other
countries in retaliation. The imposition of additional tariffs or other trade barriers, together with any future downturns in the global economy resulting
therefrom, could adversely affect our financial performance. Additionally, it is possible that government policy changes and uncertainty about such changes
could increase market volatility and currency exchange rate fluctuations. As a result of these dynamics, we cannot predict the impact to our business of any
future changes to the United States’ or other countries’ trading relationships or the impact of new laws or regulations adopted by the United States or other
countries.
Risks Related to Our Dependence on Third Parties
The commercial success of our partnered product candidates in our Pol Theta and WRN programs, which are part of the GSK Collaboration
Agreement, will depend in large part on the development and marketing efforts of GSK. If GSK is unable to perform in accordance with the terms of
the GSK Collaboration Agreement, our potential to generate future revenue from these programs would be significantly reduced and our business
would be materially and adversely harmed.
We will have limited influence and/or control over GSK’s approaches to development and commercialization of any Pol Theta or WRN products. While
we will have the right to receive potential milestone, profit share and royalty streams payable as GSK or its sublicensees advance development of such Pol
Theta or WRN products, we are likely to have limited ability to influence GSK’s development and commercialization efforts. If GSK does not perform in
the manner that we expect or fulfill its responsibilities in a timely manner, or at all, the clinical development, regulatory approval and commercialization
efforts related to product candidates we have licensed to GSK could be delayed or terminated. Furthermore, GSK or its licensees may elect to devote
greater resources to other programs that do not relate to us or our collaboration.
If we terminate the GSK Collaboration Agreement, or any program thereunder due to a material breach by GSK, we have the right to assume the
responsibility at our own expense for the development of the applicable product candidates. Assumption of sole responsibility for further development will
greatly increase our expenditures, and may mean we need to limit the size and scope of one or more of our programs, seek additional funding and/or choose
to stop work altogether on one or more of the affected product candidates. This could result in a limited potential to generate future revenue from such
product candidates, and our business could be materially and adversely affected.
We rely on third parties to conduct certain of our preclinical studies and all of our clinical trials and intend to rely on third parties in the conduct of all
of our future clinical trials. If these third parties do not successfully carry out their contractual duties, fail to comply with applicable regulatory
requirements or meet expected deadlines, it may delay or prevent us from seeking or obtaining regulatory approval or commercializing our current or
future product candidates.
We currently do not have the ability to independently conduct preclinical studies that comply with the regulatory requirements known as good laboratory
practice, or GLP, requirements. We also do not currently have the ability to independently conduct any clinical trials. The FDA and regulatory authorities
in other jurisdictions require us to comply with regulations and standards, commonly referred to as GCP, requirements for conducting, monitoring,
recording and reporting the results of clinical trials, in order to ensure that the data and results are scientifically credible and accurate and that the clinical
trial patients are adequately informed of the potential risks of participating in clinical trials. We rely on medical institutions, clinical investigators, contract
laboratories and other third parties, such as CROs, to conduct GLP-compliant preclinical studies and GCP-compliant clinical trials on our product
candidates properly and on time. The third parties with whom we contract for execution of our GLP-compliant preclinical studies and our GCP-compliant
clinical trials play a significant role in the conduct of these studies and trials and the subsequent collection and analysis of data. These third parties are not
our employees and, except for restrictions imposed by our contracts with such third parties, we have limited ability to control the amount or timing of
resources that they devote to our programs. Although we rely on these third parties to conduct our GLP-compliant preclinical studies and GCP-compliant
clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its
investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities.
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Many of the third parties with whom we contract may also have relationships with other commercial entities, including our competitors, for whom they
may also be conducting clinical trials or other drug development activities that could harm our competitive position. Further, some of these agreements
may also be terminated by such third parties on short notice, or under certain circumstances, including our insolvency. If the third parties conducting our
preclinical studies or our clinical trials do not adequately perform their contractual duties or obligations, experience significant business challenges,
disruptions or failures, do not meet expected deadlines, terminate their agreements with us or need to be replaced, or if the quality or accuracy of the data
they obtain is compromised due to their failure to adhere to our protocols or to GCPs, or for any other reason, we may need to enter into new arrangements
with alternative third parties. This could be difficult, costly or impossible, and our preclinical studies or clinical trials may need to be extended, delayed,
terminated or repeated. As a result, we may not be able to obtain regulatory approval in a timely fashion, or at all, for the applicable product candidate, and
our business, financial position, results of operations and prospects may be adversely affected.
We rely on third parties for the manufacture of our product candidates for preclinical and clinical development and expect to continue to do so for the
foreseeable future. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or
such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
We do not own or operate manufacturing facilities and have no plans to build our own clinical or commercial scale manufacturing capabilities. We rely,
and expect to continue to rely, on third parties for the manufacture of our product candidates and related raw materials for preclinical and clinical
development, as well as for commercial manufacture of any future approved products. The facilities used by third-party manufacturers to manufacture our
product candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our NDA to the FDA. We do not control
the manufacturing process of, and are completely dependent on, third-party manufacturers for compliance with cGMP requirements or similar applicable
foreign requirements for manufacture of drug products. If these third-party manufacturers cannot successfully manufacture material that conforms to our
specifications and the strict regulatory requirements of the FDA or other comparable foreign regulatory authorities, including requirements related to the
manufacturing of high potency compounds, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. These
third-party manufacturers may be delayed in their manufacture or shipment of our product candidates due to public health outbreaks, heightened
geopolitical conflict, increases in inflation and interest rates, or supply chain disruptions. For example, deterioration in the relationship between the United
States and the PRC may impact international trade, government spending, regional stability and macroeconomic conditions. The impact of these potential
developments, including any resulting sanctions, export controls or other restrictive actions that may be imposed against governmental or other entities in,
for example, the PRC, may contribute to disruption of our PRC-based third-party suppliers and instability and volatility in the global markets, which in turn
could adversely impact our operations and weaken our financial results. Additionally, our ability to audit these third-party manufacturers for compliance
with cGMP requirements or similar foreign requirements (where applicable) and our specifications may be hindered or delayed due to a public health
outbreak or geopolitical conditions.
In addition, we have no control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws
any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain
regulatory approval for or market our product candidates, if approved. Our failure, or the failure of our third-party manufacturers, to comply with
applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or
withdrawal of approvals, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could
significantly and adversely affect supplies of our products.
In addition, we currently and may in the future rely on foreign contract manufacturing organizations, or CMOs, contract research organizations, or CROs
and other foreign organizations and companies that conduct manufacturing or research for us. Such foreign entities may be subject to U.S. legislation,
sanctions, trade restrictions and other foreign regulatory requirements which could increase the cost or reduce the supply of material available to us, delay
the procurement or supply of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our
potential therapies. For example, in January 2024, there was Congressional activity, including the introduction of the BIOSECURE Act (H.R. 7085) in the
House of Representatives and a substantially similar Senate bill (S.3558). The BIOSECURE Act was passed by the House of Representatives in September
2024. If these bills become law, or similar laws are passed, they would have the potential to severely restrict the ability of U.S. biopharmaceutical
companies like us to purchase services or products from, or otherwise collaborate with, certain Chinese biotechnology companies “of concern” without
losing the ability to contract with, or otherwise receive funding from, the U.S. government.
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In addition, we may be unable to establish or renew any agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to
establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:
•
failure of third-party manufacturers to comply with regulatory requirements and maintain quality assurance;
•
breach of the manufacturing agreement by the third-party;
•
failure to manufacture our product according to our specifications;
•
failure to manufacture our product according to our schedule or at all;
•
misappropriation of our proprietary information, including our trade secrets and know-how; and
•
termination or nonrenewal of the agreement by the third-party at a time that is costly or inconvenient for us.
Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing
facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us, particularly
if the COVID-19 pandemic, geopolitical conflict and macroeconomic concerns continue or worsen.
Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval, and any related
remedial measures may be costly or time-consuming to implement. We do not currently have arrangements in place for redundant supply or a second
source for all required raw materials used in the manufacture of our product candidates. If our current third-party manufacturers cannot perform as agreed,
we may be required to replace such manufacturers and we may be unable to replace them on a timely basis or at all.
We rely on, and in the future may rely on, third-party databases and collaborations with third parties to inform patient selection and drug target
identification for our existing product candidates and any future product candidates and for the supply of biomarker companion diagnostics.
We are using bioinformatics, including data analytics, biostatistics, and computational biology, to identify new target and biomarker opportunities. As part
of this approach, we interrogate public and proprietary databases comprising human tumor genetic information and specific cancer-target dependency
networks. We rely on these databases and data analytics for identifying or validating some of our biomarker-target relationships and access to these
databases may not continue to be available publicly or through a proprietary subscription on acceptable terms.
Many of our precision medicine targeted therapeutic product candidates also rely on the availability and use of commercially available tumor diagnostics
panels or data on the prevalence of our target patient population to inform the patient selection and drug target identification for our product candidates. In
cases where such biomarker diagnostic is not already commercially available, we expect to establish strategic collaborations for the clinical supply and
development of companion diagnostics. If these diagnostics are not able to be developed, or if commercial tumor profiling panels are not able to be updated
to include additional tumor-associated genes, or if clinical oncologists do not incorporate molecular or genetic sequencing into their clinical practice, we
may not be successful in developing our existing product candidates or any future product candidates.
We depend on third-party suppliers for key materials required for the production of our product candidates, and the loss of these third-party suppliers
or their inability to supply us with adequate materials could harm our business.
We rely on third-party suppliers for certain materials, such as starting reagents, required for the production of our product candidates and/or for certain
materials and assays, such as diagnostics, for clinical and commercial use of our product candidates. Our dependence on these third-party suppliers and the
challenges we may face in obtaining adequate supplies of materials involve several risks, including limited control over pricing, availability, quality and
delivery schedules. As a small company, our negotiation leverage is limited and we are likely to get lower priority than our competitors that are larger than
we are. We cannot be certain that our suppliers will continue to provide us with the quantities of these raw materials that we require or satisfy our
anticipated specifications and quality requirements. Any supply interruption in limited or sole sourced raw materials could materially harm our ability to
manufacture our product candidates until a new source of supply, if any, could be identified and qualified. We may be unable to find a sufficient alternative
supply channel in a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers could delay the
development and
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potential commercialization of our product candidates, including limiting supplies necessary for clinical trials and regulatory approvals, which would have
a material adverse effect on our business.
Additionally, the facilities to manufacture our product candidates must be the subject of a satisfactory inspection before the FDA or other regulatory
authorities approve an NDA or grant a marketing authorization for the product candidate manufactured at that facility. We will depend on these third-party
manufacturing partners for compliance with the FDA’s requirements for the manufacture of our finished products. If our manufacturers cannot successfully
manufacture material that conforms to our specifications and the FDA’s and other regulatory authorities’ GMP requirements, our product candidates will
not be approved or, if already approved, may be subject to recalls.
Furthermore, certain of the third-party suppliers on which we rely are based in the PRC. The evolving trade dispute between the PRC and the United States
has resulted in the imposition of significant tariffs on certain imports from the PRC. Any deterioration of the relationship between the United States and the
PRC, or the imposition of more stringent export controls or tariffs applicable to our suppliers in the PRC, could adversely affect our ability to obtain the
raw materials required for the manufacture of our product candidates, and therefore adversely affect our business, financial condition, results of operations
and prospects.
Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured the product candidates ourselves, including:
•
the possibility of a breach of the manufacturing agreements by the third parties because of factors beyond our control;
•
the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement
third-party manufacturer; and
•
the possibility that we may not be able to secure a manufacturer or manufacturing capacity in a timely manner and on satisfactory terms in
order to meet our manufacturing needs.
Any of these factors could cause the delay of approval or commercialization of any products, cause us to incur higher costs or prevent us from
commercializing any products successfully. Furthermore, if any of our product candidates are approved and contract manufacturers fail to deliver the
required commercial quantities of finished product on a timely basis and at commercially reasonable prices, and we are unable to find one or more
replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volumes and quality and on a timely basis,
we would likely be unable to meet demand for our products and could lose potential revenue. It may take several years to establish an alternative source of
supply for our product candidates and to have any such new source approved by the FDA or any other relevant regulatory authority.
If we fail to comply with our obligations under any of our in-license agreements, we could lose license rights that are important to our business.
Our current in-license agreements or any future in-license agreements provide or may provide that we must use reasonable efforts to obtain regulatory
approval for a product candidate using the licensed compound. The agreements further impose or may impose an obligation to make various milestone
payments and royalty payments, as well as other obligations on us. If we materially breach the terms of any in-license agreement and fail to cure such
breach within the period allowed, then the licensor may terminate the license agreement. In addition, the licensor has or may have the right to terminate on
our insolvency. If the agreement is terminated, then we will not be able to further develop or commercialize the licensed compound or any future related
product candidates.
Furthermore, any dispute with the licensor may result in the delay or termination of the research, development or commercialization of the licensed
compound or any future related product candidates, and may result in costly litigation or arbitration that diverts management attention and resources away
from our day-to-day activities, which may adversely affect our business, financial condition, results of operations and prospects.
Our existing collaboration arrangements and any collaboration arrangements that we may enter into in the future may not be successful, which could
adversely affect our ability to develop and commercialize our product candidates or diagnostics associated with such product candidates.
In the future, we may seek to enter into additional collaboration arrangements for the development or commercialization of certain of our product
candidates or diagnostics for biomarkers associated with our product candidates. To the extent that we
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decide to enter into additional collaboration agreements in the future, we may face significant competition in seeking appropriate collaborators. Moreover,
collaboration arrangements are complex and time-consuming to negotiate, document, implement and maintain and challenging to manage. We may not be
successful in our efforts to prudently manage our existing collaborations or to enter new ones should we chose to do so. The terms of new collaborations or
other arrangements that we may establish may not be favorable to us.
The success of our collaboration arrangements, including our GSK Collaboration Agreement, will depend heavily on the efforts and activities of our
collaborators. Collaborations are subject to numerous risks, which may include risks that:
•
collaborators may have significant discretion in determining the efforts and resources that they will apply to collaborations;
•
collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew
development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of
competitive products or their internal development of competitive products, availability of funding or other external factors, such as a
business combination that diverts resources or creates competing priorities;
•
collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a product
candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
•
collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or
product candidates;
•
a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or
otherwise not perform satisfactorily in carrying out these activities;
•
we could grant exclusive rights to our collaborators that would prevent us from collaborating with others;
•
collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary
information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or
proprietary information or expose us to potential liability;
•
disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of
our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources;
•
collaborations may be terminated, which may result in a need for additional capital to pursue further development or commercialization of
the applicable current or future product candidates;
•
collaborators may own or co-own intellectual property covering products that result from our collaboration with them, and in such cases, we
would not have the exclusive right to develop or commercialize such intellectual property;
•
disputes may arise with respect to the ownership or inventorship of any intellectual property developed pursuant to our collaborations; and
•
a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal
proceedings.
Risks Related to Commercialization of Our Product Candidates
Even if we receive regulatory approval for any product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review,
which may result in significant additional expense. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions
on marketing or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience
unanticipated problems with our product candidates, when and if any of them are approved.
If one of our product candidates is approved, it will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage,
advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market
information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.
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For example, the FDA or similar foreign regulatory authorities may impose significant restrictions on a product’s indicated uses or marketing or impose
ongoing requirements for potentially costly and time-consuming post-approval studies, post-market surveillance or clinical trials to monitor the safety and
efficacy of the product candidate. The FDA may also require a REMS as a condition of approval of our product candidates, which could include
requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods,
patient registries and other risk minimization tools. Similar requirements may apply in foreign jurisdictions. In addition, if the FDA or a comparable foreign
regulatory authority approves our product candidates, the manufacturing processes, labeling, packaging, distribution, AE reporting, storage, advertising,
promotion, import, export and recordkeeping for our product candidates will be subject to extensive and ongoing regulatory requirements. These
requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs or
similar foreign requirements and GCP requirements for any clinical trials that we conduct post-approval. Later discovery of previously unknown problems
with our product candidates, including AEs of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or
failure to comply with regulatory requirements, may result in, among other things:
•
suspension or withdrawal of regulatory approval, restrictions on the marketing or manufacturing of our product candidates, withdrawal of the
product from the market, or voluntary or mandatory product recalls;
•
restrictions on product distribution or use, or requirements to conduct post-marketing studies or additional clinical trials;
•
suspension of any of our ongoing clinical trials;
•
fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials;
•
refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications
filed by us or suspension or revocation of approvals;
•
product seizure or detention, or refusal to permit the import or export of our product candidates; and
•
injunctions or the imposition of civil or criminal penalties.
The occurrence of any event or penalty described above may inhibit our ability to commercialize any future approved product and generate revenue and
could require us to expend significant time and resources in response and could generate negative publicity.
In addition, if any of our product candidates is approved, our product labeling, advertising and promotion will be subject to regulatory requirements and
continuing regulatory review. The FDA strictly regulates the promotional claims that may be made about drug products. In particular, a product may not be
promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling. Similar requirements may apply in foreign
jurisdictions. If we receive marketing approval for a product, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with
the approved label. If we are found to have promoted such off-label uses, we may become subject to significant liability. The FDA and other agencies
actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label
uses may be subject to significant sanctions. The federal government has levied large civil and criminal fines against companies for alleged improper
promotion and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent
decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay
regulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or
policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve
or sustain profitability.
The incidence and prevalence of our target patient populations are estimations. If the market opportunities for our product candidates are smaller than
we estimate, our business, financial position, results of operations and prospects may be harmed.
We rely on various sources, including published literature and public or proprietary databases, to ascertain an estimate of the number of patients having
particular genetic alterations, such as mutations, deletions or fusions, across various tissue-type specific indications. The determinable prevalence may vary
depending on the source and quality of the underlying data and in
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some cases, insufficient data or poorly curated data may impact our ability to accurately estimate the prevalence of our target patient populations for each
indication and in the aggregate across multiple indications both in the clinical trial setting, as well as in the commercial setting, if our product is approved.
If the market opportunities for our product candidates are smaller than we estimate, our business, financial position, results of operations and prospects may
be harmed. In addition, upon treatment with our product candidates, patients may have or develop resistance to our product candidates, reducing the
addressable patient population and the duration of treatment.
Even if our product candidates or any future product candidate obtains regulatory approval, they may fail to achieve the broad degree of physician and
patient adoption and use necessary for commercial success.
Even if our product candidates or any future product candidate receives FDA or other regulatory approvals, the commercial success of any product will
depend significantly on the broad adoption and use of the resulting product by physicians and patients for approved indications. For a variety of reasons,
including among other things, competitive factors, pricing or physician preference, reimbursement by insurers, the degree and rate of physician and patient
adoption of any products, if approved, commercial success will depend on a number of factors, including:
•
the clinical indications for which the product is approved and patient demand for approved products that treat those indications;
•
the safety and efficacy of our product as compared to other available therapies;
•
the availability of companion diagnostics for biomarkers associated with our product candidates or any other future product candidates;
•
the time required for manufacture and release of our products;
•
the availability of coverage and adequate reimbursement from managed care plans, private insurers, government payors (such as Medicare
and Medicaid) and other third-party payors for any of our products that may be approved;
•
acceptance by physicians, operators of hospitals and clinics and patients of the product as a safe and effective treatment;
•
physician and patient willingness to adopt a new therapy over other available therapies for a particular indication;
•
proper training and administration of our product candidates by physicians and medical staff;
•
patient satisfaction with the results and administration of our product candidates and overall treatment experience, including, for example, the
convenience of any dosing regimen;
•
the cost of treatment with our product candidates in relation to alternative treatments and reimbursement levels, if any, and willingness to pay
for the product, if approved, on the part of insurance companies and other third-party payors, physicians and patients;
•
the prevalence and severity of side effects;
•
limitations or warnings contained in the FDA-approved labeling for our products or similar foreign requirements;
•
the willingness of physicians, operators of hospitals and clinics and patients to utilize or adopt our products as a solution;
•
any FDA requirement for a REMS or similar foreign risk mitigation measures;
•
the effectiveness of our sales, marketing and distribution efforts;
•
adverse publicity about our products or favorable publicity about competitive products; and
•
potential product liability claims.
We cannot assure you that our current or future product candidates, if approved, will achieve broad market acceptance among physicians and patients. Any
failure by our product candidates that obtain regulatory approval to achieve market acceptance or commercial success would adversely affect our business,
financial condition, results of operations and prospects.
The successful commercialization of any products will depend in part on the extent to which governmental authorities, private health insurers,
managed care plans and other third-party payors provide coverage, adequate reimbursement levels and implement pricing policies favorable for any
products. Failure to obtain or maintain coverage and adequate
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reimbursement for products, if approved, could limit our ability to market those products and decrease our ability to generate revenue.
The availability of coverage and adequacy of reimbursement by governmental healthcare programs, such as Medicare and Medicaid, private health
insurers, managed care plans and other third-party payors are essential for most patients to be able to afford medical services and pharmaceutical products
such as our product candidates that receive FDA approval. Our ability to achieve acceptable levels of coverage and reimbursement by third-party payors for
our products will have an effect on our ability to successfully commercialize our product candidates.
No uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and
reimbursement for products can differ significantly from payor to payor. The process for determining whether a third-party payor will provide coverage for
a product typically is separate from the process for setting the price of such product or for establishing the reimbursement rate that the payor will pay for
the product once coverage is approved. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which
might not include all of the FDA-approved products for a particular indication, or place products at certain formulary levels that result in lower
reimbursement levels and higher cost-sharing obligation imposed on patients. One third-party payor’s decision to cover a particular medical product or
service does not ensure that other payors will also provide coverage for the medical product or service. As a result, the coverage determination process will
often require us to provide scientific and clinical support for the use of our products to each payor separately and can be a time-consuming process, with no
assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. We cannot be sure that coverage will be
available for any product that we may develop. A decision by a third-party payor not to cover any of our product candidates could reduce physician
utilization of our products once approved and adversely affect our business, financial condition, results of operations and prospects.
Assuming there is coverage for our products, if any, by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require
co-payments that patients find unacceptably high. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases on short
notice, and we believe that changes in these rules and regulations are likely.
Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to
provide coverage and reimbursement for particular drugs or biologics when an equivalent generic drug, biosimilar or a less expensive therapy is available.
It is possible that a third-party payor may consider our product candidates as substitutable and only offer to reimburse patients for the less expensive
product. Even if we show improved efficacy or improved convenience of administration with our products, pricing of other third-party therapeutics may
limit the amount we will be able to charge for our products. These third-party payors may deny or revoke the reimbursement status of our products, if
approved, or establish prices for our products at levels that are too low to enable us to realize an appropriate return on our investment. If reimbursement is
not available, is decreased or eliminated in the future, or is available only at limited levels, we may not be able to successfully commercialize our products
and may not be able to obtain a satisfactory financial return on our products.
Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we
believe the increasing emphasis on cost-containment initiatives in Europe and other countries has and will continue to put pressure on the pricing and usage
of our products, if any. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems.
Other countries allow companies to fix their own prices for medical products but monitor and control company profits. Additional foreign price controls or
other changes in pricing regulation could restrict the amount that we are able to charge for our products. Accordingly, in markets outside the United States,
the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue
and profits.
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such
organizations to limit both coverage and the level of reimbursement for newly approved products, and, as a result, they may not cover or provide adequate
payment for our products. We expect to experience pricing pressures in connection with the sale of our product candidates due to the trend toward managed
health care, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in
general, particularly prescription drugs and biologics and surgical procedures and other treatments, has become intense. As a result, increasingly high
barriers are being erected to the entry of new products.
If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any products.
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We face an inherent risk of product liability as a result of the planned clinical trials of our product candidates and will face an even greater risk if we
commercialize any products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during
product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design,
a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranty. Claims could also be asserted under state
consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to
limit commercialization of any products. Even successful defense would require significant financial and management resources. Regardless of the merits
or eventual outcome, liability claims may result in:
•
decreased demand for any products;
•
injury to our reputation;
•
withdrawal of clinical trial participants;
•
costs to defend the related litigation;
•
a diversion of management’s time and our resources;
•
substantial monetary awards to clinical trial participants or patients;
•
regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;
•
loss of revenue; and
•
the inability to commercialize any products.
Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product
liability claims could prevent or inhibit the commercialization of any products. Although we have obtained and intend to maintain product liability
insurance covering our clinical trials, any claim that may be brought against us could result in a court judgment or settlement 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 insurance policies also have various
exclusions and deductibles, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded
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 be able to
obtain, sufficient funds to pay such amounts. Moreover, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in
sufficient amounts to protect us against losses. If and when we obtain approval for marketing any of our product candidates, we intend to expand our
insurance coverage to include the sale of such product candidate; however, we may be unable to obtain this liability insurance on commercially reasonable
terms or at all.
Risks Related to Intellectual Property
Our success depends on our ability to obtain and maintain protection for our intellectual property and our proprietary technologies and to avoid
infringing the rights of others.
Our commercial success depends in part on our ability to obtain and maintain patent, trademark, trade secret and other intellectual property protection for
our product candidates and proprietary technologies, as well as our ability to operate without infringing upon the proprietary rights of others.
We and our licensors have applied, and we intend to continue applying, for patents covering important aspects of our product candidates, proprietary
technologies and their uses as we deem appropriate. However, the patent prosecution process is expensive, time-consuming and complex, and we may not
be able to apply for patents on certain aspects of our current or future product candidates and proprietary technologies in a timely fashion, at a reasonable
cost, in all jurisdictions, or at all. If we cannot adequately obtain, maintain and enforce our intellectual property rights and proprietary technology,
competitors may be able to use our technologies or the goodwill we have acquired in the marketplace and erode or negate any competitive advantage we
may have and our ability to compete, which could harm our business and ability to achieve profitability and/or cause us to incur significant expenses.
Failure to obtain, maintain and/or enforce intellectual property rights necessary to our business and failure to protect, monitor and control the use of our
intellectual property rights could negatively impact our ability to compete and cause us to incur significant expenses. The intellectual property laws and
other statutory and contractual arrangements in the United States and other jurisdictions we depend upon may not provide sufficient protection in the future
to prevent the infringement, use, violation or misappropriation of our patents, trademarks, data, technology and
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other intellectual property rights and products by others, and may not provide an adequate remedy if our intellectual property rights are infringed,
misappropriated or otherwise violated by others.
Our patent applications cannot be enforced against third parties practicing the inventions claimed in such applications unless, and until, patents issue from
such applications, and then only to the extent the issued claims cover the invention as claimed. The patent application process is subject to numerous risks
and uncertainties, and there can be no assurance that we or any of our actual or potential future collaborators or licensors will be successful in protecting
our product candidates and proprietary technologies by obtaining and defending patents. These risks and uncertainties include the following:
•
the United States Patent and Trademark Office, or USPTO, and various foreign governmental patent agencies require compliance with a
number of procedural, documentary, fee payment and other requirements during the patent process, the noncompliance with which can result
in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction;
•
patent applications may not result in any patents being issued;
•
our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in
competing technologies, may seek or may have already obtained or licensed patents that will limit, interfere with or eliminate our ability to
make, use and sell our product candidates;
•
other parties may have designed or may design around our claims or developed technologies that may be related or competitive to our
platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent
applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position;
•
any successful opposition to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies
or the successful commercialization of any product candidates that we may develop;
•
because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be
certain that we or our licensors were the first to file any patent application related to our product candidates and proprietary technologies;
•
an interference proceeding can be provoked by a third-party or instituted by the USPTO to determine who was the first to invent any of the
subject matter covered by the patent claims of our applications for any application with an effective filing date before March 16, 2013;
•
there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both
inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health
concerns; and
•
countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign
competitors a better opportunity to create, develop and market competing product candidates.
We rely in part on our portfolio of issued and pending patent applications in the United States and other countries to protect our intellectual property and
competitive position. The patent position of biopharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and
has been the subject of much litigation in recent years. It is possible that we will fail to identify patentable aspects of our research and development output
before it is too late to obtain patent protection. If we fail to timely file for patent protection in any jurisdiction, we may be precluded from doing so at a later
date. And although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and
development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors
and other third parties, any of these parties may breach such agreements and disclose such output before a patent application is filed, thereby jeopardizing
our ability to seek patent protection. Furthermore, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent
applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we
cannot be certain that we were the first to make the inventions claimed in any of our patents or pending patent applications, or that we were the first to file
for patent protection of such inventions. Moreover, should we become a licensee of a third-party’s patents or patent applications, depending on the terms of
any future in-licenses to which we may become a party, we may not have the right to control the preparation, filing and prosecution of patent applications,
or to maintain or enforce the patents, covering technology in-licensed from third parties. Therefore, these patents and patent applications may not be
prosecuted, maintained and/or enforced in a manner consistent with the best
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interests of our business. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on
our business.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability and it may not provide us with adequate proprietary
protection or competitive advantages against competitors with similar products or services. Accordingly, we cannot provide any assurances about which of
our patent applications will issue, the breadth of any resulting patent, whether any of the issued patents will be found to be infringed, invalid or
unenforceable or will be threatened or challenged by third parties, that any of our issued patents have, or that any of our currently pending or future patent
applications that mature into issued patents will include, claims with a scope sufficient to protect our products and services. The coverage claimed in a
patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. We cannot offer any assurances
that the breadth of our granted patents will be sufficient to stop a competitor from developing, manufacturing and commercializing a product or
technologies in a non-infringing manner that would be competitive with one or more of our products or technologies, or otherwise provide us with any
competitive advantage. Further, our patents or the patent rights that we license from others, may be challenged in the courts or patent offices in the United
States and abroad. Once granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification
or derivation action or similar proceedings in court or before patent offices in the United States or foreign jurisdictions for a given period after allowance or
grant, during which time third parties can raise objections against such patents. Such challenges may result in loss of exclusivity or in patent claims being
narrowed, invalidated or held unenforceable, all of which could limit our ability to stop others from using or commercializing similar or identical product
candidates, or limit the duration of the patent protection of our product candidates. In addition, defending such challenges in such proceedings may be
costly. Further, there can be no assurance that we will have adequate resources to enforce our patents. Thus, any patents that we may own may not provide
the anticipated level of, or any, protection against competitors. Furthermore, an adverse decision may result in a third-party receiving a patent right sought
by us, which in turn could affect our ability to develop, manufacture or commercialize our products or technologies.
The degree of future protection for our patent rights is uncertain, and we cannot ensure that:
•
any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient
to protect our product candidates;
•
any of our pending patent applications will issue as patents;
•
any of the patents we own or license will be found to ultimately be valid and enforceable if subject to challenge;
•
we were the first to make the inventions covered by each of our patents and pending applications;
•
we were the first to file patent applications for these inventions;
•
we will be able to successfully manufacture and commercialize our products on a substantial scale, if approved, before relevant patents we
may have expire;
•
any patents issued to us or our licensors will provide a basis for an exclusive market for any commercially viable products we may develop or
will provide us with any competitive advantages;
•
we will develop or in-license additional proprietary technologies that are patentable;
•
the patents of others will not have an adverse effect on our business;
•
others will not develop, manufacture and/or commercialize similar or alternative products or technologies that do not infringe our patents;
•
our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use
the information learned from such activities to develop competitive products for sale in our major commercial markets; and
•
our commercial activities or products will not infringe upon the patents of others.
Our ability to enforce patent rights also depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the
components or methods that are used in connection with their products and services. Such proceedings could also provoke third parties to assert claims
against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable. Moreover, it may be difficult or
impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product or service. We may not prevail in any lawsuits that we
initiate and the damages or other remedies awarded if we were to prevail may not be commercially meaningful. If we initiate
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lawsuits to protect or enforce our patents, or litigate against third-party claims, such proceedings would be expensive and would divert the attention of our
management and technical personnel.
Where we obtain licenses from or collaborate with third parties, in some circumstances, we may not have the right to control the preparation, filing and
prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties, or such activities, if controlled by us,
may require the input of such third parties. We may also require the cooperation of our licensors and collaborators to enforce any licensed patent rights, and
such cooperation may not be provided. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best
interests of our business. Moreover, if we do obtain necessary licenses, we will likely have obligations under those licenses, and any failure to satisfy those
obligations could give our licensor the right to terminate the license. Termination of a necessary license, or expiration of licensed patents or patent
applications, could have a material adverse impact on our competitive position, business, financial condition, results of operations and prospects.
Some of our patents and patent applications may in the future be co-owned with third parties. If we are unable to obtain an exclusive license to any such
third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our
competitors, and our competitors could market competing products, services and technology. In addition, we may need the cooperation of any such co-
owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us.
Furthermore, our owned and in-licensed intellectual property rights may be subject to a reservation of rights by one or more third parties. For example, the
research resulting in certain of our owned and in-licensed patent rights and technology was funded in part by the U.S. government. As a result, the
government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with government
funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to use the
invention for non-commercial purposes. These rights may permit the government to disclose our confidential information to third parties and to exercise
march-in rights to use or allow third parties to use our licensed technology. The government can exercise its march-in rights if it determines that action is
necessary because we fail to achieve practical application of the government-funded technology, because action is necessary to alleviate health or safety
needs, to meet requirements of federal regulations, or to give preference to U.S. industry. In addition, our rights in such inventions may be subject to certain
requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could harm our
competitive position, business, financial condition, results of operations, and prospects.
Further, we rely on a combination of contractual provisions, confidentiality procedures and patent, trademark, copyright, trade secret and other intellectual
property laws to protect the proprietary aspects of our products, brands, technologies, trade secrets, know-how and data. These legal measures afford only
limited protection, and competitors or others may gain access to or use our intellectual property rights and proprietary information. Our success will
depend, in part, on preserving our trade secrets, maintaining the security of our data and know-how and obtaining, maintaining and enforcing other
intellectual property rights. We may not be able to obtain, maintain and/or enforce our intellectual property or other proprietary rights necessary to our
business or in a form that provides us with a competitive advantage.
If we fail to obtain sufficient patent or other intellectual property protection for our product candidates or proprietary technologies or if we lose any patent
or other intellectual property protection for our product candidates or proprietary technologies, our business, financial condition, results of operations and
prospects could be adversely affected.
If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation for
patents covering our product candidates, our business may be materially harmed, and in any case, the terms of our patents may not be sufficient to
effectively protect our product candidates and business.
Patents have a limited term. In most countries, including the United States, the expiration of a patent is generally 20 years after its first effective non-
provisional filing date. However, depending upon the timing, duration and specifics of FDA marketing approval of darovasertib, IDE397, our other product
candidates or any future product candidates, one or more of any U.S. patents we may be issued or have licensed may be eligible for limited patent term
restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Amendments.
The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and
the FDA regulatory review process. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA-approved product as compensation
for the patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of
14 years from the date of product approval and only those claims covering such approved drug product, a method for using it or a method for
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manufacturing it may be extended. Patent term extension may also be available in certain foreign countries upon regulatory approval of our product
candidates. However, we may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to
expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection
afforded could be less than we request. If we are unable to obtain patent term extension or restoration or the term of any such extension is less than we
request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of
competing products following our patent expiration, and our competitive position, business, financial condition, results of operations, and prospects could
be harmed, possibly materially.
If there are delays in obtaining regulatory approvals or other additional delays, the period of time during which we can market our product candidates under
patent protection could be further reduced. Given the amount of time required for the development, testing and regulatory review of new product
candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. Once the patent
term has expired, we may be open to competition from similar or generic products. The launch of a generic version of one of our products in particular
would be likely to result in an immediate and substantial reduction in the demand for that product, which could have a material adverse effect on our
business, financial condition, results of operations and prospects.
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other
requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these
requirements.
The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other
provisions during the patent application process to maintain patent applications and issued patents. In addition, periodic maintenance fees, renewal fees,
annuity fees and various other government fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of the
patent and/or applications and any patent rights we may obtain in the future. While an unintentional lapse of a patent or patent application can in many
cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance with these
requirements can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant
jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to
respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we fail to
maintain the patents and patent applications covering our products or services, we may not be able to stop a competitor from marketing products or services
that are the same as or similar to our products or services, which would have a material adverse effect on our business, financial condition and results of
operations. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case.
Our rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by others, and
the patent protection, prosecution and enforcement for some of our product candidates may be dependent on our licensors.
We currently are reliant upon licenses of certain intellectual property rights and proprietary technology from third parties that are important or necessary to
the development of our proprietary technology, including technology related to our product candidates. For example, we rely on our exclusive license
agreement with Novartis for the clinical development of darovasertib and our option and license agreement with CRT for the clinical development of
PARG inhibitors. These licenses, and other licenses we may enter into in the future, may not provide adequate rights to use such intellectual property rights
and proprietary technology in all relevant fields of use or in all territories in which we may wish to develop or commercialize technology and product
candidates in the future. Licenses to additional third-party proprietary technology or intellectual property rights that may be required for our development
programs may not be available in the future or may not be available on commercially reasonable terms. In that event, we may be required to expend
significant time and resources to redesign our proprietary technology or product candidates or to develop or license replacement technology, which may not
be feasible on a technical or commercial basis. If we are unable to do so, we may not be able to develop and commercialize technology and product
candidates in fields of use and territories for which we are not granted rights pursuant to such licenses, which could harm our business, financial condition,
results of operations and prospects significantly. Third-party patents may exist which might be enforced against our current or future product candidates,
resulting in either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of
compensation to third parties.
In some circumstances, we may not have the right to control the preparation, filing, prosecution and enforcement of patent applications, or to maintain the
patents, covering technology that we license from third parties. In addition, some of our
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agreements with our licensors require us to obtain consent from the licensor before we can enforce patent rights, and our licensor may withhold such
consent or may not provide it on a timely basis. Therefore, we cannot be certain that our licensors or collaborators will prosecute, maintain, enforce and
defend such intellectual property rights in a manner consistent with the best interests of our business, including by taking reasonable measures to protect
the confidentiality of know-how and trade secrets, or by paying all applicable prosecution and maintenance fees related to intellectual property registrations
for any of our product candidates. We also cannot be certain that our licensors have drafted or prosecuted the patents and patent applications licensed to us
in compliance with applicable laws and regulations, which may affect the validity and enforceability of such patents or any patents that may issue from
such applications. This could cause us to lose rights in any applicable intellectual property that we in-license, and as a result our ability to develop and
commercialize product candidates may be adversely affected and we may be unable to prevent competitors from making, using and selling competing
products.
Our current licenses impose, and our future licenses likely will impose, various royalty payments, milestones, and other obligations on us. If we fail to
comply with any of these obligations, we may be subject to liability, including the payment of damages, and the licensor may have the right to terminate
the license. Termination by the licensor would cause us to lose valuable rights, and could prevent us from developing and commercializing our product
candidates and proprietary technologies. Furthermore, if any current or future licenses terminate, or if the underlying patents fail to provide the intended
exclusivity, competitors or other third parties may gain the freedom to seek regulatory approval of, and to market, products similar or identical to our
planned products. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to
claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights. In addition, while we cannot currently determine the
amount of the royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant. The amount of our future
royalty obligations will depend on the technology and intellectual property we use in product candidates that we successfully develop and commercialize, if
any. Therefore, even if we successfully develop and commercialize product candidates, we may be unable to achieve or maintain profitability. In addition,
we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses
in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our
competitors) to receive licenses to a portion of the intellectual property rights that are subject to our existing licenses. Any of these events could have a
material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
We may fail to comply with any of our obligations under existing or future agreements pursuant to which we license or have otherwise acquired
intellectual property rights or technology, which could result in the loss of rights or technology that are material to our business.
We are party to various agreements that we depend on to operate our business, including intellectual property rights relating to darovasertib, in particular,
our agreement with Novartis. Our rights to use currently licensed intellectual property, or intellectual property to be licensed in the future, are or will be
subject to the continuation of and our compliance with the terms of these agreements. These agreements are complex, and certain provisions in such
agreements may be susceptible to multiple interpretations which could lead to disputes, including but not limited to those regarding:
•
the scope of rights granted under the license agreement;
•
the extent to which our proprietary technology and product candidates infringe on intellectual property of the licensor that is not subject to
the licensing agreement;
•
the sublicensing of patent and other rights;
•
diligence obligations under the license agreement and what activities satisfy those diligence obligations;
•
the ownership of inventions and know-how resulting from the creation or use of intellectual property by us or our counterparties, alone or
jointly;
•
the scope and duration of our payment obligations;
•
the priority of invention of patented technology;
•
rights upon termination of such agreement; and
•
the scope and duration of exclusivity obligations of each party to the agreement.
The resolution of any contractual interpretation dispute that may arise, if unfavorable to us, could have a material adverse effect on our business, financial
condition, results of operations and prospects. Such resolution could narrow what we believe
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to be the scope of our rights to the relevant intellectual property or technology, increase what we believe to be our financial or other obligations under the
relevant agreement or decrease the third-party’s financial or other obligations under the relevant agreement.
Furthermore, if disputes over intellectual property rights that we have licensed or acquired from third parties prevent or impair our ability to maintain our
current license agreements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. If we fail to
comply with our obligations under current or future license agreements, these agreements may be terminated or the scope of our rights under them may be
reduced and we might be unable to develop, manufacture or market any product that is licensed under these agreements. We are generally also subject to all
of the same risks with respect to protection of intellectual property that we may license as we are for intellectual property that we own, which are described
herein. If we or any of our current or future licensors fail to adequately protect this intellectual property, our ability to commercialize product candidates
could suffer.
We may become subject to third-party claims alleging infringement, misappropriation or violation of such third-party’s patents or other intellectual
property rights and/or third-party claims seeking to invalidate our patents, which could require us to spend significant time and money and, if
successfully asserted against us, could delay or prevent us from developing, manufacturing and selling our products.
Our commercial success depends significantly on our ability to develop, manufacture or commercialize our products and product candidates without
infringing, misappropriating or otherwise violating the intellectual property rights of third parties. However, our research, development and
commercialization activities may nonetheless be subject to claims that we infringe or otherwise violate patents or other intellectual property rights owned
or controlled by third parties. Claims by third parties that we infringe their intellectual property rights may result in liability for damages or prevent or
delay our developmental and commercialization efforts. We cannot assure you that our operations do not, or will not in the future, be found to infringe
existing or future patents.
Other entities may have or obtain patents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import our product candidates
or impair our competitive position. As the biotechnology industry expands and more patents are issued, the risk increases that our product candidates may
be subject to claims of infringement of the patent rights of third parties. Our competitors in both the United States and abroad, many of which have
substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or
may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidates.
There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the
biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions, reexaminations, inter partes review
proceedings and post-grant review proceedings before the USPTO and/or corresponding foreign patent offices, and companies in the industry have used
these proceedings to gain a competitive advantage. Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields
in which we are developing product candidates. There may be third-party patents or patent applications with claims to materials, formulations, methods of
manufacture or methods for treatment related to the use or manufacture of our product candidates. For example, we are aware of an international patent
application published as PCT WO 2017/096165 A1. If a patent issues from such patent application with claims similar to those published, our ability to
commercialize a product candidate for our MAT2A program may be adversely affected if we do not obtain a license under such patent.
Furthermore, the scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history
and can involve other factors such as expert opinion. Our analysis of these issues, including interpreting the relevance or the scope of claims in a patent or a
pending application, determining applicability of such claims to our proprietary technologies or product candidates, predicting whether a third-party’s
pending patent application will issue with claims of relevant scope, and determining the expiration date of any patent in the United States or abroad that we
consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates. We do not always conduct
independent reviews of pending patent applications of and patents issued to third parties.
Additionally, patent applications in the United States and elsewhere are typically published approximately 18 months after the earliest filing for which
priority is claimed, with such earliest filing date being commonly referred to as the priority date. Certain U.S. applications that will not be filed outside the
United States can remain confidential until patents issue. In addition, patent applications in the United States and elsewhere can be pending for many years
before issuance, or unintentionally abandoned patents or applications can be revived. Furthermore, pending patent applications that have been published
can, subject to certain limitations, be later amended in a manner that could cover our technologies, our product candidates or the use of our product
candidates. These applications may later result in issued patents, or the revival of previously abandoned patents, that will prevent, limit or otherwise
interfere with our ability to make, use or sell our products.
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As a result, we may be unaware of third-party patents that may be infringed by commercialization of darovasertib, IDE397 or our other product candidates,
and cannot be certain that we were the first to file a patent application related to a product candidate or proprietary technology. In addition, identification of
third-party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among
patents, incomplete databases and the difficulty in assessing the meaning of patent claims. Moreover, we may face patent infringement claims from non-
practicing entities that have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect. We may be unaware
of one or more issued patents that would be infringed by the manufacture, sale or use of our product candidates.
Further, we may be required to indemnify future collaboration partners against claims of infringement, misappropriation, or other violations of intellectual
property rights. We are not aware of any threatened or pending claims related to these matters, but in the future litigation may be necessary to defend
against such claims. If a patent infringement suit were brought against us, we could be forced, including by court order to stop or delay development,
manufacturing and/or sales of the product or product candidate that is the subject of the suit. As a result of patent infringement claims, or in order to avoid
potential claims, we may choose to seek, or be required to seek, a license from the third-party and would most likely be required to pay license fees or
royalties or both. These licenses may not be available on commercially reasonable terms, or at all, in which event our business would be materially and
adversely affected. Even if we were able to obtain a license, we may be unable to maintain such licenses and the rights may be nonexclusive, which could
give our competitors access to the same intellectual property.
Although no third-party has asserted a claim of patent infringement against us as of December 31, 2024, others may hold proprietary rights that could
prevent darovasertib, IDE397, our other product candidates or any future product candidates from being marketed. Any patent-related legal action against
us claiming damages and seeking to enjoin commercial activities relating to our product candidates or proprietary technologies could subject us to potential
liability for damages, including treble damages if we were determined to willfully infringe or attorney’s fees and costs of litigation to the party whose
intellectual property rights we may be found to be infringing, and require us to obtain a license to manufacture or market darovasertib, IDE397, our other
product candidates or any future product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and
would be time-consuming and a substantial diversion of management and employee resources from our business. Even if we believe such claims are
without merit, we cannot predict whether we would prevail in any such actions or that any license required under any of these patents would be made
available on commercially acceptable terms, if at all. Even if such licenses are available, we could incur substantial costs related to royalty payments for
licenses obtained from third parties, which could negatively affect our gross margins, and the rights may be non-exclusive, which could give our
competitors access to the same technology or intellectual property rights licensed to us. In addition, we cannot be certain that we could redesign our product
candidates or proprietary technologies to avoid infringement, if necessary, or on a cost-effective basis. If we were to challenge the validity of any such
third-party U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and
convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court of competent jurisdiction would invalidate the
claims of any such U.S. patent. We will have similar burdens to overcome in foreign courts in order to successfully challenge a third-party claim of patent
infringement. Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us
from developing and commercializing darovasertib, our other product candidates or any future product candidates, until the asserted patent expires or is
held finally invalid or not infringed in a court of law. In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity or
the disclosure of confidential information, and the perceived value of our product candidates or intellectual property could be diminished correspondingly.
Additionally, our collaborators or any third parties with which we collaborate in the future, may not properly maintain or defend our intellectual property
rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary
information or expose us to litigation or potential liability. Further, collaborators may infringe the intellectual property rights of third parties, which may
expose us to litigation and potential liability. Also, we may be obligated under our agreements with our collaborators, licensors, suppliers and others to
indemnify and hold them harmless for damages arising from intellectual property infringement by us. Any of the foregoing could harm our competitive
position, business, financial condition, results of operations, and prospects.
We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming, and
unsuccessful. Further, our issued patents could be found invalid or unenforceable if challenged.
Third parties, including our competitors may currently, or in the future, infringe, misappropriate or otherwise violate our issued patents or other intellectual
property rights or those of our licensors. To prevent infringement or unauthorized use, we may be required to file lawsuits or initiate other proceedings to
protect or enforce our patents or other intellectual property
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rights, which can be expensive, time-consuming and unsuccessful. However, the steps we have taken, and are taking, to protect our proprietary rights may
not be adequate to enforce our rights as against such infringement, misappropriation or violation of our intellectual property rights. In certain circumstances
it may not be practicable or cost-effective for us to enforce our intellectual property rights fully, particularly in certain developing countries or where the
initiation of a claim might harm our business relationships. We may also be hindered or prevented from enforcing our rights with respect to a government
entity or instrumentality because of the doctrine of sovereign immunity. Our ability to enforce our patent or other intellectual property rights depends on
our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components or methods that are used in connection with
their products or technologies. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s
product or technologies. Thus, we may not be able to detect unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. Any
inability to meaningfully enforce our intellectual property rights could harm our ability to compete and reduce demand for our products and product
candidates.
In addition, in a patent infringement proceeding, a court or administrative tribunal may decide that a patent we own or in-license is not valid, is
unenforceable and/or is not infringed. If we or any of our collaborators or potential future collaborators, were to initiate legal proceedings against a third-
party to enforce a patent directed at one of our product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable in
whole or in part. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds
for a validity challenge include an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement.
Grounds for an unenforceability assertion could include an allegation that someone connected with prosecution of the patent withheld relevant information
from the USPTO or made a misleading statement during prosecution. Third parties may also raise similar claims before the USPTO, even outside the
context of litigation. Similar mechanisms for challenging the validity and enforceability of a patent exist in foreign patent agencies. The outcome following
legal assertions of invalidity and unenforceability is unpredictable, and could result in the revocation, cancellation, or amendment of our patents or those of
our licensors. With respect to validity, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were
unaware during prosecution. A court may decide that a patent or other intellectual property right of ours is invalid or unenforceable, in whole or in part,
construe the patent’s claims or other intellectual property narrowly or refuse to stop the other party from using the technology at issue on the grounds that
our patents or other intellectual property do not cover the technology in question. If a defendant were to prevail on a legal assertion of invalidity and/or
unenforceability, we could lose at least part, and perhaps all, of the patent protection on an affected product candidate. Such a loss of patent protection
would have a material adverse impact on our business, financial condition, results of operations and prospects.
Additionally, interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO, or equivalent actions brought in
foreign jurisdictions, may be necessary to determine the priority of invention with respect to our patents or patent applications or those of our licensors. Our
defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other
employees. An unfavorable outcome could require us to cease using the covered technology or to attempt to license rights to it from the prevailing party.
Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms or at all, or if a non-exclusive license is
offered and our competitors gain access to the same technology. These and other uncertainties associated with litigation could have a material adverse
effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third
parties or enter into development or manufacturing partnerships that would help us bring our product candidates to market.
Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and
could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results
of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have
a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce
the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other
resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings
more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or
other proceedings could compromise our ability to compete in the marketplace.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our
confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of
hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a
material adverse effect on the price of our
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common stock. Any of the foregoing could harm our business, financial condition, results of operations and prospects. Even if our patents or other
intellectual property rights are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us
monetary damages and/or ongoing royalties. Such monetary compensation may be insufficient to adequately offset the damage to our business caused by
the infringer’s competition in the market. An adverse result in any litigation or administrative proceeding could put one or more of our patents or other
intellectual property rights at risk of being invalidated or interpreted narrowly, which could adversely affect our competitive business position, financial
condition and results of operations.
We may be subject to claims that we or our employees, consultants, advisors or other third parties have wrongfully used or disclosed alleged
confidential information or trade secrets of their former employers.
We may be subject to claims that our employees or consultants have wrongfully used for our benefit or disclosed to us confidential information of third
parties. As is common in the biotechnology and biopharmaceutical industries, in addition to our employees, we engage the services of consultants, advisors
and other third parties to assist us in the development of our product candidates. Many of these individuals, and many of our employees, were previously
employed at, or may have previously provided or may be currently providing consulting services to, other biotechnology or biopharmaceutical companies
including our competitors or potential competitors. Some of these employees, consultants and contractors, may have executed proprietary rights, non-
disclosure and non-competition agreements in connection with such previous employment or engagement. Although we try to ensure that individuals
working for or collaborating with us do not use the intellectual property rights, proprietary information or know-how of others in their work for us, and do
not perform work for us that is in conflict with their obligations to another employer or any other entity, we may become subject to claims that we, our
employees, consultants, advisors or other third parties have, inadvertently or otherwise, misappropriated the intellectual property, including know-how,
trade secrets or other information proprietary to their former or current employers or clients. We may also be subject to claims that patents and applications
we have filed to protect inventions of our employees, consultants, advisors or other third parties, even those related to one or more of our product
candidates, are rightfully owned by their former or concurrent employer. Litigation may be necessary to defend against these claims. There is no guarantee
of success in defending these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual
property rights, which could adversely affect our competitive position, business, financial condition, results of operations, and prospects. Even if we are
successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team.
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property rights.
We may also be subject to claims that our former employees, contractors or collaborators, or other third parties have an ownership interest in our current or
future patents, patent applications, or other intellectual property rights, including as an inventor or co-inventor. We may be subject to ownership or
inventorship disputes arising, for example, from conflicting obligations of employees, consultants or others who were or are involved in developing our
products or product candidates. Although it is our policy to require our employees and our personnel who may be involved in the development of
intellectual property to execute agreements assigning such inventions, we may not obtain these agreements in all circumstances, and individuals with whom
we have these agreements may not comply with their terms. The assignment of intellectual property may not be self-executing and despite such agreement,
such inventions may become assigned to third parties. In the event of unauthorized use or disclosure of our trade secrets or proprietary information, these
agreements, even if obtained, may not provide meaningful protection, particularly for our trade secrets or other confidential information. We may be
subject to claims that former employees, consultants, advisors or other third parties have an ownership interest in our patents or other intellectual property.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive
ownership of, or right to use, valuable intellectual property rights, and other owners may be able to license their rights to other third parties, including our
competitors. Such an outcome could have a material adverse effect on our business. Even if we are successful in prosecuting or defending against such
claims, litigation could result in substantial costs and be a distraction to our management and scientific personnel.
In addition, we may face claims by third parties challenging ownership interest in or inventorship of intellectual property rights we regard as our own,
based on claims that our agreements with employees, consultants, advisors or other third parties obligating them to assign intellectual property to us are
ineffective or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual
property we have developed or will develop and interfere with our ability to capture the commercial value of such intellectual property. In the future
litigation may be necessary to defend against these and other claims challenging inventorship or ownership and it may be necessary or we may desire to
obtain a license to such third-party’s intellectual property rights to settle any such claim; however, there can be no assurance that we would be able to
obtain such license on commercially reasonable terms, if at all. If we fail in
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defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. A court could prohibit us from using
technologies, features or other intellectual property rights that are essential to our products or technologies, if such technologies or features are found to
incorporate or be derived from the trade secrets or other proprietary information of another person or entity, including another or former employers. An
inability to incorporate technologies, features or other intellectual property rights that are important or essential to our products or product candidates could
have a material adverse effect on our business, financial condition, results of operations, and competitive position, and may prevent us from developing,
manufacturing and/or commercializing our products or technologies. In addition, we may lose valuable intellectual property rights or personnel. Such an
outcome could have a material adverse effect on our competitive position, business, financial condition, results of operations, and prospects. Even if we are
successful in defending against such claims, litigation could result in substantial costs and distraction to management and other employees. Any litigation
or the threat thereof may adversely affect our ability to hire employees or contract with independent sales representatives. A loss of key personnel or their
work product could hamper or prevent our ability to develop, manufacture and/or commercialize our products or services, which could materially and
adversely affect our business, financial condition and results of operations.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
In addition to patent protection, we also rely on other intellectual property rights, including protection of copyright, trade secrets, know-how, technology
and/or other proprietary information that is not patentable or that we elect not to patent. Trade secrets can be difficult to protect, and some courts are less
willing or unwilling to protect trade secrets. To maintain the confidentiality of our trade secrets and proprietary information, we rely heavily on
confidentiality agreements with third parties, and confidential information and invention assignment agreements with employees, consultants, advisors and
appropriate third parties. However, we cannot guarantee that we have entered into such agreements with each party that may have or have had access to our
trade secrets or proprietary technology and processes and we may not enter into such agreements with all employees, consultants and third parties who have
been involved in the development of our intellectual property rights. Although we generally require all of our employees, consultants, advisors and any
third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, we cannot provide any
assurances that all such agreements have been duly executed.
In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly accepted physical and
technological security measures. Despite these efforts, we cannot provide any assurances that all such agreements have been duly executed, and any of
these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate
remedies for such breaches. In addition, such security measures may not provide adequate protection for our proprietary information, for example, in the
case of misappropriation of a trade secret by an employee, consultant, customer or third-party with authorized access. Our security measures may not
prevent an employee, consultant, advisor or other third-party from misappropriating our trade secrets and providing them to a competitor, and recourse we
take against such misconduct may not provide an adequate remedy to protect our interests fully. Monitoring unauthorized uses and disclosures is difficult,
and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. Therefore, we may not be able to prevent the
unauthorized disclosure or use of our technical knowledge or other trade secrets by such employees, consultants, advisors or third parties, despite the
existence generally of these confidentiality restrictions. These agreements may not provide meaningful protection against the unauthorized use or
disclosure of our trade secrets, know-how or other proprietary information in the event the unwanted use is outside the scope of the provisions of the
contracts or in the event of any unauthorized use, misappropriation, or disclosure of such trade secrets, know-how, or other proprietary information. There
can be no assurances that such employees, consultants, advisors or third parties will not breach their agreements with us, that we will have adequate
remedies for any breach, or that our trade secrets will not otherwise become known or independently developed by third parties, including our competitors.
Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. We may not be able to
obtain adequate remedies in the event of such unauthorized use. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be
difficult, expensive and time-consuming, and the outcome is unpredictable. Further, we may not be able to obtain adequate remedies for any breach. Even
though we use commonly accepted security measures, trade secret violations are often a matter of state law in the United States, and the criteria for
protection of trade secrets can vary among different jurisdictions. If the steps we have taken to maintain our trade secrets are deemed inadequate, we may
have insufficient recourse against third parties for misappropriating the trade secret.
Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is
unpredictable. Because from time to time we expect to rely on third parties in the development, manufacture, and distribution of our products and provision
of our services, we must, at times, share trade secrets with them.
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In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Trade secrets will over time be
disseminated within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art
from company to company or academic to industry scientific positions. Though our agreements with third parties typically restrict the ability of our
advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets, our
agreements may contain certain limited publication rights. In addition, if any of our trade secrets were to be lawfully obtained or independently developed
by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our
competitive position. Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk
that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation
of these agreements. If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly
reduced and our competitive position, business, financial condition, results of operations, and prospects would be harmed. If any of our trade secrets were
to be disclosed to or independently developed by a competitor, our competitive position would be harmed. The exposure of our trade secrets and other
proprietary information would impair our competitive advantages and could have a material adverse effect on our business, financial condition and results
of operations. In particular, a failure to protect our proprietary rights may allow competitors to copy our technology, which could adversely affect our
pricing and market share. If we do not apply for patent protection prior to such publication or if we cannot otherwise maintain the confidentiality of our
proprietary technology and other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be
jeopardized.
Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not
adequately protect our business or permit us to maintain our competitive advantage. For example:
•
others may be able to make precision medicines that are similar to ours but that are not covered by the claims of the patents that we own or
have exclusively licensed;
•
we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patents or pending
patent applications that we own or have exclusively licensed;
•
we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions;
•
others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual
property rights;
•
it is possible that our pending patent applications or those that we may own in the future will not lead to issued patents;
•
issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors;
•
the patents of others may harm our business;
•
we may choose not to seek patent protection for some of our proprietary technology to maintain certain trade secrets or know-how, and a
third-party may subsequently file a patent covering such trade secrets or know-how;
•
our competitors might conduct research and development activities in countries where we do not have patent rights and then use the
information learned from such activities to develop competitive products for sale in our major commercial markets; and
•
we may not develop additional proprietary technologies that are patentable;
Should any of these events occur, they could significantly harm our business, financial condition, results of operations and prospects.
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Risks Related to Government Regulation
Enacted and future healthcare legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product
candidates and may affect the prices we may set.
In the United States, the EU and other jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory
changes and proposed changes to the healthcare system that could affect our future results of operations. In particular, there have been and continue to be a
number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in March
2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively the ACA, was
enacted, which substantially changed the way healthcare is financed by both governmental and private payors. Among the provisions of the ACA, those of
greatest importance to the pharmaceutical and biotechnology industries include the following:
•
an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents
(other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain
government healthcare programs;
•
an increase to the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and an extension the rebate
program to individuals enrolled in Medicaid managed care organizations;
•
a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are
inhaled, infused, instilled, implanted or injected;
•
expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain
individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate
liability;
•
a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off
negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s
outpatient drugs to be covered under Medicare Part D;
•
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness
research, along with funding for such research; and
•
establishment of a Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test
innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Since its enactment, there have been judicial, executive and congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme
Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
Prior to the U.S. Supreme Court’s decision, President Biden issued an executive order initiating a special enrollment period from February 15, 2021
through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain
governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare.
In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. In August 2011, the Budget Control
Act of 2011, among other things, led to aggregate reductions of Medicare payments to providers. These reductions went into effect in April 2013 and, due
to subsequent legislative amendments to the statute, will remain in effect through 2032, with the exception of a temporary suspension from May 1, 2020
through March 31, 2022, unless additional action is taken by Congress. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law,
which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment
centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
The American Rescue Plan Act of 2021 was also signed into law, which eliminated the statutory Medicaid drug rebate cap, beginning January 1, 2024. The
rebate was previously capped at 100% of a drug’s average manufacturer price.
Moreover, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, which among other things, includes prescription drug
provisions that have significant implications for the pharmaceutical industry and beneficiaries, including extending enhanced subsidies for individuals
purchasing health insurance coverage in ACA marketplaces through
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plan year 2025, allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs (beginning in
2026), imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for
all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation (first due in 2023), and redesigning
Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries (which began in 2025). CMS has published the negotiated prices for the
initial ten drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject to negotiation, although the
drug price negotiation program is currently subject to legal challenges. For that and other reasons, it is currently unclear how the IRA will be effectuated.
The implementation of cost containment measures, including the prescription drug provisions under the IRA, as well as other healthcare reforms may
prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates if approved. Complying with any new
legislation and regulatory changes could be time-intensive and expensive, resulting in a material adverse effect on our business.
Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and
biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost
disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Legally-mandated
price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and
prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical
products and which suppliers will be included in their prescription drug and other healthcare programs. Furthermore, there has been increased interest by
third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. These reforms could reduce the
ultimate demand for our product candidates or put pressure on our product pricing.
In the EU, similar political, economic and regulatory developments may affect our ability to profitably commercialize our product candidates, if approved.
In addition to continuing pressure on prices and cost containment measures, legislative developments at the EU or member state level may result in
significant additional requirements or obstacles that may increase our operating costs. The delivery of healthcare in the EU, including the establishment and
operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy.
National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement
of products in that context. In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing
and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing
to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and
affect our ability to commercialize our product candidates, if approved. In markets outside of the United States and EU, reimbursement and healthcare
payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.
On December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted. The
Regulation entered into force in January 2022 and has been applicable since January 2025, with phased implementation based on the type of product, i.e.
oncology and advanced therapy medicinal products as of 2025, orphan medicinal products as of 2028, and all other medicinal products by 2030. The
Regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products, and provide the
basis for cooperation at the EU level for joint clinical assessments in these areas. It will permit EU member states to use common HTA tools,
methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies
with the highest potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of
emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU member states
will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and
reimbursement.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action in the United
States, the EU or any other jurisdiction. If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the
adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any
regulatory approval that may have been obtained and we may not achieve or sustain profitability.
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Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient
organizations and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties.
Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient
organizations and customers, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws may constrain the
business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our
product candidates, if approved. Such laws include:
•
the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting,
offering, receiving or providing any remuneration (including any kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly,
in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or
recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under any U.S. federal
healthcare program, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific
intent to violate it in order to have committed a violation;
•
the U.S. federal civil and criminal false claims and civil monetary penalties laws, including the civil False Claims Act, which prohibit, among
other things, including through civil whistleblower or qui tam actions, individuals or entities from knowingly presenting, or causing to be
presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to
be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid,
decrease or conceal an obligation to pay money to the U.S. federal government. Pharmaceutical manufacturers can cause false claims to be
presented to the U.S. federal government by engaging in impermissible marketing practices, such as the off-label promotion of a product for
an indication for which it has not received FDA approval. In addition, the government may assert that a claim including items and services
resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False
Claims Act;
•
the Health Insurance Portability and Accountability Act, as amended by the Health Information Technology for Economic and Clinical
Health Act of 2009, or HIPAA, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or
attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up
a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or
services. Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the healthcare fraud
statute implemented under HIPAA or specific intent to violate it in order to have committed a violation;
•
the Federal Food Drug or Cosmetic Act, or FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics
and medical devices;
•
the U.S. Physician Payments Sunshine Act and its implementing regulations, which requires certain manufacturers of drugs, devices,
biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific
exceptions, to report annually to the government information related to certain payments and other transfers of value to physicians (defined to
include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (nurse practitioners, certified nurse
anesthetists, physician assistants, clinical nurse specialists, anesthesiology assistants and certified nurse midwives), and teaching hospitals, as
well as ownership and investment interests held by the physicians described above and their immediate family members;
•
federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm
consumers;
•
analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices,
including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services
reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the
pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal
government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws and
regulations that require drug manufacturers to file reports relating to pricing and marketing
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information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; state
and local laws requiring the registration of pharmaceutical sales representatives;
•
the U.S. Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and
agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to
foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates
for foreign political office, and foreign political parties or officials thereof; and
•
similar healthcare laws and regulations in the EU and other jurisdictions, including reporting requirements detailing interactions with and
payments to healthcare providers.
Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will
involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes,
regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in
violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant
penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare
and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance,
disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.
If any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may
be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment, which could
affect our ability to operate our business. Further, defending against any such actions can be costly, time-consuming and may require significant personnel
resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.
Actual or perceived failures to comply with applicable data protection, privacy and security and AI/ML laws, regulations, standards and other
requirements could adversely affect our business, results of operations, and financial condition.
The regulatory environment surrounding information security, data collection and privacy is increasingly demanding. We are subject to numerous U.S.
federal and state laws and non-U.S. regulations governing the protection of personal and confidential information of our clinical patients, clinical
investigators, employees and vendors/business contacts, including in relation to medical records, credit card data and financial information. Outside the
United States, an increasing number of laws, regulations, and industry standards apply to data privacy and security. For example, in Europe, the European
Union General Data Protection Regulation, or GDPR, went into effect in May 2018, implementing more stringent requirements in relation to our use of
personal data. The GDPR applies to any company established in the European Economic Area, or EEA, as well as to those outside the EEA if they collect
and use personal data in connection with the offering of goods or services to individuals in the EEA or the monitoring of their behavior. Companies that
must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements
and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide
adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and
the United States remains uncertain, and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains
uncertain. Case law from the Court of Justice of the European Union, or CJEU, states that reliance on the standard contractual clauses – a standard form of
contract approved by the European Commission as an adequate personal data transfer mechanism – alone may not necessarily be sufficient in all
circumstances and that transfers must be assessed on a case-by-case basis.
On July 10, 2023, the European Commission adopted its Adequacy Decision in relation to the new EU-US Data Privacy Framework, or the DPF, rendering
the DPF effective as a GDPR transfer mechanism to U.S. entities self-certified under the DPF. The DPF also introduced a new redress mechanism for EU
citizens which addresses a key concern in the previous CJEU judgments and may mean transfers under standard contractual clauses are less likely to be
challenged in future. We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue. In particular, we
expect the DPF Adequacy Decision to be challenged and international transfers to the United States and to other jurisdictions more generally to continue to
be subject to enhanced scrutiny by regulators. As a result, we may have to make certain operational changes and we will have to implement revised
standard contractual clauses and other relevant documentation for existing data transfers within required time frames.
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Further, from January 1, 2021, companies have had to comply with the GDPR and also the UK data protection regime, which imposes separate but similar
obligations to those under the GDPR. The UK GDPR mirrors the fines under the GDPR (e.g., fines up to the greater of €20 million (£17.5 million) or 4%
of global turnover). On October 12, 2023, the UK Extension to the DPF came into effect (as approved by the UK Government), as a UK GDPR data
transfer mechanism to U.S. entities self-certified under the UK Extension to the DPF. As we continue to expand into other foreign countries and
jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.
In the United States, HIPAA imposes privacy, security and breach reporting obligations with respect to individually identifiable health information upon
“covered entities” (health plans, health care clearinghouses and certain health care providers), and their respective business associates, individuals or
entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.
While we do not believe that we are currently acting as a covered entity or business associate under HIPAA and thus are not directly regulated under
HIPAA, any person may be prosecuted under HIPAA’s criminal provisions either directly or under aiding-and-abetting or conspiracy principles.
Consequently, depending on the facts and circumstances, we could face substantial criminal penalties if we knowingly receive individually identifiable
health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA’s requirements for disclosure of
individually identifiable health information.
In addition, certain states govern the privacy and security of health-related and other personal information in certain circumstances, many of which differ
from each other in significant ways and may not have the same effect, thus complicating compliance efforts. By way of example, the California Consumer
Privacy Act, as amended by the California Privacy Rights Act, collectively, the CCPA, requires covered businesses that process the personal information of
California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of
their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt
out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California
resident personal information on the business’s behalf. Additional compliance investment and potential business process changes may also be required.
Similar laws have passed in other states and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy
legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. In
the event that we are subject to or affected by HIPAA, the CCPA, or other domestic privacy and data protection laws, any liability from failure to comply
with the requirements of these laws could adversely affect our financial condition.
If any person, including any of our employees, clinical trial collaborators or those with whom we share such information, negligently disregards or
intentionally breaches our established controls with respect to clinical subject, clinical investigator or employee data, or otherwise mismanages or
misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or
more jurisdictions. In addition, a data breach could result in negative publicity which could damage our reputation and have an adverse effect on our
business, financial condition or results of operations.
In addition, we use artificial intelligence, including machine learning, and automated decision-making technologies, or collectively, AI Technologies, in
our business. We have recently adopted an AI Acceptable Use Policy, however, if the models underlying the AI Technologies we use are incorrectly
designed or implemented; trained or reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data, or on data to which we do not
have sufficient rights or in relation to which we and/or the providers of such data have not implemented sufficient legal compliance measures; used without
sufficient oversight and governance to ensure their responsible use; and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity
threats or material performance issues, the performance of our products, services and business, as well as our reputation, could suffer or we could incur
liability resulting from the violation of laws or contracts to which we are a party or civil claims. The regulatory framework for AI Technologies is rapidly
evolving as many federal, state, and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations.
Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of AI Technologies. As a result, implementation
standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws,
regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to
these laws or regulations.
It is possible that new laws and regulations will be adopted in the United States and in other non-U.S. jurisdictions, or that existing laws and regulations,
including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to
change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which
we use AI Technologies. We may need to expend resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions
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are not consistent across jurisdictions. Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws,
could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI
Technologies). Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely
affect our business, financial condition and results of operations.
Risks Related to Our Common Stock
Our stock price may be volatile and you may not be able to resell shares of our common stock at or above the price you paid.
The trading price of our common stock could be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are
beyond our control. These factors include those discussed in this “Risk Factors” section of this Annual Report on Form 10-K and others such as:
•
results from, and any delays in our clinical trials, including those for darovasertib, IDE397, IDE161, or any other future clinical development
programs, including public misperception of the results of our clinical trials;
•
announcements by academic or other third parties challenging the fundamental premises underlying our approach to treating cancer and/or
biopharmaceutical product development;
•
announcements of regulatory approval or disapproval of our current or any future product candidates;
•
failure or discontinuation of any of our research and development programs;
•
manufacturing setbacks or delays of or issues with the supply of the materials for our product candidates;
•
announcements relating to, or results from, our GSK Collaboration Agreement or other collaborations;
•
announcements related to our Biocytogen Option and License Agreement or Hengrui Pharma License Agreement;
•
announcements relating to future licensing, collaboration or development agreements;
•
delays in the commercialization of our current or any future product candidates;
•
public misperception regarding the use of our therapies;
•
acquisitions and sales of new products, technologies or businesses;
•
quarterly variations in our results of operations or those of our future competitors;
•
changes in earnings estimates or recommendations by securities analysts;
•
announcements by us or our competitors of new products, significant contracts, commercial relationships, acquisitions or capital
commitments;
•
developments with respect to intellectual property rights;
•
our commencement of, or involvement in, litigation;
•
changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;
•
major changes in our board of directors or management;
•
new legislation in the United States relating to the sale or pricing of pharmaceuticals;
•
FDA or other U.S. or comparable foreign regulatory actions affecting us or our industry;
•
product liability claims or other litigation or public concern about the safety of our product candidates;
•
market conditions in the biopharmaceutical and biotechnology sectors, particularly as a result of the volatility in the market caused by the
COVID-19 pandemic, as well as adverse geopolitical and macroeconomic developments, such as the ongoing Ukraine-Russia conflict, the
Israel-Hamas conflict, and related sanctions, instability in the global banking system, actual and anticipated changes in interest rates,
economic inflation and the responses by central banking authorities to control such inflation; and
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•
general economic and geo-political conditions in the United States and abroad.
In addition, the stock markets in general, and the markets for biopharmaceutical and biotechnology stocks in particular, have experienced extreme
volatility. In particular, the market prices of securities of smaller biotechnology have experienced dramatic fluctuations that often have been unrelated or
disproportionate to the operating results of these companies. These broad market fluctuations may adversely affect the trading price or liquidity of our
common stock. Furthermore, the trading price of our common stock may be adversely affected by third-parties trying to drive down the market price. Short
sellers and others, some of whom post anonymously on social media, may be positioned to profit if our stock declines and their activities can negatively
affect our stock price. In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action
litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and
the attention of our management would be diverted from the operation of our business.
An active, liquid and orderly market for our common stock may not be maintained, and you may not be able to resell your common stock.
Prior to our initial public offering, or IPO, in May 2019, there was no public market for shares of our common stock. Our stock currently trades on the
Nasdaq Global Select Market, but we can provide no assurance that we will be able to maintain an active trading market on the Nasdaq Global Select
Market or any other exchange in the future. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a
price that you consider reasonable. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire
other businesses, applications, or technologies using our shares as consideration.
Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.
If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our
common stock could decline. As of December 31, 2024, we have outstanding a total of 86.5 million shares of common stock. Registration of these shares
under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by
affiliates. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock. In addition, as of
December 31, 2024, approximately 99.5 million shares of common stock that are either subject to outstanding options or reserved for future issuance under
our existing equity incentive plan will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules,
Rule 144 and Rule 701 under the Securities Act. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public
market, the trading price of our common stock could decline.
General Risks
Our information technology systems, or those of our collaborators, CROs or other contractors or consultants, may fail or suffer security breaches,
which could adversely affect our business. Security breaches, loss of data or financial assets, and other disruptions could compromise sensitive
information related to our business or prevent us from accessing critical information and expose us to liability.
We collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information
technology systems and infrastructure to operate our business. In the ordinary course of our business, we collect, store and transmit large amounts of
confidential information, including intellectual property, proprietary business information, preclinical and clinical trial data, health-related information and
personal information, or collectively, Confidential Information. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of
such Confidential Information, including both our own and that of third parties. We have established physical, electronic and organizational measures to
safeguard and secure our systems to prevent a data compromise, and rely on commercially available systems, software, tools, and monitoring to provide
security for our information technology systems and the processing, transmission and storage of digital information. We have also outsourced elements of
our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our Confidential Information. Our
internal information technology systems and infrastructure, and those of our current and any future collaborators, contractors and consultants and other
third parties on which we rely, are vulnerable to attack, damage and interruption from computer viruses, malware (e.g. ransomware), malicious code,
misconfigurations, “bugs” or other vulnerabilities, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks or
intrusions over the Internet, phishing attacks and other social engineering schemes, attachments to emails, human error, fraud, denial or degradation of
service
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attacks, sophisticated nation-state and nation-state-supported actors, employee theft or misuse, persons inside our organization, or persons with access to
systems inside our organization.
The risk of a security breach or disruption or data loss, particularly through cyberattacks or cyber-intrusion, including by computer hackers, foreign
governments and cyber-terrorists, has generally increased as the number, level of persistence, intensity and sophistication of attempted attacks and
intrusions from around the world have increased. Emerging and evolving cybersecurity threats such as the attack on SolarWinds and the Log4j
vulnerability reported in December 2021 pose unique challenges and involve sophisticated threat actors. In addition, the pervasive use of mobile devices
that access Confidential Information increases the risk of data security breaches, which could lead to the loss of Confidential Information, including both
our own and that of third parties. As a result of the continuing hybrid working environment, we may also face increased cybersecurity risks due to our
reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals
to exploit vulnerabilities.
We rely on industry-accepted security measures and technology to securely maintain all confidential and proprietary information on our information
systems. We have devoted and will continue to devote significant resources to the security of our information technology systems, but they may still be
vulnerable to these threats. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often
are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may
also experience security breaches that may remain undetected for an extended period. The costs to us to mitigate network security problems, bugs, viruses,
worms, malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our data
security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected
interruptions, delays, cessation of service and other harm to our business and our competitive position. There can also be no assurance that our programs,
and our future collaborators’, contractors’ and consultants’ cybersecurity risk management programs and processes, including policies, controls or
procedures, will be fully implemented, complied with or effective in protecting our systems, networks and Confidential Information.
We and certain of our service providers are from time to time subject to cyberattacks and security incidents. While we do not believe that we have
experienced any significant system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it
could result in a material disruption of our product development programs. For example, the loss of clinical trial data could result in delays in our
regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Moreover, if a computer security breach affects our
systems or results in the unauthorized release of personally identifiable information, our reputation could be materially damaged. In addition, such a breach
may require notification to governmental agencies, the media or individuals pursuant to applicable privacy and security laws. We would also be exposed to
a risk of loss, including financial assets, litigation and potential liability and significant incident response, system restoration or remediation and future
compliance costs, all of which could materially adversely affect our business, financial condition, results of operations and prospects. We maintain cyber
liability insurance; however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an
interruption or breach of our systems.
If we engage in future acquisitions or strategic collaborations, it may increase our capital requirements, dilute our stockholders, cause us to incur debt
or assume contingent liabilities and subject us to other risks.
We may evaluate various acquisitions and strategic collaborations, including licensing or acquiring complementary products, intellectual property rights,
technologies, or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:
•
increased operating expenses and cash requirements;
•
the assumption or incurrence of additional indebtedness or contingent liabilities;
•
the issuance of our equity securities;
•
assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new
personnel;
•
the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or
acquisition;
•
loss of key personnel, and uncertainties in our ability to maintain key business relationships;
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•
uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product
candidates and regulatory approvals; and
•
our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or
even to offset the associated acquisition and maintenance costs.
In addition, if we undertake acquisitions, we may incur large one-time expenses and acquire intangible assets that could result in significant future
amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain
access to technology or products that may be important to the development of our business.
We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses.
Our programs may require the use of intellectual property rights held by third parties to which we do not have rights. In such a case, the growth of our
business will depend in part on our ability to acquire, in-license or use these rights. However, we may be unable to acquire or in-license any compositions,
methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary for our product candidates on
reasonable terms and conditions or at all.
The acquisition or licensing of intellectual property rights for pharmaceutical products is very competitive. If we seek to acquire or license additional
intellectual property rights, we may face substantial competition from a number of more established companies, some of which have acknowledged
strategies to license or acquire products, and many of which have more institutional experience and greater financial and other resources than we have.
These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and
commercialization capabilities, as may other emerging companies taking similar or different approaches to product licenses and/or acquisitions. In addition,
a number of established research-based pharmaceutical and biotechnology companies may acquire products in late stages of development to augment their
internal product lines, which may provide those companies with an even greater competitive advantage. Furthermore, companies that perceive us to be a
competitor may be unwilling to assign or license rights to us or may interfere with our acquisition or licensing of rights from others. We also may be unable
to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.
We have collaborated with U.S. academic institutions and may in the future collaborate with U.S. and foreign academic institutions to accelerate our
preclinical research or development under written agreements with these institutions. These institutions may provide us with an option to negotiate a
license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such option, we may be unable to negotiate a license
within the specified timeframe or under terms that are acceptable to us.
If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have
on reasonable terms, we may have to abandon development of that program and our competitive position, business, financial condition, results of
operations, and prospects could suffer.
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our
business may be adversely affected.
Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on
other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential
collaborators or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our
ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims
brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long
term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our
business may be adversely affected. We may license our trademarks and trade names to third parties, such as distributors. Though these license agreements
may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by
our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our
proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could
result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects.
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Changes in patent law in the United States or in other countries could diminish the value of patents in general, thereby impairing our ability to protect
our product candidates.
Our patent rights may be affected by developments or uncertainty in the United States’ or other jurisdictions’ patent statutes, patent case law, USPTO rules
and regulations or the rules and regulations of other jurisdictions’ patent offices.
There are a number of recent changes to U.S. patent laws that may have a significant impact on our ability to protect our technology and enforce our
intellectual property rights. For example, on September 16, 2011, the Leahy-Smith America Invents Act, or Leahy-Smith Act, was signed into law. The
Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications will be
prosecuted and may also affect patent litigation. In particular, under the Leahy-Smith Act, the United States transitioned in March 2013 to a “first to file”
system in which the first inventor to file a patent application is typically entitled to the patent. Third parties are allowed to submit prior art before the
issuance of a patent by the USPTO, and may become involved in post-grant proceedings including opposition, derivation, reexamination, inter partes
review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission,
proceeding or litigation could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position.
In addition, the U.S. Congress may pass additional patent reform legislation that is unfavorable to us.
The Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or
weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future,
this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on decisions by the U.S. Congress, the
federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new
patents or to enforce our existing patents and patents we might obtain in the future. Similarly, statutory or judicial changes to the patent laws of other
countries may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.
We may not be able to protect our intellectual property rights throughout the world.
Filing, prosecuting and defending all current and future patents in all countries throughout the world would be prohibitively expensive, and our intellectual
property rights in some countries outside the United States can be less extensive than those in the United States. In addition, 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 practicing our inventions in all countries outside the United States, or from selling or importing products made using our
inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent
protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but
enforcement is not as strong as that in the United States. These products may compete with our product candidates, and our patents or other intellectual
property rights may not be effective or sufficient to prevent them from competing.
The legal systems of many foreign countries do not favor the enforcement of patents and other intellectual property protection, which could make it
difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights. For example, some foreign
countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, some countries limit the
enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or
no benefit. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other
aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could
provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any,
may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a
significant commercial advantage from the intellectual property that we develop or license. If we or any of our licensors is forced to grant a license to third
parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of
operations, and prospects may be adversely affected.
Further, on June 1, 2023, the European Union Patent Package (EU Patent Package) regulations were implemented with the goal of providing a single pan-
European Unitary Patent and a new European Unified Patent Court (UPC) for litigation involving European patents. As a result, all European patents,
including those issued prior to ratification of the EU Patent Package, now by default automatically fall under the jurisdiction of the UPC. It is uncertain
how the UPC will impact granted European patents in the biotechnology and pharmaceutical industries. Our European patent applications, if issued, could
be
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challenged in the UPC. During the first seven years of the UPC’s existence, the UPC legislation allows a patent owner to opt its European patents out of the
jurisdiction of the UPC. We may decide to opt out our future European patents from the UPC, but doing so may preclude us from realizing the benefits of
the UPC. Moreover, if we do not meet all of the formalities and requirements for opt-out under the UPC, our future European patent applications and
patents could remain under the jurisdiction of the UPC. The UPC will provide our competitors with a new forum to centrally revoke our European patents,
and allow for the possibility of a competitor to obtain pan-European injunction. Such a loss of patent protection could have a material adverse impact on
our business and our ability to commercialize our technology and product candidates and, resultantly, on our business, financial condition, prospects and
results of operations.
Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other
requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these
requirements.
The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other
provisions during the patent process. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or
applications will be due to be paid to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime
of the patents and/or applications. We employ reputable professionals and rely on such third parties to help us comply with these requirements and effect
payment of these fees with respect to the patents and patent applications that we own, and if we license intellectual property we may have to rely upon our
licensors to comply with these requirements and effect payment of these fees with respect to any patents and patent applications that we license. In many
cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in
which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the
relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case.
If securities or industry analysts do not continue to publish research or reports about our business, or if they issue an adverse or misleading opinion
regarding our stock, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our
business. If any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock
performance, or if our clinical trials and operating results fail to meet the expectations of analysts, our stock price would likely decline. If one or more of
these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our
stock price or trading volume to decline.
We incur significant costs as a result of operating as a public company, and our management devotes substantial time to new compliance initiatives.
We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, which could result in
sanctions or other penalties that would harm our business.
We incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations under
the Exchange Act and regulations regarding corporate governance practices. The listing requirements of the Nasdaq Global Select Market and the rules of
the Securities and Exchange Commission, or SEC, require that we satisfy certain corporate governance requirements relating to director independence,
filing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our
management and other personnel devote a substantial amount of time to ensure that we comply with all of these requirements. Moreover, the reporting
requirements, rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly. Any
changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at
all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company,
could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive
officers, or to obtain certain types of insurance, including D&O insurance, on acceptable terms.
As a public company, we are subject to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, and the related rules of the SEC, which generally
require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting.
This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
Additionally, as a result of our ceasing to be an emerging growth company and being deemed a large accelerated filer as of January 1, 2024, commencing
with our Annual Report on Form 10-K for the year ended December 31, 2023, our independent registered public accounting
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firm is required to issue an opinion on the effectiveness of our internal control over financial reporting. We expect to incur significant expenses and devote
substantial management effort toward ensuring compliance with the auditor attestation requirements of Section 404. Furthermore, we will also have to file
a more expansive proxy statement and be subject to shorter filing deadlines, which will require additional time and expense as well. It may require
significant resources and management oversight to maintain and, if necessary, improve our disclosure controls and procedures and internal control over
financial reporting to meet this standard. As a result, management’s attention may be diverted from other business concerns, which could adversely affect
our business and operating results. To comply with these requirements, we may need to hire more employees in the future or engage outside consultants,
which would increase our costs and expenses.
In order to provide the reports required by these rules, we must conduct reviews and testing of our internal controls. During the course of our review and
testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports. Furthermore, if we have a material
weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our audited financial statements may be materially
misstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control
over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the
trading price of our stock to fall. In addition, as a public company we are required to file accurate and timely quarterly and annual reports with the SEC
under the Exchange Act. In order to report our results of operations and financial statements on an accurate and timely basis, we will depend on CROs and
contract manufacturing organizations, or CMOs, to provide timely and accurate notice of their costs to us and on GSK to provide timely and accurate
reports of cost sharing under the GSK Collaboration Agreement. Any failure to report our financial results on an accurate and timely basis could result in
sanctions, lawsuits, delisting of our shares from the Nasdaq Global Select Market or other adverse consequences that would materially harm to our
business.
If we are unable to maintain effective internal controls, our business, financial position, results of operations and prospects could be adversely affected.
As a public company, we are subject to reporting and other obligations under the Exchange Act, including Section 404, which require annual management
assessments of the effectiveness of our internal control over financial reporting. As a result of our ceasing to be an emerging growth company and being
deemed a “large accelerated filer” as of January 1, 2024, commencing with our Annual Report on Form 10-K for the year ending December 31, 2023, our
independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting pursuant to
Section 404.
The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require
significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management
may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act of 2002.
These reporting and other obligations place significant demands on our management and administrative and operational resources, including accounting
resources, which further increases as a large accelerated filer.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with accounting principles generally accepted in the United States. Any failure to maintain effective internal controls
could have an adverse effect on our business, financial position, and results of operations.
If we sell shares of our common stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may
decline.
We may from time to time issue additional shares of common stock at a discount from the current trading price of our common stock. As a result, our
stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at such discount. In addition, as opportunities
present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common
stock. If we issue common stock or securities convertible into common stock, our common stockholders would experience additional dilution and, as a
result, our stock price may decline.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
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We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a
greater than 50 percentage point change (by value) in its stock ownership by certain stockholders over a three-year period, the corporation’s ability to use
its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes (such as research and development tax credits) to offset its
post-change taxable income may be limited. As a result of such ownership changes, our ability to utilize certain NOLs and other tax attributes may be
permanently limited if such attributes will expire unused. We have experienced ownership changes in the past, and we may experience ownership changes
in the future due to subsequent shifts in our stock ownership (some of which may be outside our control). As a result, even if we attain profitability, we
may be unable to use a material portion of our NOLs and other tax attributes to offset future taxable income.
Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to
entrenchment of management.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could delay or prevent changes in control or
changes in our management without the consent of our board of directors. These provisions include the following:
•
a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a
majority of our board of directors;
•
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
•
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the
resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
•
the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those
shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a
hostile acquiror;
•
the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval;
•
the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and
restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of
directors;
•
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our
stockholders;
•
the requirement that a special meeting of stockholders may be called only by our chief executive officer or president or by the board of
directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of
directors; and
•
advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters
to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to
elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law. Under Section 203, a corporation
may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three
years or, among other exceptions, the board of directors has approved the transaction.
Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may
reduce the amount of money available to us.
Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each
case to the fullest extent permitted by Delaware law.
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In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements
that we have entered into with our directors and officers provide that:
•
we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the
fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any
criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;
•
we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;
•
we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such
directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;
•
we will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that
person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a
right to indemnification;
•
the rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements
with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and
•
we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers,
employees and agents.
If the costs of maintaining adequate D&O insurance coverage increase significantly in the future, our operating results could be materially adversely
affected. Likewise, if any of our current D&O insurance coverage should become unavailable to us or become economically impractical, we may need to
decrease our coverage limits or increase our self-insured retention or we may be unable to renew such insurance at all. If we incur liabilities that exceed our
coverage or incur liabilities not covered by our insurance, we would have to self-fund any indemnification amounts owed to our directors and officers and
employees in which case our results of operations and financial condition could be materially adversely affected. Additionally, a lack of D&O insurance
may make it difficult for us to retain and attract talented and skilled directors and officers to serve our company, which could adversely affect our business.
Our amended and restated certificate of incorporation provides for an exclusive forum in the Court of Chancery of the State of Delaware and in the
U.S. federal district courts for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable
judicial forum for disputes with us or our directors, officers or employees.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any state law
derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising
pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, any action
to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or amended and restated bylaws, or any action
asserting a claim against us that is governed by the internal affairs doctrine. The choice of forum provision may limit a stockholder’s ability to bring a
claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits
against us and our directors, officers and other employees and result in increased costs for investors to bring a claim.
We do not intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on
appreciation in the price of our common stock.
We do not intend to pay any cash dividends on our common stock for the foreseeable future. We currently intend to invest our future earnings, if any, to
fund our growth. Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future. Since we do not intend to pay
dividends, your ability to receive a return on your investment will depend on any future appreciation in the market value of our common stock. There is no
guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.
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Item 1B. Unresolved Staff Comments.
Not applicable.
Item 1C. Cybersecurity.
Cybersecurity Risk Management and Strategy
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our
critical systems and information.
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF). This does not
imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess,
and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting
channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk
areas.
Key elements of our cybersecurity risk management program include but are not limited to the following:
•
risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information;
•
a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our
response to cybersecurity incidents;
•
a documented set of cybersecurity policies and procedures that specifies the manner in which security controls are implemented;
•
the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;
•
cybersecurity awareness training of our employees, including incident response personnel, and senior management;
•
a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
•
a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective
risk profile,, suppliers, and vendors who have access to our critical systems and information.
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully
implemented, complied with or effective in protecting our systems and information.
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of
operations, or financial condition. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents,
that have materially affected us. For more information, see the section titled “Risk Factor— Our information technology systems, or those of our
collaborators, CROs or other contractors or consultants, may fail or suffer security breaches, which could adversely affect our business. Security breaches,
loss of data or financial assets, and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical
information and expose us to liability.”
Cybersecurity Governance
Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee, or the Committee,
oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program. The Committee is
composed of members of our board of directors with diverse expertise, including risk management, public accounting, biotechnology, chief executive
officer roles, and multiple public company directorships, which has prepared them to oversee our cybersecurity risks.
The Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Committee where it deems
appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant.
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The Committee reports to our full board of directors regarding its activities, including those related to cybersecurity. The full board of directors also
receives briefings from management on our cybersecurity risk management program. Board members receive presentations on cybersecurity topics from
our Senior Vice President, or SVP, Head of Finance and Investor Relations, Senior Vice President, General Counsel, internal security staff and external
experts as part of the board of directors’ continuing education on topics that impact public companies.
Andres Briseno, our SVP, Head of Finance and Investor Relations and, Douglas Snyder, our Senior Vice President, General Counsel, are primarily
responsible for assessing and managing our material risks from cybersecurity threats. Mr. Briseno and Mr. Snyder have primary responsibility for our
overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity
consultants. Mr. Briseno has served in a number of significant leadership roles at our company since 2016, including oversight of investor relations,
business operations and corporate developments, and was appointed as SVP, Head of Finance and Investor Relations in 2023. Mr. Snyder has served in a
number of significant leadership roles in various companies in the healthcare industry, and provided an oversight to legal and compliance teams with his
broad legal background. Prior to joining our company, Mr. Snyder served in senior leadership and operations roles across healthcare field, including
biotechnology, pharmaceuticals and the FDA. Further, our management team’s experience includes monitoring the cybersecurity landscape for new risks
and best practices, developing and executing cybersecurity strategies, overseeing related governance policies, testing compliance with applicable technical
standards, remediating known risks and leading employee training programs.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents
through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from
governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the
information technology environment.
Item 2. Properties
Our corporate headquarters are located in South San Francisco, California, where we lease and occupy office and laboratory space.
In June 2023, we entered into a lease agreement for approximately 44,000 square feet of laboratory and office facilities at 5000 Shoreline Court, South San
Francisco, California. The lease term is 120 months, and we have an option to extend the lease term for a total of two consecutive five-year periods. The
lease commenced in August 2024.
In May 2024, we amended our 5000 Shoreline Court facility lease agreement to expand the size of the original premises by adding approximately 11,321
rentable square feet of additional space. The amendment to the lease term commenced in January 2025. Our lease at 7000 Shoreline Court, South San
Francisco, California, expired in September 2024.
In November 2023, we entered into a lease agreement for approximately 5,700 square feet of space at 11710 El Camino Real, San Diego, California for
corporate office space. The lease commenced in December 2023 and expires in March 2028. We have an option to renew the lease for three years.
We believe our existing facilities are sufficient for our needs for the foreseeable future. To meet the future needs of our business, we may lease additional
or alternate space, and we believe suitable additional or alternative space will be available in the future on commercially reasonable terms.
Item 3. Legal Proceedings
From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that,
in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse
impact on our business, financial condition, results of operations and prospects because of defense and settlement costs, diversion of management resources
and other factors.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock trades on the Nasdaq Global Select Market under the symbol “IDYA.”
Stockholders
As of February 14, 2025, we had 8 record holders of our common stock. Since many of our shares of common stock are held by brokers and other
institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Dividend Policy
We have never declared or paid any cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans
Information about our equity compensation plans is incorporated by reference to Item 12 of Part III of this Annual Report on Form 10-K.
Sale of Unregistered Securities
None.
Use of Proceeds from the Sale of Registered Securities
Not applicable.
Issuer Purchases of Equity Securities
None.
Item 6. Reserved
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and
related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth
elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, 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 results described, in or implied, by these forward-looking statements. Please also
see the section of this Annual Report on Form 10-K titled “Note Regarding Forward-Looking Statements.”
Overview
We are a precision medicine oncology company committed to the discovery and development of targeted therapeutics for patient populations selected using
molecular diagnostics. Our approach integrates small molecule drug discovery with extensive capabilities in identifying and validating translational
biomarkers to develop targeted therapies for select patient populations that are most likely to benefit from these targeted therapies. Our small molecule drug
discovery expertise includes discovery and development of small molecule therapeutics. We are applying these capabilities and approach to develop a
robust pipeline in precision medicine oncology.
Our clinical pipeline includes six potential first-in-class clinical-stage product candidates – darovasertib (PKC), IDE397 (MAT2A), IDE849(DLL3),
IDE275 / GSK959 (Werner Helicase), IDE161 (PARG), and IDE705 / GSK101 (Pol Theta Helicase). We own or control all commercial rights of three of
these product candidates: darovasertib, IDE397, and IDE161, and own or control all commercial rights outside of greater China for IDE849. We are also
advancing several development candidates, including IDE892, a potential best-in-class MTA-cooperative PRMT5 inhibitor for which we are targeting an
investigational new drug, or IND, filing in mid-year 2025; IDE034, a potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-payload bispecific
antibody drug conjugate, or BsADC, program for which we are targeting an IND filing in the second half of 2025; and IDE251, a potential first-in-class
KAT6/7 dual inhibitor program for which we are targeting an IND filing in the second half of 2025. We also have multiple earlier-stage preclinical
programs. We have established selective, value-accretive collaborations with leading pharmaceutical companies to support our clinical development
activities.
Darovasertib – PKC Inhibitor Clinical Candidate in Uveal Melanoma
Darovasertib (IDE196) is our most advanced clinical-stage product candidate, which we in-licensed from Novartis. Darovasertib is a potent, selective small
molecule inhibitor of protein kinase C, or PKC, which we are developing for genetically-defined cancers having GNAQ or GNA11 gene mutations. PKC is
a protein kinase that functions downstream of the GTPases GNAQ and GNA11.
We have enrolled over 230 patients as of February 7, 2025, and have opened multiple clinical sites, including international sites, in our potential
registration-enabling Phase 2/3 clinical trial, designated as IDE196-002. The purpose of the clinical trial is to evaluate darovasertib in combination with
crizotinib, Pfizer’s investigational cMET inhibitor, in patients having metastatic uveal melanoma, or MUM, with human leukocyte antigen-, or HLA-
A*02:01 negative, or HLA-A2(-), serotype, as part of the second Clinical Trial Collaboration and Supply Agreement, or Second Pfizer Agreement, with
Pfizer.
In December 2024, we announced the recommendation of a move-forward dose and the completion of the Part 2a dose optimization for the potential
registration-enabling Phase 2/3 trial evaluating the combination of darovasertib and crizotinib in the first-line, or 1L setting in patients with HLA-A2(-)
MUM.
We are enrolling additional HLA-A*02:01 positive, or HLA-A2(+), patients as an independent clinical strategy to address HLA-A2(+) MUM patients, in
our ongoing Phase 2 clinical trial, designated as IDE196-001.
We are targeting a median overall survival, or OS, readout from our Phase 2 clinical trial, designated as IDE196-001, in approximately 40 1L MUM
patients in 2025.
We have enrolled 95 patients as of December 31, 2024, in our Phase 2 clinical trial, designated as IDE196-009, evaluating darovasertib as single-agent
neoadjuvant and adjuvant therapy in patients having primary uveal melanoma, or UM, with ongoing enrollment and multiple clinical sites open. We are
targeting a clinical data update in over 75 patients and regulatory update(s) in in the first half of 2025, including vision data in plaque brachytherapy
patients.
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In September 2024, we announced interim clinical data from the ongoing Phase 2 Company-sponsored trial and provided a regulatory update on a potential
Phase 3 registration-enabling clinical trial in neoadjuvant UM patients based on a Type C meeting held with the U.S. Food and Drug Administration, or
FDA. Based on the FDA meeting, we currently project approximately 400 patients will be randomized for treatment with darovasertib in the treatment arm
or the control arm, with potential modifications pending further feedback from the FDA. We are currently finalizing the trial protocol for neoadjuvant UM
and are targeting to initiate the study in the first half of 2025.
We are also supporting evaluation of darovasertib as single-agent neoadjuvant and adjuvant therapy in primary UM in an ongoing investigator-sponsored
clinical trial, or IST, captioned as “Neoadjuvant / Adjuvant trial of Darovasertib in Ocular Melanoma,” or NADOM, led by St. Vincent’s Hospital in
Sydney with the participation of Alfred Health and the Royal Victorian Eye and Ear Hospital in Melbourne.
In June 2024, we announced interim clinical data from the ongoing investigator-sponsored Phase 2 trial of darovasertib as neoadjuvant/adjuvant treatment
in UM, which was included in an oral presentation at the American Society of Clinical Oncology, or ASCO, 2024 Annual Meeting, and preliminary clinical
data from our Phase 2 trial of darovasertib for neoadjuvant UM.
We own or control all commercial rights in our darovasertib program in UM, including in MUM and in primary UM, subject to certain economic
obligations pursuant to our exclusive, worldwide license to darovasertib with Novartis.
IDE397 – MAT2A Inhibitor in Tumors with MTAP Deletion
IDE397, our small molecule methionine adenosyltransferase 2a, or MAT2A, inhibitor, is being evaluated in a Phase 1/2 clinical trial. We have selected a
move-forward Phase 2 expansion dose for IDE397 monotherapy, based on adverse event, or AE, profile and preliminary clinical efficacy observed,
including multiple partial responses by RECIST 1. We are enrolling patients with an initial focus in MTAP-deletion urothelial cancer, or UC, and non-
small cell lung cancer, or NSCLC.
In July 2024, we announced clinical data for the IDE397 Phase 2 monotherapy expansion dose demonstrating preliminary clinical efficacy in heavily pre-
treated MTAP-deletion UC and NSCLC patients.
We are collaborating with Gilead Sciences, Inc., or Gilead, to clinically evaluate IDE397 in combination with Trodelvy (sacituzumab-govitecan-hziy),
Gilead’s Trop-2 directed antibody drug conjugate, or ADC, in patients having MTAP-deletion UC, in our Phase 1 clinical trial pursuant to a Clinical Study
Collaboration and Supply Agreement, or the Gilead CSCSA, with Gilead. A first patient was dosed for the Phase 1 trial in June 2024.
In October 2024, we reported the first preliminary clinical case study of the IDE397 and Trodelvy combination in MTAP-deletion UC at ENA 2024,
including a partial response by RECIST 1.1 in a patient case report with a genetic co-alteration of MTAP-deletion and a FGFR3-TACC3 fusion, and rapid
and deep first-evaluation molecular responses, or MRs, with ctDNA reduction of greater than 95% observed. The partial response reported at ENA 2024
has confirmed by RECIST 1.1. We are targeting a Phase 1/2 expansion in the first quarter of 2025 and a clinical data update for the Phase 1 trial in MTAP-
deletion UC in 2025.
In February 2025, we expanded our clinical study collaboration and entered into a Clinical Study Collaboration and Supply Agreement, or the Second
Gilead CSCSA, to evaluate the IDE397 and Trodelvy combination in MTAP-deletion NSCLC.
We were collaborating with Amgen to clinically evaluate IDE397 in combination with AMG 193, the Amgen investigational MTA-cooperative PRMT5
inhibitor, in patients having tumors with MTAP deletion, in an Amgen-sponsored clinical trial pursuant to our Clinical Trial Collaboration and Supply
Agreement with Amgen, or the Amgen CTCSA. We and Amgen mutually agreed to wind down the IDE397 and AMG 193 clinical combination study in
February 2025 and will not pursue dose expansion.
In October 2024, we presented a preclinical poster presentation on the antitumor activity by combinatorial inhibition of MAT2A and PRMT5 in MTAP-
deleted tumors at the EORTC-NCI-AACR Symposium, or ENA 2024. We are targeting to enable our wholly-owned clinical combination of IDE397 and
IDE892, our potential best-in-class MTA-cooperative PRMT5 inhibitor development candidate, in the second half of 2025 in MTAP-deletion NSCLC.
We own all right, title and interest in and to IDE397 and the MAT2A program, including all worldwide commercial rights thereto.
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IDE849 (DLL3) Program with Hengrui Pharma
In December 2024, we entered into an exclusive License Agreement, or the Hengrui Pharma License Agreement, with Jiangsu Hengrui Pharmaceuticals
Co., Ltd., or Hengrui Pharma, pursuant to which Hengrui Pharma granted us an exclusive worldwide license outside of Greater China for IDE849 (SHR-
4849), a potential first-in-class Phase 1 DLL3 TOP1i ADC. Under the terms of the Hengrui Pharma License Agreement, Hengrui Pharma is eligible to
receive upfront and milestone payments totaling $1.045 billion, including a $75.0 million upfront fee, up to $200.0 million in development and regulatory
milestone payments, plus commercial success-based milestones. Hengrui Pharma is also eligible to receive mid-single to low-double digit royalties on net
sales outside of Greater China.
IDE849 is currently being evaluated by Hengrui Pharma in an ongoing Phase 1 trial in China in small cell lung cancer, or SCLC, patients. In preliminary
results from the trial, 8 out of 11 evaluable patients achieved partial response by RECIST 1.1. In January 2025, Hengrui Pharma selected expansion doses
for the Phase 1 trial.
We are planning on submitting a U.S. IND for the evaluation of IDE849 as a monotherapy in SCLC in the first half of 2025. We are also targeting to
initiate the evaluation of IDE849 in combination with IDE161 and in neuroendocrine tumors, or NETs, in the second half of 2025. A clinical data update is
targeted in 2025.
We own or control all commercial rights outside of greater China for IDE849.
IDE275 (GSK959) - WRN Inhibitor in Tumors with High Microsatellite Instability
We, in collaboration with GSK, received IND clearance for IDE275 (GSK959), a potential first-in-class WRN inhibitor, in October 2024 to enable first-in-
human clinical evaluation of IDE275 (GSK959) for patients having tumors with high microsatellite instability, or MSI-High. GSK will lead clinical
development for the Werner Helicase program. GSK is responsible for 80% of global research and development costs, and we are responsible for 20% of
such costs. GSK holds a global, exclusive license to develop and commercialize the Werner Helicase Inhibitor DC.
In October 2024, GSK initiated a Phase 1 clinical trial for IDE275 (GSK959), following the submission of the GSK-sponsored IND and FDA allowance to
proceed with the clinical trial. IDE275 (GSK959) targets the helicase domain of the Werner, or WRN, protein, for patients having tumors with MSI-High.
We earned a $7.0 million milestone payment for the IND clearance of IDE275 (GSK959) in October 2024. We previously earned an earlier milestone of
$3.0 million in October 2023 in connection with IND-enabling studies. We have the potential to earn up to an additional $10.0 million milestone payment
upon initiation of Phase 1 clinical dose expansion.
We are also eligible to receive further aggregate late-stage development and regulatory milestones of up to $465.0 million. Upon commercialization, we
will be eligible to receive up to $475.0 million of commercial milestones, 50% of U.S. net profits and tiered royalties on global non-U.S. net sales of the
Werner Helicase Inhibitor DC – ranging from high single-digit to sub-teen double-digit percentages, subject to certain customary reductions.
IDE161 – PARG Inhibitor in Tumors with Homologous Recombination Deficiency
IDE161 is our potential first-in-class, small molecule poly (ADP-ribose) glycohydrolase, or PARG, inhibitor. We are progressing with enrollment of
patients having tumors with homologous recombination deficiency, or HRD, into the Phase 1 expansion portion of the Phase 1/2 clinical trial. We selected
an initial Phase 1/2 monotherapy expansion dose for IDE161 in endometrial cancer, based on AE profile and preliminary efficacy observed. In parallel, we
are also continuing with Phase 1 dose optimization to confirm a move-forward expansion dose for the planned Phase 2 portion of the clinical trial.
In March 2024, we entered into a Clinical Trial Collaboration and Supply Agreement, or the Merck CTCSA, with Merck (known as MSD outside of the
United States and Canada). We are evaluating the combination of IDE161 with KEYTRUDA® (pembrolizumab) in patients with MSI-High and
microsatellite stable, or MSS, endometrial cancer. Under the Merck CTCSA, Merck will provide KEYTRUDA® to us, and we will sponsor the Phase 1
clinical combination trial.
In December 2024, the first patient was dosed with IDE161 in combination with KEYTRUDA in the Company-sponsored Phase 1 clinical trial. We are
targeting a Phase 1 expansion in MSI-High and MSS endometrial cancer in 2025.
In October 2024, we presented preclinical results on the IDE161 and ADC combination rationale as a poster at ENA 2024. We are targeting clinical
combination(s) of IDE161 with TOP1i-ADCs in solid tumors in 2025.
We received Fast Track Designation from the FDA in September 2023 for IDE161, specifically for the treatment of (i) adult,
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pretreated, platinum-resistant advanced or metastatic ovarian cancer patients having tumors with BRCA1/2 mutations and (ii) adult, pretreated, advanced or
metastatic hormone receptor positive, or HR+, Her2- and BRCA1/2 mutant breast cancer patients.
We entered into an exclusive license under the Evaluation, Option and License Agreement with Cancer Research Technologies Ltd., also known as Cancer
Research United Kingdom, or CRT, and the University of Manchester, pursuant to which we hold exclusive worldwide license rights covering a broad
class of PARG inhibitors.
In April 2023, we incurred an obligation to pay milestone payments in an aggregate amount of £750,000 to CRT based upon the achievement of certain
milestones relating to first and second tumor histologies in connection with the Phase 1 portion of the IDE161-001 Phase 1/2 clinical trial in oncologic
diseases. We will be obligated to make additional payments to CRT aggregating up to £18.75 million upon the achievement of specific development and
regulatory approval events for development of a PARG inhibitor in oncologic diseases, including an aggregate of up to £1.5 million and up to £2.25 million
for the achievement of certain Phase 2 and Phase 3 development milestones, respectively, in each case as relating to first and second tumor histologies.
We own or control all commercial rights in our PARG program, subject to certain economic obligations pursuant to our exclusive, worldwide license to
certain PARG inhibitors, including IDE161, with CRT and University of Manchester.
IDE705 (GSK101) – Pol Theta Helicase Inhibitor in tumors with Homologous Recombination Deficiency
Enrollment is ongoing in the Phase 1 dose escalation portion of the GSK-sponsored study. IDE705 (GSK101) targets the helicase domain of the Pol Theta
protein for patients having solid tumors with BRCA or other mutations associated with HRD. GSK is leading clinical development of IDE705 (GSK101).
GSK is clinically evaluating IDE705(GSK101) in a GSK-sponsored dose escalation trial in combination with niraparib, the GSK small molecule inhibitor
of poly-(ADP-ribose) polymerase, or PARP, in solid tumors.
In August 2023, we earned a $7.0 million payment for a milestone based on acceptance of the IND by the FDA. An earlier preclinical development $3.0
million milestone payment from GSK was achieved in August 2022 in connection with ongoing IND-enabling studies to support the evaluation of IDE705
(GSK101). We have the potential to earn up to an additional $10.0 million milestone payment upon initiation of Phase 1 clinical dose expansion.
We have the potential to earn further aggregate late-stage development and regulatory milestones of up to $465.0 million. Upon commercialization, we will
be eligible to receive up to $475.0 million of commercial milestones, and tiered royalties on global net sales of GSK101 – ranging from high single-digit to
sub-teen double-digit percentages, subject to certain customary reductions.
IDE892 - MTA-cooperative PMRT5 inhibitor
In December 2024, we announced the selection of IDE892, a potential best-in-class MTA-cooperative PRMT5 inhibitor. IDE892 was discovered through
our iterative physics-based ligand design and optimization platform, and is a highly potent and selective MTA-cooperative PRMT5 inhibitor with best-in-
class potential and favorable drug-like properties. IDE892 has demonstrated exceptionally selective antiproliferative activity in MTAP-deleted tumor cell
models and durable complete responses in combination with MAT2A inhibitor IDE397 in challenging MTAP-deletion preclinical models.
Subject to successful completion of ongoing IND-enabling studies for IDE892, we are targeting an IND submission in mid-year 2025. We are also
targeting to enable our wholly-owned clinical combination of IDE397 and IDE892 in the second half of 2025 in MTAP-deletion NSCLC.
IDE034 (B7H3/PTK7) program with Biocytogen
In July 2024, we entered into an Option and License Agreement, or the Biocytogen Option and License Agreement, with Biocytogen Pharmaceuticals
(Beijing) Co., Ltd., (Biocytogen, HKEX: 02315), or Biocytogen, pursuant to which Biocytogen granted us an option for an exclusive worldwide license for
a potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-payload bispecific antibody drug conjugate, or BsADC, program, or the Option.
In November 2024, we announced the selection of IDE034, a potential first-in-class B7H3/PTK7 topo-I-payload BsADC, as a development candidate and
the exercise of the Option. Under the terms of the Biocytogen Option and License Agreement, we paid Biocytogen an upfront fee and an exercise fee for
the Option totaling $6.5 million.
Subject to the successful completion of ongoing IND-enabling studies for IDE034, we are targeting an IND submission in the second half of 2025.
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Biocytogen is eligible to receive total potential upfront, option exercise and milestone payments equal an aggregate of $406.5 million, including
development and regulatory milestones of $100.0 million.
IDE251 - KAT6/7 inhibitor
In December 2024, we announced the selection of IDE251, a potential first-in-class KAT6/7 inhibitor. IDE251 is an equipotent, highly selective, small
molecule dual inhibitor of the lysine acetyltransferase (KAT) 6 and 7, both of which have been shown to support cancer cell survival. IND-enabling studies
to support the potential clinical evaluation of IDE251 monotherapy in patients with breast and lung cancers with 8p11 amplification are ongoing, as well as
additional opportunities in the setting of lineage addiction. Based on our biomarker evaluation, 8p11 amplification prevalence is projected to be
approximately 15% in breast cancer and 17.5% in squamous NSCLC.
IDE251 selectively inhibits both KAT6 and KAT7 while sparing other structurally similar KAT molecules. KAT6 and KAT7 are mechanistically
intertwined epigenetic modulators of cell identity and lineage commitment programs corrupted by oncogenic transformation. Dual KAT6/7 inhibition with
IDE251 delivers robust and durable anti-tumor activity, superior to KAT6 inhibition alone, in preclinical tumor models with 8p11 amplifications, as well as
in biomarker selected indications dependent upon lineage-specific transcription factor activity.
Subject to the successful completion of ongoing IND-enabling studies for IDE251, we are targeting an IND submission in the second half of 2025.
Next-Generation Precision Medicine Pipeline Programs
We have initiated early preclinical research programs focused on pharmacological inhibition of several new targets, or NTs, for patients with solid tumors
characterized by defined biomarkers based on genetic mutations and/or molecular signatures. We believe these research programs have the potential for
discovery and development of first-in-class or unique-in-class or best-in-class therapeutics. Collectively, we believe these efforts will further advance our
multi-pronged clinical and business strategy. We own or control all commercial rights in our next-generation NT programs.
New Target and Biomarker Discovery Platform
Since the inception of the company, our core research has and continues to be focused on precision medicine oncology, with synthetic lethality as a central
tenet. We have invested significantly and continue to invest in capabilities for identification and validation of new precision medicine targets and
biomarkers for patient selection. For targets of interest, we advance our research to discover therapeutic drugs and to further qualify relevant biomarkers.
Prospectus Supplement - At-the-Market Facility
On June 26, 2023, we filed a new Registration Statement on Form S-3 (File No. 333- 272936) under the Securities Act as an automatic shelf registration
statement as a “well-known seasoned issuer,” as defined in Rule 405 under the Securities Act. On June 26, 2023, we also entered into an Open Market
Sales Agreement, or the June 2023 Sales Agreement, with Jefferies LLC, or Jefferies, relating to an at-the-market offering program under which we may
offer and sell, from time to time at our sole discretion, shares of our common stock, par value $0.0001 per share, having aggregate gross proceeds of up to
$250.0 million through Jefferies as sales agent.
From January 1, 2024 through January 17, 2024, we sold an aggregate of 6,115,516 shares of our common stock for aggregate net proceeds of $215.9
million at a weighted average sales price of approximately $36.39 per share under the at-the-market offering pursuant to the June 2023 Sales Agreement
with Jefferies as sales agent.
On January 19, 2024, we entered into a new Open Market Sales Agreement, or the January 2024 Sales Agreement, with Jefferies, relating to an at-the-
market offering program under which we may offer and sell, from time to time at our sole discretion, shares of common stock having aggregate gross
proceeds of up to $350.0 million through Jefferies as sales agent.
During the year ended December 31, 2024, pursuant to the January 2024 Sales Agreement, we sold an aggregate of 4,066,866 shares of our common stock
for aggregate net proceeds of $164.0 million at a weighted average sales price of approximately $41.28 per share under the at-the-market offering pursuant
to the January 2024 Sales Agreement with Jefferies as sales agent. As of December 31, 2024, approximately $182.1 million of common stock remained
available to be sold under the ATM facility.
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Subsequent to December 31, 2024, from January 1, 2025 through January 6, 2025, the Company sold an aggregate of 984,000 shares of our common stock
for aggregate net proceeds of $25.1 million at a weighted average sales price of approximately $26.00 per share under the at-the-market offering pursuant
to the January 2024 Sales Agreement with Jefferies as sales agent. As of January 6, 2025, approximately $156.6 million of common stock remained
available to be sold under the ATM facility.
We may cancel our at-the-market program at any time upon written notice, pursuant to its terms.
2024 July Public Offering and Sale of IDEAYA Common Stock
On July 11, 2024, we completed an underwritten public follow-on offering. The offering consisted of 8,355,714 shares of common stock at an offering
price to the public of $35.00 per share, including 1,127,142 shares of common stock upon the exercise in full of the overallotment option by the
underwriters, as well as pre-funded warrants to purchase 285,715 shares of common stock at a public offering price of $34.9999 per underlying share, in
each case before underwriting discounts and commissions. Pursuant to the offering, we received aggregate gross proceeds of approximately $302.4 million,
before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $283.8 million, after
deducting underwriting discounts and commissions and other offering expenses.
2023 October Public Offering and Sale of IDEAYA Common Stock
On October 27, 2023, we completed an underwritten public follow-on offering. The offering consisted of 5,797,872 shares of common stock at an offering
price to the public of $23.50 per share, including 797,872 shares of common stock upon the exercise in full of the overallotment option by the underwriters,
as well as pre-funded warrants to purchase 319,150 shares of common stock at a public offering price of $23.4999 per underlying share, in each case before
underwriting discounts and commissions. Pursuant to the offering, we received aggregate gross proceeds of approximately $143.7 million, before
deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $134.6 million, after deducting
underwriting discounts and commissions and other offering expenses.
2023 April Public Offering and Sale of IDEAYA Common Stock
On April 27, 2023, we completed an underwritten public follow-on offering. The offering consisted of 8,858,121 shares of common stock at an offering
price to the public of $18.50 per share, including 1,418,920 shares of common stock upon the exercise in full of the overallotment option by the
underwriters, as well as pre-funded warrants to purchase 2,020,270 shares of common stock at a public offering price of $18.4999 per underlying share, in
each case before underwriting discounts and commissions. Pursuant to the offering, we received aggregate gross proceeds of approximately $201.3 million,
before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $188.7 million, after
deducting underwriting discounts and commissions and other offering expenses.
Corporate Update
We do not have any products approved for sale and have not generated any product revenue since inception. We have funded our operations primarily
through the sale and issuance of common stock and the upfront payment and certain milestone payments received from GSK. As of December 31, 2024, we
had cash, cash equivalents and marketable securities of $1.1 billion, consisting primarily of money market funds, U.S. government securities, commercial
paper, and corporate bonds.
Since our inception in June 2015, we have devoted substantially all of our resources to discovering and developing our product candidates. We have
incurred significant operating losses to date and expect that our operating expenses will increase significantly as we advance our product candidates
through preclinical and clinical development; seek regulatory approval, and prepare for, and, if approved, proceed to commercialization; acquire, discover,
validate and develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel.
Certain program costs that contribute to our operating expenses have been and/or will be reimbursed by GSK pursuant to the GSK Collaboration
Agreement, including 100% of costs we incur for research we perform in connection with the Pol Theta program and 80% of the aggregate program costs
incurred by us and GSK for research each of us performs for the Werner Helicase program. We also incur costs in accordance with the Gilead CSCSA and
Second CSCSA. Gilead bears internal or external costs incurred in connection with its supply of Trodelvy. We bear all internal and external costs and
expenses associated with the conduct of the combination study. We also incur costs in accordance with the Merck CTCSA. Merck provides KEYTRUDA
for the study at no cost to us. We bear all internal and external costs and expenses associated with the conduct of the study. We also entered into two in-
licensing agreements for ADCs with topoisomerase-I-inhibitor-payloads to
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enable combinations with our synthetic lethality programs with Hengrui Pharma for IDE849 and Biocytogen for IDE034. See Note 10. Significant
Agreements.
Our net losses were $274.5 million and $113.0 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had
an accumulated deficit of $622.8 million.
Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of
our product candidates, ourselves, or for some programs, in collaboration with our strategic partners.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt
financings, or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be
available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly
delay, scale back or discontinue the development and commercialization of our product candidates.
We believe that our cash, cash equivalents, and short-term and long-term marketable securities will be sufficient to fund our planned operations for at least
twelve months from the date of the issuance of our Annual Report on Form 10-K filed February 18, 2025
These funds will support our efforts through potential achievement of multiple preclinical and clinical milestones across multiple programs.
Components of Operating Results
Collaboration Revenues
To date, we have not generated any revenue from product sales, and we do not expect to generate any revenue from product sales unless and until we are
able to initiate a registrational clinical trial, obtain regulatory approval and commercialize one of our product candidates in the future. Our revenue consists
exclusively of collaboration revenue under the GSK Collaboration Agreement, including amounts that are recognized related to previously received upfront
payments and amounts due and payable to us for research and development services. The amount of revenue recognized related to the GSK Collaboration
Agreement, including as related to the previously received upfront payment or to certain development milestone payments, may vary considerably by
period and certain components thereof may generally decrease year-over-year as we satisfy remaining performance obligations, for example, relating to the
Pol Theta and WRN R&D Services. Since December 31, 2023, we have fully recognized the contract liabilities related to the upfront payment and
reimbursements for the research and development performance obligations under the GSK Collaboration Agreement. There are no remaining contract
liabilities as of December 31, 2024 as we concluded all the research and development performance obligations under the GSK Collaboration Agreement.
The future revenue recognition will be contingent on additional milestones earned, profit sharing and royalties on any net product sales under our
collaborations. We expect that any revenue we recognize or generate under the GSK Collaboration Agreement will fluctuate from period to period due to
period to period variability in milestone payments and other payments.
Operating Expenses
Research and Development Expenses
Substantially all of our research and development expenses consist of expenses incurred in connection with the discovery and development of our product
candidates. These expenses include certain payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based
compensation expenses for our research and product development employees, fees to third parties to conduct certain research and development activities on
our behalf including fees to CMOs and CROs in support of manufacturing and clinical activity for darovasertib, IDE397, IDE849, IDE275 (GSK959),
IDE161, IDE705 (GSK 101), and consulting costs, costs for laboratory supplies, costs for product licenses and allocated overhead, including rent,
equipment, depreciation, information technology costs and utilities. We expense both internal and external research and development expenses as they are
incurred.
We have entered into various agreements with CMOs and CROs. Our research and development accruals are estimated based on the level of services
performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development
provided, but not yet invoiced, are included in accrued liabilities on the balance sheet. If the actual timing of the performance of services or the level of
effort varies from the original estimates, we will adjust the accrual accordingly. Payments made to CMOs and CROs under these arrangements in advance
of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered.
114
Costs of certain activities, such as preclinical studies, are generally recognized based on an evaluation of the progress to completion of specific tasks.
Nonrefundable payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are
deferred and capitalized as prepaid expenses and other current assets on our balance sheet. The capitalized amounts are recognized as expense as the goods
are delivered or the related services are performed.
We do not allocate our internal costs by product candidate, including internal costs, such as payroll and other personnel expenses, laboratory supplies and
allocated overhead. With respect to internal costs, several of our departments support multiple product candidate research and development programs, and
therefore the costs cannot be allocated to a particular product candidate or development program. The following table summarizes our external clinical
development expenses by program:
Year Ended December 31,
2024
2023
External clinical development expenses :
Darovasertib
55,335
$
25,829
IDE397
16,629
11,985
IDE161
9,743
7,104
Personnel related and stock-based compensation
54,543
38,948
Other research and development expenses :
158,423
45,642
Total research and development expenses
$
294,673
$
129,508
(1)
External clinical development expenses include manufacturing and clinical trial costs. These expenses are primarily for services provided by external consultants, CMOs and CROs.
(2)
IDE397 includes costs from the Amgen CTCSA
(3)
Other research and development expenses include $75.0 million upfront payment under the Hengrui Pharma License Agreement for IDE849 and $6.5 million of upfront and option
license exercise fees under the Biocytogen Option and License Agreement for IDE034.
We are focusing substantially all of our resources on the development of our product candidates. We expect our research and development expenses to
increase substantially during the next few years, as we seek to initiate and/or advance clinical trials for our product candidates, complete our clinical
program, pursue regulatory approval of our product candidates and prepare for a possible commercial launch. Predicting the timing or the cost to complete
our clinical program or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors,
including factors outside of our control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those
that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant
additional financial resources and time on the completion of clinical development. Furthermore, we are unable to predict when or if our product candidates
will receive regulatory approval with any certainty.
General and Administrative Expenses
General and administrative expenses consist primarily of payroll and personnel-related expenses, including salaries, employee benefit costs and stock-
based compensation expense, professional fees for legal, patent, consulting, accounting and tax services, allocated overhead, including rent, equipment,
depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development
expenses.
We anticipate that our general and administrative expenses will increase, as a result of increased personnel costs, including salaries, benefits and stock-
based compensation expense, patent costs for our product candidates, expanded infrastructure and higher consulting, legal and accounting services
associated with maintaining compliance with our Nasdaq stock exchange listing and requirements of the Securities and Exchange Commission, or the SEC,
investor relations costs and director and officer insurance policy premiums associated with being a public company.
Other Income
Interest Income and Other Income, Net
Interest income and other income, net consists primarily of interest income earned on our cash, cash equivalents and marketable securities.
Results of Operations
(1)
(2)
(3)
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A discussion regarding our financial condition and results of operations for fiscal year 2024 compared to fiscal year 2023 is presented below. A discussion
regarding our financial condition and results of operations for fiscal year 2023 compared to fiscal year 2022 can be found in “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on February 20, 2024.
Comparison of the Years Ended December 31, 2024 and December 31, 2023
The following table summarizes our results of operations for the periods indicated (in thousands):
Year Ended December 31,
2024
2023
Change
% Change
Revenue
Collaboration revenue
$
7,000 $
23,385 $
(16,385 )
(70 %)
Operating expenses
Research and development
294,673
129,508
165,165
128 %
General and administrative
39,302
28,306
10,996
39 %
Total operating expenses
333,975
157,814
176,161
112 %
Loss from operations
(326,975 )
(134,429 )
(192,546 )
143 %
Other income
Interest income and other income, net
52,498
21,468
31,030
145 %
Net loss
$
(274,477 ) $
(112,961 ) $
(161,516 )
143 %
Collaboration Revenue
Collaboration revenue decreased by $16.4 million, or 70%, during the year ended December 31, 2024 compared to the year ended December 31, 2023.
We completed all performance obligations related to the upfront payment under the GSK Collaboration Agreement as of December 31, 2023 for the Pol
Theta and WRN programs. Future collaboration revenue recognized under the GSK Collaboration Agreement is related to milestone payments as they are
earned.
In October 2024, we earned a $7.0 million milestone payment for the IND clearance of IDE275 (GSK 959), a potential first-in-class WRN inhibitor.
Research and Development Expenses
Research and development expenses increased by $165.2 million, or 128%, during the year ended December 31, 2024 compared to the year ended
December 31, 2023. The increase in research and development expenses was primarily due to $75.0 million upfront payment under the Hengrui Pharma
License Agreement for IDE849, $6.5 million in upfront and option exercise fees under the Biocytogen Option and License Agreement for IDE034,
increases of $64.1 million in fees paid to CROs, CMOs and consultants related to the advancement of our lead product candidates through preclinical and
clinical studies, $15.6 million in personnel-related expenses, including salaries, benefits and stock-based compensation, to support our growth, and $4.0
million in costs for laboratory supplies, facilities and information technology costs to support our research and development programs.
General and Administrative Expenses
General and administrative expenses increased by $11.0 million, or 39%, during the year ended December 31, 2024 compared to the year ended December
31, 2023. The increase in general and administrative expenses was primarily due to increases of $7.0 million in personnel-related expenses, including
salaries, benefits and stock-based compensation and $4.0 million in consulting and legal services.
Interest Income and Other Income, Net
Interest income increased by $31.0 million, or 145%, during the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily
due to higher interest rates and investment balances.
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Liquidity and Capital Resources; Plan of Operations
Sources of Liquidity
We have funded our operations primarily through the sale and issuance of common stock and the upfront payment and certain milestone payments received
from GSK. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $1.1 billion, consisting primarily of money market funds,
U.S. government securities, commercial paper, and corporate bonds.
Material Cash Requirements
We have incurred net losses since our inception. For the years ended December 31, 2024 and December 31, 2023, we had net losses of $274.5 million and
$113.0 million, respectively, and we expect to incur substantial additional losses in future periods. As of December 31, 2024, we had an accumulated
deficit of $622.8 million. Based on our current business plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient
to fund our planned operations for at least the next 12 months from the issuance date of this Annual Report on Form 10-K.
To date, we have not generated any product revenue. We do not expect to generate any meaningful product revenue unless and until we obtain regulatory
approval of and commercialize any of our product candidates, and we do not know when, or if, it will occur. We expect to continue to incur significant
losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for our product
candidates, and begin to commercialize any approved products. We are subject to all of the risks typically related to the development of new product
candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our
business. Moreover, we expect to incur additional costs associated with operating as a public company.
We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise
capital through private or public equity or debt financings, collaboration or other arrangements with corporate sources, or through other sources of
financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed would have
a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional
capital, the requirements for which will depend on many factors, including:
•
the scope, timing, rate of progress and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for
our product candidates;
•
the number and scope of clinical programs we decide to pursue;
•
the scope and costs of manufacturing development and commercial manufacturing activities;
•
the extent to which we acquire or in-license other product candidates and technologies;
•
the cost, timing and outcome of regulatory review of our product candidates;
•
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending
intellectual property-related claims;
•
our ability to establish and maintain collaborations on favorable terms, if at all;
•
our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the
development of our product candidates;
•
the costs associated with being a public company; and
•
the cost and timing associated with commercializing our product candidates, if they receive marketing approval.
A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the
costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will
continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds
by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional
covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock,
make certain investments or engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may
contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce,
or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others rights to our product
candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.
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In June 2023, we entered into a lease agreement for approximately 44,000 square feet of laboratory and office facilities at 5000 Shoreline Court, South San
Francisco, California. The lease term is 120 months, and we have an option to extend the lease term for a total of two consecutive five-year periods. The
lease commenced in August 2024. In May 2024, we amended our 5000 Shoreline Court facility lease agreement to expand the size of the original premises
by adding approximately 11,321 rentable square feet of additional space. The amendment to the lease term commenced in January 2025. Our lease at 7000
Shoreline Court, South San Francisco, California, expired in September 2024.
In November 2023, we entered into a lease agreement for approximately 5,700 square feet of space at 11710 El Camino Real, San Diego, California for
corporate office space. The lease commenced in December 2023 and expires in March 2028. We have an option to renew the lease for three years.
We enter into contracts in the normal course of business with third-party contract organizations for preclinical and clinical studies and testing, manufacture
and supply of our preclinical and clinical materials and providing other services and products for operating purposes. These contracts generally provide for
termination following a certain period after notice, and therefore, we believe that our non-cancelable obligations under these agreements are not material.
See Notes 5. Operating Leases, 6. Commitments and Contingencies, 7. Income Taxes and 10. Significant Agreements.
Adequate additional funding may not be available to us on acceptable terms or at all. See the section of this Annual Report on Form 10-K titled “Part I,
Item 1A. – Risk Factors” for additional risks associated with our substantial capital requirements.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
Summary Statement of Cash Flows
The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for each of the periods presented below (in
thousands):
Year Ended December 31,
2024
2023
Net cash (used in) provided by:
Operating activities
$
(247,584 )
$
(115,224 )
Investing activities
(502,559 )
(158,456 )
Financing activities
677,551
362,717
Net (decrease) increase in cash, cash equivalents and restricted cash
$
(72,592 )
$
89,037
Cash Flows from Operating Activities
Net cash used in operating activities was $247.6 million for the year ended December 31, 2024. Cash used in operating activities was primarily due to the
use of funds in our operations to develop our product candidates resulting in a net loss of $274.5 million, adjusted for net non-cash charges of $15.3 million
and changes in net operating assets and liabilities of $11.5 million. Our non-cash charges consisted of $34.7 million in stock-based compensation, $2.4
million in depreciation and $1.4 million of the amortization of right of use assets, partially offset by $23.2 million accretion of discounts on marketable
securities. The net change in our operating assets and liabilities consisted primarily of cash inflows from $8.3 million in accounts payable and $10.8 million
in accrued and other liabilities due to CRO fees in support of research and manufacturing activities, partially offset by cash outflows of $6.2 million in
prepaid and other assets and $1.4 million in lease liabilities.
Net cash used in operating activities was $115.2 million for the year ended December 31, 2023. Cash used in operating activities was primarily due to the
use of funds in our operations to develop our product candidates resulting in a net loss of $113.0 million, adjusted for net non-cash charges of $10.9 million
and changes in net operating assets and liabilities of $13.2 million. Our non-cash charges consisted of $18.5 million in stock-based compensation, and $2.5
million in depreciation and amortization of right of use assets of $1.5 million, partially offset by $11.6 million accretion of discounts on marketable
securities. The net change in our operating assets and liabilities consisted primarily of decreases of $13.8 million in contract liabilities due to revenue
recognized under the GSK Collaboration Agreement, $2.0 million in prepaid and other assets, and $1.9 million in lease liabilities, partially offset by $1.6
million accrued and other liabilities due to CRO fees in support of
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research and manufacturing activities, $2.6 million in accounts payable, and $0.2 million in accounts receivable from GSK for estimated program costs
under the GSK Collaboration Agreement.
Cash Flows from Investing Activities
Net cash used in investing activities was $502.6 million for the year ended December 31, 2024, which consisted primarily of $1.2 billion used to purchase
marketable securities and $3.9 million used to purchase property and equipment, partially offset by $692.6 million provided by maturities of marketable
securities.
Net cash used in investing activities was $158.5 million for the year ended December 31, 2023, which consisted primarily of $596.0 million used to
purchase marketable securities and $2.4 million used to purchase property and equipment, partially offset by $439.9 million provided by maturities of
marketable securities.
Cash Flows from Financing Activities
Net cash provided by financing activities was $677.6 million for the year ended December 31, 2024, which consisted primarily of $274.4 million of net
proceeds from our follow-on offering, $9.4 million of proceeds from issuance of pre-funded warrants, $379.9 million of proceeds from ATM offering,
$12.5 million of proceeds from exercise of common stock options and $1.4 million of proceeds from ESPP purchase.
Net cash provided by financing activities was $362.7 million for the year ended December 31, 2023, which consisted primarily of $281.2 million of net
proceeds from our follow-on offering, $42.2 million of proceeds from issuance of pre-funded warrants, $28.6 million of proceeds from ATM offering, $9.6
million of proceeds from exercise of common stock options, and $1.2 million of proceeds from ESPP purchase.
Critical Accounting Policies and Estimates
Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these
financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements and the reported revenue recognized and expenses incurred during the reporting periods. Our
estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding
our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. For more
detail on our critical accounting policies, refer to Note 2 to the financial statements appearing elsewhere in this Annual Report on Form 10-K.
Revenue Recognition
Licenses of intellectual property: If a license to our intellectual property is determined to be distinct from the other promised goods or services identified in
an arrangement, we recognize revenue from non-refundable, upfront fees allocated to the license at the point in time when the license is transferred to the
customer and the customer is able to use and benefit from the license. For licenses that are bundled with other goods or services, we utilize judgment to
assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in
time and, if over time, the appropriate method of measuring progress toward satisfying the performance obligation for purposes of recognizing revenue
from non-refundable, upfront fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of progress and related
revenue recognition.
Customer options for additional goods or services: If a contract contains customer options that allow the customer to acquire additional goods or services,
including a license to our intellectual property, the goods and services underlying the customer options are evaluated to determine whether they are deemed
to represent a material right. In determining whether the customer option has a material right, we assess whether there is an option to acquire additional
goods or services at a discount. If the customer option is determined not to represent a material right, the option is not considered to be a performance
obligation. If the customer option is determined to represent a material right, the material right is recognized as a separate performance obligation. We
allocate the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the
probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until the option is exercised.
119
Milestone payments: At the inception of each arrangement or amendment that includes development, regulatory or commercial milestone payments, we
evaluate whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606
prescribes two methods to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under
the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most
likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should
be consistently applied throughout the life of the contract; however, it is not necessary for us to use the same approach for all contracts. If it is probable that
a significant revenue reversal would not occur when the uncertainty associated with the milestone is resolved, the associated milestone value is included in
the transaction price. Milestone payments that are highly susceptible to factors outside our influence, such as regulatory approvals, are not considered
probable of being achieved until those approvals are received. If there is more than one performance obligation, the transaction price is then allocated to
each performance obligation on a relative stand-alone selling price basis. We recognize revenue as or when the performance obligations under the contract
are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability or achievement of each milestone and any related constraint,
and if necessary, adjust our estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would
affect revenues and earnings in the period of adjustment.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license deemed to be the
predominant item to which the royalties relate, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation
to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Upfront payments and fees are recorded as contract liabilities upon receipt or when due and may require deferral of revenue recognition to a future period
until we perform our obligations under these arrangements. Amounts payable to us are recorded as accounts receivable when our right to consideration is
unconditional. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period
between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
Contractual cost sharing payments received from a customer or collaboration partner are accounted for as variable consideration. We include an expected
value in the transaction price. Contractual cost sharing payments made to a customer or collaboration partner are accounted for as a reduction to the
transaction price if such payments are not related to distinct goods or services received from the customer or collaboration partner.
Contracts may be amended to account for changes in contract specifications and requirements. Contract modifications exist when the amendment either
creates new, or changes existing, enforceable rights and obligations. When contract modifications create new performance obligations and the increase in
consideration approximates the standalone selling price for goods and services related to such new performance obligations as adjusted for specific facts
and circumstances of the contract, the modification is accounted for as a separate contract. If a contract modification is not accounted for as a separate
contract, we account for the promised goods or services not yet transferred at the date of the contract modification (the remaining promised goods or
services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services are distinct
from the goods or services transferred on or before the date of the contract modification. We account for a contract modification as if it were a part of the
existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at
the date of the contract modification. In such case the effect that the contract modification has on the transaction price, and on the entity’s measure of
progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of
revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis).
Upfront payment contract liabilities resulting from our license and collaboration agreements do not represent a financing component as the payment is not
financing the transfer of goods and services, and the technology underlying the licenses granted reflects research and development expenses already
incurred by us. As such, we do not adjust our revenues for the effects of a significant financing component.
Determination of the timing of satisfaction of performance obligations
We recognize revenue from the MAT2A R&D Services, Pol Theta R&D Services and WRN R&D Services over time, as GSK simultaneously receives and
consumes the benefits provided by our performance as we perform. We measure our progress toward complete satisfaction of the MAT2A R&D Services,
Pol Theta R&D Services and WRN R&D Services
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based on the costs incurred as a percentage of the estimated total costs to be incurred to complete the performance obligations.
The estimated total costs to be incurred to complete the MAT2A R&D Services, Pol Theta R&D Services and WRN R&D Services may evolve and be
updated throughout the performance period with the consultation with GSK through the joint development committee. The change in the estimated total
costs and/or the timing of completion may materially impact an amount of subsequent revenue recognition and/or its timing. MAT2A R&D Services and
Pol Theta R&D Services are completed. The expected timing of completing the WRN R&D Services may be updated.
Recent Accounting Pronouncements
See the section titled “Summary of Significant Accounting Policies—Recent Accounting Pronouncements” in Note 2 to our financial statements included
elsewhere in this Annual Report on Form 10-K for additional information.
121
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Sensitivity
The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates
or exchange rates. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $1.1 billion, consisting of bank deposits, interest-
bearing money market funds, investments in U.S. government securities, commercial paper, and corporate bonds, for which the fair value would be
affected by changes in the general level of U.S. interest rates. Even if the fair value of certain government securities, commercial paper, and corporate
bonds is affected by changes in U.S. interest rates, the principal of such instruments will be due to us upon maturity.
The primary objective of our investment activities is to preserve capital to fund our operations. We also seek to maximize income from our investments
without assuming significant risk. Because our investments are primarily short-term in duration and our holdings in U.S. government treasury bonds mature
prior to our expected need for liquidity, we believe that our exposure to interest rate risk is not significant.
While we are seeing, and expect to continue to see, record inflation due to geopolitical and macroeconomic events, such as the ongoing Ukraine-Russia
conflict and related sanctions, the Israel-Hamas conflict, and the banking sector volatility, we do not believe that inflation, or exchange rate fluctuations
have had a significant impact on our results of operations for any periods presented herein.
Item 8. Financial Statements and Supplementary Data
The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Item 15
of Part IV of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
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Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or
the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1)
recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2)
accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate
to allow timely decisions regarding required disclosure. Our management recognizes that any disclosure controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible disclosure controls and procedures.
Our management, with the participation of our principal executive officer and principal financial and accounting officer, evaluated the effectiveness of our
disclosure controls and procedures at the end of the period covered by this Annual Report on Form 10-K. Based upon such evaluation, our principal
executive officer and principal financial and accounting officer have concluded that our disclosure controls and procedures were effective at the reasonable
assurance level as of such date.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that have materially
affected, or are reasonably likely to materially effect, our internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Under the supervision of and with the participation of our principal executive officer and principal financial and accounting officer, our
management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control—Integrated Framework” (2013). Based on this assessment,
management concluded that our internal control over financial reporting was effective as of December 31, 2024.
The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an
independent registered public accounting firm, as stated in their report, which is included under “Item 8. Financial Statements and Supplementary Data” of
this Annual Report.
Item 9B. Other Information
Trading Plans
During the three months ended December 31, 2024, no Section 16 officers or directors adopted or terminated contracts, instructions or written plans for the
purchase or sale of our securities.
Clinical Study Collaboration and Supply Agreement
On February 12, 2025, we entered into the Second Gilead CSCSA with Gilead pursuant to which we and Gilead will collaborate on a portion of our Phase
1 study for the clinical evaluation of our IDE397 compound in combination with Gilead’s Trop2-ADC, Trodelvy, or the Combination Study, in certain
patients with advanced solid tumors in lungs. Pursuant to the Second Gilead CSCSA, we are the sponsor of the Combination Study, and we will provide the
IDE397 compound and pay for the costs of the Combination Study.
Gilead will provide Trodelvy for the Combination Study at no cost to us. We and Gilead will jointly own clinical data from the Combination Study and all
inventions relating to the combined use of IDE397 and Trodelvy. Each party retains commercial rights to its respective compounds, including with respect
to use as a monotherapy or combination agent. We and Gilead will form a joint steering committee responsible for coordinating all regulatory and other
activities under the Second Gilead CSCSA.
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The Second Gilead CSCSA will continue in effect until the later of (i) the completion of the patient monitoring period for the separate arm of the study
evaluating the combination therapy, or the Gilead Arm, in accordance with the study protocol and (ii) our provision to Gilead of the final version of the
final study report for the Gilead Arm, unless earlier terminated by either party pursuant to its terms. We or Gilead may terminate the Second Gilead
CSCSA for the other party’s insolvency, upon uncured material breach or for other specified reasons with certain notice and other requirements.
The Second Gilead CSCSA contains various representations, warranties, covenants, dispute resolution mechanisms, indemnities and other provisions
customary for transactions of this nature.
The foregoing is only a summary description of the terms of the Second Gilead CSCSA, does not purport to be complete and is qualified in its entirety by
reference to the Second Gilead CSCSA, which will be filed as an exhibit to our Quarterly Report on Form 10-Q for the fiscal quarter ending March 31,
2025.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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Part III
Item 10. Directors, Executive Officers and Corporate Governance.
We have adopted insider trading policies and procedures applicable to our directors, officers and employees, that we believe are reasonably designed to
promote compliance with insider trading laws and regulations and the Nasdaq stock exchange listing standards. A copy of our policy is filed with this
Annual Report on Form 10-K as Exhibit 19.1.
The other information required by this item will be contained in our definitive proxy statement to be filed with the SEC in connection with the Annual
Meeting of Stockholders within 120 days after December 31, 2024, or the Proxy Statement, and is incorporated in this Annual Report on Form 10-K by
reference.
Item 11. Executive Compensation.
The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 14. Principal Accounting Fees and Services.
The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
125
Part IV
Item 15. Exhibits, Financial Statement Schedules.
(a)
The following documents are filed as part of this report:
(1)
FINANCIAL STATEMENTS
The following documents are included on pages F-1 through F-31 attached hereto and are filed as part of this Annual Report on Form 10-K.
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
F-2
Audited Financial Statements:
Balance Sheets
F-4
Statements of Operations and Comprehensive Loss
F-5
Statements of Stockholders’ Equity
F-6
Statements of Cash Flows
F-7
Notes to Financial Statements
F-8
(2)
FINANCIAL STATEMENT SCHEDULES
All schedules to the financial statements are omitted as the required information is either inapplicable or presented in the financial statements.
(3)
EXHIBITS
The exhibits listed in the accompanying Exhibit Index are filed as part of, or incorporated by reference into, this report.
126
Exhibit Index
(a) Exhibits.
Exhibit
Number
Exhibit Description
Incorporated by Reference
Filed
Herewith
Form
Date
Number
3.1
Amended and Restated Certificate of Incorporation.
8-K
5/28/2019
3.1
3.2
Amended and Restated Bylaws.
8-K
5/28/2019
3.2
4.1
Reference is made to Exhibits 3.1 through 3.2.
4.2
Form of Common Stock Certificate.
S-1/A
5/13/2019
4.2
4.3
Description of Common Stock.
X
4.4
Form of April 2023 Pre-funded Warrant.
8-K
4/27/2023
4.1
4.5
Form of October 2023 Pre-funded Warrant.
8-K
10/27/2023
4.1
4.6
Form of July 2024 Pre-funded Warrant.
8-K
7/11/2024
4.1
10.1†
License Agreement by and between IDEAYA Biosciences, Inc. and
Novartis International Pharmaceutical, Inc. dated as of September 19,
2018.
S-1
4/26/2019
10.1
10.2(a)†
Evaluation, Option and License Agreement by and among IDEAYA
Biosciences, Inc., Cancer Research Technology Ltd. and University
of Manchester dated as of April 28, 2017.
S-1
4/26/2019
10.2(a)
10.2(b)
Amendment #1 to Evaluation, Option and License Agreement by and
among IDEAYA Biosciences, Inc., Cancer Research Technology Ltd.
and University of Manchester dated as of April 24, 2019.
S-1
4/26/2019
10.2(b)
10.2(c)
Amendment #2 to Evaluation, Option and License Agreement by and
among IDEAYA Biosciences, Inc., Cancer Research Technology Ltd.
and University of Manchester dated as of March 3, 2020.
10-K
3/24/2020
10.2(c)
10.3(a)#
2019 Incentive Award Plan.
S-1/A
5/13/2019
10.5(a)
10.3(b)#
Form of Stock Option Grant Notice and Stock Option Agreement
under the 2019 Incentive Award Plan.
S-1/A
5/13/2019
10.5(b)
10.3(c)#
Form of Restricted Stock Award Grant Notice and Restricted Stock
Award Agreement under the 2019 Incentive Award Plan.
S-1/A
5/13/2019
10.5(c)
10.3(d)#
Form of Restricted Stock Unit Award Grant Notice and Restricted
Stock Unit Award Agreement under the 2019 Incentive Award Plan.
S-1/A
5/13/2019
10.5(d)
10.4#
Employee Stock Purchase Plan.
S-1/A
5/13/2019
10.6
10.5(a)#
2015 Equity Incentive Plan, as amended.
S-1
4/26/2019
10.4(a)
10.5(b)#
Form of Stock Option Agreement under the 2015 Equity Incentive
Plan.
S-1
4/26/2019
10.4(b)
127
10.5(c)#
Form of Early Exercise Stock Option Agreement under the 2015
Equity Incentive Plan.
S-1
4/26/2019
10.4(c)
10.5(d)#
Form of Stock Purchase Right Grant Notice and Restricted Stock
Purchase Agreement under 2015 Equity Incentive Plan.
S-1
4/26/2019
10.4(d)
10.6(a)#
2023 Employment Inducement Award Plan.
S-8
3/7/2023
99.3(a)
10.6(b)#
Amendment to the 2023 Employment Inducement Award Plan.
S-8
8/6/2024
99.1(c)
10.6(c)#
Form of Stock Option Grant Notice and Stock Option Agreement
under the 2023 Employment Inducement Award Plan.
S-8
3/7/2023
99.3(b)
10.7#
Employment Agreement by and between IDEAYA Biosciences, Inc.
and Yujiro Hata.
S-1/A
5/13/2019
10.7(b)
10.8#
Amended and Restated Employment Agreement by and between
IDEAYA Biosciences, Inc. and Michael White.
10-Q
11/15/2021
10.2
10.9#
Employment Agreement by and between IDEAYA Biosciences, Inc.
and Darrin Beaupre.
10-K
3/7/2023
10.10
10.10#
Amended and Restated Employment Agreement, dated as of July 1,
2023 by and between IDEAYA Biosciences, Inc. and Andres Ruiz
Briseno.
10-Q
8/10/2023
10.5
10.11#†
Employment Agreement by and between IDEAYA Biosciences, Inc.
and Douglas Snyder.
10-Q
11/4/2024
10.2
10.12#†
Employment Agreement by and between IDEAYA Biosciences, Inc.
and Stu Dorman.
X
10.13#
Non-Employee Director Compensation Program.
10-K
2/20/2024
10.13
10.14
Form of Indemnification Agreement for Directors and Officers.
S-1/A
5/13/2019
10.14
10.15
Lease Agreement by and between IDEAYA Biosciences, Inc. and
ARE-SAN FRANCISCO NO. 17, LLC dated as of August 26, 2016.
S-1
4/26/2019
10.15
10.16
Letter Agreement Amendment to Lease Agreement by and between
IDEAYA Biosciences, Inc. and ARE-SAN FRANCISCO NO. 17,
LLC dated as of January 27, 2017.
S-1
4/26/2019
10.16
10.17
First Amendment to Lease Agreement by and between IDEAYA
Biosciences, Inc. and ARE-SAN FRANCISCO NO. 17, LLC dated as
of May 31, 2018.
S-1
4/26/2019
10.17
10.18
Second Amendment to Lease Agreement by and between IDEAYA
Biosciences, Inc. and ARE-SAN FRANCISCO NO. 17, LLC dated as
of September 30, 2019.
10-Q
11/13/2019
10.11
128
10.19(a)†
Option and License Agreement by and between IDEAYA
Biosciences, Inc. and Biocytogen Pharmaceuticals (Beijing) Co.,
Ltd., dated as of July 30, 2024.
10-Q
11/4/2024
10.1
10.19(b)†
First Amendment to Option and License Agreement by and between
IDEAYA Biosciences, Inc. and Biocytogen Pharmaceuticals
(Beijing) Co., Ltd., dated as of December 12, 2024.
X
10.20(a)†
Clinical Trial Collaboration and Supply Agreement by and between
IDEAYA Biosciences, Inc. and Pfizer Inc. dated as of March 11,
2020.
10-Q
5/12/2020
10.4
10.20(b)†
Amendment No. 1 to Clinical Trial Collaboration and Supply
Agreement by and between Pfizer Inc. and IDEAYA Biosciences,
Inc. dated as of September 23, 2020.
10-Q
11/12/2020
10.1
10.20(c)†
Amendment No. 2 to Clinical Trial Collaboration and Supply
Agreement by and between Pfizer Inc. and IDEAYA Biosciences,
Inc. dated as of April 8, 2021.
10-Q
5/10/2021
10.1
10.20(d)†
Amendment No. 3 to Clinical Trial Collaboration and Supply
Agreement by and between Pfizer Inc. and IDEAYA Biosciences,
Inc. dated as of August 9, 2021.
10-Q
11/15/2021
10.1
10.20(e)†
Amendment No. 4 to Clinical Trial Collaboration and Supply
Agreement by and between Pfizer Inc. and IDEAYA Biosciences,
Inc. dated as of May 12, 2023.
10-Q
8/10/2023
10.1
10.20(f)†
Amendment No. 5 to Clinical Trial Collaboration and Supply
Agreement by and between Pfizer Inc. and IDEAYA Biosciences,
Inc. dated as of December 16, 2024
X
10.21(a)†
Collaboration, Option and License Agreement by and between
GlaxoSmithKline Intellectual Property (No. 4) Limited and IDEAYA
Biosciences, Inc. dated as of June 15, 2020.
10-Q
8/12/2020
10.3
10.21(b)
Amendment No. 1 to Collaboration, Option and License Agreement
by and between GlaxoSmithKline Intellectual Property (No. 4)
Limited and IDEAYA Biosciences, Inc. dated as of October 23, 2020.
10-K
3/18/2022
10.18
10.21(c)†
Amendment No. 2. to Collaboration, Option and License Agreement
by and between GlaxoSmithKline Intellectual Property (No. 4)
Limited and IDEAYA Biosciences, Inc. dated as of January 31, 2022.
10-Q
5/10/2022
10.3
10.22(a)†
Clinical Trial Collaboration and Supply Agreement by and between
Pfizer Inc. and IDEAYA Biosciences, Inc. dated as of March 9, 2022.
10-Q
5/10/2022
10.1
10.22(b)†
Amendment No. 1 to Clinical Trial Collaboration and Supply
Agreement by and between Pfizer Inc. and IDEAYA Biosciences,
Inc. dated as of May 10, 2023
10-Q
8/10/2023
10.2
129
10.23†
Clinical Trial Collaboration and Supply Agreement by and between
Amgen Inc. and IDEAYA Biosciences, Inc. dated as of July 26, 2022.
10-Q
11/8/2022
10.1
10.24†
Clinical Study Collaboration and Supply Agreement by and between
Gilead Sciences, Inc. and IDEAYA Biosciences, Inc. dated as of
November 29, 2023
10-K
2/20/2024
10.23
10.25(a)
Lease Agreement by and between DW LSP 5000 Shoreline, LLC and
IDEAYA Biosciences, Inc. dated as of June 1, 2023.
10-Q
8/10/2023
10.3
10.25(b)†
First Amendment to Lease Agreement by and between DW LSP 5000
Shoreline, LLC and IDEAYA Biosciences, Inc. dated as of May 10,
2024.
X
10.26
Office Lease Agreement by and between AAT TORREY 13-14, LLC
and IDEAYA Biosciences, Inc. dated as of November 14, 2023
10-K
2/20/2024
10.25
10.27†
Option and License Agreement by and between IDEAYA
Biosciences, Inc. and Jiangsu Hengrui Pharmaceuticals Co., Ltd.,
dated as of December 27, 2024.
X
10.28†
Clinical Trial Collaboration and Supply Agreement by and between
IDEAYA Biosciences, Inc. and MSD International Business GmbH,
dated as of March 8, 2024
10-Q
5/7/2024
10.1
10.29
Open Market Sales Agreement by and between IDEAYA
Biosciences, Inc. and Jefferies LLC, dated as of January 19, 2024.
8-K
1/19/2024
10.1
19.1†
Insider Trading Compliance Policy.
X
23.1
Consent of Independent Registered Public Accounting Firm.
X
24.1
Power of Attorney (included on signature page to this Annual Report
on Form 10-K).
X
31.1
Certification of the Chief Executive Officer pursuant to Rule 13a-
14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
X
31.2
Certification of the Chief Financial Officer pursuant to Rule 13a-
14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
X
32.1*
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
X
130
97
Policy for Recovery of Erroneously Awarded Compensation.
10-K
2/20/2024
97
101.INS
Inline XBRL Instance Document
X
101.SCH
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase
Documents
X
104
Cover Page Interactive Data File (embedded with the Inline XBRL
document)
X
† Portions of this exhibit have been omitted pursuant to Regulation S-K, Item 601(b)(10) or certain schedules and attachments to this exhibit have been
omitted pursuant to Regulation S-K, Item 601(a)(5). Such omitted information is not material and would likely cause competitive harm to the registrant if
publicly disclosed.
# Indicates management contract or compensatory plan.
* The certification attached as Exhibit 32.1 that accompanies this Annual Report on Form 10-K is not deemed filed with the SEC and is not to be
incorporated by reference into any filing of IDEAYA Biosciences, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing.
Item 16. Form 10-K Summary.
None.
F-1
INDEX TO THE FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
F-2
Balance Sheets
F-4
Statements of Operations and Comprehensive Loss
F-5
Statements of Stockholders’ Equity
F-6
Statements of Cash Flows
F-7
Notes to Financial Statements
F-8
F-2
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of IDEAYA Biosciences, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying balance sheets of IDEAYA Biosciences, Inc. (the "Company") as of December 31, 2024 and 2023, and the related
statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31,
2024, including the related notes (collectively referred to as the "financial statements"). We also have audited the Company's internal control over financial
reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31,
2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with
accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued
by the COSO.
Basis for Opinions
The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting
appearing under Item 9A. Our responsibility is to express opinions on the Company’s financial statements and on the Company's internal control over
financial reporting 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 of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control
over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
F-3
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or
required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii)
involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical
audit matter or on the accounts or disclosures to which it relates.
Accrued Research and Development Expenses Related to Contract Research Organizations
As described in Notes 2 and 4 to the financial statements, the Company has entered into various agreements with contract research organizations (CROs).
The Company’s accrued research and development expenses as of December 31, 2024 was $20.0 million, of which a portion relates to open agreements
with CROs. The Company’s research and development accruals are estimated based on the level of services performed, progress of the studies, including
the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in
accrued liabilities on the balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates,
management will adjust the accrual accordingly. Management’s process involves reviewing open contracts and purchase orders, communicating with
applicable personnel to identify services that have been performed, and estimating the level of service performed and the associated costs incurred based on
vendor estimates for the services when the Company has not yet been invoiced or otherwise notified of actual costs.
The principal consideration for our determination that performing procedures relating to accrued research and development expenses related to CROs is a
critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s accrued research and development expenses
related to CROs.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial
statements. These procedures included testing the effectiveness of controls relating to accrued research and development expenses, including controls
related open agreements with CROs. These procedures also included, among others, testing research and development expenses related to CROs, on a
sample basis, by obtaining and inspecting source documents, such as underlying agreements with CROs, purchase orders, invoices received, and
information received from certain third party service providers.
/s/ PricewaterhouseCoopers LLP
San Jose, California
February 18, 2025
We have served as the Company’s auditor since 2017.
F-4
IDEAYA Biosciences, Inc.
Balance Sheets
(in thousands, except share and per share amounts)
December 31,
2024
2023
Assets
Current assets
Cash and cash equivalents
$
84,378
$
157,018
Short-term marketable securities
591,941
368,096
Accounts receivable
3
18
Prepaid expenses and other current assets
13,391
7,500
Total current assets
689,713
532,632
Restricted cash
805
757
Long-term marketable securities
405,832
107,492
Property and equipment, net
8,966
6,164
Right-of-use assets
18,775
2,246
Other non-current assets
—
25
Total assets
$
1,124,091
$
649,316
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable
$
15,421
$
6,598
Accrued liabilities
30,352
18,756
Operating lease liabilities, current
298
1,747
Total current liabilities
46,071
27,101
Long-term operating lease liabilities
18,873
1,125
Total liabilities
64,944
28,226
Commitments and contingencies (Note 6)
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized as of December 31,
2024 and December 31, 2023; no shares issued and outstanding as of December 31, 2024
and December 31, 2023
—
—
Common stock, $0.0001 par value, 300,000,000 shares authorized as of December 31,
2024 and December 31, 2023; 86,503,509 and 65,039,369 shares issued and outstanding
as of December 31, 2024 and December 31, 2023
9
7
Additional paid-in capital
1,681,167
968,885
Accumulated other comprehensive income
812
562
Accumulated deficit
(622,841 )
(348,364 )
Total stockholders’ equity
1,059,147
621,090
Total liabilities and stockholders’ equity
$
1,124,091
$
649,316
The accompanying notes are an integral part of these financial statements.
F-5
IDEAYA Biosciences, Inc.
Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
Year Ended December 31,
2024
2023
2022
Collaboration revenue
$
7,000 $
23,385 $
50,931
Total revenue
7,000
23,385
50,931
Operating expenses
Research and development
294,673
129,508
89,536
General and administrative
39,302
28,306
23,897
Total operating expenses
333,975
157,814
113,433
Loss from operations
(326,975 )
(134,429 )
(62,502 )
Other income
Interest income and other income, net
52,498
21,468
3,847
Net loss
(274,477 )
(112,961 )
(58,655 )
Unrealized gains (losses) on marketable securities
250
3,433
(2,159 )
Comprehensive loss
$
(274,227 ) $
(109,528 ) $
(60,814 )
Net loss per common share, basic and diluted
$
(3.36 ) $
(1.96 ) $
(1.42 )
Weighted-average number of common shares outstanding
used in computing net loss per share, basic and diluted
81,678,069
57,519,929
41,444,696
The accompanying notes are an integral part of these financial statements.
F-6
IDEAYA Biosciences, Inc.
Statements of Stockholders’ Equity
(in thousands, except share amounts)
Accumulated
Additional
Other
Total
Common Stock
Paid-In
Comprehensive
Accumulated
Stockholders'
Shares
Amount
Capital
Income (Loss)
Deficit
Equity
Balances as of December 31, 2021
38,533,045 $
4 $
478,970 $
(712 ) $
(176,748 ) $
301,514
Issuance of common stock upon follow-on public offering, net of
issuance costs
8,761,905
1
86,080
—
—
86,081
Issuance of common stock related to at-the-market offering program,
net of issuance costs
601,844
—
8,842
—
—
8,842
Issuance of common stock upon exercise of stock options
214,643
—
1,448
—
—
1,448
Employee stock purchase plan (ESPP) purchase
81,742
—
755
—
—
755
Stock-based compensation
—
—
11,629
—
—
11,629
Other comprehensive loss
—
—
—
(2,159 )
—
(2,159 )
Net loss
—
—
—
—
(58,655 )
(58,655 )
Balances as of December 31, 2022
48,193,179
5
587,724
(2,871 )
(235,403 )
349,455
Issuance of common stock upon follow-on public offering, net of
issuance costs
14,655,993
2
281,120
—
—
281,122
Issuance of pre-funded warrants for the purchase of common stock
—
—
42,182
—
—
42,182
Issuance of common stock related to at-the-market offering program,
net of issuance costs
1,188,705
—
28,598
—
—
28,598
Issuance of common stock upon exercise of stock options
931,012
—
9,559
—
—
9,559
Employee stock purchase plan (ESPP) purchase
70,480
—
1,213
—
—
1,213
Stock-based compensation
—
—
18,489
—
—
18,489
Other comprehensive gain
—
—
—
3,433
—
3,433
Net loss
—
—
—
—
(112,961 )
(112,961 )
Balances as of December 31, 2023
65,039,369
7
968,885
562
(348,364 )
621,090
Issuance of common stock upon follow-on public offering, net of
issuance costs
8,355,714
1
274,349
274,350
Issuance of pre-funded warrants for the purchase of common stock
—
—
9,400
—
—
9,400
Exercise of pre-funded warrants
1,749,993
Issuance of common stock related to at-the-market offering program,
net of issuance costs
10,182,382
1
379,865
—
—
379,866
Issuance of common stock upon exercise of stock options
1,118,695
—
12,483
—
—
12,483
Employee stock purchase plan (ESPP) purchase
57,356
—
1,439
—
—
1,439
Stock-based compensation
—
—
34,746
—
—
34,746
Other comprehensive gain
—
—
—
250
—
250
Net loss
—
—
—
—
(274,477 )
(274,477 )
Balances as of December 31, 2024
86,503,509 $
9 $
1,681,167 $
812 $
(622,841 ) $
1,059,147
The accompanying notes are an integral part of these financial statements.
F-7
IDEAYA Biosciences, Inc.
Statements of Cash Flows
(in thousands)
Year Ended December 31,
2024
2023
2022
Cash flows from operating activities
Net loss
$
(274,477 ) $
(112,961 ) $
(58,655 )
Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation and amortization
2,387
2,476
2,101
Net amortization (accretion) of premiums (discounts) on
marketable securities
(23,233 )
(11,553 )
(695 )
Stock-based compensation
34,746
18,489
11,629
Amortization of right of use assets
1,447
1,532
1,414
Changes in assets and liabilities
Accounts receivable
15
193
892
Prepaid expenses and other assets
(6,174 )
(2,045 )
(2,119 )
Accounts payable
8,280
2,635
1,864
Accrued and other liabilities
10,794
1,635
4,572
Contract liabilities
—
(13,753 )
(46,479 )
Lease liabilities
(1,369 )
(1,872 )
(1,699 )
Net cash used in operating activities
(247,584 )
(115,224 )
(87,175 )
Cash flows from investing activities
Purchases of property and equipment, net
(3,857 )
(2,368 )
(3,443 )
Purchases of marketable securities
(1,191,309 )
(595,980 )
(255,808 )
Maturities of marketable securities
692,607
439,892
225,847
Net cash used in investing activities
(502,559 )
(158,456 )
(33,404 )
Cash flows from financing activities
Proceeds from issuance of common stock in public offering, net of issuance costs
274,350
281,165
86,105
Proceeds from issuances of pre-funded warrants
9,400
42,182
—
Proceeds from issuance of common stock related to at-the-market offering program, net of
issuance costs
379,879
28,598
8,857
Proceeds from exercise of common stock options
12,483
9,559
1,448
Proceeds from ESPP purchases
1,439
1,213
755
Net cash provided by financing activities
677,551
362,717
97,165
Net (decrease) increase in cash, cash equivalents and restricted cash
(72,592 )
89,037
(23,414 )
Cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, at beginning of period
157,775
68,738
92,152
Cash, cash equivalents and restricted cash, at end of period
$
85,183 $
157,775
$
68,738
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents
$
84,378 $
157,018
$
68,632
Restricted cash
805
757
106
Cash, cash equivalents and restricted cash
$
85,183 $
157,775
$
68,738
Supplemental disclosure of cash flow information:
Cash paid for interest
$
25 $
69
$
60
Supplemental non-cash investing and financing activities:
Right-of-use asset obtained in exchange for a new operating lease liability
$
17,976 $
1,294
$
—
Purchases of property and equipment in accounts payable and accrued
liabilities
1,479
147
384
Unpaid offering costs
—
43
39
Unpaid at-the-market offering program costs
$
13 $
—
$
—
The accompanying notes are an integral part of these financial statements.
F-8
IDEAYA Biosciences, Inc.
Notes to Financial Statements
1. Organization
Description of the Business
IDEAYA Biosciences, Inc. (the “Company”) is a precision medicine oncology company committed to the discovery and development of targeted
therapeutics for patient populations selected using molecular diagnostics. The Company is headquartered in South San Francisco, California and was
incorporated in the State of Delaware in June 2015. To date, the Company has been primarily engaged in business planning, research, development,
recruiting and raising capital.
Follow-On Offering
On July 11, 2024, the Company completed an underwritten public follow-on offering. The offering consisted of 8,355,714 shares of the Company’s
common stock, par value $0.0001 per share (“common stock”), at an offering price to the public of $35.00 per share, including 1,127,142 shares of
common stock upon the exercise in full of the overallotment option by the underwriters, as well as pre-funded warrants to purchase 285,715 shares of
common stock at a public offering price of $34.9999 per underlying share, in each case before underwriting discounts and commissions. Pursuant to the
offering, the Company received aggregate gross proceeds of approximately $302.4 million, before deducting underwriting discounts and commissions and
other offering expenses, resulting in net proceeds of approximately $283.8 million, after deducting underwriting discounts and commissions and other
offering expenses.
On October 27, 2023, the Company completed an underwritten public follow-on offering. The offering consisted of 5,797,872 shares of common stock at
an offering price to the public of $23.50 per share, including 797,872 shares of common stock upon the exercise in full of the overallotment option by the
underwriters, as well as pre-funded warrants to purchase 319,150 shares of common stock at a public offering price of $23.4999 per underlying share, in
each case before underwriting discounts and commissions. Pursuant to the offering, the Company received aggregate gross proceeds of approximately
$143.7 million, before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $134.6
million, after deducting underwriting discounts and commissions and other offering expenses.
On April 27, 2023, the Company completed an underwritten public follow-on offering. The offering consisted of 8,858,121 shares of common stock at an
offering price to the public of $18.50 per share, including 1,418,920 shares of common stock upon the exercise in full of the overallotment option by the
underwriters, as well as pre-funded warrants to purchase 2,020,270 shares of common stock at a public offering price of $18.4999 per underlying share, in
each case before underwriting discounts and commissions. Pursuant to the offering, the Company received aggregate gross proceeds of approximately
$201.3 million, before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $188.7
million, after deducting underwriting discounts and commissions and other offering expenses.
At-the-Market Offering
On June 26, 2023, the Company filed a new Registration Statement on Form S-3 (File No. 333- 272936) under the Securities Act as an automatic shelf
registration statement as a “well-known seasoned issuer,” as defined in Rule 405 under the Securities Act. On June 26, 2023, the Company also entered
into an Open Market Sales Agreement (the “June 2023 Sales Agreement”), with Jefferies LLC (“Jefferies”), relating to an at-the-market offering program
under which the Company may offer and sell, from time to time at its sole discretion, shares of our common stock, having aggregate gross proceeds of up
to $250.0 million through Jefferies as sales agent.
From January 1, 2024 through January 17, 2024, the Company sold an aggregate of 6,115,516 shares of its common stock for aggregate net proceeds of
$215.9 million at a weighted average sales price of approximately $36.39 per share under the at-the-market offering pursuant to the June 2023 Sales
Agreement with Jefferies as sales agent.
On January 19, 2024, the Company entered into a new Open Market Sales Agreement (the “January 2024 Sales Agreement”), with Jefferies, relating to an
at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of common stock having
aggregate gross proceeds of up to $350.0 million through Jefferies as sales agent.
F-9
During the year ended December 31, 2024, pursuant to the January 2024 Sales Agreement, the Company sold an aggregate of 4,066,866 shares of its
common stock for aggregate net proceeds of $164.0 million at a weighted average sales price of approximately $41.28 per share under the at-the-market
offering pursuant to the January 2024 Sales Agreement with Jefferies as sales agent. As of December 31, 2024, approximately $182.1 million of common
stock remained available to be sold under the ATM facility.
The Company may cancel its at-the-market program at any time upon written notice, pursuant to its terms.
Liquidity
The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of
$622.8 million as of December 31, 2024.
The Company has financed its operations primarily through the sale and issuance of common stock and the upfront payment and certain milestone
payments received from GSK.
To date, none of the Company’s product candidates have been approved for sale, and the Company has not generated any revenue from commercial
products since inception. Management expects operating losses to continue and increase for the foreseeable future, as the Company progresses clinical
development activities for its lead product candidates. The Company’s prospects are subject to risks, expenses and uncertainties frequently encountered by
companies in the biotechnology industry as discussed under Risks and Uncertainties in Note 2. While the Company has been able to raise multiple rounds
of financing, there can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are
favorable or at all. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a
material adverse effect on the Company’s ability to achieve its intended business objectives.
As of December 31, 2024, the Company had cash, cash equivalents and marketable securities of $1.1 billion. Management believes that the Company’s
current cash, cash equivalents and marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance
of these financial statements.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of
America (“GAAP”).
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Such estimates include useful lives of property and equipment, determination of the discount rate for
operating leases, accruals for research and development activities, revenue recognition, stock-based compensation, and income taxes. On an ongoing basis,
management reviews these estimates and assumptions. Changes in facts and circumstances may alter such estimates and actual results could differ from
those estimates.
Segments
The Company has one reportable and operating segment. Financial information about the Company’s operating segment and geographic areas is presented
in Note 13 of the financial statements.
Risks and Uncertainties
The Company operates in a dynamic and highly competitive industry and is subject to risks and uncertainties common to early-stage companies in the
biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology,
dependence on key personnel, contract manufacturers, contract research organizations and collaboration partners, compliance with government regulations
and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research
and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts
require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. The Company believes that
changes in any of the following areas could have a material
F-10
adverse effect on the Company’s future financial position, results of operations, or cash flows: ability to obtain future financing; advances and trends in
new technologies and industry standards; results of clinical trials and collaboration activities; regulatory approval and market acceptance of the Company’s
products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent,
product, regulatory, or other factors; and the Company’s ability to attract and retain employees necessary to support its growth.
Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies
prior to commercial sales. There can be no assurance that the Company’s research and development will be successfully completed, that adequate
protection for the Company’s intellectual property will be obtained or maintained, that the products will receive the necessary approvals, or that any
approved products will be commercially viable. If the Company was denied approval, approval was delayed or the Company was unable to maintain
approval, it could have a materially adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain
when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid change in technology and
substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its
employees, consultants and other third parties.
The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of product candidates.
The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing
and distribution of products that receive regulatory approval. The Company may require additional funds to commercialize its products. The Company is
unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional
sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which would
materially and adversely affect its business, financial condition and operations.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and marketable securities.
Substantially all the Company’s cash, cash equivalents and marketable securities are held by three financial institutions that management believes are of
high credit quality. Such deposits may, at times, exceed federally insured limits.
The Company’s investment policy addresses credit ratings, diversification, and maturity dates.
The Company invests its cash equivalents and marketable securities in money market funds, U.S. government securities, commercial paper, and corporate
bonds. The Company limits its credit risk associated with cash equivalents and marketable securities by placing them with banks and institutions it believes
are creditworthy and in highly rated investments and, by policy, limits the amount of credit exposure with any one commercial issuer. The Company has
not experienced any credit losses on its deposits of cash, cash equivalents or marketable securities.
Cash Equivalents
Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments
purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents.
Restricted Cash
Restricted cash as of December 31, 2024 and December 31, 2023 consisted of cash balances held as security in connection with the Company’s facility
lease agreements in South San Francisco, California and San Diego, California. The balances are classified as long-term assets on the Company’s balance
sheet.
Marketable Securities
Marketable securities are investments in marketable securities with maturities greater than three months at the time of purchase. The Company determines
the appropriate classification of its investments in marketable securities at the time of purchase and reevaluates such designation at each balance sheet date.
The Company has classified and accounted for its marketable securities as available-for-sale. After consideration of the Company’s risk versus reward
objectives and liquidity requirements, the Company may sell these securities prior to their stated maturities. The Company classifies highly liquid securities
with maturities beyond 12 months as long-term marketable securities in the balance sheet. These securities are carried at fair value as determined based
upon quoted market prices or pricing models for similar securities. Unrealized gains and losses, if any, are excluded from earnings and are reported as a
component of accumulated other comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and
accretion of discounts to maturity, which is included in interest income and other income (expense), net on the statements of operations and comprehensive
loss. Realized gains and losses, if any, on available-for-sale securities are included in interest income and other income (expense),
F-11
net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are
included in interest income.
Fair Value of Financial Instruments
The carrying amounts of the Company’s certain financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued
liabilities approximate fair value due to their relatively short maturities and market interest rates if applicable. Refer to Note 3 for details on the fair value
of marketable securities.
Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets, which is generally between three and five years. Leasehold improvements are stated at cost and amortized over the
shorter of the useful lives of the assets or the lease term. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise
disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the statements of
operations and comprehensive loss in the period realized.
Impairment of Long-Lived Assets
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
or asset group may not be recoverable. Recoverability is measured by comparison of the carrying amount of the asset or asset group to the future net cash
flows which the asset or asset group is expected to generate. If such asset or asset group is considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. There have been no
such impairments of long-lived assets for the years ended December 31, 2024 and December 31, 2023.
Leases
The Company determines if an arrangement is a lease, or contains a lease, at its inception. Operating leases are included in right-of-use (“ROU”) assets,
lease liabilities, and long-term lease liabilities on the Company’s balance sheet.
ROU assets and lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As most
of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at
commencement date in determining the present value of future payments. The ROU asset also includes any lease payments made to the lessor at or before
the commencement date, minus lease incentives received, and initial direct costs incurred. The Company’s lease terms may include options to extend or
terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-
line basis over the lease term. The Company combines lease and nonlease components.
Cloud Computing Arrangements
The Company capitalizes certain implementation costs incurred under a cloud computing arrangement that is a service contract. Costs incurred during the
application development stage related to the implementation of the hosting arrangement are capitalized and included within prepaid expenses and other
current assets, and other non-current assets on the accompanying balance sheets. Amortization of capitalized implementation costs is recognized on a
straight-line basis over the term of the associated hosting arrangement when it is ready for its intended use. Costs related to preliminary project activities
and post-implementation activities are expensed as incurred.
Revenue Recognition
The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the
Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the
Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are
within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance
obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v)
recognize revenue when (or as) the Company satisfies a performance obligation.
F-12
The Company applies the five-step model to contracts when (1) parties have approved the contract and are committed to performing respective obligations,
(2) the Company can identify each party’s rights regarding the goods or services to be transferred, (3) the Company can identify the payment terms for the
goods or services to be transferred, (4) the contract has commercial substance, and (5) it is probable that the Company will collect the consideration it is
entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised
within each contract and determines the performance obligations by assessing whether each promised good or service is distinct. Goods or services that are
not distinct are bundled with other goods or services in the contract until a bundle of goods or services that is distinct is created. The Company then
recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligations when (or as) the performance
obligations are satisfied. The Company constrains its estimate of the transaction price up to the amount (the “variable consideration constraint”) that a
significant reversal of recognized revenue is not probable.
Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other promised goods or services
identified in an arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license at the point in time when the
license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other goods or services,
the Company applies judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is
satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward satisfying the performance obligation for
purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if
necessary, adjusts the measure of progress and related revenue recognition.
Customer options for additional goods or services: If a contract contains customer options that allow the customer to acquire additional goods or services,
including a license to the Company’s intellectual property, the goods and services underlying the customer options are evaluated to determine whether they
are deemed to represent a material right. In determining whether the customer option has a material right, the Company assesses whether there is an option
to acquire additional goods or services at a discount. If the customer option is determined not to represent a material right, the option is not considered to be
a performance obligation. If the customer option is determined to represent a material right, the material right is recognized as a separate performance
obligation. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the
identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until
the option is exercised.
Milestone payments: At the inception of each arrangement or amendment that includes development, regulatory or commercial milestone payments, the
Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC
606 prescribes two methods to use when estimating the amount of variable consideration: the expected value method and the most likely amount method.
Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the
most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. The Company uses the
expected value method to estimate the amount of variable consideration related to the reimbursement of Pol Theta and WRN program costs which is
consistently applied throughout the life of the contract: however, it is not necessary for the Company to use the same approach for all contracts. If it is
probable that a significant revenue reversal would not occur when the uncertainty associated with the milestone is resolved, the associated milestone value
is included in the transaction price. Milestone payments that are highly susceptible to factors outside the Company’s influence, such as regulatory
approvals, are not considered probable of being achieved until those approvals are received. If there is more than one performance obligation, the
transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when
the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or
achievement of each milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are
recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license deemed to be the
predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the
performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Upfront payments and fees are recorded as contract liabilities upon receipt or when due and may require deferral of revenue recognition to a future period
until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the
Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the
expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the
customer will be one year or less.
Contractual cost sharing payments received from a customer or collaboration partner are accounted for as variable consideration. The Company includes an
expected value in the transaction price. Contractual cost sharing payments made to a
F-13
customer or collaboration partner are accounted for as a reduction to the transaction price if such payments are not related to distinct goods or services
received from the customer or collaboration partner.
Contracts may be amended to account for changes in contract specifications and requirements. Contract modifications exist when the amendment either
creates new, or changes existing, enforceable rights and obligations. When contract modifications create new performance obligations and the increase in
consideration approximates the standalone selling price for goods and services related to such new performance obligations as adjusted for specific facts
and circumstances of the contract, the modification is accounted for as a separate contract. If a contract modification is not accounted for as a separate
contract, the Company accounts for the promised goods or services not yet transferred at the date of the contract modification (the remaining promised
goods or services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services
are distinct from the goods or services transferred on or before the date of the contract modification. The Company accounts for a contract modification as
if it were a part of the existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is
partially satisfied at the date of the contract modification. In such case, the effect that the contract modification has on the transaction price, and on the
entity’s measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in
or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis).
Upfront payment contract liabilities resulting from the Company’s license and collaboration agreements do not represent a financing component as the
payment is not financing the transfer of goods and services, and the technology underlying the licenses granted reflects research and development expenses
already incurred by the Company. As such, the Company does not adjust its revenues for the effects of a significant financing component. Amounts
received prior to satisfying the revenue recognition criteria are recorded as contract liability in the Company’s balance sheets. If the related performance
obligation is expected to be satisfied within the next twelve (12) months, this will be classified and included within current contract liability.
Research and Development Expenses
Research and development expenses consist of compensation costs, employee benefit costs, costs for contract manufacturing organizations (“CMOs”),
costs for contract research organizations (“CROs”), costs for clinical trials, costs for sponsored research, consulting costs, costs for laboratory supplies,
costs for product licenses, facility-related expenses and depreciation. All research and development costs are charged to research and development
expenses as incurred and included within the statements of operations and comprehensive loss. Payments associated with licensing agreements to acquire
exclusive licenses to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate
commercial use are also expensed as incurred. Payments made to third parties under these arrangements in advance of the performance of the related
services by the third parties are recorded as prepaid expenses until the services are rendered.
Accrued Research and Development Expenses
The Company has entered into various agreements with CMOs and CROs. The Company’s research and development accruals are estimated based on the
level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and
development provided, but not yet invoiced, are included in accrued liabilities on the balance sheet. If the actual timing of the performance of services or
the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Payments made to CMOs and CROs under these
arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered.
Management’s process involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify services that have
been performed, and estimating the level of service performed and the associated costs incurred based on vendor estimates for the services when the
Company has not yet been invoiced or otherwise notified of actual costs.
Stock-Based Compensation
The Company accounts for stock-based compensation arrangements with employees and non-employees in accordance with ASC 718, Stock
Compensation. The Company accounts for stock-based compensation arrangements using a fair value method which requires the recognition of
compensation expense related to all stock-based awards. The fair value method requires the Company to estimate the fair value of stock option awards on
the date of grant using an option pricing model. The Company uses the Black-Scholes option pricing model to determine the fair value of options granted,
which is expensed on a straight-line basis over the vesting period. Generally, the stock options granted by the Company to its employees have a 10-year
term and vest over a 4-year period with 1-year cliff vesting.
F-14
Income Taxes
The Company accounts for income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are currently in effect unless
such rate is expected to be different when the deferred item reverses. Valuation allowances are established where necessary to reduce deferred tax assets to
the amounts expected to be realized. Deferred tax assets and liabilities are classified as noncurrent on the balance sheet.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax
positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected
in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in interest expense
and other expense, respectively.
Comprehensive Income and Loss
Comprehensive income and loss include net loss and certain changes in stockholders’ equity that are excluded from net loss, primarily unrealized gains and
losses from the Company’s marketable securities.
Net Loss per Share Attributable to Common Stockholders
Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common
stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss
attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. Pre-
funded warrants are included in the calculation of basic and diluted earnings per share. For purposes of the diluted net loss per share calculation, stock
options, restricted stock and restricted stock that is subject to repurchase at the original purchase price are considered to be potentially dilutive securities.
The Company considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of
such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock. The holders of early exercised shares subject to
repurchase do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders.
Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share
for those periods.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard
codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date, unless otherwise discussed below.
New Accounting Pronouncements Adopted
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard
codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date, unless otherwise discussed below.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves
reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. These amendments enhance interim
disclosure requirements, require disclosure of the title and position of the chief operating decision maker (“CODM”), require disclosure of significant
segment expenses that are regularly provided to the CODM, clarify circumstances for disclosure of more than one segment profit or loss measure and
require that a public entity that has a single reportable segment provide all disclosures required by ASC 280 and amendments. This ASU update is effective
for fiscal years beginning after December 15, 2023 for the Company’s annual report, and interim periods within fiscal years beginning after December 15,
2024. The Company adopted this ASU for the annual report for the fiscal year beginning January 1, 2024, and evaluated the impact of the adoption of the
ASU. It did not result in a material impact on the Company's financial statements and related disclosures. See Note 13. Segment Information.
New Accounting Pronouncements, Not yet Adopted
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and
Simplification Initiative, which modifies the disclosure or presentation requirements related to variety of FASB Accounting Standard Codification topics.
The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K is
effective. If by June 30, 2027, the
F-15
SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the associated amendment will be
removed from the Codification and will not become effective for any entities. The Company is currently evaluating the effect of adopting this ASU.
On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which amends the guidance in ASC 740, Income
Taxes. The ASU is intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of
information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the
effectiveness of income tax disclosures. The ASU’s amendments are effective for public business entities for annual periods beginning after December 15,
2024. Entities are permitted to early adopt the standard “for annual financial statements that have not yet been issued or made available for issuance.”
Adoption is either prospectively or retrospectively; the Company will adopt this ASU on a prospective basis. The Company is currently evaluating the
impact of the ASU, but does not expect any material impact upon adoption.
On November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures
(Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires more detailed disclosures about the types of expenses in commonly
presented expense captions such as cost of sales, selling, general and administrative expenses and research and development expenses. This includes
separate footnote disclosure for expenses such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization. Public
business entities are required to apply the guidance prospectively and may apply it retrospectively. The ASU's amendments are effective for public business
entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Public business entities
are required to apply the guidance prospectively and may apply it retrospectively. The Company is currently evaluating the effect of adopting this ASU.
3. Fair Value Measurement and Marketable Securities
The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at
fair value in the financial statements on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined
based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value
hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:
Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not
active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the
measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
F-16
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable
inputs to the extent possible, as well as consider counterparty credit risk in its assessment of fair value.
As of December 31, 2024, financial assets measured and recorded at fair value are as follows (in thousands):
December 31, 2024
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Assets
U.S. government securities
Level 2
$
552,008 $
1,214 $
(353 ) $
552,869
Corporate bonds
Level 2
363,197
357
(419 )
363,135
Commercial paper
Level 2
89,109
21
(8 )
89,122
Subtotal
1,004,314
1,592
(780 )
1,005,126
Money market funds
Level 1
57,626
—
—
57,626
Cash
19,399
—
—
19,399
Total value of assets
$
1,081,339 $
1,592 $
(780 ) $
1,082,151
Included in cash and cash equivalents
84,379
—
(1 )
84,378
Included in marketable securities, current
591,089
928
(76 )
591,941
Included in marketable securities, non-
current
405,871
664
(703 )
405,832
Total value of assets
$
1,081,339 $
1,592 $
(780 ) $
1,082,151
(1)
$7.4 million of commercial paper was included in cash and cash equivalents on the balance sheet due to securities with purchase dates within 90 days of maturity dates.
(2)
The Company’s short-term marketable securities mature in one year or less.
(3)
The Company’s long-term marketable securities mature between one and three years.
As of December 31, 2023, financial assets measured and recognized at fair value are as follows (in thousands):
December 31, 2023
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Assets
U.S. government securities
Level 2
$
412,679 $
591 $
(135 ) $
413,135
Corporate bonds
Level 2
53,983
197
(32 )
54,148
Commercial paper
Level 2
126,601
—
(58 )
126,543
Subtotal
593,263
788
(225 )
593,826
Money market funds
Level 1
38,300
—
—
38,300
Cash
480
—
—
480
Total value of assets
$
632,043 $
788 $
(225 ) $
632,606
Included in cash and cash equivalents
157,055
4
(41 )
157,018
Included in marketable securities, current
368,043
227
(174 )
368,096
Included in marketable securities, non-
current
106,945
557
(10 )
107,492
Total value of assets
$
632,043 $
788 $
(225 ) $
632,606
(1)
$37.8 million of U.S. government securities and $80.4 million of commercial paper were included in cash and cash equivalents on the balance sheet due to securities with purchase dates
within 90 days of maturity dates
(2)
The Company’s short-term marketable securities mature in one year or less.
(3)
The Company’s long-term marketable securities mature between one and three years
(1)
(2)
(3)
(1)
(2)
(3)
F-17
As of December 31, 2024 and December 31, 2023, all marketable securities had a remaining maturity of less than three years. There were no financial
liabilities measured and recognized at fair value as of December 31, 2024 and December 31, 2023.
The Company considers available evidence in evaluating potential other-than-temporary impairments of its marketable securities, including the duration
and extent to which fair value is less than cost, and the Company’s ability and intent to hold the investment. As of December 31, 2024 and December 31,
2023, the Company held certain securities in an unrealized loss position. These unrealized losses were considered to be temporary as the Company expects
to recover the entire amortized cost basis on the securities in unrealized loss positions based on the creditworthiness of the underlying issuer, and the
Company neither intends to sell these securities nor considers it more likely than not that the Company would be required to sell any such security before
its anticipated recovery. As a result, the Company did not consider any of these investments to be other-than-temporarily impaired at December 31, 2024
and December 31, 2023.
4. Balance Sheet Components
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
Useful Life
As of December 31,
(In Years)
2024
2023
Laboratory equipment
5
$
13,513 $
11,455
Computer equipment
3
503
261
Software
3
231
231
Leasehold improvements
Shorter of useful
life or lease term
4,913
3,321
Furniture and fixtures
5
1,517
507
Total property and equipment
20,677
15,775
Less: Accumulated depreciation and amortization
(11,711 )
(9,611 )
Property and equipment, net
$
8,966 $
6,164
Depreciation and amortization expense was $2.4 million, $2.5 million and $2.1 million for the years ended December 31, 2024, 2023 and 2022,
respectively.
Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
As of December 31,
2024
2023
Accrued research and development expenses
$
19,956 $
10,676
Accrued salaries and benefits
8,233
6,974
Legal and professional fees
1,213
959
Other
950
147
Accrued liabilities
$
30,352 $
18,756
5. Operating Leases
In June 2023, the Company entered into a lease agreement for approximately 44,000 square feet of laboratory and office facilities at 5000 Shoreline Court,
South San Francisco, California. The lease term is 120 months, and the Company has an option to extend the lease term for a total of two consecutive five-
year periods. This lease agreement commenced in August 2024.
In May 2024, the Company amended its 5000 Shoreline Court facility lease agreement to expand the size of the original premises by adding approximately
11,321 rentable square feet of additional space. The lease term for the expanded premises will not begin until the landlord makes certain improvements and
offers to deliver possession of the expansion premises to the Company. The lease term for the expanded premises has not yet commenced as of December
31, 2024.
F-18
The Company's lease at 7000 Shoreline Court, South San Francisco, California, expired in September 2024.
In November 2023, the Company entered into a lease agreement for approximately 5,700 square feet of space at 11710 El Camino Real, San Diego,
California for corporate office space. The lease term commenced in December 2023 and expires in March 2028. The Company has an option to renew the
lease for three years.
Future minimum lease payments under operating leases included on the Company's balance sheet are as follows:
As of
(in thousands)
December 31, 2024
2025
$
386
2026
1,705
2027
4,389
2028
4,224
2029
4,263
Thereafter
22,790
Total future minimum lease payments
37,757
Less: imputed interest
(18,586 )
Total operating lease liabilities
$
19,171
The following table summarizes other information about the Company's operating leases:
As of December 31,
2024
2023
Weighted-average remaining lease term
9.4
2.4
Weighted-average discount rate
12.6%
8.0%
Operating lease costs were $1.9 million, $1.7 million and $1.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. Variable lease
costs were $1.1 million, $1.4 million, and $1.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. Variable lease costs represent
additional costs incurred, related to administration, maintenance and property tax costs incurred, which are billed based on both usage and as a percentage
of the Company's share of total square footage.
During the years ended December 31, 2024, 2023 and 2022, cash paid for amounts included in the measurement of lease liabilities and included within
cash used in operating activities in the statement of cash flows was $1.7 million, $2.0 million and $2.0 million, respectively.
6. Commitments and Contingencies
Contingencies
From time to time, the Company may be involved in litigation related to claims that arise in the ordinary course of its business activities. The Company
accrues for these matters when it is probable that future expenditures will be made and these expenditures can be reasonably estimated. As of December 31,
2024, the Company does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial
position, results of operations or cash flows.
Indemnification
The Company enters into standard indemnification arrangements in the ordinary course of business with vendors, clinical trial sites and other parties.
Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred
by the indemnified party. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum
potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never
F-19
incurred costs to defend lawsuits or settle claims related to these indemnification agreements. Accordingly, the Company has not recorded a liability related
to such indemnification agreements as of December 31, 2024.
7. Income Taxes
No provision for income taxes was recorded for the years ended December 31, 2024, December 31, 2023 and December 31, 2022. The Company has
incurred net operating losses only in the United States since its inception. The Company has not reflected any benefit of such net operating loss
carryforwards in the financial statements.
The provision for income taxes differs from the amount expected by applying the federal statutory rate to the loss before taxes as follows:
Year Ended December 31,
2024
2023
2022
Federal statutory income tax rate
21.0 %
21.0 %
21.0 %
State income taxes
1.5 %
1.3 %
1.9 %
Change in valuation allowance
(25.1 %)
(29.1 %)
(23.4 %)
Stock-based compensation
1.1 %
0.7 %
(1.2 %)
Research tax credits
2.7 %
8.3 %
4.4 %
Other permanent differences
(0.0 %)
(0.1 %)
(0.1 %)
Section 162(m) limitation
(1.2 %)
(2.1 %)
(2.6 %)
Provision for income taxes
0.0 %
0.0 %
0.0 %
The tax effects of temporary differences and carryforwards of the deferred tax assets are presented below (in thousands):
As of December 31,
2024
2023
Deferred tax assets:
Net operating loss carryforwards
$
37,524
$
34,717
Research and development credit carryforwards
30,868
19,997
Lease liability
4,074
610
Intangible assets
18,365
1,096
Stock-based compensation
7,401
2,593
Accruals and reserves
1,468
1,257
Capitalized research & development expenditures
69,271
36,267
Gross deferred tax assets
168,971
96,537
Less: Valuation allowance
(164,876 )
(95,888 )
Deferred tax assets, net of valuation allowance
4,095
649
Deferred tax liabilities:
Right-of-use assets
(3,990 )
(477 )
Property and equipment
(105 )
(172 )
Net deferred tax assets
$
—
$
—
F-20
The Company has established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.
ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that
management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate
sufficient taxable income within the carryforward period. Because of the Company’s recent history of operating losses, management believes that
recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has
provided a valuation allowance. The valuation allowance increased by $69.0 million, $32.1 million and $14.2 million during 2024, 2023, and 2022,
respectively.
The Company had net operating loss carryforwards of $147.5 million and $135.3 million available to reduce future taxable income, if any, for federal
income tax purposes as of December 31, 2024 and December 31, 2023, respectively. The Company had net operating loss carryforwards of $93.5 million
and $89.6 million available to reduce future taxable income, if any, for state income tax purposes. If not utilized, the federal carryforwards of $11.6 million
and the state carryforwards of $93.5 million will begin to expire in 2037 and 2036, respectively. The federal net operating loss carryforwards of $135.9
million arising after December 31, 2017 do not expire.
The Company also had federal and state research and development credit carryforwards of $19.8 million and $10.8 million as of December 31, 2024 and
$12.0 million and $6.4 million as of December 31, 2023, respectively. The Company had Orphan Drug Credits (“ODC”), related to the orphan drug
designation of darovasertib in 2022, of $8.1 million and $6.3 million as of December 31, 2024 and December 31, 2023, respectively. The federal credits
will expire starting in 2037 if not utilized, and the state research credit can be carried forward indefinitely.
The Tax Reform Act of 1986 limits the use of net operating loss carryforwards in certain situations where changes occur in the stock ownership of a
company. The annual limitation may result in the expiration of net operating losses and credits before utilization. The Company performed a Section 382
analysis through December 31, 2024. The Company has not experienced ownership changes in the current year. Subsequent ownership changes may affect
the limitation in future years.
Related to unrecognized tax benefits noted below, the Company accrued no penalties or interest during the years ended December 31, 2024, December 31,
2023 and December 31, 2022. The Company does not expect its unrecognized tax benefit balance to change materially over the next 12 months.
The Company had $5.9 million and $3.8 million of unrecognized tax benefits as of December 31, 2024 and December 31, 2023, respectively.
The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands).
Balance as of January 1, 2023
$
1,962
Increase related to prior year tax positions
372
Increase related to current year tax positions
1,488
Balance as of December 31, 2023
$
3,822
Decrease related to prior year tax positions
(185 )
Increase related to current year tax positions
2,290
Balance as of December 31, 2024
$
5,927
The Company files income tax returns in the U.S. federal jurisdiction and in the states of Arizona, California, New Jersey, North Carolina, Pennsylvania,
Texas, Utah and Wisconsin. For jurisdictions in which tax filings have been filed, all tax years remain open for examination by the federal and state
authorities for three and four years, respectively, from the date of utilization of any net operating losses or credits.
The Company is under audit in California for tax years 2020-2021.
F-21
8. Common Stock
As of December 31, 2024 and December 31, 2023, the Company’s certificate of incorporation authorized the Company to issue 300,000,000 shares of
common stock at a par value of $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to
receive dividends whenever funds are legally available and when declared by the Company’s board of directors. As of December 31, 2024, no dividends
have been declared to date.
On July 11, 2024, the Company completed an underwritten public follow-on offering. The offering consisted of 8,355,714 shares of common stock at an
offering price to the public of $35.00 per share, including 1,127,142 shares of common stock upon the exercise in full of the overallotment option by the
underwriters, as well as pre-funded warrants to purchase 285,715 shares of common stock at a public offering price of $34.9999 per underlying share, in
each case before underwriting discounts and commissions. Pursuant to the offering, the Company received aggregate gross proceeds of approximately
$302.4 million, before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $283.8
million, after deducting underwriting discounts and commissions and other offering expenses.
On October 27, 2023, the Company completed an underwritten public follow-on offering. The offering consisted of 5,797,872 shares of common stock at
an offering price to the public of $23.50 per share, including 797,872 shares of common stock upon the exercise in full of the overallotment option by the
underwriters, as well as pre-funded warrants to purchase 319,150 shares of common stock at a public offering price of $23.4999 per underlying share, in
each case before underwriting discounts and commissions. Pursuant to the offering, the Company received aggregate gross proceeds of approximately
$143.7 million, before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $134.6
million, after deducting underwriting discounts and commissions and other offering expenses.
On April 27, 2023, the Company completed an underwritten public follow-on offering. The offering consisted of 8,858,121 shares of common stock at an
offering price to the public of $18.50 per share, including 1,418,920 shares of common stock upon the exercise in full of the overallotment option by the
underwriters, as well as pre-funded warrants to purchase 2,020,270 shares of common stock at a public offering price of $18.4999 per underlying share, in
each case before underwriting discounts and commissions. Pursuant to the offering, the Company received aggregate gross proceeds of approximately
$201.3 million, before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $188.7
million, after deducting underwriting discounts and commissions and other offering expenses.
As of December 31, 2024, the following aggregate warrants to purchase shares of the Company’s common stock were issued and outstanding:
Issue Date
Expiration Date
Exercise Price per Share
Number of Shares subject to
Outstanding Warrants
July 11, 2024
None
$
0.0001
285,715
October 27, 2023
None
$
0.0001
319,150
April 27, 2023
None
$
0.0001
270,270
(1)
F-22
(1) In September 2024, 1,750,000 shares of common stock subject to outstanding pre-funded warrants were cashless exercised and 1,749,993 shares of
common stock were issued.
The warrants are classified as a component of Stockholders’ Equity within Additional Paid-in-Capital. The warrants are classified as equity because they
are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do
not embody an obligation for the Company to repurchase its shares, are indexed to the Company’s common stock and meet the equity classification criteria.
The warrants will not expire until they are fully exercised.
The Company had reserved common stock for future issuance as follows:
As of December 31,
2024
2023
Exercise of outstanding options under the 2015, 2019 and 2023 Plans
7,737,595
6,269,975
Shares available for grant under the 2019 Plan
1,910,589
964,622
Shares available for grant under the 2023 Inducement Plan
593,592
524,300
Shares available under the Employee Stock Purchase Plan
1,911,011
1,317,974
Pre-funded warrants issued and outstanding
875,135
2,339,420
Total
13,027,922
11,416,291
9. Stock-Based Compensation
2023 Inducement Plan
On February 24, 2023, the Company adopted the IDEAYA Biosciences, Inc. 2023 Employment Inducement Award Plan (the “2023 Inducement Plan”),
pursuant to which the Company reserved 1,000,000 shares of its common stock to be used exclusively for grants of awards to individuals who were not
previously employees or directors of the Company as an inducement material to the individual’s entry into employment with the Company within the
meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The 2023 Inducement Plan was approved by the Company’s board of directors without
stockholder approval in accordance with such rule. Options granted under the 2023 Inducement Plan have a term of 10 years and generally vest over a 4-
year period with 1-year cliff vesting.
On June 25, 2024, the Company amended the 2023 Employment Inducement Award Plan, increasing the number of shares available for issuance by
1,000,000.
As of December 31, 2024, the number of shares available for issuance under the 2023 Inducement Plan was 593,592.
2019 Incentive Award Plan
In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Incentive Award Plan (the “2019 Plan”),
under which the Company may grant cash and equity-based incentive awards to the Company’s employees, consultants and directors. Following the
effectiveness of the 2019 Plan, the Company will not make any further grants under the 2015 Equity Incentive Plan (the “2015 Plan”). However, the 2015
Plan continues to govern the terms and conditions of the outstanding awards granted under it. Shares of common stock subject to awards granted under the
2015 Plan that are forfeited or lapse unexercised and which following the effective date of the 2019 Plan are not issued under the 2015 Plan will be
available for issuance under the 2019 Plan.
Options granted under the 2019 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to
Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees, directors and consultants.
The 2019 Plan is subject to an annual increase on the first day of each year beginning in 2020 and ending in 2029, equal to the lesser of 4% of the shares
outstanding on the last day of the immediately preceding fiscal year, and such smaller number of shares as determined by the Company’s board of
directors. Options granted under the 2019 Plan have a term of 10 years (or five years if granted to a 10% stockholder) and generally vest over a 4-year
period with 1-year cliff vesting.
As of December 31, 2024, the number of shares available for issuance under the 2019 Plan was 1,910,589.
F-23
2015 Equity Incentive Plan
In 2015, the Company established its 2015 Plan which provides for the granting of stock options to employees, directors and consultants of the Company.
Options granted under the 2015 Plan may be either ISOs or NSOs.
2019 Employee Stock Purchase Plan
In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Employee Stock Purchase Plan (the “ESPP”).
The ESPP provides eligible employees with the opportunity to acquire an ownership interest in the Company through periodic payroll deductions up to
15% of eligible compensation. The offering period is determined by the Company in its discretion but may not exceed 27 months. The per-share purchase
price on the applicable exercise date for an offering period is equal to the lesser of 85% of the fair market value of the common stock at either the first
business day or last business day of the offering period, provided that no more than 4,000 shares of common stock may be purchased by any one employee
during each offering period.
The ESPP is intended to constitute an “employee stock purchase plan” under Section 423(b) of the Internal Revenue Code of 1986, as amended. A total of
195,000 shares of common stock were initially reserved for issuance under the ESPP, subject to an annual increase on January 1 of each year, beginning on
January 1, 2020, equal to the lesser of 1% of the shares outstanding on the last day of the immediately preceding fiscal year and such smaller number of
shares as may be determined by the Company’s board of directors, provided, however, that no more than 2,500,000 shares may be issued under the ESPP.
As of December 31, 2024, the number of shares available for issuance under the ESPP was 1,911,011. For the years ended December 31, 2024, 2023, and
2022 the Company recorded $0.6 million, $0.6 million and $0.4 million respectively, of compensation expense related to employee participation in the
ESPP.
Stock-Based Compensation Expense
Total stock-based compensation expense recorded related to awards granted to employees and non-employees was as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Research and development
$
21,115 $
10,826 $
6,050
General and administrative
13,631
7,663
5,579
Total stock-based compensation expense
$
34,746 $
18,489 $
11,629
Stock Options
Activity under the Company’s 2015 and 2019 Plans and 2023 Inducement Plan is set forth below:
Outstanding Options
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value
(in thousands)
Balance, January 1, 2024
6,269,975 $
15.53
7.82 $
128.49
Options granted
3,247,538 $
41.88
Options exercised
(1,118,695 ) $
11.16
Options canceled
(661,223 ) $
29.57
Balance, December 31, 2024
7,737,595 $
26.06
7.89
43.01
Exercisable as of December 31, 2024
3,185,690 $
15.63
6.62 $
31.04
Vested and expected to vest as of
December 31, 2024
7,737,595 $
26.06
7.89 $
43.01
F-24
The weighted-average grant-date fair value of options granted during the years ended December 31, 2024, 2023 and 2022 was $29.93, $13.98 and $10.10
per share, respectively. The aggregate intrinsic value of options exercised for the years ended December 31, 2024, 2023, 2022 was $32.0 million, $16.9
million and $1.8 million, respectively. Intrinsic values are calculated as the difference between the exercise price of the underlying options and the fair
value of the common stock on the date of exercise.
As of December 31, 2024 and December 31, 2023, the total unrecognized stock-based compensation expense for stock options was $90.2 million and $41.1
million, which is expected to be recognized over a weighted-average period of 2.63 years and 2.59 years, respectively.
Black-Scholes Assumptions
The fair values of options were calculated using the assumptions set forth below:
Year Ended December 31,
2024
2023
2022
Expected term
5.5 - 6.1 years
6.1 years
6.1 years
Expected volatility
76.8% - 81.3%
81.8% - 86.9%
86.8% - 89.9%
Risk-free interest rate
3.6% - 4.7%
3.6% - 4.8%
1.6% - 4.1%
Dividend yield
0%
0%
0%
Expected term. The expected term represents the weighted-average period the stock options are expected to remain outstanding and is based on the options’
vesting terms and contractual terms.
Expected Volatility. The expected volatility is based on the Company’s historical stock price volatility. The historical stock price volatility is calculated
based on a period of time commensurate with the expected term assumption for each grant.
Risk-Free Interest Rate. The risk-free rate assumption is based on U.S. Treasury instruments whose term was consistent with the expected term of the
Company’s stock options.
Expected Dividend Rate. The Company has not paid and does not anticipate paying any dividends in the near future. Accordingly, the Company has
estimated the dividend yield to be zero.
The Company accounts for forfeitures as they occur.
Fair Value of Common Stock
The fair value of the Company’s common stock is determined based on the market price on the date of grant.
10. Significant Agreements
GSK Collaboration, Option and License Agreement
In June 2020, the Company entered into the Collaboration, Option and License Agreement (the “GSK Collaboration Agreement”), with an affiliate of GSK
plc, GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4) LIMITED (“GSK”), pursuant to which the Company and GSK have entered into a
collaboration for its synthetic lethality programs targeting MAT2A, Pol Theta and Werner Helicase (“WRN”). On July 27, 2020, the Company and GSK
received Hart-Scott-Rodino Antitrust Improvements Act clearance, and the GSK Collaboration Agreement became effective.
Pursuant to the GSK Collaboration Agreement, GSK paid the Company $100.0 million on July 31, 2020. As of December 31, 2024, GSK has made
aggregate payments in the amount of $20.0 million for the achievement of certain development and regulatory milestones with respect to Pol Theta and
WRN products.
GSK Collaboration - Pol Theta Program
Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize Pol Theta products arising out of the
Pol Theta program. The Company and GSK collaborated on preclinical research for the Pol
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Theta program, and GSK is leading clinical development for the Pol Theta program. GSK is responsible for all research and development costs for the Pol
Theta program.
The Company will be eligible to receive total development and regulatory milestones of up to $485.0 million, with respect to each Pol Theta product,
including as applicable, for multiple Pol Theta products that target certain alternative protein domains or are based on alternative modalities. Additionally,
the Company will be eligible to receive up to $475.0 million of commercial milestones with respect to each Pol Theta product. The Company is also
entitled to receive tiered royalties on global net sales of Pol Theta products by GSK, its affiliates and their sublicensees ranging from high single digit to
sub-teen double-digit percentages, subject to certain customary reductions.
In June 2022, the Company announced the nomination of a Pol Theta Helicase Inhibitor development candidate (“DC”), and in August 2022, the Company
announced the achievement of an initial preclinical development milestone in connection with ongoing investigational new drug (“IND”)-enabling studies
to support evaluation of Pol Theta Helicase Inhibitor DC, triggering a $3.0 million milestone payment, which the Company received in October 2022.
An IND was submitted and was cleared by the FDA in August 2023 to enable clinical evaluation in combination with niraparib, triggering a $7.0 million
milestone payment.
The Company has the potential to achieve an additional $10.0 million development milestone upon initiation of Phase 1 clinical dose expansion, as well as
potential further aggregate late-stage development and regulatory milestones of up to $465.0 million.
GSK Collaboration - Werner Helicase Program
Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize WRN products arising out of the
WRN program. The Company and GSK are collaborating on ongoing preclinical research for the WRN program, and GSK will lead clinical development
for the WRN program, with the Company responsible for 20% and GSK responsible for 80% of such global research and development costs. The cost-
sharing percentages will be adjusted based on the actual ratio of U.S. to global profits for WRN products, as measured three and six years after global
commercial launch thereof.
The Company will be eligible to receive total development milestones of up to $485.0 million, with respect to each WRN product, including as applicable,
for multiple WRN products that are based on alternative modalities. Additionally, the Company will be eligible to receive up to $475.0 million of
commercial milestones with respect to each WRN product. The Company will be entitled to receive 50% of U.S. net profits and tiered royalties on global
non-U.S. net sales of WRN products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double-digit percentages,
subject to certain customary reductions. The Company will have a right to opt-out of the 50% U.S. net profit share and corresponding research and
development cost share for the WRN program, and would be eligible to receive tiered royalties on U.S. net sales of WRN products by GSK, its affiliates
and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the WRN
program at the time of opt-out.
In October 2023, the Company earned a $3.0 million milestone from GSK in connection with IND-enabling studies for the Werner Helicase Inhibitor DC.
In October 2024, an IND was cleared by the FDA to enable clinical evaluation, triggering a $7.0 million milestone payment.
The Company has the potential to earn up to an additional $10.0 million development milestone upon initiation of Phase 1 clinical dose expansion, as well
as potential further aggregate late-stage development and regulatory milestones of up to $465.0 million.
GSK Collaboration - General
Under the terms of the GSK Collaboration Agreement, subject to certain exceptions, the Company and GSK will not, directly or through third parties,
develop or commercialize other products whose primary and intended mechanism of action is the modulation of WRN or Pol Theta for an agreed upon
period of time. The Company and GSK have formed a joint steering committee, joint development committees, and joint commercialization committees
responsible for coordinating all activities under the GSK Collaboration Agreement. Ownership of intellectual property developed under the GSK
Collaboration Agreement is allocated between or shared by the parties depending on development and subject matter.
F-26
GSK’s royalty obligations continue with respect to each country and each product until the later of (i) the date on which such product is no longer covered
by certain intellectual property rights in such country and (ii) the 10th anniversary of the first commercial sale of such product in such country.
Each party has the right to sublicense its rights under the GSK Collaboration Agreement subject to certain conditions.
The GSK Collaboration Agreement will continue in effect on a product-by-product and country-by-country basis until the expiration of the obligation to
make payments under the GSK Collaboration Agreement with respect to such product in each country, unless earlier terminated by either party pursuant to
its terms. Either party may terminate the GSK Collaboration Agreement for the other party’s insolvency or certain uncured breaches. The Company may
terminate the GSK Collaboration Agreement if GSK or any of its sublicensees or affiliates challenge certain patents of the Company. GSK may terminate
the GSK Collaboration Agreement in its entirety or on a target-by-target basis upon 90-day notice to the Company.
Novartis License Agreement
In September 2018, the Company entered into a License Agreement with Novartis to develop and commercialize Novartis’ LXS196 (also known as
IDE196), a Phase 1 PKC inhibitor, for the treatment of cancers having GNAQ and GNA11 mutations. The Company renamed Novartis’ LXS196 oncology
as IDE196, and which has a non-proprietary name of darovasertib. Under the license agreement, Novartis granted to the Company a worldwide, exclusive,
sublicensable license to research, develop, manufacture, and commercialize certain defined compounds and products, including IDE196 and certain other
PKC inhibitors, as well as companion diagnostic products, collectively referred to as the licensed products, for any purpose.
The Company paid Novartis an upfront payment of $2.5 million and issued 263,615 shares of its Series B redeemable convertible preferred stock
concurrently with the execution of the license agreement. Subject to completion of certain clinical and regulatory development milestones, the Company
agreed to make milestone payments in the aggregate of up to $9.0 million, and subject to achievement of certain commercial sales milestones, the
Company agreed to make milestone payments in the aggregate of up to $20.0 million. The Company also agreed to pay mid to high single-digit tiered
royalty payments based on annual worldwide net sales of licensed products, payable on a licensed product-by-licensed product and country by country
basis until the latest of the expiration of the last to expire exclusively licensed patent, the expiration of regulatory exclusivity, and the ten year anniversary
of the first commercial sale of such product in such country. The royalty payments are subject to reductions for lack of patent coverage, loss of market
exclusivity, and payment obligations for third-party licenses.
Pfizer Clinical Trial Collaboration and Supply Agreements
In March 2020, the Company entered into a Clinical Trial Collaboration and Supply Agreement with Pfizer, Inc. (as amended in September 2020, April
2021, September 2021 and May 2023 (the “Pfizer Agreement”). Pursuant to the Pfizer Agreement, Pfizer supplies the Company with their MEK inhibitor,
binimetinib, and their cMET inhibitor, crizotinib, to evaluate combinations of darovasertib independently with each of the Pfizer compounds, in patients
with tumors harboring activating GNAQ or GNA11 mutations. Under the Pfizer Agreement, the Company is the sponsor of the combination studies and
will provide darovasertib and pay for the costs of the combination studies. Pfizer will provide binimetinib and crizotinib for use in the clinical trial at no
cost to the Company. The Pfizer Agreement provides that the Company and Pfizer will jointly own clinical data generated from the clinical trial and will
also jointly own inventions, if any, relating to the combined use of darovasertib and binimetinib, or independently, to the combined use of darovasertib and
crizotinib. The Company and Pfizer have formed a joint development committee responsible for coordinating all regulatory and other activities under the
agreement.
In March 2022, the Company and Pfizer entered into a Second Clinical Trial Collaboration and Supply Agreement (as amended in May 2023 (the “Second
Pfizer Agreement”), pursuant to which the Company is evaluating darovasertib and crizotinib as a combination therapy in MUM in a planned Phase 2/3
potential registration-enabling clinical trial. Pursuant to the Second Pfizer Agreement, the Company is the sponsor of the combination trial and the
Company will provide darovasertib and pay for the costs of the combination trial, and Pfizer will provide crizotinib for the planned combination trial at no
cost to the Company for up to an agreed-upon number of MUM patients. The Company and Pfizer will jointly own clinical data from the planned
combination trial and all inventions relating to the combined use of darovasertib and crizotinib. The Company and Pfizer have formed a joint development
committee responsible for coordinating all regulatory and other activities under the Second Pfizer Agreement.
Separately, in March 2022, the Company and Pfizer also entered into a Third Clinical Trial Collaboration and Supply Agreement (the “Third Pfizer
Agreement”), pursuant to which the Company could, subject to preclinical validation and FDA feedback and guidance, evaluate darovasertib and
crizotinib, as a combination therapy in cMET-driven tumors such as NSCLC and/or HCC in a Phase 1 clinical trial. Pursuant to the Third Pfizer
Agreement, the Company was the sponsor of the planned combination trial, and the Company would provide darovasertib and pay for the costs of the
combination trial. Pfizer would provide crizotinib for the planned combination trial at no cost to the Company. Pursuant to Amendment No. 1 to the Second
Pfizer Agreement, as described below, the Company and Pfizer terminated the Third Pfizer Agreement.
F-27
In May 2023, the Company continued its relationship with Pfizer by entering into Amendment No. 4 to the Pfizer Agreement relating to the supply of
crizotinib in support of this Phase 2 clinical trial, pursuant to which Pfizer will continue to provide the Company with an additional defined quantity of
crizotinib at no cost.
The Company expanded its relationship with Pfizer in May 2023 under an Amendment No. 1 to the Second Pfizer Agreement to support the Phase 2/3
registrational trial to evaluate darovasertib and crizotinib as a combination therapy in MUM. Under the as-amended Second Pfizer Agreement, Pfizer will
provide the Company with a first defined quantity of crizotinib at no cost, as well as an additional second defined quantity of crizotinib at a lump-sum cost.
The Third Pfizer Agreement has been terminated by the Company and Pfizer under Amendment No. 1 to the Second Pfizer Agreement.
In December 2024, we entered into Amendment No. 5 to the Pfizer Agreement for the supply of crizotinib in the Phase 1/2 clinical trial for Pfizer to
provide us a defined quantity of crizotinib at defined costs.
Cancer Research UK and University of Manchester Exclusive Option and License Agreement
In January 2022, the Company exercised its option for an exclusive worldwide license covering a broad class of poly (ADP-ribose) glycohydrolase
(“PARG”), inhibitors from Cancer Research Technology Ltd. (“CRT”), and the University of Manchester, and in connection therewith, paid a one-time
option exercise fee of £250,000. The Company will be obligated to make payments to CRT aggregating up to a total of £19.5 million upon the achievement
of specific development and regulatory approval events for development of a PARG inhibitor in oncologic diseases. The Company will also pay low
single-digit tiered royalties, and potentially also sales-based milestones, to CRT based on net sales of licensed products. In addition, in the event the
Company sublicenses the intellectual property, it will also be obligated to pay CRT a specified percentage of any sublicense revenue.
In April 2023, the Company incurred an obligation to pay milestone payments in an aggregate amount of £750,000 to CRT based upon the achievement of
certain milestones relating to first and second tumor histologies in connection with the Phase 1 portion of the Phase 1/2 clinical trial in oncologic diseases.
The Company will be obligated to make additional payments to CRT aggregating up to £18.75 million upon the achievement of specific development and
regulatory approval events for development of a PARG inhibitor in oncologic diseases, including an aggregate of up to £1.5 million and up to £2.25 million
for the achievement of certain Phase 2 and Phase 3 development milestones, respectively, in each case as relating to first and second tumor histologies.
Amgen Clinical Trial Collaboration and Supply Agreement
In July 2022, the Company entered into a Clinical Trial Collaboration and Supply Agreement with Amgen Inc.(the “Amgen CTCSA”), to clinically
evaluate IDE397 in combination with AMG 193, the Amgen investigational MTA-cooperative PRMT5 inhibitor, in patients having MTAP-null solid
tumors, in a Phase 1/2 clinical trial. Under the mutually non-exclusive Amgen CTCSA, the Company will provide IDE397 drug supply to Amgen, who will
be the sponsor of the Phase 1 clinical combination trial evaluating IDE397 and AMG 193. Each party will pay for fifty percent (50%) of the external third-
party costs of the combination study. Each party will be responsible for its own internal costs and expenses in support of the combination study. The
Company and Amgen will jointly oversee clinical development of the combination therapy through a Joint Oversight Committee responsible for
coordinating all regulatory and other activities under the Amgen CTCSA. The parties will jointly own collaboration data and combination-related
intellectual property, if any, arising from the combination clinical trial. The Company and Amgen each retain commercial rights to its respective
compounds, including with respect to use as a monotherapy agent or combination agent. The Company and Amgen mutually agreed to wind down the
IDE397 and AMG 193 clinical combination study in February 2025 and will not pursue dose expansion.
Gilead Clinical Study Collaboration and Supply Agreement
In November 2023, the Company entered into a Clinical Study Collaboration and Supply Agreement with Gilead Sciences, Inc. (“Gilead”), (“Gilead
CSCSA”), to clinically evaluate IDE397 in combination with Trodelvy (sacacituzumab-govitecan-hziy), a Trop-2 directed ADC, in patients having MTAP-
deletion urothelial cancer, in a Phase 1 clinical trial. Under the mutually non-exclusive Gilead CSCSA, the Company will receive Trodelvy drug supply
from Gilead and will sponsor the Phase 1 clinical combination trial evaluating ID397 and Trodelvy. Gilead will bear internal or external costs incurred in
connection with its supply of Trodelvy. The Company will bear all internal and external costs and expenses associated with the conduct of the combination
study. The Company and Gilead will jointly oversee clinical development of the combination therapy through a Joint Steering Committee responsible for
coordinating all regulatory and other activities under the Gilead CSCSA. The Company and Gilead each retain commercial rights to its respective
compounds, including with respect to use as a monotherapy agent or combination agent.
F-28
On February 12, 2025, the Company entered into an additional Clinical Study Collaboration and Supply Agreement with Gilead, or the Second Gilead
CSCSA, pursuant to which the Company and Gilead will collaborate on a portion of the Company’s Phase 1 study for the clinical evaluation of our IDE397
compound in combination with Trodelvy, or the Combination Study, in certain patients with advanced solid tumors in lungs. Pursuant to the Second Gilead
CSCSA, the Company is the sponsor of the Combination Study and the Company will provide the IDE397 compound and pay for the costs of the
Combination Study. Gilead will provide Trodelvy for the Combination Study at no cost to the Company. The Company and Gilead will jointly own clinical
data from the Combination Study and all inventions relating to the combined use of IDE397 and Trodelvy. Each party retains commercial rights to its
respective compounds, including with respect to use as a monotherapy or combination agent. The Company and Gilead will form a joint steering
committee responsible for coordinating all regulatory and other activities under the Second Gilead CSCSA.
Merck Clinical Trial Collaboration and Supply Agreement
In March 2024, the Company entered into a Clinical Trial Collaboration and Supply Agreement (“Merck CTCSA”), with Merck (known as MSD outside of
the United States and Canada) to evaluate the combination of IDE161 with Merck’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab), in patients with
high microsatellite instability (“MSI-High”) and microsatellite stable (“MSS”) endometrial cancer. Pursuant to the Merck CTCSA, the Company is the
sponsor of the combination study, and the Company will provide the IDE161 compound and pay for the costs of the combination study. Merck will provide
KEYTRUDA at no cost to the Company. The Company and Merck will jointly own clinical data from the combination. Each party retains commercial
rights to its respective compounds, including with respect to use as a monotherapy or combination agent.
Biocytogen Option and License Agreement
In July 2024, the Company entered into an Option and License Agreement (the “Biocytogen Option and License Agreement”), pursuant to which
Biocytogen Pharmaceuticals (Beijing) Co., Ltd. (“Biocytogen”), granted us an option for an exclusive worldwide license from Biocytogen to develop and
commercialize products in connection with a potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-payload BsADC program (the “Option”).
Under the terms of the Biocytogen Option and License Agreement, the Company paid Biocytogen an upfront fee and, upon the Company’s potential
exercise of the Option, an exercise fee totaling up to $6.5 million. The Option is exercisable by the Company within a specified time period after the
Company obtains all data and results from certain non-GLP toxicology studies specified in the Biocytogen Option and License Agreement, which the
Company will conduct at its own cost. Subject to the Company’s exercise of the Option, Biocytogen will be eligible to receive an option exercise fee,
development and regulatory milestone payments and commercial milestone payments, as well as low to mid single-digit royalties on net sales. Total
potential milestone payments equal an aggregate of $400.0 million, including development and regulatory milestone payments of up to $100.0 million.
Hengrui Pharma License Agreement
In December 2024, the Company entered into an exclusive License Agreement (the “Hengrui Pharma License Agreement”) with Jiangsu Hengrui
Pharmaceuticals Co., Ltd. (“Hengrui Pharma”), pursuant to which Hengrui Pharma granted the Company an exclusive worldwide license outside of Greater
China, for IDE849 (SHR-4849), a potential first-in-class Phase 1 DLL3 TOP1i ADC. Under the terms of the Hengrui Pharma License Agreement, Hengrui
Pharma is eligible to receive upfront and milestone payments totaling $1.045 billion, including a $75.0 million upfront fee, up to $200.0 million in
development and regulatory milestone payments, plus commercial success-based milestones. Hengrui Pharma is also eligible to receive mid-single to low-
double digit royalties on net sales outside of Greater China.
11. Revenue Recognition
The Company recognizes revenue in accordance with ASC 606 for the GSK Collaboration Agreement (see No. 10, Significant Agreements).
Disaggregation of Revenue
The following table presents revenue disaggregated by research program (in thousands):
F-29
Year Ended December 31,
2024
2023
2022
MAT2A
$
-
$
3,722
$
29,756
Pol Theta
-
3,002
13,894
WRN
7,000
16,661
7,281
Total collaboration revenue
$
7,000
$
23,385
$
50,931
The Company identified the following six performance obligations associated with the GSK Collaboration Agreement:
(i)
Preclinical and Phase 1 Monotherapy clinical research and development services under the MAT2A program (“MAT2A R&D Services”)
(ii)
Preclinical research services and the related license to IDEAYA-owned technology under the Pol Theta program (“Pol Theta R&D Services”)
(iii)
Preclinical research services and the related license to IDEAYA-owned technology under the WRN program (“WRN R&D Services”)
(iv)
Material right associated with the option to license IDEAYA-owned technology under the MAT2A program (“Option”)
(v)
Material right associated with the option to license to IDEAYA-owned technology under the MAT2A program to the extent necessary for
preclinical activities in preparation for the MAT2A Combination Trial (“Preclinical MAT2A License”)
(vi)
Material right associated with the supply of MAT2A product for the MAT2A Combination Trial (“MAT2A Supply”)
With respect to the Pol Theta and WRN programs, the Company identified two promises: (1) granting of the license to develop and commercialize Pol
Theta and WRN products, respectively, and (2) the preclinical research services. The Company determined that these two promises are not distinct within
the context of the contract.
The Company recognized revenue related to amounts allocated to the MAT2A R&D services as the underlying services were performed over the period
through the delivery of the Option data package, which is generated from its conduct of the dose escalation portion of the MAT2A Phase 1 monotherapy
clinical trial. The Company used its internal research and development capability and also engaged third-party clinical research organizations (“CROs”),
for which the Company acted as a principal. The Company delivered the Option data package to GSK. Accordingly, the performance obligation related to
the MAT2A R&D services was fulfilled.
The Company recognized revenue related to amounts allocated to the Pol Theta R&D Services and WRN R&D Services as the underlying services were
performed over the period through the completion of the Pol Theta and WRN preclinical research programs, respectively. Within 90 days from the end of
each calendar quarter, GSK reimbursed the Pol Theta program costs incurred by the Company. Within 75 days from the end of each calendar quarter, the
Company and GSK determined the amounts of WRN program costs incurred by both parties and the net amount owed by GSK to the Company or by the
Company to GSK, which was paid within 75 days from such determination by a reimbursing party. The Company used its internal research capability and
could also engage third-party CROs in transferring the Pol Theta R&D services and WRN R&D services, for which the Company acts as a principal. The
Company completed Pol Theta R&D services during December 2022. Accordingly, the performance obligation related to the Pol Theta R&D services was
fulfilled. The Company completed WRN R&D services during December 2023. Accordingly, the performance obligation related to the WRN R&D
services was fulfilled.
The Company completed all performance obligations related to the upfront payment under the GSK Collaboration Agreement as of December 31, 2023.
Since December 31, 2023, the Company has no accounts receivable and no contract liabilities related to the GSK Collaboration Agreement. Because the
Company completed all performance obligations, future collaboration revenue recognized under the GSK Collaboration Agreement is only related to
milestone payments as they are earned.
For the Pol Theta product, the Company achieved and earned a $7.0 million payment for a milestone in August 2023 based on acceptance of the IND by
the FDA. An earlier preclinical development $3.0 million milestone payment from GSK was achieved in August 2022 in connection with ongoing IND-
enabling studies to support evaluation of GSK101. The Company has the potential to receive an additional $10.0 million milestone payment upon initiation
of Phase 1 clinical dose expansion.
F-30
For the WRN product, the Company achieved and earned a $7.0 million payment for a milestone in October 2024 based on the acceptance of the IND by
the FDA. An earlier preclinical development $3.0 million payment from GSK was achieved in October 2023 in connection with IND-enabling studies for
the Werner Helicase Inhibitor DC. The Company has the potential to receive an additional $10.0 million milestone payment upon initiation of Phase 1
clinical dose expansion.
Significant judgments
In applying ASC 606 to the GSK Collaboration Agreement, the Company made the following judgment that significantly affect the timing and amount of
revenue recognition.
(i) Determination of the transaction price, including whether any variable consideration is included at inception of the contract
The transaction price is the amount of consideration that the Company expects to be entitled to in exchange for transferring promised goods or services to
the customer. The transaction price must be determined at inception of a contract and may include amounts of variable consideration. However, there is a
constraint on inclusion of variable consideration in the transaction price, if there is uncertainty at inception of the contract as to whether such consideration
will be recognized in the future.
The decision as to whether or not it is probable that a significant reversal of revenue will occur in the future, depends on the likelihood and magnitude of
the reversal and is highly susceptible to factors outside the Company’s influence (for example, the Company cannot determine the outcome of clinical
trials; the Company cannot determine if or when the counterparty will initiate or complete clinical trials; and the Company cannot determine if or when an
regulatory agency provides any approval). In addition, the uncertainty is not expected to be resolved for a long period and finally, the Company has limited
experience in the field. Therefore, at inception of the GSK Collaboration Agreement, development and regulatory milestones were fully constrained and
were not included in the transaction price based on the factors noted above.
The Company constrains estimates of other variable consideration, such as reimbursable program costs, to amounts that are not expected to result in a
significant revenue reversal in the future. The Company re-evaluates the transaction price, including the estimated variable consideration included in the
transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur.
12. Net Loss Per Share Attributable to Common Stockholders
The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and
per share data):
Year Ended December 31,
2024
2023
2022
Numerator:
Net loss attributable to common stockholders
$
(274,477 ) $
(112,961 ) $
(58,655 )
Denominator:
Weighted-average shares used in computing net loss per share
attributable to common stock, basic and diluted
81,678,069
57,519,929
41,444,696
Net loss per share attributable to common stockholders, basic and
diluted
(3.36 )
(1.96 )
(1.42 )
(1) The shares underlying the pre-funded warrants to purchase shares of the Company's common stock have been included in the calculation of the
weighted-average number of shares outstanding, basic and diluted, for the years ended December 31, 2024, 2023 and 2022.
The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common
stockholders for the periods presented because including them would have been antidilutive:
As of December 31,
2024
2023
2022
Options to purchase common stock
7,737,595
6,269,975
5,097,263
(1)
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13. Segment Information
The Company operates and manages its business as one operating and reportable segment, which is the business of research and development for oncology-
focused precision medicine. The Company’s chief operating decision maker (“CODM”) is its President and CEO. The Company’s measure of segment
profit or loss is net income. For purposes of evaluating performance and allocating resources, the CODM reviews the financial information and evaluates
net income against comparable prior periods and the Company’s forecast. All of the Company's long-lived assets are located in the United States.
In addition to the significant expense categories included within net income presented on the Company's statements of operations and comprehensive loss,
see below for disaggregated research and development expenses:
Year Ended December 31,
2024
2023
2022
External clinical development expenses :
Darovasertib
$
55,335
$
25,829
$
13,433
IDE397
16,629
11,985
9,426
IDE161
9,743
7,104
2,749
Personnel related and stock-based compensation
54,543
38,948
26,717
Other research and development expenses :
158,423
45,642
37,211
Total research and development expenses
$
294,673
$
129,508
$
89,536
(1) External clinical development expenses include manufacturing and clinical trial costs. These expenses are primarily for services provided by
external consultants, CMOs and CROs.
(2) IDE397 includes costs from the Amgen CTCSA
(3) Other research and development expenses include manufacturing and clinical trial costs for preclinical and earlier clinical stage programs.
These expenses are primarily for services provided by external consultants, CMOs and CROs.
14. Subsequent Events
At-the-Market Offering
Subsequent to December 31, 2024, from January 1, 2025 through January 6, 2025, the Company raised aggregate net proceeds of $25.1 million under the
at-the-market offering pursuant to the January 2024 Sales Agreement with Jefferies as sales agent. As of January 6, 2025, approximately $156.6 million of
common stock remained available to be sold under the ATM facility.
Commencement of Expansion Premises Office Lease - South San Francisco
The Company commenced the First Amendment to the Lease Agreement by and between DW LSP 5000 Shoreline, LLC and the Company in January
2025. The Company added approximately 11,321 rentable square feet of additional space to expand the size of the original premises.
Clinical Study Collaboration and Supply Agreement
On February 12, 2025, the Company entered into the Second Gilead CSCSA with Gilead pursuant to which the Company and Gilead will collaborate on a
portion of the Phase 1 study for the clinical evaluation of IDE397 in combination with Trodelvy, or the Combination Study, in certain patients with
advanced solid tumors in lungs. Pursuant to the Second Gilead CSCSA, the Company is the sponsor of the Combination Study, and the Company will
provide the IDE397 compound and pay for the costs of the Combination Study.
(1)
(2)
(3)
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized, in South San Francisco, California on February 18, 2025.
IDEAYA Biosciences, Inc.
By:
/s/ Yujiro Hata
Yujiro Hata
President and Chief Executive Officer
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Yujiro Hata and
Andres Briseno, and each of them acting individually, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution, for
him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K (including post-effective amendments), and to file the
same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, with full power
of each to act alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as
fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed by the following persons in the capacities
and on the dates indicated.
Signature
Title
Date
/s/ Yujiro Hata
President, Chief Executive Officer and Director
(Principal Executive Officer)
February 18, 2025
Yujiro Hata
/s/ Andres Ruiz Briseno
Senior Vice President and Head of Finance and Investor
Relations
(Principal Financial and Accounting Officer)
February 18, 2025
Andres Ruiz Briseno
/s/ Terry Rosen, Ph.D.
Chairman of the Board of Directors
February 18, 2025
Terry Rosen, Ph.D.
/s/ Garret Hampton, Ph.D.
Director
February 18, 2025
Garret Hampton, Ph.D.
/s/ Susan L. Kelley, M.D.
Director
February 18, 2025
Susan L. Kelley, M.D.
/s/ Catherine Mackey, Ph.D.
Director
February 18, 2025
Catherine Mackey, Ph.D.
/s/ Scott Morrison
Director
February 18, 2025
Scott Morrison
/s/ Jeffrey Stein, Ph.D.
Director
February 18, 2025
Jeffrey Stein, Ph.D.
/s/ Wendy Yarno
Director
February 18, 2025
Wendy Yarno
Exhibit 4.3
DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE
ACT OF 1934
IDEAYA Biosciences (“we,” “us,” or “our”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as
amended: our common stock, $0.0001 par value per share (“common stock”).
Description of Capital Stock
The following summary describes our common stock and the material provisions of our amended and restated certificate of incorporation (the
“certificate of incorporation”), our amended and restated bylaws (the “bylaws”), the amended and restated investors’ rights agreement (the “investors’
rights agreement”), each as amended from time to time, to which we and certain of our stockholders are parties, and of the Delaware General Corporation
Law (the “DGCL”). Because the following is only a summary, it does not contain all of the information that may be important to you. For a complete
description, you should refer to the full text of our certificate of incorporation, bylaws and investors’ rights agreement. We encourage you to read those
documents and the DGCL carefully.
General
The certificate of incorporation authorizes 300,000,000 shares of common stock, $0.0001 par value per share.
Common Stock
Voting Rights
Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of
directors. Our stockholders do not have cumulative voting rights in the election of directors. Accordingly, holders of a majority of the voting shares are able
to elect all of the directors. In addition, the affirmative vote of holders of 66-2/3% of the voting power of all of the then outstanding voting stock is required
to take certain actions, including amending certain provisions of our amended and restated certificate of incorporation, such as the provisions relating to
amending our amended and restated bylaws, the classified board and director liability.
Dividends
Subject to preferences that may be applicable to any then outstanding preferred stock, holders of our common stock are entitled to receive dividends, if
any, as may be declared from time to time by our board of directors out of legally available funds.
Liquidation
In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in the net assets legally available
for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the
holders of any then outstanding shares of preferred stock.
Rights and Preferences
Holders of our common stock have no preemptive, conversion, subscription or other rights, and there are no redemption or sinking fund provisions
applicable to our common stock. The rights, preferences and privileges of the
holders of our common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of our preferred stock that we
may designate in the future.
Fully Paid and Nonassessable
All outstanding shares of common stock are fully paid and non-assessable.
Undesignated Preferred Stock
Under our certificate of incorporation, our board of directors has the authority, without further action by our stockholders, to issue up to 10,000,000
shares of preferred stock, $0.0001 par value per share, in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These
rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund
terms and the number of shares constituting, or the designation of, such series, any or all of which may be greater than the rights of common stock. The
issuance of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive
dividend payments and payments upon our liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or
preventing a change in control of our company or other corporate action. No shares of preferred stock are outstanding, and we have no present plan to issue
any shares of preferred stock.
Registration Rights
Certain holders of unregistered common stock purchased in private placements, or their permitted transferees, are entitled to rights with respect to the
registration of such shares under the Securities Act of 1933, as amended (the “Securities Act”). These rights are provided under the terms of (i) an
investors’ rights agreement between us and the holders of certain of these shares, or the investors’ rights agreement, which include demand registration
rights and piggyback registration rights, and (ii) a stock purchase agreement between us and the holder of certain of these shares, or the stock purchase
agreement, which include Form S-3 registration rights. All fees, costs and expenses of underwritten registrations will be borne by us and all selling
expenses, including underwriting discounts and selling commissions, will be borne by the holders of the shares being registered.
The demand, piggyback and Form S-3 registration rights will expire, with respect to any particular stockholder party to the investors’ rights
agreement, upon the earliest of (i) three years after the consummation of our initial public offering, (ii) when that stockholder can sell all of its shares under
Rule 144 of the Securities Act during any 90-day period or (iii) upon the consummation of an acquisition. The Form S-3 registration rights will expire, with
respect to the stockholder party to the stock purchase agreement, when such stockholder can sell all of its shares under Rule 144 of the Securities Act
during any 90-day period.
Anti-Takeover Effects of Provisions of Our Amended and Restated Certificate of Incorporation, Our Amended and Restated Bylaws and
Delaware Law
Some provisions of Delaware law and our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions
that could make the following transactions more difficult: acquisition of us by means of a tender offer; acquisition of us by means of a proxy contest or
otherwise; or removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter
transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions that might result in a
premium over the market price for our shares.
These provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also
designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased
protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the
disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.
Delaware Anti-Takeover Statute
We are subject to Section 203 of the DGCL, which prohibits persons deemed “interested stockholders” from engaging in a “business combination”
with a publicly-held Delaware corporation for three years following the date these persons become interested stockholders unless the business combination
is, or the transaction in which the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies.
Generally, an “interested stockholder” is a person who, together with affiliates and associates, beneficially owns, or within three years prior to the
determination of interested stockholder status did own, 15% or more of a corporation’s voting stock. Generally, a “business combination” includes a
merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. The existence of this provision may have an
anti-takeover effect with respect to transactions not approved in advance by the board of directors, such as discouraging takeover attempts that might result
in a premium over the market price of our common stock.
Undesignated Preferred Stock
The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or
preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deterring hostile
takeovers or delaying changes in control or management of our company.
Special Stockholder Meetings
Our amended and restated bylaws provide that a special meeting of stockholders may be called by our board of directors, or by our President or Chief
Executive Officer.
Requirements for Advance Notification of Stockholder Nominations and Proposals
Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for
election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors.
Elimination of Stockholder Action by Written Consent
Our amended and restated certificate of incorporation and our amended and restated bylaws eliminate the right of stockholders to act by written
consent without a meeting.
Classified Board; Election and Removal of Directors; Filling Vacancies
Our board of directors is divided into three classes. The directors in each class will serve for a three-year term, one class being elected each year by
our stockholders, with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other
classes continuing for the remainder of their respective three-year terms. Because our stockholders do not have cumulative voting rights, our stockholders
holding a majority of the shares of common stock outstanding will be able to elect all of our directors. Our amended and restated certificate of
incorporation provides for the removal of any of our directors only for cause and requires a stockholder vote by the holders of at least a 66-2/3% of the
voting power of the then outstanding voting stock. Furthermore, any vacancy on our board of directors, however occurring, including a vacancy resulting
from an increase in the size of the board, may only be filled by a resolution of the board of directors unless the board of directors determines that such
vacancies shall be filled by the stockholders. This system of electing and removing directors and filling vacancies may tend to discourage a third party from
making a tender offer or otherwise attempting to obtain control of us, because it generally makes it more difficult for stockholders to replace a majority of
the directors.
Choice of Forum
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of
Chancery of the State of Delaware will be the exclusive forum for: any state law derivative action or proceeding brought on our behalf; any action asserting
a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL; or any action asserting a claim against us that
is governed by the internal affairs doctrine. Similarly, our amended and restated certificate of incorporation provides that the U.S. federal district courts are
the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. The enforceability of similar choice of
forum provisions has been challenged in legal proceedings, and it is possible that, in connection with such actions or any future actions, a court could find
the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable. Although our
amended and restated certificate of incorporation contains the choice of forum provision described above, it is possible that a court could find that such
provisions are inapplicable for a particular claim or action or that such provisions are unenforceable.
Amendment of the Certificate of Incorporation and Bylaws
The amendment of any of the above provisions, except for the provision making it possible for our board of directors to issue undesignated preferred
stock, would require approval by a stockholder vote by the holders of at least a 66-2/3% of the voting power of the then outstanding voting stock.
The provisions of the DGCL, our amended and restated certificate of incorporation and our amended and restated bylaws could have the effect of
discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our
common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our
management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their
best interests.
Limitations of Liability and Indemnification Matters
Our amended and restated certificate of incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest
extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach
of fiduciary duties as directors, except liability for:
•
any breach of the director’s duty of loyalty to us or our stockholders;
•
any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
•
unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or
•
any transaction from which the director derived an improper personal benefit.
Each of our amended and restated certificate of incorporation and amended and restated bylaws provide that we are required to indemnify our
directors and officers, in each case to the fullest extent permitted by Delaware law. Our amended and restated bylaws also obligate us to advance expenses
incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer,
director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to
indemnify him or her under Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors, executive officers
and other employees as determined by our board of directors. With specified exceptions, these agreements provide for indemnification for related expenses
including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding.
We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We
also maintain directors’ and officers’ liability insurance.
The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws
may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duty. They may also reduce the
likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and our stockholders. Further, a
stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damages.
Nasdaq Global Select Market Listing
Our common stock is listed on the Nasdaq Global Select Market under the symbol “IDYA.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. The transfer agent and registrar’s address
is 6201 15th Avenue, Brooklyn, New York 11219.
Exhibit 10.12
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IDEAYA BIOSCIENCES, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is entered into between IDEAYA Biosciences, Inc., a Delaware
corporation (the “Company”) and Stu Dorman (“Executive” and, together with the Company, the “Parties”) effective as of
December 1, 2024 (the “Effective Date”).
WHEREAS, the Company desires to assure itself of the services of Executive by engaging Executive to perform
services as an employee of the Company under the terms hereof; and
WHEREAS, Executive desires to provide services to the Company on the terms herein provided effective as of the
Effective Date.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the
respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties
hereto agree as follows:
1. Employment.
(a)
General. The Company shall employ Executive upon the terms and conditions provided herein effective
as of the Effective Date.
(b)
Position and Duties. Effective as of the Effective Date, Executive: (i) shall serve as the Company’s Chief
Commercial Officer with responsibilities, duties, and authority usual and customary for such position, subject to direction by the
Chief Executive Officer of the Company (the “CEO”); (ii) shall report directly to the CEO or the CEO’s designee; and (iii)
agrees promptly and faithfully to comply with all present and future policies, requirements, rules and regulations, and reasonable
directions and requests, of the Company in connection with the Company’s business. At the Company’s request, Executive shall
serve the Company and/or its subsidiaries and affiliates in such other capacities in addition to the foregoing as the Company shall
designate. In the event that Executive serves in any one or more of such additional capacities, Executive’s compensation shall
not automatically be increased on account of such additional service.
(c)
Principal Office. Executive shall perform services for the Company at the Company’s offices located in
South San Francisco, California, or, with the Company’s consent, at any other place in connection with the fulfillment of
Executive’s role with the Company; provided, however, that the Company may from time to time require Executive to travel
temporarily to other locations in connection with the Company’s business.
(d)
Exclusivity. Except with the prior written approval of the CEO (which the CEO may grant or withhold in
his or her sole and absolute discretion), Executive shall devote Executive’s best efforts and full working time, attention, and
energies to the business of the Company, except during any paid vacation or other excused absence periods. Notwithstanding the
Exhibit 10.12
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foregoing, Executive may, without violating this Section 1(d), (i) as a passive investment, own publicly traded securities in such
form or manner as will not require any services by Executive in the operation of the entities in which such securities are owned;
(ii) engage in charitable and civic activities; or (iii) engage in other personal passive investment activities, in each case, so long as
such interests or activities do not materially interfere to the extent such activities do not, individually or in the aggregate, interfere
with or otherwise prevent the performance of Executive’s duties and responsibilities hereunder. Executive may also serve as a
member of the board of directors or board of advisors of another organization provided (i) such organization is not a competitor
of the Company; (ii) Executive receives prior written approval from the Company’s CEO; and (iii) such activities do not
individually or in the aggregate interfere with the performance of Executive’s duties under this Agreement, violate the
Company’s standards of conduct then in effect, or raise a conflict under the Company’s conflict of interest policies. For the
avoidance of doubt, the CEO has approved Executive’s continued service with those organizations set forth on Exhibit A, such
approval to continue until the earlier to occur of (a) the CEO’s revocation of such approval in his or her sole and absolute
discretion, or (b) such time as such service interferes with the performance of Executive’s duties under this Agreement, violates
the Company’s standards of conflict or raises a conflict under the Company’s conflict of interest policies.
2. Term. The period of Executive’s employment under this Agreement shall commence on the Effective Date and shall
continue until Executive’s employment with the Company is terminated pursuant to Section 5. The phrase “Term” as used in this
Agreement shall refer to the entire period of employment of Executive by the Company.
3.
Compensation and Related Matters.
(a)
Annual Base Salary. During the Term, Executive shall receive a base salary at the rate of $500,000 per
year (as may be increased from time to time, the “Annual Base Salary”), subject to withholdings and deductions, which shall be
paid to Executive in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary
shall be reviewed by the CEO, and, as applicable, the Board of Directors of the Company (the “Board”) and/or the Compensation
Committee of the Board, not less than annually.
(b)
Annual Bonus. Executive shall be eligible to receive a discretionary annual bonus based on Executive’s
achievement of performance objectives established by the Board, its Compensation Committee and/or the CEO, such bonus to be
targeted at forty percent (40%) of Executive’s Annual Base Salary (the “Annual Bonus”). Any Annual Bonus approved by the
Board, the Compensation Committee of the Board and/or the CEO shall be paid at the same time annual bonuses are paid to other
executives of the Company generally, subject to Executive’s continuous employment through the date of approval.
(c)
Benefits. Executive shall be entitled to participate in such employee and executive benefit plans and
programs as the Company may from time to time offer to provide to its executives, subject to the terms and conditions of such
plans. Notwithstanding the foregoing, nothing herein is intended, or shall be construed, to require the Company to institute or
continue any particular plan or benefit.
Exhibit 10.12
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(d)
Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-
pocket travel and other business expenses incurred by Executive in the performance of Executive’s duties to the Company in
accordance with the Company’s applicable expense reimbursement policies and procedures as are in effect from time to time.
(e)
Vacation. Executive will be entitled to paid vacation in accordance with the Company’s vacation policy,
as in effect from time to time.
4. Equity Awards.
(a)
Initial Equity Grant. In connection with entering into this Agreement, promptly following the
commencement of your employment with the Company, subject to the terms and conditions of the Company’s 2023 Employment
Inducement Award Plan, and subject to the approval of the Board or the Compensation Committee of the Board, Executive will
be granted an option to purchase one hundred seventy thousand (170,000) shares of the Company’s common stock (the “Stock
Option”), with an exercise price per share equal to the closing trading price of a share of the Company’s common stock on the
date of grant. Subject to Executive’s continued employment with the Company through the applicable vesting date, 25% of the
shares underlying the Stock Option will vest on the first anniversary of the date of the Effective Date and 1/48th of the total
number of shares initially underlying the Stock Option will vest on the last day of the month of each monthly anniversary
thereafter. The Stock Option will be subject to the terms and conditions of the Company’s 2013 Employment Inducement Plan
and the Company’s standard form of stock option agreement.
(b)
Future Awards. Executive shall be eligible for such future grants of stock options and other equity awards
as may be determined by the Board or its Compensation Committee.
(c)
Covered Terminations. Notwithstanding anything to the contrary in any agreement evidencing the Stock
Option, or any future stock option or other equity award, the unvested portion of the Stock Option, or such future stock option or
other equity award, shall not terminate upon the date of a Covered Termination (as defined below) but instead shall remain
outstanding and eligible to vest in accordance with Section 6 hereof until the three month anniversary of such Covered
Termination.
5. Termination.
(a)
At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and
shall continue to be at-will, as defined under applicable law. This means that it is not for any specified period of time and can be
terminated by Executive or by the Company at any time, with or without advance notice, and for any or no particular reason or
cause. It also means that Executive’s job duties, title, and responsibility and reporting level, work schedule, compensation, and
benefits, as well as the Company’s personnel policies and procedures, may be changed with prospective effect, with or without
notice, at any time in the sole discretion of the Company (subject to any ramification such changes may have under Section 6 of
this Agreement). This “at-will” nature of Executive’s employment shall remain unchanged during
Exhibit 10.12
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Executive’s tenure as an employee and may not be changed, except in an express writing signed by Executive and a duly-
authorized officer of the Company. If Executive’s employment terminates for any lawful reason, Executive shall not be entitled
to any payments, benefits, damages, award, or compensation other than as provided in this Agreement.
(b)
Notice of Termination. During the Term, any termination of Executive’s employment by the Company or
by Executive (other than by reason of death) shall be communicated by written notice (a “Notice of Termination”) from one
Party hereto to the other Party hereto (i) indicating the specific termination provision in this Agreement relied upon, if any, (ii)
setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated, and (iii) specifying the Date of Termination (as defined below). The failure by the
Company to set forth in the Notice of Termination all of the facts and circumstances which contribute to a showing of Cause (as
defined below) shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing their rights hereunder. The failure by the Executive to set forth in the Notice of Termination all of the
facts and circumstances which contribute to a showing of Good Reason (as defined below) shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing their rights hereunder.
(c)
Date of Termination. For purposes of this Agreement, “Date of Termination” shall mean the date of the
termination of Executive’s employment with the Company specified in a Notice of Termination.
(d)
Deemed Resignation. Upon termination of Executive’s employment for any reason, Executive shall be
deemed to have resigned from all offices and board memberships, if any, then held with the Company or any of its affiliates, and,
at the Company’s request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations.
6. Consequences of Termination.
(a)
Payments of Accrued Obligations upon all Terminations of Employment. Upon a termination of
Executive’s employment for any reason, Executive (or Executive’s estate or legal representative, as applicable) shall be entitled
to receive, within 30 days after Executive’s Date of Termination (or such earlier date as may be required by applicable law): (i)
any portion of Executive’s Annual Base Salary earned through Executive’s Date of Termination not theretofore paid, (ii) any
expenses owed to Executive under Section 3, (iii) any accrued but unused paid time-off owed to Executive, (iv) any Annual
Bonus earned but unpaid as of the Date of Termination, and (v) any amount arising from Executive’s participation in, or benefits
under, any employee benefit plans, programs, or arrangements under Section 3, which amounts shall be payable in accordance
with the terms and conditions of such employee benefit plans, programs, or arrangements. Except as otherwise set forth in
Sections 6(b) and (c), the payments and benefits described in this Section 6(a) shall be the only payments and benefits payable in
the event of Executive’s termination of employment for any reason.
Exhibit 10.12
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(b)
Severance Payments upon Covered Termination Outside a Change in Control Period. If, during the Term,
Executive experiences a Covered Termination outside a Change in Control Period (each as defined below), then in addition to the
payments and benefits described in Section 6(a), the Company shall, subject to Executive’s delivery to the Company of a waiver
and release of claims agreement substantially in the form of Exhibit B hereto, with any such changes to applicable law as the
Company deems necessary (the “Release”) that becomes effective and irrevocable in accordance with Section 11(d), provide
Executive with the following:
(i) The Company shall pay to Executive an amount equal to Executive’s Annual Base Salary multiplied
by 0.75. Such amount will be subject to applicable withholdings and payable in a single lump sum cash payment on the
first regular payroll date following the date the Release becomes effective and irrevocable in accordance with Section
11(d).
(ii) During the period commencing on the Date of Termination and ending on the nine month
anniversary thereof or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage
under a subsequent employer’s group health plan (in any case, the “Non-CIC COBRA Period”), subject to Executive’s
valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended
(the “Code”) and the regulations thereunder, the Company shall, in its sole discretion, either (A) continue to provide to
Executive and Executive’s dependents, at the Company’s sole expense, or (B) reimburse Executive and Executive’s
dependents for coverage under its group health plan (if any) at the same levels in effect on the Date of Termination;
provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the
expiration of the continuation coverage period to be, exempt from the application of Section 409A under Treasury
Regulation Section 1.409A‑1(a)(5), (2) the Company is otherwise unable to continue to cover Executive or Executive’s
dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law
(including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to
each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments over
the Non-CIC COBRA Period (or remaining portion thereof).
(c)
Severance Payments upon Covered Termination During a Change in Control Period. If, during the Term,
Executive experiences a Covered Termination during a Change in Control Period, then, in addition to the payments and benefits
described in Section 6(a), the Company shall, subject to Executive’s delivery to the Company of the Release that becomes
effective and irrevocable in accordance with Section 11(d), provide Executive with the following:
(i) The Company shall pay to Executive an amount equal to the sum of Executive’s Annual Base
Salary and Executive’s target Annual Bonus. Such amount will be subject to applicable withholdings and payable in a
single lump sum cash payment on the first regular payroll date following the date the Release becomes effective and
irrevocable in accordance with Section 11(d).
Exhibit 10.12
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(ii) During the period commencing on the Date of Termination and ending on the twelve month
anniversary thereof or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage
under a subsequent employer’s group health plan (in any case, the “CIC COBRA Period”), subject to Executive’s valid
election to continue healthcare coverage under Section 4980B of the Code and the regulations thereunder, the Company
shall, in its sole discretion, either (A) continue to provide to Executive and Executive’s dependents, at the Company’s
sole expense, or (B) reimburse Executive and Executive’s dependents for coverage under its group health plan (if any) at
the same levels in effect on the Date of Termination; provided, however, that if (1) any plan pursuant to which such
benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the
application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to
continue to cover Executive or Executive’s dependents under its group health plans, or (3) the Company cannot provide
the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service
Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive
in substantially equal monthly installments over the CIC COBRA Period (or remaining portion thereof).
(iii)Cause any unvested equity awards, including any stock options, restricted stock awards and any
such awards subject to performance-based vesting, held by Executive as of the Date of Termination, to become fully
vested and, if applicable, exercisable, and cause all restrictions and rights of repurchase on such awards to lapse with
respect to all of the shares of the Company’s Common Stock subject thereto.
(d)
No Other Severance. The provisions of this Section 6 shall supersede in their entirety any severance
payment provisions in any severance plan, policy, program, or other arrangement maintained by the Company except as
otherwise approved by the Board.
(e)
No Requirement to Mitigate; Survival. Executive shall not be required to mitigate the amount of any
payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to
the contrary in this Agreement, the termination of Executive’s employment shall not impair the rights or obligations of any Party.
(f)
Definition of Cause. For purposes hereof, “Cause” shall mean any one of the following: (i) Executive’s
commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any
state thereof; (ii) Executive’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii)
Executive’s intentional, material violation of any contract or agreement between Executive and the Company or of any statutory
duty owed to the Company; (iv) Executive’s unauthorized use or disclosure of the Company’s confidential information or trade
secrets; or (v) Executive’s gross misconduct. The determination that a termination of Executive’s employment is either for Cause
or without Cause shall be made by the Board or its Compensation Committee, in each case, in its sole discretion.
Exhibit 10.12
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(g)
Definition of Change in Control. For purposes of this Agreement, “Change in Control” shall mean any
of the following types of transactions: (i) the direct or indirect sale or exchange in a single or series of related transactions by the
stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation
in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company
(each, a “Transaction”), wherein the stockholders of the Company immediately before the Transaction do not retain immediately
after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting securities of the Company or the successor entity, or, in the case of a
Transaction described in (iii), the corporation or other entity to which the assets of the Company were transferred, as the case
may be. Notwithstanding the foregoing, a transaction shall not constitute a Change in Control if: (i) its sole purpose is to change
the state of the Company’s incorporation; (ii) its sole purpose is to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities immediately before such transaction; (iii) it constitutes
the Company’s initial public offering of its securities; or (iv) it is a transaction effected primarily for the purpose of financing the
Company with cash (as determined by the Board in its discretion). Notwithstanding the foregoing, a “Change in Control” must
also constitute a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5).
(h)
Definition of Change in Control Period. For purposes hereof, “Change in Control Period” shall mean
the period commencing three months prior to a Change in Control and ending 12 months after such Change in Control.
(i)
Definition of Covered Termination. For purposes hereof, “Covered Termination” shall mean the
termination of Executive’s employment by the Company without Cause or by Executive for Good Reason, and shall not include a
termination due to Executive’s death or disability.
(j)
Definition of Good Reason. For purposes hereof, “Good Reason” shall mean that Executive has
complied in all material respects with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the
following events, without Executive’s prior written consent: (i) a material reduction of Executive’s Annual Base Salary (unless
pursuant to a salary reduction program applicable generally to the Company’s senior management employees); or (ii) relocation
of Executive’s principal place of employment to a place that increases Executive’s one-way commute by more than by more than
seventy-five (75) miles as compared to Executive’s principal place of employment immediately prior to such relocation; or (iii) a
material reduction in Executive’s job title and primary duties, responsibilities and authorities, provided, however, that a change in
job position (including a change in title) shall not be deemed a “material reduction” in and of itself unless Executive’s new duties
are materially reduced from the prior duties.
(k)
Definition of Good Reason Process. For the purposes hereof, “Good Reason Process” shall mean that
(A) Executive has reasonably determined in good faith that a
Exhibit 10.12
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“Good Reason” condition has occurred; (B) Executive has notified the Company in writing of the first occurrence of the Good
Reason condition within 60 days of the first time the Executive becomes aware of the occurrence of such condition; (C)
Executive has cooperated in good faith with the Company’s efforts, for a period not less than 30 days immediately following the
Company’s receipt of such notice (the “Cure Period”), to remedy the condition; (D) notwithstanding such efforts, the Good
Reason condition continues to exist; and (E) Executive terminates Executive’s employment with the Company within 30 days
after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be
deemed not to have occurred.
7. Assignment and Successors. The Company shall assign its rights and obligations under this Agreement to any
successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall
be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal
representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s rights or
obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be
transferred only by will, operation of law, or as otherwise provided herein.
8. Miscellaneous Provisions.
(a)
Restrictive Covenant Agreements. On or before the Effective Date, Executive shall enter into the
Company’s standard form Proprietary Information and Invention Assignment Agreement (the “Intellectual Property Assignment
Agreement” together with any other confidentiality agreement between Executive and the Company, the “Restrictive Covenant
Agreements”). The Restrictive Covenant Agreements shall survive the termination of this Agreement and Executive’s
employment with the Company for the applicable period(s) set forth therein. Notwithstanding the foregoing, in the event of any
conflict between the terms of the Restrictive Covenant Agreements and the terms of this Agreement, the terms of this Agreement
shall prevail.
(b)
Non-Solicitation of Employees. For a period of one year following Executive’s Date of Termination,
Executive shall not, either directly or indirectly (i) solicit for employment by any individual, corporation, firm, or other business,
any employees, consultants, independent contractors, or other service providers of the Company or any of its affiliates, or (ii)
solicit any employee or consultant of the Company or any of its affiliates to leave the employment or consulting of or cease
providing services to the Company or any of its affiliates; provided, however, that the foregoing clauses (i) and (ii) shall not
apply to a general advertisement or solicitation (or any hiring pursuant to such advertisement or solicitation) that is not
specifically targeted to such employees or consultants.
(c)
Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance
with its express terms, and otherwise in accordance with the substantive laws of the State of California, without giving effect to
any principles of conflicts of
Exhibit 10.12
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law, whether of the State of California or any other jurisdiction, and where applicable, the laws of the United States, that would
result in the application of the laws of any other jurisdiction.
(d)
Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(e)
Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be
deemed effective for all purposes.
(f)
Entire Agreement. The terms of this Agreement, together with the Restrictive Covenant Agreements, are
intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the
Company and supersede all prior understandings and agreements, whether written or oral, regarding Executive’s service to the
Company. The Parties further intend that this Agreement, together with the Restrictive Covenant Agreements, shall constitute
the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this Agreement or the Restrictive Covenant Agreements.
Notwithstanding the foregoing, in the event of any conflict between the terms of the Restrictive Covenant Agreements and the
terms of this Agreement, the terms of this Agreement shall prevail.
(g)
Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an
instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing
similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other
Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or
perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any
other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
(h) Dispute Resolution. To ensure the timely and economical resolution of disputes
that arise in connection with this Agreement, Executive and the Company agree that any and all controversies, claims and
disputes arising out of or relating to this Agreement, including without limitation any alleged violation of its terms, shall be
resolved solely and exclusively by final and binding arbitration held in San Francisco, California through JAMS in conformity
with the then-existing JAMS employment arbitration rules, which can be found at https://www.jamsadr.com/rules-employment-
arbitration/. The arbitration provisions of this Agreement shall be governed by and enforceable pursuant to the Federal
Arbitration Act. In all other respects for provisions not governed by the Federal Arbitration Act, this Agreement shall be
construed in accordance with the laws of the State of California, without reference to conflicts of law principles. The arbitrator
shall: (a) provide adequate discovery for the resolution of the dispute; and (b) issue a written arbitration decision, to include the
arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator shall award the prevailing Party
attorneys’
Exhibit 10.12
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fees and expert fees, if any. Notwithstanding the foregoing, it is acknowledged that it will be impossible to measure in money the
damages that would be suffered if the Parties fail to comply with any of the obligations imposed on them under Section 8(a), and
that in the event of any such failure, an aggrieved person will be irreparably damaged and will not have an adequate remedy at
law. Any such person shall, therefore, be entitled to seek injunctive relief, including specific performance, to enforce such
obligations, and if any action shall be brought in equity to enforce any of the provisions of Section 8(a), none of the Parties shall
raise the defense, without a good faith basis for raising such defense, that there is an adequate remedy at law. Executive and the
Company understand that by agreement to arbitrate any claim pursuant to this Section 8(h), they will not have the right to have
any claim decided by a jury or a court, but shall instead have any claim decided through arbitration. Executive and the Company
waive any constitutional or other right to bring claims covered by this Agreement other than in their individual capacities.
Except as may be prohibited by applicable law, the foregoing waiver includes the ability to assert claims as a plaintiff or class
member in any purported class or representative proceeding.
(i)
Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under
present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added
automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may
be possible and be legal, valid, and enforceable.
(j)
Withholding. The Company shall be entitled to withhold from any amounts payable under this
Agreement any federal, state, local, or foreign withholding or other taxes or charges which the Company is required to withhold.
The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding
shall arise.
(k)
Whistleblower Protections and Trade Secrets. Notwithstanding anything to the contrary contained herein,
nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any United States
governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities
Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of
state or federal law or regulation (including the right to receive an award for information provided to any such government
agencies). Furthermore, in accordance with 18 U.S.C. § 1833, notwithstanding anything to the contrary in this Agreement: (i)
Executive shall not be in breach of this Agreement, and shall not be held criminally or civilly liable under any federal or state
trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official
or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a
trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal;
and (ii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may
disclose the trade secret to Executive’s attorney, and
Exhibit 10.12
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may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under
seal, and does not disclose the trade secret, except pursuant to court order.
9. Prior Employment. Executive represents and warrants that Executive’s acceptance of employment with the
Company has not breached, and the performance of Executive’s duties hereunder will not breach, any duty owed by Executive to
any prior employer or other person. Executive further represents and warrants to the Company that (a) the performance of
Executive’s obligations hereunder will not violate any agreement between Executive and any other person, firm, organization, or
other entity; (b) Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from
competing, directly or indirectly, with the business of such previous employer or other party that would be violated by Executive
entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement; and (c)
Executive’s performance of Executive’s duties under this Agreement will not require Executive to, and Executive shall not, rely
on in the performance of Executive’s duties or disclose to the Company or any other person or entity or induce the Company in
any way to use or rely on any trade secret or other confidential or proprietary information or material belonging to any previous
employer of Executive.
10.Golden Parachute Excise Tax.
(a)
Best Pay. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit
Executive would receive from the Company pursuant to this Agreement or otherwise (“Payment”) would (i) constitute a
“parachute payment” within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax
imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount (as defined
below). The “Reduced Amount” will be either (A) the largest portion of the Payment that would result in no portion of the
Payment (after reduction) being subject to the Excise Tax or (B) the entire Payment, whichever amount after taking into account
all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of
such state and local taxes), results in Executive’ s receipt, on an after-tax basis, of the greater economic benefit notwithstanding
that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the
preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall
occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive. If more than one
method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata
Reduction Method”). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in
any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be
subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be,
shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (1) as a first priority, the
modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-
tax basis; (2) as a second priority, Payments that are
Exhibit 10.12
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contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not
contingent on future events; and (3) as a third priority, Payments that are “deferred compensation” within the meaning of Section
409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(b)
Accounting Firm. The accounting firm engaged by the Company for general tax purposes as of the day
prior to the Change in Control will perform the calculations set forth in Section 10(a). If the firm so engaged by the Company is
serving as the accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting
firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by
such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its
calculations, together with detailed supporting documentation, to the Company within 30 days before the consummation of a
Change in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting
firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced
Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be
imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder will be final,
binding and conclusive upon the Company and Executive.
11.Section 409A.
(a)
General. The intent of the Parties is that the payments and benefits under this Agreement comply with or
be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date,
(“Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance
therewith. Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any compensation
or benefits payable under this Agreement may be subject to Section 409A, the Company shall work in good faith with Executive
to adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to avoid
the imposition of taxes under Section 409A, including, without limitation, actions intended to (i) exempt the compensation and
benefits payable under this Agreement from Section 409A, and/or (ii) comply with the requirements of Section 409A; however,
this Section 11(a) shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or
take any such other action, nor shall the Company (A) have any liability for failing to do so, or (B) incur or indemnify Executive
for any taxes, interest or other liabilities arising under or by operation of Section 409A.
(b)
Separation from Service. Notwithstanding any provision to the contrary in this Agreement: (i) no
amount that constitutes “deferred compensation” under Section 409A shall be payable pursuant to Section 6 unless the
termination of Executive’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the
Department of Treasury Regulations (“Separation from Service”); (ii) for purposes of Section 409A, Executive’s
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right to receive installment payments shall be treated as a right to receive a series of separate and distinct payments; and (iii) to
the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such
reimbursement or benefit shall be provided no later than December 31st of the year following the year in which the expense was
incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any
subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits
provided in any other year.
(c)
Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed
by the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A,
to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is
required in order to avoid a prohibited distribution under Section 409A, such portion of Executive’s benefits shall not be provided
to Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s Separation
from Service with the Company or (ii) the date of Executive’s death. Upon the first business day following the expiration of the
applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to
Executive (or Executive’s estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be
paid as otherwise provided herein.
(d)
Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due
under this Agreement as a result of Executive’s termination of employment are subject to Executive’s execution and delivery of
the Release, (i) if Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely
revokes Executive’s acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise
conditioned on the Release, and (ii) in any case where Executive’s Date of Termination and the Release Expiration Date fall in
two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as
nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this
Section 11(d), “Release Expiration Date” shall mean the date that is 21 days following the date upon which the Company timely
delivers the Release to Executive, or, in the event that Executive’s termination of employment is “in connection with an exit
incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of
1967), the date that is 45 days following such delivery date. To the extent that any payments of nonqualified deferred
compensation (within the meaning of Section 409A) due under this Agreement as a result of Executive’s termination of
employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date
following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or,
in the case of any payments subject to Section 11(d)(ii), on the first payroll period to occur in the subsequent taxable year, if later.
12.Employee Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is
fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than
those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.
Exhibit 10.12
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[Signature Page Follows]
|US-DOCS\157183142.1||
The Parties have executed this Agreement as of the Effective Date.
IDEAYA BIOSCIENCES, INC.
By:/s/ Yujiro S. Hata
Name: Yujiro S. Hata
Title:
President and Chief Executive Officer
EXECUTIVE
By:/s/ Stu Dorman
Name: Stu Dorman
Address:
[ ]
[ ]
Exhibit 10.12
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EXHIBIT A
PERMITTED OUTSIDE ACTIVITIES
1.
[[ ]]
Exhibit 10.12
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EXHIBIT B
RELEASE OF CLAIMS
This Release of Claims (“Release”) is entered into as of _________________, 20__, between [__________] (“Executive”) and
IDEAYA Biosciences, Inc., a Delaware corporation (the “Company” and, together with Executive, the “Parties”), effective eight days after
Executive’s signature hereto (the “Effective Date”), unless Executive revokes his acceptance of this Release as provided in Paragraph 1(c),
below.
1. Executive’s Release of the Company. Executive understands that by agreeing to this Release, Executive
is agreeing not to sue, or otherwise file any claim against, the Company or any of its employees or other agents for any reason
whatsoever based on anything that has occurred as of the date Executive signs this Release.
(a)On behalf of Executive and Executive’s heirs and assigns, Executive hereby releases and forever
discharges the “Releasees” hereunder, consisting of the Company, and each of its owners, affiliates, divisions,
predecessors, successors, assigns, agents, directors, officers, partners, employees, and insurers, and all persons acting
by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause
or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands,
damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called
“Claims”), which Executive now has or may hereafter have against the Releasees, or any of them, by reason of any
matter, cause, or thing whatsoever from the beginning of time to the date hereof, including, without limiting the
generality of the foregoing, any Claims arising out of, based upon, or relating to Executive’s hire, employment,
remuneration or resignation by the Releasees, or any of them, including Claims arising under federal, state, or local
laws relating to employment, Claims of any kind that may be brought in any court or administrative agency, any
Claims arising under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621, et seq.; Title VII of the
Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, 42 U.S.C. § 2000 et seq.; the Equal Pay Act, 29
U.S.C. § 206(d); the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, 29 U.S.C.
§ 2601 et seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq.; the False Claims Act , 31
U.S.C. § 3729 et seq.; the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq.; the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. the Fair Labor Standards Act, 29 U.S.C. § 215 et
seq., the Sarbanes-Oxley Act of 2002; the California Labor Code; the employment and civil rights laws of California;
Claims for breach of contract; Claims arising in tort, including, without limitation, Claims of wrongful dismissal or
discharge, discrimination, harassment, retaliation, fraud, misrepresentation, defamation, libel, infliction of emotional
distress, violation of public policy, and/or breach of the implied covenant of good faith and fair dealing; and Claims for
damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages,
injunctive relief and attorney’s fees.
Exhibit 10.12
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(b)Notwithstanding the generality of the foregoing, Executive does not release the following claims:
(i)
Claims for unemployment compensation or any state disability insurance benefits
pursuant to the terms of applicable state law;
(ii)
Claims for workers’ compensation insurance benefits under the terms of any worker’s
compensation insurance policy or fund of the Company;
(iii)
Claims to continued participation in certain of the Company’s group benefit plans
pursuant to the terms and conditions of COBRA;
(iv)
Claims to any benefit entitlements vested as the date of Executive’s employment
termination, pursuant to written terms of any Company employee benefit plan;
(v)
Claims for indemnification under any indemnification agreement with the Company, the
Company’s Bylaws, California Labor Code Section 2802 or any other applicable law; and
(vi)
Executive’s right to bring to the attention of the Equal Employment Opportunity
Commission claims of discrimination; provided, however, that Executive does release Executive’s right to
secure any damages for alleged discriminatory treatment.
(c)In accordance with the Older Workers Benefit Protection Act of 1990, Executive has been advised
of the following:
(i)
Executive has the right to consult with an attorney before signing this Release;
(ii)
Executive has been given at least [twenty-one (21) OR forty-five (45)] days to
consider this Release;
(iii)
Executive has seven (7) days after signing this Release to revoke it, and Executive will
not receive the severance benefits provided by that certain Employment Agreement between the Parties (the
“Employment Agreement”) unless and until such seven (7) day period has expired. If Executive wishes to
revoke this Release, Executive must deliver notice of Executive’s revocation in writing, no later than 5:00 p.m.
on the 7th day following Executive’s execution of this Release to [ ].
(d)EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED OF AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS
FOLLOWS:
Exhibit 10.12
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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING
PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
BEING AWARE OF SAID CODE SECTION, EXECUTIVE HEREBY EXPRESSLY WAIVES ANY RIGHTS
EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON
LAW PRINCIPLES OF SIMILAR EFFECT.
2. Executive Representations. Executive represents and warrants that:
(a)Executive has returned to the Company all Company property in Executive’s possession;
(b)Executive is not owed wages, commissions, bonuses or other compensation, other than wages
through the date of the termination of Executive’s employment and any accrued, unused vacation earned through such
date, and any payments that become due under the Change of Control Agreement;
(c)During the course of Executive’s employment Executive did not sustain any injuries for which
Executive might be entitled to compensation pursuant to worker’s compensation law or Executive has disclosed any
injuries of which Executive is currently, reasonably aware for which Executive might be entitled to compensation
pursuant to worker’s compensation law; and
(d)Executive has not initiated any adversarial proceedings of any kind against the Company or against
any other person or entity released herein, nor will Executive do so in the future, except as specifically allowed by this
Release.
3. Severability. The provisions of this Release are severable. If any provision is held to be invalid or
unenforceable, it shall not affect the validity or enforceability of any other provision.
4. Choice of Law. This Release shall in all respects be governed and construed in accordance with the laws
of the State of California, including all matters of construction, validity and performance, without regard to conflicts of law
principles.
5. Integration Clause. This Release and the Employment Agreement contain the Parties’ entire agreement
with regard to the separation of Executive’s employment, and supersede and replace any prior agreements as to those matters,
whether oral or written. This Release may not be changed or modified, in whole or in part, except by an instrument in writing
signed by Executive and a duly authorized officer or director of the Company.
Exhibit 10.12
6
|
6. Execution in Counterparts. This Release may be executed in counterparts with the same force and
effectiveness as though executed in a single document. Facsimile signatures shall have the same force and effectiveness as
original signatures.
7. Intent to be Bound. The Parties have carefully read this Release in its entirety; fully understand and agree
to its terms and provisions; and intend and agree that it is final and binding on all Parties.
Exhibit 10.12
7
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IN WITNESS WHEREOF, and intending to be legally bound, the Parties have executed the foregoing on the dates shown below.
EXECUTIVE
IDEAYA BIOSCIENCES, INC.
__________________________
__________________________
By:
Title:
Date: ______________________
Date: _____________________
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
LICENSE AGREEMENT
This LICENSE AGREEMENT (the “Agreement”) is entered into as of December 27th, 2024 (the
“Effective Date”), by and between Jiangsu Hengrui Pharmaceuticals Co., Ltd., organized under the laws of the
People’s Republic of China, having an address at No. 7 Kunlunshan Road, Lianyungang, Jiangsu Province
222047, China and its Affiliates (“Hengrui”), and IDEAYA Biosciences, Inc., organized under the laws of
Delaware, having an address at 5000 Shoreline Court, Suite 300, South San Francisco, California 94080 U.S.A.
(“Ideaya”). Hengrui and Ideaya may be referred to herein individually as a “Party” or collectively as the
“Parties”.
RECITALS
Whereas, Ideaya is a precision medicine biotechnology company that focuses on discovering,
developing, and commercializing targeted therapeutics for patients to treat cancer;
Whereas, Hengrui is a biotechnology company that possesses intellectual property relating to certain
antibody-drug-conjugates; and
Whereas, Ideaya desires to obtain from Hengrui, and Hengrui desires to grant to Ideaya, an exclusive
license to develop and commercialize products containing such antibody-drug- conjugates, all under the terms
and conditions set forth herein.
Now, Therefore, in consideration of the foregoing premises and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Ideaya and Hengrui hereby agree as follows:
AGREEMENT
ARTICLE 1 DEFINITIONS
1.1
“Acceptance” means, with respect to an IND for a Licensed Product, that [***]
have passed since such IND has been submitted to the FDA, unless the FDA notifies the sponsor that the
investigations described in the IND are subject to a clinical hold, or on earlier notification by FDA that the
clinical investigations in the IND may begin.
1.2
“ADC(s)” means a compound consisting of an Antibody conjugated to a drug(s).
1.3
“Affiliate” means, with respect to any party, any entity that, now or in the future, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such
party, but for only so long as such control exists. As used in this Section 1.3, “control” means (a) to possess,
directly or indirectly, the power to direct the management or policies of an entity, whether through ownership
of voting securities, by contract relating to voting rights, or corporate governance; or (b) direct or indirect
beneficial ownership of fifty percent (50%) or more (or such lesser percentage which is the maximum allowed
to be owned by a foreign corporation in a particular jurisdiction) of the voting share capital or other equity
interest in such entity.
1.4
“Alliance Manager” has the meaning set forth in Section 3.7(f).
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
1.5
“Antibody” means a molecule comprising or containing: (a) one or more immunoglobulin
variable domains; (b) fragments, variants, modifications, or derivatives of such immunoglobulin variable
domains irrespective of origin or source; or (c) the nucleic acid consisting of a sequence of nucleotides
encoding (or complementary to a nucleic acid encoding) the foregoing molecules in clause (a) or (b). The
molecules described in clause (a) or (b) can be fused to any immunoglobulin constant domains, for example,
CH1, CH2, CH3, or CL, or a combination thereof.
1.6
“API” means active pharmaceutical ingredient. For clarity, drug delivery vehicles, adjuvants,
and excipients shall not be deemed to be APIs, except in the case where such delivery vehicle, adjuvant, or
excipient is recognized by the FDA as an active ingredient in accordance with 21 CFR 210.3(b)(7).
1.7
“Applicable Laws” means the applicable provisions of any and all national, supranational,
regional, state, and local laws, treaties, statutes, rules, regulations, administrative codes, guidance, ordinances,
judgments, decrees, directives, injunctions, orders, permits of or from any Governmental Authority having
jurisdiction over or related to the subject item, including the
U.S. Food, Drug and Cosmetic Act (21 U.S.C. §301 et seq.), Prescription Drug Marketing Act, the Generic
Drug Enforcement Act of 1992 (21 U.S.C. §335a et seq.), U.S. Patent Act (35 U.S.C. §1 et seq.), Federal Civil
False Claims Act (31 U.S.C. §3729 et seq.), and the Anti-Kickback Statute (42 U.S.C. §1320a-7b et seq.), all
as amended from time to time, together with any rules, regulations, and compliance guidance promulgated
thereunder.
1.8
“Arising IP” has the meaning set forth in Section 8.2.
1.9
“BLA” means (a) a Biologics License Application as defined in the United States Federal Food,
Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., as amended from time to time, together with any rules,
regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and
modifications thereto), or (b) any corresponding foreign application in the Territory, including, with respect to
the EU, an MAA filed with the EMA pursuant to the Centralized Approval Procedure or with the applicable
Regulatory Authority of a country in Europe with respect to the mutual recognition or any other national
approval procedure.
1.10 “Business Day” means a day other than Saturday, Sunday or any other day on which
commercial banks located in the State of New York, U.S. or Beijing, China are authorized or obligated by
Applicable Laws to close.
1.11 “Calendar Quarter” means each respective period of three (3) consecutive months ending on
March 31, June 30, September 30, and December 31.
1.12 “Calendar Year” means each respective period of twelve (12) consecutive months ending on
December 31.
1.13 “Change of Control” means, with respect to a Party, (a) any acquisition, assignment, transfer,
or other disposition, of all or substantially all of such Party’s business or assets by or to a Third Party, (b) any
reorganization or combination, whether by operation of law or otherwise, including a consolidation and
merger, of such Party with or into any other entity, (c) any change in the shareholding of such Party in which
the shareholders of such Party immediately prior to such change own less than fifty percent (50%) of such
Party immediately after such change, (d) any circumstances in which a Third Party obtains the power, directly
or indirectly, to
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
direct or cause the direction of the management or policies of such Party, or (e) the effectuation by the Party of
a transaction or series of related transactions in which fifty percent (50%) or more of the voting power of the
Party is transferred.
1.14
“Claim” has the meaning set forth in Section 10.1.
1.15
“Clinical Supply Agreement” has the meaning set forth in Section 5.4.
1.16
“CMC” means chemistry, manufacturing, and control.
1.17
“CMO” means contract manufacturing organization.
1.18 “Combination Product” means: (a) a pharmaceutical product that consists of a Licensed
Compound and at least one other API that is not a Licensed Compound; or (b) any combination of a Licensed
Product and another pharmaceutical product that contains at least one other API that is not a Licensed
Compound, where such products are not formulated together but are sold together as a single product and
invoiced as one product. The other API(s) in clause (a) and the other pharmaceutical product(s) in clause (b)
are each referred to as the “Other Product(s)”.
1.19
“Commercial Supply Agreement” has the meaning set forth in Section 5.5.
1.20 “Commercialization” means the conduct of all activities undertaken in support of the
promotion, marketing, sale and distribution (including importing, exporting, transporting, customs clearance,
warehousing, invoicing, handling, and delivering Licensed Products to customers) of Licensed Products,
including: (a) sales force efforts, detailing, commercial strategy, advertising, medical education, planning,
marketing, sales force training, and sales and distribution (including pricing and reimbursement activities), (b)
post-approval clinical trials, and (c) data generation efforts (e.g., RWE, HEOR studies, etc.). “Commercialize”
and “Commercializing” have correlative meanings.
1.21 “Commercially Reasonable Efforts” means, with respect to the efforts to be expended, or
considerations to be undertaken, by a Party or its Affiliate with respect to any objective, activity, or decision to
be undertaken hereunder, [***].
1.22
“Commercial Milestone Payment” has the meaning set forth in Section 6.3(a).
1.23 “Confidential Information” of a Party means all Know-How, materials, or other proprietary
scientific, marketing, financial, or commercial information that is disclosed by or on behalf of such Party or
any of its Affiliates or otherwise made available to the other Party or any of its Affiliates, whether made
available orally, in writing, or in electronic form, whether before, on, or after the Effective Date. The existence
and terms of this Agreement are the Confidential Information of both Parties, and the Licensed Know-How is
the Confidential Information of Hengrui.
1.24 “Confidentiality Agreement” means the Mutual Nondisclosure Agreement between Hengrui
and Ideaya, dated as of July 30, 2024.
1.25 “Control” or “Controlled” means, with respect to any materials, Know-How, Patents, or other
Intellectual Property, the legal authority or right (whether by ownership, license, or otherwise, but without
taking into account any rights granted by one Party to the other Party
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
pursuant to this Agreement) of a Party to grant access, a license, or a sublicense of or under such materials,
Know-How, Patents, or other Intellectual Property to the other Party, or to otherwise disclose proprietary or
trade secret information to such other Party, without [***].
1.26 “Cover” means, with respect to a Valid Claim in a country and a Licensed Product, that such
claim (for clarity, with respect to Valid Claim of a patent application, if such pending claim were to issue in an
issued patent without modification) would be infringed, absent a license, by the use, offer for sale, sale, or
importation or other Exploitation of such Licensed Product in such country.
1.27
“CRO” means any Third Party contract research organization.
1.28 “Data” means any and all scientific, technical, or test data pertaining to any Licensed
Compound or Licensed Product that is generated by or on behalf of Hengrui or its Affiliates or, to the extent
such data is Controlled by Hengrui, by or on behalf of its licensees, or by or on behalf of Ideaya or its
Affiliates or, to the extent Controlled by Ideaya, its Sublicensees, including research data, clinical
pharmacology data, CMC data (including analytical and quality control data and stability data), pre-clinical
data, clinical data, clinical study reports, or submissions made in association with an IND or MAA with respect
to any Licensed Compound or Licensed Product.
1.29 “Develop” means to research or develop (including clinical, nonclinical, and CMC
development), analyze, test, and conduct preclinical, clinical, and all other regulatory trials for a Licensed
Compound or Licensed Product, as well as all related regulatory activities and any and all activities pertaining
to new indications, pharmacokinetic studies, and all related activities including work on new formulations, new
methods of treatment, and CMC activities including new manufacturing methods. “Developing” and
“Development” have correlative meanings.
1.30
“Development Milestone Payment” has the meaning set forth in Section 6.2(a).
1.31
“Development Plan” has the meaning set forth in Section 3.2(a).
1.32
“Direct License” has the meaning set forth in Section 12.5(b).
1.33 “Distributor” means, with respect to a country, any Third Party that is used by pharmaceutical
manufacturers generally in such country on a non-exclusive basis, and without any license grant or other right
from Ideaya or any of its Sublicensees under any Intellectual Property, to distribute finished, packaged
pharmaceutical products to pharmacies, managed care organizations, governmental agencies, and other group
purchasing organizations (e.g., pharmaceutical benefits managers) and the like in such country. For clarity, a
Distributor of a Licensed Product in a country shall not include any person or entity that has been granted a
right, whether by license or otherwise and whether express or implied (including by subcontract or agency), by
Ideaya or its Affiliates to Manufacture any such Licensed Product.
1.34
“Divisional Specified Patent” has the meaning set forth in Section 8.4(a)(iii).
1.35
“DLL3” means Delta-like ligand 3.
1.36 “Documents” means all materials and documents that arise from any Development,
Manufacture, or Commercialization of any Licensed Compound or Licensed
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Products.
1.37
“EMA” means the European Medicines Agency or any successor entity thereto.
1.38 “EU” means all countries that are officially recognized as member states of the European Union
or the European Economic Area at the Effective Date and any country that becomes a member state of
European Union or the European Economic Area at any particular time. For clarity, countries that are officially
recognized as member states of European Union or the European Economic Area as of the Effective Date but
subsequently cease to be member states will continue to be treated as member states of European Union or the
European Economic Area in connection with this Agreement. Without limiting the foregoing, the following are
included in the definition of “EU”: the United Kingdom, Switzerland, Iceland, Liechtenstein and Norway. For
clarity, as of the Effective Date, European Union consists of Austria, Belgium, Bulgaria, Croatia, Cyprus,
Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
1.39
“Executive Officers” has the meaning set forth in Section 13.1.
1.40 “Exploit” means to make, use, sell, offer for sale, or import, including to research, Develop,
Manufacture, Commercialize, register, hold, or keep (whether for disposal or otherwise), transport, distribute,
promote, market, or otherwise dispose of, or to have any of the foregoing performed. “Exploiting” and
“Exploitation” have correlative meanings.
1.41 “Export Control Laws” means (a) all applicable trade, export control, import, and antiboycott
laws and regulations imposed, administered, or enforced by the U.S. government, including the International
Emergency Economic Powers Act (50 U.S.C. §§ 1701–1706), Section 999 of the Internal Revenue Code, the
U.S. customs laws at Title 19 of the U.S. Code, the Export Control Reform Act of 2018 (50 U.S.C. §§ 4801-
4861), the Export Administration Regulations (15 C.F.R. Parts 730-774), the U.S. customs regulations at 19
C.F.R. Chapter 1, and the Foreign Trade Regulations (15 C.F.R. Part 30); and (b) all applicable trade, export
control, import, and antiboycott laws and regulations imposed, administered or enforced by any other country,
except to the extent inconsistent with U.S. law.
1.42 “FCPA” means the U.S. Foreign Corrupt Practices Act (15 U.S.C. Section 78dd-1, et. seq.), as
amended.
1.43 “FDA” means the United States Food and Drug Administration or any successor entity thereto.
1.44
“Field” means any and all uses.
1.45 “First Commercial Sale” means, on a Licensed Product–by–Licensed Product and country-by-
country basis, the first sale by Ideaya or any of its Affiliates or Sublicensees to a Third Party of a Licensed
Product in a given country in the Territory, after Regulatory Approval has been granted with respect to such
Licensed Product in such country. Any sale of Licensed Product by Ideaya to its Affiliate or Sublicensee will
not constitute a First Commercial Sale. [***].
1.46 “FTE” means the equivalent of [***] working full time for [***] (consisting of a total of [***]
hours per year (or such other number as may be agreed by the JSC)) of scientific or
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
technical work (or scientific managerial work) undertaken by a Party’s employees, as applicable.
1.47 “Generic Product” means, with respect to a Licensed Product in a particular regulatory
jurisdiction, any pharmaceutical product that (a) (i) contains the same API as the Licensed Compound in such
Licensed Product and is approved by the Regulatory Authority in such country; (ii) is a biologic product (A)
for which the licensing, approval, or marketing authorization relies in whole or in part on a prior licensing,
approval, or marketing authorization granted such Licensed Product, (B) that is “biosimilar” to such Licensed
Product, as the term “biosimilar” is defined in 42 U.S.C. § 262(i)(2), or (C) that has been licensed by the FDA
or other Regulatory Authority outside of the United States by reference to such Licensed Product, as set forth
at 42 USC 262(k)(4) or other analogous applicable Law outside of the United States; or (iii) is approved by the
Regulatory Authority in such country as a substitutable generic for such Licensed Product; and (b) is sold in
such jurisdiction by a Third Party that is not a Sublicensee or Distributor and did not purchase such product in
a chain of distribution that included any of Ideaya or its Affiliates, Sublicensees or Distributors.
1.48 “Governmental Authority” means any national, international, federal, state, provincial, or local
government, or political subdivision thereof, or any multinational organization or any authority, agency, or
commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power, any court or tribunal (or any department, bureau or division thereof, or any governmental
arbitrator or arbitral body).
1.49
“Greater China” means the Mainland China, Hong Kong, Macao, and Taiwan.
1.50
“Hengrui Know-How” has the meaning set forth in Section 8.2.
1.51 “Hengrui Platform” means technology Controlled by Hengrui to the extent relating to [***].
1.52
“Hengrui Representative” has the meaning set forth in Section 10.2.
1.53
“ICC” has the meaning set forth in Section 13.2(a).
1.54
“ICC Rules” has the meaning set forth in Section 13.2(a).
1.55
“Ideaya Know-How” has the meaning set forth in Section 8.2.
1.56
“Ideaya Patent” has the meaning set forth in Section 8.4(c).
1.57
“Ideaya Representative” has the meaning set forth in Section 10.1.
1.58 “IND” means an investigational new drug application, clinical trial authorization or equivalent
application filed with the applicable Regulatory Authority, which application is required to commence human
clinical trials in the applicable country.
1.59
“Indemnitee” has the meaning set forth in Section 10.3.
1.60
“Indemnitor” has the meaning set forth in Section 10.3.
1.61 “Indirect Tax” has the meaning set forth in Section 7.3(c).
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
1.62 “Information” means any information, Inventions, concepts, compounds, compositions,
formulations, formulas, practices, procedures, processes, methods, knowledge, know-how, trade secrets,
technology, techniques, designs, drawings, correspondence, computer programs, documents, apparatus, results,
strategies, regulatory documentation, information and submissions pertaining to, or made in association with,
filings with any Government Authority or patent office, data, including pharmacological, toxicological, non-
clinical and clinical data, analytical and quality control data, manufacturing data and descriptions, patent and
legal data, market data, financial data or descriptions, devices, assays, chemical formulations, specifications,
material, product samples and other samples, physical, chemical and biological materials and compounds, and
the like, in written, electronic, oral or other tangible or intangible form, now known or hereafter developed,
whether or not patentable, but excluding any Patents.
1.63 “Initial Licensed Know-How” means such Know-How and related materials Controlled by
Hengrui existing as of the Effective Date that are necessary or reasonably useful for Development of the
Licensed Compound in the Field in the Territory as and to the extent set forth in Exhibit 1.63.
1.64 “Initiate” or “Initiation” means, with respect to a clinical trial, the first dosing of the first
subject in such clinical trial.
1.65 “Intellectual Property” means all worldwide intellectual property or industrial property rights
created, arising under or recognized by any laws or Governmental Authority, including (a) Patents, (b) Know-
How, (c) trademarks, service marks, logos, product names and slogans, symbols, trade dress, trade names,
d/b/a’s, domain names and other indicia of origin, all applications and registrations for the foregoing, and all
goodwill associated therewith and symbolized thereby, including all renewals of same, (d) published and
unpublished works of authorship whether or not copyrightable, including computer software programs,
databases and other compilations of information, copyrights in and to the foregoing, together with all common
law rights and moral rights therein, and any applications and registrations therefor, including extensions,
renewals, derivatives, translations, adaptations and combinations of the above and (e) any other similar
intellectual property or industrial property rights anywhere in the world.
1.66 “Inventions” means all inventions, whether or not patentable, discovered, made, conceived, or
conceived and reduced to practice, in the course of activities performed under this Agreement.
1.67
“Joint Inventions” has the meaning set forth in Section 8.2.
1.68
“Joint Know-How” has the meaning set forth in Section 8.2.
1.69
“Joint Patent” has the meaning set forth in Section 8.2.
1.70
“JSC” has the meaning set forth in Section 3.7(a).
1.71 “Know-How” means all Data, Regulatory Filings, Information, Inventions, and Documents.
1.72 “Knowledge” means, with respect to a matter that is the subject of a given representation or
warranty of Hengrui,[***].
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
1.73 “Licensed Compound” means (a) the ADC Controlled by Hengrui or its Affiliates and
designated as “SHR-4849”, which Antibody is conjugated to a drug that is designed to bind, interact with,
inhibit, or otherwise modulate topoisomerase, as set forth on Exhibit 1.73, and [***].
1.74 “Licensed Know-How” means any and all Know-How Controlled by Hengrui as of the
Effective Date or at any time during the Term that is necessary or reasonably useful to Exploit any Licensed
Compound or Licensed Product in the Field in the Territory, including, for clarity, the Initial Licensed Know-
How and any and all Hengrui Know-How or Hengrui Sole Inventions.
1.75 “Licensed Patents” means any and all patents and patent applications Controlled by Hengrui as
of the Effective Date or at any time during the Term that (a) claim the composition of matter of, or the method
of making or using, any Licensed Compound or Licensed Product in the Field in the Territory, or (b) otherwise
are necessary or reasonably useful to Exploit any Licensed Compound or Licensed Product in the Field in the
Territory, including, for clarity, any patents and patent applications Controlled by Hengrui that claim, or that
otherwise that are necessary or reasonably useful to Exploit any, Hengrui Know-How or Hengrui Sole
Inventions; in each case including all continuations, continuations-in-part, divisionals, reissues,
reexaminations, extensions, term restorations, registrations, re-instatements, amendments, or corrections
thereof, including those set forth on Exhibit 1.75, and any and all foreign equivalents of any of the foregoing.
1.76 “Licensed Product” means one or more pharmaceutical products containing a Licensed
Compound (alone or with one or more other active ingredient(s)), in any forms, presentations, delivery
systems, dosages, strengths, and formulations; provided, however, Licensed Product excludes any
pharmaceutical products containing (a) any other proprietary compound of Hengrui or its Affiliates (other than
the Licensed Compound); or (b) any proprietary compound licensed to Hengrui or its Affiliates by a Third
Party.
1.77 “Licensed Technology” means the Licensed Know-How and Licensed Patents, including
Hengrui’s interest in the Joint Know-How, Joint Inventions, and Joint Patents.
1.78
“Losses” has the meaning set forth in Section 10.1.
1.79 “Manufacture” and “Manufacturing” mean activities directed to manufacturing, processing,
filling, finishing, packaging, labeling, quality control, quality assurance testing and release, post-marketing
validation testing, stability testing, inventory control and management, storing and transporting the Licensed
Compound or the Licensed Products, but excluding Development or Commercialization.
1.80 “MAA” means a marketing authorization application or equivalent application, including a BLA
or NDA and any necessary Pricing and Reimbursement Approvals, and all amendments and supplements
thereto, filed with the applicable Regulatory Authority in any country or jurisdiction.
1.81 “Major Biopharmaceutical Company” means a company headquartered in U.S., EU or Japan
that is primarily involved in the research, development, manufacturing, and marketing of biotechnology-based
pharmaceutical products, having annual sales of pharmaceutical products of at least [***] (or its equivalent in
another currency) in the year prior to the grant of a sublicense under Section 2.2.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
1.82
“Major Market” has the meaning set forth in Section 4.2.
1.83 “NDA” means a New Drug Application (or similar application), as defined in the Federal Food,
Drug, and Cosmetic Act, as amended, and applicable regulations promulgated thereunder by the FDA (or an
equivalent foreign agency).
1.84 “Net Sales” means, with respect to any Licensed Product, [***] for sales or other disposition of
such Licensed Product by or on behalf of Ideaya or its Affiliates or Sublicensees (or Sublicensee’s Affiliates)
(each a “Selling Party”) to Third Parties (other than Sublicensees and their Affiliates), less the following
deductions to the extent included in the gross invoiced sales price for such Licensed Product or otherwise
directly paid or actually incurred by a Selling Party and not otherwise recovered by or reimbursed to the Selling
Parties, as applicable, with respect to the sale of such Licensed Product:
[***]
1.85
“Party Vote” has the meaning set forth in Section 3.7(e).
1.86 “Patents” means (a) all national, regional and international patents, certificates of invention,
applications for certificates of invention, priority patent filings, and patent applications, or (b) any renewals,
divisions, continuations (in whole or in part), or requests for continued examination of any of such patents,
certificates of invention and patent applications, and any and all patents or certificates of invention issuing
thereon, and any and all reissues, reexaminations, extensions, divisions, renewals, substitutions, confirmations,
registrations, revalidations, revisions, and additions of or to any of the foregoing.
1.87 “Phase 1 Clinical Trial” means a human clinical trial of a Licensed Product in any country
conducted in a small number of volunteers designed or intended to establish an initial safety profile,
pharmacodynamics, or pharmacokinetics of a Product and that would satisfy the requirements of 21 CFR
312.21(a) or foreign equivalent.
1.88 “Phase 2 Clinical Trial” means a human clinical trial of a Licensed Product in any country to
determine initial efficacy and determine the appropriate dose range and that would satisfy the requirements of
21 CFR 312.21(b) or foreign equivalent.
1.89 “Phase 3 Clinical Trial” means a pivotal human clinical trial of a Licensed Product in any
country with a defined dose or a set of defined doses of a Licensed Product designed to ascertain efficacy and
safety of such Licensed Compound or Licensed Product for the purpose of submitting applications for
Regulatory Approval to the competent Regulatory Authorities and that would satisfy the requirements of 21
CFR 312.21(c) or foreign equivalent.
1.90 “Platform Patents” means all Licensed Patents, excluding any Product Patents, to the extent
Covering the Hengrui Platform (or any improvements thereto), including those Licensed Patents identified as
such in Exhibit 1.75 and any Patents issuing thereon, any divisional, continuation, continuation-in-part, reissue,
reexamination, utility model, parent or extension thereof, any Patent that claims priority to or shares priority or
a common specification therewith, and any foreign counterparts of any of the foregoing.
1.91 “PMDA” means the Pharmaceuticals and Medical Devices Agency of Japan or any successor
entity thereto.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
1.92 “Pricing and Reimbursement Approval” means, with respect to a Licensed Product, the
approval, agreement, determination, or decision of the applicable Regulatory Authority establishing the price
or level of reimbursement for such Licensed Product, as required in a given country or jurisdiction prior to
reimbursed (or insurance-covered) sale of such Licensed Product in such jurisdiction.
1.93
“Production Cell Line” has the meaning set forth in Section 6.6.
1.94
“Product Infringement” has the meaning set forth in Section 8.5(b)(i).
1.95 “Product Patents” means (a) all Licensed Patents identified as Product Patents in Exhibit 1.75
and (b) any other Licensed Patents that relate solely to the Licensed Compound(s) or Licensed Product(s) (e.g.,
do not relate to compounds or products that are not Licensed Compound(s) or Licensed Product(s)), including
any Patents filed pursuant to the last sentence of Section 8.4(a)(iii).
1.96 “Regulatory Approval” means any and all approvals, licenses, registrations, permits,
notifications, and authorizations (or waivers) of any applicable Regulatory Authority, including Pricing and
Reimbursement Approvals, that are necessary for the manufacture, use, storage, import, transport, promotion,
marketing, distribution, offer for sale, sale, or other Commercialization of a Licensed Product in a given
country or regulatory jurisdiction.
1.97 “Regulatory Authority” means any applicable Governmental Authority responsible for
granting Regulatory Approvals for Licensed Products, including the FDA, the EMA, and any corresponding
national or regional regulatory authorities.
1.98 “Regulatory
Filings”
means
any
regulatory
application,
submission,
notification,
communication (including meeting minutes), correspondence, registration, briefing documents, and other
filings made to, received from, or otherwise conducted with a Regulatory Authority in order to Develop,
Manufacture, or Commercialize a Licensed Compound or Licensed Product in a particular country or
jurisdiction, including any IND, MAA, or Regulatory Approval.
1.99
“Royalty-Bearing Licensed Product” has the meaning set forth in Section 6.4(a).
1.100
“Royalty Floor” has the meaning set forth in Section 6.4(f).
1.101
“Royalty Term” has the meaning set forth in Section 6.4(b).
1.102“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered
or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S.
Department of State, or (b) the United Nations Security Council, the European Union, any European Union
member state or the United Kingdom.
1.103
“SEC” means the U.S. Securities and Exchange Commission, or any successor
entity.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
1.104
“Selling Party” has the meaning set forth in Section 1.84.
1.105
“Sigma” means
Sigma-Aldrich
(Shanghai)
Co., Ltd. and Sigma-Aldrich
(Shanghai) Trading Co., Ltd., Merck KGaA companies, with a principal place of business at 15- 18F, No.3,
Building C, The New Bund World Trade Center (Phase II) Lane 227 Dongyu Road, Pudong New District
Shanghai 200126, China.
1.106
“Sole Inventions” has the meaning set forth in Section 8.2.
1.107
“Specified Patent” means [***].
1.108
“Sublicense Agreement” has the meaning set forth in Section 2.2.
1.109“Sublicense Fees” means all non-creditable, non-refundable upfront licensee fee or
Development milestone payments received by Ideaya or its Affiliates, in consideration for the grant, under
Section 2.2, of a sublicense under the Licensed Technology, pursuant to any Sublicense Agreement executed
on or before [***] and all non-creditable, non-refundable upfront payments received by Ideaya or its Affiliates
in consideration for the assignment or transfer of all or substantially all of the rights under the Licensed
Technology to a Third Party, but for clarity excluding in connection with any Change of Control of Ideaya
(such agreement assigning or transferring such rights an “Assignment Agreement”); provided that [***].
1.110“Sublicensee” means a Third Party or an Affiliate of Ideaya to which Ideaya grants a sublicense
under Section 2.2, under the Licensed Technology, to Develop, Manufacture or Commercialize any Licensed
Compound or Licensed Product in the Field in the Territory, as the case may be, other than a Distributor. In no
event will Hengrui or any of its Affiliates be deemed a Sublicensee. Notwithstanding the foregoing, a party
appointed by Ideaya or its Affiliates to distribute, market, or sell Licensed Product, where such party makes
royalty or other payments (other than the purchase price of Licensed Product) to Ideaya or its Affiliates, will be
deemed to be a Sublicensee.
1.111
“Territory” means worldwide other than Greater China.
1.112
“Term” has the meaning set forth in Section 12.1.
1.113“Third Party” means any entity other than Ideaya or Hengrui or an Affiliate of Ideaya or
Hengrui.
1.114
“Transferred Materials” has the meaning set forth in Section 5.3.
1.115
“Tri-Party Agreement” has the meaning set forth in Section 6.6.
1.116“U.S.” means the United States of America, including its territories and possessions.
1.117“Valid Claim” means (a) a claim of an issued and unexpired patent that has not been revoked or
held unenforceable or invalid by a court or other governmental agency of competent jurisdiction in a final and
non-appealable judgment (or judgment from which no appeal was taken within the allowable time period), and
that has not been lapsed, been revoked, cancelled
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
or abandoned, been donated to the public, finally disclaimed, denied, or held finally invalid or unenforceable
by a court of competent jurisdiction in an unappealed or unappealable decision and which has not been held
unenforceable through disclaimer or otherwise (b) a claim of a pending patent application that has been
pending for no longer than [***] from its filing date and that was filed and has been pending and is being
prosecuted in good faith and has not been lapsed, been revoked, cancelled or abandoned, been donated to the
public, finally disclaimed, denied, or held finally invalid or unenforceable by a court of competent jurisdiction
in an unappealed or unappealable decision and which has not been held unenforceable through disclaimer or
otherwise.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 2 GRANT OF LICENSES
2.1
Licenses to Ideaya. Subject to the terms and conditions of this Agreement,
Hengrui hereby grants to Ideaya, effective as of the Effective Date and during the Term, an exclusive (even as
to Hengrui), royalty-bearing, non-transferable (except as set forth in Section 14.5), license, with the right to
grant sublicenses solely as provided in Section 2.2, under the Licensed Technology to Exploit the Licensed
Compound and Licensed Products in the Field in the Territory.
2.2
Sublicensing. Ideaya will have the right to grant sublicenses, through multiple tiers, under the
licenses granted in Section 2.1 to its Affiliates and to Third Parties, provided that Ideaya will notify Hengrui of
the grant of such sublicense and the identity of the applicable Sublicensee in writing, and provide to Hengrui a
copy of such sublicense (which may be redacted for financial terms to the extent not relevant to Hengrui’s
rights or obligations hereunder), in each case, no later than [***] following the grant of such sublicense
agreement (“Sublicense Agreement”), and, with respect to the grant by Ideaya of any such sublicense to a
Third Party in respect of the U.S., Japan or the EU to any such potential Sublicensee that is not a Major
Biopharmaceutical Company at the time of the proposed sublicensing, Ideaya will obtain the written consent of
Hengrui prior to entering into a Sublicense Agreement for the U.S., Japan or EU with such Third Party, such
consent not to be unreasonably withheld, conditioned, or delayed. Ideaya will ensure that each sublicense
granted under the licenses granted in Section 2.1 will be in writing and comply with all terms and conditions of
this Agreement applicable to such Sublicensee and will require further sublicenses to comply with the terms
and conditions hereof, in the same manner and to the same extent as Ideaya is bound hereby, and Ideaya shall
remain responsible for the performance of this Agreement by the Sublicensees. Without limiting the foregoing,
each Sublicense Agreement will contain the following provisions: (a) a requirement that the sublicensee
comply with Article 11 with respect to the other Party’s Confidential Information; (b) requirements consistent
with this Section 2.2 and the relevant terms of this Agreement; and (c) if such sublicense contains a right to
Commercialize the Licensed Products, such Sublicense Agreement will also contain the following provisions:
(i) a requirement that the Sublicensee submit applicable sales or other reports to Ideaya to the extent necessary
or relevant to the reports required to be made or records required to be maintained by Ideaya under this
Agreement and (ii) the audit requirement set forth in Section 7.4 (mutatis mutandis). For clarity, any attempted
sublicense by Ideaya in violation of this Section 2.2 shall be void.
2.3
No Implied Licenses. Except as expressly set forth in this Agreement, neither Party will acquire
any license or other intellectual property interest, by implication or otherwise, under or to any Intellectual
Property Controlled by the other Party.
2.4
Disclosure and Transfer of Licensed Know-How.
(a) Promptly after the Effective Date (but in no event later than [***] after the Effective
Date), to the extent not already in Ideaya’s possession, Hengrui will transfer to Ideaya the Initial Licensed
Know-How. As reasonably requested by Ideaya, Hengrui shall provide to Ideaya, reasonable access to
personnel of Hengrui or its Affiliates familiar with the Licensed Compounds and Licensed Know-How, and
shall facilitate transfer of supplier relationships to Ideaya. In addition, Hengrui will use good faith efforts to
provide to Ideaya on an ongoing basis, any Data arising from Hengrui’s conduct of any clinical trial of any
Licensed Product, in each case promptly, but no later than [***] following Ideaya’s reasonable request,
provided that any such Data that is raw data may be subject to further quality control review after such
provision to Ideaya.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Notwithstanding anything to the contrary, Hengrui shall not be required to reduce to tangible embodiments any
Know-How that does not already exist in such tangible embodiments in fulfillment of any of its obligations
hereunder (including this Section 2.4 and Section 5.2).
(b) Such access will be provided by teleconference, by electronic means, or in- person at
Hengrui’s or its contractor’s facilities. At least [***], upon Ideaya’s reasonable request, Hengrui will provide
to Ideaya or its permitted designee any material additional Licensed Know-How generated since the last such
disclosure.
(c) With respect to the Licensed Know-How transfer contemplated by Section 2.4(a), Hengrui
will provide Ideaya with electronic copies of, and if reasonably requested by Ideaya, physical access to the
originals of, any and all documents, electronic records and databases, samples, and other tangible materials
included in the applicable Licensed Know-How. For clarity, Licensed Know-How shall include all material
preclinical study reports that was generated by or on behalf of Hengrui or its Affiliates prior to the Effective
Date, for any Licensed Compound or Licensed Product or incorporated (including any Data therein) in any
Regulatory Filing for any Licensed Compound or Licensed Product.
(d) Hengrui’s provision of any Licensed Know-How or access to its personnel, and conduct of
any of its other obligations contemplated under this Section 2.4 shall be (i) at no cost or expense for the initial
[***] FTE hours (the “FTE Cap”); and (ii) at a charge to Ideaya of [***] per FTE hour thereafter.
(e) Each Party will provide the other Party with copies of Data that have been or are generated
by or on behalf of such Party and its Affiliates in relation to Licensed Compound or Licensed Products.
Hengrui will provide all Information (including all Data) under Sections 2.4 and 5.2 in the original language of
such Information. Upon reasonable request by Ideaya and acceptance by Ideaya of the fee quote provided by
Hengrui with respect thereto, Hengrui will provide the translation of any such documents into English at
Ideaya’s sole cost and expense. For clarity, notwithstanding such disclosure, any such Data will remain the
Confidential Information of the disclosing Party for purposes of this Agreement.
2.5
License Grant Back to Hengrui. In partial consideration for the rights granted to Ideaya
hereunder, Ideaya hereby grants to Hengrui, an irrevocable, perpetual, non-terminable, exclusive (even as to
Ideaya), royalty-free, fully paid-up, freely transferable license, with the right to freely grant sublicenses
through multiple tiers, under any rights Controlled by Ideaya in Arising IP to Exploit the Licensed Compounds
and Licensed Products in the Field in Greater China. Hengrui shall remain fully liable for any action or
inaction by any of its sublicensees that would be a breach of the terms of this Agreement as if committed by
Hengrui. Hengrui will ensure that each sublicense granted under the license granted in this Section 2.5 will be
in writing and comply with all terms and conditions of this Agreement applicable to such sublicensee and will
require further sublicenses to comply with the terms and conditions hereof, in the same manner and to the same
extent as Hengrui is bound hereby, and Hengrui shall remain responsible for the performance of this
Agreement by all sublicensees.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 3
DEVELOPMENT
3.1
General. As between the Parties, Ideaya will be solely responsible, at its own expense, for the
pre-clinical and clinical Development of such Licensed Compound and Licensed Products containing such
Licensed Compound in the Field in the Territory. As between the Parties, Hengrui will be solely responsible, at
its own expense, for the pre-clinical and clinical Development of such Licensed Compound and Licensed
Products containing such Licensed Compound in the Field outside of the Territory.
3.2
Development Plans.
(a) Development Plan. An initial development plan for Ideaya’s intended Development
activities is set forth on Exhibit 3.2(a) (as amended in accordance with this Agreement, the “Development
Plan”), and Ideaya will conduct such Development of the Licensed Compound under this Agreement in
accordance with such Development Plan. Ideaya will be responsible for updating the Development Plan
annually and will provide the JSC with each updated Development Plan that also includes a report on Ideaya’s
Development activities.
(b) Conflict. If the terms of a Development Plan contradict, or create inconsistencies or
ambiguities with, the terms of this Agreement, then the terms of this Agreement will govern.
3.3
Conduct of Development Activities. Each Party will perform all Development activities in
compliance with all Applicable Laws, including good scientific and clinical practices under the Applicable
Laws of the country in which such activities are conducted.
3.4
Development Diligence. Ideaya will use Commercially Reasonable Efforts (but in no event less
than such efforts that Ideaya would use for its Development activities with respect to its other programs) to
Develop a Licensed Product pursuant to the Development Plan, and if such Development is successful, file at
least one MAA for such Licensed Product in the Field in the Territory following the Effective Date. Without
limiting the generality of the foregoing, Ideaya shall use Commercially Reasonable Efforts to Initiate a clinical
trial of a Licensed Product in the Territory [***].
3.5
Use of Contractors. Each Party may perform its activities under this Agreement through one or
more contractors, including distributors, in its reasonable discretion, provided that each contractor will be
bound by a written agreement that is consistent with the terms and conditions of this Agreement, including
terms regarding the confidentiality and non-use of Confidential Information no less stringent than those set
forth in Article 11 and terms requiring assignment to such Party of all Intellectual Property that is necessary or
useful for or otherwise related to the Development, Manufacture, or Commercialization of Licensed
Compound or Licensed Products developed by each contractor in the course of performing any such work that
are consistent with the terms and conditions of this Agreement.
3.6
Conduct of Regulatory Activities; Right of Reference; Pharmacovigilance.
(a) Conduct of Regulatory Activities. Ideaya will be solely responsible, at its own expense,
for (i) all regulatory activities related to Licensed Products in the Field in the Territory, including all
Regulatory Filings and all communications with Regulatory Authorities, and (ii) preparing, filing, obtaining,
and maintaining Regulatory Approvals for Licensed Products
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
in the Field in the Territory. Subject to Applicable Laws, Ideaya (or its Affiliate or other Sublicensee) will be
the holder of all Regulatory Approvals for Licensed Products in the Field in the Territory. Without limiting the
following, Ideaya shall use Commercially Reasonable Efforts to conduct all such regulatory activities, which
shall include seeking Regulatory Approval in each of the Major Markets.
(b) Right to Reference Regulatory Materials. Each Party hereby grants to the other Party a
right of reference to all Regulatory Materials filed by such Party for Licensed Products solely for the purpose
of seeking, obtaining and maintaining Regulatory Approvals for, and the Commercialization of, Licensed
Products in such other Party’s respective territory.
(c) Pharmacovigilance and Drug Safety Agreement. Before the receipt of regulatory
approval for the commencement of any clinical trials in or for the Territory, the Parties will enter into a
mutually acceptable drug safety data exchange agreement setting forth the Parties’ respective obligations in
detail regarding pharmacovigilance and the exchange of global drug safety data for regulatory reporting and
will revise such agreement for post-marketing surveillance purposes at an appropriate time before the receipt of
approval of an MAA of a Licensed Product in the Territory.
3.7
Governance.
(a) Formation; Purposes and Principles. Within [***] after the Effective Date, the Parties
will form a joint steering committee (the “JSC”) to review and oversee certain activities of the Parties relating
to the Development and Commercialization of the Licensed Compound and Licensed Products, to ensure
coordination of Development and Commercial activities in and outside of the Territory, and to facilitate
information sharing between the Parties with respect thereto. The JSC will be in existence from the date of its
formation until the Parties mutually agree to disband the JSC.
(b)
Specific Responsibilities. The JSC will:
[***]
(c) Membership. The JSC will be composed of a total of three (3) (or such other number
agreed by the Parties) representatives appointed by each Party. Each individual appointed by a Party as a
representative to the JSC will be an employee of such Party with sufficient seniority within the applicable Party
to provide meaningful input and make decisions arising within the scope of the JSC’s responsibilities and have
knowledge and expertise in the Development of compounds and products similar to the Licensed Compound
and Licensed Products under this Agreement. Each Party may replace any of its JSC representatives at any
time upon written notice to the other Party, which notice may be given by e-mail, sent to the other Party. Each
JSC representative will be subject to confidentiality obligations no less stringent than those in Article 11.
(d) Meetings. The JSC will hold meetings [***] during the Term for so long as the JSC
exists, unless the Parties mutually agree in writing to a different frequency. Either Party may also call a special
meeting of the JSC by providing at least [***] prior written notice to the other Party if such Party reasonably
believes that a significant matter must be addressed prior to the next scheduled meeting. The JSC may meet in
person or by audio or video conference as its representatives may mutually agree. Other representatives of the
Parties (including relevant Alliance Managers), their Affiliates, and, only with the advance, written consent
(not to be
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
unreasonably withheld, delayed, or conditioned) of both Parties, Third Parties involved in the Development of
Licensed Compound and Licensed Products may be invited by the members of the JSC to attend meetings as
observers; provided, however, that such representatives are subject to confidentiality obligations no less
stringent than those set forth in Article 11.
(e) Decision-Making. Each Party’s representatives on the JSC will collectively have one (1)
vote (the “Party Vote”) on all matters before the JSC, and no action or decision will be taken by the JSC
without a unanimous Party Vote (i.e., the affirmative Party Vote of each Party). If the JSC is not able to reach
agreement with respect to a matter at a duly called meeting of the JSC, either Party may refer such matter to the
Executive Officers for resolution, and the Executive Officers will attempt to resolve the matter in good faith. If
the Executive Officers fail to resolve such matter within [***] after the date on which the matter is referred to
the Executive Officers (unless a longer period is agreed to by the Parties), then the Executive Officer of Ideaya
will have final decision-making authority on all matters relating to the Licensed Compounds and Licensed
Products in the Territory, and Hengrui will have final decision- making authority on all matters relating to the
Licensed Compounds and Licensed Products outside of the Territory; [***]. Either Party may submit for
resolution, pursuant to Section 13.1, to the Executive Officers any such disputes that are unable to be resolved
under this Section 3.7(e) in accordance with such final decision-making authority. Notwithstanding the
foregoing or anything contained herein, neither the JSC nor a Party through exercise of its final decision-
making authority will have the right or authority to amend or waive any of the terms or conditions of this
Agreement or otherwise determine any matter outside the authority of the JSC or that expressly requires
mutual agreement of the Parties under this Agreement, or to increase or materially change the other Party’s
obligations under this Agreement.
(f) Alliance Managers. Each Party will appoint an individual, who is an employee of such
Party, to act as a project manager (the “Alliance Manager”) who will be responsible for (i) providing a single
point of communication within the Parties’ respective organizations and between the Parties with respect to
this Agreement, including any issues that may arise that it may be possible to resolve without (or prior to)
escalation to the JSC, and (ii) implementing and coordinating activities and facilitating the exchange of
information between the Parties. The Alliance Managers will be responsible for facilitating the flow of
information and otherwise promoting communication, coordination and collaboration between the Parties.
Each Party may replace its Alliance Manager at any time upon written notice to the other Party.
3.8
Audits.
(a)If a Regulatory Authority desires to conduct an inspection or audit of any Ideaya facility or any Affiliate or
Third Party facility under contract with Ideaya with regard to the Development of a Licensed Product, then
Ideaya will notify Hengrui as soon as practicably possible after receipt of such notification of such audit or
inspection and provide copies of any materials provided to it by the applicable Regulatory Authority to the
extent relating to such Licensed Product; provided that Ideaya will not be required to notify Hengrui of audits
or inspections that are of a routine nature or to the extent they do not relate to Development of such Licensed
Product, except where such audits result in communications or actions of such Regulatory Authority which
have an impact upon such Licensed Product. In addition, if a Regulatory Authority conducts an unannounced
inspection or audit of any Ideaya facility or any Affiliate or Third Party facility under contract with Ideaya with
regard to Development of a Licensed Product, then Ideaya will notify Hengrui as promptly as practicable after,
but in any event within [***] of, commencement of such audit or inspection. Ideaya will cooperate, and will
use reasonable efforts to cause the contract
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
facility to cooperate, with such Regulatory Authority and Hengrui during such inspection or audit.
Following receipt of the inspection or audit observations of such Regulatory Authority, Ideaya will promptly
provide Hengrui with a copy of the inspection or audit report to the extent relating to such Licensed Product
and also provide Hengrui with copies of any written communications received from Regulatory Authorities
with respect to such facilities in a timely manner after receipt, to the extent such written communications relate
to Development of such Licensed Product, and will prepare the response to any such observations. Ideaya will
provide Hengrui with a copy of any proposed response to such communications and will consider in good faith
including Hengrui’s reasonable comments with respect to such proposed response. Ideaya agrees to conform its
activities under this Agreement to any commitments made in such a response.
(b) If a Regulatory Authority desires to conduct an inspection or audit of any Hengrui facility
or any Affiliate or Third Party facility under contract with Hengrui, in each case with regard to any Hengrui
clinical trial Information provided to Ideaya under this Agreement that Ideaya has submitted to such
Regulatory Authority in order to obtain Regulatory Approval of the Licensed Product or Manufacture of
Licensed Compound or Licensed Product supplied to Ideaya under this Agreement, then Hengrui will notify
Ideaya as soon as practicably possible after receipt of such notification of such audit or inspection and provide
copies of any materials provided to it by the applicable Regulatory Authority to the extent relating to such
Licensed Product; provided, that Hengrui will not be required to notify Ideaya of audits or inspections that are
of a routine nature or to the extent they do not relate to the Exploitation of such Licensed Product in the
Territory, except where such audits result in communications or actions of such Regulatory Authority which
have an impact upon such Licensed Product in the Territory. In addition, if a Regulatory Authority in the
Territory conducts an unannounced inspection or audit of any Hengrui facility or any Affiliate or Third Party
facility under contract with Hengrui, in each case with regard to any Hengrui clinical trial Information
provided to Ideaya under this Agreement that Ideaya has submitted to such Regulatory Authority in order to
obtain Regulatory Approval of a Licensed Product or relates to any Licensed Compound or Licensed Product
supplied to Ideaya under this Agreement, then Hengrui will notify Ideaya within [***] of commencement of
such audit or inspection. Hengrui will cooperate, and will use reasonable efforts to cause the contract facility to
cooperate, with such Regulatory Authority during such inspection or audit. Following receipt of the inspection
or audit observations of such Regulatory Authority, Hengrui will promptly provide Ideaya with a copy of the
inspection or audit report to the extent relating to such Licensed Product and also provide Ideaya with copies of
any written communications received from Regulatory Authorities with respect to such facilities in a timely
manner after receipt, to the extent such written communications relate to any Hengrui clinical trial Information
provided to Ideaya under this Agreement that Ideaya has submitted to such Regulatory Authority in order to
obtain Regulatory Approval for a Licensed Product or Licensed Compound or Licensed Product supplied to
Ideaya under this Agreement, and will prepare the response to any such observations. Hengrui will provide
Ideaya with a copy of any proposed response to such communications and will consider in good faith including
Ideaya’s reasonable comments with respect to such proposed response. Hengrui agrees to conform its activities
under this Agreement to any commitments made in such a response.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 4
COMMERCIALIZATION
4.1
General. As between the Parties, Ideaya will be solely responsible, at its own expense, for all
aspects of the Commercialization of Licensed Products in the Territory, and Hengrui will be solely responsible,
at its own expense, for all aspects of the Commercialization of Licensed Products outside the Territory,
including: (a) developing and executing a commercial launch and pre-launch plan; (b) negotiating with
applicable Regulatory Authorities regarding the price and reimbursement status of Licensed Products; (c)
marketing and promotion activities; (d) booking sales and distribution and performance of related services; (e)
handling all aspects of order processing, invoicing and collection, inventory and receivables; (f) providing
customer support, including handling medical queries, and performing other related functions; (g) medical
affairs activities (e.g., medical education, non-registrational data generation, etc.); and (h) conforming its
practices and procedures to Applicable Laws relating to the marketing, detailing, and promotion of Licensed
Products.
4.2
Commercialization Diligence. With respect to any Licensed Product for which Regulatory
Approval has been obtained in a country, Ideaya will use Commercially Reasonable Efforts (but in no event
less than such efforts that Ideaya would use for its Commercialization activities with respect to its other
programs) to Commercialize such Licensed Product in such country, including that if Regulatory Approval is
obtained in any of the United States, Japan, United Kingdom, France, Germany, Spain or Italy (each a “Major
Market”), Ideaya shall itself or through a Sublicensee use Commercially Reasonable Efforts to market and
promote such Licensed Product in such country.
4.3
Promotional Materials. The Parties will each be responsible for filing their own trademarks for
Licensed Products in their respective territories, and shall discuss granting each other mutual licenses under
copyrights embodied in marketing content to commercialize the Licensed Product in their respective territories.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 5
MANUFACTURE AND SUPPLY
5.1
Responsibility. As between the Parties, except as otherwise set forth in this Agreement, Ideaya,
itself or through its Affiliates or CMOs, will be responsible for the Manufacture and supply of Ideaya’s and its
Affiliates’ and Sublicensees’ requirements for Licensed Compound and Licensed Products for Development
and Commercial use in the Territory.
5.2Manufacturing Technology Transfer. Promptly after Ideaya’s written request, to the extent not already in
Ideaya’s possession, Hengrui will commence a technology transfer to Ideaya or its permitted designee of all
Licensed Know-How relating to the Manufacture of the Licensed Compound or Licensed Product, including
facilitating contracting with Hengrui’s current CMOs, as reasonably necessary for Ideaya or its permitted
designee to be able to implement the Manufacturing process used by Hengrui (or its Affiliate or CMO) to
Manufacture the applicable Licensed Compound or Licensed Product (including API and linker payload
materials for manufacture, and any intermediate materials or compounds). Hengrui will use good faith efforts
to complete such Manufacturing technology transfer as soon as reasonably practicable. In addition to such
Manufacturing technology transfer, Hengrui will use good faith efforts to provide reasonable assistance from
and access to Hengrui employees with relevant knowledge related to such Manufacturing technology. [***].
5.3
Transfer of Existing Materials. Promptly after Ideaya’s written request, and in accordance
with the Clinical Supply Agreement, Hengrui will transfer to Ideaya from Hengrui’s then-existing stock
(which, for the avoidance of doubt, excludes any stock that is reasonably necessary or useful for Hengrui’s
Development activities outside the Territory) of the Licensed Compound and Licensed Product in the Control
of Hengrui or any of its Affiliates (the “Transferred Materials”). For clarity, the Transferred Materials will
include any molecules or compounds used in the manufacture by Ideaya or its permitted designee of such
Licensed Compound. The Transferred Materials will be delivered by Hengrui [***] to an address Ideaya
designates in writing. Title and risk of loss will be transferred to and borne by Ideaya upon delivery of the
Transferred Materials by Hengrui to a carrier designated by Ideaya. Upon request by Ideaya made reasonably
prior to the shipment of the Transferred Materials by Hengrui, Hengrui will provide Ideaya the applicable
documentation required for Ideaya to conduct its final release for the Transferred Materials in accordance with
Applicable Laws.
5.4
Clinical Supply Agreement. In accordance with a clinical supply agreement to be negotiated
and executed promptly after the Effective Date (“Clinical Supply Agreement”) and an associated quality
agreement, Hengrui will supply the specific quantity of clinical trial materials to Ideaya for use in clinical trials
of Licensed Products, as requested by Ideaya in a forecasted order submitted to Hengrui reasonably in advance
of (but in any event, at least [***] prior to) the delivery date. Ideaya will reimburse Hengrui’s reasonable
documented fully burdened cost of Manufacturing such quantity of clinical trial material provided under the
Clinical Supply Agreement, as mutually agreed in writing in advance.
5.5
Commercial Supply Agreement. Upon the written request of Ideaya, the Parties will enter into
good faith negotiations for a supply agreement governing the supply of Licensed
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Product by Hengrui or one of its Affiliates to Ideaya for Commercialization in the Field in the Territory
following Ideaya’s receipt of the first Regulatory Approval in the Territory (the “Commercial Supply
Agreement”) and an associated quality agreement. The terms of any such Commercial Supply Agreement will
be negotiated in good faith by the Parties based upon reasonable and customary terms typically associated with
supply of pharmaceutical products for Commercialization in the Territory.
5.6Ideaya Manufacturing in Greater China. Notwithstanding anything to the contrary herein, in the event
Ideaya or any of its Affiliates elects to engage a CDMO to Manufacture Licensed Compound and Licensed
Products on its behalf in Greater China, Ideaya shall, or shall cause its applicable Affiliate to, provide notice to
Hengrui thereof offering Hengrui the right to assume such Manufacturing obligations. Upon receipt of such
notice, Hengrui and Ideaya shall negotiate in good faith to agree on such a Manufacturing arrangement in
Greater China on commercially reasonable terms; provided, however, Ideaya and its Affiliates shall have the
right to engage a Third Party to undertake the Manufacture of Licensed Compound and Licensed Products on
its behalf in Greater China if Ideaya or its applicable Affiliate provides credible evidence to Hengrui that
Hengrui’s Manufacturing capabilities do not meet Ideaya’s requisite quality standards, as assessed by the
quality assurance function of Ideaya or its applicable Affiliate, and Hengrui agrees in writing and in good faith
that Hengrui’s Manufacturing capabilities do not meet such standards.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 6
PAYMENTS
6.1
Upfront Payment. In partial consideration for Ideaya’s rights in and to the Licensed
Technology licensed hereunder and other rights granted hereunder, within [***] of the Effective Date, Ideaya
will pay to Hengrui a one-time non-creditable and non-refundable upfront fee in the amount of Seventy-Five
Million U.S dollars ($75,000,000).
6.2
Development and Regulatory Milestone Payments.
(a) Development and Regulatory Milestones. In partial consideration for Ideaya’s rights in
and to the Licensed Technology licensed hereunder and other rights granted hereunder, Ideaya will pay to
Hengrui the one-time development milestone payments (each, a “Development Milestone Payment”) set forth
in the table below upon the first achievement of each milestone event (whether by or on behalf of Ideaya, its
Affiliates, or Sublicensees):
Development Milestone Event
Development Milestone
Payment (in US$)
(i)
[***]
[***]
(ii) [***]
[***]
(iii) [***]
[***]
(iv) [***]
[***]
(v) [***]
[***]
(vi) [***]
[***]
(vii) [***]
[***]
Total
$200,000,000
Each Development Milestone Payment above is payable one time only, regardless of the number of times the
corresponding event is achieved by a Licensed Product and regardless of the number of Licensed Products to
achieve such event. Under no circumstances will Ideaya be obligated to pay Hengrui, pursuant to this Section
6.2, more than Two Hundred Million U.S. dollars ($200,000,000).
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
If any Development Milestone Event set forth in (ii) through (vii) occurs without any one of the preceding
Development Milestone Events set forth in (i) through (iii) occurring, such non- occurring Development
Milestone Payment set forth in (i) through (iii) would be deemed to be achieved and paid at the same time as
the trigger and payment for the first of the applicable subsequent Development Milestone Event set forth in (ii),
(iii), (iv), (v), (vi), or (vii).
(b) Notice and Payment. Ideaya will notify Hengrui promptly, but in no event later than
[***], after Ideaya becomes aware of the achievement of any milestone event set forth in Section 6.2(a).
Thereafter, Hengrui will submit to Ideaya an invoice for the corresponding milestone payment set forth Section
6.2(a). Within [***] of Ideaya’s receipt of any such invoice, Ideaya will remit the applicable milestone
payment to Hengrui.
6.3
Commercial Milestone Payments.
(a) Commercial Milestones. In partial consideration for Ideaya’s rights in and to the
Licensed Technology licensed hereunder and other rights granted hereunder, Ideaya will pay to Hengrui the
one-time commercial milestone payments set forth below upon the first achievement of aggregate annual Net
Sales of Royalty-Bearing Licensed Products in the Territory exceeding the values indicated below in a
Calendar Year (each, a “Commercial Milestone Payment”). For clarity, the milestone payments in this
Section 6.3(a) will be additive such that if multiple milestone events for the Licensed Compound specified
below are achieved in the same Calendar Year, then the Commercial Milestone Payments for all such
milestone events will be payable after the end of such Calendar Year.
Calendar Year Net Sales of all Royalty-Bearing Licensed
Products in the Territory (in US$)
Commercial Milestone Payment
(in US$)
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
Total
[***]
Each Commercial Milestone Payment above is payable one time only, regardless of the number of times the
corresponding event is achieved by the Licensed Products. Under no circumstances will Ideaya be obligated to
pay Hengrui, pursuant to this Section 6.3, more than [***].
(b) Notice and Payment. Ideaya will notify Hengrui promptly, but in no event later than
within [***] after Ideaya becomes aware that the Licensed Products have achieved any commercial milestone
event set forth in Section 6.3(a), whether sold by Ideaya, its Affiliates, or
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Sublicensees. Ideaya will pay to Hengrui the applicable Commercial Milestone
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Payment within [***] after the end of the Calendar Year in which such commercial milestone event is
achieved.
6.4
Royalty Payments.
(a) Royalty Rate. In partial consideration for Ideaya’s rights in and to the Licensed
Technology licensed hereunder and other rights granted hereunder, subject to the remainder of this Section 6.4,
Ideaya will make quarterly royalty payments to Hengrui, on aggregate annual Net Sales of all Licensed
Products sold in the Territory during the applicable Royalty Term for each Licensed Product in each country
(such Licensed Product in such country, a “Royalty-Bearing Licensed Product”).
Annual Net Sales of All Royalty-Bearing Licensed Products in the Territory
Royalty Rate
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
(b) Royalty Term. Royalties will be paid on a Licensed Product–by–Licensed Product and
country-by-country basis in the Territory from the First Commercial Sale of such Licensed Product in such
country until the later of: (i) expiration of the last-to-expire Valid Claim of the Licensed Patents Covering the
composition of matter or method of use in an approved Indication in such country of such Licensed Product in
such country, and (ii) [***] after the First Commercial Sale of such Licensed Product in such country (the
“Royalty Term”).
(c) Generic Competition. If one or more Generic Products to a Licensed Product is launched
in a country in the Territory during the Royalty Term for such Licensed Product in such country, and the unit
volume of all Generic Products to such Licensed Product that are sold by Third Parties in such country is equal
to or exceeds [***] of the combined unit volume
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
of such Licensed Product and such Generic Product sold in such country for any Calendar Quarter, the
royalties applicable to such Net Sales in such country will be reduced by [***] of the royalties otherwise
payable under Section 6.4(a), as applicable, for such Calendar Quarter. Determinations of unit volume will be
based on a mutually acceptable calculation method and using market share data provided by a reputable and
mutually agreed upon provider, such as IQVIA.
(d) Third Party Licenses. Subject to Section 6.6., if Ideaya, its Affiliates, or Sublicensees
obtains a license from a Third Party under such Third Party’s Patents, which Ideaya, its Affiliates or
Sublicensees determine in good faith are necessary to manufacture, use, import, offer to sell, or sell a Licensed
Compound or Licensed Product in the Field in the Territory (a “Necessary Third Party License”), then
Ideaya will have the right to credit [***] of all royalty payments made by Ideaya, its Affiliates, or Sublicensees
to such Third Party pursuant to such Necessary Third Party License against any payments owed to Hengrui
hereunder with respect to such Licensed Product; provided that (i) Ideaya shall provide written notice to
Hengrui promptly after commencing negotiations with such Third Party and (ii) any such credits not exhausted
in any Calendar Quarter may be carried forward into future Calendar Quarters, provided that such carried
forward credits never reduce the royalties due to Hengrui in any Calendar Quarter below the Royalty Floor.
(e) Know-How Royalty. On a country-by-country and Licensed Product–by– Licensed
Product basis in a Calendar Quarter, in the event that none of the manufacture, use, importation, offer to sell, or
sale of the Licensed Products is Covered by any Valid Claim of a Licensed Patent in such country, then the
royalties applicable to such Net Sales in such country for such Licensed Product will be reduced by [***] of
the royalties otherwise payable under this Section 6.4, as applicable, for such Calendar Quarter.
(f) Maximum Amount of Royalty Reduction. In no event will the royalties payable to
Hengrui under Section 6.4 be reduced by more than [***] in any Calendar Quarter during the Royalty Term for
a Licensed Product as a result of the reductions set out in Sections 6.4(c) to 6.4(e) (the “Royalty Floor”).
Credits for deductions not exhausted in any Calendar Quarter may be carried forward into future Calendar
Quarters, provided that such carried forward credits never reduce the royalties due to Hengrui in any Calendar
Quarter below the Royalty Floor.
6.5
Sublicensing Payments. In partial consideration for Ideaya’s rights in and to the Licensed
Technology licensed hereunder and other rights granted hereunder, Ideaya will pay to Hengrui an amount equal
to [***] of any Sublicense Fees received by Ideaya or its Affiliates pursuant to any Sublicense Agreement or
Assignment Agreement, in each case, executed on or before the [***], which amount shall be paid to Hengrui
promptly after, but in any event within [***] of, receipt of the applicable Sublicense Fees; provided that in no
event will Ideaya be obligated to pay more than [***] pursuant to this Section 6.5.
6.6
Tri-Party Agreement and Cell Line Costs. The Parties shall cooperate to promptly execute an
agreement with Sigma confirming Ideaya’s use (by itself or by or through its third-party contract research
organization or contract manufacturing organization) of the [***] cell line to express the Licensed Compound
pursuant to the terms of this Agreement (the “Tri-Party Agreement”). To the extent the Tri-Party Agreement
has
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
not been executed prior to the completion of the Manufacturing technology transfer contemplated by Section
5.2, the Parties will cooperate in good faith to determine an alternative solution for Ideaya to obtain such rights.
To the extent any amount is payable to Sigma under the Tri-Party Agreement in connection with the transfer by
Hengrui to Ideaya of the cell line engineered to produce the Licensed Compound (the “Production Cell
Line”), the Parties shall each bear [***] of the cost, and, notwithstanding the terms of the Tri-Party Agreement,
Ideaya shall pay such amounts when due to Sigma, and upon Ideaya’s use of the Production Cell Line to
express the Licensed Compound for GMP activities, Ideaya shall invoice Hengrui for its share of such cost. To
the extent any amount is payable to Sigma in connection with the transfer of the Production Cell Line by
Ideaya to a Third Party under the Tri-Party Agreement or any separate agreement between Ideaya, Sigma,
and/or such Third Party, as between the Parties, Ideaya shall solely bear such costs.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 7 PAYMENT;
RECORDS; AUDITS
7.1
Payment; Reports. Royalty payments due by Ideaya to Hengrui under Section 6.4 will be
calculated and reported for each Calendar Quarter. Ideaya will pay all royalty payments due under Section 6.4
within [***] after the end of each Calendar Quarter and will include with each payment a report setting forth,
on a country-by-country and Licensed Product–by– Licensed Product basis, (a) the amount of gross sales of the
Licensed Products in such Calendar Quarter, (b) the amount of Net Sales of the Licensed Product in such
Calendar Quarter (including reasonable information supporting the determination of Net Sales), (c) a
calculation of the royalty payment due on such sales, including the application of any reduction made in
accordance with Sections 6.4(c) to 6.4(e), and any Commercial Milestone Payment due on such sales, and (d)
the exchange rate for such country.
7.2
Exchange Rate; Manner and Place of Payment. All references to dollars and “$” in this
Agreement will refer to U.S. dollars. All payments under this Agreement will be payable in U.S. dollars. When
conversion of payments from any currency other than U.S. dollars is required, such conversion will be at an
exchange rate equal to the weighted average of the rates of exchange for the currency of the country from
which such payments are payable as published by The Wall Street Journal, Eastern U.S. Edition, during the
Calendar Quarter in which the applicable sales were made. All payments owed under this Agreement will be
made by wire transfer in immediately available funds to a bank and an account designated in writing by
Hengrui.
7.3
Taxes.
(a) Taxes on Income. Each Party will be solely responsible for the payment of all taxes
imposed on its share of income arising directly or indirectly from the activities of such Party under this
Agreement.
(b) Withholding Tax. The Parties agree to cooperate with one another and use reasonable
efforts to avoid or reduce tax withholding or similar obligations in respect of royalties, milestone payments,
and other payments made by Ideaya to Hengrui under this Agreement. To the extent Ideaya is required to
deduct and withhold taxes on any payment to Hengrui, Ideaya will deduct those taxes from such payment, pay
the amounts of such taxes to the proper Governmental Authority in a timely manner, and promptly transmit to
Hengrui an official tax certificate or other evidence of such withholding sufficient to enable Hengrui to claim
such payment of taxes. Hengrui will provide Ideaya any tax forms that may be reasonably necessary in order
for Ideaya not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax
treaty.
(c) Indirect Tax. Each Party will provide the other with reasonable assistance to enable the
reduction, credits, or recovery, as permitted by Applicable Laws, of withholding taxes, tariffs, or sales, use,
value added or similar taxes (each an “Indirect Tax”), or similar obligations resulting from payments made
under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or Indirect
Tax. For clarity, Hengrui will bear any Indirect Taxes imposed by the applicable tax authorities in Greater
China on payments made under this Agreement. In the event any tax authority outside of Greater China
imposes any Indirect
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Tax on payments made under this Agreement and such imposition does not result from the actions of either
Party (such as changing such Party’s location or jurisdiction), the Parties shall discuss in good faith a
reasonable allocation of such Indirect Tax to be borne by each Party. Notwithstanding the foregoing, if as a
result of any action by Hengrui, including assignment, any change in Hengrui’s tax residency, or any failure on
the part of Hengrui to comply with Applicable Laws (including filing or record retention requirements),
incremental taxes are imposed that were not otherwise applicable, then Hengrui shall be solely responsible for
the amount of such incremental taxes.
7.4
Records; Audit. Ideaya will keep, and will have its Affiliates and Sublicensees keep, complete
and accurate records pertaining to the sale or other disposition of Licensed Products in sufficient detail to
permit Hengrui to confirm the accuracy of Commercial Milestone Payments and royalty payments due
hereunder. Such records will be kept for [***] following the end of the Calendar Quarter to which they pertain,
or such longer period as may be required under Applicable Law. Hengrui will have the right to have an
independent, certified public accountant reasonably acceptable to Ideaya audit records of Ideaya, its Affiliates
or Sublicensees to confirm Net Sales, royalties, and Commercial Milestone Payments for a period covering not
more than [***] following the Calendar Quarter to which they pertain. Such audits may be conducted during
normal business hours upon reasonable prior written notice to Ideaya, and not more than once per Calendar
Year. Any such auditor will not disclose Ideaya’s Confidential Information to Hengrui, except to the extent
such disclosure is necessary to verify the accuracy of the financial reports furnished by Ideaya or the amount of
payments by Ideaya under this Agreement, and will enter into a customary confidentiality agreement with
Ideaya. Any amounts shown to be owed but unpaid will be paid within [***] after the accountant’s report. Any
overpayment by Ideaya revealed by an audit will be credited against future payments owed by Ideaya to
Hengrui (and if no further payments are due, will be refunded by Hengrui to Ideaya within [***] after the
accountant’s report). Hengrui will bear the full cost of such audit unless such audit discloses an underpayment
by Ideaya of more than [***] of the amount of royalties or other payments due under this Agreement for the
audited period, in which case, Ideaya will bear the reasonable cost (including any fee paid by Hengrui to such
auditor) of such audit.
7.5
Late Payments. In case of a delay of any undisputed payment under this Agreement, Ideaya
will pay Hengrui interest on any payments that are not paid on the date on which such payments are due under
this Agreement at a monthly interest rate equal to [***] plus the U.S. prime interest rate, as reported by The
Wall Street Journal, Eastern U.S. Edition, for the first Business Day of each month (starting with the month in
which such payment was first due), or the maximum applicable legal rate, if less, calculated based on the total
number of days payment is delinquent.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 8
INTELLECTUAL PROPERTY
8.1
Background IP. All right, title and interest in and to the Know-How and Patents, and any other
Intellectual Property Controlled by a Party or its Affiliates prior to the Effective Date or discovered, generated,
acquired or otherwise Controlled by a Party or its Affiliates during the Term outside the scope of this
Agreement will, in each case, be solely owned by such Party and its Affiliates.
8.2
Ownership of Arising IP. To the extent allowed under each Applicable Law of the applicable
jurisdiction, ownership of Inventions will be determined in accordance with U.S. patent law. If U.S. patent law
is not allowed and a different Party is considered owner or inventor of a given Invention under national patent
law, such Party will assign, or cause to assign, the Invention to the rightful owner as determined under U.S.
patent law. Hengrui will solely own any Patents and Know-How made, developed or generated solely by
Ideaya or jointly by Ideaya and Hengrui under this Agreement to the extent (a) Covering (or in the case of
Know-How, solely relating to or embodied in) the composition of matter of SHR-4849 or (b) Covering (or in
the case of Know-How, solely relating to or embodied in) the Hengrui Platform and not relating solely to the
Licensed Compound or Licensed Product (e.g., relate to compounds or products that are not Licensed
Compounds or Licensed Products) (and, for clarity, any such Patents and Know-How will automatically be
included in Licensed Patents and Licensed Know-How). Except for Patents to the extent Covering, and Know-
How solely relating to or embodied in, the composition of matter of SHR-4849 or the Hengrui Platform that are
governed by the foregoing sentence, (a) each Party will solely own any Intellectual Property relating to the
Licensed Compound or Licensed Product made, developed or generated solely by it or its Affiliates, or its or
their respective employees, agents, or independent contractors (Inventions therein, “Sole Inventions”; Ideaya’s
Know-How therein, “Ideaya Know-How”, and Hengrui’s Know-How therein, “Hengrui Know-How”) under
this Agreement (and, for clarity, any Hengrui Sole Invention and Hengrui Know-How will automatically be
included in Licensed Patents and Licensed Know-How); and (b) the Parties will jointly own any Intellectual
Property that is made, developed or otherwise generated jointly by employees, agents, or independent
contractors of one Party or its Affiliates together with employees, agents, or independent contractors of the
other Party or its Affiliates (Inventions therein, “Joint Inventions”; Know-How therein, “Joint Know-How”).
Sole Inventions, Ideaya Know-How, Hengrui Know-How, Joint Inventions, Joint Know-How, and Patents
claiming any of the Sole Inventions or Joint Inventions are collectively “Arising IP”. All Patents claiming
Joint Inventions will be referred to herein as “Joint Patents.” Except to the extent either Party is restricted by
the licenses granted to the other Party under this Agreement, each Party will be entitled to practice, license,
assign, and otherwise exploit the Joint Inventions, Joint Know-How, and Joint Patents without the duty of
accounting to the other Party or seeking consent from the other Party. References in this Section 8.2 to
generation of Intellectual Property by a Party or its Affiliates will include generation by either Party’s or its
Affiliates’ respective employees, agents, or independent contractors.
8.3
Disclosure of Inventions and Know-How. Each Party will promptly disclose to the other Party
(a) its Sole Inventions and Know-How that arise in the performance of activities under this Agreement and (b)
Joint Inventions and Know-How, including any invention
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
disclosures or other similar documents submitted to it by its employees, agents, or independent contractors
describing such Inventions, and will promptly respond to reasonable requests from the other Party for
additional information relating to such Inventions and Know-How.
8.4
Patent Prosecution and Maintenance.
(a)
Licensed Patents other than Joint Patents.
(i)
As between the Parties, Hengrui will have the sole right to control the
preparation, filing, prosecution, and maintenance (including any interferences, reissue proceedings,
reexaminations, patent term extensions, applications for supplementary protection certificates, oppositions,
invalidation proceedings, and defense of validity or enforceability challenges) of all Licensed Patents (other
than Product Patents and Joint Patents) at its sole cost and expense and by counsel of its own choice.
(ii)
Subject to this Section 8.4(a), as between the Parties, Hengrui will have the
first right, but not the obligation to control the preparation, filing, prosecution, and maintenance (including any
interferences, reissue proceedings, reexaminations, patent term extensions, applications for supplementary
protection certificates, oppositions, and invalidation proceedings) of all Product Patents (excluding, for clarity,
any Joint Patents) at its sole cost and expense and by counsel of its own choice.
(iii)
Hengrui will consult with Ideaya and keep Ideaya reasonably informed of the
status of all Product Patents in the Territory and will promptly provide Ideaya with all material correspondence
received from any patent authority in connection therewith. In addition, Hengrui will promptly provide Ideaya
with drafts of all proposed filings and correspondence to any patent authority with respect to such Product
Patents in the Territory sufficiently in advance of any applicable filing deadlines for Ideaya’s review and
comment prior to the submission of such proposed filings and correspondences. Hengrui will confer with
Ideaya and consider in good faith and incorporate Ideaya’s reasonable comments in relation to such filings and
correspondences, so long as Ideaya provides such comments within [***] (or a shorter period reasonably
designated by Hengrui if [***] is not practicable given the filing deadline) of receiving the draft filings and
correspondences from Hengrui. In addition, Hengrui will confer with Ideaya and file, at Ideaya’s reasonable
request, continuation or divisional applications of the Specified Patent such that the continuation or divisional
application(s) relate solely to the Licensed Compound (or the complementarity determining region sequences
contained in the Antibody portions thereof) or Licensed Product (each, a “Divisional Specified Patent”),
including claims covering the genus of the antibody hu100 (subject to Claim 1(i) of the Specified Patent) used
in the Licensed Compound and Licensed Product, and such Divisional Specified Patents shall thereafter be
deemed Product Patents.
(iv)
In the event that Hengrui desires to abandon or cease prosecution or
maintenance of any Product Patent in the Territory, Hengrui will provide reasonable prior written notice to
Ideaya of such intention to abandon (which notice will, to the extent possible, be given no later than [***] prior
to the next deadline for any action that must be taken with respect to any such Product Patent in the relevant
patent office). In such case, upon Ideaya’s written election
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
provided no later than [***] after such notice from Hengrui, Ideaya will have the right to assume the
prosecution and maintenance of such Product Patent at Ideaya’s expense. For clarity, if Ideaya does not
provide such election within [***] after such notice from Hengrui, Hengrui may, in its sole discretion, continue
or discontinue prosecution and maintenance of such Product Patent.
(v)
For clarity, Hengrui will have the sole right to control the preparation, filing,
prosecution, and maintenance (including any interferences, reissue proceedings, reexaminations, patent term
extensions, applications for supplementary protection certificates, oppositions, invalidation proceedings, and
defense of validity or enforceability challenges) of all Licensed Patents, Joint Patents and Patents claiming any
Hengrui Sole Invention in Greater China at its sole cost and expense and by counsel of its own choice.
(b)
Joint Patents.
(i)
Subject to this Section 8.4(b), as between the Parties, Ideaya will have the first
right, but not the obligation, to control the preparation, filing, prosecution, and maintenance including any
interferences, reissue proceedings, reexaminations, patent term extensions, applications for supplementary
protection certificates, oppositions, invalidation proceedings, and defense of validity or enforceability
challenges of Joint Patents that are filed in the Territory by counsel of its own choice. Hengrui shall have the
sole right, but not the obligation, to control the preparation, filing, prosecution, and maintenance, including any
interferences, reissue proceedings, reexaminations, patent term extensions, applications for supplementary
protection certificates, oppositions, invalidation proceedings, and defense of validity or enforceability
challenges of any Joint Patents in Greater China.
(ii)
Ideaya will consult with Hengrui and keep Hengrui reasonably informed of the
status of the Joint Patents and will promptly provide Hengrui with all material correspondence received from
any patent authority in connection therewith. In addition, Ideaya will promptly provide Hengrui with drafts of
all proposed material filings and correspondence to any patent authority with respect to the Joint Patents
sufficiently in advance of any applicable filing deadlines for Hengrui’s review and comment prior to the
submission of such proposed filings and correspondences. Ideaya will confer with Hengrui and consider in
good faith Hengrui’s comments prior to submitting such filings and correspondences, so long as Hengrui
provides such comments within [***] (or a shorter period reasonably designated by Ideaya if [***] is not
practicable given the filing deadline) of receiving the draft filings and correspondences from Ideaya.
(iii)
In the event that Ideaya desires to abandon or cease prosecution or
maintenance of any Joint Patent in any country, Ideaya will provide reasonable prior written notice to Hengrui
of such intention to abandon or cease prosecution or maintenance of any Joint Patent (which notice will, to the
extent possible, be given no later than [***] prior to the next deadline for any action that must be taken with
respect to any such Joint Patent in the relevant patent office). In such case, upon Hengrui’s written election
provided no later than [***] after such notice by Ideaya, Ideaya will assign its rights and title in such Joint
Patent to Hengrui and Hengrui will acquire all rights and title in such Joint Patent at its expense. If Hengrui
does not provide such election within [***] after such notice, Ideaya may, in its sole discretion, continue or
discontinue prosecution and maintenance of such Joint Patent.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
(c) Ideaya’s Solely Owned Patents. As between the Parties, Ideaya will have the first right,
but not the obligation, to file, prosecute and maintain all Patents claiming Sole Inventions that are solely owned
by Ideaya (each, an “Ideaya Patent”), at Ideaya’s sole cost and expense. In the event that Ideaya desires to
abandon or cease prosecution or maintenance of any Ideaya Patent that Covers any Licensed Compound or
Licensed Product, Ideaya will provide reasonable prior written notice to Hengrui of such intention to abandon
(which notice will, to the extent possible, be given no later than [***] prior to the next deadline for any action
that must be taken with respect to any such Ideaya Patent in the relevant patent office). In such case, upon
Hengrui’s written election provided no later than [***] after such notice from Ideaya, Hengrui will have the
right to assume the prosecution and maintenance of such Ideaya Patent at Hengrui’s expense and upon any
such assumption, such Patent shall constitute a Licensed Patent and not an Ideaya Patent for purposes of this
Agreement. For clarity, if Hengrui does not provide such election within [***] after such notice from Ideaya,
Ideaya may, in its sole discretion, continue or discontinue prosecution and maintenance of such Ideaya Patent.
(d) Cooperation of the Parties. Each Party agrees to cooperate fully in the preparation,
filing, prosecution, and maintenance of Patents in the Territory under this Section 8.4 and in the obtaining and
maintenance of any patent term extensions, supplementary protection certificates and their equivalent with
respect thereto, at its own cost. Such cooperation includes:
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
(i) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and
instruments, so as enable the other Party to apply for and to prosecute patent applications in any country as
permitted by this Section 8.4; and (ii) promptly informing the other Party of any matters coming to such Party’s
attention that may affect the preparation, filing, prosecution, or maintenance of any such patent applications.
(e) CREATE Act. Without limiting Section 8.4(d), neither Party shall have the right to make
an election under the Cooperative Research and Technology Enhancement Act of 2004, 35 U.S.C. 103(c)(2)-
(c)(3) (the “CREATE Act”) when exercising its rights under this Section 8.4 without the prior written consent
of the other Party. With respect to any such permitted election, the Parties shall coordinate their activities with
respect to any submissions, filings, or other activities in support thereof. The Parties acknowledge and agree
that this Agreement is a “joint research agreement” as defined in the CREATE Act.
(f) Patent Marking. To the extent required by Applicable Law, Ideaya shall, and shall cause
its Affiliates and Sublicensees to, use Commercially Reasonable Efforts to mark the Licensed Products (or the
applicable product insert or packaging) sold under this Agreement with the number of each issued Licensed
Patent or Joint Patent, as applicable, that applies to the Licensed Products.
(g) Common Interest. All information exchanged between the Parties regarding the
prosecution, maintenance, enforcement or defense of Patents under this Article 8 will be deemed to be
Confidential Information of the Party that controls the prosecution, maintenance or defense (as applicable) of
the applicable Patent. In addition, each Party acknowledges and agrees that, with regard to such prosecution,
maintenance, enforcement and defense, the interests of the Parties as collaborators, licensors or licensees are
to, for their mutual benefit, obtain patent protection and plan patent defense against potential
patentability/invalidity challenges or infringement activities by Third Parties, and as such, are aligned and are
legal in nature. Each Party agrees and acknowledges that it has not waived, and nothing in this Agreement
constitutes a waiver of, any legal privilege concerning Patent Rights under this Article 8, including privilege
under the common interest doctrine and similar or related doctrines. Notwithstanding anything to the contrary
in this Agreement, to the extent a Party has a good faith belief that any information required to be disclosed by
such Party to the other Party under this Article 8 is protected by attorney-client privilege or any other
applicable legal privilege or immunity, such Party shall not be required to disclose such information unless and
until the Parties have agreed upon a procedure (which may include entering into a specific common interest
agreement, disclosing such Confidential Information on a “for counsel eyes only” basis or similar procedure)
under which such Confidential Information may be disclosed without waiving or breaching such privilege or
immunity. The Parties shall in good faith cooperate to agree upon any such procedures.
8.5
Infringement by Third Parties.
(a) Notice. Each Party will notify the other Party within [***] of becoming aware of any
alleged or threatened infringement by a Third Party of any of the Licensed Patents or Joint Patents in the
Territory, including any declaratory judgment, opposition, or similar action alleging the invalidity,
unenforceability, or non-infringement of any of the Licensed Patents or
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Joint Patents.
(b)
Enforcement Right.
(i)
As between the Parties, Ideaya will have (A) the sole right, but not the
obligation, to bring and control any action or proceeding with respect to infringement or challenge (and defend
to the extent such defense is in connection with an enforcement action initiated by Ideaya) of any Ideaya
Patent, and (B) the first right, but not the obligation, to bring and control any action or proceeding with respect
to infringement or challenge (and defend to the extent such defense is in connection with an enforcement
action initiated by Ideaya) of any Product Patent or Joint Patent in the Field in the Territory with respect to a
Licensed Product by a Third Party product (“Product Infringement”), in each case at its own expense and by
counsel of its own choice. Hengrui will have the right, at its own expense, to be represented in any action under
subsection (B) by counsel of its own choice, and Ideaya and its counsel will reasonably cooperate with Hengrui
and its counsel in strategizing, preparing, and litigating any such action or proceeding. If Ideaya fails to bring
an action or proceeding with respect to Product Infringement of any Product Patent or Joint Patent in the
Territory within (X) [***] following the notice of alleged infringement or declaratory judgment or (Y) [***]
before the time limit, if any, set forth in the appropriate laws and regulations for the filing of such actions,
whichever comes first, Hengrui will have the right, but not the obligation, to bring and control any such action
at its own expense and by counsel of its own choice, and Ideaya will have the right, at its own expense, to be
represented in any such action by counsel of its own choice, and Hengrui and its counsel will reasonably
cooperate with Ideaya and its counsel in strategizing, preparing, and litigating any such action or proceeding.
(ii)
Except as otherwise agreed by the Parties as part of a cost-sharing
arrangement, any recovery or damages realized as a result of such action or proceeding with respect to Product
Patents or Joint Patents in the Territory will be used first to reimburse the Parties’ reasonable and documented
out-of-pocket legal expenses relating to the action or proceeding, and any remaining compensatory damages
relating to Licensed Products or Joint Patents (including lost sales or lost profits with respect to Licensed
Products) and punitive damages will be retained by the Party that brought and controlled such action or
proceeding, and in the case that Ideaya brought and controlled such action or proceeding, such remaining
compensatory damages for the Territory will be deemed to be Net Sales subject to royalty payments to Hengrui
in accordance with the provisions of Section 6.3. Ideaya will have the sole right to retain any recovery or
damages realized as a result of any action or proceeding solely in relation to any Ideaya Patent, and any such
amounts will not be treated as Net Sales for the purposes of this Agreement.
(iii)
For clarity, Hengrui will have the sole right to bring and control any action or
proceeding with respect to infringement or challenge (and defend to the extent such defense is in connection
with an enforcement action initiated by Hengrui) of (A) any Platform Patents or any other Licensed Patents
(other than Product Patents) worldwide, and (B) any Licensed Patents or Joint Patents in Greater China, in each
case of (A) and (B), at its own expense and by counsel of its own choice.
(c) Cooperation. In the event that a Party brings an action in accordance with this Section
8.5, the other Party will cooperate fully, including, if required to bring such action, being named as a party to
such action or furnishing of power of attorney.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
8.6
Infringement of Third Party Rights. If any Licensed Compound or Licensed Product used or
sold by Ideaya, its Affiliates, or Sublicensees becomes the subject of a Third Party’s claim or assertion of
infringement of any Intellectual Property in a jurisdiction within the Territory, Ideaya will promptly notify
Hengrui, and the Parties will promptly meet to consider the claim or assertion and the appropriate course of
action and may, if appropriate, agree on and enter into a “common interest agreement” wherein the Parties
agree to their shared, mutual interest in the outcome of such potential dispute. Absent any agreement to the
contrary, and subject to claims for indemnification under Article 10, each Party will defend itself from any
such Third Party claim that is brought against such Party at its own cost and expense, provided, however, that
the provisions of Section 8.5 will govern the right of the Parties to assert a counterclaim of infringement of any
Licensed Patent or Joint Patent.
8.7
Consent for Settlement. Neither Party will unilaterally enter into any settlement or compromise
of any action or proceeding under this Article 8 that would in any manner alter, diminish, or be in derogation
of the other Party’s rights under this Agreement without the prior written consent of such other Party, which
will not be unreasonably withheld, conditioned or delayed.
8.8
Rights Under Tri-Party Agreement. In the event of any conflict between the provisions of this
Article 8 and the Tri-Party Agreement, the Parties agree that this Article 8 shall govern with respect to rights of
the Parties under to file Patents claiming the Production Cell Line expressing the Licensed Compound.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 9 REPRESENTATIONS
AND WARRANTIES
9.1
Mutual Representations and Warranties. Each Party represents and warrants to the other that,
as of the Effective Date: (a) it is duly organized and validly existing under the laws of its jurisdiction of
incorporation or formation, and has full corporate or other power and authority to enter into this Agreement
and to carry out the provisions hereof, (b) it is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been
duly authorized to do so by all requisite corporate or partnership action, and (c) this Agreement is legally
binding upon it, enforceable in accordance with its terms, and does not conflict with any agreement, instrument
or understanding, oral or written, to which it is a Party or by which it may be bound, nor violate any material
law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.
9.2
Additional Hengrui Representations, Warranties, and Covenants. Hengrui represents,
warrants, and covenants, as applicable, to Ideaya that, as of the Effective Date:
(a) Hengrui is the sole owner of the entire right, title, and interest, or exclusive licensee (with
the right to grant sublicenses of the scope contemplated herein), in and to all patents, patent applications, and
other Intellectual Property within the Licensed Technology, free and clear from any mortgages, pledges, liens,
security interests, conditional and installment sale agreements, encumbrances, charges, or claims of any kind;
(b) Hengrui has the full and legal right and authority to grant the licenses granted by it under
this Agreement, without the requirement to obtain the consent of any Third Party; and Hengrui has not granted
as of the Effective Date, and will not grant during the Term, any right to any Third Party under the Licensed
Technology that would conflict with the rights granted to Ideaya hereunder;
(c) Exhibit 1.75 lists all Patents Controlled by Hengrui as of the Effective Date that would be
infringed, absent a license or other right to practice granted under such Patents, by the Exploitation of the
Licensed Compound in the Field in the Territory;
(d) the inventorship of each Licensed Patent is properly identified on each patent and patent
application; all official fees, maintenance fees and annuities for the Licensed Patents have been paid and all
administrative procedures with Governmental Authorities have been completed for the Licensed Patents such
that the Licensed Patents are subsisting and, to Hengrui’s Knowledge, the claims included in any Licensed
Patents that are issued are valid and enforceable, and no claim or action has been brought or, to Hengrui’s
Knowledge, threatened by any Third Party alleging that the Licensed Patents are invalid or unenforceable, and
no Licensed Patent is the subject of any interference, opposition, cancellation, or other protest proceeding;
(e) Hengrui has not received any written notice from a Third Party asserting or alleging that
the Development of any Licensed Compound or Licensed Product conducted by Hengrui prior to the Effective
Date infringed any Patents or misappropriated any Intellectual
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Property of any Third Party in the Field in the Territory; and except as disclosed in Exhibit 9.2, to Hengrui’s
Knowledge, the Exploitation of the Licensed Compounds and Licensed Products in the Field in the Territory
will not infringe the issued Patents of any Third Party in the Territory that, if issued with the published or
currently pending claims, would be infringed by the Exploitation of the Licensed Compounds and Licensed
Products in the Field in the Territory;
(f) to Hengrui’s Knowledge, no Third Party is infringing or misappropriating or has infringed
or misappropriated the Licensed Technology with respect to the Licensed Compound in the Field in the
Territory;
(g) the Licensed Know-How has been kept confidential or has been disclosed to Third Parties
only under terms of confidentiality, and to Hengrui’s Knowledge, no breach of such confidentiality has been
committed by any Third Party; and the Licensed Technology does not include any trade secrets that have been
misappropriated from any Third Party or obtained in breach of any contractual obligation of Hengrui or its
employees to a Third Party;
(h) Exhibit 1.63 lists all material Know-How Controlled by Hengrui existing as of the
Effective Date that are necessary or reasonably useful for Development of the Licensed Compound in the Field
in the Territory; and
(i) to Hengrui’s Knowledge, all tangible information and data provided by or on behalf of
Hengrui to Ideaya on or before the Effective Date in contemplation of this Agreement was and is true,
complete, and correct (as of the Effective Date) in all material respects;
(j) except as disclosed in Exhibit 9.2, there are no agreements in effect as of the Effective
Date between Hengrui and a Third Party under which rights with respect to any material Licensed Technology
are licensed to Hengrui in the Field in the Territory; and
(k) Hengrui has disclosed to Ideaya (i) true, complete, and correct copies (as of the Effective
Date) of written documents in Hengrui’s possession and Control as of the Effective Date containing all
material adverse information known to Hengrui with respect to the safety and efficacy of the Licensed
Compounds or Licensed Products, and (ii) all material information of which it is aware or that is in its
possession and Control as of the Effective Date that is material to evaluating the Product Patents filed within
the Territory, including Information relating to the novelty, validity or sufficiency of such Product Patents and
any challenges thereto, including any freedom to operate searches, analyses, opinions, or reports.
9.3
Mutual Covenants.
(a) Each Party represents, warrants and covenants to the other Party that it is not debarred or
disqualified under the U.S. Federal Food, Drug and Cosmetic Act, as may be amended, or comparable laws in
any country or jurisdiction other than the U.S., and it does not, and will not during the Term, employ or use the
services of any person who is debarred or disqualified, in connection with activities relating to any Licensed
Compound or Licensed Product. In the event that either Party becomes aware of the debarment or
disqualification or threatened debarment or disqualification of any person providing services to such Party,
including the Party
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
itself or its Affiliates, Sublicensees, or other licensees, that directly or indirectly relate to activities
contemplated by this Agreement, such Party will immediately notify the other Party in writing and such Party
will cease employing, contracting with, or retaining any such person to perform any such services.
(b) Hengrui covenants for itself and for its Affiliates, heirs, successors, agents, and assigns,
and any person or entity claiming by, through or under it, that Hengrui will not, and it will cause its Affiliates,
and will include provisions in its agreements with licensees (other than Ideaya) requiring such licensees, not to,
nor will any person, organization, or any other entity acting on behalf of or with the authorization of Hengrui or
its Affiliates, directly or indirectly, conduct any activities, including any research, Development,
manufacturing, or Commercialization activities, relating to any compound or product that contains an ADC that
contains a mono-specific Antibody that is designed to bind, interact with, inhibit, or otherwise modulate [***],
other than a combination product (for clarity, “combination” shall not mean an ADC) consisting of any
compound (other than the Licensed Compound or Licensed Product) Controlled by Hengrui in combination
with (but not conjugated to) a [***], which [***] is Controlled by a Third Party, in any country in the
Territory, during the Term.
(c) Ideaya covenants for itself and for its Affiliates, heirs, successors, agents, and assigns, and
any person or entity claiming by, through or under it, that Ideaya will not, and it will cause its Affiliates, and
will include provisions in its agreements with Sublicensees requiring such Sublicensees, not to, nor will any
person, organization, or any other entity acting on behalf of or with the authorization of Ideaya or its Affiliates,
directly or indirectly, conduct any activities, including any research, Development, manufacturing, or
Commercialization activities, relating to any compound or product that contains an ADC that contains a mono-
specific Antibody that is designed to bind, interact with, inhibit, or otherwise modulate [***], other than a
Licensed Compound or Licensed Product or a combination product consisting of a Licensed Compound or
Licensed Product together with any compound Controlled by Ideaya other than a [***], in any country in the
Territory during the Term.
(d) Hengrui agrees and covenants for itself and for its Affiliates, heirs, successors, agents, and
assigns, and any person or entity claiming by, through or under it, that Hengrui will, and it will cause its
Affiliates, and will include provisions in its agreements with licensees (other than Ideaya) requiring such
licensees, not to, directly or indirectly, actively promote, market, distribute, import, sell, have sold, or
otherwise Commercialize any Licensed Compound or Licensed Product in countries in the Territory. Without
limiting the foregoing, Hengrui and its Affiliates will not engage in any advertising or promotional activities
relating to any Licensed Compound or Licensed Product for sale in the Territory; and Hengrui and its Affiliates
will not actively solicit orders or Licensed Compound or Licensed Product from any prospective purchaser for
sale in the Territory; and Hengrui will include provisions in its agreements with licensees (other than Ideaya)
requiring such licensees not to so engage or solicit. If Hengrui or its Affiliates or licensees (other than Ideaya)
receives any order from a prospective purchaser for sale in the Territory, Hengrui will promptly refer that order
to Ideaya. Hengrui and its Affiliates will not and will not authorize its licensees (other than Ideaya) to
knowingly accept any such orders. Notwithstanding anything to the contrary, it is understood that materials
used in the advertisement and promotion of Licensed Compound or Licensed Product outside the Territory
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
may be accessible to persons in the Territory (such as advertisement or Internet sites or other digital uses), and
such use shall not be a breach of the terms of this Agreement provided that: (i) the media chosen is not
primarily directed to persons residing in the Territory or chosen with the primary intent of communicating with
persons residing in the Territory; and (ii) in the case of a periodical or other distributed materials, is not
primarily distributed to persons in the Territory.
(e) Ideaya agrees and covenants for itself and for its Affiliates, heirs, successors, agents, and
assigns, and any person or entity claiming by, through or under it, that Ideaya will, and it will cause its
Affiliates, and will include provisions in its agreements with Sublicensees requiring such Sublicensees, not to
directly or indirectly, actively promote, market, distribute, import, sell, have sold, or otherwise Commercialize
any Licensed Compound or Licensed Product in countries outside of the Territory. Without limiting the
foregoing, Ideaya and its Affiliates will not engage in any advertising or promotional activities relating to any
Licensed Compound or Licensed Product for sale outside the Territory; and Ideaya and its Affiliates will not
actively solicit orders or Licensed Compound or Licensed Product from any prospective purchaser for sale
outside the Territory; and Ideaya will include provisions in its agreements with Sublicensees requiring such
Sublicensees not to so engage or solicit. If Ideaya or its Affiliates or licensees (other than Hengrui) receives
any order from a prospective purchaser for sale outside the Territory, Ideaya will promptly refer that order to
Hengrui. Ideaya and its Affiliates will not and will not authorize its licensees (other than Hengrui) to
knowingly accept any such orders. Notwithstanding anything to the contrary, it is understood that materials
used in the advertisement and promotion of Licensed Compound or Licensed Product in the Territory may be
accessible to persons outside the Territory (such as advertisement or Internet sites or other digital uses), and
such use shall not be a breach of the terms of this Agreement provided that: (i) the media chosen is not
primarily directed to persons residing outside the Territory or chosen with the primary intent of communicating
with persons residing outside the Territory; and (ii) in the case of a periodical or other distributed materials, is
not primarily distributed to persons outside the Territory.
9.4
Compliance. Each Party covenants as follows:
(a) In the performance of its obligations under this Agreement, such Party will comply and
will cause its and its Affiliates’ employees and contractors to comply with all Applicable Laws. Without
limiting the foregoing, any transfer of Know-How to the other Party under this Agreement (including with
respect to the termination provisions) will be made in full compliance with the FCPA, Export Control Laws,
Sanctions, or any other Applicable Laws, which may require specific, prior authorization from a Governmental
Authority.
(b) It and its and its Affiliates’ employees and contractors have not, directly or indirectly as of
the Effective Date, and will not, in connection with the performance of their respective obligations under this
Agreement, directly or indirectly through Third Parties, pay, promise or offer to pay, or authorize the payment
of, any money or give any promise or offer to give, or authorize the giving of anything of value to a public
official or entity or other person for purpose of obtaining or retaining business for or with, or directing business
to, any person, including either Party.
(c) It and its Affiliates, and their respective employees and contractors, in
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
connection with the performance of their respective obligations under this Agreement, will not cause any
Ideaya Representatives or Hengrui Representatives, as applicable, to be in violation of the FCPA, Export
Control Laws, Sanctions, or any other Applicable Laws or otherwise cause any reputational harm to the other
Party.
(d) It will immediately notify the other Party if it has any information or suspicion that there
may be a violation of the FCPA, Export Control Laws, Sanctions, or any other Applicable Laws in connection
with the performance of this Agreement or the Development, Manufacture, or Commercialization of any
Licensed Product.
(e) Such Party will have the right, upon reasonable prior written notice and during the other
Party’s regular business hours, to reasonably audit the other Party’s books and records in the event such Party
can provide reasonable evidence proving that a suspected violation of any of the representations, warranties, or
covenants in this Section 9.4 needs to be investigated.
9.5
Disclaimer.
Except
as
expressly
set
forth
in
this
Agreement,
ALL
OTHER
REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR
OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED, EACH PARTY EXPRESSLY DISCLAIMS
ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE
WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR
ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification by Hengrui. Hengrui will defend, indemnify, and hold harmless Ideaya and its
Affiliates and their respective directors, officers, employees and agents (each, an “Ideaya Representative”)
from and against any and all liabilities, expenses, and losses, including reasonable legal expenses and
attorneys’ fees (collectively, “Losses”), to which any Ideaya Representative may become subject as a result of
any claim, demand, action, or other proceeding by any Third Party (a “Claim”) to the extent such Losses arise
out of: (a) the Development, Manufacture, Commercialization, use, handling, or storage of any Licensed
Compound or Licensed Product by Hengrui or its Affiliates or licensees (other than Ideaya, its Affiliates or
Sublicensees), (b) the gross negligence or willful misconduct of any Hengrui Representative, or
(c) the breach by Hengrui of any warranty, representation, covenant, or agreement made by Hengrui in this
Agreement; except, in each of subsection (a), (b), and (c), to the extent such Losses are (i) subject to Ideaya’s
obligations pursuant to Section 10.2 or (ii) subject to the Parties’ indemnification obligations under the Clinical
Supply Agreement or Commercial Supply Agreement.
10.2 Indemnification by Ideaya. Ideaya will defend, indemnify, and hold harmless Hengrui and its
Affiliates and their respective directors, officers, employees, and agents (each, a “Hengrui Representative”)
from and against any and all Losses to which any Hengrui Representative may become subject as a result of
any Claim to the extent such Losses arise out of:
(a) the Development, Manufacture, Commercialization, use, handling, or storage of any Licensed Compound
or Licensed Product by Ideaya or its Affiliates or Sublicensees in the Territory, (b) the gross negligence or
willful misconduct of any Ideaya Representative, or (c) the breach by Ideaya of any warranty, representation,
covenant, or agreement made by Ideaya in this Agreement; except, in each of subsection (a), (b), and (c), to the
extent such Losses are (i) subject to Hengrui’s obligations pursuant to Section 10.1 or (ii) subject to the Parties’
indemnification obligations under the Clinical Supply Agreement or Commercial Supply Agreement.
10.3 Procedure. A party that intends to claim indemnification under this Article 10 (the
“Indemnitee”) will promptly notify the indemnifying Party (the “Indemnitor”) in writing of any Claim in
respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor will have sole
control of the defense or settlement thereof. The Indemnitee may participate at its expense in the Indemnitor’s
defense of and settlement negotiations for any Claim with counsel of the Indemnitee’s own selection. The
indemnity arrangement in this Article 10 will not apply to amounts paid in settlement of any action with respect
to a Claim, if such settlement is effected without the consent of the Indemnitor, which consent will not be
unreasonably withheld or delayed. The failure to deliver written notice to the Indemnitor within a reasonable
time after the commencement of any action with respect to a Claim will only relieve the Indemnitor of its
indemnification obligations under this Article 10 if and to the extent the Indemnitor is actually prejudiced
thereby. The Indemnitee will cooperate fully with the Indemnitor and its legal representatives in the
investigation of any action with respect to a Claim covered by this indemnification.
10.4 Insurance. Ideaya, at its own expense, will maintain product liability and other
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
appropriate insurance (or self-insure) in an amount consistent with sound business practice and reasonable in
light of its obligations under this Agreement during the Term. Ideaya will provide a certificate of insurance (or
evidence of self-insurance) evidencing such coverage to Hengrui upon request.
10.5
Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH ARTICLE
11 HEREOF OR A PARTY’S WILLFUL MISCONDUCT OR FRAUDULENT OR INTENTIONALLY
WRONGFUL ACT, NEITHER PARTY WILL BE ENTITLED TO RECOVER FROM THE OTHER PARTY
ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN CONNECTION
WITH THIS AGREEMENT OR ANY
LICENSE GRANTED HEREUNDER; provided, however, that this Section 10.5 will not be construed to limit
either Party’s indemnification obligations under this Article 10.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 11
CONFIDENTIALITY
11.1 Confidential Information. Except to the extent expressly authorized by this Agreement or
otherwise agreed in writing by the Parties, the Parties agree that, during the Term and for [***] thereafter (or,
for any trade secret, for so long as such trade secret constitutes a trade secret under Applicable Law), the
receiving Party will keep confidential and will not publish or otherwise disclose and will not use for any
purpose other than as expressly provided for in this Agreement any Confidential Information of the other Party
under this Agreement, and both Parties will keep confidential and, subject to Sections 11.2 through 11.5, will
not publish or otherwise disclose the terms of this Agreement. Each Party may use the other Party’s
Confidential Information only to the extent required to accomplish the purposes of this Agreement, including
exercising its rights or performing its obligations. Each Party will use at least the same standard of care as it
uses to protect proprietary or Confidential Information of its own (but no less than reasonable care) to ensure
that its employees, agents, consultants, contractors, and other representatives do not disclose or make any
unauthorized use of the Confidential Information of the other Party. Each Party will promptly notify the other
Party upon discovery of any unauthorized use or disclosure of the Confidential Information of the other Party.
Notwithstanding the definition of “Confidential Information” in Article 1, all Confidential Information
included in the Licensed Know-How and relating to the Licensed Compound or Licensed Products in the Field
will be Confidential Information of both Parties during the Term.
11.2 Exceptions. The obligations of confidentiality and restriction on use under Section 11.1 will not
apply to any information that the receiving Party can prove by competent written evidence: (a) is now, or
hereafter becomes, through no act or failure to act on the part of the receiving Party, generally known or
available to the public; (b) is known by the receiving Party at the time of receiving such information, other than
by previous disclosure of the disclosing Party, or its Affiliates, employees, agents, consultants, or contractors;
(c) is hereafter furnished to the receiving Party without restriction by a Third Party who has no obligation of
confidentiality or limitations on use with respect thereto, as a matter of right; or (d) is independently
discovered or developed by the receiving Party without the use of Confidential Information belonging to the
disclosing Party.
11.3 Authorized Disclosure. Each Party may disclose Confidential Information belonging to the
other Party as expressly permitted by this Agreement or if and to the extent such disclosure is reasonably
necessary in the following instances:
(a) filing, prosecuting, or maintaining Licensed Patents and Joint Patents as permitted by this
Agreement;
(b) regulatory filings for Licensed Products that such Party has a license or right to Develop
hereunder in a given country or jurisdiction;
(c)
prosecuting or defending litigation as permitted by this Agreement;
(d) complying with applicable court orders or governmental regulations,
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
including regulations applicable to the public sale of securities;
(e) in the case of Ideaya, disclosure to its and its Affiliates, employees, consultants,
contractors, and agents, and to Sublicensees, in each case on a need-to-know basis in connection with the
Development, Manufacture, or Commercialization of Licensed Compounds or Licensed Products in
accordance with the terms of this Agreement, in each case under written obligations of confidentiality and non-
use at least as stringent as those herein;
(f) in the case of Hengrui, disclosure to its and its Affiliates, employees, consultants,
contractors, and agents, and to licensee, in each case on a need-to-know basis in connection with the
Development of Licensed Compounds or Licensed Products outside of the Field and Territory in accordance
with the terms of this Agreement, in each case under written obligations of confidentiality and non-use at least
as stringent as those herein; and
(g) disclosure to potential and actual investment bankers, investors, lenders, investors,
acquirors, licensees, and other financial or commercial partners (and their attorneys and agents) solely for the
purpose of evaluating or carrying out an actual or potential investment, acquisition, or collaboration, in each
case under written obligations of confidentiality and non-use at least as stringent as those herein, but may be of
shorter duration (except for trade secrets which will be maintained as confidential as long as they are trade
secrets) to the extent such shorter duration is reasonable and customary in the case of investment bankers,
investors, lenders, or financial partners and their attorneys and agents.
In the event that a Party is required to make a disclosure of the other Party’s Confidential Information pursuant
to Section 11.3(c) or (d), it will, except where impracticable, give reasonable advance notice to the other Party
of such disclosure and use efforts to secure confidential treatment of such Confidential Information at least as
diligent as such Party would use to protect its own confidential information, but in no event less than
reasonable efforts. Any information disclosed pursuant to Section 11.3(c) or (d) will remain Confidential
Information and subject to the restrictions set forth in this Agreement, including the foregoing provisions of
this Article 11. Notwithstanding the foregoing, the Parties will take all reasonable action to avoid disclosure of
Confidential Information hereunder.
11.4 Securities Filings. The Parties agree that the press release set forth on Exhibit 11.4 may be
released on or after the Effective Date. Except with respect to such press release, notwithstanding anything to
the contrary in this Article 11, in the event either Party proposes to file with the Securities and Exchange
Commission or the securities regulators of any state or other jurisdiction a registration statement or any other
disclosure document that describes or refers to the terms and conditions of this Agreement or any related
agreements between the Parties, such Party will notify the other Party of such intention and will provide the
other Party with a copy of relevant portions of the proposed filing at least [***] prior to such filing (and any
revisions to such portions of the proposed filing a reasonable time prior to the filing thereof), including any
exhibits thereto that refer to the other Party or the terms and conditions of this Agreement or any related
agreements between the Parties. The Party making such filing will cooperate in good faith with the other Party
to obtain confidential treatment of the terms and conditions of this Agreement or any related agreements
between the Parties that the other Party requests to be kept confidential or otherwise afforded confidential
treatment, and will only disclose Confidential Information that it
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
is reasonably advised by legal counsel is legally required to be disclosed. No such notice will be required if the
description of or reference to this Agreement or a related agreement between the Parties contained in the
proposed filing has been included in any previous filing made by the either Party in accordance with this
Section 11.4 or otherwise approved by the other Party or disclosed in a prior press release by the Parties or
other prior public disclosure made by a Party in accordance with the terms of this Article 11.
11.5
Publications and Promotional Materials.
(a) As between the Parties, (i) Ideaya or its Affiliates or Sublicensees will have the sole right
to publish academic, scientific or medical peer reviewed publications (including, for clarity, presentations) that
relate to the Licensed Compound or Licensed Product in the Territory, other than any publication of Data
resulting from clinical trials conducted by Hengrui or its Affiliates or licensees with respect to Development of
Licensed Product for Regulatory Approval outside of the Territory, and (ii) Hengrui or its Affiliates or
licensees will have the sole right to publish Data resulting from clinical trials conducted by Hengrui or its
Affiliates or licensees with respect to Development of Product for Regulatory Approval outside of the
Territory.
(b) Each Party will submit to the other Party for such other Party’s review any proposed
academic, scientific or medical peer reviewed publication by such Party or its Affiliates or licensees that relates
to the Licensed Compound or Licensed Product or any Confidential Information of such other Party. Ideaya
will also submit to Hengrui for its review any proposed academic, scientific or medical publication or public
presentation that contains Licensed Know- How or Joint Know-How that has not been previously publicly
disclosed or otherwise approved by Hengrui to be publicly disclosed, for the purposes of determining whether
any portion of the proposed publication or presentation should be modified or deleted so as to preserve the
value of such Licensed Know-How and Joint Know-How. Hengrui will also submit to Ideaya for its review
any proposed academic, scientific or medical publication or public presentation that contains Licensed Know-
How (relating to Exploitation of Licensed Compound or Licensed Product in the Territory) or Joint Know-
How that has not been previously publicly disclosed or otherwise approved by Ideaya to be publicly disclosed,
for the purposes of determining whether any portion of the proposed publication or presentation should be
modified or deleted so as to preserve the value of such Licensed Know-How or Joint Know-How. Each Party
will consider all comments provided by the other Party in good faith, including comments regarding the
potential adverse impact on Exploitation of Licensed Compound or Licensed Product.
(c) Written copies of any proposed publication or presentation required to be submitted
hereunder will be submitted to the applicable Party within a reasonable time period before submission for
publication or presentation (the “Review Period”). The Party receiving such submission will provide its
comments with respect to such publications and presentations within [***] of its receipt of such written copy.
The Review Period may be extended for an additional [***] in the event such receiving Party can, within [***]
of receipt of the written copy, demonstrate reasonable need for such extension including for the preparation
and filing of patent applications.
(d) Each Party will comply, and will cause its Affiliates or licensees to comply, to the extent
applicable, with (i) standard academic practice regarding authorship of scientific
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
publications and recognition of contribution of the other Party in any publication governed by this Section
11.5, including International Committee of Medical Journal Editors standards regarding authorship and
contributions, and (ii) standard pharmaceutical industry accepted guidelines regarding promotional materials,
including Pharmaceutical Research and Manufacturers of America (PhRMA) guidelines.
11.6 Prior Confidentiality Agreement. As of the Effective Date, the terms of this Article 11 will
supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their
Affiliates) relating to the subject of this Agreement to the extent it applies to each Party’s rights and
obligations relating to each other. Any information disclosed pursuant to any such prior agreement will be
deemed Confidential Information for purposes of this Agreement.
11.7 Equitable Relief. Given the nature of the Confidential Information and the competitive damage
that a Party would suffer upon unauthorized disclosure, use, or transfer of its Confidential Information to any
Third Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach of this
Article 11. In addition to all other remedies, a Party will be entitled to seek specific performance and injunctive
and other equitable relief as a remedy for any breach or threatened breach of this Article 11.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 12
TERM AND TERMINATION
12.1 Term. This Agreement will commence on the Effective Date and unless terminated earlier as
provided in this Article 12 will continue until the expiration of all Royalty Terms in the Territory (the
“Term”). Upon expiration of the Royalty Term for a Licensed Product in a particular country (to the extent,
for clarity, that the Agreement has not been terminated earlier as provided in this Article 12), the licenses
granted by Hengrui to Ideaya under Section 2.1, with respect to such Licensed Product (and corresponding
Licensed Compound) and such country will become non-exclusive, fully paid-up, royalty-free, perpetual, and
irrevocable.
12.2 Termination by Mutual Agreement. The Parties may terminate this Agreement at any time
upon mutual written agreement, in its entirety or, subject to the Parties’ agreement with respect to the effects of
termination, with respect to one or more Licensed Products or countries.
12.3
Termination for Cause.
(a) Material Breach. Each Party will have the right to terminate this Agreement upon written
notice to the other Party if such other Party materially breaches this Agreement and has not cured such breach
or such breach is not curable within [***] after notice of such breach from the non-breaching Party, provided
that, if such breach is not reasonably capable of cure within such [***] period but is capable of cure, the
breaching Party may submit a reasonable cure plan prior to the end of such [***] period, in which case, if the
other Party agrees to such plan (such agreement not to be unreasonably withheld, conditioned or delayed), the
other Party will not have the right to terminate this Agreement during an additional [***] period, so long as the
breaching Party is using best efforts to implement such cure plan throughout such additional [***] period.
(b) Disputed Breach. Unless and until the Parties have completed the dispute resolution
procedures set forth in Article 14, then provided the Party alleged to be in breach continues to comply with its
other obligations under this Agreement, including all payment obligations, during the pendency of any dispute,
then the non-breaching Party will not have the right to terminate this Agreement under Section 12.3(a). It is
understood and agreed that during the pendency of such dispute, all of the terms and conditions of this
Agreement will remain in effect and the Parties will continue to perform all of their respective obligations.
(c) Bankruptcy. To the extent permitted under Applicable Law, each Party will have the right
to terminate this Agreement in its entirety upon written notice to the other Party if such other Party makes a
general assignment for the benefit of creditors, files an insolvency petition in bankruptcy, petitions for or
acquiesces in the appointment of any receiver, trustee, or similar officer to liquidate or conserve its business or
any substantial part of its assets, commences under the laws of any jurisdiction any proceeding involving its
insolvency, bankruptcy,
reorganization, adjustment of debt, dissolution, liquidation, or any other similar proceeding for the release of
financially distressed debtors or becomes a party to any proceeding or action of the type described above and
such proceeding is not dismissed within [***] after the commencement thereof.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
12.4 Termination by Ideaya for Convenience. Ideaya will have the right to terminate this
Agreement for any reason or no reason upon [***] written notice to Hengrui in its entirety.
12.5
Effects of Termination. Upon termination of this Agreement, the following will
apply:
(a)
Upon termination of this Agreement pursuant to Section 12.2 or 12.4 or by
Hengrui pursuant to Section 12.3, the license granted to Ideaya in Section 2.1 will automatically terminate, and
all other rights and obligations of the Parties under this Agreement will terminate (except for those rights that
survive pursuant to Sections 12.5(a), 12.6 and 12.7).
(b) Sublicense Survival. Upon an early termination of Ideaya’s license rights under this
Agreement pursuant to Section 12.3 by Hengrui (and such early termination is not due in whole or in part to
the actions or omissions of the applicable Third Party Sublicensee), (i) Ideaya will provide written notice to
Hengrui within [***] following the notice of termination that it desires to have any Third Party Sublicensee to
become a direct licensee of Hengrui of substantially identical scope as the sublicense granted by Ideaya or its
Affiliates and on terms substantially identical to this Agreement (“Direct License”), (ii) during a period of
[***] (or [***] if the [***] additional cure period in Section 12.3(a) applies) following the date of delivery of
notice of termination of this Agreement pursuant to Section 12.3, Ideaya will respond, or will cause such Third
Party Sublicensee to respond, promptly to Hengrui’s reasonable requests for true and correct information and
documentation to enable Hengrui to confirm the compliance of such Sublicensee with all Applicable Laws and
this Agreement, and (iii) if such Third Party Sublicensee is then not in material breach of the terms of this
Agreement in regard to such sublicense, and is then in compliance with all Applicable Laws at the date of
delivery of notice of termination of this Agreement, and if such Third Party Sublicensee agrees in writing to
assume all applicable obligations of Ideaya under this Agreement, taking into consideration any differences in
scope or territory between this Agreement and the applicable sublicense agreement, then (y) the Direct License
will become effective, upon the effective date of termination of this Agreement, and such sublicense will
terminate effective upon the effective date of the Direct License, and (z) Hengrui and such Third Party
Sublicensee will promptly enter into a written agreement reflecting terms of the Direct License.
Notwithstanding the foregoing, provided Ideaya and such Sublicensee have complied with the obligations to
provide information under clause (ii) above, Hengrui has not completed its inquiries or review of information
set forth above by the effective date of termination of this Agreement, such Direct License will automatically
become effective upon the effective date of termination, subject to Hengrui’s right to terminate such Direct
License in accordance with the terms thereof, and if Ideaya disputes Hengrui’s determination that any such
Sublicensee was in material breach of the terms of this Agreement in regard to such sublicense, or was not in
compliance with all Applicable Laws at the date of delivery of notice of termination of this Agreement, then
the Parties may submit such dispute for resolution pursuant to Article 13, and this Agreement will not be
terminated with respect to such Sublicensee during the pendency of such dispute resolution.
For clarity, upon any existing sublicense becoming a Direct License between Hengrui and
such Third Party Sublicensee, any sales of products following the effective date of termination of this
Agreement by such Third Party Sublicensee that would have been Licensed
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Products under this Agreement will be considered Net Sales, and will be subject to the royalty obligations
under the applicable Direct License.
(c) Except in the event of termination of this Agreement by Hengrui pursuant to Section 12.3,
Ideaya and its Affiliates and Sublicensees will have the right to sell any or all of the inventory of Licensed
Products held by Ideaya and its Affiliates and Sublicensees as of the date of termination for a period of [***]
following such termination, so long as such sales are made in the normal course consistent with Ideaya’s past
practice and the applicable terms of this Agreement and Ideaya continues to comply with all of its payment,
reporting and audit obligations hereunder with respect to the Licensed Products.
(d) Each Party will immediately pay or cause to be paid to the other Party all sums which at
the date of termination are due and payable to the other Party under this Agreement.
(e) Notwithstanding anything to the contrary herein, if any clinical trial of a Licensed Product
has been initiated at the time of termination, the terms of this Agreement will continue to apply as necessary to
accomplish a safe and orderly wind-down of such clinical trials, at the cost and expense of Ideaya.
(f) Subject to any rights retained by any applicable Sublicensee under Section 12.5(b), and
subject to any payment obligations set forth in Section 12.5(f)(iii) and (iv):
(i)
With respect to all Regulatory Filings and all other regulatory documents
necessary to further Develop and Commercialize the Licensed Products, as they exist as of the date of such
termination, Hengrui shall determine in its sole discretion which of these shall be, at the reasonable cost and
expense of Hengrui (i) assigned to Hengrui, and Ideaya shall provide to Hengrui a copy of the applicable
documents and filings, together with the raw and summarized data for any preclinical and clinical studies of
the Licensed Products or (ii) withdrawn or inactivated.
(ii)
To the extent not already in Hengrui’s possession, Ideaya shall, at Hengrui’s
reasonable cost and expense, provide to Hengrui the tangible embodiments of all Know- How Controlled by
Ideaya to the extent necessary for the Development, Manufacture and Commercialization of the Licensed
Products in existence as of the date of such termination. Ideaya shall reasonably cooperate with Hengrui to
assist Hengrui with understanding and Exploitation of the Know-How provided to Hengrui under this Section
12.5(f). Effective upon such termination date, Ideaya hereby grants to Hengrui a royalty-bearing, perpetual,
worldwide, transferable, non- exclusive, freely sublicensable (through multiple tiers) right and license under
such Know-How solely for Developing, Manufacturing and Commercialization the Licensed Products in the
Field; provided that the applicable portions of such license will be contingent on payment by Hengrui to Ideaya
of any and all payments payable, as a result of the grant of such license, by Ideaya or its Affiliates to any Third
Party that Controls any such Ideaya Technology.
(iii)
To the extent Ideaya owns any trademarks or trade names (whether registered
or unregistered, including applications therefor) or domain names that pertain specifically to the Licensed
Product that Hengrui reasonably believes would be necessary or
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
reasonably useful for the Commercialization of a Licensed Product (as then currently marketed, but not
including any marks that include any corporate name or logo of Ideaya), Ideaya shall, at Hengrui’s reasonable
cost and expense, assign (or cause its Affiliate to assign) to Hengrui all of Ideaya’s (or such Affiliate’s) right,
title and interest in and to such trademark, trade name or domain name.
(iv)
The foregoing subsections 12.5(f)(i), (ii), and (iii) will be royalty- bearing, and
the Parties shall negotiate in good faith and mutually agree on a fair and reasonable royalty rate to be paid by
Hengrui to Ideaya for the grant of a license and right of reference to Hengrui under the Ideaya Technology
Controlled by Ideaya or its Affiliates as of the effective date of such termination that is necessary or reasonably
useful for Hengrui to Develop, Commercialize and otherwise Exploit the Licensed Compounds and Licensed
Product in the Field in the terminated portions of the Territory, which royalty rate shall account for the duration
of the Term, the commercial viability of the Licensed Compounds and Licensed Product in the Field in the
terminated portions of the Territory, the scope of the Ideaya Technology subject to the foregoing grant of rights
and the amount and extent of Ideaya’s investments in such Ideaya Technology. If the Parties fail to reach an
agreement on such royalty rate after [***] of negotiations, such royalty rate shall be determined through
binding arbitration in accordance with Section 13.2.
12.6 Confidential Information. Upon termination of this Agreement, except to the extent that a
Party obtains or retains the right to use the other Party’s Confidential Information, each Party will promptly
return to the other Party, or delete or destroy, all relevant records and materials in such Party’s possession or
Control containing Confidential Information of the other Party, pursuant to the other Party’s request; provided
that such Party may keep one copy of such materials for archival purposes only subject to continuing
confidentiality obligations or to the extent such Confidential Information is electronically archived in the
ordinary course of the receiving Party’s business. Any such Confidential Information retained by the receiving
Party pursuant to this Section 12.6 will remain subject to the obligations of non-disclosure and will not be used
for any purpose other than to comply with Applicable Law.
12.7 Survival. Expiration or termination of this Agreement for any reason will not relieve the Parties
of any obligation or right that has already accrued prior to such expiration or termination. Except as set forth
below or elsewhere in this Agreement, the obligations and rights of the Parties under the following provisions
will survive expiration or termination of this Agreement: Article 1 (as applicable), Article 6 (with respect to
any payment obligations incurred prior to the date of notice of termination or expiration), Article 10, Article 11
(excluding Section 11.5), Article 13, and Article 14 and Sections 2.3, 2.5, 3.7(f) (solely with respect to any
outstanding decisions and disputes at the time of termination or expiration), 7.1 through 7.2 (with respect to
any payment obligations incurred prior to the date of notice of termination or expiration), 7.3, 7.4 through 7.5
(with respect to any payment obligations incurred prior to the date of notice of termination or expiration), 8.1,
8.2, 9.5, 12.5 (as applicable), 12.6, 12.7, and 12.8.
12.8 Exercise of Right to Terminate. The use by either Party of a termination right provided for
under this Agreement will not give rise to the payment of damages or any other form of compensation or relief
to the other Party with respect thereto; provided that termination of this Agreement will not preclude either
Party from claiming any other damages, compensation, or relief that it may be entitled to upon such
termination.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 13
DISPUTE RESOLUTION
13.1 Resolution by Executive Officers. If a dispute as to matters arising under or relating to this
Agreement or either Party’s rights and obligations hereunder arises, either Party may refer such dispute to the
officer designated by the Chief Executive Officer of Ideaya and the officer designated by the Chief Strategy
Officer of Hengrui (collectively, the “Executive Officers”), who will meet in person or by telephone within
[***] after such referral to attempt in good faith to resolve such dispute. If such matter cannot be resolved by
discussion of such officers within such [***] period, or such other time period as the Parties may agree to in
writing, such dispute will be resolved in accordance with Section 13.2.
13.2
Arbitration.
(a) Any dispute arising under or relating to this Agreement that is not resolved as provided in
Section 13.1, may be submitted by either Party for resolution through binding arbitration in accordance with
the Rules of Arbitration of the International Chamber of Commerce (“ICC”) as then in effect (the “ICC
Rules”). Notwithstanding the foregoing, the Parties acknowledge and agree that the following disputes may be
resolved by a competent court under the Applicable Laws: (i) disputes with respect to determining the validity,
enforceability or infringement of any patent, (ii) any dispute relating to antitrust matters, and (iii) any other
dispute that is not permitted under applicable law to be resolved by arbitration despite the existence of this
Section 14.3.
(b) The arbitration will be conducted by a panel of three (3) arbitrators, none of whom will be
a current or former employee or director, or a then-current stockholder, of either Party, their respective then-
current Affiliates, or any Sublicensee. Each Party will be entitled to appoint a co-arbitrator, and the two co-
arbitrators so appointed will nominate the third arbitrator, who will act as the President of the Tribunal, within
[***] of their appointment. If any Party or the co-arbitrators fail to make the appointment as provided herein,
the ICC Court of Arbitration will make the appointment in accordance with the ICC Rules. The place of
arbitration will be Hong Kong, and the arbitration and all communications and documents relating thereto will
be conducted in English.
(c) Document production in the arbitration will generally be conducted in accordance with the
latest IBA Rules on the Taking of Evidence in International Arbitration.
(d) The award will be final and unappealable, and judgment upon the award may be entered in
any court of competent jurisdiction. The arbitrators will have no authority to award punitive or any other non-
compensatory damages. The arbitrators will, unless they deem otherwise in the circumstances, order that all or
part of the costs incurred by the prevailing Party
in connection with the arbitration, including reasonable attorneys’ fees, be paid by the non- prevailing Party.
(e) Except to the extent necessary to confirm or enforce an award or to accomplish the
purpose of this Agreement, including to exercise its rights and to perform its
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
obligations under this Agreement or as may be required by Applicable Law, the existence, content, or results of
an arbitration will be Confidential Information of each of the Parties, and neither a Party nor an arbitrator may
disclose such Confidential Information without the prior written consent of the other Party, provided, however,
each Party may disclose the content of the award to its Affiliates, Sublicensees and the licensees, employees,
agents, consultants, contractors and other representatives who have a legitimate need to know the content of
the award or as otherwise permitted under Article 11.
13.3 Payment Tolling. During the pendency of any dispute resolution proceeding between the
Parties under this Article 13, the obligation to make any payment, or portion thereof, under this Agreement
from one Party to the other Party, which payment, or portion thereof, is the subject, in whole or in part, of a
proceeding under this Article 13, will be tolled until the final outcome of such dispute has been established.
Any portion of a payment which is not in dispute will be paid in accordance with the terms of this Agreement.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
ARTICLE 14
GENERAL PROVISIONS
14.1 Governing Law. This Agreement will be governed by and construed in accordance with the
laws of the State of New York, U.S., without giving effect to any rules of conflict of laws that would result in
the application of the laws of any other jurisdiction.
14.2 Entire Agreement; Modification. This Agreement, including the exhibits, is both a final
expression of the Parties’ agreement and a complete and exclusive statement with respect to all of its terms.
This Agreement supersedes all prior and contemporaneous agreements and communications, whether oral,
written, or otherwise, concerning any and all matters contained herein. This Agreement may only be modified
or supplemented in a writing expressly stated for such purpose and signed by the Parties to this Agreement.
14.3 Relationship Between the Parties. The Parties’ relationship, as established by this Agreement,
is solely that of independent contractors. This Agreement does not create any partnership, joint venture, or
similar business relationship between the Parties. Neither Party is a legal representative of the other Party, and
neither Party can assume or create any obligation, representation, warranty, or guarantee, express or implied,
on behalf of the other Party for any purpose whatsoever.
14.4 Non-Waiver. The failure of a Party to insist upon strict performance of any provision of this
Agreement or to exercise any right arising out of this Agreement will neither impair that provision or right nor
constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any
waiver by a Party of a particular provision or right will be in writing, will be as to a particular matter and, if
applicable, for a particular period of time and will be signed by such Party.
14.5
Assignment.
(a) Neither this Agreement nor any rights or obligations hereunder may be assigned or
otherwise transferred by either Party, whether by merger, consolidation, divesture, restructure, sale of stock,
sale of assets, or otherwise, without the prior written consent of the other Party (which consent will not be
unreasonably withheld, delayed or conditioned), except that: (i) either Party may assign or otherwise transfer
this Agreement and its rights and obligations hereunder, without the other Party’s consent in connection with a
Change of Control of such Party, to the successor of the Party in such Change of Control, provided that the
assignee will expressly agree to be bound by the assigning Party’s obligations under this Agreement; (ii) either
Party may assign or otherwise transfer this Agreement and its rights and obligations hereunder without the
other Party’s consent to an Affiliate of such assigning Party, provided that the assigning Party will remain
liable and responsible to the non-assigning Party for the performance and observance of all such duties and
obligations by such Affiliate; and (iii) either Party may assign or otherwise transfer this Agreement and its
rights and obligations hereunder without the other Party’s consent in connection with the sale, transfer or other
disposition of all or substantially all of such Party’s assets to which this Agreement relates, provided that the
assignee will expressly agree to be bound
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
by the assigning Party’s obligations under this Agreement.
(b) As soon as practicable upon the entry by a Party to a definitive agreement that effects a
Change of Control of such Party, such Party will provide written notice to other Party setting forth the name of
the Third Party acquirer or the entity with or into which such Party will be merged or consolidated, as the case
may be and such other details as the other Party may reasonably request in connection with such Change of
Control.
(c) In the event of (i) a Change of Control involving either Party, or (ii) the acquisition by
either Party of all or substantially all of the business of a Third Party (together with any entities that were
Affiliates of such Third Party immediately prior to such acquisition, an “Acquiree”), whether by merger, sale
of stock, sale of assets or otherwise (an “Acquisition”), the Intellectual Property of the Third Party acquirer in
a Change of Control, or the Acquiree, as applicable, that existed prior to the effective date of such Change of
Control or Acquisition (or that is developed thereafter without any use of Intellectual Property of such Party or
any of its Affiliates existing prior to the Change of Control or Acquisition or acquired or developed thereafter)
will not be included in the Patent Rights, Know-How, or other Intellectual Property rights licensed or
transferred hereunder by such Party to the other Party, or otherwise subject to this Agreement.
(d) The rights and obligations of the Parties under this Agreement will be binding upon and
inure to the benefit of the permitted successors and permitted assigns of the Parties specified above, and the
name of a Party appearing herein will be deemed to include the name of such Party’s permitted successors and
permitted assigns to the extent necessary to carry out the intent of this section. Any assignment not in
accordance with this Section 14.5 will be null and void.
14.6 Severability. If, for any reason, any part of this Agreement is adjudicated invalid,
unenforceable, or illegal by a court of competent jurisdiction, such adjudication will not, to the extent feasible,
affect or impair, in whole or in part, the validity, enforceability, or legality of any remaining portions of this
Agreement. All remaining portions will remain in full force and effect as if the original Agreement had been
executed without the invalidated. unenforceable, or illegal part.
14.7 Notices. Any notice to be given under this Agreement must be in writing and delivered either in
person, by (a) air mail (postage prepaid) requiring return receipt, (b) internationally-recognized overnight
courier, or (c) email confirmed thereafter by any of the foregoing, to the Party to be notified at its address(es)
given below, or at any address such Party may designate by prior written notice to the other in accordance with
this Section 14.7. Notice will be deemed sufficiently given for all purposes upon the earliest of: (i) the date of
actual receipt;
(ii) if air mailed, [***] after the date of postmark; (iii) if delivered by overnight courier, the [***] after
dispatch; or (iv) if sent by email, the date of confirmation of receipt if during the recipient’s normal business
hours and followed up via delivery pursuant to subsection (i), (ii), or (iii) above.
If to Ideaya, notices must be addressed to:
IDEAYA Biosciences, Inc.
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
[***]
with a copy (which alone will not constitute notice) to:
IDEAYA Biosciences, Inc.
[***]
If to Hengrui, notices must be addressed to:
Jiangsu Hengrui Pharmaceuticals Co., Ltd. [***]
with a copy (which alone will not constitute notice) to: Jiangsu
Hengrui Pharmaceuticals Co., Ltd.
[***]
14.8 Force Majeure. Each Party will be excused from liability for the failure or delay in performance
of any obligation under this Agreement by reason of any event beyond such Party’s reasonable control,
including Acts of God, fire, flood, explosion, earthquake, pandemic flu, or other natural forces, war, civil
unrest, acts of terrorism, accident, destruction or other casualty, any lack or failure of transportation facilities,
any lack or failure of supply of raw materials, or any other event similar to those enumerated above. Such
excuse from liability will be effective only to the extent and duration of the event(s) causing the failure or delay
in performance and provided that the Party has not caused such event(s) to occur. Notice of a Party’s failure or
delay in performance due to force majeure must be given to the other Party within [***] after its occurrence.
All delivery dates under this Agreement that have been affected by force majeure will be tolled for the duration
of such force majeure. In no event will any Party be required to prevent or settle any labor disturbance or
dispute.
14.9 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by
one Party to the other Party are, and will otherwise be deemed to be, for purposes of Section 365(n) of the U.S.
Bankruptcy Code or comparable provision of applicable bankruptcy or insolvency laws, licenses of right to
“intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code or comparable provision of
applicable bankruptcy or insolvency laws. The Parties agree that a Party that is a licensee of such rights under
this Agreement will retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code
or comparable provision of applicable bankruptcy or insolvency laws. The Parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against a Party to this Agreement under the U.S.
Bankruptcy Code or comparable provision of applicable bankruptcy or insolvency laws, the other Party will be
entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, and same, if not already in its possession, will be promptly
delivered to it (a) upon any such commencement of a bankruptcy or insolvency proceeding upon its written
request therefor, unless the bankrupt Party
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
elects to continue to perform all of its obligations under this Agreement, or (b) if not delivered under (a) above,
following the rejection of this Agreement by or on behalf of the bankrupt Party upon written request therefor
by the other Party.
14.10Designation of Affiliates. Each Party may discharge any obligations and exercise any rights
hereunder through delegation of its obligations or rights to any of its Affiliates. Each Party hereby guarantees
the performance by its Affiliates of such Party’s obligations under this Agreement, and will cause its Affiliates
to comply with the provisions of this Agreement in connection with such performance. Any breach by a
Party’s Affiliate of any of such Party’s obligations under this Agreement will be deemed a breach by such
Party, and the other Party may proceed directly against such Party without any obligation to first proceed
against such Party’s Affiliate.
14.11Interpretation. The headings of clauses contained in this Agreement preceding the text of the
sections, subsections, and paragraphs hereof are inserted solely for convenience and ease of reference and will
not constitute any part of this Agreement, or have any effect on its interpretation or construction. All references
in this Agreement to the singular will include the plural where applicable. Unless otherwise specified,
references in this Agreement to any Article will include all Sections, subsections, and paragraphs in such
Article, references to any Section will include all subsections and paragraphs in such Section, and references in
this Agreement to any subsection will include all paragraphs in such subsection. The word “including” and
similar words means including without limitation. The word “or” means “and/or” unless the context dictates
otherwise because the subjects of the conjunction are mutually exclusive. The words “herein,” “hereof,” and
“hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision. All references to days in this Agreement mean calendar days, unless otherwise
specified. Ambiguities and uncertainties in this Agreement, if any, will not be interpreted against either Party,
irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist. This
Agreement has been prepared in the English language and the English language will control its interpretation.
In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral, or other
communications between the Parties regarding this Agreement will be in the English language.
14.12Further Actions. Each Party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as necessary or appropriate in order to carry out the purposes and
intent of this Agreement.
14.13Counterparts; Electronic or Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which will be an original, but all of which together will constitute one
instrument. This Agreement may be executed and delivered electronically or by facsimile and upon such
delivery such electronic or facsimile signature will be deemed to have the same effect as if the original
signature had been delivered to the other Party.
[SIGNATURE PAGE FOLLOWS]
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
In Witness Whereof, the Parties have caused this License Agreement to be executed and entered into
by their duly authorized representatives as of the Effective Date.
JIANGSU HENGRUI
PHARMACEUTICALS CO., LTD.
IDEAYA BIOSCIENCES, INC.
By: /s/ Frank Jiang
By: /s/ Yujiro Hata
Name:
Frank Jiang
Name:
Yujiro Hata
Title:
Chief Strategy Officer
Title:
Chief Executive Officer
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
Exhibit 11.4 PRESS
RELEASE
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
IDEAYA Biosciences Enters Exclusive License with Hengrui Pharma for SHR-4849, a Novel Phase 1
DLL3 Topo-I-Payload ADC Targeting SCLC and NET Solid Tumors
•
Exclusive global license outside of Greater China for SHR-4849, a Phase 1 DLL3-targeting Topo-I-
payload antibody drug conjugate (ADC)
•
DLL3 highly expressed in Small Cell Lung Cancer (SCLC) and Neuroendocrine Tumors (NETs), respectively
85% and 20-40%
•
Rational combination opportunities with IDEAYA’s DNA Damage Repair (DDR) clinical pipeline,
including Phase 1 PARG inhibitor IDE161
•
Targeting US IND filing for SHR-4849 in H1 2025
SOUTH SAN FRANCISCO, CALIFORNIA and SHANGHAI, China, December 29, 2024 /PRNewswire/
-- IDEAYA Biosciences, Inc. (NASDAQ: IDYA), a precision medicine oncology company committed to the discovery
and development of targeted therapeutics, announced that it has entered into an exclusive license agreement for SHR-
4849, a novel DLL3-targeting Topo-I-payload ADC program with Jiangsu Hengrui Pharmaceuticals Co., Ltd. (Hengrui
Pharma, SHA: 600276), an innovative global pharmaceutical company headquartered in China focused on unmet clinical
needs. Under the terms of the agreement, IDEAYA will develop and commercialize SHR-4849 worldwide outside of
Greater China.
"There is significant unmet medical need in DLL3-expressing solid tumors, and we are excited by the opportunity to
develop SHR-4849, which has monotherapy potential in SCLC and NETs. SHR-4849 is competitively well positioned
with first-in-class potential in the DLL3 topo-I-payload ADC field, a therapeutic area that has demonstrated preliminary
monotherapy clinical validation in SCLC," said Yujiro
S. Hata, Chief Executive Officer and Founder, IDEAYA Biosciences. “In addition, SHR-4849 accelerates IDEAYA’s
strategic objective to develop wholly-owned rational clinical combinations of topo-payload based ADCs with our PARG
inhibitor IDE161, where we observe enhanced preclinical combination efficacy versus evaluated topo-payload ADCs
alone," said Daniel A. Simon, Chief Business Officer, IDEAYA Biosciences.
Frank Jiang, Chief Strategy Officer and Board Director, Hengrui Pharma, said "SHR-4849 is a novel DLL3 targeting
ADC showing encouraging early clinical signals in small-cell lung cancer with a manageable safety profile. We are
delighted to partner with IDEAYA to support the development of this ADC globally, which furthers our goal of
delivering innovative medicines for the benefit of patients around the world."
SHR-4849 has shown promising antitumor activity in preclinical studies, including tumor regression as a monotherapy in
multiple models. This drug is currently being evaluated in a Phase 1 clinical trial for advanced solid tumors in China
(NCT06443489). In the ongoing Phase 1 dose escalation, SHR-4849 has reached therapeutic dose levels where multiple
partial responses have been observed as of the data cut-off date of December 10, 2024. Among 11 evaluable small cell
lung cancer (SCLC) subjects treated at therapeutic dose levels, 8 partial responses by RECIST 1.1 were observed,
resulting in an overall response rate of ~73% (including both confirmed and unconfirmed responses, all unconfirmed
responses were pending further evaluation). As of the data cut-off date, treatment related adverse events (TRAEs) were
predominantly Grade 1 or 2, and the Phase 1 dose escalation is ongoing with no reported drug-related discontinuations,
and the maximum tolerated dose has not yet been reached. The most common TRAEs
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
observed were white blood cell count decreased, anemia, neutrophil count decreased, nausea and platelet count decreased.
IDEAYA is targeting to file a US IND for SHR-4849 in the first half of 2025.
DLL3 has been reported to be expressed in multiple solid tumor types, including in SCLC and Neuroendocrine Tumors at
approximately 85% and 20-40%, respectively, based on the Human Protein Atlas database. DLL3 has limited extracellular
expression in normal tissues, making it a promising therapeutic target in these tumor types, for which there remains significant
unmet medical need.
Under the terms of the agreement, Hengrui Pharma is eligible to receive upfront and milestone payments totaling $1.045
billion, including a $75m upfront fee, up to $200m in development and regulatory milestone payments, plus commercial
success-based milestones. Hengrui is also eligible to receive mid- single to low-double digit royalties on net sales outside
of Greater China. The upfront and projected research and development costs, including potential milestone payments,
does not change the earlier provided IDEAYA guided cash out runway of at least 2028.
About IDEAYA Biosciences
IDEAYA is a precision medicine oncology company committed to the discovery and development of targeted
therapeutics for patient populations selected using molecular diagnostics. IDEAYA's approach integrates capabilities in
identifying and validating translational biomarkers with drug discovery to select patient populations most likely to benefit
from its targeted therapies. IDEAYA is applying its early research and drug discovery capabilities to synthetic lethality –
which represents an emerging class of precision medicine targets.
About Hengrui Pharma
Jiangsu Hengrui Pharmaceuticals Co., Ltd. (Hengrui Pharma) is an innovative global pharmaceutical company focused
on unmet clinical needs, with a strong track record of scientific and technological innovation. Since its first innovative
drug approval in 2011, Hengrui Pharma has invested more than $5.4 billion in R&D and set up 14 R&D centers in
Lianyungang, Shanghai, the U.S., and Europe. It has 9 major manufacturing sites and a global R&D team of more than
5,000 professionals. Hengrui Pharma has independently established a number of leading technology platforms such as its
ADC platform, proteolysis targeting chimera (PROTAC), molecular gels, bi/multi-specific antibodies, and AI molecular
design, which provide a strong foundation for innovative R&D. Hengrui strives for continued innovation and
collaboration with global partners to serve a healthy China and benefit patients around the world.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to
(i) the timing of a potential IND filing, (ii) potential development strategies, (iii) the estimated potential addressable
market and (iv) the potential therapeutic benefits of IDEAYA therapeutics. Such forward- looking statements involve
substantial risks and uncertainties that could cause IDEAYA's preclinical and clinical development programs, future
results, performance or achievements to differ significantly from those expressed or implied by the forward-looking
statements. Such risks and uncertainties include, among others, the uncertainties inherent in the drug development
process, including IDEAYA's
Exhibit 10.27
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
programs' early stage of development, the process of designing and conducting preclinical and clinical trials, the
regulatory approval processes, the timing of regulatory filings, the challenges associated with manufacturing drug
products, IDEAYA's ability to successfully establish, protect and defend its intellectual property, and other matters that
could affect the sufficiency of existing cash to fund operations. IDEAYA undertakes no obligation to update or revise
any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to
differ from those expressed in these forward-looking statements, as well as risks relating to the business of IDEAYA in
general, see IDEAYA's Annual Report on Form 10-K dated February 20, 2024 and any current and periodic reports filed
with the U.S. Securities and Exchange Commission.
Investor and Media Contact
IDEAYA Biosciences Andres
Ruiz Briseno
SVP, Head of Finance and Investor Relations investor@ideayabio.com
SOURCE IDEAYA Biosciences, Inc., Jiangsu Hengrui Pharmaceuticals Co., Ltd. Sources
2024 AACR. Abstract 3146/27
Rojo, F., at al., International Real-World Study of DLL3 Expression in Patients with Small Cell Lung Cancer. Lung
Cancer. 2020;147:237–243
Tanaka, K., at al., Prevalence of Delta-like protein 3 expression in patients with small cell lung cancer. Lung Cancer.
2018 Jan:115:116-120
Yao, J., at al.,DLL3 as an Emerging Target for the Treatment of Neuroendocrine Neoplasms. The Oncologist, 2022, 27,
940–951
Ali, G., at al., Prevalence of Delta-Like Protein 3 in a Consecutive Series of Surgically resected Lung Neuroendocrine
Neoplasms. Front. Oncol. 11:729765.
Song, H., at al., Expression of Notch receptors and their ligands in pancreatic ductal adenocarcinoma. Exp Ther Med 16:
53-60, 2018
Exhibit 10.19(b)
AMENDMENT NUMBER ONE TO OPTION AND LICENSE AGREEMENT
This Amendment Number One to Option and License Agreement (“Amendment No. 1”) is entered
into as of December 12, 2024 (the “Amendment No. 1 Effective Date”), by and between Biocytogen
Pharmaceuticals (Beijing) Co., Ltd., organized under the laws of China, having an address at No.12, Baoshen
South Street, Daxing Bio-Medicine Industry Park, Daxing District, Beijing, China 102609 (“Biocytogen”),
and IDEAYA Biosciences, Inc., organized under the laws of Delaware, having an address at 5000 Shoreline
Court, Suite 300, South San Francisco, California 94080 U.S.A. (“Ideaya”). Biocytogen and Ideaya may be
referred to herein individually as a “Party” or collectively as the “Parties”.
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
1
WHEREAS, the Parties entered into the Option and License Agreement, effective on July 30, 2024
(the “Agreement”); and
Whereas, the Parties desire to amend, pursuant to Section 15.2 of the Agreement, certain terms of
the Agreement in accordance with this Amendment No. 1 effective as of the Amendment No. 1 Effective
Date.
Now Therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the Parties, the Parties, intending to be legally bound, agree as follows:
1.
All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such
terms in the Agreement.
2.
Exhibit 2.1 of the Agreement shall be deleted in its entirety and replaced with the exhibit set forth in
Attachment 1 to this Amendment No. 1.
3.
In the event of any discrepancies or conflicting terms between this Amendment No. 1 and the
Agreement, the terms of this Amendment No. 1 shall control.
4.
The Agreement and this Amendment No. 1 constitutes and contains the complete, final and exclusive
understanding and agreement of the Parties and cancels and supersedes any and all prior negotiations,
correspondence, understandings and agreements, whether oral or written, between the Parties
respecting the subject matter hereof and thereof.
5.
This Amendment No. 1, and all claims arising under or in connection therewith, will be governed by
and interpreted in accordance with the substantive laws of the State of Delaware, without regard to
conflict of law principles thereof.
6.
This Amendment No. 1 may be executed in two counterparts, each of which will be an original and
both of which will constitute together the same document. Counterparts may
Exhibit 10.19(b)
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
2
be signed and delivered by facsimile or PDF file, each of which will be binding when received by the
applicable Party.
7.
Except for the matters set forth in this Amendment No. 1, all other terms of the Agreement shall
remain unchanged and in full force and effect.
Exhibit 10.19(b)
IN WITNESS WHEREOF, authorized representatives of the Parties have duly executed this Amendment
No. 1 to be effective as of the Amendment No. 1 Effective Date.
BIOCYTOGEN PHARMACEUTICALS (BEIJING) CO.,
LTD.
IDEAYA BIOSCIENCES, INC.
By /s/ Yuelei Shen
By /s/ Douglas Snyder
Name: Yuelei Shen
Title: CEO
Name: Douglas Snyder
Title:
Senior Vice President, General Counsel
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
3
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
4
ATTACHMENT 1
EXHIBIT 2.1
OPTION PERIOD STUDIES
[***]
Exhibit 10.20(f)
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.1
Amendment No. 5 to Agreement
(“Amendment No. 5”)
Amendment No. 5 Date:
Dec 16, 2024
Name of Original Agreement: Clinical Trial Collaboration and Supply Agreement (the “Original Agreement,” and together
with any previous amendments which may be described below, the
“Agreement”)
Effective Date of Original Agreement:
March 11, 2020
Parties: Pfizer Inc. (“Pfizer”) and Ideaya Biosciences, Inc. (“Ideaya”)
WHEREAS, the parties hereto desire to amend, among other things, certain terms of the Agreement.
NOW, THEREFORE, in order to accommodate the desired amendment(s), the parties hereby agree as follows:
1.
Defined Terms. Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in
the Agreement.
2.
Amendment(s) to the Agreement. Appendix B of the Agreement is revised to read, in its entirety, as set forthing in Appendix
B of this Amendment No 5.
3.
Ratification of the Agreement. Except as expressly set forth in Article 2 above, the Agreement shall remain unmodified and
in full force and effect. The execution, delivery and effectiveness of this Amendment No. 5 shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of the parties to the Agreement, nor constitute a waiver of
any provision of the Agreement.
4.
Counterparts. This Amendment No. 5 may be executed in any number of counterparts, each of which shall be an original
instrument and all of which, when taken together, shall constitute one and the same agreement.
SIGNATURES IMMEDIATELY FOLLOWING ON NEXT PAGE
Exhibit 10.20(f)
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.2
IN WITNESS WHEREOF, the duly authorized representatives of Pfizer and Ideaya have executed this Amendment No. 4 as of
the date first above written.
Ideaya Biosciences, Inc.
By: /s/ Yujiro Hata
Print Name:
Yujiro Hata
Title:
President and Chief Executive Officer
Date: 12/17/2024
(Duly authorized)
Pfizer Inc.
By: /s/ Arati Rao
Print Name:
Arati Rao
Title: Thoracic Oncology TA Development Head
Date: 12/24/2024
(Duly authorized)
Exhibit 10.20(f)
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.3
Appendix B– Supply Schedule
Supply of Compounds – Phase I/II Study combo with IDE196
Ideaya and Pfizer are entering into this Supply Schedule to define each Party’s clinical supply chain responsibilities with respect
to the IDEYA Study pursuant to the Clinical Trial Collaboration and Supply Agreement dated March 11, 2020, as amended by
Amendment No. 1 to Agreement dated September 23, 2020, Amendment No. 2 to Agreement dated April 8, 2021, Amendment
No. 3 to Agreement dated August 9, 2021, Amendment No 4 to Agreement dated May 10, 2023, and Amendment No. 5 to
Agreement dated November XX, 2024.
This Supply Schedule is to be used for contracting purposes between Ideaya and Pfizer and defines the responsibilities not
covered in the Quality Agreement for the binimetinib Drug Product (“Binimetinib Compound”) and the crizotinib Drug Product
(“Crizotinib Compound” and each a “Pfizer Compound”), clinical packaging/labeling, release, storage/distribution
/control/disposal, import/export, and Interactive Response Technology (IRT), regulatory, forecast planning activities for the
Ideaya Compound(s)/ binimetinib or Compound(s)/crizotinib and Ideaya combination clinical trials.
Upon approval, it will serve as the standard of operation between both parties for these clinical supply activities.
Ideaya will provide Pfizer written orders [***] days before delivery of the binimetinib Drug Product. Pfizer will provide Ideaya
with binimetinib [***]. Pfizer is providing [***].
Ideaya will provide Pfizer written orders [***] days before delivery of the crizotinib Drug Product. Pfizer will provide Ideaya
with [***].
Delivery timelines and Compound quantities are based on the Phase I/II study plan in place at the time of the Effective Date.
Compound quantities are subject to modification based on Study conduct (due, for example, to the addition of Study sites or
countries, patients with durable responses, etc). If the quantity of compounds set forth in this Agreement are not sufficient to
complete the Study, Ideaya shall so notify Pfizer and the Parties shall discuss in good faith regarding additional quantities of
Compounds to be provided and the schedule on which such additional quantities may be provided.
As specified in the Collaboration Agreement, the Parties agree that Pfizer shall provide each Pfizer Compound for use in the
Study at no cost to Ideaya.
Following are estimates of the demand for the supply of the Pfizer Compound for the Study. The supply chain teams from Pfizer
and Ideaya will meet regularly to review demand and supply requirements and adjust the delivery schedule to ensure continuous
supply for the Study.
Study Assumptions
[***]
Exhibit 10.20(f)
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.4
The source of the Compounds to be provided by the Parties during the Term may change. In such event, the supplying Party
will ensure that all Compounds supplied by such Party will be from an approved source and the table above will be updated
as applicable Regulatory Authorities approve the change to the Manufacturing Site.
Exhibit 10.20(f)
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded
information is not material and would likely cause competitive harm to the registrant if publicly disclosed.5
The responsibilities of both parties are summarised in table below:
CLINICAL SUPPLIES TABLE OF ROLES AND RESPONSIBILITIES
Documentation will be transferred between the Clinical Supply Chain contacts or designee.
[***]
This Supply Schedule is binding on the final date of approval. The Supply Schedule can be reviewed at any time by mutual
consent of each party to determine if changes will be considered minor or major. Any minor changes to the content of the Supply
Schedule will be documented in the Revision History box and no re-routing for signatures will be required. A major change will
necessitate the document to be revised, re-routed for signatures and be assigned the next sequential version number.
IN WITNESS HEREOF, Ideaya and Pfizer hereby approves this Supply Schedule, Version 1 as of the dates set forth below:
Ideaya Biosciences, Inc.
Pfizer, Inc.
Signature
/s/ Yujiro Hata
Signature
/s/ Patrick Furcolo
Name
Yujiro Hata
Name
Patrick Furcolo
Title
President and Chief Executive Officer
Title
Senior Director, Global Clinical Supply
Date
12/17/2024
Date
06-Jan-2025
Exhibit 10.25(b)
1
ACTIVE\1608352630.1
Execution Version
FIRST AMENDMENT TO LEASE
5000 Shoreline Court
THIS FIRST AMENDMENT TO OFFICE LEASE (this “Amendment”) is made as of May 10, 2024 (the “Amendment Effective
Date”), by and between DW LSP 5000 SHORELINE LLC, a Delaware limited liability company (“Landlord”), and IDEAYA
BIOSCIENCES, INC., a Delaware corporation (“Tenant”).
RECITALS
A. Pursuant to that certain Lease dated June 1, 2023 (the “Lease”), Tenant leased from Landlord and Landlord leased to Tenant
certain premises (the “Original Premises”) containing approximately 43,966 rentable square feet of space located on the third (3rd) and first
(1st) floors in the building known as 5000 Shoreline Court, San Francisco, California (the “Building”). Capitalized terms used but not
defined herein are used herein with the meanings ascribed to them in the Lease. All references herein to the “Lease” shall mean the
Original Lease as amended by this Amendment, unless the context clearly indicates otherwise.
B. Landlord and Tenant desire to amend the Lease to expand the Premises to include, in addition to the Original Premises, the
Expansion Premises (as defined below), upon the terms set forth hereinbelow.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledge, Landlord
and Tenant hereby agree as follows:
1. Recitals. The foregoing recitals are true and correct and are incorporated as part of the agreement of the parties.
2. Expansion of Premises.
(a) Expansion Premises. Landlord hereby agrees to lease to Tenant and Tenant hereby agrees to lease from Landlord the remaining
rentable area of the third (3rd) floor of the Building shown on Exhibit A to this Amendment containing approximately 11,321 rentable
square feet of gross leasable area (the “Expansion Premises”). Effective as of the Expansion Commencement Date (as defined below) and
continuing through the Lease Term for the Original Premises (such period being the “Expansion Term”), the Expansion Premises shall be
added to and leased by Tenant as part of the Premises under the Lease. Landlord shall install the Tenant Improvements (as defined on
Exhibit B attached hereto and made a part hereof) to initially prepare the Expansion Premises for Tenant’s occupancy thereof for office use,
in accordance with the terms of Exhibit B.
(b) Expansion Commencement Date. The Expansion Term shall begin on the date (the “Expansion Commencement Date”) that
Landlord offers to deliver possession of the Expansion Premises to Tenant following Substantial Completion (as defined on Exhibit B) of
the Tenant Improvements to be constructed by Landlord pursuant to Exhibit B. The Expansion Commencement Date is estimated to occur
on November 1, 2024 (the “Estimated Expansion Commencement Date”). If Landlord is unable to deliver possession of the Expansion
Premises to Tenant on or before the Estimated Expansion Commencement
Exhibit 10.25(b)
2
ACTIVE\1608352630.1
Date for any reason whatsoever, then this Amendment shall not be void or voidable, and Landlord shall not be liable to Tenant for any loss
or damage resulting therefrom. Notwithstanding the foregoing, if delivery of possession of the Expansion Premises to Tenant shall occur
after the date that is sixty (60) days after the Estimated Expansion Commencement Date (other than by reason of Force Majeure or Tenant
Delay) (the “Expansion Premises Outside Delivery Date”) and such delay actually delays Tenant’s occupancy of the Expansion Premises,
then Tenant shall receive a day for day credit against Base Monthly Rent applicable to the Expansion Premises for each day of delay in
delivery beyond the Expansion Premises Outside Delivery Date until the occurrence of the delivery of the Expansion Premises to Tenant (or
if applicable, the Critical Expansion Premises Outside Delivery Date), and if delivery occurs on or after the date that is sixty (60) days
following the Expansion Premises Outside Delivery Date (other than by reason of Force Majeure or Tenant Delay) (the “Critical Expansion
Premises Outside Delivery Date”) and such delay actually delays Tenant’s occupancy of the Expansion Premises, then Tenant shall receive
a two (2)-day credit against Base Monthly Rent applicable to the Expansion Premises for each day of delay in delivery beyond the Critical
Expansion Premises Outside Delivery Date until the delivery of the Expansion Premises to Tenant. If any portion of the delay in delivery is
due to any Tenant Delay (as defined in Exhibit B), then the delivery date shall be deemed (for the purposes of calculating the Expansion
Commencement Date) the date the Expansion Premises would have been delivered but for such delays by Tenant.
(c) Premises Square Footage. Effective as of the Expansion Commencement Date, the Premises shall contain a total of 55,287
rentable square feet of gross leasable area. Except as expressly set forth in this Amendment, Tenant’s lease of the Expansion Premises shall
be on all of the terms and conditions set forth in the Lease that are in effect immediately before the Amendment Effective Date.
(d) Expansion Premises Base Rent. Commencing on the Expansion Commencement Date, Tenant shall pay Base Monthly Rent for
the Expansion Premises in the amounts shown below:
Lease Year
Annual
Base Rent
Base Monthly
Rent
1
$923,793.60
$76,982.80
2
$956,126.38
$79,677.20
3
$989,590.80
$82,465.90
4
$1,024,226.48
$85,352.21
5
$1,060,074.40
$88,339.53
6
$1,097,177.01
$91,431.42
7
$1,135,578.20
$94,631.52
8
$1,175,323.44
$97,943.62
9
$1,216,459.76
$101,371.65
10
$1,259,035.85
$104,919.65
For purposes of this Amendment, the term “Lease Year” with respect to the Expansion Premises shall mean each consecutive
twelve (12)-month period during the Lease Term commencing on the Expansion Commencement Date (the partial month following the
Expansion Commencement Date (if such date is not the first day of a month) shall be deemed to be included in the first Lease Year), except
that the last Lease Year shall end on the expiration date of the Lease Term.
Notwithstanding the foregoing, provided that Tenant is not then in default of the Lease, as amended hereby, after the expiration of
applicable notice and cure periods, then during the first (1st) through the twenty-first (21st) full calendar months of the Expansion Term (the
“Expansion Abatement Period”), Tenant shall not be obligated to pay any Base Monthly Rent otherwise attributable to the Expansion
Premises
Exhibit 10.25(b)
3
ACTIVE\1608352630.1
during such Expansion Abatement Period (the “Expansion Abatement”). Landlord and Tenant acknowledge that the aggregate amount of the
Expansion Abatement shall equal $1,640,888.38. Tenant shall be required to pay Tenant’s Share of Operating Expenses for the Expansion
Premises as provided herein attributable to the Expansion Abatement Period, as well as for utilities and other services. Tenant acknowledges
and agrees that the foregoing Expansion Abatement has been granted to Tenant as additional consideration for entering into this Amendment,
and for agreeing to pay the rental and performing the terms and conditions otherwise required under the Lease, as amended hereby. If Tenant
shall be in default under the Lease, as amended hereby, and shall fail to cure such default within the notice and cure period, if any, permitted
for the cure pursuant to the terms and conditions of the Lease, and Landlord shall have terminated the Lease by reason of such uncured
default, then Tenant shall pay Landlord unamortized portion of the Expansion Abatement, such amortization to be computed over a period of
the number of full calendar months of the Expansion Term with interest at the lesser of (i) ten percent (10%) per annum or (ii) the maximum
rate permitted by applicable law.
(d)
Expansion Premises Additional Rent. During the Expansion Term, Tenant shall pay additional charges for Operating
Expenses on account of the Expansion Premises in accordance with Article 8 of the Lease, except that Tenant’s Share for the Expansion
Premises shall be 8.11%. Effective as of the Expansion Commencement Date, Tenant’s Share for the Original Premises (31.49%) together
with the Expansion Premises (8.11%) shall be 39.60%.
(e) Early Occupancy. Landlord shall use commercially reasonable efforts to permit Tenant, or any agent, employee or contractor
of Tenant, to enter, use or occupy the Expansion Premises not less than thirty (30) days prior to the Expansion Commencement Date. Such
entry, use or occupancy shall be subject to all the provisions of the Lease, as amended hereby (other than the payment of Base Monthly Rent
and Additional Rent on account of Operating Expenses, Real Estate Taxes and utilities), including, without limitation, Tenant’s compliance
with the insurance and indemnity requirements of the Lease. Said early possession shall not advance the Expansion Commencement Date.
During such early access to the Expansion Premises, Tenant agrees that it shall not in any way materially interfere with the progress of the
Tenant Improvements by such entry. Should such entry prove a material impediment to the progress of the Tenant Improvements, in
Landlord’s reasonable judgment, Landlord may demand that Tenant forthwith vacate the Expansion Premises during the period of time that
the Tenant Improvements would be materially impeded, and Tenant shall promptly comply with this demand.
3. Tenant’s Estoppel. Tenant hereby certifies and acknowledges that, as of the Amendment Effective Date, (a) to Tenant’s
knowledge, Landlord is not in default in any respect under the Lease; (b) Tenant does not have any defenses to its obligations under the
Lease, and (c) there are no offsets against Rent. Tenant acknowledges and agrees that: (i) the representations herein set forth constitute a
material consideration to Landlord in entering into this Amendment; (ii) such representations are being made by Tenant for purposes of
inducing Landlord to enter into this Amendment; and (iii) Landlord is relying on such representations in entering into this Amendment.
4. Additional Security Deposit. Landlord is currently holding FirstCitizensBank Irrevocable Standby Letter of Credit No.
SVBFS001791 dated June 2, 2023 in the amount of $615,524.00 (the “Existing Letter of Credit”) as the Security Deposit under the Lease.
In addition to the Existing Letter of Credit, within ten (10) days of the execution hereof, Tenant, as additional security for the performance
of the obligations of Tenant under the Lease, as amended hereby, shall provide to Landlord either (x) an amendment to the Existing Letter
of Credit to increase the amount of same by $153,965.60 (two (2) months’ Base Rent payable with respect to the Expansion Premises), or
(y) a clean, irrevocable letter of credit in the amount of $769,489.60 substantially in the form of the letter of credit attached to the Lease as
Exhibit M, and otherwise in accordance with the terms and conditions of the Lease, including but not
Exhibit 10.25(b)
4
ACTIVE\1608352630.1
limited to Section 3.5. Accordingly, as of the date hereof, the amount specified as “Security/Letter of Credit” in Section M of the
Summary shall be amended to mean $769,489.60.
5. Brokerage. Tenant represents and warrants that, other than CBRE, Inc. and Jones Lang LaSalle (together, the “Brokers”), it
has had no dealings with any broker or agent in connection with this Amendment. Tenant shall indemnify and hold Landlord harmless
from and against any and all costs, expense or liability for any compensation, commissions, and charges claimed by any broker or agent
(other than the Brokers) with respect to this Amendment or the negotiation thereof arising from a breach of the foregoing warranty.
Landlord shall be responsible for payment of the brokerage commissions due to the Brokers in connection with this Amendment pursuant to
a separate written agreement. The terms of this Section shall survive the expiration or earlier termination of the Lease.
6. Ratification. Except as set forth herein, the terms of the Lease are hereby ratified and confirmed, including without limitation
the provisions of Section 10.1 of the Lease concerning Landlord’s liability, which are expressly incorporated herein. The representations
and warranties set forth in Section 15.10 of the Lease are hereby restated and confirmed as of the date hereof by the persons executing this
Amendment on behalf of Tenant with respect to the Lease as amended hereby.
7. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, successors, and assigns.
8. Miscellaneous. This Amendment shall be deemed to have been executed and delivered within the State of California, and the
rights and obligations of Landlord and Tenant shall be construed and enforced in accordance with, and governed by, the laws of the State of
California. Each party has cooperated in the drafting and preparation of this Amendment and, therefore, in any construction to be made of
this Amendment, the same shall not be construed against either party. Except as expressly amended by this Amendment, all other terms,
conditions and provisions of the Lease are hereby ratified and confirmed and shall continue in full force and effect.
9. Counterparts; Execution. This Amendment may be executed in counterparts, which, when taken together, shall constitute one
and the same instrument. Any facsimile or electronic (e.g., email, pdf, DocuSign or comparable format) transmittal of original signature
versions of this Amendment shall be considered to have the same legal effect as execution and delivery of the original document and shall
be treated in all manner and respects as the original document. In case any one or more of the provisions contained in this Amendment
shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provision of this Amendment, and this Amendment shall be construed as if such invalid, illegal or unenforceable provision
had never been contained herein.
[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]
Exhibit 10.25(b)
[Signature Page to First Amendment to Lease]
IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the Amendment Effective Date.
LANDLORD:
DW LSP 5000 SHORELINE LLC,
a Delaware limited liability company
By: Divco West Real Estate Asset Management, Inc., a Delaware
corporation, its Agent
By: /s/ Chris Pong
Name: Chris Pong
Title: Authorized Signatory
TENANT:
IDEAYA BIOSCIENCES, INC.,
a Delaware corporation
By: /s/ Yujiro Hata
Name: Yujiro Hata
Title: President and Chief Financial Officer
Exhibit 10.25(b)
A-1
Exhibit A
Expansion Premises
Exhibit 10.25(b)
B-1
EXHIBIT B
WORK LETTER FOR CONSTRUCTION OBLIGATIONS
This Exhibit B forms a part of that certain First Amendment to Lease by and between DW LSP 5000 SHORELINE LLC, a Delaware limited
liability company, as Landlord, and IDEAYA BIOSCIENCES, INC., a Delaware corporation, as Tenant, to which this Exhibit is attached. If
there is any conflict between this Exhibit and said Amendment, this Exhibit shall govern. All capitalized terms referred to in this Exhibit shall
have the same meaning provided in the Lease as amended by the Amendment, except where expressly provided to the contrary in this
Exhibit.
1.
Defined Terms. All defined terms referred to in this Exhibit shall have the same meaning as defined in the Lease to which this
Exhibit is a part, except where expressly defined to the contrary.
2.
Additional Definitions. Each of the following terms shall have the following meaning:
“Construction Plans” – The final, complete plans and specifications for the construction of the Tenant Improvements consisting of
all architectural, engineering, mechanical and electrical drawings and specifications which are required to obtain all building permits, licenses
and certificates from the applicable governmental authority(ies) for the construction of the Tenant Improvements. The Construction Plans
shall be prepared by duly licensed and/or registered architectural and/or engineering professionals selected by Landlord in its sole and
reasonable discretion, and shall be in substantial compliance in all respects with all applicable laws, rules, regulations, building codes for the
city and county where the Building is located. Landlord hereby approves HPC and DGA as architectural professionals (the parties
acknowledging that Landlord intends to engage DGA for the preparation of the Construction Plans). In the event Tenant requests that
Landlord retain DGA as the architect for the Tenant Improvements, Landlord agrees to use commercially reasonable efforts to retain DGA
for the Tenant Improvements.
“Force Majeure Delays” - Any delay, other than a Tenant Delay, by Landlord in completing the Tenant Improvements by the
Estimated Expansion Commencement Date set forth in the Amendment by reason of (i) any strike, lockout or other labor trouble or industrial
disturbance (whether or not on the part of the employees of either party hereto), (ii) governmental preemption of priorities or other controls in
connection with a national or other public emergency, civil disturbance, riot, war, sabotage, blockade, embargo, inability to secure customary
materials, supplies or labor through ordinary sources by reason of regulation or order of any government or regulatory body, or (iii) shortages
of fuel, materials, supplies or labor (not arising from Landlord’s failure to exercise prudent practices in ordering in advance long lead items),
(iv) lightning, earthquake, fire, storm, tornado, flood, washout explosion, or unseasonable inclement weather or any other similar industry-
wide or Building-wide cause beyond the reasonable control of Landlord, or (v) any other cause, whether similar or dissimilar to the above,
beyond Landlord’s reasonable control. The time for performance of any obligation of Landlord to construct the Tenant Improvements under
this Exhibit or the Amendment shall be extended at Landlord’s election by the period of any delay caused by any of the foregoing events.
Landlord shall use commercially reasonable efforts to keep Tenant reasonably apprised of any events that may materially delay the date of
Substantial Completion.
“Space Plan” - That certain Space Plan to be attached hereto as Exhibit B-2, reflecting the Tenant Improvements to be constructed
by Landlord. Landlord and Tenant hereby approve of the Space Plan.
Exhibit 10.25(b)
B-2
“Spec Buildout Sheet” - That certain list of specifications identified on Exhibit B-3 attached hereto, with respect to the Tenant
Improvements to be constructed by Landlord. Landlord and Tenant hereby approve of the Spec Buildout Sheet.
“ Substantial Completion,” “Substantially Complete,” “Substantially Completed” ‑ The terms Substantial Completion,
Substantially Completed and Substantially Complete shall mean when the last of the following has occurred (or would have occurred but for
Tenant Delays): (a) Landlord has delivered to Tenant a written notice stating that the Tenant Improvements have been Substantially
Completed substantially in accordance with the Construction Plans, except “punch list” items which may be completed without materially
impairing Tenant’s use of the Expansion Premises or a material portion thereof for the Permitted Use and such work as Landlord is required
to perform but cannot complete until Tenant performs necessary portions of construction work it has elected or is required to do; (b) the
acquisition of a temporary or permanent certificate of occupancy or its legal equivalent allowing occupancy of the Expansion Premises; (c)
all base building systems are operational and fully-commissioned to the extent of serving the Expansion Premises; and (d) delivery of a
certificate of substantial completion from the architect on behalf of the contractor confirming the matters set forth in the foregoing clause (a).
“Tenant Delay” - Any incremental delay incurred by Landlord in Substantially Completing the Tenant Improvements due to (i) a
delay by Tenant, or by any person employed or engaged by Tenant, in approving or delivering to Landlord any plans, schedules or
information, including, without limitation, the Construction Plans beyond the applicable time period set forth in this Exhibit, if any; (ii) a
delay in the performance of work in the Expansion Premises by Tenant or any person employed by Tenant; (iii) any changes requested by
Tenant in or to previously approved work or in the Space Plan, Spec Buildout Sheet, or Construction Plans; (iv) Tenant’s requests for
materials and finishes which are not readily available, and/or delays in delivery of any materials specified by Tenant through change orders;
(v) the failure of Tenant to pay as and when due under this Exhibit all costs and expenses to construct the Tenant Improvements to the extent
Tenant is required to pay for such costs in this Exhibit; (vi) interference with the construction of the Tenant Improvements, or (vii) the acts or
omission of Tenant or its employees, agents or contractors (including without limitation the failure to timely deliver plans, insurance
certificates or other items required by the Lease). Notwithstanding anything to the contrary contained herein, no delay under clauses (ii),
(iii), (iv), (vi) or (vii) shall constitute a Tenant Delay unless Landlord has given to Tenant reasonably detailed written notice of such delay by
email to: [ ], and Tenant fails to correct the cause thereof within one (1) business day after receipt thereof. In the event of Tenant Delay,
the Expansion Commencement Date shall be accelerated so that each date shall be deemed to be one day earlier than the actual date thereof
for each day of Tenant Delay.
“Tenant Improvements” - The improvements to be installed by Landlord in the Expansion Premises substantially in accordance
with the Space Plan and the Spec Buildout Sheet. The type and quality of materials to be used by Landlord to construct the Tenant
Improvements will be consistent with the Landlord’s standard building improvements for the Building, except as described to the contrary in
the Space Plan and/or the Spec Buildout Sheet (the “Standard Specifications”).
2.
Construction of the Tenant Improvements. Landlord shall construct the Tenant Improvements in accordance with this exhibit and
the Lease pursuant to a construction contract to be executed by Landlord and its contractor(s). The construction contract for constructing the
Tenant Improvements and the contractor(s) to perform the work shall be approved and/or selected, as the case may be, by Landlord, at its
sole and absolute discretion without the consent of Tenant.
2.1
Construction Plans. Landlord shall cause to be prepared the Construction Plans for the Tenant Improvements that are
consistent with and are logical evolutions of the Space Plan, the Spec Buildout Sheet, and the building standards, and deliver the same to
Tenant for Tenant’s approval (which
Exhibit 10.25(b)
B-3
shall not be unreasonably withheld, conditioned or delayed). Tenant shall notify Landlord in writing within five (5) business days after
receipt of Construction Plans or any preliminary plans that (i) Tenant approves of such plans; or (ii) Tenant disapproves the plans because
they vary in design from the Space Plan or the Spec Buildout Sheet approved by Landlord and Tenant in the particular instances specified by
Tenant in such notice (including, without limitation, the specific changes requested by Tenant), but such disapproval shall constitute a Tenant
Delay (subject to the terms of such definition) unless the plans materially deviate from the Space Plan or the Spec Buildout Sheet or changes
in such Space Plan or the Spec Buildout Sheet. The failure of Tenant to provide such written notice within said five (5) business day period
shall be deemed an approval by Tenant of such plans.
2.2 Construction. Landlord shall construct the Tenant Improvements substantially in accordance with the Construction
Plans. The construction contract for constructing the Tenant Improvements and the contractor(s) to perform the work shall be approved
and/or selected, as the case may be, by Landlord at its sole and absolute discretion without the consent of Tenant. The parties anticipate that
the Tenant Improvements will be “turnkey” condition and Substantially Completed by the Estimated Expansion Commencement Date,
subject to Tenant Delays and Force Majeure Delays.
2.3 Tenant’s Responsibility. Tenant shall be solely responsible for the suitability for the Tenant’s needs and business of the
design and function of the Tenant Improvements. Except as included in the Tenant Improvements, Tenant shall be responsible for procuring
or installing in the Premises any trade fixtures, equipment, furniture, furnishings, telephone equipment or other personal property (“Personal
Property”) to be used in the Premises by Tenant, and the cost of such Personal Property shall be paid by Tenant. In furtherance of the
foregoing, Tenant shall be responsible for the procurement and installation of any and all equipment on the equipment list attached hereto as
Exhibit B-1 (the “Equipment List”). Landlord, at its cost, shall provide the utility capacity and distribution to the locations within the
Premises required for the equipment on the Equipment List. In addition, Landlord agrees to provide up to Four Hundred Fifty Thousand
Dollars ($450,000.00) (the “N2 Allowance”) toward the cost of the installation of the N2 system and related equipment to be installed in the
Premises to service the Existing Premises and the Expansion Premises (the “N2 System”). Tenant will provide the N2 System at Tenant’s
cost, and Landlord will install the N2 System as part of the Tenant Improvements pursuant to a separate bid obtained by Landlord from its
general contractor (the “N2 Cost Estimate”). In the event that the N2 Cost Estimate exceeds the N2 Allowance, the difference (the “Over-
Allowance Amount”) shall be paid to Landlord within thirty (30) days of Landlord’s request for the same. The parties shall reconcile the
Over-Allowance Amount against actual incremental costs incurred by Landlord to install the N2 System, within thirty (30) days following
Substantial Completion of the Tenant Improvements. Landlord shall provide documentation reasonably requested by Tenant to substantiate
the reconciled amounts. At the expiration or sooner termination of the Lease Term, the N2 System shall be surrendered to Landlord as part
of the realty and shall then become Landlord’s property. Tenant shall conform to the Building’s wiring standards in installing any telephone
equipment and shall be subject to any and all rules of the site during construction.
3.
Payment of Construction Costs. Except for the Over-Allowance Amount, Landlord shall pay for the costs to construct the Tenant
Improvements based on the Space Plan and Spec Buildout Sheet approved by the parties as provided above. Any additional costs due to
changes in the Tenant Improvements reflected in the Space Plan, the Spec Buildout Sheet, or in the Construction Plans requested by Tenant
or as a result of any Tenant Delay shall be paid by Tenant as provided in Section 4 below.
4.
Changes in Work. If Tenant at any time desires any changes, alterations or additions to the Tenant Improvements, Tenant shall
submit a detailed written request to Landlord specifying such changes, alterations or additions (a “Tenant Change Request”). Without
limiting the generality of the foregoing, Landlord agrees to reasonably cooperate with Tenant with respect to any Tenant Change Request that
would not materially and adversely affect the value of the Project or Landlord's ability to re-lease the space upon
Exhibit 10.25(b)
B-4
the expiration or earlier termination of the Lease for office, laboratory or research and development purposes (as applicable), and would not
increase the cost, or cause a delay in the performance of the work, unless such increase in cost or delay is economically offset by Tenant, and
if such delay causes a delay in Substantial Completion, such delay is agreed in writing by Tenant to constitute a Tenant Delay. Upon receipt
of any Tenant Change Request, Landlord shall promptly, and within ten (10) business days after Landlord’s receipt of the Tenant Change
Request (unless such Tenant Change Request requires third party review, in which case such ten-business-day deadline shall not apply),
notify Tenant of whether the matters proposed in the Tenant Change Request pursuant to the standard set forth in the preceding sentence are
approved by Landlord (which approval shall not be unreasonably withheld, conditioned or delayed) or are disapproved. If Landlord
disapproves the Tenant Change Request, Landlord shall promptly notify Tenant in writing of such disapproval and the specific reasons for
such disapproval, with particularity. If Landlord approves the Tenant Change Request, Landlord’s notice to Tenant regarding such approval
shall specify (A) Landlord’s reasonable estimate of the number of days of Tenant Delay, if any, which shall be caused by such Tenant
Change Request if implemented (including, without limitation, delays due to the need to obtain any revised plans or drawings and any
governmental approvals), and (B) Landlord’s reasonable estimate of the increase, if any, which shall occur in the cost for the items or
components affected by such Tenant Change Request if such Tenant Change Request is implemented (including, but not limited to, any costs
of compliance with laws or governmental regulations that become applicable because of the implementation of the Tenant Change Request).
If Landlord approves the Tenant Change Request, Tenant shall notify Landlord in writing, within five (5) business days after receipt of such
notice (if any) from Landlord, that Tenant approves and wishes to proceed with the Tenant Change Request (including the estimated delays
and cost increases, if any, described in Landlord’s notice, if any), in which event Landlord shall cause such Tenant Change Request to be
incorporated into the Tenant Improvements, and Tenant shall be responsible for all actual delays and all actual costs or cost increases
reasonably resulting from or attributable to the implementation of the Tenant Change Request, as a Tenant Delay. If Tenant fails to notify
Landlord in writing of Tenant’s approval of and desire to proceed with such Tenant Change Request within said five (5) business day period,
then such Tenant Change Request shall be deemed to be withdrawn and shall be of no further force or effect. The incremental cost of such
changes and the additional costs as a result of any other Tenant Delay, including the cost to revise the Construction Plans, obtain any
additional permits, construct any additional improvements required as a result thereof, the cost for materials and labor, the cost for any
construction supervisory or administrative fee payable by Landlord to its property manager, and all other additional costs incurred by
Landlord from resulting delays in completing the Tenant Improvements, shall be paid by Tenant to Landlord upon completion of such
changes and receipt by Tenant of invoices substantiating the additional costs. Such additional costs shall be Additional Rent, payable within
thirty (30) days after Tenant’s receipt of notice from Landlord (along with any applicable invoices). If Landlord does not receive such
payment within said thirty (30) day period, Landlord shall have the right, in addition to any other rights or remedies available under the
Lease, at law or in equity, to discontinue all or any portion of the work until it receives said payment; in which case the commencement or
completion of such work shall not be deemed a waiver of Tenant’s obligation to pay for same or any additional costs or expenses incurred as
a result thereof. Any delay caused as a result of such a change or request for a change shall constitute a Tenant Delay (subject to the terms of
such definition).
5.
Tenant’s Lease Default. Notwithstanding any provision to the contrary contained in the Lease, if a default by Tenant under the
Lease or this Exhibit, beyond applicable notice and cure periods, has occurred at any time on or before the Substantial Completion of the
Tenant Improvements, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, Landlord shall have the
right to cease the construction of the Tenant Improvements (in which case, Tenant shall be responsible for any delay in the Substantial
Completion of the Tenant Improvements caused by such work stoppage), and (ii) all other obligations of Landlord under the terms of this
Exhibit shall be forgiven until such time as such default is cured pursuant to the terms of the Lease.
Exhibit 10.25(b)
B-5
6.
Warranties. Landlord shall use commercially reasonable efforts to cause the Tenant Improvements to be completed in a good
and workmanlike manner and free of defect, and in good condition and repair and in compliance with all applicable laws. To Landlord’s
knowledge, Landlord has not received a notice of violation of Hazardous Materials laws in the Expansion Premises. In the case of defects in
the Tenant Improvements first discovered after the Expansion Commencement Date, Tenant shall be deemed to have waived any claim for
correction or cure thereof on the date that is eleven and a half months after the date of Substantial Completion thereof if Tenant has not then
given notice of such defect to Landlord. With respect to items as to which Tenant has given adequate and timely notice hereunder, Landlord
shall cause Landlord’s contractor so to remedy, repair or replace any incomplete, defective or malfunctioning aspects of the Tenant
Improvements, as applicable, which materially affect Tenant’s use of, access to or occupancy of the Expansion Premises, such action to occur
as soon as practicable during normal working hours and so as to avoid any unreasonable interruption of Tenant’s use of the Expansion
Premises. The foregoing shall constitute Landlord’s entire obligation with respect to all incomplete, defective or malfunctioning aspects of
the Tenant Improvements.
Exhibit 10.25(b)
B-6
Exhibit B-1
Equipment List
[See attached]
Exhibit 10.25(b)
B-7
Exhibit B-2
Space Plan
Exhibit 10.25(b)
B-8
Exhibit B-3
Spec Buildout Sheet
[See attached]
Exhibit 19.1
1
IDEAYA BIOSCIENCES, INC.
INSIDER TRADING COMPLIANCE POLICY
(Adopted: April 4, 2019)
(Effective as of: May 28, 2019)
(Amended as of: October 30, 2024)
This Insider Trading Compliance Policy (this “Policy”) of IDEAYA Biosciences, Inc. (the “Company”) consists of
seven sections:
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Section I provides an overview;
•
Section II sets forth the Company’s policies prohibiting insider trading;
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Section III explains insider trading;
•
Section IV consists of procedures that have been put in place by the Company to prevent insider
trading;
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Section V sets forth additional transactions that are prohibited by this Policy;
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Section VI explains Rule 10b5-1 trading plans and provides information about Section 16 and Rule
144; and
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Section VII refers to the execution and return of a compliance certificate.
I.
SUMMARY
Preventing insider trading is necessary to comply with securities laws and to preserve the reputation and integrity of the
Company as well as that of all persons affiliated with the Company. “Insider trading” occurs when any person purchases or sells
a security (e.g., stock) while in possession of “inside information” relating to the security. As explained in Section III below,
“inside information” is information that is both “material” and “non-public.” Insider trading violates several laws, including civil
and criminal laws. The penalties for violating insider trading laws include imprisonment, disgorgement of profits, civil fines, and
criminal fines of up to $5 million for individuals and $25 million for corporations. Insider trading is also prohibited by this
Policy, and violation of this Policy may result in Company-imposed sanctions, including removal or dismissal for cause.
This Policy applies to all officers, directors, employees and consultants of the Company and extends to all activities
within and outside an individual’s duties at the Company. Individuals subject to this Policy are responsible for ensuring that their
immediate family members (e.g., spouses, children, stepchildren, parents, grandparents, stepparents, siblings, mothers-in-law,
fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law or sisters-in-law) and members of their households also comply
with this Policy. This Policy also applies to any entities controlled by individuals subject to this Policy, including any
corporations, partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy and
applicable securities laws as if they were for the individual’s own account. Notwithstanding the
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foregoing, this Policy, including, without limitation, the pre-clearance policy, blackout periods and prohibited transactions, does
not apply to venture capital entities or other institutional investors, and the related transactions in the Company’s equity securities
by such entities, that may be affiliated with a director of the Company or for Company equity securities that a director may be
deemed to have beneficial ownership of by virtue of such affiliation.
This Policy extends to all activities within and outside an individual’s Company duties. Every officer, director,
employee and consultant must review this Policy
Questions regarding the Policy should be directed to the Company’s General Counsel (the “Compliance Officer”).
II.
STATEMENT OF POLICIES PROHIBITING INSIDER TRADING
No officer, director, employee or consultant, or any immediate family member or any member of the household of any
such person, shall purchase or sell any type of security while in possession of material, non-public information relating to the
security, whether the issuer of such security is the Company or any other company.
Additionally, no officer, director or employee, or any consultant listed under “Applicable Consultants” on
Schedule I, or any immediate family member or any member of the household of any such person, shall purchase or sell
any security of the Company during the period beginning at market close on the last trading day of any fiscal quarter of
the Company and ending at market close on the second full trading day following the public release of earnings data for
such fiscal quarter or during any other trading suspension period declared by the Company, whether or not the Company
or any of its officers, directors or employees, or any applicable consultants, is in possession of material, non-public
information.
Additionally, from time to time, the Company may impose a blackout period in connection with non-routine
events outside of the financial reporting cycle. These events may include consideration of major strategic transactions
(e.g., acquisitions, dispositions, joint ventures), product developments, interim earnings or sales releases, significant legal
proceedings and other circumstances that potentially implicate material non-public information.
These prohibitions do not apply to:
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purchases of the Company’s securities from the Company or sales of the Company’s securities to the Company,
or the surrender to or withholding by the Company of the Company’s securities (e.g., to cover withholding
obligations upon the vesting or settlement of equity-based awards);
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exercises of stock options or other equity awards or vesting of equity-based awards that do not involve a market
sale of the Company’s securities (note that the “cashless exercise” of a Company stock option does involve a
market sale of the Company’s securities, and therefore would not qualify under this exception);
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bona fide gifts of the Company’s securities; or
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purchases or sales of the Company’s securities made pursuant to any binding contract, specific instruction or
written plan entered into while the purchaser or seller, as applicable, was unaware of any material, non-public
information and which contract, instruction or plan (i) meets all requirements of the affirmative defense
provided by Rule 10b5-1 (“Rule 10b5-1”) promulgated under the Securities Exchange Act of 1934, as amended
(the “1934 Act”), (ii) was pre-cleared in advance pursuant to this Policy and (iii) has not been amended or
modified in any respect after such initial pre-clearance without such amendment or modification being pre-
cleared in advance pursuant to this Policy. For more information about Rule 10b5-1 trading plans, see Section
VI below.
For the purposes of this Policy, a “trading day” is a day on which national stock exchanges are open for trading.
No officer, director, employee or consultant shall directly or indirectly communicate (or “tip”) material, non-public
information to anyone outside the Company (except in accordance with the Company’s policies regarding the protection or
authorized external disclosure of Company information) or to anyone within the Company other than on a need-to-know basis.
III. EXPLANATION OF INSIDER TRADING
“Insider trading” refers to the purchase or sale of a security by someone who is in possession of “material,” “non-
public” information relating to the security.
“Insider” refers to employees, officers, directors and consultants of the Company and anyone else within the Company
who has material, non-public information about the Company.
“Securities” includes stocks, bonds, notes, debentures, options, warrants and other convertible securities, as well as
derivative instruments.
“Purchase” and “sale” are defined broadly under the federal securities law. “Purchase” includes not only the actual
purchase of a security, but any contract to purchase or otherwise acquire a security. “Sale” includes not only the actual sale of a
security, but any contract to sell or otherwise dispose of a security. These definitions extend to a broad range of transactions,
including conventional cash-for-stock transactions, conversions, the exercise of stock options, and acquisitions and exercises of
warrants or puts, calls or other derivative securities.
It is generally understood that insider trading includes the following:
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trading by insiders while in possession of material, non-public information;
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trading by persons other than insiders while in possession of material, non-public information, if the information
either was given in breach of an insider’s fiduciary duty to keep it confidential or was misappropriated; and
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communicating or tipping material, non-public information to others, including recommending the purchase or
sale of a security while in possession of such information.
A. What Facts are Material?
The materiality of a fact depends upon the circumstances. A fact is considered “material” if there is a substantial
likelihood that a reasonable investor would consider it important in
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making a decision to buy, sell or hold a security, or if the fact is likely to have a significant effect on the market price of the
security. Material information can be positive or negative and can relate to virtually any aspect of a company’s business or to
any type of security, debt or equity.
Examples of material information include (but are not limited to) information about the results of clinical trials;
communications sent to or received from the U.S. Food and Drug Administration; dividends; corporate earnings or earnings
forecasts; mergers, acquisitions, tender offers or dispositions; major new products or product developments; important business
developments such as major contract awards or cancellations; management or control changes; significant borrowing or financing
developments including pending public sales or offerings of debt or equity securities; defaults on borrowings; bankruptcies; and
significant litigation or regulatory actions. Moreover, material information does not have to be related to a company’s business.
For example, the contents of a forthcoming newspaper column that is expected to affect the market price of a security can be
material.
A good general rule of thumb: When in doubt, do not trade.
B.
What is Non-public?
Information is “non-public” if it is not available to the general public. In order for information to be considered public, it
must be widely disseminated in a manner making it generally available to investors through such media as Dow Jones, Business
Wire, Reuters, The Wall Street Journal, Associated Press, or United Press International, a broadcast on widely available radio or
television programs, publication in a widely available newspaper, magazine or news website, a Regulation FD-compliant
conference call, or public disclosure documents filed with the Securities and Exchange Commission (“SEC”) that are available on
the SEC’s website.
The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination.
In addition, even after a public announcement, a reasonable period of time must lapse in order for the market to react to the
information. Generally, one should allow two full trading days following publication as a reasonable waiting period before such
information is deemed to be public.
C.
Who is an Insider?
“Insiders” include officers, directors, employees and consultants of a company and anyone else within the Company who
has material, non-public information about a company. Insiders have independent fiduciary duties to their company and its
stockholders not to trade on material, non-public information relating to the company’s securities. All officers, directors,
employees and consultants of the Company should consider themselves insiders with respect to material, non-public information
about the Company’s business, activities and securities. Officers, directors, employees and consultants may not trade in the
Company’s securities while in possession of material, non-public information relating to the Company, nor may they tip such
information to anyone outside the Company (except in accordance with the Company’s policies regarding the protection or
authorized external disclosure of Company information) or to anyone within the Company other than on a need-to-know basis.
Individuals subject to this Policy are responsible for ensuring that their immediate family members and members of their
households also comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy,
including any corporations,
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partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy and applicable securities
laws as if they were for the individual’s own account.
D. Trading by Persons Other than Insiders
Insiders may be liable for communicating or tipping material, non-public information to a third party (“tippee”), and
insider trading violations are not limited to trading or tipping by insiders. Persons other than insiders also can be liable for
insider trading, including tippees who trade on material, non-public information tipped to them or individuals who trade on
material, non-public information that has been misappropriated.
Tippees inherit an insider’s duties and are liable for trading on material, non-public information illegally tipped to them
by an insider. Similarly, just as insiders are liable for the insider trading of their tippees, so are tippees who pass the information
along to others who trade. In other words, a tippee’s liability for insider trading is no different from that of an insider. Tippees
can obtain material, non-public information by receiving overt tips from others or through, among other things, conversations at
social, business, or other gatherings.
E.
Penalties for Engaging in Insider Trading
Penalties for trading on or tipping material, non-public information can extend significantly beyond any profits made or
losses avoided, both for individuals engaging in such unlawful conduct and their employers. The SEC and Department of Justice
have made the civil and criminal prosecution of insider trading violations a top priority. Enforcement remedies available to the
government or private plaintiffs (e.g., the Company’s stockholders) under the federal securities laws include:
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SEC administrative sanctions;
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securities industry self-regulatory organization sanctions;
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civil injunctions;
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damage awards to private plaintiffs;
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disgorgement of all profits;
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civil fines for the violator of up to three times the amount of profit gained or loss avoided;
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civil fines for the employer or other controlling person of a violator (i.e., where the violator is an employee or
other controlled person) of up to the greater of $1,425,000 or three times the amount of profit gained or loss
avoided by the violator;
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criminal fines for individual violators of up to $5,000,000 ($25,000,000 for an entity); and
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jail sentences of up to 20 years.
In addition, insider trading could result in serious sanctions by the Company, including dismissal. Insider trading
violations are not limited to violations of the federal securities laws. Other federal and state civil or criminal laws, such as the
laws prohibiting mail and wire fraud
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and the Racketeer Influenced and Corrupt Organizations Act (RICO), also may be violated in connection with insider trading.
F.
Size of Transaction and Reason for Transaction Do Not Matter
The size of the transaction or the amount of profit received does not have to be significant to result in prosecution. The
SEC has the ability to monitor even the smallest trades, and the SEC performs routine market surveillance. Brokers and dealers
are required by law to inform the SEC of any possible violations by people who may have material, non-public information. The
SEC aggressively investigates even small insider trading violations.
G. Examples of Insider Trading
Examples of insider trading cases include actions brought against corporate officers, directors, employees and
consultants who traded in a company’s securities after learning of significant confidential corporate developments; friends,
business associates, family members and other tippees of such officers, directors, employees and consultants who traded in the
securities after receiving such information; government employees who learned of such information in the course of their
employment; and other persons who misappropriated, and took advantage of, confidential information from their employers.
The following are illustrations of insider trading violations. These illustrations are hypothetical and, consequently, not
intended to reflect on the actual activities or business of the Company or any other entity.
Trading by Insider
An officer of X Corporation learns that earnings to be reported by X Corporation will increase dramatically. Prior to the
public announcement of such earnings, the officer purchases X Corporation’s stock. The officer, an insider, is liable for
all profits as well as penalties of up to three times the amount of all profits. The officer also is subject to, among other
things, criminal prosecution, including up to $5,000,000 in additional fines and 20 years in jail. Depending upon the
circumstances, X Corporation and the individual to whom the officer reports also could be liable as controlling persons.
Trading by Tippee
An officer of X Corporation tells a friend that X Corporation is about to publicly announce that it has concluded an
agreement for a major acquisition. This tip causes the friend to purchase X Corporation’s stock in advance of the
announcement. The officer is jointly liable with his friend for all of the friend’s profits, and each is liable for all civil
penalties of up to three times the amount of the friend’s profits. The officer and his friend are also subject to criminal
prosecution and other remedies and sanctions, as described above.
H. Prohibition of Records Falsification and False Statements
Section 13(b)(2) of the 1934 Act requires companies subject to the 1934 Act maintain proper internal books and records
and to devise and maintain an adequate system of internal accounting controls. The SEC has supplemented the statutory
requirements by adopting rules that prohibit (1) any person from falsifying records or accounts subject to the above requirements
and (2) officers or directors from making any materially false, misleading, or incomplete
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statement to any accountant in connection with any audit or filing with the SEC. These provisions reflect the SEC’s intent to
discourage officers, directors and other persons with access to the Company’s books and records from taking action that might
result in the communication of materially misleading financial information to the investing public.
IV. STATEMENT OF PROCEDURES PREVENTING INSIDER TRADING
The following procedures have been established, and will be maintained and enforced, by the Company to prevent
insider trading. Every officer, director, employee and consultant is required to follow these procedures.
A. Pre-Clearance of All Trades by All Officers, Directors and Certain Employees and Consultants
To provide assistance in preventing inadvertent violations of applicable securities laws and to avoid the appearance of
impropriety in connection with the purchase and sale of the Company’s securities, all transactions in the Company’s securities
(including without limitation, acquisitions and dispositions of Company stock, the sale of Company stock issued upon
exercise of stock options) by the officers or directors, or any employees or consultants listed on Schedule I (as amended
from time to time by the Compliance Officer), must be pre-cleared by the Company’s Compliance Officer. Pre-clearance is
not required for exercises of stock options or other equity awards or vesting of equity-based awards that do not involve a market
sale of the Company’s securities (the “cashless exercise” of a Company stock option does involve a market sale of the
Company’s securities, and therefore would not qualify under this exception). As part of the pre-clearance process, the individual
requesting pre-clearance must confirm that he or she is not in possession of material, non-public information. Pre-clearance does
not relieve anyone of his or her responsibility under SEC rules. For clarity, transactions in the Company’s securities pursuant to
a Rule 10b5-1 plan, which was approved in advance of entering into the plan, are considered pre-cleared.
In the event of a disagreement regarding a proposed transaction, the Compliance Officer is required to report the
proposed transaction to the Audit Committee of the Board of Directors. If the Compliance Officer has determined to withhold
clearance of a proposed transaction and the individual requesting pre-clearance disagrees with such decision, in order to receive
clearance for the proposed transaction such individual must receive clearance from at least two of the three following persons: (i)
the Chairman of the Board of Directors, (ii) the President or Chief Executive Officer of the Company and (iii) the Chairman of
the Audit Committee of the Board of Directors. The Compliance Officer and the Audit Committee may obtain the advice of
outside legal counsel with respect to such request. The individual requesting pre-clearance may not in any event engage in the
proposed transaction until request has been finally resolved to the satisfaction of the Compliance Officer or, if applicable, the
Chairman of the Board of Directors, President or Chief Executive Officer, or Chairman of the Audit Committee.
B.
Black-Out Periods
Additionally, no officer, director or employee, or any consultant listed under “Applicable Consultants” on
Schedule I, or any immediate family member or any member of the household of any such person, shall purchase or sell
any security of the Company during the period beginning at market close on the last trading day of any fiscal quarter of
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the Company and ending at market close on the second full trading day following the public release of earnings data for
such fiscal quarter or during any other trading suspension period declared by the Company, except for:
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purchases of the Company’s securities from the Company or sales of the Company’s securities to the Company;
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exercises of stock options or other equity awards or vesting of equity-based awards that do not involve a market
sale of the Company’s securities (the “cashless exercise” of a Company stock option does involve a market sale
of the Company’s securities, and therefore would not qualify under this exception);
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bona fide gifts of the Company’s securities; and
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purchases or sales of the Company’s securities made pursuant to any binding contract, specific instruction or
written plan entered into while the purchaser or seller, as applicable, was unaware of any material, non-public
information and which contract, instruction or plan (i) meets all requirements of the affirmative defense
provided by Rule 10b5-1, (ii) was pre-cleared in advance pursuant to this Policy and (iii) has not been amended
or modified in any respect after such initial pre-clearance without such amendment or modification being pre-
cleared in advance pursuant to this Policy.
Exceptions to the black-out period policy may be approved only by the Company’s Compliance Officer or, in the case of
exceptions for directors, the Chairperson of the Board of Directors or Chairperson of the Audit Committee of the Board of
Directors.
From time to time, the Company, through the Board of Directors, the Company’s disclosure committee or the
Compliance Officer, may recommend that some or all officers, directors, employees, consultants or others suspend trading in the
Company’s securities because of developments that have not yet been disclosed to the public. Individuals affected by such an
event-specific blackout will be notified by the Company that they are subject to the blackout. Subject to the exceptions noted
above, all those affected should not trade in our securities while the suspension is in effect, and should not disclose to others that
we have suspended trading.
C.
Post-Termination Transactions
With the exception of the pre-clearance requirement, the insider trading laws continue to apply to transactions in the
Company’s securities even after termination of service to the Company. If an individual is in possession of material, non-public
information when his or her service terminates, that individual may not trade in the Company’s securities until that information
has become public or is no longer material.
D. Information Relating to the Company
1.
Access to Information
Access to material, non-public information about the Company, including the Company’s business, earnings or
prospects, should be limited to officers, directors, employees and consultants of the Company on a need-to-know basis. In
addition, such information should not be communicated to anyone outside the Company under any circumstances (except in
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accordance with the Company’s policies regarding the protection or authorized external disclosure of Company information) or
to anyone within the Company on an other than need-to-know basis.
In communicating material, non-public information to employees or consultants of the Company, all officers, directors,
employees and consultants must take care to emphasize the need for confidential treatment of such information and adherence to
the Company’s policies with regard to confidential information.
2.
Inquiries From Third Parties
Inquiries from third parties, such as industry analysts, investors or members of the media, about the Company should be
directed to the General Counsel at [ ] or [ ].
E.
Limitations on Access to Company Information
The following procedures are designed to maintain confidentiality with respect to the Company’s business operations
and activities.
All officers, directors, employees and consultants should take all steps and precautions necessary to restrict access to,
and secure, material, non-public information by, among other things:
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maintaining the confidentiality of Company-related transactions;
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conducting their business and social activities so as not to risk inadvertent disclosure of confidential information
(e.g., review of confidential documents in public places should be conducted so as to prevent access by
unauthorized persons);
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restricting access to documents and files (including computer files) containing material, non-public information
to individuals on a need-to-know basis (including maintaining control over the distribution of documents and
drafts of documents);
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promptly removing and cleaning up all confidential documents and other materials from conference rooms
following the conclusion of any meetings;
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disposing of all confidential documents and other papers, after there is no longer any business or other legally
required need, through shredders when appropriate;
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restricting access to areas likely to contain confidential documents or material, non-public information;
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safeguarding laptop computers, mobile devices, tablets, memory sticks, CDs and other items that contain
confidential information; and
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avoiding the discussion of material, non-public information in places where the information could be overheard
by others such as in elevators, restrooms, hallways, restaurants, airplanes or taxicabs.
Personnel involved with material, non-public information, to the extent feasible, should conduct their business and
activities in areas separate from other Company activities.
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V. ADDITIONAL PROHIBITED TRANSACTIONS
The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate
conduct if the persons subject to this Policy engage in certain types of transactions. Therefore, officers, directors, employees and
consultants shall comply with the following policies with respect to certain transactions in the Company securities:
A. Short Sales
Short sales of the Company’s securities evidence an expectation on the part of the seller that the securities will decline in
value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition,
short sales may reduce the seller’s incentive to improve the Company’s performance. For these reasons, short sales of the
Company’s securities are prohibited by this Policy. In addition, as noted below, Section 16(c) of the 1934 Act absolutely
prohibits Section 16 reporting persons from making short sales of the Company’s equity securities, i.e., sales of shares that the
insider does not own at the time of sale, or sales of shares against which the insider does not deliver the shares within 20 days
after the sale.
B.
Publicly Traded Options
A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the
appearance that an officer, director, employee or consultant is trading based on inside information. Transactions in options also
may focus an officer’s, director’s, employee’s or consultant’s attention on short-term performance at the expense of the
Company’s long-term objectives. Accordingly, transactions in puts, calls or other derivative securities involving the Company’s
equity securities, on an exchange or in any other organized market, are prohibited by this Policy.
C.
Hedging Transactions
Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an
insider to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside
appreciation in the stock. These transactions allow the insider to continue to own the covered securities, but without the full risks
and rewards of ownership. When that occurs, the insider may no longer have the same objectives as the Company’s other
stockholders. Therefore, such transactions involving the Company’s equity securities are prohibited by this Policy.
D. Purchases of the Company’s Securities on Margin; Pledging the Company’s Securities to Secure Margin or Other
Loans
Purchasing on margin means borrowing from a brokerage firm, bank or other entity in order to purchase the Company’s
securities (other than in connection with a cashless exercise of stock options under the Company’s equity plans). Margin
purchases of the Company’s securities are prohibited by this Policy. Pledging the Company’s securities as collateral to secure
loans is prohibited. This prohibition means, among other things, that you cannot hold the Company’s securities in a “margin
account” (which would allow you to borrow against your holdings to buy securities).
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VI. RULE 10b5-1 TRADING PLANS, SECTION 16 AND RULE 144
A. Rule 10b5-1 Trading Plans
1.
Overview
Rule 10b5-1 will protect directors, officers, employees and consultants from insider trading liability under Rule 10b5-1
for transactions under a previously established contract, plan or instruction to trade in the Company’s stock (a “Trading Plan”)
entered into in good faith and in accordance with the terms of Rule 10b5-1 and all applicable state laws and will be exempt from
the trading restrictions set forth in this Policy. The initiation or revocation of, and any modification to, any such Trading Plan
will be deemed to be a transaction in the Company’s securities, and such initiation, revocation or modification is subject to all
limitations and prohibitions relating to transactions in the Company’s securities. Each such Trading Plan, and any modification
or revocation thereof, must be submitted to and pre-approved by the Company’s Compliance Officer, or such other person as the
Company’s Board of Directors may designate from time to time (the “Authorizing Officer”), who may impose such conditions on
the implementation and operation of the Trading Plan as the Authorizing Officer deems necessary or advisable. The Authorizing
Officer may prescribe certain forms of Trading Plans to which employees’ Trading Plans must conform. The Authorizing
Officer may also require that Trading Plans be arranged with a specified broker. However, compliance of the Trading Plan to the
terms of Rule 10b5-1 and the execution of transactions pursuant to the Trading Plan are the sole responsibility of the person
initiating the Trading Plan, not the Company or the Authorizing Officer.
Trading Plans do not exempt individuals from complying with Section 16 short-swing profit rules or liability.
Rule 10b5-1 presents an opportunity for insiders to establish arrangements to sell (or purchase) Company stock without
the restrictions of trading windows and black-out periods, even when there is undisclosed material information. A Trading Plan
may also help reduce negative publicity that may result when key executives sell the Company’s stock. Rule 10b5-1 only
provides an “affirmative defense” in the event there is an insider trading lawsuit. It does not prevent someone from bringing a
lawsuit.
A director, officer, employee or consultant may enter into a Trading Plan only when he or she is not in possession of
material, non-public information, and only during a trading window period outside of the trading black-out period. Although
transactions effected under a Trading Plan will not require further pre-clearance at the time of the trade, any transaction
(including the quantity and price) made pursuant to a Trading Plan of a Section 16 reporting person must be reported to the
Company promptly on the day of each trade to permit the Company’s filing coordinator to assist in the preparation and filing of a
required Form 4.
The Company reserves the right from time to time to suspend, discontinue or otherwise prohibit any transaction in the
Company’s securities, even pursuant to a previously approved Trading Plan, if the Authorizing Officer or the Board of Directors,
in its discretion, determines that such suspension, discontinuation or other prohibition is in the best interests of the Company.
Any Trading Plan submitted for approval hereunder should explicitly acknowledge the Company’s right to prohibit transactions
in the Company’s securities. Failure to discontinue
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purchases and sales as directed shall constitute a violation of the terms of this Policy and result in a loss of the exemption set
forth herein.
Officers, directors, employees and consultants may adopt Trading Plans with brokers that outline a pre-set plan for
trading of the Company’s stock, including the exercise of options. Trades pursuant to a Trading Plan generally may occur at any
time. However, the Company requires a cooling-off period of at least 30 days between the establishment of a Trading Plan and
commencement of any transactions under such plan. Subject to the terms of the Trading Plan, an individual may adopt more than
one Trading Plan. Please review the following description of how a Trading Plan works.
Pursuant to Rule 10b5-1, an individual’s purchase or sale of securities will not be “on the basis of” material, non-public
information if:
•
First, before becoming aware of the information, the individual enters into a binding contract to purchase or sell
the securities, provides instructions to another person to sell the securities or adopts a written plan for trading
the securities (i.e., the Trading Plan).
•
Second, the Trading Plan must either:
•
specify the amount of securities to be purchased or sold, the price at which the securities are to be
purchased or sold and the date on which the securities are to be purchased or sold;
•
include a written formula or computer algorithm for determining the amount, price and date of the
transactions; or
•
prohibit the individual from exercising any subsequent influence over the purchase or sale of the
Company’s stock under the Trading Plan in question.
•
Third, the purchase or sale must occur pursuant to the Trading Plan and the individual must not enter into a
corresponding hedging transaction or alter or deviate from the Trading Plan.
2.
Revocation of and Amendments to Trading Plans
Revocation of Trading Plans should occur only in unusual circumstances. Effectiveness of any revocation, modification
or amendment of a Trading Plan will be subject to the prior review and approval of the Authorizing Officer. Revocation is
effected upon written notice to the broker. Once a Trading Plan has been revoked, the participant should wait at least 90 days
before trading outside of a Trading Plan and at least 90 days before establishing a new Trading Plan.
A person acting in good faith may amend a prior Trading Plan so long as such amendments are made outside of a
quarterly blackout or other black-out period and at a time when the Trading Plan participant does not possess material, non-public
information. Plan amendments require a cooling-off period of at least 30 days between the amendment of a Trading Plan and
commencement of any transactions under such amended plan.
Exhibit 19.1
13
A Trading Plan shall include provision for suspension or revocation in certain circumstances, such as the announcement
of a merger or the occurrence of an event that would cause the transaction either to violate the law or be expected to have an
adverse effect on the Company. The Authorizing Officer or administrator of the Company’s stock plans is authorized to notify
the broker in such circumstances, thereby insulating the insider in the event of suspension or revocation.
3.
Discretionary Plans
Although non-discretionary Trading Plans are preferred, discretionary Trading Plans, where the discretion or control
over trading is transferred to a broker, are permitted if pre-approved by the Authorizing Officer.
The Authorizing Officer of the Company must pre-approve any Trading Plan, arrangement or trading instructions, etc.,
involving potential sales or purchases of the Company’s stock or option exercises, including but not limited to, blind trusts,
discretionary accounts with banks or brokers, or limit orders. The actual transactions effected pursuant to a pre-approved Trading
Plan will not be subject to further pre-clearance for transactions in the Company’s stock once the Trading Plan or other
arrangement has been pre-approved by the Authorizing Officer.
4.
Reporting (if Required)
If required, an SEC Form 144 will be completed and filed by the individual/brokerage firm in accordance with the
existing rules regarding Form 144 filings. A footnote at the bottom of the Form 144 should indicate that the trades “are in
accordance with a Trading Plan that complies with Rule 10b5-1 and expires ____.” For Section 16 reporting persons, Forms 4
should be filed before the end of the second business day following the date that the broker, dealer or plan administrator informs
the individual that a transaction was executed, provided that the date of such notification is not later than the third business day
following the trade date. A similar footnote should be placed at the bottom of the Form 4 as outlined above.
5.
Options
Exercises of options for cash may be executed at any time. “Cashless exercise” option exercises are subject to trading
windows. However, the Company will permit same day sales under Trading Plans. If a broker is required to execute a cashless
exercise in accordance with a Trading Plan, then the Company must have exercise forms attached to the Trading Plan that are
signed, undated and with the number of shares to be exercised left blank. Once a broker determines that the time is right to
exercise the option and dispose of the shares in accordance with the Trading Plan, the broker will notify the Company in writing
and the administrator of the Company’s stock plans will fill in the number of shares and the date of exercise on the previously
signed exercise form. The insider should not be involved with this part of the exercise.
6.
Trades Outside of a Trading Plan
During an open trading window, trading in the Company securities not pursuant to an approved Trading Plan is allowed
as long as the trading instructions in the approved Trading Plan continue to be followed.
Exhibit 19.1
14
7.
Public Announcements
The Company may make a public announcement that Trading Plans are being implemented in accordance with Rule
10b5-1. It will consider in each case whether a public announcement of a particular Trading Plan should be made. It may also
make public announcements or respond to inquiries from the media as transactions are made under a Trading Plan.
8.
Prohibited Transactions
The transactions prohibited under Section V of this Policy, including among others short sales and hedging transactions,
may not be carried out through a Trading Plan or other arrangement or trading instruction involving potential sales or purchases
of the Company’s securities.
B.
Section 16: Insider Reporting Requirements, Short-Swing Profits and Short Sales (Applicable to Officers,
Directors and 10% Stockholders)
1.
Reporting Obligations Under Section 16(a): SEC Forms 3, 4 and 5
Section 16(a) of the 1934 Act generally requires all officers, directors and beneficial owners of more than ten percent of
our outstanding stock (each, a “10% stockholder”) (collectively, “Sec. 16 insiders”), within 10 days after the Sec. 16 insider
becomes an officer, director, or 10% stockholder, to file with the SEC an “Initial Statement of Beneficial Ownership of
Securities” on Form 3 listing the amount of the Company’s stock, options and warrants which the Sec. 16 insider beneficially
owns. Following the initial filing on Form 3, changes in beneficial ownership of the Company’s stock, options and warrants
must be reported on Form 4, generally within two business days after the date on which such change occurs, or in certain cases
on Form 5, within 45 days after fiscal year end. A Form 4 must be filed even if, as a result of balancing transactions, there has
been no net change in holdings. In certain situations, purchases or sales of Company stock made within six months prior to the
filing of a Form 3 must be reported on Form 4. Similarly, certain purchases or sales of Company stock made within six months
after an officer or director ceases to be an insider must be reported on Form 4.
2.
Recovery of Profits Under Section 16(b)
For the purpose of preventing the unfair use of information which may have been obtained by a Sec. 16 insider, any
profits realized by any officer, director or 10% stockholder from any “purchase” and “sale” of Company stock during a six-month
period (so called “short-swing profits”) are subject to recovery by the Company. When such a purchase and sale occurs, good
faith is no defense. The Sec. 16 insider is liable even if compelled to sell for personal reasons, and even if the sale takes place
after full disclosure and without the use of any inside information.
The liability of an insider under Section 16(b) of the 1934 Act is only to the Company itself. The Company, however,
cannot waive its right to short swing profits, and any Company stockholder can bring suit in the name of the Company. Reports
of ownership filed with the SEC on Form 3, Form 4 or Form 5 pursuant to Section 16(a) (discussed above) are readily available
to the public, and certain attorneys carefully monitor these reports for potential Section 16(b) violations. In addition, liabilities
under Section 16(b) may require separate disclosure in the
Exhibit 19.1
15
Company’s annual report to the SEC on Form 10-K or its proxy statement for its annual meeting of stockholders. No suit may be
brought more than two years after the date the profit was realized. However, if the Sec. 16 insider fails to file a report of the
transaction under Section 16(a), as required, the two-year limitation period does not begin to run until after the transactions
giving rise to the profit have been disclosed. Failure to report transactions and late filing of reports require separate disclosure in
the Company’s proxy statement.
Officers and directors should consult the attached “Short-Swing Profit Rule Section 16(b) Checklist” attached hereto as
Attachment A, in addition to consulting the Compliance Officer prior to engaging in any transactions involving the Company’s
securities, including without limitation, the Company’s stock, options or warrants.
3.
Short Sales Prohibited Under Section 16(c)
Section 16(c) of the 1934 Act prohibits insiders absolutely from making short sales of the Company’s equity securities.
Short sales include sales of stock, which the insider does not own at the time of sale, or sales of stock against which the insider
does not deliver the shares within 20 days after the sale. Under certain circumstances, the purchase or sale of put or call options,
or the writing of such options, can result in a violation of Section 16(c). Insiders violating Section 16(c) face criminal liability.
The Compliance Officer should be consulted if you have any questions regarding reporting obligations, short-swing
profits or short sales under Section 16.
C.
Rule 144 (Applicable to Officers, Directors and 10% Stockholders)
Rule 144 provides a safe harbor exemption to the registration requirements of the Securities Act of 1933, as amended,
for certain resales of “restricted securities” and “control securities.” “Restricted securities” are securities acquired from an issuer,
or an affiliate of an issuer, in a transaction, or chain of transactions, not involving a public offering. “Control securities” are any
securities owned by directors, executive officers or other “affiliates” of the issuer, including stock purchased in the open market
and stock received upon exercise of stock options. Sales of Company securities by affiliates (generally, directors, officers and
10% stockholders of the Company) must comply with the requirements of Rule 144, which are summarized below:
•
Current Public Information. The Company must have filed all SEC-required reports during the last 12 months.
•
Volume Limitations. Total sales of Company common stock by a covered individual for any three-month
period may not exceed the greater of: (i) 1% of the total number of outstanding shares of Company common
stock, as reflected in the most recent report or statement published by the Company, or (ii) the average weekly
reported volume of such shares traded during the four calendar weeks preceding the filing of the requisite Form
144.
•
Method of Sale. The shares must be sold either in a “broker’s transaction” or in a transaction directly with a
“market maker.” A “broker’s transaction” is one in which the broker does no more than execute the sale order
and receive the usual and customary commission. Neither the broker nor the selling person can solicit
Exhibit 19.1
16
or arrange for the sale order. In addition, the selling person or member of the Board of Directors must not pay
any fee or commission other than to the broker. A “market maker” includes a specialist permitted to act as a
dealer, a dealer acting in the position of a block positioner, and a dealer who holds himself out as being willing
to buy and sell Company common stock for his own account on a regular and continuous basis.
•
Notice of Proposed Sale. A notice of the sale (a Form 144) must be filed with the SEC at the time of the sale.
Brokers generally have internal procedures for executing sales under Rule 144 and will assist you in completing
the Form 144 and in complying with the other requirements of Rule 144.
If you are subject to Rule 144, you must instruct your broker who handles trades in Company securities to follow the
brokerage firm’s Rule 144 compliance procedures in connection with all trades.
VII. EXECUTION AND RETURN OF CERTIFICATION OF COMPLIANCE
After reading this Policy, all officers, directors, employees and consultants should execute and return to the Company’s
Compliance Officer the Certification of Compliance form attached hereto as Attachment B.
SCHEDULE I
INDIVIDUALS SUBJECT TO PRE-CLEARANCE REQUIREMENT AND
TRADING BLACK-OUT PERIODS
(as of January 30, 2025)
Attachment A
ATTACHMENT A
SHORT-SWING PROFIT RULE SECTION 16(B) CHECKLIST
Note: ANY combination of PURCHASE AND SALE or SALE AND PURCHASE within six months of each other by
an officer, director or 10% stockholder (or any family member living in the same household or certain affiliated entities) results
in a violation of Section 16(b), and the “profit” must be recovered by IDEAYA Biosciences, Inc. (the “Company”). It makes no
difference how long the shares being sold have been held or, for officers and directors, that you were an insider for only one of
the two matching transactions. The highest priced sale will be matched with the lowest priced purchase within the six-month
period.
Sales
If a sale is to be made by an officer, director or 10% stockholder (or any family member living in the same
household or certain affiliated entities):
1.
Have there been any purchases by the insider (or family members living in the same household or certain
affiliated entities) within the past six months?
2.
Have there been any option grants or exercises not exempt under Rule 16b-3 within the past six months?
3.
Are any purchases (or non-exempt option exercises) anticipated or required within the next six months?
4.
Has a Form 4 been prepared?
Note: If a sale is to be made by an affiliate of the Company, has a Form 144 been prepared and has the broker been
reminded to sell pursuant to Rule 144 under the
Securities Act of 1933, as amended?
Purchases And Option Exercises
If a purchase or option exercise for Company stock is to be made:
1.
Have there been any sales by the insider (or family members living in the same household or certain affiliated
entities) within the past six months?
2.
Are any sales anticipated or required within the next six months (such as tax-related or year-end transactions)?
3.
Has a Form 4 been prepared?
Before proceeding with a purchase or sale, consider whether you are aware of material inside information
which could affect the price of the Company stock. All transactions in the Company’s securities by officers and directors
must be pre-cleared by contacting the Company’s Compliance Officer.
Attachment B
ATTACHMENT B
CERTIFICATION OF COMPLIANCE
RETURN BY [_________] [insert return deadline]
TO: Douglas Snyder, General Counsel
FROM: __________________________
RE: INSIDER TRADING COMPLIANCE POLICY OF IDEAYA BIOSCIENCES, INC.
I have received, reviewed and understand the above-referenced Insider Trading Compliance Policy and
undertake, as a condition to my present and continued employment with (or, if I am not an employee, affiliation with) IDEAYA
Biosciences, Inc., to comply fully with the policies and procedures contained therein.
___________________________ _______________
SIGNATURE DATE
___________________________
NAME
___________________________
TITLE
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No.333-231784, 333-237362, 333-254617,
333-263657, 333-270334, 333-277189 and 333-281301) and Form S-3 (No. 333-254606, 333-238849 and 333-272936) of IDEAYA
Biosciences, Inc. of our report dated February 18, 2025 relating to the financial statements, and the effectiveness of internal control over
financial reporting, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
San Jose, California
February 18, 2025
Exhibit 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Yujiro Hata, certify that:
1.
I have reviewed this Annual Report on Form 10-K of IDEAYA 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 the
statements 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
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure 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 reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness 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 recent
fiscal 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, the registrant’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 the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Date: February 18, 2025
By:
/s/ Yujiro Hata
Yujiro Hata
President and Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Andres Ruiz Briseno, certify that:
1.
I have reviewed this Annual Report on Form 10-K of IDEAYA 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 the
statements 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
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure 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 reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness 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 recent
fiscal 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, the registrant’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 the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Date: February 18, 2025
By:
/s/ Andres Ruiz Briseno
Andres Ruiz Briseno
Senior Vice President and Head of Finance and Investor Relations
(Principal Financial and Accounting Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Yujiro Hata, President and Chief Executive Officer of IDEAYA Biosciences, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. § 1350, as
adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1)
The Annual Report on Form 10-K of the Company for the period ended December 31, 2024 (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.
Date: February 18, 2025
By:
/s/ Yujiro Hata
Yujiro Hata
President and Chief Executive Officer
(Principal Executive Officer)
I, Andres Ruiz Briseno, Senior Vice President and Head of Finance and Investor Relations of IDEAYA Biosciences, Inc. (the “Company”), hereby certify,
pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1)
The Annual Report on Form 10-K of the Company for the period ended December 31, 2024 (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.
Date: February 18, 2025
By:
/s/ Andres Ruiz Briseno
Andres Ruiz Briseno
Senior Vice President and Head of Finance and Investor Relations
(Principal Financial and Accounting Officer)