Jounce Therapeutics
Annual Report 2017

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549________________________________________________________________________________________________________FORM 10-K________________________________________________________________________________________________________(Mark One)x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2017¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______________ to ______________.Commission File Number 001-37998________________________________________________________________________________________________________JOUNCE THERAPEUTICS, INC.(Exact name of registrant as specified in its charter)________________________________________________________________________________________________________ Delaware(State or other jurisdiction ofincorporation or organization) 45‑4870634(I.R.S. EmployerIdentification No.) 780 Memorial DriveCambridge, Massachusetts(Address of principal executive offices) 02139(Zip Code)Registrant’s telephone number, including area code: (857) 259‑3840Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, $0.001 par value per share Nasdaq Global Select MarketSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No xIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No xIndicate 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 suchshorter 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 x No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant toRule 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 and post such files). Yes x No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x 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 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 filerx (Do not check if a smaller reporting company)Smaller reporting company ¨ Emerging growth companyx 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 standardsprovided pursuant to Section 13(a) of the Exchange Act. x Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ¨ No xAs of June 30, 2017, the last day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s Common Stock held by non-affiliates of theregistrant was approximately $158,864,650, based upon the closing price of the registrant’s Common Stock on June 30, 2017. As of February 28, 2018, there were 32,391,531 shares of common stock, $0.001 par value per share, outstanding.Documents Incorporated by ReferencePortions of the registrant’s Definitive Proxy Statement on Schedule 14A relating to its 2018 Annual Meeting of Stockholders to be filed within 120 days of the end of the registrant’s fiscal yearended December 31, 2017 are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. Table of ContentsTable of Contents PagePART I Item 1.Business3Item 1A.Risk Factors23Item 1B.Unresolved Staff Comments54Item 2.Properties55Item 3.Legal Proceedings55Item 4.Mine Safety Disclosures55 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities56Item 6.Selected Financial Data58Item 7Management’s Discussion and Analysis of Financial Condition and Results of Operations59Item 7A.Quantitative and Qualitative Disclosures above Market Risk76Item 8.Financial Statements and Supplementary Data76Item 9.Change in and Disagreements with Accountants on Accounting and Financial Disclosure76Item 9A.Controls and Procedures76Item 9B.Other Information77 PART III Item 10.Directors, Executive Officers and Corporate Governance78Item 11.Executive Compensation78Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters78Item 13.Certain Relationships and Related Transactions, and Director Independence78Item 14.Principal Accounting Fees and Services78 PART IV Item 15.Exhibits and Financial Statement Schedules79Item 16.Form 10-K Summary79 SIGNATURES EXHIBIT INDEX Table of ContentsReferences to JounceThroughout this Annual Report on Form 10-K, the “Company,” “Jounce,” “Jounce Therapeutics,” “we,” “us,” and “our,” except where the contextrequires otherwise, refers to Jounce Therapeutics, Inc. and its consolidated subsidiary, and “our board of directors” refers to the board of directorsof Jounce Therapeutics, Inc.Cautionary Note Regarding Forward-Looking Statements and Industry DataThis Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. All statements other thanstatements of historical facts contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, futurefinancial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-lookingstatements. 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.The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “would”, “will,” “target”, “goal”, “could,” “should,“potential,” “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statementscontain these identifying words. These forward-looking statements include, among other things, statements about:•the timing, progress, and results of preclinical studies and clinical trials for JTX-2011, JTX-4014 and any product candidates we maydevelop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the periodduring which the results of the trials will become available, and our research and development programs;•the timing, scope, or likelihood of regulatory filings and approvals, including, as applicable, timing of our Investigational New DrugApplication for, Biologics License Application filing for, and final Food and Drug Administration approval of JTX-2011, JTX-4014 and anyproduct candidates we may develop;•our ability to use our Translational Science Platform to identify targets for future product candidates and to match immunotherapies toselect patient subsets;•our ability to identify, develop and advance any future product candidates into, and successfully complete, clinical studies;•our ability to develop combination therapies, whether on our own or in collaboration with Celgene Corporation, or Celgene, and other thirdparties, for JTX-2011 and JTX-4014;•our expectations regarding the size of the patient populations for JTX-2011 and JTX-4014, if approved for commercial use, and anyproduct candidates we may develop;•our commercialization and marketing capabilities and strategy;•the pricing and reimbursement of JTX-2011, JTX-4014 and any product candidates we may develop, if approved;•the implementation of our business model and our strategic plans for our business, JTX-2011, JTX-4014 and any product candidates wemay develop, and our technology;•our ability to develop and commercialize a companion diagnostic or complementary diagnostic for JTX-2011, JTX-4014 and any productcandidates we may develop;•the rate and degree of market acceptance and clinical utility of JTX-2011, JTX-4014 and any product candidates we may develop;•the potential benefits of and our ability to maintain our collaboration with Celgene, and establish or maintain future collaborations orstrategic relationships or obtain additional funding;•our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals;•our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rightscovering JTX-2011, JTX-4014 and any product candidates we may develop, and our ability not to infringe, misappropriate or otherwiseviolate any third-party intellectual property rights;1Table of Contents•our competitive position, and developments and projections relating to our competitors and our industry;•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;•the impact of laws and regulations; and•our expectations regarding the time during which we will be an emerging growth company under the JOBS Act.There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and youshould not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions andexpectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included inthis Annual Report on Form 10-K, particularly in the section entitled “Risk Factors” in Part I, Item 1A that could cause actual results or events todiffer materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any futureacquisitions, mergers, dispositions, joint ventures or investments that we may make.You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-Kcompletely and with the understanding that our actual future results may be materially different from what we expect. The forward-lookingstatements contained in this Annual Report on Form 10-K are made as of the date of this Annual Report on Form 10-K, and we do not assume anyobligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required byapplicable law.This Annual Report on Form 10-K includes industry and market data, which we obtained from our own internal estimates and research, as well asfrom industry and general publications and research, surveys, and studies conducted by third parties. Industry publications, studies, and surveysgenerally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness ofsuch information. While we believe that each of these studies and publications is reliable, we have not independently verified market and industrydata from third‑party sources. While we believe our internal company research is reliable and the market definitions are appropriate, neither suchresearch nor these definitions have been verified by any independent source.Website and Social Media DisclosureFrom time to time, we may use our website (www.jouncetx.com), investor and media relations website (http://ir.jouncetx.com/phoenix.zhtml?c=254289&p=irol-irhome), Facebook page (https://www.facebook.com/jouncetx), LinkedIn page (https://www.linkedin.com/company/3494537/) andTwitter feed (https://twitter.com/JounceTx) as channels for the distribution of information. The information we post through these channels may bedeemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, Securities and ExchangeCommission filings and public conference calls and webcasts. The contents of our website and social media channels are not, however, a part ofthis report.2Table of ContentsPART IItem 1. BusinessOverviewWe are a clinical stage immunotherapy company dedicated to transforming the treatment of cancer by developing therapies that enable theimmune system to attack tumors and provide long-lasting benefits to patients. We have developed a suite of integrated technologies that compriseour Translational Science Platform, enabling us to comprehensively interrogate the cellular and molecular composition of tumors. By focusing onspecific cell types, both immune and non-immune, within tumors, we can prioritize targets and then identify related biomarkers designed to matchthe right therapy to the right patient. Through this deep, scientific understanding of the tumor microenvironment, or TME, our goal is to effectivelyand efficiently identify and develop new cancer immunotherapies designed to benefit patients with tumors across the spectrum from highlyinflamed, or “hot,” to poorly inflamed, or “cold,” and especially those not well served by current therapies.Our most advanced product candidate, JTX-2011, is a clinical-stage monoclonal antibody that binds to and activates the Inducible T cell CO-Stimulator, or ICOS, a protein on the surface of certain T cells commonly found in many solid tumors. JTX-2011 is being assessed in an adaptivePhase I/II clinical trial as both a monotherapy and in combination with other therapies, including anti-PD-1 antibodies, to determine whether it canoffer a treatment alternative to patients who otherwise lack an effective response to currently approved therapies, and/or whether it can enhancethe therapeutic benefit of currently approved therapies. We expect to report preliminary efficacy data from our Phase I/II clinical trial of JTX-2011in some solid tumors in the second quarter of 2018. Our second development candidate, JTX-4014, is an anti-PD-1 antibody that we aredeveloping for use in combination with potential future product candidates, as we believe that combination therapy has the potential to be amainstay of cancer immunotherapy. We expect to file an Investigational New Drug, or IND, for JTX-4014 in 2018. In addition, the nextdevelopment candidate emerging from our Translational Science Platform efforts that focused on tumor-associated macrophages has entered INDenabling activities. Therapies targeting these innate immune cells may have the potential to complement the existing approaches that focus on Tcells thereby providing benefit to patients with less-inflamed or colder tumors.The strategy for all of our product candidates involves a biomarker-driven, adaptive approach to the initial trial design. Early in the developmentprocess, we use our Translational Science Platform to identify potential predictive biomarkers to enable us to enrich our trials for a patientpopulation that may be more likely to respond to our immunotherapy. In addition, we can also use characteristics defined by our biomarker effortsto focus on niche indications and/or niche subsets within indications to inform our clinical strategy. By taking this biomarker-driven approach, webelieve that we can more efficiently develop cancer immunotherapies and potentially provide greater benefit to patients. We believe that thebiomarker results, coordinated to clinical response, will determine the utility of proceeding to the use of a complementary diagnostic and/orcompanion diagnostic for a given therapy.Our ability to prioritize targets and potential predictive biomarkers using our Translational Science Platform helped lead to our strategiccollaboration with Celgene Corporation, or Celgene. This global strategic collaboration, which included a $225.0 million upfront payment and a$36.1 million equity investment, is primarily focused on co-developing and co-commercializing innovative biologic immunotherapy treatments forpatients with cancer. Under the agreement, we granted Celgene exclusive options to develop and commercialize our lead product candidate, JTX-2011, and up to four early-stage programs consisting of targets to be selected from a pool of certain B cell, T regulatory cell and tumor-associatedmacrophage targets. Additionally, Celgene has an exclusive option to develop and commercialize our product candidate JTX-4014, which, uponexercise of such option, will be a shared program that may be used by both parties within and outside of the collaboration. Under the terms of theagreement, if Celgene exercises all of its options, all programs meet all milestones, including regulatory approvals in the United States and outsidethe United States, and Celgene extends the initial four-year research term for three additional years, we are eligible to earn up to approximately$2.6 billion in clinical, regulatory, and/or commercialization milestone payments, option-exercise fees and research term extension fees. In additionto progressing collaboration programs, we will continue to use our Translational Science Platform to progress our own programs that are not part ofthe collaboration and for which we retain worldwide commercial rights.We have assembled a highly experienced team of experts in immunotherapy to help us leverage our Translational Science Platform to drive thedevelopment of our early discovery programs and our product candidates including JTX-2011. In addition, two of our founders, Dr. James Allisonand Dr. Padmanee Sharma of the University of Texas MD Anderson Cancer Center, were initially responsible for the translational science behindICOS. Dr. James Allison played a fundamental role in ushering in the era of checkpoint therapy in general, including contributing to the3Table of Contentsunderstanding of the basic science of CTLA-4 that supported the development of ipilimumab, or Yervoy, a single agent immunotherapy that targetsCTLA-4 on certain T cells.Our StrategyWe aim to build a multi-product company that discovers, develops and commercializes first-in-class and/or best in class novel therapeutics andcombination approaches that create options for patients who are less likely to respond to currently approved therapies and/or enhance responsesin patients who may have had limited responses to currently approved immunotherapies. Key elements of our strategy include:•Aggressively develop our product candidates, and subsequent candidates, using biomarker-driven adaptive trial designs aimed at bringingthe right immunotherapy to the right patients;•Continue our investment in our Translational Science Platform to enhance our deep understanding of the TME, as we look to broaden thebenefit of immunotherapy through targeting additional cell types;•Address the unmet need of cancer patients with tumors unresponsive to T effector cell-directed therapies by focusing our discovery effortson other cell types within the TME; and•Expand our pipeline by leveraging our internal discovery platform and/or in-licensing new technologies and methodologies to turn coldtumors into hot tumors to make them more amenable to immunotherapy.Immuno-Oncology OverviewHistorically, cancer treatments have focused on either killing or arresting the proliferation of the tumor cells themselves. However, fundamentalwork pioneered by one of our founders, Dr. James Allison, led to the discovery of immune cell checkpoint therapy. Immune checkpoint inhibitorsshow promise in treating various cancers, with two immunotherapies that target the PD-1 receptor on certain T cells—pembrolizumab, marketed asKeytruda, and nivolumab, marketed as Opdivo—now approved in multiple cancer types and across different lines of therapy. The data emergingfrom clinical studies with these PD-1 checkpoint inhibitors (shown in Figure 1) suggests that:1.Certain indications, for example melanoma, appear to be more immuno-responsive than others.2.As these agents move to earlier lines of treatment, response rates increase, however, it is still only a minority of patients who benefit frommonotherapy.3.Response rates may be increased by the use of biomarkers to select patients who may be more likely to benefit from immunotherapies.4Table of ContentsFigure 1: Unmet Need/Therapeutic OpportunityEven with the success of these PD-1 checkpoint inhibitors, there is still a significant unmet need, as can be seen from Figure 1, which shows theOverall Response Rates, or the ORR, in patients treated with either of the approved anti-PD-1 antibody therapies as monotherapy in the indicatedcancers. These data also highlight the importance of a biomarker-driven patient-enrichment strategy, like that used for Keytruda, in biomarker-selected first-line non-small cell lung cancer, or NSCLC, subjects and in second line microsatellite-instability-high, or MSI-H, cancer patientpopulations. Additional highlights of the evolving immunotherapy landscape include longer-lasting responses as compared to chemotherapy andthat these longer-lasting responses can be improved with combination therapy.The interplay between the immune system and cancer is dynamic and as more patients, in an expanded set of indications, are being exposed tocancer immunotherapies we are learning about the factors that may contribute to a lack of response or a failed response. Reasons for resistanceto immunotherapy can include a lack of appropriate immune cells in the TME, for example, the absence of T effector cells or the presence ofimmunosuppressive cells such as tumor associated macrophages or T regulatory cells. In these cases, therapeutic approaches that target othercell types within the TME to convert colder tumors to hot tumors may broaden the applicability of cancer immunotherapies. In addition, a tumormay initially respond to a PD-1/PD-L1 targeted immunotherapy but other immune checkpoints may emerge or acquired resistance to the particularimmunotherapy may occur, for example through genetic alterations in key T cell signaling pathways. In these instances, combination therapyapproaches that target more than one checkpoint, or more than one mechanism, may be key to maximizing the benefit of cancerimmunotherapies. As an example, clinical data demonstrates that the combination of Opdivo with Yervoy, which targets CTLA-4, a different proteinreceptor, on certain T cells, provides additional benefit to melanoma patients than either therapy alone.We believe that our Translational Science Platform, which enables both the identification and prioritization of targets across a broad spectrum ofimmune and non-immune cell types and the identification of potential biomarkers to inform our clinical development strategy, may position us toaddress multiple pathways and indications, including those that may be important in colder tumors, and to identify the most appropriate indicationsand most responsive patient populations for our new immunotherapies. By taking this dual approach, we believe we may be able to address areasof unmet need, particularly in the combination setting.The promise of long-lasting benefit to cancer patients has led to heightened enthusiasm for these types of immunotherapy products and the rapidexpansion of the market opportunity. The overall market for immunotherapy is expected to expand over the next five years, with 2023 market sizeestimates ranging from $37 billion to $58 billion across solid and blood-based tumors according to market reports.5Table of ContentsStrategic Alliance with CelgeneIn July 2016, we entered into a Master Research and Collaboration Agreement, or the Celgene Collaboration Agreement, with Celgene. The primarygoal of the collaboration is to co-develop and co-commercialize innovative biologic immunotherapies that either activate or suppress the immunesystem by binding to targets identified by leveraging our Translational Science Platform. Under the agreement, we granted Celgene exclusiveoptions to develop and commercialize our lead product candidate, JTX-2011, and up to four early-stage programs consisting of targets to beselected from a pool of certain B cell, T regulatory cell and tumor-associated macrophage targets. Additionally, Celgene has an exclusive option todevelop and commercialize our product candidate JTX-4014, which, upon exercise of such option, will be a shared program that may be used byboth parties in and outside of the collaboration. Prior to Celgene exercising an option for a program, we are responsible for all research anddevelopment activities for that program under the agreement during the collaboration, and subject to all costs and potential liabilities.Advancement of biologics: For programs that have biologics that meet mutually agreed criteria for suitability for further development, Celgene mayelect that program’s target (solely with respect to immune activation or immune suppression, as applicable) to be added to the pool of targets forwhich we may conduct further research subject to the terms of the collaboration. If we continue to conduct research and development for suchprograms, then such activity will be part of the collaboration. If Celgene does not elect a program that achieves such criteria, then we will retain therights to such program’s targets and biologics and Celgene will not have an option to such program.Exercise of options and further development of programs: Celgene may extend the initial four-year research term of the collaboration for up to threeadditional one-year periods upon payment of an extension fee for each additional year. Celgene may exercise its option for a program at any timeuntil the expiration of an option term for that program. For each program, the option term ends 45 to 60 days following Celgene’s receipt of a datapackage that includes certain information relating to the program’s research and development activities. The data package for a program may bedelivered to Celgene after the applicable development milestone for such program has been achieved. Depending on the program, the applicabledevelopment milestone is (i) IND acceptance, (ii) availability of certain Phase Ia data, or (iii) availability of certain Phase I/II data. If Celgene failsto exercise its option during the option term for a program, we will retain the rights to such program. If Celgene exercises its option for a programother than JTX-4014, then we will enter into a co-development and co-commercialization agreement with Celgene for such program in substantiallythe form attached to the agreement as an exhibit. Under the co-development and co-commercialization agreement for JTX-2011 and one additionalprogram for which Celgene opts in that is not JTX-4014, we will be responsible for leading development and commercialization activities in theUnited States and Celgene will be responsible for development and commercialization activities outside the United States. For all other additionalprograms for which Celgene opts in, other than JTX-4014, Celgene will lead development and commercialization activities worldwide. If Celgeneexercises its option for JTX-4014, we will enter into a license agreement, in substantially the form attached to the agreement as an exhibit,pursuant to which we will both be able to equally access JTX-4014 for combinations within our portfolios and with other molecules that are subjectto the agreement, subject to joint governance. Once Celgene opts in with respect to a given program, Celgene and we must each usecommercially reasonable efforts to develop and commercialize the corresponding product in the United States.Governance: The collaboration is governed by a joint steering committee, or JSC, and a joint patent committee. The JSC may establish additionalsubcommittees to oversee particular projects or activities. Subject to limitations specified in the agreement, if the applicable governancecommittee is unable to make a decision by consensus and the parties are unable to resolve the issue through escalation to specified seniorexecutive officers of the parties, then we generally have final decision-making authority over research and development matters for programs priorto Celgene’s exercise of its option to such program. If Celgene exercises its option for a program, final decision-making authority for that programis specified in the applicable co-development and co-commercialization agreement or license agreement.Exclusivity: During the collaboration’s research term (i.e., for four years plus up to three one-year extensions that Celgene may elect), we may notalone, or with a third party, research, develop, manufacture or commercialize a biologic that binds to a defined pool of B cell, T regulatory cell ortumor-associated macrophage targets that meet certain criteria, termed an exclusive target, and inhibit, activate or otherwise modulate the activityof such exclusive target. In addition, if Celgene exercises its option for a program within the collaboration other than JTX-4014, then untiltermination or expiration of the applicable co-development and co-commercialization agreement for such program, we may not directly or indirectlyresearch, develop, manufacture or commercialize, outside of the collaboration, any biologic with specified activity against that program’scollaboration target.6Table of ContentsFinancial terms: Under the terms of the agreements, we received a $225.0 million upfront cash payment and $36.1 million from the sale of10,448,100 shares of our Series B-1 convertible preferred stock to Celgene, which shares converted into 2,831,463 shares of common stock uponthe closing of our initial public offering. If Celgene exercises any of its options, then Celgene will pay us an option-exercise fee, the parties willenter into a co-development and co-commercialization agreement or a license agreement that governs the development and commercialization ofthe applicable program, and we will then split future development and commercialization costs with Celgene in accordance with such agreement.Additionally, under the terms of the agreement, if Celgene exercises all of its options, all programs meet all milestones, including regulatoryapprovals in the United States and outside the United States, and Celgene extends the initial four-year research term for three additional years, weare eligible to earn up to approximately $2.6 billion in clinical, regulatory, and/or commercialization milestone payments, option-exercise fees andresearch term extension fees.The development milestones are payable on initiation of certain clinical trials and range from $32.5 million to $105.0 million, per program, with anaggregate total of $290.0 million. The regulatory approval milestones are payable upon regulatory approval in the United States and outside theUnited States and range from $7.5 million to $50.0 million per milestone, with an aggregate total of $700.0 million. The commercial milestones arepayable upon achievement of specified aggregate product sales outside the United States for each program and range from $40.0 million to$200.0 million per milestone, with an aggregate total of $1.270 billion. We are also eligible to receive royalties on product sales outside the UnitedStates ranging from high single digit to mid-teen royalties. As of December 31, 2017, we had not received any option exercise, research termextension, milestone or royalty payments under the Celgene Collaboration Agreement.Profit sharing, cost sharing and commercialization rights for products: If Celgene exercises its option for a program, then we will share withCelgene the U.S. profits or losses on such collaboration program as follows:•We will retain 60 percent of the U.S. operating profits or losses arising from commercialization of JTX-2011, with 40 percent allocated toCelgene.•We will retain 25 percent of the U.S. operating profits or losses arising from commercialization of the first program, other than JTX-2011 orJTX-4014, for which an IND application is filed under the collaboration, with 75 percent allocated to Celgene. Celgene has a one-time rightto substitute and swap the economics and governance of this program with that of another program for which it exercises an option (otherthan JTX-2011 and JTX-4014).•We and Celgene will equally share U.S. operating profits or losses arising from commercialization of up to three additional programs (otherthan JTX-2011 or JTX-4014).•We and Celgene will share all development costs, other than for JTX-4014, in accordance with the applicable co-development and co-commercialization agreement.If Celgene exercises its option for a program other than JTX-4014, we will enter into a co-development and co-commercialization agreement,pursuant to which Celgene will have the exclusive right to develop and commercialize the products arising out of such collaboration programoutside of the United States, and we will be eligible to receive tiered royalties ranging from a high single digit to mid-teen percentage rate on netproduct sales outside of the United States. Under each co-development and co-commercialization agreement, we will also have the right to opt outof profit sharing in the United States and instead receive milestones and royalties.Furthermore, if Celgene exercises its option for JTX-4014, we will enter into a license agreement, pursuant to which Celgene and we will each haveequal rights to develop and commercialize JTX-4014 in combination with other proprietary molecules in their or our respective pipelines or incombination with products arising out of collaboration programs. Subject to terms specified in the license agreement for JTX-4014, the partyowning the proprietary molecule that is combined with JTX-4014, if such molecule does not arise from a collaboration program with Celgene, will besolely responsible for all development and commercialization costs related to such combination. If JTX-4014 is combined with a product arisingfrom a collaboration program, then the parties will share costs and, if co-packaged or co-formulated, profits or losses in accordance with the co-development and co-commercialization agreement for such other product.Intellectual Property: We and Celgene will jointly own any intellectual property that is generated or invented by both parties pursuant to theactivities conducted under the collaboration agreement. If Celgene exercises its option for a program, each party will also grant the other partyexclusive or co-exclusive licenses, with rights to grant sublicenses, under certain of each party’s intellectual property rights, determined by thenature of the program and the licensed territory.7Table of ContentsTermination: At any point during the collaboration agreement, including during the research, development and clinical trial process, or during theterm of the applicable co-development and co-commercialization or license agreement, respectively, Celgene can terminate the applicableagreement with us in its entirety, or with respect to any program under the collaboration agreement, upon 120 days’ notice and can terminate theentire agreement with us in connection with a material breach of the agreement by us that remains uncured for 90 days.Our Product PipelineWe are developing a pipeline of immunotherapies that we believe will provide a meaningful and long-lasting benefit to cancer patients. We plan todevelop each of these as a single agent and/or in combination with other therapies, as applicable. The following table depicts our current pipeline:Lead Program JTX-2011: an Anti-ICOS Monoclonal Antibody ImmunotherapyOur lead product candidate, JTX-2011 is in clinical development in an adaptive Phase I/II clinical trial which we refer to as ICONIC. Currently, thisis an open label, dose escalation and expansion trial of JTX-2011 alone or in combination with a fixed dose of nivolumab in subjects with advancedsolid tumors who have failed all available therapies and have no standard options. The monotherapy and combination with nivolumab Phase IIportions of the trial were initiated in April and July of 2017, respectively.JTX-2011 is a monoclonal antibody that binds to and activates ICOS, a protein on the surface of certain T cells. JTX-2011 was designed with ahuman IgG1 Fc portion, which we believe contributes to a dual mechanism of action whereby JTX-2011 amplifies an immune response in Teffector cells, or "good" T cells, while preferentially reducing the number of T regulatory cells, or "bad" T cells, within a tumor.Preclinical data suggest that, through its dual mechanism of action, JTX-2011 has the potential to act as a monotherapy that may offer treatmentalternatives to patients who otherwise lack an effective response to currently approved therapies.The initial data on the safety, pharmacokinetic, or PK, and pharmacodynamics, or PD, from the Phase I portion of ICONIC, comprised of data frompatients with any relapsed or refractory advanced solid cancers with no biomarker enrichment, was presented in June 2017 at the AmericanSociety of Clinical Oncology, or ASCO, annual meeting. Patients in the Phase I portion of ICONIC were heavily pre-treated, with a median of fourprior therapies. The safety data were consistent with studies of approved PD-1 inhibitors in similar patients and the human PK and PD data wereconsistent with the model that was developed based on preclinical requirements for efficacy.8Table of ContentsBased on preclinical data in mouse tumor models that suggested a correlation between a higher percentage of ICOS-expressing immune cells inthe tumor and response to monotherapy ICOS agonist antibody, the Phase II portion of ICONIC is composed of disease-specific cohorts in certaintumor types that appear to have higher percentage of ICOS-expressing immune cells within the tumor. The JTX-2011 monotherapy cohorts includeNSCLC, head and neck squamous cell cancer, or HNSCC, and gastric cancer and the adaptive nature of the trial allows for the addition of newtumor types identified through our Translational Science Platform.The inducible nature of the ICOS target which can be upregulated on T cells following exposure to multiple agents, including anti-PD-1 antibodies,offers the potential to combine treatment of JTX-2011 with a PD-1 inhibitor. Patients with NSCLC, HNSCC, triple negative breast cancer, or TNBC,melanoma, and gastric cancer, as well as additional tumor types identified through our Translational Science Platform, are included in the Phase IIcombination therapy cohorts with the anti-PD-1 antibody, nivolumab.Patients in both the monotherapy and combination cohorts with tumors for which a PD-1 or PD-L1 inhibitor is approved must have had progressivedisease on or after treatment with a PD-1 or PD-L1 inhibitor. These tumor types include NSCLC, HNSCC, melanoma and gastric cancer. Ourgastric cancer combination cohort of the Phase II portion of ICONIC commenced in July 2017, prior to approval of Keytruda for gastric cancer.Therefore, our gastric cohorts include PD-1 and PD-L1 inhibitor naive patients as well as patients who have failed a prior PD-1 inhibitor.In both the monotherapy and combination tumor-specific cohorts, the patients with relapsed or refractory solid cancers, who are heavily pre-treated, are stratified based on ICOS levels, as determined by immunohistochemistry. In certain cohorts, ICOS levels are analyzed for eachpatient using archival tumor and the number of patients with ICOS low tumors enrolled in each cohort is limited. Enrollment in each cohortcontinues until sufficient patients with ICOS high tumors are enrolled, based on a fresh pre-treatment biopsy. Additional potential predictivebiomarkers, including an ICOS gene signature, will also be evaluated for their utility in identifying patients who may be more likely to respond toJTX-2011 therapy.The Phase II combination cohorts of JTX-2011 and nivolumab in gastric cancer and TNBC have met their enrollment targets, and we expect toreport overall safety and preliminary efficacy data from these cohorts, plus complementary data from the Phase II JTX-2011 monotherapy cohortin gastric cancer and additional patients with these tumor types enrolled in Phase I in the second quarter of 2018.Although our initial combination cohorts of the ICONIC trial focus on the combination of JTX-2011 with an anti-PD-1 antibody, nivolumab, theability of other agents to induce ICOS upregulation on T cells, including anti-PD-1 antibodies, anti-PD-L1 antibodies, anti-CTLA-4 antibodies andcancer vaccines such as GVAX, PROSTVAC, and Mammaglobin-A, offers the potential for combinations with JTX-2011. In addition to continuingto investigate JTX-2011 in combination with nivolumab, we plan to initiate new dose-escalation cohorts of JTX-2011 in combination with theapproved CTLA-4 inhibitor, ipilimumab, within the ICONIC trial in 2018. We believe this inducible nature of ICOS to be a cornerstone of our strategyin combination trials. By combining with other approved therapies, JTX-2011 may provide the potential to maximize the benefit ofimmunotherapeutic approaches across a broad spectrum of indications.JTX-4014: An Anti-PD-1 Antibody for Combination TherapyCombination therapy aimed at multiple targets has become an important element of immunotherapy development efforts with the goal of creatingeven better, long-lasting responses. PD-1 checkpoint inhibitors are anticipated to play a key role in combination therapies. For this reason, we aredeveloping our own anti-PD-1 antagonist antibody, JTX-4014, for use in combinations with potential future product candidates.We expect to file an IND for JTX-4014 in 2018 and, assuming continued successful development, JTX-4014 will be evaluated as a monotherapyprior to moving into combination settings where we anticipate JTX-4014 will provide us flexibility to optimize potential combination therapyapproaches.Beyond T Effector Cell Discovery ProgramsWith our focus on bringing the right immunotherapy to the right patients, we have invested heavily in our Translational Science Platform as webelieve that the systematic interrogation of the immune make-up of human tumors gives us the ability to target different cell types within the TMEbeyond the T effector cells that are the focus of currently approved immunotherapies. This may enable us to fully exploit the promise ofimmunotherapy in cancer by allowing us to pursue tumor types not currently served by therapies that target the T effector arm of the adaptive9Table of Contentsimmune system, as well as potentially convert the TME from an immunosuppressive environment to an immune activating environment andthereby convert cold tumors to hot tumors.Analysis of The Cancer Genome Atlas, or TCGA, using our proprietary gene signatures, which represent various immune cells, shows that theimmune cell composition of tumors is diverse, both across and within indications, and suggests that a significant number of tumors, including coldtumors in particular, may not benefit from the current T-cell focused immunotherapies such as the PD-1 checkpoint inhibitors (Figure 2).Figure 2: Characterization of human tumors by immune profiling using cell-specific gene signaturesOur early discovery efforts include programs that target adaptive immune cells, including T regulatory cells and innate cells, such asimmunosuppressive macrophages. Immunosuppressive macrophages are highly prevalent in many solid tumor types, including many cold tumors,and their presence is associated with poorer disease prognosis; therefore, we prioritized macrophage targets for our initial foray into developingmore effective cancer therapies to address colder tumors. Using our Translational Science Platform, we have identified potential targets onimmunosuppressive M2 macrophages that, when treated with specific monoclonal antibodies, may influence the composition of macrophageswithin the TME, with the goal of converting, but not depleting, the immune-suppressing M2 to immune-enhancing M1 macrophages, thus engagingthe innate immune system in the response to cancer. We have commenced IND-enabling activities for the first potential candidate to emerge from our macrophage-focused efforts and we havegenerated encouraging in vitro data and ex vivo data using human tumor histoculture10Table of Contentsdemonstrating an ability of this antibody to promote an immune-activating phenotype in otherwise suppressive macrophages.We are generating and screening other antibodies identified using our macrophage-specific approach that are focused on other targets for theirpotential as cancer immunotherapies. We are also leveraging our Translational Science Platform to systematically and comprehensivelyinterrogate cell types within the TME, including non-immune cells such as stromal cells, with the goal of enabling us to develop therapies to benefitpatients with tumors across the hot to cold spectrum. We believe that some of our discovery approaches, including targeting stromal cells, mayidentify product candidates with the potential to address a significant unmet medical need by turning cold tumors hot and making them amenableto PD-1 checkpoint inhibitors, such as JTX-4014.ManufacturingWe rely on and will continue to rely on our contract manufacturing organizations, or CMOs, for both drug substance and drug product. While we donot plan to develop our own full-scale manufacturing capabilities, we may consider establishing a small, flexible approach for supporting preclinicalIND enabling studies and early clinical studies. As of now, all of our manufacturing is outsourced to well-established third-party manufacturers. Wehave entered into a long-term contract with a CMO for drug supply to our JTX-2011 and JTX-4014 clinical trials.CompetitionThe biotechnology and pharmaceutical industries, and the immunotherapy subsector, are characterized by rapid evolution of technologies, fiercecompetition and strong defense of intellectual property. While we believe that our product candidates, discovery programs, technology, knowledge,experience, and scientific resources provide us with competitive advantages, we face competition from major pharmaceutical and biotechnologycompanies, academic institutions, governmental agencies and public and private research institutions, among others.Any product candidates that we successfully develop and commercialize will compete with currently approved therapies and new therapies thatmay become available in the future. Key product features that would affect our ability to effectively compete with other therapeutics include theefficacy, safety and convenience of our products and the ease of use and effectiveness of any complementary diagnostics and/or companiondiagnostics. Potentially competitive therapies fall primarily into the following groups of treatment:•traditional cancer therapies, including chemotherapy;•two anti-ICOS antibody programs in clinical trials, the first being developed by GlaxoSmithKline plc, for which patient enrollment in aPhase I trial began in the second quarter of 2016 and the second being developed by Bristol Myers Squibb Company, for which patientenrollment in a Phase I/II trial began in the third quarter of 2017;•approved immunotherapy antibodies, including an approved anti-CTLA 4 antibody (Yervoy, marketed by Bristol Myers Squibb Company)and approved anti-PD-1/anti-PD-L1 antibodies (Opdivo, Keytruda, Tecentriq, Bavencio and Imfizi, marketed by Bristol Myers SquibbCompany, Merck & Co., Genentech, Inc., Merck KGaA and Pfizer Inc. and AstraZeneca PLC, respectively);•anti-PD-1/anti-PD-L1 immunotherapy antibodies in clinical development;•other agonist immunotherapy antibodies in clinical development; and•therapies targeting macrophages, T regulatory cells and B cells that are in clinical development.The availability of reimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of ourproducts. In addition, our competitors may obtain Food and Drug Administration, or FDA, or other regulatory approval for their products morerapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able toenter the market.Many of the companies against which we may compete, either alone or with their strategic partners, have significantly greater financial resourcesand expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals andmarketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific and managementpersonnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, ornecessary for, our programs.11Table of ContentsIntellectual PropertyOur intellectual property is critical to our business and we strive to protect it, including by obtaining and maintaining patent protection in the UnitedStates and internationally for our product candidates, novel biological discoveries, including new targets and applications, and other inventions thatare important to our business. For our product candidates, generally we intend to first pursue patent protection covering both compositions ofmatter and methods of use. As we continue the development of our product candidates, we intend to identify additional means of obtaining patentprotection that would potentially enhance commercial success, including through additional methods of use and biomarker and complementarydiagnostic and/or companion diagnostic related claims.The patent positions of biotechnology companies like ours are generally uncertain and involve complex legal, scientific and factual questions. Inaddition, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpretedafter issuance. Consequently, we may not obtain or maintain adequate patent protection for any of our product candidates. As of February 28,2018, with respect to JTX-2011 patent rights, we own two pending U.S. provisional patent applications, one pending U.S. non-provisionalapplication, twenty-six pending foreign patent applications, and one pending Patent Cooperation Treaty, or PCT, patent application within threepatent families that cover compositions of matter and methods of use and ICOS-related biomarkers, and we do not own any issued patents. As ofFebruary 28, 2018, with respect to JTX-4014 patent rights, we own one pending U.S. non-provisional application, three pending foreign patentapplications, and one pending PCT patent application within one patent family that covers compositions of matter and methods of use, and we donot own any issued patents. We cannot predict whether the patent applications we pursue will issue as patents in any particular jurisdiction orwhether the claims of any issued patents will provide any proprietary protection from competitors. Even if our pending patent applications aregranted as issued patents, those patents, as well as any patents we license from third parties, may be challenged, circumvented or invalidated bythird parties.In addition, we exclusively in-licensed a patent portfolio from Sloan Kettering Institute for Cancer Research, Memorial Sloan Kettering CancerCenter and Memorial Hospital for Cancer, or MSK, and University of Texas MD Anderson Cancer Center, or MD Anderson, consisting of twoissued U.S. patents, one issued Japanese patent, one issued Chinese patent, one pending U.S. patent application, and four pending foreign patentapplications. This licensed patent portfolio covers methods related to the use of an ICOS agonist in combination with blocking agents of certain Tcell inhibitory receptors. The issued patents and the pending patent applications (if issued) licensed from MSK and MD Anderson, if theappropriate maintenance, renewal, annuity or other governmental fees are paid, are expected to expire in 2030, excluding any additional term forpatent term adjustments or patent term extensions.The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in whichwe file, the patent term is 20 years from the earliest date of filing a non-provisional patent application. In the United States, the patent term of apatent that covers an FDA-approved drug may also be eligible for patent term extension, which permits patent term restoration as compensationfor the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five yearsbeyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review.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 onepatent applicable to an approved drug may be extended. Similar provisions are available in Europe and other foreign jurisdictions to extend theterm of a patent that covers an approved drug. In the future, if and when our products receive FDA approval, we expect to apply for patent termextensions on patents covering those products. We plan to seek patent term extensions to any of our issued patents in any jurisdiction wherethese are available, however there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with ourassessment of whether such extensions should be granted, and if granted, the length of such extensions.We also rely on unpatented know-how, inventions and other proprietary information relating to JTX-2011, JTX-4014 and our other future productcandidates. We seek to protect and maintain the confidentiality of proprietary information to protect aspects of our business that are not amenableto, or that we do not consider appropriate for, patent protection. Although we take steps to protect our proprietary information and trade secrets,including through contractual means with our employees and consultants, third parties may independently develop substantially equivalentproprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology. Thus, we may not be able tomeaningfully protect our trade secrets. It is our policy to require our employees, consultants, outside scientific collaborators, sponsoredresearchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us.These12Table of Contentsagreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual duringthe course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. Ouragreements with employees also provide that all inventions conceived by the employee in the course of employment with us or from theemployee’s use of our confidential information are our exclusive property. However, such confidentiality agreements and invention assignmentagreements can be breached and we may not have adequate remedies for any such breach. For a more comprehensive discussion of the risksrelated to our intellectual property, please see “Risk Factors—Risks Related to Intellectual Property.”Exclusive License Agreement with Sloan Kettering Institute for Cancer Research, Memorial Sloan Kettering Cancer Center, and MemorialHospital for Cancer and Allied DiseasesIn September 2015, we amended and restated an exclusive license agreement from December 2013 with Sloan Kettering Institute for CancerResearch, MSK and Memorial Hospital for Cancer and Allied Diseases. Pursuant to this amended and restated license agreement, MSK and MDAnderson granted to us a worldwide exclusive license under certain patents to manufacture, develop and commercialize certain products andservices, including those products for which the use in combination with another product for the treatment of any disease is covered by suchpatents (including, potentially, JTX-2011), and to practice certain methods covered by the patents.Under the license agreement, we are obligated to use commercially reasonable efforts to commercialize at least one licensed product or licensedservice as defined in the license agreement. We also are required to achieve the following developmental milestones by the end of 2019:achievement of initial efficacy of proof of concept, identification of a development candidate, and filing of an IND application with the FDA. As ofSeptember 30, 2016, we have achieved all of these milestones.In connection with the license agreement, we issued to MSK and MD Anderson an aggregate of 60,974 shares of our common stock. We also paidan upfront license fee of $30,000 to MSK and MD Anderson. Commencing on the third anniversary of the effective date of the license agreement,we must pay an annual maintenance fee ranging in the mid-four figures to the mid-five figures. The annual maintenance fee is fully credited againstthe royalty payments for the same year or any subsequent year or any other amount due under the license agreement. We are obligated to payMSK milestone payments of up to $3,475,000 for the first and second licensed products to achieve certain development and marketing approvalmilestones, including up to $2,725,000 for the first licensed product to achieve such developmental and marketing approval milestones. On acountry-by-country basis and licensed product-by-licensed product or licensed service-by-licensed service basis, we are also obligated to payMSK a low single-digit percentage royalty on net sales of licensed products or licensed services, to the extent used in combination with anotherproduct for the treatment of any disease covered by the applicable patents, until the earlier of the expiration of the last valid patent claim coveringsuch licensed product or licensed service in such country or twelve years after the first commercial sale of such licensed product or licensedservice in such country. If we sublicense our rights under our license agreement with MSK, we would be obligated to pay MSK a low double-digitpercentage royalty of the total gross proceeds we receive in consideration of the grant of the sublicense, excluding royalties, research anddevelopment funding, payments for equity or debt securities and certain other expenses we have incurred that are reimbursed by the sublicensee.Unless terminated earlier, the license agreement expires on the date that we no longer have any royalty payment obligations under the licenseagreement. We may terminate the license agreement for convenience in its entirety upon 30 days’ prior written notice to MSK and MD Anderson.Either party may terminate the license agreement in its entirety in the event of an uncured material breach or the bankruptcy, insolvency,dissolution or winding up of the other party which is not dismissed or cured within a set period of time. If we terminate the license agreementbecause of MSK’s and MD Anderson’s uncured breach or insolvency, we will retain a non-exclusive, perpetual, irrevocable, fully paid-up, royalty-free worldwide license to the licensed patents. Upon expiration of our obligation to pay royalties for a licensed product or service in a country, ourlicense to the licensed patents for such licensed product or service will become exclusive, perpetual, irrevocable, fully paid-up and royalty-free insuch country.13Table of ContentsGovernment RegulationGovernment authorities in the United States at the federal, state and local level and in other countries regulate, among other things, the research,development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution,post-approval monitoring and reporting, marketing and export and import of drug and biological products, such as JTX-2011, JTX-4014 and anyfuture product candidates. Generally, before a new drug or biologic can be marketed, considerable data demonstrating its quality, safety andefficacy must be obtained, organized into a format specific for each regulatory authority, submitted for review and approved by the regulatoryauthority.U.S. Drug DevelopmentIn the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and its implementing regulations andregulates biologics under the FDCA, the Public Health Service Act, or PHSA, and their implementing regulations. Both drugs and biologics also aresubject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliancewith appropriate federal, state, local and foreign statutes and regulations requires 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 post-market maysubject an applicant to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approvepending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product recalls or market withdrawals, product seizures,total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement and civil orcriminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.JTX-2011, JTX-4014 and any future product candidates must be approved by the FDA through either a New Drug Application, or NDA, or BiologicsLicense Application, or BLA, process before they may be legally marketed in the United States. We expect JTX-2011, JTX-4014 and other futureproduct candidates to be regulated by the FDA as biologics and require the submission of a BLA prior be being marketed in the United States. Theprocess generally involves the following:•completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with goodlaboratory practice, or GLP, requirements;•submission to the FDA of an IND application, which must become effective before human clinical trials may begin;•approval by an independent institutional review board, or IRB, or ethics committee at each clinical trial site before each trial may beinitiated;•performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice, orGCP, requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for eachproposed indication;•submission to the FDA of an NDA or BLA;•determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the filing for review;•satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug or biologic will beproduced to assess compliance with current good manufacturing practices, or cGMP, requirements to assure that the facilities, methodsand controls are adequate to preserve the drug or biologic’s identity, strength, quality and purity;•potential FDA audit of the preclinical and/or clinical trial sites that generated the data in support of the NDA or BLA; and•FDA review and approval of the NDA or BLA, including consideration of the views of any FDA advisory committee, prior to anycommercial marketing or sale of the drug or biologic in the United States.Preclinical Studies and INDThe preclinical developmental stage generally involves laboratory evaluations of product chemistry, formulation and stability, as well as in vitro andanimal studies to evaluate toxicity, assess the potential for adverse events and, in some cases, establish a rationale for therapeutic use. Theconduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies. An INDsponsor must submit14Table of Contentsthe results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans forclinical studies, among other things, to the FDA as part of an IND. An IND is an exemption from the FDCA that allows an unapproved productcandidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer suchinvestigational product to humans. Some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity,may continue after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time, theFDA raises concerns or questions related to one or more proposed clinical trials and places the trial on clinical hold. In such a case, the INDsponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not resultin the FDA allowing clinical trials to commence.Clinical TrialsThe clinical stage of development involves the administration of the investigational product to healthy volunteers or patients under the supervisionof qualified investigators in accordance with GCP requirements, including the requirement that all research subjects provide their informed consent.Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selectionand exclusion criteria and the parameters to be used to monitor subject safety and assess efficacy. Each protocol, and any subsequentamendments to the protocol, must be submitted to the FDA as part of the IND. Furthermore, an IRB for each institution at which the clinical trialwill be conducted must review and approve the protocol before a clinical trial commences at such institution, approve the information regarding thetrial and the consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trialuntil completed. Additionally, some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as adata safety monitoring board or committee, or DSMB. This group provides authorization as to whether or not a trial may move forward atdesignated check points based on available data from the study. There also are requirements governing the reporting of ongoing clinical trials andcompleted clinical trial results to public registries.Clinical trials generally are conducted in three sequential phases, known as Phase I, Phase II and Phase III, which may overlap.•Phase I clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to asingle dose and then multiple doses of the product candidate. The primary purpose of these clinical trials is to assess the metabolism,pharmacologic action, side effect tolerability and safety of the drug.•Phase II clinical trials involve studies in disease-affected patients to determine the dose required to produce the desired benefits. At thesame time, safety and further PK and PD information is collected, possible adverse effects and safety risks are identified and apreliminary evaluation of efficacy is conducted.•Phase III clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary todemonstrate the effectiveness of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship ofthe product and provide an adequate basis for product approval. These trials may include comparisons with placebo and/or othercomparator treatments. The duration of treatment is often extended to mimic the actual use of a product during marketing.Post-approval trials, sometimes referred to as Phase IV clinical trials, may be conducted after initial marketing approval. These trials are used togain additional experience from the treatment of patients in the intended therapeutic indication.Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and written IND safety reports must besubmitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from animal or in vitro testing or otherstudies that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reactionover that listed in the protocol or investigator brochure.Clinical trials may not be completed successfully within any specified period, if at all. The FDA or the sponsor may suspend or terminate a clinicaltrial 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 withthe IRB’s requirements or if the drug or biologic has been associated with unexpected serious harm to patients. Results from one trial are notnecessarily predictive of results from later trials. Concurrent with clinical trials, companies usually complete15Table of Contentsadditional animal studies and must develop additional information about the chemistry and physical characteristics of the drug or biologic as wellas finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing processmust be capable of consistently producing quality batches of the product and, among other things, companies must develop methods for testingthe identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studiesmust be conducted to demonstrate that JTX-2011, JTX-4014 and any future product candidates do not undergo unacceptable deterioration overtheir shelf life.NDA/BLA and FDA Review ProcessThe results of preclinical studies and clinical trials, together with other detailed information, including proposed labeling, chemistry andmanufacturing information, are submitted to the FDA as part of an NDA or BLA. The NDA or BLA is a request for approval to market the drug orbiologic for one or more specified indications and must contain proof of safety and efficacy for a drug or safety, purity and potency for a biologic.The FDA must approve the NDA or BLA before a drug or biologic may be marketed in the United States.Under the Prescription Drug User Fee Act, or PDUFA, as amended, each NDA or BLA must be accompanied by a user fee. Under federal law, thesubmission of most NDAs and BLAs is subject to a substantial application user fee, currently $2,421,495 for an application requiring clinical datafor fiscal year 2018, and the sponsor of an approved NDA or BLA is also subject to an annual product or program fees, currently $304,162 perprogram. These fees may be increased or decreased annually and fee waivers, reductions or deferrals are available in certain circumstances.The FDA reviews each NDA and BLA for administrative completeness and reviewability within 60 days following receipt by the FDA of the NDA orBLA. If the submission is found to be complete, the FDA will file the NDA or BLA, triggering a full review. The FDA may refuse to file any NDA orBLA that it deems incomplete or not properly reviewable at the time of submission. The established goal of the FDA is to review applications withinten months of the filing date for a new molecular-entity NDA or original BLA and within six months from the filing date for a new molecular-entityNDA or original BLA designated for priority review. The FDA does not always meet its goal dates for standard and priority NDAs or BLAs, and thereview process is often extended by FDA requests for additional information or clarification.Before approving an NDA or BLA, the FDA may inspect the manufacturing facilities for the new product and will not approve the product unless thefacilities comply with cGMP requirements. The FDA may refer applications for novel drug products or drug products which present difficultquestions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and arecommendation as to whether the application should be approved and under what conditions, if any. The FDA is not bound by recommendationsof an advisory committee, but it considers such recommendations when making decisions on approval. Additionally, the FDA may audit data fromclinical trials to ensure compliance with GCP requirements and likely will reanalyze the clinical trial data, which could result in extensivediscussions between the FDA and the applicant during the review process. After the FDA evaluates an NDA or BLA, it will issue an approval letteror a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specificindications. A Complete Response Letter describes additional work that must be done before the application can be approved, such as requiringadditional clinical data, additional pivotal Phase III clinical trial(s) and/or other significant and time-consuming requirements related to clinical trials,preclinical studies or manufacturing. Even if such data and information are submitted, the FDA may decide that the NDA or BLA does not satisfythe criteria for approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret thesame data.Orphan Drug DesignationUnder the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition,which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in theUnited States and for which there is no reasonable expectation that the cost of developing and making the product available in the United Statesfor this type of disease or condition will be recovered from sales of the product.Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the identity of thetherapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in orshorten the duration of the regulatory review and approval process. These circumstances are where another product shows clinical superiority tothe product with orphan drug exclusivity because it is shown to be safer, more effective or makes a major contribution to patient16Table of Contentscare. This is the case despite an earlier court opinion holding that the Orphan Drug Act unambiguously required the FDA to recognize orphanexclusivity regardless of a showing of clinical superiority.If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has suchdesignation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market thesame drug for the same indication for seven years from the date of such approval, except in limited circumstances.Competitors may also receive approval of either a different product for the same indication or the same product for a different indication but thatcould be used off-label in the orphan indication. Orphan drug exclusivity also could block the approval of one of our products if a competitorobtains approval before we do for the same product, as defined by the FDA, for the same indication we are seeking approval, or if one of ourproducts is determined to be contained within the scope of the competitor’s product for the same indication or disease. If one of our productsdesignated as an orphan drug receives marketing approval for an indication broader than that which is designated, it may not be entitled to orphandrug exclusivity. Orphan drug status in the European Union has similar, but not identical, requirements and benefits.Expedited Development and Review ProgramsThe FDA has various programs, including a fast track program, priority review and accelerated approval, that are intended to expedite or facilitatethe process for reviewing new drugs and biologics that, generally, are intended to treat a serious or life-threatening condition, demonstrate thepotential to address unmet medical needs and that offer meaningful benefits over existing treatments. The fast track program is designed tofacilitate the development and review of drugs to treat serious or life-threatening diseases or conditions and fulfill unmet needs. Priority review isdesigned to give drugs that offer major advances in treatment or provide treatment where no adequate therapy exists. The FDA will attempt todirect additional resources to the evaluation of an application for a new drug or biologic designated for priority review in an effort to facilitate thereview.A candidate product may also be eligible for accelerated approval if it treats a serious or life-threatening condition and generally provides ameaningful advantage over available therapies. In addition, the investigational product must demonstrate an effect on a surrogate endpoint that isreasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM,which is reasonably likely to predict an effect on IMM or other clinical benefit. As a condition of approval, the FDA may require that a sponsor of adrug or biologic receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials.Additionally, a drug or biologic may be eligible for designation as a breakthrough therapy if the product is intended, alone or in combination with oneor more other drugs or biologics, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product maydemonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints. The benefits ofbreakthrough therapy designation include the same benefits as fast track designation, plus intensive guidance from the FDA to ensure an efficientdrug development program. Fast track designation, priority review, accelerated approval and breakthrough therapy designation do not change thestandards for approval, but may expedite the development or approval process.Pediatric InformationUnder the Pediatric Research Equity Act, an NDA or BLA or supplement to a NDA or BLA must contain data to assess the safety and efficacy ofthe drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatricsubpopulation for which the product is safe and effective. The assessment must also support dosing and administration for each pediatricsubpopulation for which the product is safe and effective. The Food and Drug Administration Safety and Innovation Act, or FDASIA, requires thesubmission of a pediatric study plan prior to the assessment of data, which must contain proposed pediatric study, including study design andobjectives, any deferral or waiver requests, and any other information required by regulation. The FDA may grant deferrals for submission ofpediatric data until after the approval of the drug for use in adults or full or partial waivers from the pediatric data requirements. Additionalrequirements and procedures relating to deferral requests and requests for extensions of deferrals are contained in FDASIA.Post-marketing RequirementsFollowing approval of a new product, the manufacturer and the approved product are subject to continuing regulation by the FDA, including, amongother things, monitoring and record-keeping activities, reporting of adverse experiences, complying with promotion and advertising requirements,which include restrictions on promoting drugs17Table of Contentsfor unapproved uses or patient populations (known as “off-label use”) and limitations on industry-sponsored scientific and educational activities.The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. The FDA and other agenciesactively enforce the laws and regulations prohibiting the promotion of off label uses, and a company that is found to have improperly promoted offlabel uses may be subject to significant liability. If a company is found to have promoted off-label uses, it may become subject to adverse publicrelations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of theDepartment of Health and Human Services, as well as state authorities.The FDA may also place other conditions on approvals, including imposing limitations on the uses for which the product may be marketed,requiring that warning statements be included in the product labeling, requiring that additional studies be conducted following approval as acondition of the approval, imposing restrictions and conditions on product distribution, prescribing or dispensing in the form of a Risk Evaluationand Mitigation Strategy, or REMS, or otherwise limiting the scope of any approval. Product approvals may be withdrawn for non-compliance withregulatory requirements or if problems occur following initial marketing.FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMP regulations. We rely, andexpect to continue to rely, on third parties for the production of clinical and commercial quantities of our products in accordance with cGMPregulations. These manufacturers must comply with cGMP regulations that require, among other things, quality control and quality assurance, themaintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP. Manufacturers and otherentities involved in the manufacture and distribution of approved drugs or biologics are required to register their establishments with the FDA andcertain state agencies. The discovery of violative conditions, including failure to conform to cGMP regulations, could result in enforcement actions,and the discovery of problems with a product after approval may result in restrictions on a product, manufacturer or holder of an approved NDA orBLA, including recall.Companion Diagnostics and Complementary DiagnosticsWe believe that the success of our product candidates may depend, in part, on the development and commercialization of either a companiondiagnostic or complementary diagnostic. Companion diagnostics and complementary diagnostics can identify patients who are most likely tobenefit from a particular therapeutic product, identify patients likely to be at increased risk for serious side effects as a result of treatment with aparticular therapeutic product, or monitor response to treatment with a particular therapeutic product for the purpose of adjusting treatment toachieve improved safety or effectiveness. Companion diagnostics and complementary diagnostics are regulated as medical devices by the FDAand, as such, require either clearance or approval prior to commercialization. The level of risk combined with available controls to mitigate riskdetermines whether a companion diagnostic device requires Premarket Approval Application approval or is cleared through the 510(k) premarketnotification process. Under FDA guidance, for a novel therapeutic product for which a companion diagnostic device is essential for the safe andeffective use of the product, the companion diagnostic device should be developed and approved or 510(k)-cleared contemporaneously with thetherapeutic. The use of the companion diagnostic device will be stipulated in the labeling of the therapeutic product. This is also true for acomplementary diagnostic, although it is not a prerequisite for receiving the therapeutic.Other Regulatory MattersManufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities inthe United States in addition to the FDA, including the Centers for Medicare & Medicaid Services, other divisions of the Department of Health andHuman Services, the Department of Justice, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal TradeCommission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments.For example, in the United States, sales, marketing and scientific and educational programs also must comply with state and federal fraud andabuse laws. These laws include the federal Anti-Kickback Statute, which makes it illegal for any person, including a prescription drug manufacturer(or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce or rewardreferrals, including the purchase, recommendation, order or prescription of a particular drug, for which payment may be made under a federalhealthcare program, such as Medicare or Medicaid.18Table of ContentsAlthough we would not submit claims directly to payors, manufacturers also can be held liable under the federal False Claims Act, which prohibitsanyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for itemsor services, including drugs or biologics, that are false or fraudulent, claims for items or services not provided as claimed or claims for medicallyunnecessary items or services. In addition, our future activities relating to the reporting of wholesaler or estimated retail prices for our products, thereporting of prices used to calculate Medicaid rebate information and other information affecting federal, state and third-party reimbursement for ourproducts, and the sale and marketing of our products, are subject to scrutiny under this law.Pricing and rebate programs must comply with the Medicaid rebate requirements of the U.S. Omnibus Budget Reconciliation Act of 1990 and morerecent requirements in the Affordable Care Act. The distribution of pharmaceutical products is subject to additional requirements and regulations,including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceuticalproducts.The failure to comply with any of these laws or regulatory requirements subjects us to possible legal or regulatory action. Depending on thecircumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, requestsfor recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals or refusal to allow a firm to enterinto supply contracts, including government contracts. Any action against us for violation of these laws, even if we successfully defend against it,could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Prohibitions orrestrictions on sales or withdrawal of future products marketed by us could materially affect our business in an adverse way.Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example:(i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products;or (iv) additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of our business.U.S. Patent Term Restoration and Marketing ExclusivityDepending upon the timing, duration and specifics of FDA approval of JTX-2011, JTX-4014 and any future product candidates, some of our U.S.patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonlyreferred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit restoration of the patent term of up to five years ascompensation for patent term lost during product development and FDA regulatory review process. Patent term restoration, however, cannotextend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The United States Patent and TrademarkOffice, or USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future,we may apply for restoration of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date,depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA.Market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of a NDA for a new chemical entity; adrug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the moleculeor ion responsible for the action of the drug substance.An abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, an FDA-licensed reference biologicalproduct was created by the Biologics Price Competition and Innovation Act of 2009, or BPCI Act, as part of the Affordable Care Act. Biosimilarity,which requires that the biological product be highly similar to the reference product notwithstanding minor differences in clinically inactivecomponents and that there be no clinically meaningful differences between the product and the reference product in terms of safety, purity andpotency, can be shown through analytical studies, animal studies and a clinical trial or trials. Complexities associated with the larger, and oftenmore complex, structure of biological products as compared to small molecule drugs, as well as the processes by which such products aremanufactured, pose significant hurdles to implementation that are still being worked out by the FDA.A reference biological product is granted twelve years of data exclusivity from the time of first licensure of the product, and the FDA will not acceptan application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensureof the reference product. “First licensure” typically means the initial date the particular product at issue was licensed in the United States. It isnecessary to19Table of Contentsdetermine whether a new product includes a modification to the structure of a previously licensed product that results in a change in safety, purity,or potency to assess whether the licensure of the new product is a first licensure that triggers its own period of exclusivity and, for subsequentapplications, such determinations are made a case-by-case basis with data submitted by the sponsor. As of January 1, 2018, the FDA hasapproved nine biosimilar products for use in the United States. No interchangeable biosimilars have been approved.Pediatric exclusivity is another type of regulatory market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months toexisting regulatory exclusivity periods or patent protection. This six-month exclusivity may be granted based on the voluntary completion of apediatric trial in accordance with an FDA-issued “Written Request” for such a trial. Furthermore, a biological product seeking licensure as biosimilarto or interchangeable with a reference product indicated for a rare disease or condition and granted seven years of orphan drug exclusivity may notbe licensed by the FDA for the protected orphan indication until after the expiration of the seven-year orphan drug exclusivity period or the 12-yearreference product exclusivity, whichever is later.Foreign RegulationAs in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of ourfuture products and medicinal products can be marketed only if a marketing authorization from the competent regulatory agencies has beenobtained.Certain countries outside of the United States have a process that requires the submission of a clinical study application much like the IND prior tothe commencement of human clinical studies. In the European Union, for example, a CTA must be submitted for each clinical trial to the nationalhealth authority and an independent ethics committee in each country in which the company intends to conduct clinical trials. Once the CTA isapproved in accordance with a country’s requirements, the clinical study may proceed. In all cases, the clinical trials must be conducted inaccordance with GCPs and other applicable regulatory requirements and ethical principles.To obtain regulatory approval of an investigational product under European Union regulatory systems, we must submit a marketing authorizationapplication under either a centralized or decentralized procedure. The centralized procedure is compulsory for medicinal products produced bybiotechnology. The application used to file the BLA in the United States is similar to that required in the European Union, with the exception of,among other things, region-specific document requirements.The European Union also provides opportunities for market exclusivity. For example, upon receiving marketing authorization, innovative medicinalproducts generally receive eight years of data exclusivity and an additional two years of market exclusivity. If grated, data exclusivity preventsregulatory authorities in the European Union from referencing the innovator’s data to assess a generic or biosimilar application. There is noguarantee that a product will be considered by the European Union’s regulatory authorities to be an innovative medicinal product, and productsmay not qualify for data exclusivity. Products receiving orphan designation in the European Union can receive ten years of market exclusivity,during which time no similar medicinal product for the same indication may be placed on the market. An orphan product can also obtain anadditional two years of market exclusivity in the European Union for pediatric studies. No extension to any supplementary protection certificate canbe granted on the basis of pediatric studies for orphan indications.If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal ofregulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.ReimbursementSales of our products will depend, in part, on the extent to which our products will be covered by third-party payors, such as government healthprograms, commercial insurance and managed healthcare organizations. In the United States, no uniform policy of coverage and reimbursementfor drug or biological products exists. Accordingly, decisions regarding the extent of coverage and amount of reimbursement to be provided for anyof our products will be made on a payor-by-payor basis. As a result, the coverage determination process is often a time-consuming and costlyprocess that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance thatcoverage and adequate reimbursement will be obtained.The United States government, state legislatures and foreign governments have shown significant interest in implementing cost containmentprograms to limit the growth of government-paid health care costs, including price-controls, restrictions on reimbursement and requirements forsubstitution of generic products for branded prescription drugs. If we obtain approval in the future to market any our product candidates, we mayseek approval20Table of Contentsand coverage for those products under Medicaid, Medicare and the Public Health Service pharmaceutical pricing program and may seek approvalto sell the products to federal agencies. Adoption of general controls and measures, coupled with the tightening of restrictive policies injurisdictions with existing controls and measures, could limit payments for pharmaceutical drugs.Medicaid is a joint federal and state program that is administered by the states for low income and disabled beneficiaries. The Medicaid DrugRebate Program requires pharmaceutical manufacturers to pay a rebate for each product reimbursed by the state Medicaid programs. The amountof the rebate for each product is set by law and may be subject to an additional discount if certain pricing increases more than inflation.Medicare is a federal program that is administered by the federal government. The program covers individuals age 65 and over as well as thosewith certain disabilities. Medicare Part D provides coverage to enrolled Medicare patients for self-administered drugs (i.e., drugs that are notadministered by a physician). Medicare Part D is administered by private prescription drug plans approved by the U.S. government and each drugplan establishes its own Medicare Part D formulary for prescription drug coverage and pricing, which the drug plan may modify from time to time.Medicare Part B covers most injectable drugs given in an in-patient setting, and some drugs administered by a licensed medical provider inhospital outpatient departments and doctors’ offices. Medicare Part B is administered by Medicare Administrative Contractors, which generallyhave the responsibility of making coverage decision. Subject to certain payment adjustments and limits, Medicare generally pays for Part Bcovered drugs based on a percentage of a manufacturer-reported average sales price.As noted above, the marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government andthird-party payors fail to provide adequate coverage and reimbursement. An increasing emphasis on cost containment measures in the UnitedStates has increased and we expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-partyreimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for whichwe receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.In addition, in most foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirementsgoverning drug pricing and reimbursement vary widely from country to country. There can be no assurance that any country that has price controlsor reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.Historically, products launched in the European Union do not follow price structures of the United States and generally prices tend to besignificantly lower.Healthcare ReformA primary trend in the U.S. healthcare industry and elsewhere is cost containment. There have been a number of federal and state proposalsduring the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugsand other medical products, government control and other changes to the healthcare system in the United States. By way of example, the UnitedStates and state governments continue to propose and pass legislation designed to reduce the cost of healthcare. In March 2010, the UnitedStates Congress enacted the Affordable Care Act, or ACA, which, among other things, includes changes to the coverage and payment forproducts under government health care programs.Since enactment of the ACA, there have been numerous legal challenges and Congressional actions to repeal and replace provisions of the law.For example, with enactment of the Tax Cuts and Jobs Act of 2017, Congress repealed the “individual mandate.” The repeal of this provision,which requires most Americans to carry a minimal level of health insurance, will become effective in 2019. According to the Congressional BudgetOffice, the repeal of the individual mandate will cause 13 million fewer Americans to be insured in 2027 and premiums in insurance markets mayrise.Further, there have been several recent U.S. congressional inquiries and proposed federal and proposed and enacted state legislation designed to,among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reducethe costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. At the federal level, Congressand the current administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drugcosts. At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to controlpharmaceutical and biological product pricing, including price or21Table of Contentspatient 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.EmployeesAs of December 31, 2017, we had 112 full-time employees. Of these full-time employees, 42 have Ph.D. or M.D. degrees and 87 are engaged inresearch and development activities. None of our employees are represented by labor unions or covered by collective bargaining agreements. Weconsider our relationship with our employees to be good.Corporate InformationWe were incorporated under the laws of the State of Delaware in March 2012. Our principal offices are located at 780 Memorial Drive, Cambridge,MA 02139, and our telephone number is (857) 259-3840.We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an emerging growthcompany until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, (b) in which we havetotal annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value ofour common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and (ii) the date on which we have issued morethan $1.0 billion in non-convertible debt during the prior three-year period.We view our operations and measure our business as one reportable segment operating in the United States. Please see Note 2 to ourconsolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. Additional information requiredby this item is incorporated herein by reference to Part II Item 6 of this Annual Report on Form 10-K.Our website address is www.jouncetx.com. Our website and the information contained on, or that can be accessed through, the website will not bedeemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K. Our website is included as aninactive textual reference only. You should not rely on any such information in making your decision whether to purchase our common stock.Available InformationWe file annual, quarterly, and current reports, proxy statements and other documents with the Securities and Exchange Commission, or the SEC,under the Securities Exchange Act of 1934, as amended, or the Exchange Act. The public may read and copy any materials that we file with theSEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of thePublic Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports, proxy andinformation statements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain anydocuments that we file with the SEC at www.sec.gov.Copies of each of our filings with the SEC on Form 10-K, Form 10-Q and Form 8-K and all amendments to those reports, can be viewed anddownloaded free of charge at our website, www.jouncetx.com as soon as reasonably practicable after the reports and amendments areelectronically filed with, or otherwise furnished to, the SEC.Our code of conduct, corporate governance guidelines and the charters of our Audit Committee, Compensation Committee and Nominating andCorporate Governance Committee are available through our website at www.jouncetx.com.22Table of ContentsItem 1A. Risk FactorsOur business is subject to numerous risks. The following important factors, among others, could cause our actual results to differ materially fromthose expressed in forward-looking statements made by us or on our behalf in this Annual Report on Form 10-K and other filings with the SEC,press releases, communications with investors and oral statements. Actual future results may differ materially from those anticipated in ourforward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, futureevents or otherwise.Risks Related to Product Development and Regulatory ProcessWe are early in our development efforts. Our lead product candidate, JTX-2011, is in clinical development and our other productcandidate, JTX-4014, and other future product candidates are in preclinical or earlier stages of development. If we are unable to advanceJTX-2011 through clinical development, or advance JTX-4014 or any other future product candidates to clinical development, or obtainmarketing approval and ultimately commercialize any product candidates or experience significant delays in doing so, our business willbe materially harmed.We are early in our development efforts, with only our lead product candidate, JTX-2011, in clinical development and our other product candidate,JTX-4014, and other future product candidates in preclinical or earlier stages of development. We have invested substantially all of our efforts andfinancial resources in the identification of targets and early stage, preclinical and clinical development of monoclonal antibodies, including thedevelopment of our lead product candidate, JTX-2011, and JTX-4014. JTX-2011 is currently in clinical development in an adaptive Phase I/IIclinical trial. The monotherapy and combination with nivolumab Phase II portions of this clinical trial were initiated in April 2017 and July of 2017,respectively.Our other efforts have been invested in early stage, preclinical and earlier development programs. Our ability to generate product revenues, whichwe do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of JTX-2011, JTX-4014 or any other future product candidates, which may never occur. We currently generate no revenues from sales of any products,and we may never be able to develop or commercialize a marketable product. JTX-2011, JTX-4014 and any other future product candidates willrequire additional preclinical and clinical development, management of clinical, preclinical and manufacturing activities, marketing approval in theUnited States and other markets, demonstrating effectiveness to pricing and reimbursement authorities, obtaining sufficient manufacturing supplyfor both clinical development and commercial production, building of a commercial organization, and substantial investment and significantmarketing efforts before we generate any revenues from product sales. In addition, our product development programs contemplate thedevelopment of complementary diagnostics and/or companion diagnostics, which are assays or tests to identify an appropriate patient population.Complementary diagnostics and companion diagnostics are subject to regulation as medical devices and, if there are no adequate complementarydiagnostics and/or companion diagnostics currently on the market for our product candidates, we may elect to advance a diagnostic and thatdiagnostic would have to be approved or cleared for marketing by the FDA or comparable foreign regulatory agencies before we couldcommercialize it. The success of JTX-2011, JTX-4014 and any other future product candidates will depend on several factors, including thefollowing:•successful completion of preclinical studies of JTX-4014 and any future product candidates;•successful completion of non-clinical toxicology studies that may be required for regulatory approval of JTX-2011;•acceptance of INDs for our planned clinical trials or future clinical trials;•successful enrollment and completion of clinical trials;•demonstration of a benefit/risk profile for JTX-2011, JTX-4014 and any other future product candidates that is sufficient to support asuccessful BLA;•successful development and marketing approval and clearance of complementary diagnostics and/or companion diagnostics for use withJTX-2011, JTX-4014 or any other future product candidates, if applicable;•receipt and maintenance of marketing approvals from applicable regulatory authorities;•approval by national pricing and reimbursement agencies (such as NICE, National Institute for Health Care and Excellence in the UnitedKingdom);23Table of Contents•establishing agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if ourproduct candidate is approved;•obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates;•launching commercial sales of JTX-2011, JTX-4014 or any other future product candidates, if and when approved;•acceptance of our product candidates, if and when approved, by patients, the medical community and third-party payors;•effectively competing with other therapies;•obtaining and maintaining healthcare coverage and adequate reimbursement;•enforcing and defending intellectual property rights and claims;•successful completion of clinical confirmatory trials to verify clinical benefit, if applicable; and•maintaining a continued acceptable safety profile of the product candidates following approval.If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfullycommercialize JTX-2011, JTX-4014 or any other future product candidates, which would materially harm our business. If we do not receivemarketing approvals for JTX-2011, JTX-4014 or any other future product candidates, we may not be able to continue our operations.We rely on our Translational Science Platform to identify and develop product candidates. Our competitive position could be materiallyharmed if our competitors develop a platform similar to our Translational Science Platform and develop rival product candidates.We rely on unpatented know-how, inventions and other proprietary information, to maintain our competitive position. We consider know-how to beour primary intellectual property with respect to our Translational Science Platform. Know-how can be difficult to protect. In particular, we anticipatethat with respect to this platform, this know-how may over time be disseminated within the industry through independent development, thepublication of journal articles describing the methodology, and the movement of skilled personnel.We cannot rule out that our competitors may have or obtain the knowledge necessary to analyze and characterize tumors for the purpose ofidentifying and developing products that could compete with the product candidates we develop. Our competitors may also have significantlygreater financial, product development, technical, and human resources and access to other human tumors than we do and may have significantlygreater experience in using translational science methodology to identify and develop product candidates.We may not be able to prohibit our competitors from using translational science methods to develop product candidates, including such methodsthat are the same as or similar to our own. If our competitors use translational science methods to identify and develop products that compete withJTX-2011, JTX-4014 or any future product candidates we develop, our ability to develop and market a promising product or product candidate maydiminish substantially, which could have a material adverse effect on our business prospects, financial condition, and results of operations.Clinical product development involves a lengthy and expensive process, with an uncertain outcome. We will incur additional costs inconnection with, and may experience delays, in completing, or ultimately be unable to complete, the development andcommercialization of JTX-2011, JTX-4014, any other future product candidates, and any complementary diagnostics and/or companiondiagnostics.JTX-2011, our lead product candidate, is in clinical development and JTX-4014, our other product candidate, and other future product candidatesare in preclinical or earlier stages of development. The risk of failure at any stage of clinical or preclinical development is high. It is impossible topredict when or if JTX-2011, JTX-4014 and any other future product candidates will prove effective and safe in humans and will receive marketingapproval. Before obtaining marketing approval from regulatory authorities for the sale of JTX-2011, JTX-4014 or any other future productcandidates, we must complete preclinical studies and then conduct extensive clinical trials to demonstrate the safety and efficacy of JTX-2011,JTX-4014 and any other future product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many yearsto complete or may be delayed and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. Theoutcome of preclinical development testing and early clinical trials may not be predictive of the success of later clinical trials,24Table of Contentsand interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varyinginterpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies andclinical trials have nonetheless failed to obtain marketing approval of their product candidates. Our preclinical studies and clinical trials may not besuccessful.The FDA or comparable foreign regulatory authorities could change their position on the acceptability of our trial designs or the clinical endpointsselected, which may require us to complete more preclinical studies or provide additional data before continuing clinical trials. In the event we arerequired to satisfy additional FDA requests, the completion of our clinical trials for JTX-2011 may be delayed. Successful completion of our clinicaltrials is a prerequisite to submitting a BLA to the FDA and a Marketing Authorization Application, or MAA, in Europe for JTX-2011, JTX-4014 andany other future product candidates and, consequently, the ultimate approval and commercial marketing of JTX-2011, JTX-4014 and our otherfuture product candidates. We do not know whether any of our clinical trials will be completed on schedule, if at all.We may experience delays in completing our preclinical studies and initiating or completing clinical trials, and we may experience numerousunforeseen events during, or as a result of, any potential future clinical trials that could delay or prevent our ability to receive marketing approval ofJTX-2011, JTX-4014 and any other future product candidates, including:•regulators, IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at aprospective trial site;•we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospectivecontract research organizations, or CROs;•clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additionalpreclinical studies or clinical trials or abandon product development programs;•the number of patients required for clinical trials may be larger than we anticipate;•it may be difficult to enroll a sufficient number of patients with a predictive biomarker or enrollment in these clinical trials may be slowerthan we anticipate or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than weanticipate;•our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, orat all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites orinvestigators;•we may elect to, or regulators or IRBs or ethics committees may require that we or our investigators, suspend or terminate clinicalresearch for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed tounreasonable and significant health risks;•the cost of clinical trials may be greater than we anticipate;•the supply or quality of materials or other materials necessary to conduct clinical trials may be insufficient or inadequate;•the size of the patient population required to validate our JTX-2011 predictive biomarker strategy may be larger than we anticipate;•competitors may obtain regulatory approval ahead of us for compounds similar to ours, preventing us from obtaining regulatory approvaldespite positive clinical data;•our product candidates may have undesirable side effects or other unexpected characteristics, causing us to suspend or terminate thetrials, or reports may arise from preclinical or clinical testing of other similar cancer therapies that raise safety or efficacy concerns aboutour product candidates; and•the FDA or other regulatory authorities may require us to submit additional data or impose other requirements before permitting us toinitiate or continue a clinical trial.We could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are beingconducted or ethics committees, or by the FDA or other regulatory authorities, or recommended for suspension or termination by the Data SafetyMonitoring Board, or DSMB, for such trial. Such authorities or we may impose such a suspension or termination due to a number of factors,including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the25Table of Contentsclinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issuesor adverse side effects, including those issues or effects seen in other drugs or drug candidates in the class to which our drug candidates belong,failure to demonstrate a benefit from using a product, changes in governmental regulations or lack of adequate funding to continue the clinical trial.Many of the factors that result in a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketingapproval of our product candidates. Further, regulatory authorities may disagree with our clinical trial design and our interpretation of data fromclinical trials, or may change the requirements for approval even after such authorities have reviewed and commented on the design for our clinicaltrials.If we are required to conduct additional clinical trials or other testing, if the results of these trials or tests are not positive or are only modestlypositive or if there are safety concerns, or if we are unable to successfully complete clinical trials or other testing of JTX-2011, JTX-4014 and anyother future product candidates, we may:•be delayed in obtaining marketing approval for our product candidates;•not obtain marketing approval at all;•obtain approval for indications or patient populations that are not as broad as intended or desired;•be subject to post-marketing testing requirements; or•have the product removed from the market after obtaining marketing approval.Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any of ourclinical trials will need to be restructured, will be completed on schedule, or will begin as planned, if at all. Any delays in our preclinical or futureclinical development programs may harm our business, financial condition and prospects significantly.If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise beadversely affected.The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient numberof patients who remain in the study until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety ofreasons. The enrollment of patients depends on many factors, including:•the patient eligibility criteria defined in the protocol;•our ability to identify and enroll sufficient number of patients with a predictive biomarker;•the size of the patient population required for analysis of the trial’s primary endpoints;•the proximity of patients to study sites;•the design of the trial;•our ability to recruit clinical trial investigators with the appropriate competencies and experience;•clinicians’ and patients’ perceptions of the potential advantages of the product candidate being studied in relation to other availabletherapies;•our ability to obtain and maintain patient consents for participation in our clinical trials and, where appropriate, biopsies for future patientenrichment efforts; and•the risk that patients enrolled in clinical trials will drop out of the trials before completion or, because they are late-stage cancer patients,will not survive the full terms of the clinical trials.In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as JTX-2011, JTX-4014 and any other future product candidates. This competition will reduce the number and types of patients available to us, because somepatients who might have opted to enroll in our trials may instead opt to enroll in a trial conducted by one of our competitors. Since the number ofqualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of ourcompetitors use, which will reduce the number of patients who are available for our clinical trials at such sites. Moreover, because JTX-2011, JTX-4014 and any other future product candidates represent a departure from more commonly used methods for cancer treatment, potential patientsand their doctors may be inclined to use conventional therapies, such as chemotherapy, rather than enroll patients in our ongoing or any futureclinical trial.26Table of ContentsDelays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could preventcompletion of these trials and adversely affect our ability to advance the development of JTX-2011, JTX-4014 and any other future productcandidates.JTX-2011, JTX-4014 and any other future product candidates we develop may cause undesirable side effects or have other propertieswhen used alone or in combination with other approved pharmaceutical products or investigational new drugs that could halt theirclinical development, prevent their marketing approval, limit their commercial potential or result in significant negative consequences.Although JTX-2011, JTX-4014 and any other future product candidates will undergo safety testing to the extent possible and, where applicable,under such conditions discussed with regulatory authorities, not all adverse effects of drugs can be predicted or anticipated. Immunotherapy, andits method of action of harnessing the body’s immune system, is powerful and could lead to serious side effects that we only discover in clinicaltrials. Undesirable or clinically unmanageable side effects could occur and cause us or regulatory authorities to interrupt, delay or halt clinical trialsand could result in a more restrictive label or the delay or denial of marketing approval by the FDA or comparable foreign regulatory authorities.Results of our trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Unforeseen sideeffects from JTX-2011, JTX-4014 and any other future product candidates could arise either during clinical development or, if such side effects aremore rare, after JTX-2011, JTX-4014 and any other future product candidates have been approved by regulatory authorities and the approvedproduct has been marketed, resulting in the exposure of additional patients. Although we have preliminary safety data for JTX-2011 in humans, wecannot predict if future clinical trials of JTX-2011 or JTX-4014 will demonstrate safety in humans. If JTX-2011, JTX-4014 or any other futureproduct candidates we develop fail to demonstrate safety and efficacy in clinical trials or do not gain marketing approval, we will not be able togenerate revenue and our business will be harmed.Our product candidates could cause undesirable side effects similar to those toxicities observed in other immunotherapies. While we have alreadyevaluated JTX-2011 in these in vitro tests, our Phase II clinical trial of JTX-2011 has been ongoing for less than a year, and we have onlypreliminary safety data on the risk profile in humans. It remains possible that new or more severe toxicities could be seen if JTX-2011 or JTX-4014is used in combination with other agents. Such toxicities, if observed, could result in development delays, delay or denial of approval, or limit thelabeling and thus overall market scope for JTX-2011 or JTX-4014.If unacceptable toxicities arise in the development of JTX-2011, JTX-4014 and any other future product candidates, we or a future collaboratorcould suspend or terminate our trials, or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or denyapproval of JTX-2011, JTX-4014 and any other future product candidates for any or all targeted indications. Treatment-related side effects couldalso affect patient recruitment or the ability of enrolled subjects to complete the trial, or result in potential product liability claims. In addition, theseside effects may not be appropriately recognized or managed by the treating medical staff, particularly outside of our existing or futurecollaborators as toxicities resulting from cancer immunotherapies are not normally encountered in the general patient population and by medicalpersonnel. We expect to have to train medical personnel using JTX-2011 or JTX-4014 to understand the side effect profile of JTX-2011 or JTX-4014 for both our ongoing and planned clinical trials and upon commercialization of JTX-2011 or JTX-4014. The inability to recognize and managethe potential side effects of JTX-2011 or JTX-4014 could result in patient deaths. Any of these occurrences may prevent us from achieving ormaintaining market acceptance of the affected product candidate and may harm our business, financial condition and prospects significantly.We may seek a Breakthrough Therapy Designation or Fast Track Designation by the FDA for JTX-2011, JTX-4014 and any other futureproduct candidates, and we may be unsuccessful. If we are successful, the designation may not actually lead to a faster development orregulatory review or approval process, and it does not increase the likelihood that JTX-2011, JTX-4014 and any other future productcandidates will receive marketing approval.We may seek a Breakthrough Therapy Designation or Fast Track Designation for JTX-2011, JTX-4014 and any other future product candidates. Abreakthrough 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 currentlyapproved therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.Fast Track Designation may be available if a product is intended for the treatment of a serious or life-threatening condition and preclinical orclinical data demonstrate the potential to address an unmet medical need for this condition. Drugs that receive Breakthrough Therapy Designationor Fast Track Designation by the FDA are eligible for accelerated approval and priority review.27Table of ContentsThe FDA has broad discretion whether or not to grant Breakthrough Therapy Designation or Fast Track Designation. Even if we receiveBreakthrough Therapy Designation or Fast Track Designation for a product candidate, such designation may not result in a faster developmentprocess, review or approval compared to conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even ifJTX-2011, JTX-4014 or any other future product candidates receive Breakthrough Therapy Designation or Fast Track Designation, the FDA maylater decide that the drugs no longer meet the conditions for qualification and rescind the designation.We may seek Orphan Drug Designation for JTX-2011, JTX-4014 and any other future product candidates, and we may be unsuccessful ormay be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for market exclusivity.As part of our business strategy, we may seek Orphan Drug Designation for JTX-2011, JTX-4014 and any other future product candidates, and wemay be unsuccessful. In the United States, Orphan Drug Designation entitles a party to financial incentives such as opportunities for grant fundingtowards clinical trial costs, tax advantages and user-fee waivers.In Europe, Orphan Drug Designation entitles a party to a number of incentives, such as protocol assistance and scientific advice specifically fordesignated orphan medicines, and potential fee reductions depending on the status of the sponsor.Generally, if a drug with an Orphan Drug Designation subsequently receives the first marketing approval for the indication for which it has suchdesignation, the drug is entitled to a period of marketing exclusivity, which precludes the European Medicines Agency or the FDA from approvinganother marketing application for the same drug and indication for a set time period, except in limited circumstances.Even if we obtain orphan drug exclusivity for a drug, that exclusivity may not effectively protect the drug from competition because different drugscan be approved for the same condition, or the drug may be used off-label. Even after an orphan drug is approved, the FDA can subsequentlyapprove another drug for the same condition if the FDA concludes that the other drug is clinically superior. In addition, a designated orphan drugmay 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 wasmaterially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease orcondition. Orphan Drug Designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage inthe regulatory review or approval process. While we may seek Orphan Drug Designation for applicable indications for JTX-2011, JTX-4014 and anyother future product candidates, we may never receive such designations. Even if we do receive such designations, there is no guarantee that wewill enjoy the benefits of those designations.The marketing approval process is expensive, time consuming and uncertain and may prevent us or any of our existing or futurecollaboration partners from obtaining approvals for the commercialization of JTX-2011, JTX-4014 and any other future productcandidates.Among other things, the research, testing, manufacturing, labeling, approval and license maintenance, selling, import and export, marketing anddistribution of biologic products are subject to extensive regulation by the FDA and comparable foreign regulatory authorities. Neither we nor anyexisting or future collaboration partner is permitted to market JTX-2011, JTX-4014 and any other future products in the United States until wereceive approval of a BLA from the FDA. We have never submitted an application for, or received, marketing approval. Obtaining approval of aBLA can be a lengthy, expensive and uncertain process. In addition, failure to comply with FDA and other applicable domestic and foreignregulatory requirements may subject us to administrative or judicially imposed sanctions, including the following:•untitled and warning letters;•civil or criminal penalties and fines;•injunctions;•suspension or withdrawal of marketing approval;•suspension of any ongoing clinical trials;•product recalls;28Table of Contents•refusal to accept or approve BLAs or supplements thereto filed by us;•restrictions on operations, including costly new manufacturing requirements; or•seizure or detention of our products or import bans.Prior to receiving approval to commercialize our product candidates in the United States or abroad, we and any of our existing or futurecollaboration partners must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA andcomparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses. Even if we and any of ourexisting or future collaboration partners believe the preclinical or clinical data for JTX-2011, JTX-4014 and any other future product candidates arepromising, such data may not be sufficient to support approval by the FDA and comparable foreign regulatory authorities. Administering ourproduct candidates to humans may produce undesirable side effects, which could interrupt, delay or cause suspension of clinical trials of ourproduct candidates and result in the FDA or other regulatory authorities denying approval of JTX-2011, JTX-4014 and any other future productcandidates for any or all targeted indications.Marketing approval of a BLA is not guaranteed, and the approval process is expensive and may take several years. The FDA also has substantialdiscretion in the approval process. Despite the time and expense exerted, failure can occur at any stage, and we could encounter problems thatcause us to abandon or repeat clinical trials, or perform additional preclinical studies and clinical trials. The number of preclinical studies andclinical trials that will be required for FDA approval varies depending on the product candidate, the disease or condition that the product candidateis designed to address and the regulations applicable to any particular product candidate. The FDA can delay, limit or deny approval of a productcandidate for many reasons, including, but not limited to, the following:•a product candidate may not be deemed safe or effective;•FDA officials may not find the data from preclinical studies and clinical trials sufficient;•the FDA might not deem our or our third-party manufacturers’ processes or facilities adequate for approval of our marketing applications;or•the FDA may change its approval policies or adopt new regulations.If JTX-2011, JTX-4014 and any other future product candidates fail to demonstrate safety and efficacy in clinical trials or do not gain marketingapproval, our business will be harmed.We may choose not to develop a potential product candidate, or we may suspend or terminate one or more discovery or preclinicalprograms related to our product candidates.At any time and for any reason, we may determine that one or more of our discovery programs, preclinical programs or product candidates doesnot have sufficient potential to warrant the allocation of resources toward such program or product candidate. Furthermore, because we havelimited financial and personnel resources, we are placing significant focus on the development of our product candidates JTX-2011 and JTX-4014.Accordingly, we may choose not to develop a product candidate or elect to suspend or terminate one or more of our discovery or preclinicalprograms. If we suspend or terminate a program or product candidate in which we have invested significant resources, we will have expendedresources on a program or product candidate that will not provide a full return on our investment and we may have missed an opportunity to haveallocated those resources to potentially more productive uses, including existing or future programs or product candidates. If we do not accuratelyevaluate the commercial potential or target market for a particular future product candidate, we may relinquish valuable rights to future productcandidates through collaboration, licensing or other royalty arrangements.Even if we complete the necessary clinical trials, we cannot predict when or if we will obtain marketing approval to commercialize aproduct or the approval may be for a more narrow indication than we expect.We cannot commercialize a product candidate until the appropriate regulatory authorities have reviewed and approved the product candidate. Evenif our product candidates demonstrate safety and efficacy in clinical trials, the regulatory agencies may not complete their review processes in atimely manner, or we may not be able to obtain marketing approval. In addition, we may experience delays or rejections based upon governmentregulation or changes in regulatory agency policy during the period of product development. Regulatory agencies also may impose significantlimitations in the form of narrow indications, warnings, precautions or contraindications with respect to conditions of use or may grant approvalsubject to the performance of costly post-marketing clinical trials29Table of Contentsor may not approve the price we intend to charge for our product candidates. Any of the foregoing scenarios could materially harm the commercialprospects for JTX-2011, JTX-4014 and any future products.Obtaining and maintaining marketing approval of JTX-2011, JTX-4014 or any other future product candidates in one jurisdiction does notmean that we will be successful in obtaining marketing approval of that product candidate in other jurisdictions.Obtaining and maintaining marketing approval of JTX-2011, JTX-4014 and any other future product candidates in one jurisdiction does notguarantee that we will be able to obtain or maintain marketing approval in any other jurisdiction. For example, even if the FDA grants marketingapproval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing andpromotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements andadministrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials.Obtaining foreign marketing approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costsfor us and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements ininternational markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full marketpotential of JTX-2011, JTX-4014 and any other future product candidates will be harmed. Even if we obtain approval for our product candidates andultimately commercialize them in foreign markets, we would be subject to separate risks and uncertainties, including the burden of complying withcomplex and changing foreign regulatory, tax, accounting and legal requirements and the reduced protection of intellectual property rights in someforeign countries.Our failure to successfully identify, acquire, develop, in-license and commercialize additional products or product candidates couldimpair our ability to grow.Although a substantial amount of our efforts will focus on the clinical testing and potential approval of our most advanced product candidate, JTX-2011, a key element of our long-term growth strategy is to acquire, develop and/or market additional products and product candidates. We maynever be able to identify, discover, develop, in-license, acquire or commercialize additional product candidates, which would have a materialadverse effect on our business.Because our internal research capabilities are limited, we may be dependent upon pharmaceutical and biotechnology companies, academicscientists, and other researchers to sell or license products or technology to us. The success of this strategy depends partly upon our ability toidentify, select, and acquire promising pharmaceutical product candidates and products. The process of proposing, negotiating and implementing alicense or acquisition of a product candidate or approved product is lengthy and complex. Other companies, including some with substantiallygreater financial, marketing and sales resources, may compete with us for the license or acquisition of product candidates and approved products.Acquisitions and in-licenses include numerous risks, including potential failure to achieve the expected benefits of the acquisition or license andpotential unknown liabilities associated with the product or technology. We have limited resources to identify and execute the acquisition or in-licensing of third-party products, businesses, and technologies, integrate them into our current infrastructure and manage our development efforts.Even if we receive marketing approval of JTX-2011, JTX-4014 or any other future product candidates, we will be subject to ongoingregulatory obligations and continued regulatory review.Any marketing approvals that we receive for JTX-2011, JTX-4014 and any other future product candidates may be subject to limitations on theapproved indicated uses for which the product may be marketed or the conditions of approval, or contain requirements for potentially costly post-market testing and surveillance to monitor the safety and efficacy of the product candidate. In addition, if the FDA or a comparable foreignregulatory authority approves JTX-2011, JTX-4014 and any other future product candidates, the manufacturing processes, labeling, packaging,distribution, adverse event reporting, storage, advertising, promotion, import and export and record keeping for JTX-2011, JTX-4014 and any otherfuture product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety andother post-marketing information and reports, registration, as well as continued compliance with current good manufacturing practice, or cGMP,and good clinical practice, or GCP, for any clinical trials that we conduct post-approval. Failure to comply with regulatory requirements, may resultin, among other things:•restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market, or product recalls;30Table of Contents•fines, untitled and warning letters, or holds on clinical trials;•refusal by the FDA to approve pending applications or supplements to approved applications we filed or suspension or revocation oflicense 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.We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either inthe United States or abroad. 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 achieveor sustain profitability.Even if JTX-2011, JTX-4014 and any other future product candidates receive marketing approval, they may fail to achieve the degree ofmarket acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.If JTX-2011, JTX-4014 and any other future product candidates receive marketing approval, whether as a single agent or in combination with othertherapies, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors, and others in the medicalcommunity. If JTX-2011, JTX-4014 and any other future product candidates do not achieve an adequate level of acceptance, we may not generatesignificant product revenues and we may not become profitable.Risks Related to Manufacturing, Commercialization and Reliance on Third PartiesWe depend on our collaboration with Celgene and may depend on collaborations with additional third parties for the development andcommercialization of our product candidates. If our collaborations are not successful, we may not be able to capitalize on the marketpotential of these product candidates.In July 2016, we entered into the Celgene Collaboration Agreement with Celgene focused on developing and commercializing biologicimmunotherapies. Under our Celgene Collaboration Agreement with Celgene, Celgene may exercise options granting it certain commercialization orlicensing rights for JTX-2011, JTX-4014 and other product candidate programs from a pool of certain molecular targets. The collaboration involvesa complex allocation of rights, provides for milestone payments to us based on the achievement of specified clinical development, regulatory andcommercial milestones, provides for additional payments upon Celgene’s election to exercise rights to commercialize additional productcandidates or extend the research term, and provides us with profit-sharing and royalty-based revenue if certain product candidates aresuccessfully commercialized. We cannot provide any assurance with respect to, or otherwise, the success of the collaboration.We may form or seek other strategic alliances, joint ventures, or collaborations, or enter into additional licensing arrangements with third partiesthat we believe will complement or augment our development and commercialization efforts with respect to JTX-2011, JTX-4014 and any futureproduct candidates that we may develop.Collaborations involving our product candidates, including our collaboration with Celgene, pose the following risks to us:•Collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations. For example,under our collaboration agreement with Celgene, development and commercialization plans and strategies for licensed programs will beconducted in accordance with a plan approved by the appropriate committee comprised of representatives from both us and Celgene.•Collaborators, including Celgene, may not pursue development and commercialization of JTX-2011, JTX-4014 or any future productcandidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes intheir strategic focus due to the acquisition of competitive products, availability of funding or other external factors such as a businesscombination 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 productcandidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing. For example, underour collaboration agreement with Celgene, at any point in the research, development and clinical trial process, or during the term of anyapplicable co-31Table of Contentsdevelopment and co-commercialization or license agreement, respectively, Celgene may terminate the applicable agreement upon120 days’ prior written notice with respect to any product candidate that is subject to the collaboration agreement without triggering atermination of the remainder of the collaboration and, under a co-development and co-commercialization agreement or a licenseagreement, it is possible for Celgene to terminate that agreement upon 120 days prior written notice at any point during the development orcommercialization activities. If Celgene exercises any such termination right, we may not have sufficient resources to continue theresearch, development or commercialization of such product candidate.•Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products orproduct candidates.•A collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to their marketing anddistribution.•Collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in suchcases, we would not have the exclusive right to develop, commercialize, enforce, maintain or defend such intellectual property.•Collaborators may not properly enforce, maintain or defend our intellectual property rights or may use our proprietary information in a waythat gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information orexpose us to potential litigation, or other intellectual property proceedings. For example, under certain limited circumstances, Celgene hasthe first right to enforce, maintain or defend our intellectual property rights under our collaboration arrangement with respect to certainlicensed programs and, although we may have the right to assume the enforcement, maintenance and defense of our intellectual propertyrights if Celgene does not, our ability to do so may be compromised by Celgene’s actions.•Disputes may arise between a collaborator and us that cause the delay or termination of the research, development or commercializationof JTX-2011, JTX-4014 and any other future product candidates, or that result in costly litigation or arbitration that diverts managementattention and resources. For example, although we and Celgene have agreed to the form of co-development and co-commercializationagreement and license agreement to be entered into should Celgene exercise its option for a program under the Celgene CollaborationAgreement, we may never come to agreement with Celgene on a final definitive agreement. Further, even if we do reach a definitiveagreement, it may not be on terms that are as favorable to us as expected.•Collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development orcommercialization of the applicable product candidates. For example, Celgene can terminate its agreement with us, in its entirety or withrespect to any program, upon 120 days’ notice and can terminate the entire agreement with us in connection with a material breach of theagreement by us that remains uncured for 90 days. If Celgene exercises such termination right, we may not have sufficient resources tocontinue the development of such product candidate.•Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.•Collaboration agreements may restrict our right to independently pursue new product candidates. For example, if Celgene exercises itsoption for a program within the collaboration other than JTX-4014, then until termination or expiration of the applicable co-development andco-commercialization agreement for such program, we may not directly or indirectly research, develop, manufacture or commercialize,outside of the collaboration, any biologic medicine or product candidate with specified activity against that program’s collaboration target.As a result, if we enter into additional collaboration agreements and strategic partnerships or license our intellectual property, products orbusinesses, we may not be able to realize the benefit of, or generate revenues from, such arrangements.We may seek to establish additional collaborations, and, if we are not able to establish them on commercially reasonable terms, we mayhave to alter our development and commercialization plans.Our drug development programs and the potential commercialization of our product candidates will require substantial additional resources. Forsome of our product candidates, we may decide to collaborate with additional pharmaceutical and biotechnology companies for the developmentand potential commercialization of those product32Table of Contentscandidates. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures,issue securities that dilute our existing stockholders, or disrupt our management and business.We face significant competition in seeking appropriate strategic partners and the negotiation process is time consuming and complex. Whether wereach a definitive agreement for other collaborations will depend, among other things, upon our assessment of the collaborator’s resources andexpertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of our business. We may not besuccessful in our efforts to establish a strategic partnership or other alternative arrangements for future product candidates because they may bedeemed to be at too early of a stage of development for collaborative effort and third parties may not view them as having the requisite potential todemonstrate safety and efficacy. In addition, there have been a significant number of recent business combinations among large pharmaceuticalcompanies that have resulted in a reduced number of potential future collaborators.We may also be restricted under existing collaboration agreements from entering into future agreements on certain terms with potentialcollaborators. For example, during the research term of our collaboration with Celgene, we may not directly or indirectly research, develop,manufacture or commercialize, except pursuant to the agreement, certain product candidates. In addition, if Celgene exercises its option for aprogram within the collaboration other than JTX-4014, then until termination or expiration of the applicable co-development and co-commercialization agreement for such program, we may not directly or indirectly develop, manufacture or commercialize, outside of thecollaboration, any biologic medicine or product candidate with specified activity against that program’s collaboration target.We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtailthe development of the product candidate for which we are seeking to collaborate, reduce or delay its development program, delay or reduce thescope of potential commercialization activities, or increase our expenditures and undertake development or commercialization activities at our ownexpense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtainadditional capital, which may not be available to us on acceptable terms or at all.The market opportunities for JTX-2011, JTX-4014 and any other products, if and when approved, may be limited to those patients whoare ineligible for established therapies or for whom prior therapies have failed, and may be small.Cancer therapies are sometimes characterized as first-line, second-line, or third-line, and the FDA often approves new therapies initially only forthird-line use. When cancer is detected early enough, first-line therapy, usually chemotherapy, hormone therapy, surgery, radiation therapy, and,increasingly, immunotherapies or a combination of these, is sometimes adequate to cure the cancer or prolong life without a cure. Second andthird-line therapies are administered to patients when prior therapy is not effective. We expect to initially seek approval of JTX-2011, JTX-4014 andany other future product candidates as a therapy for patients who have received one or more prior treatments. Subsequently, for those productsthat prove to be sufficiently beneficial, if any, we would expect to seek approval potentially as a first-line therapy, but there is no guarantee thatJTX-2011, JTX-4014 and any other future product candidates, even if approved, would be approved for first-line therapy, and, prior to any suchapprovals, we may have to conduct additional clinical trials.Our projections of both the number of people who have the cancers we are targeting, as well as the subset of people with these cancers who havereceived one or more prior treatments, and who have the potential to benefit from treatment with JTX-2011, JTX-4014 and any other future productcandidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature,surveys of clinics, patient foundations, and market research, and may prove to be incorrect. Further, new studies may change the estimatedincidence or prevalence of these cancers. The number of patients may turn out to be lower than expected. Additionally, the potentially addressablepatient population for JTX-2011, JTX-4014 and any other future product candidates may be limited or may not be amenable to treatment with JTX-2011, JTX-4014 and any other products, if and when approved. Even if we obtain significant market share for JTX-2011, JTX-4014 and any otherproducts, if and when approved, because the potential target populations are small, we may never achieve profitability without obtaining marketingapproval for additional indications, including to be used as first- or second-line therapy.33Table of ContentsExclusivity and other governance provisions within our collaboration agreement with Celgene may prevent us from pursuing alternativeproduct candidates and exercising complete control over our product candidates’ development.During the research term in our collaboration agreement with Celgene, we may not alone, or with a third party, research, develop, manufacture orcommercialize a biologic that binds to a pool of certain B cell, T regulatory cell or tumor-associated macrophage targets, other than PD-1, thatmeet certain criteria, termed an exclusive target, and inhibit, activate or otherwise modulate the activity of such exclusive target. In addition, ifCelgene exercises its option for a program within the collaboration other than JTX-4014, then until termination or expiration of the applicable co-development and co-commercialization agreement for such program, we may not directly or indirectly research, develop, manufacture orcommercialize, outside of the collaboration, any biologic with specified activity against that program’s collaboration target. Further, ourcollaboration with Celgene is governed by the joint steering committee, or JSC, and a joint patent committee. The JSC may establish additionalsubcommittees, to oversee particular projects or activities. Subject to limitations specified in the agreement, if the applicable governancecommittee is unable to make a decision by consensus and the parties are unable to resolve the issue through escalation to specified seniorexecutive officers of the parties, then we generally have final decision-making authority over research and development matters for programs priorto Celgene’s exercise of its option to such program. If Celgene exercises its option for a program, final decision-making authority for that programis specified in the applicable co-development and co-commercialization agreement or license agreement. These exclusivity and governanceprovisions may inhibit our development efforts and may materially harm our business, financial condition, results of operations and prospects.We rely and expect to continue to rely on third parties to conduct our clinical trials. If these third parties do not successfully carry outtheir contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain marketingapproval for or commercialize our product candidates and our business could be substantially harmed.We do not have the ability to independently conduct clinical trials. We rely and will rely on medical institutions, clinical investigators, contractlaboratories, and other third parties, such as CROs, to conduct or otherwise support our ongoing clinical trials, including processing of human bloodand tumor samples and analysis of biomarkers from the clinical trials. We rely and will rely heavily on these parties for execution of clinical trialsfor JTX-2011, JTX-4014 and any other future product candidates and we control only certain aspects of their activities. Nevertheless, we areresponsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol, legal and regulatory requirementsand scientific standards, and our reliance on these third parties including CROs will not relieve us of our regulatory responsibilities. For anyviolations of laws and regulations during the conduct of our clinical trials, we could be subject to untitled and warning letters or enforcement actionthat may include civil penalties up to and including criminal prosecution.We and our clinical investigators and CROs are required to comply with regulations and requirements, including GCP, for conducting, monitoring,recording and reporting the results of clinical trials to ensure that the data and results are scientifically credible and accurate, and that the trialpatients are adequately informed of the potential risks of participating in clinical trials and their rights are protected. If we or our clinicalinvestigators or CROs fail to comply with applicable GCP, the clinical data generated in our clinical trials may be deemed unreliable and the FDAor comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. Wecannot assure stockholders that, upon inspection, the FDA will determine that any of our future clinical trials will comply with GCP. In addition, ourclinical trials must be conducted with product candidates produced under cGMP regulations. Our failure or the failure of our clinical investigators orCROs to comply with these regulations may require us to repeat clinical trials, which would delay the marketing approval process and could alsosubject us to enforcement action. We also are required to register certain ongoing clinical trials and provide certain information, includinginformation relating to the trial’s protocol, on a government-sponsored database, ClinicalTrials.gov, within specific time frames. Failure to do socan result in fines, adverse publicity and civil and criminal sanctions.Although we designed the clinical trials for JTX-2011 and intend to design the clinical trials for JTX-4014 and any other future product candidates,clinical investigators or CROs will conduct all of the clinical trials. As a result, many important aspects of our development programs, includingtheir conduct and timing, will be outside of our direct control. Our reliance on third parties to conduct future clinical trials will also result in lessdirect control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff.Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.Outside parties may also face internal challenges that may materially adversely34Table of Contentsaffect the willingness or ability of such parties to conduct our clinical trials and may subject us to unexpected cost increases that are beyond ourcontrol. If the clinical investigators or CROs do not perform clinical trials in a satisfactory manner, breach their obligations to us or fail to complywith regulatory requirements, the development, marketing approval and commercialization of JTX-2011, JTX-4014 and any other future productcandidates may be delayed, or our development program may be materially and irreversibly harmed. If we are unable to rely on clinical datacollected by our clinical investigators and CROs, we could be required to repeat, extend the duration of, or increase the size of any clinical trialswe conduct and this could significantly delay commercialization and require significantly greater expenditures.If clinical investigators or CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to bereplaced or if the quality or accuracy of the clinical data they obtain are compromised due to the failure to adhere to our clinical protocols,regulatory requirements or for other reasons, any clinical trials such clinical investigators or CROs are associated with may be extended, delayedor terminated. As a result, we believe that our financial results and the commercial prospects for JTX-2011, JTX-4014 and any other future productcandidates in the subject indication would be harmed, our costs could increase and our ability to generate revenue could be delayed.We face significant competition and if our competitors develop and market products that are more effective, safer or less expensive thanJTX-2011, JTX-4014 or any other future product candidates, our commercial opportunities will be negatively impacted.The life sciences industry is highly competitive and subject to rapid and significant technological change. We are currently developing therapeuticsthat will compete with other products and therapies that currently exist or are being developed, such as GlaxoSmithKline plc’s anti-ICOS antibodyprogram. Products we may develop in the future are also likely to face competition from other products and therapies, some of which we may notcurrently be aware. Technological advances or products developed by our competitors may render our technologies or product candidatesobsolete, less competitive or not economical.We have both domestic and international competitors, including major multinational pharmaceutical companies, established biotechnologycompanies, specialty pharmaceutical companies, universities and other research institutions and small and other early-stage companies. Many ofour competitors have significantly greater financial, manufacturing, marketing, product development, technical and human resources than we do.Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining marketing approvals, establishing clinicaltrial sites, recruiting patients and in manufacturing pharmaceutical products and may succeed in discovering, developing and commercializingproducts in our field before we do. We also face competition in recruiting and retaining qualified scientific and management personnel, as well as inacquiring technologies complementary to, or necessary for, our programs.There are a large number of companies developing or marketing treatments for cancer, including many major pharmaceutical and biotechnologycompanies. These treatments consist both of small molecule drug products, as well as biologics approaches to address cancer. These treatmentsare often combined with one another in an attempt to maximize the response rate.Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective,have fewer or less severe side effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed or are lessexpensive than any products that we may develop. Our competitors also may obtain FDA, European Commission or other marketing approval fortheir products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position beforewe are able to enter the market. Even if JTX-2011, JTX-4014 and any other future product candidates achieve marketing approval, they may bepriced at a significant premium over competitive products if any have been approved by then, resulting in reduced competitiveness. In addition, ifJTX-2011, JTX-4014 and other future product candidates are approved by the FDA, the approval of a biosimilar product to one of our productscould have a material impact on our business.Because we rely on third-party manufacturing and supply partners, including a single supplier for some of our materials, our supply ofresearch and development, preclinical and clinical development materials may become limited or interrupted or may not be ofsatisfactory quantity or quality.We rely on third-party contract manufacturers to manufacture our preclinical and clinical trial product supplies. We do not own manufacturingfacilities for producing such supplies. There can be no assurance that our preclinical and clinical development product supplies will not be limited,interrupted, or of satisfactory quality or continue to be35Table of Contentsavailable at acceptable prices. Our or a third party’s failure to execute on our manufacturing requirements, or to do so on commercially reasonableterms and comply with cGMP could adversely affect our business in a number of ways, including:•an inability to continue clinical trials of JTX-2011 or initiate or continue clinical trials of JTX-4014 or any other future product candidatesunder development;•delay in submitting regulatory applications, or receiving marketing approvals, for JTX-2011, JTX-4014 or any other future productcandidates;•loss of cooperation of an existing or future collaborator;•subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities; and•requirements to cease distribution or to recall batches of JTX-2011, JTX-4014 and any other future product candidates.In the event that any of our manufacturers fails to comply with applicable regulatory requirements and facility and process validation tests or toperform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited orinterrupted for other reasons, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities orresources, or enter into an agreement with another third party, which we may not be able to do on reasonable terms, if at all. In some cases, thetechnical skills or technology required to manufacture our future product candidates may be unique or proprietary to the original manufacturer,which would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another thirdparty manufacture such future product candidates. In particular, any replacement of our manufacturer could require significant effort and expertisebecause there may be a limited number of qualified replacements. If we are required to change manufacturers for any reason, we will be required toverify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations andguidelines, which could negatively affect our ability to develop product candidates in a timely manner or within budget.Certain raw materials necessary for the manufacture of our product candidates under our current manufacturing process, such as growth media,resins and filters, are available from a single supplier. We do not have agreements in place that guarantee our supply or the price of these rawmaterials. Any significant delay in the acquisition or decrease in the availability of these raw materials could considerably delay the manufacture ofJTX-2011, JTX-4014 and any other future product candidates, which could adversely impact the timing of any planned trials or the marketingapproval of that product candidate.We expect to continue to rely on third-party manufacturers if we receive marketing approval for any product candidate. If we are unable to maintainthird-party manufacturing for JTX-2011 and JTX-4014 or obtain or maintain third-party manufacturing for any other future product candidates, or todo so on commercially reasonable terms, we may not be able to develop and commercialize JTX-2011, JTX-4014 or any other future productcandidates successfully. We do not yet have sufficient information to reliably estimate the cost of the commercial manufacture of JTX-4014 or anyother future product candidates.In addition, in order to conduct clinical trials of JTX-2011, JTX-4014 and any other future product candidates, we will need to work with third-partymanufacturers to manufacture them in large quantities. Our manufacturing partners or our third-party collaborators may be unable to successfullyincrease the manufacturing capacity of JTX-2011, JTX-4014 and any other future product candidates in a timely or cost-effective manner, or at all.In addition, quality issues may arise during scale-up activities. If our manufacturing partners or collaborators are unable to successfully scale upthe manufacture of JTX-2011, JTX-4014 or any other future product candidates in sufficient quality and quantity, the development, testing, andclinical trials of that product candidate may be delayed or infeasible, and marketing approval or commercial launch of any resulting product may bedelayed or not obtained, which could significantly harm our business.We are subject to manufacturing risks that could substantially increase our costs and limit the supply of our products.The process of manufacturing JTX-2011 or any other future product candidates is complex, highly regulated and subject to several risks, includingthose listed below.36Table of Contents•We do not have the capability internally to manufacture drug products or drug substances for clinical use. We use third-partymanufacturers for manufacturing JTX-2011 for our Phase I/II study of JTX-2011. Any changes in our manufacturing processes as a resultof scaling-up may require additional approvals or may delay the development and marketing approval of JTX-2011, JTX-4014 and anyother future product candidates and ultimately affect our success.•The manufacturing facilities in which JTX-2011, JTX-4014 or any other future product candidates are made could be adversely affected byequipment failures, contamination, vendor error, labor shortages, natural disasters, power failures and numerous other factors.•Any adverse developments affecting manufacturing operations for JTX-2011, JTX-4014 or any other future product candidates, if any areapproved, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in thesupply of our products. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meetspecifications, undertake costly remediation efforts or seek more costly manufacturing alternatives.•Biologics, such as JTX-2011, that have been produced and are stored for later use may degrade, become contaminated, suffer otherquality defects or may not be used within their shelf life, which may cause the affected product candidates to no longer be suitable fortheir intended use in clinical trials or other development activities. If the defective product candidates cannot be replaced in a timelyfashion, we may incur significant delays in our development programs that could adversely affect the value of such product candidates.We expect to develop JTX-2011, JTX-4014 and future product candidates in combination with other drugs. If we are unable to enter into astrategic collaboration for, or if we are unable to purchase on commercially reasonable terms, an approved cancer drug to use incombination with our product candidates, we may be unable to develop or obtain approval for, JTX-2011, JTX-4014 and future productcandidates in combination with other drugs.We intend to develop JTX-2011, JTX-4014 and future product candidates in combination with one or more other cancer drugs. If the FDA or similarregulatory authorities outside of the United States revoke or do not grant approval of any drugs we use in combination with JTX-2011, JTX-4014 orany other future product candidates, we will not be able to market any products in combination with such drugs.If safety or efficacy issues arise with any of these drugs, we could experience significant regulatory delays, and the FDA or similar regulatoryauthorities outside of the United States may require us to redesign or terminate the applicable clinical trials. If the drugs we use are replaced asthe standard of care for the indications we choose for JTX-2011, JTX-4014 or any other future product candidates, the FDA or similar regulatoryauthorities outside of the United States may require us to conduct additional clinical trials. In addition, if manufacturing or other issues result in ashortage of supply of the drugs with which we determine to combine with JTX-2011, JTX-4014 or any other future product candidates, we may notbe able to complete clinical development of JTX-2011, JTX-4014 or any other future product candidates on our current timeline or at all.Even if JTX-2011, JTX-4014 or any other future product candidates were to receive marketing approval or be commercialized for use incombination with other existing drugs, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of theUnited States could revoke approval of such existing drugs or that safety, efficacy, manufacturing or supply issues could arise with such drugs.We may form or seek strategic collaborations to evaluate and, if approved, market JTX-2011 and JTX-4014 in combination with another approvedcancer drug. If we are unable to enter into a strategic collaboration on commercially reasonable terms or fail to realize the benefits of any suchcollaboration, we may be required to purchase an approved cancer drug to use in combination with JTX-2011 and JTX-4014. The failure to enterinto a successful collaboration or the expense of purchasing an approved cancer drug may delay our development timelines, increase our costsand jeopardize our ability to develop JTX-2011 and JTX-4014.We may develop complementary diagnostics and/or companion diagnostics for JTX-2011, JTX-4014 and any potential future productcandidates. If we are unable to successfully develop such companion diagnostics or complementary diagnostics, or experiencesignificant delays in doing so, we may not realize the full commercial potential of JTX-2011, JTX-4014 or any other future productcandidates.Because we are focused on patient enrichment strategies, in which predictive biomarkers may be used to identify the right patients for our productcandidates, we believe that our success may depend, in part, on our ability to37Table of Contentsdevelop complementary diagnostics and/or companion diagnostics, which are assays or tests to identify an appropriate patient population for ourproduct candidates. There has been limited success to date industry-wide in developing these types of complementary diagnostics and/orcompanion diagnostics. To be successful, we need to address a number of scientific, technical and logistical challenges. We have not yet initiateddevelopment of complementary diagnostics and/or companion diagnostics. We have little experience in the development of diagnostics and maynot be successful in developing appropriate diagnostics to pair with any of our product candidates that receive marketing approval. Complementarydiagnostics and/or companion diagnostics are subject to regulation by the FDA and similar regulatory authorities outside the United States asmedical devices and require separate regulatory approval or clearance prior to commercialization. Given our limited experience in developingdiagnostics, we expect to rely in part or in whole on third parties for their design and manufacture. If we, or any third parties that we engage toassist us, are unable to successfully develop complementary diagnostics and/or companion diagnostics for JTX-2011, JTX-4014 and any otherfuture product candidates, or experience delays in doing so:•the development of JTX-2011, JTX-4014 and any other future product candidates may be adversely affected if we are unable toappropriately select patients for enrollment in our clinical trials;•JTX-2011, JTX-4014 and any other future product candidates may not receive marketing approval if safe and effective use of a productcandidate depends on a complementary diagnostics and/or companion diagnostics and such diagnostic is not commercially available orotherwise approved or cleared by the appropriate regulatory authority; and•we may not realize the full commercial potential of JTX-2011, JTX-4014 and any other future product candidates that receive marketingapproval if, among other reasons, we are unable to appropriately identify, or it takes us longer to identify, patients who are likely to benefitfrom therapy with our products, if approved.If any of these events were to occur, our business would be harmed, possibly materially.If product liability lawsuits are brought against us, we may incur substantial liabilities.We face an inherent risk of product liability as a result of the clinical testing of JTX-2011, JTX-4014 and any other future product candidates. Forexample, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinicaltesting, 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 or a breach of warranties. Claims could also be asserted under stateconsumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities. Evensuccessful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claimsmay result in:•decreased demand for our product candidates;•injury to our reputation;•withdrawal of clinical trial participants;•initiation of investigations by regulators;•costs to defend the related litigation;•a diversion of management’s time and our resources;•substantial monetary awards to trial participants or patients;•product recalls, withdrawals or labeling, marketing or promotional restrictions;•loss of revenue;•exhaustion of any available insurance and our capital resources;•the inability to commercialize any product candidate; and•a decline in our share price.Insurance coverage is increasingly expensive. We may not be able to maintain insurance at a reasonable cost or in an amount adequate to satisfyany liability that may arise, if at all. Our insurance policy contains various exclusions, and we may be subject to a product liability claim for whichwe have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations orthat are not38Table of Contentscovered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with anyfuture corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claimarise.Adverse events in the field of immuno-oncology could damage public perception of our product candidates and negatively affect ourbusiness.The commercial success of our products will depend in part on public acceptance of the use of cancer immunotherapies. Adverse events inclinical trials of JTX-2011, JTX-4014, any of our other future product candidates or other similar products and the resulting publicity, as well as anyother adverse events in the field of immuno-oncology that may occur, including in connection with competitor therapies such asGlaxoSmithKline plc’s anti-ICOS antibody, could result in a decrease in demand for JTX-2011, JTX-4014 or any other products that we maydevelop. If public perception is influenced by claims that the use of cancer immunotherapies is unsafe, whether related to our or our competitors’therapies, our products may not be accepted by the general public or the medical community.Future adverse events in immuno-oncology or the biopharmaceutical industry could also result in greater governmental regulation, stricter labelingrequirements and potential regulatory delays in the testing or approvals of our products. Any increased scrutiny could delay or increase the costsof obtaining marketing approval for JTX-2011, JTX-4014 and any other future product candidates.Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. For example, in March2010, the Affordable Care Act was passed, which substantially changes the way health care is financed by both governmental and privateinsurers, and significantly impacts the U.S. pharmaceutical industry.We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts thatfederal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates orcomplementary diagnostics or companion diagnostics or additional pricing pressures.For example, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by the President on December 22, 2017, Congress repealedthe “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, will becomeeffective in 2019. According to the Congressional Budget Office, the repeal of the individual mandate will cause 13 million fewer Americans to beinsured in 2027 and premiums in insurance markets may rise. Further, each chamber of the Congress has put forth multiple bills designed torepeal or repeal and replace portions of the Affordable Care Act, or ACA. Although none of these measures has been enacted by Congress to date,Congress may consider other legislation to repeal and replace elements of the ACA. The Congress will likely consider other legislation to replaceelements of the ACA, during the next Congressional session.The current administration has also taken executive actions to undermine or delay implementation of the ACA. In January 2017, the Presidentsigned an Executive Order directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, ordelay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers,health insurers, or manufacturers of pharmaceuticals or medical devices. In October 2017, the President signed a second Executive Orderallowing for the use of association health plans and short-term health insurance, which may provide fewer health benefits than the plans soldthrough the ACA exchanges. At the same time, the Administration announced that it will discontinue the payment of cost-sharing reduction, orCSR, payments to insurance companies until Congress approves the appropriation of funds for such CSR payments. The loss of the CSRpayments is expected to increase premiums on certain policies issued by qualified health plans under the ACA. A bipartisan bill to appropriatefunds for CSR payments was introduced in the Senate, but the future of that bill is uncertain.39Table of ContentsOur future relationships with customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly,to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcarelaws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm,administrative burdens and diminished profits and future earnings.Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare lawsand regulations. In addition, we may be subject to transparency laws and patient privacy regulation by the U.S. federal and state governments andby governments in foreign jurisdictions in which we conduct our business. The applicable federal, state and foreign healthcare laws and regulationsthat may affect our ability to operate include the federal Anti-Kickback Statute, the federal Health Insurance Portability and Accountability Act of1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, the federallegislation commonly referred to as the Physician Payments Sunshine Act, and analogous state and foreign laws and regulations, any of whichmay constrain the business or financial arrangements and relationships through which we sell, market and distribute any products for which weobtain marketing approval.Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available under such laws, it ispossible that some of our business activities could be subject to challenge under one or more of such laws. The scope and enforcement of each ofthese laws is also uncertain and any investigation or settlement could be time- and resource-consuming, divert management’s attention, increaseour costs or otherwise have an adverse effect on our business.If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may besubject to various significant penalties, any of which could harm our ability to operate our business and our financial results. In addition, theapproval and commercialization of our product candidates outside the United States will also likely subject us to foreign equivalents of thehealthcare laws mentioned above, among other foreign laws.Risks Related to our Financial Position and Need for Additional CapitalWe have incurred net losses in every year since our inception and anticipate that we will continue to incur substantial and increasing netlosses in the foreseeable future.We are a clinical stage biopharmaceutical company with a limited operating history, and we are early on in our development efforts. Investment inbiopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk thatany potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain marketing approval and becomecommercially viable. We have financed our operations primarily through the sale of equity securities, convertible debt securities and ourcollaboration with Celgene. Since our inception, most of our resources have been dedicated to the preclinical and clinical development of JTX-2011and preclinical and planned clinical development of JTX-4014 and other discovery programs. The size of our future net losses will depend, in part,on our future expenses and our ability to generate additional revenue, if any. We have no products approved for commercial sale and have notgenerated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related toour ongoing operations. As a result, we have incurred losses in each annual period since our inception. For the years ended December 31, 2017,2016 and 2015, we reported net losses of $16.4 million, $13.7 million and $28.5 million, respectively. As of December 31, 2017, we had anaccumulated deficit of $89.6 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses toincrease as we continue our research and development of, and seek marketing approvals for JTX-2011, JTX-4014 and any future productcandidates.Even if we succeed in receiving marketing approval for and commercialize our product candidate, we will continue to incur substantial researchand development and other expenditures to develop and market additional potential products. We may encounter unforeseen expenses, difficulties,complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, onthe rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and willcontinue to have an adverse effect on our stockholders’ equity and working capital.40Table of ContentsWe have never generated any revenue from product sales and our ability to generate revenue from product sales and become profitabledepends on our success on a number of factors.We have no products approved for commercial sale, have not generated any revenue from product sales, and do not anticipate generating anyrevenue from product sales until some time after we have received marketing approval for the commercial sale of a product candidate, if ever. Ourability to generate revenue and achieve profitability depends significantly on our success in many factors, including:•completing clinical development of our lead product candidate, JTX-2011, and completing research and discovery and preclinical andclinical development of any other programs and product candidates;•obtaining marketing approvals for JTX-2011, JTX-4014 and any future product candidates for which we complete clinical trials;•developing a sustainable and scalable manufacturing process for our product candidates, including establishing and maintainingcommercially viable supply and manufacturing relationships with third parties;•launching and commercializing our product candidates for which we obtain marketing approvals, either directly or with a collaborator ordistributor;•obtaining market acceptance of JTX-2011, JTX-4014 and any future product candidates as viable treatment options;•addressing any competing technological and market developments;•identifying, assessing, acquiring and developing new product candidates;•negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter;•obtaining, maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and•attracting, hiring, and retaining qualified personnel.Even if our product candidates or any future product candidates that we develop are approved for commercial sale, we anticipate incurringsignificant costs associated with commercializing any approved product candidate. These costs may fluctuate or exceed our expectations and ourrevenues will depend on many factors that we cannot control or estimate. If we are not able to generate revenue from the sale of any approvedproducts, we may never become profitable.We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed couldforce us to delay, limit, reduce or terminate our product development or commercialization efforts.Our operations have consumed substantial amounts of cash since inception. As of December 31, 2017, our cash, cash equivalents andinvestments were $257.9 million. We expect to continue to spend substantial amounts to continue the clinical development of JTX-2011 andpreclinical and clinical development of JTX-4014 and any future product candidates. If we are able to gain marketing approval for any of ourproduct candidates, we will require significant additional amounts of cash in order to launch and commercialize those product candidates to theextent that such launch and commercialization are not the responsibility of a collaborator. In addition, other unanticipated costs may arise.Because the design and outcome of our planned and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actualamounts necessary to successfully complete the development and commercialization of JTX-2011, JTX-4014 and any other future productcandidates. Our future capital requirements depend on many factors, including:•the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies andclinical trials;•the timing of, and the costs involved in, obtaining marketing approvals for our product candidates if clinical trials are successful;•the success of our collaboration with Celgene;•whether Celgene exercises its licensing and co-development options under our collaboration agreement with Celgene, each of which wouldtrigger additional payments to us;41Table of Contents•the cost of commercialization activities for our product candidates, that are approved for sale, including marketing, sales and distributioncosts;•the cost of manufacturing our product candidates for clinical trials in preparation for marketing approval and in preparation forcommercialization;•our ability to establish and maintain strategic licensing or other arrangements and the financial terms of such agreements;•the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigationcosts and the outcome of such litigation;•the timing, receipt, and amount of sales of, or royalties on, our future products, if any;•the emergence of competing cancer therapies and other adverse market developments; and•the requirement for and cost of developing complementary diagnostics and/or companion diagnostics.We do not have any committed external source of funds or other support for our development efforts, other than our collaboration with Celgene,which is limited in scope and duration. We will not receive any option-exercise fees or milestone payments prior to Celgene exercising a licensingor co-development option. Until we can generate sufficient product and royalty revenue to finance our cash requirements, which we may never do,we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategicalliances, licensing arrangements and other marketing or distribution arrangements. Based on our research and development plans, we expect thatour existing cash, cash equivalents and investments will enable us to fund our operating expenses and capital expenditure requirements for atleast 24 months from the filing date of this Annual Report on Form 10-K.If we are unable to obtain adequate financing on favorable terms when needed, we may have to delay, reduce the scope of or suspend one or moreof our clinical trials or research and development programs or our commercialization efforts.Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to ourtechnologies or JTX-2011, JTX-4014 and any other future product candidates.Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of privateand public equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additionalcapital through the sale of common stock or securities convertible or exchangeable into common stock, stockholders’ ownership interest will bediluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. Debt financing,if available, would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability totake specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.If we are unable to raise additional funds through equity or debt financings when needed, and instead raise additional capital through marketing anddistribution agreements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certainvaluable rights to JTX-2011, JTX-4014 and any other future product candidates, technologies, future revenue streams or research programs orgrant licenses on terms that may not be favorable to us.Risks Related to Intellectual PropertyIf we are unable to obtain, maintain and protect our intellectual property rights for our product candidates or if our intellectual propertyrights are inadequate, our competitive position could be harmed.Our commercial success will depend in part on our ability to obtain and maintain patent and other intellectual property protection in the UnitedStates and other countries with respect to our product candidates. We rely on trade secret, patent, copyright and trademark laws, andconfidentiality, licensing and other agreements with employees and third parties, all of which offer only limited protection. We currently, or will inthe future, seek to protect our proprietary position by filing and prosecuting patent applications in the United States and abroad related to JTX-2011, JTX-4014, any other future product candidates, and any future novel technologies that are important to our business.42Table of ContentsThe steps we or our licensors have taken to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietaryinformation or infringement of our intellectual property rights, both inside and outside of the United States.If we or our licensors are unable to obtain and maintain patent protection for JTX-2011, JTX-4014 or any other future product candidates, or if thescope of the patent protection obtained is not sufficient, our competitors could develop and commercialize products similar or superior to ours, andour ability to successfully commercialize JTX-2011, JTX-4014 and any other future product candidates and future technologies may be adverselyaffected.Our pending applications cannot be enforced against third parties unless and until a patent issues from such applications and, even after issuance,such patents may be challenged in the courts or patent offices in the United States and abroad. Such proceedings may result in the loss of patentprotection, the narrowing of claims in such patents or the invalidity or unenforceability of such patents, which could limit our ability to stop othersfrom using or commercializing similar or identical products, or limit the duration of the patent protection for JTX-2011, JTX-4014 and any otherfuture product candidates. In addition, we cannot predict whether any of our future patent applications will result in the issuance of patents thateffectively protect JTX-2011, JTX-4014 and any other future product candidates, or if any of our issued patents or if any of our licensor’s issuedpatents will effectively prevent others from commercializing competitive products. In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property rights, even in relation to issued patent claims, and proving any such infringementmay be even more difficult. If we are unable to obtain, maintain, and protect our intellectual property our competitive advantage could be harmed,and it could result in a material adverse effect on our business, financial condition, and the results of operations and prospects.Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time, and JTX-2011, JTX-4014 and any other future product candidates for which we intend to seek approval as biologic products may face competition soonerthan anticipated.Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting suchcandidates might expire before or shortly after such candidates are commercialized. We expect to seek patent term adjustments or extensions ofpatent terms in the United States for our licensed patents and any patents we own in the future and, if available, in other countries where that maybe available when we are prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permitsa patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved indication (or any additionalindications approved during the period of extension). However, the applicable authorities, including the FDA and the USPTO in the United States,and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and mayrefuse to grant extensions to our patents, or may grant more limited extensions than we request. We may not be granted an extension because of,for example, failure to exercise due diligence during the testing phase or regulatory review process, failure to apply within applicable deadlines,failure to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. If we are unable to obtain patent termextension or the term of any such extension is less than we request, our competitors may be able to take advantage of our investment indevelopment and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case,which could result in a material adverse effect on our business, financial condition, results of operation and prospects.The Biologics Price Competition and Innovation Act of 2009, or BPCIA, established legal authority for the FDA to review and approve biosimilarbiologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an existing brand product. Under theBPCIA, an application for a biosimilar product cannot be approved by the FDA until 12 years after the original branded product was approved undera BLA. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, andmeaning are subject to uncertainty. While it is uncertain when such processes intended to implement BPCIA may be fully adopted by the FDA,any such processes could have a material adverse effect on the future commercial prospects for our biological products.We intend to seek market exclusivity for our biological product candidate that is subject to its own BLA for 12 years in the United States, 10 yearsin Europe and other durations in other markets. However, the term of the patents that cover such product candidates may not extend beyond theapplicable market exclusivity awarded by a particular country. For example, in the United States, if all of the patents that cover our particularbiologic product expire before the 12-year market exclusivity expires, a third party could submit a marketing application for a biosimilar product fouryears after approval of our biologic product, and the FDA could immediately review the application and approve the biosimilar product for marketing12 years after approval of our biologic. Alternatively, a third party could43Table of Contentssubmit a BLA for a similar or identical product any time after approval of our biologic product, and the FDA could immediately review and approvethe similar or identical product for marketing and the third party could begin marketing the similar or identical product upon expiry of all of thepatents that cover our particular biologic product.Additionally, there is a risk that this exclusivity could be shortened due to congressional action, potentially creating the opportunity for biosimilarcompetition sooner than anticipated. The extent to which a biosimilar, once approved, will be substituted for any one of our reference products in away that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace andregulatory factors that are still developing.If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and productscould be adversely affected.In addition to seeking patent protection, we also rely on other proprietary rights, including protection of trade secrets, know-how and confidentialand proprietary information. To maintain the confidentiality of our trade secrets and proprietary information, we enter into confidentiality agreementswith our employees, consultants, collaborators and other third parties who have access to our trade secrets. These agreements require that allconfidential information developed by the individual or made known to the individual by us during the course of the individual’s relationship with usbe kept confidential and not disclosed to third parties. Our agreements with employees also provide that any inventions conceived by the individualin the course of rendering services to us shall be our exclusive property. However, we may not obtain these agreements in all circumstances, andindividuals with whom we have these agreements may not comply with their terms. The assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that theymay bring against us, to determine the ownership of what we regard as our intellectual property. In addition, in the event of unauthorized use ordisclosure of our trade secrets or proprietary information, these agreements, even if obtained, may not provide meaningful protection, particularlyfor our trade secrets or other confidential information.Adequate remedies may not exist in the event of unauthorized use or disclosure of our confidential information. Enforcing a claim that a partyillegally disclosed or misappropriated a trade secret is difficult, expensive, and time consuming, and the outcome is unpredictable. In addition,some courts are less willing or unwilling to protect trade secrets. The disclosure of our trade secrets or the independent development of our tradesecrets by a competitor or other third party would impair our competitive position and may materially harm our business, financial condition, resultsof operations and prospects.Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which wouldbe uncertain and could harm our business.Our commercial success depends on our ability and the ability of our current or future collaborators to develop, manufacture, market and sell ourproduct candidates, and to use our related proprietary technologies without infringing, misappropriating or otherwise violating the intellectualproperty and proprietary rights of third parties. The biotechnology and pharmaceutical industries are characterized by extensive litigation regardingpatents and other intellectual property rights. We may become party to, or threatened with, adversarial proceedings or litigation regardingintellectual property rights with respect to our current and any other future product candidates. For example, we are aware of third party patentsgenerally directed to methods of treating certain indications with an anti-PD-1 monoclonal antibody that may be construed to cover one or more ofour current and future product candidates. If we are found to infringe a third-party’s intellectual property rights, and we are unsuccessful indemonstrating that such intellectual property rights are invalid or unenforceable, we could be required to obtain a license from such third party tocontinue developing, manufacturing and commercializing our product candidates. However, we may not be able to obtain any required license oncommercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors andother third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. Wealso could be forced, including by court order, to cease developing, manufacturing, and commercializing our product candidates. In addition, in anysuch proceeding or litigation, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if we arefound to have willfully infringed a patent or other intellectual property right. Any of the foregoing could have a material adverse effect on ourbusiness, financial condition, results of operations and prospects.In addition, we are testing JTX-2011 and expect to test future product candidates with other products that are covered by patents held by othercompanies or institutions. In the event that a labeling instruction is required in product packaging recommending that combination, we could beaccused of, or held liable for, infringement of the44Table of Contentsthird-party patents covering the product candidate or product recommended for administration with our product candidates. In such a case, wecould be required to obtain a license from the other company or institution to use the required or desired package labeling, which may not beavailable on commercially reasonable terms, or at all.If we breach any of our license agreements or collaboration agreements, it could have a material adverse effect on ourcommercialization efforts for our product candidates.Our commercial success depends on our ability, and at times, the ability of our licensors and current or future collaborators to develop,manufacture, market, and sell our product candidates, and use our licensors proprietary technologies without infringing the property rights of thirdparties. For example, we have entered into our Celgene Collaboration Agreement relating to JTX-2011, JTX-4014 and other product candidates,and an exclusive license agreement with Sloan Kettering Institute for Cancer Research, Memorial Sloan Kettering Cancer Center and MemorialHospital for Cancer and The University of Texas MD Anderson Cancer Center related to certain uses of our JTX-2011, and we may enter intoadditional licenses in the future. These and other licenses may not provide exclusive rights to use such intellectual property and technology in allrelevant fields of use and in all territories in which we may wish to develop or commercialize our products in the future. As a result, we may not beable to prevent competitors from developing and commercializing competitive products in territories included in all our licenses.In addition, we may not have the right to control the preparation, filing, prosecution, maintenance, enforcement and defense of patents and patentapplications covering the technology that we license from third parties. For example, under our Celgene Collaboration Agreement, under certaincircumstances, Celgene has the first right to enforce, maintain or defend our intellectual property rights with respect to certain licensed programs.Therefore, we cannot be certain that these patents and patent applications will be prepared, filed, prosecuted, maintained, enforced, and defendedin a manner consistent with the best interests of our business. If our licensors fail to prosecute, maintain, enforce and defend such patents, or loserights to those patents or patent applications, the rights we have licensed may be reduced or eliminated and our right to develop andcommercialize our product candidates that are the subject of such licensed rights could be adversely affected. Furthermore, our owned and in-licensed patents may be subject to a reservation of rights by one or more third parties.Certain of our license agreements also require us to meet development thresholds to maintain the license, including establishing a set timeline fordeveloping and commercializing products. If we fail to comply with the obligations under our license agreements, including payment and diligenceterms, our licensors may have the right to terminate our agreements. Such an occurrence could materially adversely affect the value of theproduct candidate being developed under any such agreement. Termination of our license agreements or reduction or elimination of our rightsunder them may result in our having to negotiate a new or reinstated agreement, which may not be available to us on equally favorable terms, or atall.If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements oncommercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could havea material adverse effect on our business, financial conditions, results of operations and prospects.Further, the resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to therelevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, eitherof which could have a material adverse effect on our business, financial condition, results of operations and prospects.We may not be successful in obtaining necessary rights to our product candidates we may develop, or obtain through acquisitions andin-licenses.We currently have rights to intellectual property, through licenses from third parties, for certain uses of JTX-2011. Because JTX-2011, JTX-4014and any other future product candidates may require the use of proprietary rights held by third parties, the growth of our business likely will depend,in part, on our ability to acquire, in-license or use these proprietary rights. We may be unable to acquire or in-license any compositions, methods ofuse, processes or other intellectual property rights from third parties that we identify as necessary for JTX-2011, JTX-4014 and other futureproduct candidates. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more establishedcompanies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive. These establishedcompanies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercializationcapabilities.45Table of ContentsIf we are unable to successfully obtain required third-party intellectual property rights or maintain the existing intellectual property rights we have,we may have to abandon or alter our plans for the development or commercialization of the relevant program or product candidate, which couldhave a material adverse effect on our business, financial condition, results of operations and prospects.We may not be able to protect our intellectual property and proprietary rights throughout the world.Filing, prosecuting and defending patents on JTX-2011, JTX-4014 and all other future product candidates throughout the world would beprohibitively expensive, and intellectual property rights in some countries outside the United States can be less extensive than those in the UnitedStates.Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. Anyefforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantagefrom the intellectual property we develop or license.Moreover, many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. If we orany of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position maybe impaired and our business and results of operations may be adversely affected.Generic or biosimilar product manufacturers may develop, seek approval for, and launch biosimilar versions or generic versions, respectively, ofour products. The FDA has published draft guidance documents on biosimilar product development. For the FDA to approve a biosimilar productas interchangeable with a reference product, the agency must find that the biosimilar product can be expected to produce the same clinical resultsas the reference product and, for products administered multiple times, the biosimilar and the reference biologic may be switched after one hasbeen previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. IfJTX-2011, JTX-4014 and any other future product candidates are approved by the FDA, the approval of a biosimilar product to one of our productscould have a material impact on our business. In particular, a biosimilar product could be significantly less costly to bring to market and pricedsignificantly lower than our products, if approved by the FDA.Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment andother 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 payments andother similar provisions during the patent application process and to maintain patents after they are issued. In certain circumstances, we rely onour licensing partners to take the necessary action to comply with these requirements with respect to our licensed intellectual property. While anunintentional lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in whichnoncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in therelevant jurisdiction. If we fail to obtain and maintain the patents and patent applications covering our products or procedures, we may not be ableto stop a competitor from marketing products that are the same as or similar to JTX-2011, JTX-4014 and any other future product candidates,which would have a material adverse effect on our business.Changes to the patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairingour ability to protect our product candidates.As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtainingand enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly, time consumingand inherently uncertain. Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertaintiesand costs.The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certaincircumstances or weakening the rights of patent owners in certain situations. Depending on future actions by the U.S. Congress, the U.S. courts,the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable waysthat would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. Changes inpatent law could increase the uncertainties and costs surrounding the prosecution of our patent46Table of Contentsapplications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financialcondition, results of operations and prospects.We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming andunsuccessful and have a material adverse effect on the success of our business.Competitors may infringe our licensed patents or any patent we own in the future or misappropriate or otherwise violate our intellectual propertyrights. We may also be required to defend against claims of infringement and our licensed patents and any patents we own in the future maybecome involved in priority or other intellectual property related disputes. To counter infringement or unauthorized use, litigation may be necessaryto enforce or defend our intellectual property rights or to determine the validity and scope of our own intellectual property rights or the proprietaryrights of others. Also, third parties may initiate legal proceedings against us or our licensors to assert that we are infringing their intellectualproperty rights or to challenge the validity or scope of our owned or licensed intellectual property rights. Litigation and other intellectual propertyrelated proceedings could result in substantial costs and diversion of management resources, which could harm our business and financial results.Despite our best efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property. In addition,an adverse result in any litigation or other intellectual property related proceeding could put one or more of our patents at risk of being invalidated,held unenforceable or interpreted narrowly.Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some ofour confidential information could be disclosed during this type of litigation. There could also be public announcements of the results of hearings,motions or other interim proceedings or developments in any such proceedings. If securities analysts or investors perceive these results to benegative, it also could have a material adverse effect on the price of shares of our common stock. Any of the foregoing may have a materialadverse effect on our business, financial condition, results of operations and prospects.We may be subject to claims by third parties asserting that our collaborators, licensors, employees or we have misappropriated theirintellectual property, have wrongfully used or disclosed confidential information of third parties or are in breach of non-competition ornon-solicitation agreements with our competitors.Many of our employees, our collaborators’ employees and our licensors’ employees, including our senior management, are currently or previouslywere employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Some ofthese employees, including each member of our senior management, executed proprietary rights, non-disclosure and non-competition agreements,or similar agreements, in connection with such previous employment. Although we try to ensure that our employees do not use the proprietaryinformation or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectualproperty of any such individual’s current or former employer. In addition, we could be subject to claims that we or our employees haveinadvertently or otherwise used or disclosed alleged trade secrets or other confidential information of former employers or competitors, that wecaused an employee to breach the terms of his or her non-competition or non-solicitation agreement, or that we or these individuals have,inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a former employer or competitor. Litigationmay be necessary to defend against such claims. If we fail in defending any such claims, we may lose valuable intellectual property rights orpersonnel or sustain monetary damages. Even if we are successful in defending against such claims, litigation could result in substantial costsand be a distraction to management. Any of the foregoing may have a material adverse effect on our business, financial condition, results ofoperations and prospects.Issued patents covering JTX-2011, JTX-4014 and any other future product candidates could be found invalid or unenforceable ifchallenged in court or before the USPTO or comparable foreign authority.If we or one of our licensing partners initiate legal proceedings against a third party to enforce a patent covering one of JTX-2011, JTX-4014 or anyother future product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid or unenforceable. Theoutcome following legal assertions of invalidity and unenforceability is unpredictable. If a third party were to prevail on a legal assertion of invalidityand/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on JTX-2011, JTX-4014 and any other future productcandidates. Such a loss of patent protection could have a material adverse impact on our business.47Table of ContentsRisks Related to Employee Matters, Managing our Growth and Other Risks Related to our BusinessWe currently have no marketing and sales organization and have no experience in marketing products. If we are unable to establishmarketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not beable to generate product revenue.We currently have no sales, marketing, or distribution capabilities and have no experience in marketing products. If any of our product candidatesreceives appropriate regulatory approval, we intend to develop an in-house marketing organization and sales force, which will require significantcapital expenditures, management resources and time. We will have to compete with other pharmaceutical and biotechnology companies torecruit, hire, train and retain marketing and sales personnel.If we are unable or decide not to establish internal sales, marketing and distribution capabilities, we will pursue collaborative arrangementsregarding the sales and marketing of our products; however, we cannot assure stockholders that we will be able to establish or maintain suchcollaborative arrangements, on favorable terms if at all. We cannot assure stockholders that we will be able to develop in-house sales anddistribution capabilities or establish or maintain relationships with third-party collaborators to commercialize any current or future productcandidates.We will need to grow the size of our organization, and we may experience difficulties in managing this growth.As of December 31, 2017, we had 112 full-time employees, including 87 employees engaged in research and development. As our developmentand commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial and otherpersonnel. Future growth would impose significant added responsibilities on members of management, including:•identifying, recruiting, integrating, maintaining and motivating additional employees;•managing our internal development efforts effectively, including the clinical and FDA review process for JTX-2011, JTX-4014 and anyother future product candidates, while complying with our contractual obligations to contractors and other third parties; and•improving our operational, financial and management controls, reporting systems and procedures.Our future financial performance and our ability to commercialize JTX-2011, JTX-4014 and any other future product candidates will depend, in part,on our ability to effectively expand our organization by hiring new employees and expand our groups of consultants and contractors and manageany future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in orderto devote a substantial amount of time to managing these growth activities.We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors andconsultants to provide certain services, including substantially all aspects of marketing approval, clinical management, and manufacturing. Wecannot assure stockholders that we can effectively manage our outsourced activities.We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualifiedpersonnel, we may not be able to successfully implement our business strategy.Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract, motivate andretain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, particularly our chief executiveofficer, Richard Murray, and our scientific and medical personnel. The loss of the services of any of our executive officers, key employees, andscientific and medical advisors, and our inability to find suitable replacements, could result in delays in product development and harm ourbusiness.We conduct our operations at our facility in Cambridge, Massachusetts, in a region that is home to many other biopharmaceutical companies andmany academic and research institutions. Competition for skilled personnel is intense and the turnover rate can be high, which may limit our abilityto hire and retain highly qualified personnel on acceptable terms or at all. We expect that we will need to recruit talent from outside of our region,and doing so may be costly and difficult.To induce valuable employees to remain at our Company, in addition to salary and cash incentives, we have provided restricted stock and stockoption grants that vest over time. The value to employees of these equity grants48Table of Contentsthat vest over time may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficientto counteract more lucrative offers from other companies. Although we have employment agreements with our key employees, these employmentagreements provide for at-will employment, meaning that such employees could leave our employment at any time, with or without notice. We donot maintain “key man” insurance policies on the lives of all of these individuals or the lives of any of our other employees.If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incurcosts that could have a material adverse effect on the success of our business.We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and thehandling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammablematerials, including chemicals and biological and radioactive materials. Our operations also produce hazardous waste products. We generallycontract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from thesematerials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages,and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employeesresulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintaininsurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological,hazardous or radioactive materials.Our internal computer systems, or those used by our CROs or other collaborators, may fail or suffer security breaches and cyber-attacks,which could compromise our intellectual property or other sensitive information and could result in a material disruption of ourbusiness.Despite the implementation of security measures, our internal computer systems are vulnerable to damage from computer viruses andunauthorized access. While we have not to our knowledge experienced any such material system failure or security breach to date, if such anevent were to occur, it could result in a material disruption of our business operations. Likewise, we rely on third parties for many aspects of ourbusiness, including manufacturing product candidates and conducting clinical trials. The secure maintenance of this information is critical to ourbusiness and reputation. We believe that companies have been increasingly subject to a wide variety of security incidents, cyber-attacks andother attempts to gain unauthorized access. These threats can come from a variety of sources, ranging in sophistication from an individual hackerto a state-sponsored attack. Cyber threats may be generic, or they may be custom-crafted against our information systems. Over the past fewyears, cyber-attacks have become more prevalent and much harder to detect and defend against.Our network and storage applications and those of our CROs, collaborators and vendors may be subject to unauthorized access by hackers orbreached due to operator error, malfeasance or other system disruptions. It is often difficult to anticipate or immediately detect such incidents andthe damage caused by them. These data breaches and any unauthorized access or disclosure of our information or intellectual property couldcompromise our intellectual property and expose sensitive business information. A data security breach could also lead to public exposure ofpersonal information of our employees. Cyber-attacks could cause us to incur significant remediation costs, disrupt key business operations anddivert attention of management and key information technology resources. Our network security and data recovery measures and those of ourCROs, collaborators and vendors may not be adequate to protect against such security breaches and disruptions. To the extent that anydisruption, security breach or cyber-attack were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure ofconfidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates couldbe delayed.49Table of ContentsWe, or the third parties upon whom we depend, may be adversely affected by natural disasters and our business continuity and disasterrecovery plans may not adequately protect us from a serious disaster.Natural disasters could severely disrupt our operations and have a material adverse effect on our business. If a natural disaster, power outage orother event occurred that damaged critical infrastructure, such as our headquarters or the manufacturing facilities of our third-party contractmanufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for asubstantial period of time. The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a seriousdisaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuityplans, which, could have a material adverse effect on our business.Our employees, independent contractors, vendors, principal investigators, CROs and consultants may engage in misconduct or otherimproper activities, including non-compliance with regulatory standards and requirements and insider trading.We are exposed to the risk that our employees, independent contractors, vendors, principal investigators, CROs and consultants may engage infraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure ofunauthorized activities to us that violate the regulations of the FDA and comparable foreign regulatory authorities, including those laws requiringthe reporting of true, complete and accurate information to such authorities; healthcare fraud and abuse laws and regulations in the United Statesand abroad; or laws that require the reporting of financial information or data accurately. In particular, sales, marketing and business arrangementsin the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and otherabusive practices. We have adopted a code of conduct applicable to all of our employees, but it is not always possible to identify and determisconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks orlosses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws orregulations. Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. If any suchactions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could result in significantpenalties and could have a material adverse effect on our ability to operate our business and our results of operations.If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, causeus to incur debt or assume contingent liabilities, and subject us to other risks.We may evaluate various acquisitions and additional strategic partnerships, including licensing or acquiring complementary products, intellectualproperty rights, technologies, or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:•increased operating expenses and cash requirements;•the assumption 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 newpersonnel;•the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger oracquisition;•retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;•risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existingproducts or product candidates and marketing approvals; and•our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisitionor even to offset the associated acquisition and maintenance costs.In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses andacquire intangible assets that could result in significant future amortization expense.50Table of ContentsMoreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access totechnology or products that may be important to the development of our business.Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stockprice.Our general business strategy may be adversely affected by any economic downturn, volatile business environment or unpredictable and unstableconditions in global credit and financial markets. We cannot assure stockholders that deterioration of the global credit and financial markets wouldnot negatively impact our stock price, our current portfolio of cash equivalents or investments, or our ability to meet our financing objectives. If thecurrent equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive.Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy,financial performance and stock price and could require us to delay or abandon clinical development plans.Risks Related to our Common StockOur ability to utilize our net operating loss carryforwards and certain other tax attributes has been limited by “ownership changes” andmay be further limited.Under Section 382 of the Internal Revenue Code of 1986, as amended, or the IRC, if a corporation undergoes an “ownership change” (generallydefined as a greater than 50% change (by value) in the ownership of its equity over a three-year period), the corporation’s ability to use its pre-change net operating loss, or NOL, carryforwards and certain other pre-change tax attributes to offset its post-change income may be limited. AnIRC Section 382 study, completed in August 2016, identified three previous ownership changes for purposes of IRC Section 382. As a result ofthese ownership changes, our net operating loss and tax credit carryforwards allocable to the periods preceding each such ownership change aresubject to limitations under IRC Section 382. We may experience ownership changes in the future as a result subsequent shifts in our stockownership, some of which are outside our control, which may also be subject to limitations by “ownership changes” in the future, which could resultin increased tax liability to us.The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of ourcommon stock.Our stock price is likely to be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experiencedextreme volatility that has often been unrelated to the operating performance of particular companies. The market price for our common stock maybe influenced by many factors, including:•the success of competitive products or technologies;•results of our clinical trials or those of our competitors;•regulatory or legal developments in the United States and other countries;•developments or disputes concerning patent applications, issued patents or other proprietary rights;•the recruitment or departure of key personnel;•the level of expenses related to our product candidates or clinical development programs;•the results of our efforts to discover, develop, acquire or in-license additional product candidates or drugs;•actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;•variations in our financial results or those of companies that are perceived to be similar to us;•changes in the structure of healthcare payment systems;•market conditions in the pharmaceutical and biotechnology sectors;•general economic, industry and market conditions; and•the other factors described in this “Risk factors” section.51Table of ContentsAn active trading market for our common stock may not be sustained.Our shares of common stock began trading on the Nasdaq Global Select Market on January 27, 2017. Given the limited trading history of ourcommon stock, there is a risk that an active trading market for our shares will not be sustained, which could put downward pressure on the marketprice of our common stock and thereby affect the ability of our stockholders to sell their shares.We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipatedeclaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of theirstock.Our executive officers, directors, principal stockholders and their affiliates will continue to exercise control over our Company, whichwill limit your ability to influence corporate matters and could delay or prevent a change in corporate control.As of December 31, 2017, our executive officers and directors, combined with our stockholders who owned more than 5% of our outstandingcommon stock, and their affiliates, beneficially owned approximately 77% of our outstanding common stock. As a result, these stockholders, ifthey act together, will be able to control the outcome of matters submitted to our stockholders for approval, including the election of directors andany sale, merger, consolidation, or sale of all or substantially all of our assets. In addition, this concentration of ownership might adversely affectthe market price of our common stock by:•delaying, deferring or preventing a change of control;•impeding a merger, consolidation, takeover or other business combination; or•discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control.We are incurring and will continue to incur significantly increased costs as a result of operating as a public company, and ourmanagement is now required to devote substantial time to new compliance initiatives.As a public company, we are incurring and will continue to incur significant legal, accounting and other expenses that we did not incur as a privatecompany. We are subject to the reporting requirements of the Exchange Act, as well as various requirements imposed by the Sarbanes-Oxley Act,rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, and the Dodd-Frank Wall Street Reformand Consumer Protection Act. Stockholder activism, the current political environment and the current high level of government intervention andregulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impactthe manner in which we operate our business in ways we cannot currently anticipate.We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to makesome activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensivefor us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage.We also expect that we will need to hire additional accounting, finance and other personnel in connection with our efforts to comply with therequirements of being a public company, and our management and other personnel will need to devote a substantial amount of time towardsmaintaining compliance with these requirements. We cannot predict or estimate the amount or timing of additional costs we may incur to respondto these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve onour board of directors, our board committees or as executive officers.Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.Certain stockholders hold a substantial number of shares of our common stock. If such 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.In addition, shares of common stock that are either subject to outstanding options or reserved for future issuance under our stock incentive planswill become eligible for sale in the public market extent permitted by the provisions of various vesting schedules and Rule 144 and Rule 701 underthe Securities Act of 1933, as amended, or the52Table of ContentsSecurities Act, and, in any event, we have filed a registration statement permitting shares of common stock issued on exercise of options to befreely sold in the public market. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the publicmarket, the trading price of our common stock could decline.Certain holders of our common stock are entitled to rights with respect to the registration of their shares under the Securities Act. Registration ofthese shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except forshares held by affiliates. Any sales of securities by these stockholders who have exercised registration rights could have a material adverse effecton the trading price of our common stock.Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause ouroperating results to fall below expectations or our guidance.Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results. Fromtime to time, we may enter into license or collaboration agreements with other companies that include development funding and significant upfrontand milestone payments and/or royalties, which may become an important source of our revenue. Accordingly, our revenue may depend ondevelopment funding and the achievement of development and clinical milestones under current and any potential future license and collaborationagreements and sales of our products, if approved. These upfront and milestone payments may vary significantly from period to period and anysuch variance could cause a significant fluctuation in our operating results from one period to the next.Furthermore, our operating results may fluctuate due to a variety of other factors, many of which are outside of our control and may be difficult topredict, including the following:•the timing and cost of, and level of investment in, research and development activities relating to our current and any future productcandidates, which will change from time to time;•our ability to enroll patients in clinical trials and the timing of enrollment;•the cost of manufacturing our current and any future product candidates, which may vary depending on FDA guidelines and requirements,the quantity of production and the terms of our agreements with manufacturers;•expenditures that we will or may incur to acquire or develop additional product candidates and technologies;•the timing and outcomes of clinical studies for JTX-2011, JTX-4014 and any other future product candidates or competing productcandidates;•competition from existing and future products that may compete with JTX-2011, JTX-4014 and any other future product candidates, andchanges in the competitive landscape of our industry, including consolidation among our competitors or partners;•any delays in regulatory review or approval of JTX-2011, JTX-4014 or any other future product candidates;•the level of demand for JTX-2011, JTX-4014 and any other future product candidates, if approved, which may fluctuate significantly andbe difficult to predict;•our ability to commercialize JTX-2011, JTX-4014 and any other future product candidates, if approved;•the success of our collaboration with Celgene and our ability to establish and maintain other collaborations, licensing or otherarrangements;•our ability to adequately support future growth;•potential unforeseen business disruptions that increase our costs or expenses;•future accounting pronouncements or changes in our accounting policies; and•the changing and volatile global economic environment.The cumulative effect of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As aresult, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as anindication of our future performance. If our revenue or operating results fall below the expectations of analysts or investors or below any forecastswe may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the53Table of Contentsprice of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publiclystated revenue and/or earnings guidance we may provide.Moreover, securities class action litigation has often been brought against a company following a decline in the market price of its securities. Thisrisk is especially relevant for us as pharmaceutical companies have experienced significant stock price volatility in recent years. If we face suchlitigation, it could result in substantial costs and a diversion of management’s attention and resources.If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the priceof our stock could decline.The trading market for our common stock will rely, in part, on the research and reports that industry or financial analysts publish about us or ourbusiness. If one or more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline. Ifone or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which, in turn, could cause our stockprice to decline.Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial toour stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may delay or prevent an acquisition of us ora change in our management. These provisions include a classified board of directors, a prohibition on actions by written consent of ourstockholders and the ability of our board of directors to issue preferred stock without stockholder approval. In addition, because we areincorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability ofstockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us. Although we believe these provisionscollectively provide for an opportunity to obtain greater value for stockholders by requiring potential acquirors to negotiate with our board ofdirectors, they would apply even if an offer rejected by our board were considered beneficial by some stockholders. In addition, these provisionsmay frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult forstockholders to replace members of our board of directors, which is responsible for appointing the members of our management.Our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions andproceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum fordisputes with us or our directors, officers or employees.Our bylaws, provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole andexclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owedby any of our directors, officers and employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of theDelaware General Corporation Law, our certificate of incorporation or our bylaws, or (iv) any action asserting a claim that is governed by theinternal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named asdefendants therein. Any person purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice ofand to have consented to this provision of our bylaws. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicialforum that it finds favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and ourdirectors, officers and employees even though an action, if successful, might benefit our stockholders. Stockholders who do bring a claim in theCourt of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near the State ofDelaware. The Court of Chancery may also reach different judgments or results than would other courts, including courts where a stockholderconsidering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to usthan to our stockholders. Alternatively, if a court were to find this provision of our amended and restated certificate of incorporation inapplicable to,or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs, which could have amaterial adverse effect on our business, financial condition or results of operations.Item 1B. Unresolved Staff CommentsNot applicable.54Table of ContentsItem 2. PropertiesWe lease a facility containing our research and development, laboratory and office space, which consists of approximately 51,000 square feetlocated at 780 Memorial Drive, Cambridge, Massachusetts. Our lease expires on March 31, 2025. This facility is our corporate headquarters. Webelieve that our facilities are sufficient to meet our current needs.Item 3. Legal ProceedingsWe are not currently a party to any material legal proceedings.Item 4. Mine Safety DisclosuresNot applicable.55Table of ContentsPART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMarket InformationOur common stock trades on the Nasdaq Global Select Market under the symbol “JNCE”. Trading of our common stock commenced on January27, 2017 in connection with our initial public offering, or IPO. Prior to that time, there was no established public trading market for our commonstock. As a result, we have not set forth quarterly information with respect to the high and low prices for our common stock prior to that time. Thefollowing table sets forth the high and low sale prices per share for our common stock as reported on the Nasdaq Global Select Market for theperiods indicated: Market Price2017High LowFirst Quarter (beginning January 27, 2017)$26.75 $16.33Second Quarter$29.29 $13.75Third Quarter$17.95 $11.05Fourth Quarter$17.90 $12.43HoldersAs of February 28, 2018, we had approximately 30 holders of record of our common stock. This number does not include beneficial owners whoseshares were held by nominees in street name.Dividend PolicyWe have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings, ifany, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. Anyfuture determination to pay dividends will be made at the discretion of our board of directors and will depend on various factors, includingapplicable laws, our results of operations, financial condition, future prospects, then applicable contractual restrictions and any other factorsdeemed relevant by our board of directors. Investors should not purchase our common stock with the expectation of receiving cash dividends.Recent Sales of Unregistered SecuritiesBetween January 1, 2017 and January 26, 2017, we issued an aggregate of 1,743 shares of common stock and received aggregate cashconsideration of $1,551 upon the exercise of stock options.We deemed these exercises of stock options as exempt pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, or the SecuritiesAct, or in reliance on Rule 701 of the Securities Act as offers and sales of securities under compensatory benefit plans and contracts relating tocompensation in compliance with Rule 701. Each of the recipients of securities in any transaction exempt from registration either received or hadadequate access, through employment, business or other relationships, to information about us. On January 27, 2017, we filed a registrationstatement on Form S-8 under the Securities Act to register all of the shares of our common stock subject to outstanding options and all shares ofour common stock otherwise issuable pursuant to our equity compensation plans.Purchase of Equity SecuritiesWe did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K.56Table of ContentsUse of Proceeds from Registered SecuritiesOn February 1, 2017, we completed our IPO. The offer and sale of the shares in the IPO were registered under the Securities Act pursuant to aregistration statement on Form S-1 (File No. 333-215372), which was filed on December 30, 2016 and amended subsequently and declaredeffective on January 26, 2017. Following the sale of the shares in connection with the closing of our IPO, the offering terminated. We receivedaggregate net proceeds from the IPO of approximately $106.4 million, after deducting underwriting discounts and commissions and other offeringexpenses paid by us. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owningten percent or more of any class of our equity securities or to any other affiliates.As of December 31, 2017, we had used substantially all of the net proceeds received from the IPO, primarily in advancing JTX-2011 throughPhase I/II clinical trials, to manufacture pre-commercial clinical trial and preclinical study materials, conducting IND-enabling activities for JTX-4014 and for working capital and general corporate purposes. There was no material change in the use of proceeds from our IPO from the planneduse as described in our final prospectus filed with the Securities and Exchange Commission, or the SEC, pursuant to Rule 424(b)(4) on January27, 2017.Performance GraphThe following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the SEC for purposes ofSection 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that Section,nor shall such information be incorporated by reference into any future filing under the Exchange Act or the Securities Act, except to the extentthat we specifically incorporate it by reference into such filing. The following graph compares the performance of our common stock to the NASDAQ Composite Index and to the NASDAQ Biotechnology Indexfrom January 27, 2017 (the first date on which shares of our common stock were publicly traded) through December 31, 2017. The comparisonassumes $100 was invested in our common stock after the market closed on January 27, 2017 in each of the foregoing indices, and it assumesreinvestment of dividends, if any. The stock price performance included in this graph is not necessarily indicative of future stock priceperformance.57Table of ContentsItem 6. Selected Financial DataYou should read the following selected consolidated financial data together with our consolidated financial statements and accompanying notesappearing elsewhere in this Annual Report on Form 10-K and the “Management’s Discussion and Analysis of Financial Condition and Results ofOperations” section of this Annual Report on Form 10-K. We have derived the consolidated statement of operations data for the years endedDecember 31, 2017, 2016 and 2015 and the consolidated balance sheet data as of December 31, 2017 and 2016 from our audited consolidatedfinancial statements included elsewhere in this Annual Report on Form 10‑K. We have derived the consolidated statement of operations data fromthe year ended December 31, 2014 and consolidated balance sheet data as of December 31, 2015 and 2014 from our audited consolidatedfinancial statements not included in this Annual Report on Form 10-K. Our historical results for any prior period are not necessarily indicative of theresults that may be expected in any future period. Year Ended December 31,(in thousands, except per share data)2017 2016 2015 2014Consolidated Statements of Operations Data: Revenue: Collaboration revenue—related party$71,644 $37,197 $— $—Operating expenses: Research and development67,798 34,904 22,130 11,243General and administrative23,061 16,759 8,266 4,969Total operating expenses90,859 51,663 30,396 16,212Operating loss(19,215) (14,466) (30,396) (16,212)Other income, net: Other income, net 2,808 763 5 185Other financing income, net — — 1,859 5,511Total other income, net2,808 763 1,864 5,696Loss before provision for income taxes(16,407) (13,703) (28,532) (10,516)Provision for income taxes36 — — —Net loss$(16,443) $(13,703) $(28,532) $(10,516)Accrued dividends on convertible preferred stock and accretion of redeemableconvertible preferred stock to redemption value (1)(794) (9,435) (8,971) (2,434)Net loss attributable to common stockholders (1)$(17,237) $(23,138) $(37,503) $(12,950)Net loss per share attributable to common stockholders, basic and diluted (1)$(0.57) $(11.00) $(23.13) $(10.93)Weighted-average common shares outstanding, basic and diluted (1)30,055 2,103 1,621 1,184(1) Refer to our consolidated statements of operations as well as Note 2 to our consolidated financial statements for further details on the calculation of net loss per shareattributable to common stockholders and the weighted-average common shares outstanding used in the computation. December 31,(in thousands)2017 2016 2015 2014Balance Sheet Data: Cash, cash equivalents and investments$257,851 $257,374 $45,161 $2,338Working capital$193,046 $61,114 $38,989 $403Total assets$296,660 $271,312 $52,975 $7,515Total deferred revenue—related party$116,160 $187,804 $— $—Convertible preferred stock (2)$— $139,038 $102,961 $27,313Total stockholders’ equity (deficit)$167,109 $(69,088) $(58,760) $(28,000)(2) Upon the completion of our IPO, all outstanding preferred stock was automatically converted into an aggregate of 22,283,690 shares of common stock.58Table of ContentsItem 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financialstatements and related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, this discussion andanalysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from thoseanticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute tothese differences below and elsewhere in this Annual Report on Form 10-K, including those factors set forth in the section entitled “CautionaryNote Regarding Forward-Looking Statements and Industry Data” and in the section entitled “Risk Factors” in Part I, Item 1A.OverviewWe are a clinical stage immunotherapy company dedicated to transforming the treatment of cancer by developing therapies that enable theimmune system to attack tumors and provide long-lasting benefits to patients. We have developed a suite of integrated technologies that compriseour Translational Science Platform, enabling us to comprehensively interrogate the cellular and molecular composition of tumors. By focusing onspecific cell types, both immune and non-immune, within tumors, we can prioritize targets and then identify related biomarkers designed to matchthe right therapy to the right patient. Through this deep, scientific understanding of the tumor microenvironment, or TME, our goal is to effectivelyand efficiently identify and develop new cancer immunotherapies designed to benefit patients with tumors across the spectrum from highlyinflamed, or “hot,” to poorly inflamed, or “cold,” and especially those not well served by current therapies.Our most advanced product candidate, JTX-2011, is a clinical-stage monoclonal antibody that binds to and activates the Inducible T cell CO-Stimulator, or ICOS, a protein on the surface of certain T cells commonly found in many solid tumors. Our preclinical data demonstrates that JTX-2011 stimulates a significant T cell immune response against solid tumors. We submitted our Investigational New Drug Application, or IND, forJTX-2011 to the Food and Drug Administration, or FDA, in July 2016 and began the Phase I portion of our JTX-2011 adaptive Phase I/II clinicaltrial in patients with solid tumors in August 2016. In June 2017, we presented preliminary safety, pharmacodynamic and pharmacokinetic data fromthe Phase I portion of this clinical trial as well as the recommended dose for the Phase II monotherapy cohorts at the 2017 American Society ofClinical Oncology Annual Meeting.In April 2017, we began enrollment in the monotherapy cohorts of the Phase II portion of this clinical trial, which evaluate JTX-2011 as amonotherapy in at least three tumor-specific cohorts, including head and neck squamous cell cancer, or HNSCC, non-small cell lung cancer, orNSCLC, gastric cancer and non-indication specific solid tumors and additional tumor types identified through our Translational Science Platform. InJuly 2017, we began enrollment in the combination cohorts of the Phase II portion of this clinical trial, which evaluate JTX-2011 in combinationwith nivolumab in at least six tumor types, including HNSCC, NSCLC, triple negative breast cancer, melanoma, gastric cancer and additionaltumor types identified through our Translational Science Platform. We expect to provide preliminary efficacy data in the second quarter of 2018.We believe JTX-2011 has the potential to act both as a single agent and more importantly in combination with other therapies, such as anti-PD-1antibodies, to offer treatment alternatives to patients who otherwise lack an effective response to currently approved therapies.We are also conducting IND-enabling studies for JTX-4014, an anti-PD-1 antibody that, assuming continued successful development, we may usein future combinations with JTX-2011 as well as for use in combination with other future product candidates, as we believe combination therapyhas the potential to be a mainstay of cancer immunotherapy. We expect to file an IND for JTX-4014 in 2018.We are discovering and developing immunotherapies beyond the currently approved products targeting T effector cells. To do so, we areleveraging our Translational Science Platform to systematically and comprehensively interrogate cell types within the human tumormicroenvironment, or TME, to enable us to develop therapies with the potential to benefit patients with tumors across the spectrum from hot tocold tumor characteristics. This includes focusing on adaptive and innate immune cells, such as B and T regulatory cells, and immunosuppressivemacrophages, respectively. Therapies targeting these cell types and cell subsets may have the potential to complement existing approaches thatfocus on T effector cells and thereby benefit many patients who do not respond to the currently approved T effector cell-focused immunotherapies.In addition, we are discovering and developing multiple approaches, including targeting stromal cells, with the potential to convert cold tumors tohot tumors, thereby making the tumors more amenable to immunotherapy, perhaps in combination approaches.59Table of ContentsImmunotherapies are increasingly recognized as a critical component of cancer therapy and are beginning to fundamentally change the paradigmfor treating patients. Fewer than half of all cancer patients respond to single agent immunotherapies. Combination therapies are beginning to yieldlonger-lasting responses than single agent therapies, yet there is still significant unmet medical need among large patient populations across mostsolid tumor indications. In addition, there is a significant number of patients with tumors that lack, or have low levels of, immune cell infiltratewhere additional approaches may be required to fully realize the benefit of immunotherapy agents. We believe targeting novel immunemechanisms in combination with identifying and using predictive biomarkers may best address these areas of unmet need.Our Translational Science Platform utilizes a suite of integrated technologies to comprehensively profile the cellular and molecular characteristicswithin thousands of human solid tumors, providing critical information about the TME that we believe will allow us to identify and guide newimmunotherapies more efficiently through development. We utilize a systematic approach to match targets to defined patient populations, as wellas niche indications and/or niche subsets within indications, which we believe are more likely to benefit from these therapies. By taking thisbiomarker-driven approach, we believe that we can more efficiently develop cancer immunotherapies and potentially provide greater benefit topatients. We believe that the biomarker results, coordinated to clinical response, will determine the utility of proceeding to the use of acomplementary diagnostic and/or companion diagnostic for a given therapy.In July 2016, we entered into a Master Research and Collaboration Agreement, or the Celgene Collaboration Agreement, and a Series B-1Preferred Stock Purchase Agreement with Celgene Corporation, or Celgene. Under the terms of these agreements, we received a $225.0 millionupfront cash payment and $36.1 million from the sale of 10,448,100 shares of our Series B-1 convertible preferred stock which shares convertedinto 2,831,463 shares of common stock upon the completion of our initial public offering, or IPO, in 2017.Under the Celgene Collaboration Agreement, we granted Celgene exclusive options to develop and commercialize our lead product candidate, JTX-2011, and up to four early-stage programs, or the Lead Program and Other Programs, consisting of targets to be selected from a pool of certain Bcell, T regulatory cell and tumor-associated macrophage targets. Additionally, Celgene has an exclusive option to develop and commercialize ourproduct candidate JTX-4014, which, upon exercise of such option, will be a shared program that may be used by both parties in and outside of thecollaboration. Prior to Celgene exercising any of its options, we are responsible for all research and development activities and costs under theCelgene Collaboration Agreement.Upon the exercise of each program option, the parties will enter into a co-development and co-commercialization agreement, or the Co-CoAgreements, or, in the case of JTX-4014, a license agreement, or the JTX-4014 License Agreement, that governs the development andcommercialization of the applicable program. Although the agreements will not be executed unless and until Celgene exercises an option, theparties have agreed to the terms of the Co-Co Agreements and the JTX-4014 License Agreement as part of the Celgene Collaboration Agreement.Under the Co-Co Agreements and the JTX-4014 License Agreement, we will share with Celgene the United States profits or losses anddevelopment costs on such collaboration program.If Celgene exercises its option for a program other than JTX-4014, we will enter into a Co-Co Agreement pursuant to which Celgene will have theexclusive right to develop and commercialize the products arising out of such collaboration program outside of the United States, and we will beeligible to receive tiered royalties ranging from a high single digit to mid-teen percentage rate on net product sales outside of the United States.Under each Co-Co Agreement, we will also have the right to opt out of profit sharing and instead receive milestones and royalties.Furthermore, if Celgene exercises its option for JTX-4014, we will enter into the JTX-4014 License Agreement, pursuant to which Celgene and wewill each have equal rights to develop and commercialize JTX-4014 in combination with other proprietary molecules in their or our respectivepipelines or in combination with products arising out of collaboration programs. Subject to terms specified in the license agreement for JTX-4014,the party owning the proprietary molecule that is combined with JTX-4014, if such molecule does not arise from a collaboration program withCelgene, will be solely responsible for all development and commercialization costs related to such combination. If JTX-4014 is combined with aproduct arising from a collaboration program, then the parties will share costs and, if co-packaged or co-formulated, profits or losses in accordancewith the Co-Co Agreements for such other product.Celgene may extend the initial four-year research term of the collaboration for up to three additional one-year periods upon payment of anextension fee for each additional year. Additionally, under the terms of the agreement, if Celgene exercises all of its options, all programs meet allmilestones, including regulatory approvals in the United States and outside the United States, and Celgene extends the initial four-year researchterm for three additional60Table of Contentsyears, we are eligible to earn up to approximately $2.6 billion in clinical, regulatory, and/or commercialization milestone payments, option-exercisefees and research term extension fees.The development milestones are payable on initiation of certain clinical trials and range from $32.5 million to $105.0 million, per program, with anaggregate total of $290.0 million. The regulatory approval milestones are payable upon regulatory approval in the United States and outside theUnited States and range from $7.5 million to $50.0 million per milestone, with an aggregate total of $700.0 million. The commercial milestones arepayable upon achievement of specified aggregate product sales outside the United States for each program and range from $40.0 million to$200.0 million per milestone, with an aggregate total of $1.270 billion. We are also eligible to receive royalties on product sales outside the UnitedStates ranging from a high single digit to mid-teen percentage rate. If Celgene elects to exercise any of the program options, Celgene will pay usan option-exercise fee of $10.0 million to $60.0 million that varies by program, with an aggregate of $182.5 million if Celgene exercises all sixprogram options. The initial research term of the collaboration is four years, which can be extended, at Celgene’s option, annually for up to threeadditional years for additional consideration that ranges from $30.0 million to $45.0 million per year, for an aggregate of $120.0 million if the term isextended for an additional three years. As of December 31, 2017, we had not received any option exercise, research term extension, milestone orroyalty payments under the Celgene Collaboration Agreement.Since inception, our operations have focused on organizing and staffing our company, business planning, raising capital, developing ourTranslational Science Platform and conducting research, preclinical studies and clinical trials. We do not have any products approved for sale.From inception through December 31, 2017, we have recognized a total of $108.8 million in collaboration revenue under the Celgene CollaborationAgreement relating to the $225.0 million upfront payment received from Celgene in 2016. We are subject to a number of risks comparable to thoseof other similar companies, including dependence on key individuals; the need to develop commercially viable products; competition from othercompanies, many of which are larger and better capitalized; and the need to obtain adequate additional financing to fund the development of ourproducts. We have funded our operations through December 31, 2017 primarily through proceeds received from our IPO, the upfront paymentreceived under the Celgene Collaboration Agreement and private placements of our preferred stock.On February 1, 2017, we closed our IPO of 7,319,750 shares of our common stock at a public offering price of $16.00 per share, including 954,750shares of our common stock issued upon the full exercise by the underwriters of their option to purchase additional shares. The gross proceedsfrom the IPO were $117.1 million, and net proceeds were $106.4 million, after deducting underwriting discounts and commissions and otheroffering expenses paid by us.Due to our significant research and development expenditures, we have generated substantial operating losses in each annual period since ourinception. We have incurred an accumulated deficit of $89.6 million through December 31, 2017. We expect to incur substantial additional lossesin the future as we expand our research and development activities.Financial Operations OverviewRevenueFor the year ended December 31, 2017, we recognized $71.6 million of collaboration revenue under the Celgene Collaboration Agreement related tothe $225.0 million upfront payment received from Celgene in 2016. We had $116.2 million of deferred revenue as of December 31, 2017, which isclassified as either current or net of current portion in our consolidated balance sheets based on the period over which the revenue is expected tobe recognized. As of December 31, 2017, we had not received any option exercise, research term extension, milestone or royalty payments underthe Celgene Collaboration Agreement.In the future, we expect to continue to generate revenue from the Celgene Collaboration Agreement and may generate revenue from product salesor other collaboration agreements, strategic alliances and licensing arrangements. We expect that our revenue will fluctuate from quarter-to-quarterand year-to-year as a result of the timing and amount of license fees, milestones, reimbursement of costs incurred and other payments andproduct sales, to the extent any are successfully commercialized. If we fail to complete the development of our product candidates in a timelymanner or obtain regulatory approval for them, our ability to generate future revenue, and our results of operations and financial position, would bematerially adversely affected.61Table of ContentsOperating ExpensesResearch and Development ExpensesResearch and development expenses represent costs incurred by us for the discovery, development and manufacture of JTX-2011, JTX-4014 andour potential future product candidates and include: external research and development expenses incurred under arrangements with third parties,including academic and non-profit institutions and consultants; salaries and personnel-related costs, including non-cash stock-based compensationexpense; license fees to acquire in-process technology and other expenses, which include direct and allocated expenses for laboratory, facilitiesand other costs.We use our employee and infrastructure resources across multiple research and development programs directed toward developing ourTranslational Science Platform and for identifying, testing and developing product candidates. We manage certain activities such as contractresearch and manufacture of JTX-2011, JTX-4014 and our discovery programs through our third-party vendors.At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete thedevelopment of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from sales of ourproduct candidates. This is due to the numerous risks and uncertainties associated with developing such product candidates, including theuncertainty of:•addition and retention of key research and development personnel;•establishing an appropriate safety profile with IND-enabling toxicology studies;•the cost to acquire or make therapies to study in combination with our immunotherapies;•successful enrollment in and completion of clinical trials;•establishing agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if ourproduct candidates are approved;•receipt of marketing approvals from applicable regulatory authorities;•commercializing products, if and when approved, whether alone or in collaboration with others;•the cost to develop complementary diagnostics and/or companion diagnostics as needed for each of our development programs;•the costs associated with the development of any additional product candidates we acquire through third-party collaborations or identifythrough our Translational Science Platform;•the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone paymentsthereunder;•obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our products if and when approved; and•continued acceptable safety profiles of the products following approval.A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change thecosts, timing and viability associated with the development of that product candidate. We plan to increase our research and developmentexpenses for the foreseeable future as we continue the enhancement of our Translational Science Platform, our collaboration with Celgene andcontinue to progress our pipeline. Due to the inherently unpredictable nature of preclinical and clinical development and given the early stage of ourprograms and/or product candidates, we do not track all of our internal research and development expenses on a program-by-program basis asthey primarily relate to personnel, early research, and consumable costs, which are deployed across multiple projects under development. Also,due to the early stage of our programs and product candidates, we cannot reasonably estimate the costs we will incur and the timelines that will berequired to complete development, obtain marketing approval, and commercialize our products, if and when approved. A portion of our researchand development costs are external costs, which we do track on a program-by-program basis following the program’s nomination to thedevelopment candidate stage. We began incurring such external costs for JTX-2011 in early 2015 and JTX-4014 in early 2016.62Table of ContentsIncluded below are external research and development and external clinical and regulatory costs for JTX-2011, JTX-4014 and our pre-developmentcandidates: Year Ended December 31,(in thousands)2017 2016 2015JTX-2011$21,904 $8,887 $4,682JTX-40146,460 1,481 —Pre-development candidates1,619 1,111 1,409Total external research and development and clinical and regulatory costs$29,983 $11,479 $6,091Research and development activities account for a significant portion of our operating expenses. As we continue to implement our businessstrategy, we expect our research and development expenses to increase over the next several years. These expenses will increase as we:•continue our adaptive Phase I/II clinical trial with JTX-2011;•continue to identify and test potential combination agents to be studied with JTX-2011;•continue our IND enabling activities for JTX-4014 and advance this program into clinical trials for use in combination with our potentialproduct candidates;•continue to develop and identify potential predictive biomarkers and complementary diagnostics and/or companion diagnostics for JTX-2011 and other potential product candidates;•continue to develop and enhance our Translational Science Platform and advance our early stage pipeline of immunotherapy programsincluding early research activities under our Celgene collaboration into later stages of development; and•increase our headcount to meet our evolving needs.Product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinicaldevelopment, primarily due to the increased size and duration of later-stage clinical trials.General and Administrative ExpensesGeneral and administrative expenses consist of salaries and personnel-related costs, including non-cash stock-based compensation expense, forour personnel in executive, business development, legal, finance and accounting, human resources and other administrative functions, consultingfees, facility costs not otherwise included in research and development expenses, fees paid for accounting and tax services and non-litigationlegal costs. Non-litigation legal costs include general corporate legal fees, patent legal fees and related costs. We anticipate that our general andadministrative expenses will increase in the future to support our continued research and development activities.Other Income, NetOther income, net, consists primarily of interest and investment income on our cash, cash equivalents and investments.Other Financing Income, NetOther financing income, net, consists primarily of changes in the fair value of tranche rights associated with our Series A convertible preferredstock. These tranche rights were terminated in April 2015.Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements,which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of theseconsolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities andthe disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurredduring the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonableunder the circumstances, the results of which form the basis63Table of Contentsfor making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differfrom these estimates under different assumptions or conditions.While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere inthis Annual Report on Form 10-K, we believe the following accounting policies to be most critical to the judgments and estimates used in thepreparation of our consolidated financial statements.Revenue RecognitionWe recognize revenue in accordance with Accounting Standards Codification, or ASC, 605, Revenue Recognition. Accordingly, revenue isrecognized when all of the following criteria are met:•persuasive evidence of an arrangement exists;•delivery has occurred or services have been rendered;•the seller’s price to the buyer is fixed or determinable; and•collectability is reasonably assured.Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in our consolidated balance sheets.Amounts expected to be recognized as revenue within the twelve months following the balance sheet date are classified as deferred revenue,current. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as deferredrevenue, net of current portion.Multiple-Element ArrangementsDetermination of Units of AccountingWhen evaluating multiple-element arrangements pursuant to ASC 605-25, Revenue Recognition—Multiple-Element Arrangements, we considerwhether the deliverables under the arrangement represent separate units of accounting. This evaluation requires subjective determinations andrequires management to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects ofthe contractual relationship. In determining the units of accounting, management evaluates certain criteria, including whether the deliverables havestandalone value, based on the consideration of the relevant facts and circumstances for each arrangement. The consideration received isallocated among the separate units of accounting using the relative selling price method, and the applicable revenue recognition criteria are appliedto each of the separate units. Deliverables are considered separate units of accounting provided that: (i) the delivered item(s) has value to thecustomer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery orperformance of the undelivered item(s) is considered probable and substantially in our control. In assessing whether an item has standalone value,we consider factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of theassociated expertise in the general marketplace. In addition, we consider whether the collaboration partner can use the deliverable(s) for theirintended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s) andwhether there are other vendors that can provide the undelivered element(s).Under multiple-element arrangements, options are considered substantive if, at the inception of the arrangement, we are at risk as to whether thecollaboration partner will choose to exercise the option. Factors that we consider in evaluating whether an option is substantive include the overallobjective of the arrangement, the benefit the collaborator might obtain from the arrangement without exercising the option, the likelihood the optionwill be exercised, and the cost to exercise the option. When an option is considered substantive, we do not consider the option or item underlyingthe option to be a deliverable at the inception of the arrangement and the associated option fees are not included in the allocable arrangementconsideration, assuming the option is not priced at a significant and incremental discount. When an option is not considered substantive, we wouldconsider the option, including other deliverables contingent upon the exercise of the option, to be a deliverable at the inception of the arrangementand a corresponding amount would be included in the allocable arrangement consideration. In addition, if the price of the option includes asignificant incremental discount, the discount inherent in the option price would be included as a deliverable at the inception of the arrangement.64Table of ContentsAllocation of Arrangement ConsiderationArrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method.Then, the applicable revenue recognition criteria in ASC 605-25 are applied to each of the separate units of accounting in determining theappropriate period and pattern of recognition. We determine the selling price of a unit of accounting following the hierarchy of evidence prescribedby ASC 605-25. Accordingly, we determine the estimated selling price for units of accounting within each arrangement using vendor-specificobjective evidence, or VSOE, of selling price, if available, third-party evidence, or TPE, of selling price if VSOE is not available, or best estimateof selling price, or BESP, if neither VSOE nor TPE is available. We typically use BESP to estimate the selling price, since we generally do nothave VSOE or TPE of selling price for our units of accounting. Determining the BESP for a unit of accounting requires significant judgment. Indeveloping the BESP for a unit of accounting, we consider applicable market conditions and relevant entity-specific factors, including factors thatwere contemplated in negotiating the agreement with the customer and estimated costs. We validate the BESP for units of accounting byevaluating whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangementconsideration between multiple units of accounting.Patterns of RecognitionWe recognize arrangement consideration allocated to each unit of accounting when all of the revenue recognition criteria in ASC 605 are satisfiedfor that particular unit of accounting. We recognize revenue associated with substantive options upon exercise of the option if the underlyinglicense has standalone value from the other deliverables to be provided subsequent to delivery of the license. If the license does not havestandalone value, the amounts allocated to the license option will be combined with the related undelivered items as a single unit of accounting.We recognize the revenue amounts associated with research and development services and other service related deliverables ratably over theassociated period of performance. If there is no discernible pattern of performance or objectively measurable performance measures do not exist,then we recognize revenue under the arrangement on a straight-line basis over the period we are expected to complete our performanceobligations. If the pattern of performance in which the service is provided to the customer can be determined and objectively measurableperformance exists, then we recognize revenue under the arrangement using the proportional performance method. Revenue recognized is limitedto the lesser of the cumulative amount of payments received and the cumulative amount of revenue earned, as determined using the straight-linemethod or proportional performance, as applicable, as of each reporting period.Recognition of Milestones and RoyaltiesAt the inception of an arrangement that includes milestone payments, we evaluate whether each milestone is substantive and at risk to bothparties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (i) the consideration iscommensurate with either our performance to achieve the milestone or the enhancement of performance to achieve the milestone, (ii) theconsideration relates solely to past performance and (iii) the consideration is reasonable relative to all of the deliverables and payment terms withinthe arrangement. We evaluate factors such as clinical, regulatory, commercial and other risks that must be overcome to achieve the respectivemilestone and the level of effort and investment required to achieve the respective milestone in making this assessment. There is considerablejudgment involved in determining whether a milestone satisfies all of the criteria required to conclude that a milestone is substantive. Inaccordance with ASC 605-28, Revenue Recognition—Milestone Method, clinical and regulatory milestones that are considered substantive,recognized as revenue in their entirety upon successful accomplishment of the milestone, assuming all other revenue recognition criteria are met.Milestones that are not considered substantive are recognized as revenue over the remaining period of performance, assuming all other revenuerecognition criteria are met. Revenue from commercial milestones payments are recorded as revenue upon achievement of the milestone,assuming all other recognition criteria are met.Accrued Research and Development ExpensesAs part of the process of preparing our consolidated financial statements, we are required to estimate our accrued expenses as of each balancesheet date. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that havebeen performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yetbeen invoiced or65Table of Contentsotherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractualmilestones are met.We make estimates of our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time. Weperiodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in ouraccrued research and development expenses include the costs incurred for services performed by our vendors in connection with research anddevelopment activities for which we have not yet been invoiced. We record our expenses related to research and development activities on ourestimates of the services received and efforts expended pursuant to quotes and contracts with vendors that conduct research and development onour behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven paymentflows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of theresearch and development expenses. In accruing service fees, we estimate the time period over which services will be performed and the level ofeffort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjustthe accrual or prepaid expense accordingly. Non-refundable advance payments for goods and services that will be used in future research anddevelopment activities are expensed when the activity has been performed or when the goods have been received rather than when the payment ismade.Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing ofservices performed differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or toolow in any particular period. To date, there have been no material differences between our estimates of such expenses and the amounts actuallyincurred.Stock-based CompensationWe account for share-based payments in accordance with ASC 718, Compensation—Stock Compensation. ASC 718 requires all share-basedpayments to employees, including grants of employee stock options and restricted stock awards, to be recognized as expense in the consolidatedstatements of operations based on their grant date fair values. For stock options granted to employees and to members of our board of directorsfor their services on the board of directors, we estimate the grant date fair value of each stock option using the Black-Scholes option-pricingmodel. For restricted stock awards granted to employees, we estimate the grant date fair value of each award using intrinsic value, which is basedon the value of the underlying common stock less any purchase price. For share-based payments subject to service-based vesting conditions, werecognize stock-based compensation expense equal to the grant date fair value of share-based payment on a straight-line basis over the requisiteservice period. In accordance with the provisions of ASC 505-50, Equity-Based Payments to Non-Employees, share-based payments issued to non-employeesare initially recorded at their grant date fair values, remeasured at each reporting date as they vest and expensed over the related service period. The Black‑Scholes option pricing model requires the input of certain subjective assumptions, including (i) the calculation of expected term of theshare-based payment, (ii) the risk‑free interest rate, (iii) the expected stock price volatility and (iv) the expected dividend yield. We use thesimplified method as prescribed by SEC Staff Accounting Bulletin No. 107 to calculate the expected term for stock options granted to employeesas we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. We determine therisk‑free interest rate based on a treasury instrument whose term is consistent with the expected term of the stock options. Because there hadbeen no public market for our common stock prior to the IPO, there is a lack of historical and implied volatility data. Accordingly, we base ourestimates of expected volatility on the historical volatility of a group of publicly-traded companies with similar characteristics to us, including stageof product development and therapeutic focus within the life sciences industry. Historical volatility is calculated over a period of timecommensurate with the expected term of the share-based payment. We use an assumed dividend yield of zero as we have never paid dividendson our common stock, nor do we expect to pay dividends on our common stock in the foreseeable future. We utilize similar Black-Scholes option-pricing model assumptions to value share-based payments issued to non-employees, except the contractual term of the share-based payment isutilized as the basis for the expected term assumption.For share-based payments subject to performance-based vesting conditions, we record stock-based compensation expense over the remainingservice period when we determine that achievement of the performance condition is probable. We evaluate whether the achievement of aperformance-based milestone is probable based on the66Table of Contentsexpected satisfaction of the performance conditions as of the reporting date. Stock-based compensation expense for awards subject toperformance-based vesting conditions is recognized using the accelerated attribution method.We account for forfeitures of all share-based payments when such forfeitures occur.Determination of Fair Value of Common Stock on Grant Dates prior to our IPODue to the absence of an active market for our common stock prior to the commencement of trading of our common stock on the Nasdaq GlobalSelect Market on January 27, 2017 in connection with our IPO, the estimated fair values of our common stock as of the grant dates prior to ourIPO were determined using contemporaneous valuations performed in accordance with the guidance outlined in the American Institute of CertifiedPublic Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, also known as the PracticeAid. Following our IPO, it is no longer necessary for us to estimate the fair value of our common stock in connection with our accounting for stockoptions or other equity awards, as the fair value of our common stock can be determined by reference to its closing price on The Nasdaq GlobalSelect Market on the date of the applicable grant.For financial reporting purposes, we performed common stock valuations, with the assistance of a third-party valuation specialist, as ofFebruary 7, 2014, June 30, 2014, November 1, 2014, December 31, 2014, March 31, 2015, April 17, 2015, September 30, 2015, December 31,2015, January 15, 2016, March 31, 2016, June 30, 2016, September 30, 2016, November 30, 2016 and December 31, 2016 which resulted invaluations of our common stock of $0.63, $0.70, $0.74, $1.07, $1.51, $2.36, $4.02, $5.24, $4.06, $4.21, $8.41, $9.56, $10.63 and $10.77 pershare, respectively, as of those dates. The February 7, 2014, June 30, 2014, December 31, 2014, and March 31, 2015 valuations wereretrospective. The increase in the fair value of our common stock from March 31, 2016 to June 30, 2016 is primarily attributable to an increase inour estimated future value due to the Celgene Collaboration Agreement which was substantially negotiated and probable of execution as of theJune 30, 2016 valuation date. In conducting the valuations, we considered all objective and subjective factors that we believed to be relevant foreach valuation conducted, including our best estimate of our business condition, prospects and operating performance at each valuation date.Within the valuations performed, a range of factors, assumptions and methodologies were used. The significant factors included:•the lack of an active public market for our common and our convertible preferred stock;•the prices of shares of our convertible preferred stock that we had sold to outside investors in arm’s length transactions, and the rights,preferences and privileges of that convertible preferred stock relative to our common stock;•our results of operations, financial position and the status of our research and preclinical development efforts;•the material risks related to our business;•our business strategy;•the market performance of publicly traded companies in the life sciences and biotechnology sectors;•the likelihood of achieving a liquidity event for the holders of our common stock, such as an initial public offering given prevailing marketconditions; and•any recent contemporaneous valuation of our common stock prepared in accordance with methodologies outlined in the Practice Aid.Common Stock Valuation MethodsOur contemporaneous and retrospective valuations were prepared in accordance with the guidelines in the Practice Aid, which prescribes severalvaluation approaches for determining the value of an enterprise, such as the cost, market and income approaches, and various methodologies forallocating the value of an enterprise to its capital structure and specifically the common stock.Our common stock valuations as of February 7, 2014, June 30, 2014, November 1, 2014, December 31, 2014, March 31, 2015, and April 17, 2015were prepared using the back-solve method of the option-pricing method, or OPM, which derives the implied equity value for one type of equitysecurity from a contemporaneous transaction involving another type of security.67Table of ContentsOur common stock valuations as of September 30, 2015, December 31, 2015, January 15, 2016 and March 31, 2016 were prepared using thehybrid method. The hybrid method is a hybrid between the probability-weighted expected return method, or PWERM, and OPM, estimating theprobability-weighted value across multiple scenarios using the OPM to allocate equity value within at least one of those scenarios. Our hybridmodel included an OPM scenario and one IPO scenario.Our common stock valuations as of June 30, 2016, September 30, 2016, November 30, 2016 and December 31, 2016 were prepared usingPWERM. Our PWERM model consisted of three scenarios; a scheduled IPO, a delayed IPO or a deemed liquidation event.Option Pricing MethodThe OPM treats the rights of the holders of convertible preferred and common stock as equivalent to call options on the value of the enterpriseabove certain break points of value based upon the liquidation preferences of the holders of convertible preferred stock, as well as their rights toparticipation and conversion. Under this method, the common stock has value only if the funds available for distribution to the stockholdersexceed the value of the liquidation preference(s) at the time of the liquidity event. The OPM uses the Black-Scholes option-pricing model. Thismodel defines securities’ fair values as functions of the current fair value of a company and uses assumptions, such as the anticipated timing of apotential liquidity event, the estimated applicable risk-free rate and the estimated volatility of the equity securities.The OPM back-solve approach was used to estimate enterprise value under the OPM. The OPM back-solve approach uses the OPM to derive theimplied equity value for one type of equity security from a contemporaneous sale transaction involving another type of our equity securities. In theOPM, the assumed volatility factor was based on the historical trading volatility of our publicly-traded peer companies. At each valuation date, adetermination was made by us as to the appropriate volatility to be used, considering such factors as the expected time to a liquidity event and ourstage of development.To derive the fair value of the common stock using the OPM, the proceeds to the common stockholders were calculated based on the preferencesand priorities of the convertible preferred stock and common stock. We then applied a discount for lack of marketability to the common stock toaccount for the lack of access to an active public market.PWERMUnder the PWERM method, the fair value of our common stock is estimated based upon an analysis of future values for our company, assumingvarious outcomes. The common stock value is based on the probability-weighted present value of expected future investment returns consideringeach of the possible outcomes available as well as the rights of each class of stock. The future value of the common stock under each outcomeis discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value forthe common stock.Hybrid ModelThe hybrid method is a PWERM where the equity value in one of the scenarios is calculated using an OPM. In the hybrid method used by us, twotypes of future-event scenarios were considered: an IPO and an unspecified liquidity event. The enterprise value for the IPO scenario wasdetermined using the guideline public company, or GPC, method under the market approach. The enterprise value for the unspecified liquidityevent scenario was determined using the GPC method or the OPM backsolve method. The relative probability of each type of future-eventscenario was determined based on an analysis of market conditions at the time, including then-current IPO valuations of similarly situatedcompanies, and expectations as to the timing and likely prospects of the future-event scenarios.In our application of the GPC method, we considered preclinical and clinical-stage publicly traded companies that recently completed IPOs asindicators of our estimated future value in an IPO. That future value was discounted back to the valuation date at an appropriate risk-adjusteddiscount rate. We applied a discount for lack of marketability to the common stock to account for the lack of access to an active public market.Income TaxesIncome taxes are recorded in accordance with ASC 740, Income Taxes, which provides for deferred taxes using an asset and liability approach.We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidatedfinancial statements or tax returns. Deferred68Table of Contentstax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities usingenacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance against deferred tax assets isrecorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.We account for uncertain tax positions using a more-likely-than-not threshold for recognizing and resolving uncertain tax positions. The evaluationof uncertain tax positions is based on factors, including, but not limited to, changes in the law, the measurement of tax positions taken orexpected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstancesrelated to a tax position.Recent Accounting PronouncementsSee Note 2 to our consolidated financial statements included within Part IV, Item 15 of this Annual Report on Form 10-K for a description of recentaccounting pronouncements applicable to our business.Results of OperationsComparison of the Years Ended December 31, 2017 and 2016The following table summarizes our results of operations for the years ended December 31, 2017 and 2016, along with the changes in those itemsin dollars: Year Ended December 31, (in thousands)2017 2016 $ ChangeRevenue: Collaboration revenue—related party$71,644 $37,197 $34,447Operating expenses: Research and development67,798 34,904 32,894General and administrative23,061 16,759 6,302Total operating expenses90,859 51,663 39,196Other income, net 2,808 763 2,045Loss before provision for income taxes(16,407) (13,703) (2,704)Provision for income taxes36 — 36Net loss$(16,443) $(13,703) $(2,740)Collaboration RevenueCollaboration revenue for the years ended December 31, 2017 and 2016 was solely related to the recognition of the upfront payment we receivedunder our Celgene Collaboration Agreement that was executed in July 2016.Research and Development ExpensesThe following table summarizes our research and development expenses for years ended December 31, 2017 and 2016: Year Ended December 31, (in thousands)2017 2016 $ ChangeEmployee compensation$18,839 $13,569 $5,270External research and development16,297 7,617 8,680External clinical and regulatory13,686 3,862 9,824Lab consumables9,364 4,813 4,551Consulting research1,096 1,025 71Facility costs6,127 2,782 3,345Other research2,389 1,236 1,153Total research and development expenses$67,798 $34,904 $32,89469Table of ContentsResearch and development expenses increased by $32.9 million from $34.9 million for the year ended December 31, 2016 to $67.8 million for theyear ended December 31, 2017. The increase in research and development expenses was primarily attributable to the following:•$5.3 million of increased employee compensation costs primarily attributable to increased headcount, offset by $1.3 million of decreasedstock-based compensation expense related to the achievement of milestones during the year ended December 31, 2016 which triggeredvesting of certain outstanding awards granted to non-employees;•$8.7 million of increased external research and development costs primarily attributable to the manufacture of pre-commercial clinical trialmaterials and related activities for JTX-2011, IND enabling activities related to JTX-4014 and external costs associated with our earlydiscovery programs;•$9.8 million of increased external clinical and regulatory costs related to our JTX-2011 adaptive Phase I/II clinical trial, which commencedenrollment in August 2016;•$4.6 million of increased lab consumables costs primarily attributable to our increased research and development activities;•$3.3 million of increased facility costs, including expenses associated with the exit of our previous corporate headquarters, increased rentexpense related to our new corporate headquarters, depreciation and maintenance costs; and•$1.2 million of increased other research costs, including travel-related expenses, software license costs, information technology expensesand achievement of certain development and technical milestones related to our license and collaboration agreements.General and Administrative ExpensesThe following table summarizes our general and administrative expenses for the years ended December 31, 2017 and 2016: Year Ended December 31, (in thousands)2017 2016 $ ChangeEmployee compensation$9,055 $6,228 $2,827Consulting2,257 1,711 546Legal fees1,384 2,007 (623)Facility costs5,216 2,130 3,086Other5,149 2,638 2,511Write-off of IPO costs— 2,045 (2,045)Total general and administrative expenses$23,061 $16,759 $6,302General and administrative expenses increased by $6.3 million from $16.8 million for the year ended December 31, 2016 to $23.1 million for theyear ended December 31, 2017. The increase in general and administrative expenses was primarily attributable to the following:•$2.8 million of increased employee compensation costs primarily attributable to increased headcount, of which $1.1 million related toincreased stock-based compensation expense, as well as increased recruiting costs;•$3.1 million of increased facility costs, including expenses associated with the exit of our previous corporate headquarters, increased rentexpense related to our new corporate headquarters, depreciation and maintenance costs; and•$2.5 million of increased other costs primarily attributable to operating as a public company as well as increased headcount.These increases were offset by the following decreases:•$0.6 million of decreased legal fees due to non-litigation related legal costs incurred in 2016 in connection with our business developmentactivities; and70Table of Contents•$2.0 million of legal and accounting costs written off during the year ended December 31, 2016 as a result of the postponement of ourIPO. The IPO was originally postponed for a period significantly in excess of 90 days, and as a result, the previously-capitalized costswere written off to general and administrative expenses.Other Income, netOther income, net, increased by $2.0 million from $0.8 million for the year ended December 31, 2016 to $2.8 million for the year endedDecember 31, 2017. The change in other income, net is attributable to increased interest and investment income on our cash, cash equivalentsand investments as a result of a full year of investment income on the upfront payment received under the Celgene Collaboration Agreement inAugust 2016, the net proceeds received from our IPO in February 2017 and an overall increased rate of return due to rising interest rates and theshort-term nature of our investments.Comparison of the Years Ended December 31, 2016 and 2015The following table summarizes our results of operations for the years ended December 31, 2016 and 2015, along with the changes in those itemsin dollars: Year Ended December 31, (in thousands)2016 2015 $ ChangeRevenue: Collaboration revenue—related party$37,197 $— $37,197Operating expenses: Research and development34,904 22,130 12,774General and administrative16,759 8,266 8,493Total operating expenses51,663 30,396 21,267Other income, net 763 5 758Other financing income, net — 1,859 (1,859)Net loss(13,703) (28,532) 14,829Collaboration RevenueCollaboration revenue for the year ended December 31, 2016 was solely related to the recognition of the upfront payment we received under ourCelgene Collaboration Agreement that was executed in July 2016.71Table of ContentsResearch and Development ExpensesThe following table summarizes our research and development expenses for years ended December 31, 2016 and 2015: Year Ended December 31, (in thousands)2016 2015 $ ChangeEmployee compensation$13,569 $7,259 $6,310External research and development7,617 6,091 1,526External clinical and regulatory3,862 — 3,862Lab consumables4,813 4,972 (159)Consulting research1,025 1,254 (229)Facility costs2,782 1,953 829Other research1,236 601 635Total research and development expenses$34,904 $22,130 $12,774Research and development expenses increased by $12.8 million from $22.1 million for the year ended December 31, 2015 to $34.9 million for theyear ended December 31, 2016. The increase in research and development expenses was primarily attributable to the following:•$6.3 million of increased employee compensation costs primarily attributable to increased headcount, including $1.8 million of stock-basedcompensation expense related to the achievement of milestones during the year ended December 31, 2016 which triggered vesting ofcertain outstanding awards granted to non-employees;•$1.5 million of increased external research and development costs primarily attributable to the completion of IND enabling activities forJTX-2011, commencement of IND enabling activities related to JTX-4014 and external costs associated with our early discoveryprograms;•$3.9 million of increased external clinical and regulatory costs related to our JTX-2011 Phase I/II clinical trial, which commencedenrollment in August 2016; and•$0.8 million of increased facility costs, including rent, utilities, depreciation and maintenance costs.General and Administrative ExpensesThe following table summarizes our general and administrative expenses for the years ended December 31, 2016 and 2015: Year Ended December 31, (in thousands)2016 2015 $ ChangeEmployee compensation$6,228 $3,779 $2,449Consulting1,711 771 940Legal fees2,007 661 1,346Facility costs2,130 1,472 658Other2,638 1,583 1,055Write-off of IPO costs2,045 — 2,045Total general and administrative expenses$16,759 $8,266 $8,493General and administrative expenses increased by $8.5 million from $8.3 million for the year ended December 31, 2015 to $16.8 million for theyear ended December 31, 2016. The increase in general and administrative expenses was primarily attributable to the following:•$2.4 million of increased employee compensation costs primarily attributable to increased headcount;•$0.9 million of increased consulting costs, including external recruiting, accounting and tax services;•$1.3 million of increased legal fees primarily attributable to non-litigation related legal costs incurred in 2016 in connection with ourbusiness development activities;•$0.7 million of increased facility costs, including rent, utilities, depreciation and maintenance costs;72Table of Contents•$1.1 million of increased other costs, including information technology, audit and tax services; and•$2.0 million of legal and accounting costs written off in 2016 as a result of the postponement of our IPO. The IPO was originally postponedfor a period significantly in excess of 90 days, and as a result, the previously-capitalized costs were written off to general andadministrative expenses.Other Income, netOther income, net, increased by $0.8 million from less than $0.1 million for the year ended December 31, 2015 to $0.8 million for the year endedDecember 31, 2016. The change in other income, net is attributable to increased interest and investment income on our cash, cash equivalentsand investments as a result of the investment of the upfront payment received under the Celgene Collaboration Agreement and the net proceedsreceived from our IPO.Other Financing Income, netOther financing income, net, of $1.9 million during the year ended December 31, 2015 was primarily related to the mark-to-market adjustmentsrecorded on tranche rights associated with our Series A convertible preferred stock. These tranche rights were terminated with the final closing ofour Series A convertible preferred stock financing in April 2015.Liquidity and Capital ResourcesSources of LiquidityWe have funded our operations through December 31, 2017 primarily through gross proceeds from private placements of our convertible preferredstock of $139.1 million, a non-refundable upfront payment of $225.0 million received in connection with the Celgene Collaboration Agreement andnet proceeds from our IPO of $106.4 million. As of December 31, 2017, we had cash, cash equivalents and investments of $257.9 million.Funding RequirementsOur plan of operation is to continue implementing our business strategy, continue the research and development of our lead programs JTX-2011and JTX-4014, continue to expand our research pipeline and our internal research and development capabilities, including the enhancement of ourTranslational Science Platform. Due to the inherently unpredictable nature of preclinical and clinical development and given the early stage of ourprograms and product candidates, we cannot reasonably estimate the costs we will incur and the timelines that will be required to completedevelopment, obtain marketing approval, and commercialize our products, if and when approved. For the same reasons, we are also unable topredict when, if ever, we will generate revenue from product sales or whether, or when, if ever, we may achieve profitability. Clinical and preclinicaldevelopment timelines, the probability of success, and development costs can differ materially from expectations. In addition, we cannot forecastwhich products, if and when approved, may be subject to future collaborations, when such arrangements will be secured, if at all, and to whatdegree such arrangements would affect our development plans and capital requirements.Due to our significant research and development expenditures, we have generated substantial operating losses since inception. We have incurredan accumulated deficit of $89.6 million through December 31, 2017. We expect to incur substantial additional losses in the future as we expandour research and development activities and continue to advance our programs. Based on our research and development plans, we expect that ourexisting cash, cash equivalents and investments of $257.9 million will enable us to fund our operating expenses and capital expenditurerequirements for at least the next 24 months. However, we have based this estimate on assumptions that may prove to be incorrect, and we couldexhaust our capital resources sooner than we expect. The timing and amount of our operating expenditures will depend largely on:•the timing and progress of preclinical and clinical development activities;•the cost to access, acquire, or develop therapies to study in combination with our immunotherapies;•successful enrollment in and completion of clinical trials;•the cost to develop complementary diagnostics and/or companion diagnostics as needed for each of our development programs;•our ability to establish agreements with third-party manufacturers for clinical supply for our clinical trials and, if our product candidate isapproved, commercial manufacturing;73Table of Contents•the costs associated with the development of any additional product candidates we acquire through acquisition, third-party collaborationsor identify through our Translational Science Platform;•our ability to maintain our current research and development programs and enhancement of our Translational Science Platform;•addition and retention of key research and development personnel;•our efforts to enhance operational, financial and information management systems, and hire additional personnel, including personnel tosupport development of our product candidates;•the legal patent costs involved in prosecuting patent applications and enforcing patent claims and other intellectual property claims;•the costs and ongoing investments to in-license or acquire additional technologies, including the in-license of intellectual property relatedto our potential product candidates, the effectiveness of which is subject to certain conditions; and•the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone paymentsthereunder.A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantlychange the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in thefuture, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.In addition to the variables described above, if and when any of our product candidates successfully complete development, we have incurred andwill continue to incur substantial additional costs associated with regulatory filings, marketing approval, post-marketing requirements, maintainingour intellectual property rights, and regulatory protection, in addition to other costs. We cannot reasonably estimate these costs at this time.Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity ordebt financings and collaboration arrangements including our Celgene Collaboration Agreement. We currently do not have a credit facility orcommitted sources of capital. To the extent that we raise additional capital through the future sale of equity or debt, the ownership interests of ourstockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of ourexisting common stockholders. If we raise additional funds through the issuance of debt securities, these securities could contain covenants thatwould restrict our operations. We may require additional capital beyond our currently anticipated amounts. Additional capital may not be availableon reasonable terms, or at all. If we raise additional funds through collaboration arrangements in the future, we may have to relinquish valuablerights to our technologies, future revenue streams or product candidates, or grant licenses on terms that may not be favorable to us. If we areunable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminatedevelopment or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer todevelop and market ourselves.Cash FlowsThe following table provides information regarding our cash flows for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31,(in thousands)2017 2016 2015Net cash (used in) provided by: Operating activities$(90,738) $179,688 $(25,739)Investing activities(38,021) (215,508) (2,142)Financing activities107,470 35,507 70,704Net (decrease) increase in cash and cash equivalents$(21,289) $(313) $42,823Cash (Used in) Provided by Operating ActivitiesNet cash used in operating activities for the year ended December 31, 2017 was $90.7 million, compared to net cash provided by operatingactivities of $179.7 million for the year ended December 31, 2016. This net change of $270.4 million was primarily due to the $225.0 million upfrontcash payment received upon the execution of the74Table of ContentsCelgene Collaboration Agreement in July 2016, offset by an increase in our operating expenses and income tax payments made during the yearended December 31, 2017. The increase in operating expenses was primarily due to our increased headcount, increased clinical and regulatorycosts related to our JTX-2011 adaptive Phase I/II clinical trial and increased external research and development costs.Net cash provided by operating activities for the year ended December 31, 2016 was $179.7 million, compared to net cash used in operatingactivities of $25.7 million for the year ended December 31, 2015. This net change of $205.4 million was primarily due to the $225.0 million upfrontcash payment received upon the execution of the Celgene Collaboration Agreement in July 2016, offset by an increase in our operating expensesduring the year ended December 31, 2016.Cash Used in Investing ActivitiesNet cash used in investing activities for the year ended December 31, 2017 was $38.0 million, compared to net cash used in investing activities of$215.5 million for the year ended December 31, 2016. Net cash used in investing activities decreased by $177.5 million primarily due to purchasesof investments made during the year ended December 31, 2016 using the $225.0 million upfront cash payment received upon the execution of theCelgene Collaboration Agreement in July 2016. We purchased investments during the year ended December 31, 2017 using the net proceedsreceived from our IPO. Proceeds received from maturities and sales of investments during the year ended December 31, 2017 were eitherreinvested or used to fund our operations and to purchase property and equipment associated with our new corporate headquarters.Net cash used in investing activities for the year ended December 31, 2016 was $215.5 million, compared to net cash used in investing activitiesof $2.1 million for the year ended December 31, 2015. Net cash used in investing activities increased by $213.4 million primarily due to purchasesof investments made during the year ended December 31, 2016 using the $225.0 million upfront cash payment received upon the execution of theCelgene Collaboration Agreement in July 2016.Cash Provided by Financing ActivitiesNet cash provided by financing activities for the year ended December 31, 2017 was $107.5 million, compared to net cash provided by financingactivities of $35.5 million for the year ended December 31, 2016. Cash provided by financing activities increased by $72.0 million primarily due tothe receipt of $106.4 million of net proceeds from our IPO, after deducting underwriting discounts and commissions and other offering expensespaid by us. A portion of these offering expenses were paid during the year ended December 31, 2016. During the years ended December 31, 2016,we received $36.1 million of net proceeds from the sale of Series B-1 convertible preferred stock to Celgene.Net cash provided by financing activities for the year ended December 31, 2016 was $35.5 million, compared to net cash provided by financingactivities of $70.7 million for the year ended December 31, 2015. Net cash provided by financing activities decreased by $35.2 million primarily dueto the receipt of $70.8 million of net proceeds from the sale of Series A convertible preferred stock and Series B convertible preferred stock duringthe year ended December 31, 2015 as compared to the receipt of $36.1 million of net proceeds from the sale of Series B-1 convertible preferredstock to Celgene during the year ended December 31, 2016.Contractual ObligationsOur contractual obligations as of December 31, 2017 were as follows (in thousands):(in thousands)Total20182019 and 20202021 and 2022After 2022Operating lease obligations (1)$32,971$4,139$8,654$9,182$10,996(1) Represents future minimum lease payments under our non-cancellable operating lease as of December 31, 2017We have also entered into license and collaboration agreements with various third parties, all which are in the normal course of business. We havenot included these future payments in the table of contractual obligations above since the contracts are cancellable at any time by us, generallyupon 30 to 90 days prior written notice. The payment obligations under these license and collaboration agreements are contingent upon futureevents such as our achievement of specified development, regulatory and commercial milestones, or royalties on net product sales.Under our license agreements, we could be required to make aggregate technical, clinical development and regulatory milestone payments of up to$13.2 million and low single-digit royalty payments based on a percentage75Table of Contentsof net sales of licensed products. As of December 31, 2017, we made $0.2 million in aggregate milestone payments under these licenseagreements.Under certain of our collaboration agreements, we could be required to make aggregate technical, clinical development and regulatory milestonespayments ranging from $12.5 million to $12.9 million per product candidate and low single-digit royalty payments based on a percentage of netsales on a product-by-product basis. As of December 31, 2017, we made $0.3 million in aggregate milestone payments under these certaincollaboration agreements. Under a certain other collaboration agreement, we could be required to make aggregate technical, clinical developmentand regulatory milestones payments of $0.7 million. As of December 31, 2017, no milestone payments had been made under this certain othercollaboration agreement.Off-Balance Sheet ArrangementsWe did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicableSEC rules.Item 7A. Quantitative and Qualitative Disclosures about Market RiskAs of December 31, 2017, we had cash, cash equivalents and investments of $257.9 million. This amount was comprised of cash and cashequivalents of $23.6 million, short-term investments of $212.1 million and long-term investments of $22.2 million. Our cash and cash equivalentsconsist primarily of money market funds that are invested in U.S. Treasury obligations. Our short-term investments consist of corporate debtsecurities, U.S. Treasury obligations and government agency securities with an original maturity greater than ninety days and less than one yearfrom the balance sheet date. Our long-term investments consist of corporate debt securities and government agency securities with maturities ofgreater than one year that are not expected to be used to fund current operations. Our primary exposure to market risk is interest rate sensitivity,which is affected by changes in the general level of U.S. interest rates. Due to the short-term nature of our cash equivalents and short-terminvestments and our conservative long-term investment approach, a sudden change in interest rates would not be expected to have material effecton our business, financial condition or results of operations.We are not currently exposed to significant market risk related to changes in foreign currency exchange rates; however, we have contracted withand may continue to contract with foreign vendors. Our operations may be subject to fluctuations in foreign currency exchange rates in the future.Inflation generally affects us by increasing our cost of labor. We do not believe that inflation had a material effect on our business, financialcondition or results of operations during the years ended December 31, 2017, 2016 or 2015.Item 8. Financial Statements and Supplementary DataThe financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. An index of those financialstatements is found in Part IV, Item 15.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresOur management, with the participation of our Chief Executive Officer, who is also our principal executive officer, and Chief Financial Officer, whois also our principal financial and accounting officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31,2017. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls andother procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files orsubmits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’smanagement, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timelydecisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated,can provide only reasonable assurance of achieving their objectives and76Table of Contentsour management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on theevaluation of our disclosure controls and procedures as of December 31, 2017, our principal executive officer and principal financial officerconcluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financialreporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, a company’sprincipal executive officer and principal financial officer, or persons performing similar functions, and effected by a company’s board of directors,management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:•pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of acompany’s assets;•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that a company’s receipts and expenditures are being made only in accordance withauthorizations of the company’s management and directors; and•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets thatcould have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures may deteriorate.Under the supervision of and with the participation of our principal executive officer and principal financial officer, our management assessed theeffectiveness of our internal control over financial reporting as of December 31, 2017 based on the criteria set forth by the Committee ofSponsoring 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, 2017.This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to a transitionperiod established by rules of the SEC for newly public companies.Changes in Internal Control over Financial ReportingThere was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) thatoccurred during the fourth quarter of the year ended December 31, 2017 that has materially affected, or is reasonably likely to materially affect, ourinternal control over financial reporting.Item 9B. Other InformationNone.77Table of ContentsPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceThe information required by this Item 10 will be included in the sections captioned “Corporate Governance,” “Section 16(a) Beneficial OwnershipReporting Compliance” in our definitive Proxy Statement for our 2018 Annual Meeting of Stockholders to be filed with the SEC within 120 days ofDecember 31, 2017, which information is incorporated herein by reference.We have adopted a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principalexecutive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code isposted on the Corporate Governance section of our website, which is located at www.jouncetx.com. If we make any substantive amendments to,or grant any waivers from, the code of business conduct and ethics for any officer or director, we will disclose the nature of such amendment orwaiver on our website or in a current report on Form 8-K. We will provide any person, without charge, a copy of such Code of Business Conductand Ethics upon written request, which may be mailed to 780 Memorial Drive, Cambridge, MA 02139, Attn: Corporate Secretary.Item 11. Executive CompensationThe information required by this Item 11 will be included in the section captioned “Executive and Director Compensation” in our definitive ProxyStatement for our 2018 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2017, which information isincorporated herein by reference.Item 12. Security Ownership of Certain of Beneficial Owners and Management and Related Stockholder MattersThe information required by this Item 12 will be included in the section captioned “Principal Stockholders” and “Equity Compensation PlanInformation” in our definitive Proxy Statement for our 2018 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December31, 2017, which information is incorporated herein by reference.Item 13. Certain Relationships and Related Transactions and Director IndependenceThe information required by this Item 13 will be included in the sections captioned “Corporate Governance” and “Transactions with RelatedPersons” in our definitive Proxy Statement for our 2018 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31,2017, which information is incorporated herein by reference.Item 14. Principal Accounting Fees and ServicesThe information required by this Item 14 will be included in the section captioned “Ratification of Selection of Independent Registered PublicAccounting Firm” in our definitive Proxy Statement for our 2018 Annual Meeting of Stockholders to be filed with the SEC within 120 days ofDecember 31, 2017, which information is incorporated herein by reference.78Table of ContentsPART IVItem 15. Exhibits and Financial Statement Schedules(1) Financial StatementsThe following documents are included on pages F-1 through F-30 attached hereto and are filed as part of this Annual Report on Form 10-K. Report of Independent Registered Public Accounting FirmF-1Consolidated Balance SheetsF-2Consolidated Statements of OperationsF-3Consolidated Statements of Comprehensive LossF-4Consolidated Statements of Convertible Preferred Stock, Contingently Redeemable Common Stock and Stockholders’ Equity(Deficit)F-5Consolidated Statements of Cash FlowsF-6Notes to Consolidated Financial StatementsF-7(2) Financial Statement SchedulesSchedules have been omitted since they are either not required or not applicable or the information is otherwise included herein.(3) ExhibitsThe exhibits filed or furnished as part of this Annual Report on Form 10-K are listed in the Exhibit Index immediately preceding the signatures,which Exhibit Index is incorporated herein by reference.Item 16. Form 10-K SummaryNone.79Table of ContentsReport of Independent Registered Public Accounting FirmTo the Stockholders and the Board of Directors ofJounce Therapeutics, Inc.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Jounce Therapeutics, Inc. (the Company) as of December 31, 2017 and 2016,the related consolidated statements of operations, comprehensive loss, convertible preferred stock, contingently redeemable common stock andstockholders’ (deficit) equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectivelyreferred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects,the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the threeyears in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable 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 audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required toobtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis forour opinion./s/ Ernst & Young LLPWe have served as the Company’s auditor since 2013.Boston, MassachusettsMarch 8, 2018F-1Table of ContentsJounce Therapeutics, Inc.Consolidated Balance Sheets(amounts in thousands, except par value amounts) December 31, 2017 2016Assets: Current assets: Cash and cash equivalents$23,559 $44,848Short-term investments212,093 104,410Prepaid expenses and other current assets19,945 2,529Total current assets255,597 151,787Property and equipment, net16,151 7,241Long-term investments22,199 108,116Other non-current assets 2,713 4,168Total assets $296,660 $271,312Liabilities, convertible preferred stock, contingently redeemable common stock and stockholders’ equity(deficit): Current liabilities: Accounts payable$2,849 $3,511Accrued expenses8,454 5,855Deferred rent and lease incentive, current61 720Deferred revenue, current—related party51,142 80,544Other current liabilities 45 43Total current liabilities62,551 90,673Deferred rent and lease incentive, net of current portion1,955 1,452Deferred revenue, net of current portion—related party65,018 107,260Other non-current liabilities27 56Total liabilities129,551 199,441Commitments and contingencies (Note 15) Convertible preferred stock (Series A), $0.001 par value: No shares and 47,000 shares authorized, issued andoutstanding at December 31, 2017 and 2016, respectively— 47,112Convertible preferred stock (Series B), $0.001 par value: No shares and 24,779 shares authorized, issued andoutstanding at December 31, 2017 and 2016, respectively— 55,849Convertible preferred stock (Series B-1), $0.001 par value: No shares and 10,448 shares authorized, issued andoutstanding at December 31, 2017 and 2016, respectively— 36,077Contingently redeemable common stock— 1,921Stockholders’ equity (deficit): Preferred stock, $0.001 par value: 5,000 shares and no shares authorized at December 31, 2017 and 2016,respectively; no shares issued or outstanding at December 31, 2017 or 2016— —Common stock, $0.001 par value: 160,000 shares and 29,810 shares authorized at December 31, 2017 and 2016,respectively; 32,265 and 2,518 shares issued at December 31, 2017 and 2016, respectively; 32,249 and 2,424 sharesoutstanding at December 31, 2017 and 2016, respectively32 2Additional paid-in capital257,101 4,515Accumulated other comprehensive loss(409) (433)Accumulated deficit(89,615) (73,172)Total stockholders’ equity (deficit)167,109 (69,088)Total liabilities, convertible preferred stock, contingently redeemable common stock and stockholders’ equity (deficit)$296,660 $271,312The accompanying notes are an integral part of these consolidated financial statements.F-2Table of ContentsJounce Therapeutics, Inc.Consolidated Statements of Operations(amounts in thousands, except per share amounts) Year Ended December 31, 2017 2016 2015Revenue: Collaboration revenue—related party$71,644$37,197 $—Operating expenses: Research and development67,79834,904 22,130General and administrative23,06116,759 8,266Total operating expenses90,859 51,663 30,396Operating loss(19,215) (14,466) (30,396)Other income, net: Other income, net 2,808763 5Other financing income, net — — 1,859Total other income, net2,808 763 1,864Loss before provision for income taxes(16,407) (13,703) (28,532)Provision for income taxes36 — —Net loss$(16,443) $(13,703) $(28,532) Reconciliation of net loss to net loss attributable to common stockholders: Net loss$(16,443) $(13,703) $(28,532)Accretion of convertible preferred stock to redemption value— — (1,011)Loss on extinguishment of convertible preferred stock— — (2,079)Accrued dividends on Series A convertible preferred stock(268) (3,760) (2,716)Accrued dividends on Series B convertible preferred stock(318) (4,460) (3,165)Accrued dividends on Series B-1 convertible preferred stock(208) (1,215) —Net loss attributable to common stockholders$(17,237) $(23,138) $(37,503)Net loss per share attributable to common stockholders, basic and diluted$(0.57) $(11.00) $(23.13)Weighted-average common shares outstanding, basic and diluted30,0552,103 1,621The accompanying notes are an integral part of these consolidated financial statements.F-3Table of ContentsJounce Therapeutics, Inc.Consolidated Statements of Comprehensive Loss(amounts in thousands) Year Ended December 31, 2017 2016 2015Net loss$(16,443) $(13,703) $(28,532)Other comprehensive income (loss): Unrealized gain (loss) on available-for-sale securities 24 (433) —Comprehensive loss$(16,419) $(14,136) $(28,532)The accompanying notes are an integral part of these consolidated financial statements.F-4Table of ContentsJounce Therapeutics, Inc.Consolidated Statements of Convertible Preferred Stock, Contingently Redeemable Common Stock and Stockholders’ (Deficit) Equity(amounts in thousands) Series A ConvertiblePreferred Stock Series B ConvertiblePreferred Stock Series B-1 ConvertiblePreferred Stock ContingentlyRedeemableCommon Stock Common Stock AdditionalPaid-InCapital AccumulatedOtherComprehensiveLoss AccumulatedDeficit TotalStockholders’(Deficit)Equity Shares Amount Shares Amount Shares Amount Amount Shares Amount Balance atDecember 31, 201432,000 $27,313 — $— — $— $152 1,414 $2 $3 $— $(28,005) $(28,000)Issuances ofSeries A convertiblepreferred stock, netof issuance costs of$1615,000 14,984 — — — — — — — — — — —Reclassification oftranche rights uponissuance of preferredstock— 1,725 — — — — — — — — — — —Issuance of Series Bconvertible preferredstock, net ofissuance costs of$151— — 24,779 55,849 — — — — — — — — —Exercise of commonstock options— — — — — — — 6 — 3 — — 3Vesting of restrictedcommon stock— — — — — — — 413 — 10 — — 10Stock-basedcompensationexpense— — — — — — 503 — — 849 — — 849Accretion ofpreferred stock toredemption value— 1,011 — — — — — — — (158) — (853) (1,011)Extinguishment ofSeries A convertiblepreferred stock— 2,079 — — — — — — — — — (2,079) (2,079)Net loss— — — — — — — — — — — (28,532) (28,532)Balance atDecember 31, 201547,000 47,112 24,779 55,849 — — 655 1,833 2 707 — (59,469) (58,760)Issuance ofSeries B-1convertible preferredstock, net ofissuance costs of$74— — — — 10,448 36,077 — — — — — — —Exercise of commonstock options— — — — — — — 53 — 50 — — 50Vesting of restrictedcommon stock— — — — — — — 538 — 35 — — 35Stock-basedcompensationexpense— — — — — — 1,266 — — 3,723 — — 3,723Othercomprehensive loss— — — — — — — — — — (433) — (433)Net loss— — — — — — — — — — — (13,703) (13,703)Balance atDecember 31, 201647,000 47,112 24,779 55,849 10,448 36,077 1,921 2,424 2 4,515 (433) (73,172) (69,088)Issuance of commonstock from initialpublic offering, net ofissuance costs of$2,529— — — — — — — 7,320 7 106,381 — — 106,388Conversion ofconvertible preferredstock into commonstock upon closing ofinitial public offering(47,000) (47,112) (24,779) (55,849) (10,448) (36,077) — 22,284 23 139,015 — — 139,038Reclassification ofrestricted stockawards upontermination of putoption— — — — — — (2,191) — — 2,191 — — 2,191Exercise of commonstock options— — — — — — — 144 — 462 — — 462Vesting of restrictedcommon stock— — — — — — — 77 — 32 — — 32Stock-basedcompensationexpense— — — — — — 270 — — 4,505 — — 4,505Othercomprehensive loss— — — — — — — — — — 24 — 24Net loss— — — — — — — — — — — (16,443) (16,443)Balance atDecember 31, 2017— $— — $— — $— $— 32,249 $32 $257,101 $(409) $(89,615) $167,109The accompanying notes are an integral part of these consolidated financial statements.F-5Table of ContentsJounce Therapeutics, Inc.Consolidated Statements of Cash Flows(amounts in thousands) Year Ended December 31, 2017 2016 2015Operating activities: Net loss$(16,443) $(13,703) $(28,532)Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Stock-based compensation expense4,775 4,989 1,352Depreciation expense4,422 1,944 1,470Change in other financing income, net— — (1,859)Net amortization of premiums and discounts on investments1,172 327 —Loss on disposal of property and equipment75 — —Changes in operating assets and liabilities: Prepaid expenses and other current assets(17,416) (1,979) (23)Other non-current assets(16) (527) (99)Accounts payable373 (312) 673Accrued expenses and other current liabilities4,120 953 1,929Deferred revenue—related party(71,644) 187,804 —Other non-current liabilities— — (28)Deferred rent(156) 192 (622)Net cash (used in) provided by operating activities(90,738)179,688 (25,739)Investing activities: Purchases of investments(179,874) (213,286) —Proceeds from maturities of investments141,322 — —Proceeds from sales of investments15,638 — —Purchases of property and equipment(15,107) (2,222) (2,202)Change in restricted cash— — 60Net cash used in investing activities(38,021)(215,508) (2,142)Financing activities: Proceeds from the issuance of Series A convertible preferred stock and Tranche Rights, net of issuance costs— — 14,984Proceeds from the issuance of Series B convertible preferred stock, net of issuance costs— — 55,849Proceeds from the issuance of Series B-1 convertible preferred stock, net of issuance costs— 36,077 —Proceeds from initial public offering of common stock, net of issuance costs107,008 — —Proceeds from exercise of stock options and purchases of restricted stock462 50 112Cash paid for issuance costs— (620) (241)Net cash provided by financing activities 107,47035,507 70,704Net (decrease) increase in cash and cash equivalents(21,289) (313) 42,823Cash and cash equivalents, beginning of period44,848 45,161 2,338Cash and cash equivalents, end of period$23,559$44,848 $45,161Non-cash investing and financing activities: Accretion of convertible preferred stock to redemption value$— $— $1,011Reclassification of preferred stock tranche liability upon settlement$— $— $1,725Purchases of property and equipment in accounts payable and accrued expenses$170 $1,870 $22Issuance costs in accounts payable and accrued expenses$— $850 $1,580Supplemental cash flow information: Cash paid for income taxes$16,750 $— $—The accompanying notes are an integral part of these consolidated financial statements.F-6Table of ContentsJounce Therapeutics, Inc.Notes to Consolidated Financial Statements1. Nature of BusinessJounce Therapeutics, Inc. (the “Company”) is a clinical stage immunotherapy company dedicated to transforming the treatment of cancer bydeveloping therapies that enable the immune system to attack tumors and provide long-lasting benefits to patients. The Company is subject to anumber of risks similar to those of other clinical stage immunotherapy companies, including dependence on key individuals; the need to developcommercially viable products; competition from other companies, many of which are larger and better capitalized; and the need to obtain adequateadditional financing to fund the development of its products.The Company’s most advanced product candidate, JTX-2011, is a clinical-stage monoclonal antibody that binds to and activates the Inducible Tcell CO-Stimulator, or ICOS, a protein on the surface of certain T cells commonly found in many solid tumors. The Company submitted anInvestigational New Drug Application for JTX-2011 to the Food and Drug Administration in July 2016 and began the Phase I portion of its JTX-2011adaptive Phase I/II clinical trial in patients with solid tumors in August 2016. In June 2017, the Company presented preliminary safety,pharmacodynamic and pharmacokinetic data from the Phase I portion of this clinical trial as well as the recommended dose for the Phase IImonotherapy cohorts at the 2017 American Society of Clinical Oncology Annual Meeting.In April 2017, the Company began the monotherapy cohorts of the Phase II portion of this clinical trial, which evaluate JTX-2011 as a monotherapyin at least three tumor-specific cohorts, including head and neck squamous cell cancer (“HNSCC”), non-small cell lung cancer (“NSCLC”), gastriccancer, non-indication specific solid tumors and additional tumor types identified through its Translational Science Platform. In July 2017, theCompany began the combination cohorts of the Phase II portion of this clinical trial, which evaluate JTX-2011 in combination with nivolumab in atleast six tumor types, including HNSCC, NSCLC, triple negative breast cancer, melanoma, gastric cancer and additional tumor types identifiedthrough its Translational Science Platform. The Company expects to provide preliminary efficacy data in the second quarter of 2018.On February 1, 2017, the Company closed its initial public offering (“IPO”) of 7,319,750 shares of the Company’s common stock at a publicoffering price of $16.00 per share, including 954,750 shares of common stock issued upon the full exercise by the underwriters of their option topurchase additional shares. The gross proceeds from the IPO were $117.1 million and net proceeds were $106.4 million, after deductingunderwriting discounts and commissions and other offering expenses paid by the Company.Upon completion of the IPO, all outstanding preferred stock was automatically converted into an aggregate of 22,283,690 shares of commonstock. In connection with the IPO, the board of directors and the stockholders of the Company approved a one-for-3.69 reverse stock split of theCompany’s issued and outstanding common stock. The reverse stock split became effective on January 13, 2017. All share and per shareamounts in the consolidated financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stocksplit, including reclassifying an amount equal to the reduction in par value to additional paid-in capital.The Company has incurred losses in each annual period since its inception and had an accumulated deficit of $89.6 million as of December 31,2017. The Company expects to continue to incur significant losses for the foreseeable future. As of December 31, 2017, the Company had cash,cash equivalents, and investments of $257.9 million. The Company expects that its existing cash, cash equivalents, and investments will enable itto fund its expected operating expenses and capital expenditure requirements for at least 24 months from March 8, 2018, the filing date of thisAnnual Report on Form 10-K. The Company expects to finance its future cash needs through a combination of equity or debt financings andcollaboration arrangements, including cash inflows from its Master Research and Collaboration Agreement (the “Celgene Collaboration Agreement”)with Celgene Corporation (“Celgene”).2. Basis of Presentation and Summary of Significant Accounting PoliciesBasis of Presentation and ConsolidationThe accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the UnitedStates of America (“GAAP”) and include the accounts of Jounce Therapeutics, Inc. and its wholly-owned subsidiary, Jounce Mass Securities, Inc.,which was established in July 2016. All intercompany transactions and balances have been eliminated in consolidation.F-7Table of ContentsSegment InformationOperating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chiefoperating decision-maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operatingdecision maker, the Company’s chief executive officer, views the Company’s operations and manages its business as a single operating segment.The Company operates only in the United States.Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect theamounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimateswhich include, but are not limited to, estimates related to the period of performance for units of accounting identified under the CelgeneCollaboration Agreement, accrued research and development expenses, stock-based compensation and income taxes. The Company bases itsestimates on historical experience and other market specific or other relevant assumptions it believes to be reasonable under the circumstances.Actual results could differ from those estimates.Prior to the completion of the IPO, the Company utilized significant estimates and assumptions in determining the fair value of its common stock.The Company determined the estimated fair value of its common stock based on a number of objective and subjective factors, including externalmarket conditions affecting the biotechnology industry sector, the prices at which the Company sold shares of its convertible preferred stock andthe superior rights and preferences of the convertible preferred stock in relation to the Company’s common stock. The Company utilized variousvaluation methodologies in accordance with the framework of the American Institute of Certified Public Accountants (“AICPA”) Audit andAccounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation (the “AICPA Practice Aid”) toestimate the fair value of its common stock. These methodologies included the option pricing method utilizing the backsolve method, which is aform of the market approach defined in the AICPA Practice Aid, and the probability-weighted expected return method based upon the probability ofoccurrence of certain future liquidity events such as an IPO or sale of the Company. Each valuation methodology included estimates andassumptions that required the Company’s judgment. Significant changes to the key assumptions used in the valuations could have resulted indifferent fair values of the Company’s common stock at each valuation date.Fair Value of Financial InstrumentsAccounting Standards Codification (“ASC”) 820, Fair Value Measurement, establishes a fair value hierarchy for instruments measured at fair valuethat distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs).Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sourcesindependent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participantswould use in pricing the asset or liability, and are developed based on the best information available in the circumstances.ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid totransfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair valuemeasurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:•Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.•Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly orindirectly.•Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would usein pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that issignificant to the fair value measurement.To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fairvalue requires more judgment. Accordingly, the degree of judgment exercised byF-8Table of Contentsthe Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair valuehierarchy is based on the lowest level of any input that is significant to the fair value measurement.Cash EquivalentsCash equivalents are highly-liquid investments that are readily convertible into cash with original maturities of three months or less whenpurchased. These assets include investment in money market funds that invests in U.S. Treasury obligations.InvestmentsShort-term investments consist of investments with maturities greater than ninety days and less than one year from the balance sheet date. Long-term investments consist of investments with maturities of greater than one year that are not expected to be used to fund current operations. TheCompany classifies all of its investments as available-for-sale securities. Accordingly, these investments are recorded at fair value. Realizedgains and losses, amortization and accretion of discounts and premiums are included in other income, net. Unrealized gains and losses onavailable-for-sale securities are included in other comprehensive income (loss) as a component of stockholders’ equity (deficit) until realized.Restricted CashRestricted cash as of December 31, 2017 and 2016 is comprised of amounts held as security deposits in the form of letters of credit for theCompany’s leased facilities. If restrictions are expected to be lifted within the next twelve months, the restricted cash account is classified ascurrent.Property and Equipment, NetProperty and equipment is recorded at cost and consists of laboratory equipment, furniture and office equipment, computer equipment, leaseholdimprovements, and construction in progress. The Company capitalizes property and equipment that is acquired for research and developmentactivities and that has alternate future use. Expenditures for maintenance and repairs are recorded to expense as incurred, whereas majorbetterments are capitalized as additions to property and equipment. Leasehold improvements are depreciated over the lesser of their useful life orthe term of the lease. Depreciation is calculated over the estimated useful lives of the assets using the straight-line method.Impairment of Long-lived AssetsThe Company reviews its property and equipment whenever events or changes in circumstances indicate that the carrying value of certain assetsmight not be recoverable and recognizes an impairment loss when it is probable that an asset’s realizable value is less than the carrying value.Deferred Financing CostsThe Company capitalizes deferred financing costs, which primarily consists of direct, incremental legal and accounting fees relating to theCompany’s financing activities, within other non-current assets. Deferred financing costs are typically offset against financing proceeds receivedupon the consummation of an offering.As of the December 31, 2016, the Company had capitalized $1.5 million in deferred financing costs related to its IPO. These deferred financingcosts were subsequently reclassified to stockholders’ equity (deficit) upon the completion of the IPO in February 2017.Revenue RecognitionThe Company recognizes revenue in accordance with ASC 605, Revenue Recognition. Accordingly, revenue is recognized when all of the followingcriteria are met:•persuasive evidence of an arrangement exists;•delivery has occurred or services have been rendered;•the seller’s price to the buyer is fixed or determinable; andF-9Table of Contents•collectability is reasonably assured.Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s consolidated balancesheets. Amounts expected to be recognized as revenue within the twelve months following the balance sheet date are classified as deferredrevenue, current. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified asdeferred revenue, net of current portion.Multiple-Element ArrangementsDetermination of Units of AccountingWhen evaluating multiple-element arrangements pursuant to ASC 605-25, Revenue Recognition—Multiple-Element Arrangements, the Companyconsiders whether the deliverables under the arrangement represent separate units of accounting. This evaluation requires subjectivedeterminations and requires management to make judgments about the individual deliverables and whether such deliverables are separable fromthe other aspects of the contractual relationship. In determining the units of accounting, management evaluates certain criteria, including whetherthe deliverables have standalone value, based on the consideration of the relevant facts and circumstances for each arrangement. Theconsideration received is allocated among the separate units of accounting using the relative selling price method, and the applicable revenuerecognition criteria are applied to each of the separate units. Deliverables are considered separate units of accounting provided that: (i) thedelivered item(s) has value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to thedelivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Inassessing whether an item has standalone value, the Company considers factors such as the research, manufacturing and commercializationcapabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Companyconsiders whether the collaboration partner can use the deliverable(s) for their intended purpose without the receipt of the remaining element(s),whether the value of the deliverable is dependent on the undelivered item(s) and whether there are other vendors that can provide the undeliveredelement(s).Under multiple-element arrangements, options are considered substantive if, at the inception of the arrangement, the Company is at risk as towhether the collaboration partner will choose to exercise the option. Factors that the Company considers in evaluating whether an option issubstantive include the overall objective of the arrangement, the benefit the collaborator might obtain from the arrangement without exercising theoption, the likelihood the option will be exercised, and the cost to exercise the option. When an option is considered substantive, the Companydoes not consider the option or item underlying the option to be a deliverable at the inception of the arrangement and the associated option feesare not included in the allocable arrangement consideration, assuming the option is not priced at a significant and incremental discount. When anoption is not considered substantive, the Company would consider the option, including other deliverables contingent upon the exercise of theoption, to be a deliverable at the inception of the arrangement and a corresponding amount would be included in the allocable arrangementconsideration. In addition, if the price of the option includes a significant incremental discount, the discount inherent in the option price would beincluded as a deliverable at the inception of the arrangement.Allocation of Arrangement ConsiderationArrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method.Then, the applicable revenue recognition criteria in ASC 605-25 are applied to each of the separate units of accounting in determining theappropriate period and pattern of recognition. The Company determines the selling price of a unit of accounting following the hierarchy of evidenceprescribed by ASC 605-25. Accordingly, the Company determines the estimated selling price for units of accounting within each arrangement usingvendor-specific objective evidence (“VSOE”) of selling price, if available, third-party evidence (“TPE”) of selling price if VSOE is not available, orbest estimate of selling price (“BESP”) if neither VSOE nor TPE is available. The Company typically uses BESP to estimate the selling price,since it generally does not have VSOE or TPE of selling price for its units of accounting. Determining the BESP for a unit of accounting requiressignificant judgment. In developing the BESP for a unit of accounting, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. The Companyvalidates the BESP for units of accounting by evaluating whetherF-10Table of Contentschanges in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration betweenmultiple units of accounting.Patterns of RecognitionThe Company recognizes arrangement consideration allocated to each unit of accounting when all of the revenue recognition criteria in ASC 605are satisfied for that particular unit of accounting. The Company recognizes revenue associated with substantive options upon exercise of theoption if the underlying license has standalone value from the other deliverables to be provided subsequent to delivery of the license. If the licensedoes not have standalone value, the amounts allocated to the license option will be combined with the related undelivered items as a single unit ofaccounting.The Company recognizes the revenue amounts associated with research and development services and other service related deliverables ratablyover the associated period of performance. If there is no discernible pattern of performance or objectively measurable performance measures donot exist, then the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company is expected tocomplete its performance obligations. If the pattern of performance in which the service is provided to the customer can be determined andobjectively measurable performance exists, then the Company recognizes revenue under the arrangement using the proportional performancemethod. Revenue recognized is limited to the lesser of the cumulative amount of payments received and the cumulative amount of revenueearned, as determined using the straight-line method or proportional performance, as applicable, as of each reporting period.Recognition of Milestones and RoyaltiesAt the inception of an arrangement that includes milestone payments, the Company evaluates whether each milestone is substantive and at risk toboth parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (i) the consideration iscommensurate with either the Company’s performance to achieve the milestone or the enhancement of performance to achieve the milestone,(ii) the consideration relates solely to past performance and (iii) the consideration is reasonable relative to all of the deliverables and paymentterms within the arrangement. The Company evaluates factors such as clinical, regulatory, commercial and other risks that must be overcome toachieve the respective milestone and the level of effort and investment required to achieve the respective milestone in making this assessment.There is considerable judgment involved in determining whether a milestone satisfies all of the criteria required to conclude that a milestone issubstantive. In accordance with ASC 605-28, Revenue Recognition—Milestone Method, clinical and regulatory milestones that are consideredsubstantive, recognized as revenue in their entirety upon successful accomplishment of the milestone, assuming all other revenue recognitioncriteria are met. Milestones that are not considered substantive are recognized as revenue over the remaining period of performance, assuming allother revenue recognition criteria are met. Revenue from commercial milestones payments are recorded as revenue upon achievement of themilestone, assuming all other recognition criteria are met.Research and Development ExpensesExpenditures relating to research and development are expensed as incurred. Research and development expenses include external expensesincurred under arrangements with third parties, academic and non-profit institutions and consultants; salaries and personnel-related costs, includingnon-cash stock-based compensation expense; license fees to acquire in-process technology and other expenses, which include direct andallocated expenses for laboratory, facilities and other costs.Intellectual Property ExpensesThe Company expenses costs associated with intellectual property-related matters as incurred and classifies such costs as general andadministrative expenses within the consolidated statements of operations.Stock-based CompensationThe Company accounts for share-based payments in accordance with ASC 718, Compensation—Stock Compensation. ASC 718 requires allshare-based payments to employees, including grants of employee stock options and restricted stock awards, to be recognized as expense in theconsolidated statements of operations based on their grant date fair values. For stock options granted to employees and to members of theCompany’sF-11Table of ContentsBoard of Directors for their services on the Board of Directors, the Company estimates the grant date fair value of each stock option using theBlack-Scholes option-pricing model. For restricted stock awards granted to employees, the Company estimates the grant date fair value of eachaward using intrinsic value, which is based on the value of the underlying common stock less any purchase price. For share-based paymentssubject to service-based vesting conditions, the Company recognizes stock-based compensation expense equal to the grant date fair value ofshare-based payment on a straight-line basis over the requisite service period. In accordance with the provisions of ASC 505-50, Equity-Based Payments to Non-Employees, share-based payments issued to non-employeesare initially recorded at their grant date fair values, remeasured at each reporting date as they vest and expensed over the related service period. The Black‑Scholes option pricing model requires the input of certain subjective assumptions, including (i) the calculation of expected term of theshare-based payment, (ii) the risk‑free interest rate, (iii) the expected stock price volatility and (iv) the expected dividend yield. The Company usesthe simplified method as proscribed by SEC Staff Accounting Bulletin No. 107 to calculate the expected term for stock options granted toemployees as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expectedterm. The Company determines the risk‑free interest rate based on a treasury instrument whose term is consistent with the expected term of thestock options. Because there had been no public market for the Company’s common stock prior to the IPO, there is a lack of Company‑specifichistorical and implied volatility data. Accordingly, the Company bases its estimates of expected volatility on the historical volatility of a group ofpublicly-traded companies with similar characteristics to itself, including stage of product development and therapeutic focus within the lifesciences industry. Historical volatility is calculated over a period of time commensurate with the expected term of the share-based payment. TheCompany uses an assumed dividend yield of zero as the Company has never paid dividends on its common stock, nor does it expect to paydividends on its common stock in the foreseeable future. The Company utilizes similar Black-Scholes option-pricing model assumptions to valueshare-based payments issued to non-employees, except the contractual term of the share-based payment is utilized as the basis for the expectedterm assumption.For share-based payments subject to performance-based vesting conditions, the Company records stock-based compensation expense over theremaining service period when it determines that achievement of the performance condition is probable. The Company evaluates whether theachievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions as of the reportingdate. Stock-based compensation expense for awards subject to performance-based vesting conditions is recognized using the acceleratedattribution method.The Company accounts for forfeitures of all share-based payments when such forfeitures occur.Income TaxesIncome taxes are recorded in accordance with ASC 740, Income Taxes, which provides for deferred taxes using an asset and liability approach.The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in theconsolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financialstatement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Avaluation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some orall of the deferred tax assets will not be realized.The Company accounts for uncertain tax positions using a more-likely-than-not threshold for recognizing and resolving uncertain tax positions. Theevaluation of uncertain tax positions is based on factors, including, but not limited to, changes in the law, the measurement of tax positions takenor expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts orcircumstances related to a tax position.Comprehensive LossComprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive income (loss) for all periods presentedconsists solely of unrealized gain (loss) on available-for-sale securities.F-12Table of ContentsNet Loss per ShareBasic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average number of share commonshares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss attributable to common stockholders by theweighted-average number of common equivalent shares outstanding for the period, including any dilutive effect from convertible preferred stock,outstanding stock options or unvested restricted common stock.The Company follows the two-class method when computing net loss per share for periods when issued shares that meet the definition ofparticipating securities are outstanding. The two-class method calls for the calculation of net loss per share for each class of common andparticipating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class methodrequires income available to common stockholders to be allocated between common and participating securities based upon their respective rightsto received dividends as if all income for the period had been distributed. Net losses are not allocated to the Company’s preferred stockholders asthey do not have an obligation to share in the Company’s net losses.Concentrations of Credit Risk and Off-Balance Sheet RiskFinancial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash, cash equivalents andinvestments. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, theCompany believes that such funds are subject to minimal credit risk. The Company’s cash equivalents and investments are comprised of moneymarket funds that are invested in U.S. Treasury obligations, corporate debt securities, U.S. Treasury obligations and government agencysecurities. Credit risk in these securities is reduced as a result of the Company’s investment policy to limit the amount invested in any singleissuer and to only invest in securities of a high credit quality. The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts or other foreign hedgingarrangements.Recent Accounting PronouncementsIn May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contractswith Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The newstandard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the considerationthat the company expects to receive for those goods or services. This guidance was originally effective for interim and annual periods beginningafter December 15, 2016 and allowed for adoption using a full retrospective method, or a modified retrospective method. Early adoption wasoriginally not permitted. Subsequent to the issuance of ASU 2014-09, the FASB also issued the following updates related to ASC 606, Revenuefrom Contracts with Customers:•In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,whereby the effective date for the new revenue standard was deferred by one year. As a result of ASU 2015-14, the new revenue standardis now effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, and early adoptionis now permitted for annual periods beginning after December 15, 2016, including interim periods within that annual period.•In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus AgentConsiderations (Reporting Revenue Gross versus Net), to clarify the implementation guidance on principal versus agent considerations.•In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligationsand Licensing, to clarify the principle for determining whether a good or service is “separately identifiable” from other promises in thecontract and to clarify the categorization of licenses of intellectual property.•In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements andTechnical Expedients, to clarify guidance on transition, determining collectability, non-cash consideration and the presentation of salesand other similar taxes.F-13Table of Contents•In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts withCustomers, that allows entities not to make qualitative disclosures about remaining performance obligations in certain cases, addsdisclosure requirements for entities that elect certain optional exemptions and adds twelve additional technical corrections andimprovements to the new revenue standard.The Company will adopt ASC 606 effective January 1, 2018 under the modified retrospective method. The modified retrospective method requiresthat the cumulative effect of initially applying ASC 606 be recognized as an adjustment to the opening balance of retained earnings or accumulateddeficit of the annual period that includes the date of initial application. Accordingly, during the first quarter of 2018, the Company currently expectsto record an increase to the opening balance of accumulated deficit and a corresponding increase to deferred revenue. This cumulative adjustmentis primarily attributable to the transition from recognizing revenue on a straight-line basis over the estimated performance period for each unit ofaccounting under ASC 605 to recognizing revenue on a proportional performance basis under ASC 606. As part of the adoption of ASC 606, theCompany has implemented new processes to objectively measure the performance under the Celgene Collaboration Agreement. The Companywill complete these processes in the first quarter of 2018, upon adoption of the new standard.In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires a lessee to recognize assets and liabilities on the balancesheet for operating leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term leaseexception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize leaseassets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operatingleases using classification criteria that are substantially similar to the previous guidance. The new standard will be effective beginning January 1,2019, and early adoption is permitted for public entities. The Company is currently evaluating the potential impact that ASU 2016-02 may have onthe consolidated financial statements.In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-BasedPayment Accounting. The new standard identifies areas for simplification involving several aspects of accounting for share-based paymenttransactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock-based compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the consolidated statements ofcash flows. The Company adopted ASU 2016-09 effective January 1, 2017, and the Company has elected to apply the simplification guidancerelated to the accounting for forfeitures. Accordingly, the Company will recognize gross stock-based compensation expense with actual forfeituresrecognized as they occur. This simplification guidance related to the accounting for forfeitures is applied using a modified retrospective transitionmethod. As forfeitures previously estimated by the Company through the year ended December 31, 2016 were not material, there was not amaterial cumulative-effect adjustment to accumulated deficit upon adoption of this guidance. The adoption of ASU 2016-09 also requires allexcess tax benefits and tax deficiencies related to share-based payments to be recorded in the consolidated statements of operations. Theadoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements as the increase in net deferred taxassets is offset by a corresponding increase in the deferred tax asset valuation allowance.In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and CashPayments, which is intended to reduce diversity in practice in how entities present certain types of cash transactions in the statement of cashflows. This guidance also clarifies how the predominance principle should be applied when classifying cash receipts and cash payments that haveattributes of more than one class of cash flows. This guidance will be effective for annual reporting periods beginning after December 15, 2017,including interim periods within those annual reporting periods, and early adoption is permitted. An entity that elects early adoption must adopt allof the amendments in the same period. The Company does not anticipate a material impact to the consolidated financial statements as a result ofthe adoption of this guidance.In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which will require entities to show thechange in the total of cash, cash equivalents, restricted cash and restricted cash equivalents within the statement of cash flows. As a result,entities will no longer separately present transfers between unrestricted cash and restricted cash. This guidance will be effective for annualreporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and earlyF-14Table of Contentsadoption is permitted. The Company does not anticipate a material impact to the consolidated financial statements as a result of the adoption ofthis guidance.In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This guidanceis intended to provide clarity and reduce diversity in practice as to when changes to the terms or conditions of share-based payments areaccounted for as modifications. Under this new guidance, entities will apply modification accounting if the fair value, vesting conditions orclassification of the award changes. This guidance will be effective for annual reporting periods beginning after December 15, 2017, includinginterim periods within those annual reporting periods, and early adoption is permitted. The guidance per ASU 2017-09 is to be adoptedprospectively to an award modified on or after the adoption date. The Company does not anticipate a material impact to the consolidated financialstatements as a result of the adoption of this guidance.3. Celgene Collaboration AgreementIn July 2016, the Company entered into the Celgene Collaboration Agreement. The primary goal of the collaboration is to co-develop and co-commercialize innovative biologic immunotherapies that either activate or suppress the immune system by binding to targets identified byleveraging the Company’s Translational Science Platform. Under the Celgene Collaboration Agreement, the Company granted Celgene exclusiveoptions to develop and commercialize the Company’s lead product candidate, JTX-2011, and up to four early-stage programs, consisting of targetsto be selected from a pool of certain B cell, T regulatory cell and tumor-associated macrophage targets. Additionally, Celgene has an exclusiveoption to develop and commercialize the Company’s product candidate JTX-4014, which, upon exercise of such option, will be a shared programthat may be used by both parties in and outside of the collaboration. Prior to Celgene exercising any of its options, the Company is responsible forall research and development activities under the Celgene Collaboration Agreement.The Company received a non-refundable upfront cash payment of $225.0 million upon the execution of the Celgene Collaboration Agreement. TheCompany also received $36.1 million from the sale of 10,448,100 shares of Series B-1 convertible preferred stock (“Series B-1 Preferred Stock”)upon the execution of a Series B-1 Preferred Stock Purchase Agreement with Celgene, which shares converted into 2,831,463 shares of commonstock upon the completion of the IPO. If Celgene elects to exercise any of the program options, Celgene will pay the Company an option-exercisefee of $10.0 million to $60.0 million that varies by program, with an aggregate of $182.5 million if Celgene exercises all six program options. Theinitial research term of the collaboration is four years, which can be extended, at Celgene’s option, annually for up to three additional years foradditional consideration that ranges from $30.0 million to $45.0 million per year, for an aggregate of $120.0 million if the term is extended for anadditional three years.Worldwide Development Cost and U.S. Operating Profit and Loss SharingUpon the exercise of each program option, the parties will enter into a co-development and co-commercialization agreement (“Co-Co Agreements”)or, in the case of JTX-4014, a license agreement (“JTX-4014 License Agreement”) that governs the development and commercialization of theapplicable program. Although the agreements will not be executed unless and until Celgene exercises an option, the parties have agreed to theterms of the Co-Co Agreements and the JTX-4014 License Agreement as part of the Celgene Collaboration Agreement.Under the Co-Co Agreements and the JTX-4014 License Agreement, the Company will share with Celgene the U.S. profits or losses anddevelopment costs on such collaboration program as follows:•The Company will retain 60 percent of the U.S. operating profits or losses arising from commercialization of JTX-2011, with 40 percentallocated to Celgene.•The Company will retain 25 percent of the U.S. operating profits or losses arising from commercialization of the first program (the “LeadProgram”), other than JTX-2011 or JTX-4014, for which an IND application is filed under the collaboration, with 75 percent allocated toCelgene. Celgene has a one-time right to substitute and swap the economics and governance of this program with that of another programfor which it exercises an option (other than JTX-2011 and JTX-4014).•The Company and Celgene will equally share U.S. operating profits or losses arising from commercialization of up to three additionalprograms (other than JTX-2011, JTX-4014 or the Lead Program) (the “Other Programs”).F-15Table of Contents•The Company and Celgene will share all development costs, other than for JTX-4014, in accordance with the applicable Co-CoAgreements, of which Celgene’s portion of the costs range from 67 percent to 85 percent.If Celgene exercises its option for a program other than JTX-4014, the Company will enter into a Co-Co Agreement, pursuant to which Celgene willhave the exclusive right to develop and commercialize the products arising out of such collaboration program outside of the United States, and theCompany will be eligible to receive tiered royalties ranging from a high single digit to mid-teen percentage rate on net product sales outside of theUnited States. Under each Co-Co Agreement, the Company will also have the right to opt out of profit sharing and instead receive milestones androyalties.Furthermore, if Celgene exercises its option for JTX-4014, the Company will enter into the JTX-4014 License Agreement, pursuant to whichCelgene and the Company will each have equal rights to develop and commercialize JTX-4014 in combination with other proprietary molecules intheir or the Company’s respective pipelines or in combination with products arising out of collaboration programs. Subject to terms specified in thelicense agreement for JTX-4014, the party owning the proprietary molecule that is combined with JTX-4014, if such molecule does not arise from acollaboration program with Celgene, will be solely responsible for all development and commercialization costs related to such combination. If JTX-4014 is combined with a product arising from a collaboration program, then the parties will share costs and, if co-packaged or co-formulated, profitsor losses in accordance with the Co-Co Agreements for such other product.Milestones and RoyaltiesUnder the Co-Co Agreements and the JTX-4014 License Agreement, Celgene is required to pay the Company for specified development,regulatory and commercial milestones, if achieved, up to approximately $2.3 billion, across all collaboration programs. The developmentmilestones are payable on initiation of certain clinical trials and range from $32.5 million to $105.0 million, per program, with an aggregate total of$290.0 million. The regulatory approval milestones are payable upon regulatory approval in the United States and outside the United States andrange from $7.5 million to $50.0 million per milestone, with an aggregate total of $700.0 million. The commercial milestones are payable uponachievement of specified aggregate product sales outside the United States for each program and range from $40.0 million to $200.0 million permilestone, with an aggregate total of $1.270 billion. The Company is also eligible to receive royalties on product sales outside the United Statesranging from high single digit to mid-teen royalties.Exercise of OptionsCelgene may exercise its option for a program at any time until the expiration of an option term for that program. For each program, the option termends 45 to 60 days following Celgene’s receipt of a data package that includes certain information relating to the program’s research anddevelopment activities. The data package for a program may be delivered to Celgene after the applicable development milestone for such programhas been achieved. Depending on the program, the applicable development milestone is (i) IND acceptance, (ii) availability of certain Phase 1adata, or (iii) availability of certain Phase I/II data. If Celgene fails to exercise its option during the option term for a program, the Company willcontinue to retain all rights to such program. If Celgene exercises its option for a program other than JTX-4014, then the Company will enter into aCo-Co Agreement with Celgene for such program in substantially the form attached to the agreement as an exhibit.Under the co-development and co-commercialization agreement for JTX-2011 and one additional program for which Celgene opts in that is notJTX-4014, the Company will be responsible for leading development and commercialization activities in the United States and Celgene will beresponsible for development and commercialization activities outside the United States. For all other additional programs for which Celgene optsin, other than JTX-4014, Celgene will lead development and commercialization activities worldwide.If Celgene exercises its option for JTX-4014, the Company and Celgene will enter into a license agreement, in substantially the form attached tothe agreement as an exhibit, pursuant to which the Company and Celgene will both be able to equally access JTX-4014 for combinations withineach other’s portfolios and with other molecules that are subject to the agreement, subject to joint governance. Once Celgene opts in with respectto a given program, Celgene and the Company must each use commercially reasonable efforts to develop and commercialize the correspondingproduct in the United States.F-16Table of ContentsTerminationAt any point during the Celgene Collaboration Agreement, including during the research, development and clinical trial process, or during the termof the applicable co-development and co-commercialization or license agreement, respectively, Celgene can terminate the applicable agreementwith the Company in its entirety, or with respect to any program under the Celgene Collaboration Agreement, upon 120 days’ notice and canterminate the entire agreement with the Company in connection with a material breach of the agreement by the Company that remains uncured for90 days.ExclusivityDuring the Celgene Collaboration Agreement’s research term (i.e., for four years plus up to three one-year extensions that Celgene may elect), theCompany may not alone, or with a third party, research, develop, manufacture or commercialize a biologic that binds to a defined pool of B cell, Tregulatory cell or tumor-associated macrophage targets that meet certain criteria, termed an exclusive target, and inhibit, activate or otherwisemodulate the activity of such exclusive target. In addition, if Celgene exercises its option for a program within the Celgene CollaborationAgreement, other than JTX-4014, then until termination or expiration of the applicable Co-Co Agreement for such program, the Company may notdirectly or indirectly research, develop, manufacture or commercialize, outside of the Celgene Collaboration Agreement, any biologic with specifiedactivity against that program’s collaboration target.Accounting AnalysisThe Celgene Collaboration Agreement includes six deliverables: (i) research and development services for the product candidate, JTX-2011 (“JTX-2011 Research Services”) (ii) research and development services for the product candidate, JTX-4014 (“JTX-4014 Research Services”)(iii) research and development services associated with the Lead Program and Other Programs (“Lead and Other Programs Research Services”),(iv) research and development services associated with target screening (“Target Screening Services”), (v) non-transferable, sub-licensable andnon-exclusive licenses to use the Company’s intellectual property and collaboration intellectual property to conduct research activities, on aprogram by program basis (“Research Licenses”), and (vi) participation in the joint steering committee (“JSC”).The six program options are considered substantive as the Company is at risk with regard to whether Celgene will exercise the options as a resultof the significant uncertainties related to drug discovery, research and development as all options are for targets that have significant developmentrisk. Additionally, there is also significant uncertainty regarding Celgene’s exercise of the option for JTX-4014 because, although not a novelimmunotherapy agent, it has significant development risk associated with the Company’s ability to advance its development in a commerciallyviable manner in a short time frame. The research term extensions are also considered substantive options based upon the risk that Celgene willexercise the research term extension. In addition, there are substantial option exercise payments payable by Celgene upon exercise of eachoption that are not priced at a significant and incremental discount. Accordingly, the substantive options are not considered deliverables at theinception of the arrangement and the associated option exercise payments are not included in allocable arrangement consideration. The Companyhas also determined that any obligations which are contingent upon the exercise of a substantive option are not considered deliverables at theoutset of the arrangement.The Target Screening Services and participation in the JSC deliverables each have standalone value from the other undelivered elements andtherefore are separate units of accounting. The Company determined that the research licenses for the JTX-2011 and JTX-4014 programs do nothave value to Celgene on a standalone basis primarily as a result of the fact that the research licenses allow Celgene to evaluate the results of theresearch and development services performed by the Company and the right to perform its duties under the agreement, but do not provide Celgenewith any commercialization rights. Therefore, the research licenses do not have value to Celgene without the performance of the JTX-2011Research Services and JTX-4014 Research Services and therefore are not separable from the JTX-2011 Research Services and JTX-4014Research Services. The JTX-2011 Research Services are separate and distinct from the JTX-4014 Research Services, and therefore, theresearch license and the JTX-2011 Research Services are a separate combined unit of accounting and the research license and the JTX-4014Research Services are a separate combined unit of accounting. The Lead and Other Programs Research Services deliverable does not includeseparate and distinct services and Celgene can use the Lead and Other Programs Research Services for its intended purpose without receipt ofthe research licenses that could beF-17Table of Contentsdelivered for the Lead Program and Other Programs. The Lead and Other Programs Research Services therefore have been combined with thelicenses that could be delivered for the Lead Program and Other Programs, which have an insignificant value, as a separate combined unit ofaccounting.The allocable arrangement consideration consists of the upfront fee of $225.0 million. As described above, Celgene also purchased 10,448,100shares of Series B-1 convertible preferred stock for gross proceeds of $36.1 million, which shares converted into 2,831,463 shares of commonstock upon the completion of the IPO. The Company determined the shares of Series B-1 convertible preferred stock were sold at fair value.Therefore, the proceeds from the issuance of Series B-1 convertible preferred stock did not impact the arrangement consideration to be allocatedto the units of accounting. The Company has allocated the allocable arrangement consideration based on the relative selling price of each unit ofaccounting. For all units of accounting, the Company determined the selling price using the best estimate of selling price (“BESP”). The Companydetermined the BESP based on internal estimates of the costs to perform the services, including expected internal and external costs for servicesand supplies, adjusted to reflect a reasonable profit margin. The total cost of the research and development services reflects the nature of theservices to be performed and the Company’s best estimate of the length of time required to perform the services. The Company determined thatthe BESP of the participation in the JSC was insignificant and therefore no consideration was allocated to this unit of accounting. Similarly, giventhe limited use of the research licenses, which is only required in the event Celgene performs research activities under the Celgene CollaborationAgreement which is not expected to be significant, the Company determined the estimated selling price for the research licenses were alsoinsignificant. Therefore, the total allocable arrangement consideration has been allocated to the JTX-2011 Research Services, the JTX-4014Research Services, the Lead and Other Programs Research Services and the Target Screening Services.The Company is recognizing the consideration allocated to each unit of accounting on a straight-line basis, as there is no discernible pattern orobjective measure of performance of the services, over the estimated performance period. The estimated performance period reflects theCompany’s estimate of the period over which it will perform the separate and distinct research and development services to deliver a pre-defineddata package to Celgene for each program subject to an option. The performance periods for each unit of accounting range from twelve months tofour years.The Company evaluated the milestones in the Celgene Collaboration Agreement, the Co-Co agreements, and the JTX-4014 License Agreement todetermine if they are substantive. In evaluating if a milestone is substantive, the Company assesses whether: (i) the consideration iscommensurate with either the Company’s performance to achieve the milestone or the enhancement of the value of the delivered item(s) as aresult of a specific outcome resulting from the Company performance to achieve the milestone, (ii) the consideration relates solely to pastperformance and (iii) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. All developmentand regulatory milestones in the Celgene Collaboration Agreement, the Co-Co agreements, and the JTX-4014 License Agreement are consideredsubstantive on the basis of the contingent nature of the milestone, specifically reviewing factors such as the scientific, clinical, regulatory, andother risks that must be overcome to achieve the milestone as well as the level of effort and investment required. Accordingly, such amounts willbe recognized in the period in which the associated milestone is achieved, assuming all other revenue recognition criteria are met. All commercialmilestones will be accounted for in the same manner as royalties and recorded as revenue upon achievement of the milestone, assuming all otherrevenue recognition criteria are met.During the years ended December 31, 2017 and 2016, the Company recognized as revenue $71.6 million and $37.2 million, respectively, of the$225.0 million upfront payment received under the Celgene Collaboration Agreement. As of December 31, 2017, the Company has $116.2 millionof deferred revenue, which is classified as either current or net of current portion in the accompanying consolidated balance sheets based on theperiod over which the revenue is expected to be recognized.4. Fair Value MeasurementsThe Company measures the fair value of money market funds, U.S. Treasuries and government agency securities based on quoted prices inactive markets for identical securities. Investments also include corporate debt securities which are valued either based on recent trades ofsecurities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated byobservable market data.F-18Table of ContentsThe carrying amounts reflected in the consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable andaccrued expenses approximate their fair values, due to their short-term nature.Assets measured at fair value on a recurring basis as of December 31, 2017 were as follows (in thousands): Total Quoted Prices inActive Markets forIdentical Assets(Level 1) Significant OtherObservable Inputs(Level 2) Significant UnobservableInputs(Level 3)Money market funds, included in cash equivalents$21,059 $21,059 $— $—Investments: Corporate debt securities65,173 — 65,173 —U.S. Treasuries110,948 110,948 — —Government agency securities58,171 58,171 — —Totals$255,351 $190,178 $65,173 $—Assets measured at fair value on a recurring basis as of December 31, 2016 were as follows (in thousands): December 31, 2016 Quoted Prices inActive Markets forIdentical Assets(Level 1) Significant OtherObservable Inputs(Level 2) Significant UnobservableInputs(Level 3)Money market funds, included in cash equivalents$44,848 $44,848 $— $—Investments: Corporate debt securities92,408 — 92,408 —U.S. Treasuries120,118 120,118 — —Totals$257,374 $164,966 $92,408 $—There were no changes in valuation techniques or transfers between the fair value measurement levels during the years ended December 31, 2017or 2016. There were no liabilities measured at fair value on a recurring basis as of December 31, 2017 or 2016.5. InvestmentsShort-term investments consist of investments with maturities greater than ninety days and less than one year from the balance sheet date. Long-term investments consist of investments with maturities of greater than one year that are not expected to be used to fund current operations. TheCompany classifies all of its investments as available-for-sale securities. Accordingly, these investments are recorded at fair value. Realizedgains and losses, amortization and accretion of discounts and premiums are included in other income, net. Unrealized gains and losses onavailable-for-sale securities are included in other comprehensive income (loss) as a component of stockholders’ equity (deficit) until realized.F-19Table of ContentsCash equivalents, short-term investments and long-term investments as of December 31, 2017 were comprised as follows (in thousands): December 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Fair ValueCash equivalents and short-term investments: Money market funds, included in cash equivalents$21,059 $— $— $21,059Corporate debt securities58,136 — (64) 58,072U.S. Treasuries111,049 — (101) 110,948Government agency securities43,204 — (131) 43,073Total cash equivalents and short-term investments233,448 —(296)233,152Long-term investments: Corporate debt securities7,117 — (16) 7,101Government agency securities15,195 — (97) 15,098Total long-term investments22,312 —(113)22,199Total cash equivalents and investments$255,760 $—$(409)$255,351Cash equivalents, short-term investments and long-term investments as of December 31, 2016 were comprised as follows (in thousands): December 31, 2016 Amortized Cost Unrealized Gains Unrealized Losses Fair ValueCash equivalents and short-term investments: Money market funds, included in cash equivalents$44,848 $— $— $44,848Corporate debt securities92,549 — (141) 92,408U.S. Treasuries12,020 — (18) 12,002Total cash equivalents and short-term investments149,417 — (159) 149,258Long-term investments: U.S. Treasuries108,390 — (274) 108,116Total long-term investments108,390 — (274) 108,116Total cash equivalents and investments$257,807 $— $(433) $257,374As of December 31, 2017 and 2016, the aggregate fair value of securities that were in an unrealized loss position for less than twelve months was$113.9 million and $192.3 million, respectively. As of December 31, 2017, the aggregate fair value of securities that were in an unrealized lossposition for more than twelve months was $107.9 million. The Company did not hold any securities in an unrealized loss position for more thantwelve months as of December 31, 2016. As of December 31, 2017, the Company did not intend to sell, and would not be more likely than notrequired to sell, the securities in an unrealized loss position before recovery of their amortized cost bases. Furthermore, the Company determinedthat there was no material change in the credit risk of these securities. As a result, the Company determined it did not hold any securities with anyother-than-temporary impairment as of December 31, 2017.There were no realized gains or losses on available-for-sale securities during the years ended December 31, 2016 or 2015. There were immaterialrealized gains and losses on available-for-sale securities during the year ended December 31, 2017.F-20Table of Contents6. Prepaid Expenses and Other Current AssetsPrepaid expenses and other current assets as of December 31, 2017 and 2016 were comprised as follows (in thousands): December 31, 2017 2016Prepaid expenses$2,196 $1,310Taxes receivable16,737 —Interest receivable on investments969 709Other current assets43 510Total prepaid expenses and other current assets$19,945 $2,529Taxes receivable as of December 31, 2017 were comprised of federal and state income tax payments for which the Company expects to berefunded during the year ended December 31, 2018.7. Restricted CashAs of December 31, 2017 and 2016, the Company maintained non-current restricted cash of $1.3 million and $1.5 million, respectively. Suchamounts were comprised of letters of credit for the Company’s leased facilities.8. Property and Equipment, NetProperty and equipment, net as of December 31, 2017 and 2016 was comprised as follows (in thousands): Estimated Useful Life (inYears) December 31, 2017 2016Laboratory equipment5 $9,409 $6,275Furniture and office equipment4 1,038 226Computer equipment3 1,380 492Leasehold improvementsShorter of useful life orremaining lease term 8,498 3,997Construction in progress — 1,048Total property and equipment, gross 20,325 12,038Less: accumulated depreciation (4,174) (4,797)Total property and equipment, net $16,151 $7,241Depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $4.4 million, $1.9 million and $1.5 million, respectively.9. Accrued ExpensesAccrued expenses as of December 31, 2017 and 2016 were comprised as follows (in thousands): December 31, 2017 2016Employee compensation and benefits$3,683 $2,651External research and professional services4,647 1,923Lab consumables and other124 1,281Total accrued expenses$8,454$5,85510. Common StockThe Company is authorized to issue 160,000,000 shares of common stock. Holders of common stock are entitled to one vote per share. Holdersof common stock are entitled to receive dividends, if and when declared by the Board of Directors.F-21Table of ContentsAs of December 31, 2017 and 2016, the Company had reserved for future issuance the following number of shares of common stock (inthousands): December 31, 2017 2016Shares reserved for Series A convertible preferred stock outstanding— 12,737Shares reserved for Series B convertible preferred stock outstanding— 6,715Shares reserved for Series B-1 convertible preferred stock outstanding— 2,831Shares reserved for vesting of restricted stock awards16 94Shares reserved for exercises of outstanding stock options4,868 4,290Shares reserved for future issuances under the 2017 Stock Incentive Plan1,032 244Total shares reserved for future issuance5,916 26,91111. Preferred StockSeries A Preferred StockAt various closing dates during the years ended December 31, 2015, 2014 and 2013, the Company issued 47,000,000 shares of Series Aconvertible preferred stock (“Series A Preferred Stock”) for $1.00 per share. The shares were issued in exchange for cash proceeds of $44.6million, net of issuance costs of $0.1 million, and the exchange of approximately $2.3 million in outstanding convertible promissory notes,including accrued interest.Tranche Rights Issued with Series A Preferred StockIncluded in the terms of the Series A Preferred Stock Purchase Agreement were certain tranche rights (the “Tranche Rights”). The Tranche Rightsobligated the investors in Series A Preferred Stock to purchase, and the Company to sell, an additional 10,000,000 shares of Series A PreferredStock at $1.00 per share contingent upon the initiation of certain research and development programs and initiation of translational science(“Tranche Right I”). In addition, the investors were obligated to purchase, and the Company was obligated to sell, an additional 20,000,000 sharesof Series A Preferred Stock upon developing product candidates and achieving certain clinical milestones (“Tranche Right II”). In addition, theTranche Rights provided the investors with the ability to purchase these additional shares at their option at any time. The Tranche Rights weretransferable by the investors, subject to approval by the Company’s Board of Directors.The Company concluded that the Tranche Rights met the definition of a freestanding financial instrument, as the Tranche Rights were legallydetachable and separately exercisable from the Series A Preferred Stock. Therefore, the Company allocated the net proceeds between theTranche Rights and the Series A Preferred Stock. Since the Series A Preferred Stock was contingently redeemable upon the occurrence of adeemed liquidation event, the Tranche Rights were classified as an asset or liability under ASC 480, Distinguishing Liabilities from Equity, andwere initially recorded at fair value. The Tranche Rights were measured at fair value at each reporting period. Since the Tranche Rights weresubject to fair value accounting, the Company allocated the proceeds to the Tranche Rights based on the fair value at the date of issuance withthe remaining proceeds being allocated to the Series A Preferred Stock. The estimated fair value of the Tranche Rights was determined using aprobability-weighted present value model that considered the probability of closing a tranche, the estimated future value of Series A PreferredStock at each closing and the investment required at each closing. Future values were converted to present value using a discount rateappropriate for probability-adjusted cash flows.Tranche Right I was initially recorded as an asset of $1.2 million as the purchase price of the additional shares was greater than the estimatedvalue of the Series A Preferred Stock at the expected settlement date. Conversely, Tranche Right II was initially recorded as a liability of $6.5million as the purchase price of the additional shares was less than the estimated price of the Series A Preferred Stock at the expected settlementdate.In February 2014, the Company amended the Tranche Rights, which changed the amount and timing of the subsequent closings related to TrancheRight I and Tranche Right II. The shares associated with Tranche Right I were increased by 5,000,000 to 15,000,000, and the shares associatedwith Tranche Right II were decreased by 5,000,000 to 15,000,000. The purchase price per share remained unchanged at $1.00. Additionally, upontheF-22Table of Contentsachievement of the specified milestones, Tranche Right I and Tranche Right II would each be closed in two separate transactions whereby 50% ofthe commitment would be closed upon the achievement of the milestones and the remaining 50% commitment would be closed within six monthsof achieving the milestones. As a result of these modified Tranche Rights, the Company recognized income of $3.4 million related to the mark-to-market adjustment at the time of the amendment.The Company issued 15,000,000 additional shares under Tranche Right I in two separate closings during the year ended December 31, 2014 fortotal proceeds of $15.0 million, net of issuance costs. Prior to each closing, any changes in the value of Tranche Right I were recorded as otherfinancing income, net. The fair value of the portion of the Tranche Right I settled at each closing was reclassified to Series A Preferred Stock.In January 2015 and April 2015, Tranche Right II was settled in two separate closings, prior to achieving the contingent milestones. The Companyrecognized income of $1.9 million related to the mark-to-market of Tranche Right II during the year ended December 31, 2015, which was recordedwithin other financing income, net. The fair value of the Tranche Right II settled at closing was reclassified to Series A Preferred Stock. The initialcarrying amount of the Series A Preferred Stock issued upon the closing of Tranche Right II amounted to approximately $16.7 million, whichexceeded the redemption value of $15.0 million. Therefore, the carrying value was not subsequently adjusted until such time as the redemptionvalue exceeded the initial carrying amount.Series A Preferred Stock ExtinguishmentIn April 2015, in connection with the issuance of shares of Series B convertible preferred stock (“Series B Preferred Stock”), the rights andpreferences of the Series A Preferred Stock were modified and resulted in two primary changes. First, the right at the election of the holder toredeem the Series A Preferred Stock beginning in February 2020 was removed, and the right to participate in liquidating distributions with thecommon stock holders on a pro rata basis was also removed. The removal of these two features resulted in a fundamental change to the nature ofthe Series A Preferred Stock. As a result, the Company recognized a loss on extinguishment of the Series A Preferred Stock in the amount of$2.1 million during the year ended December 31, 2015, which caused the Series A Preferred Stock’s carrying value to equal its fair value of $47.1million after the modification. As the amended Series A Preferred Stock was no longer redeemable at the option of the holder beginning in February2020, and was only contingently redeemable upon the occurrence of a deemed liquidation event, the Company did not subsequently adjust thecarrying value of the Series A Preferred Stock until such time that it was probable that the Series A preferred stock would be redeemed.Series B Preferred StockDuring the year ended December 31, 2015, the Company issued 24,778,761 shares of Series B Preferred Stock for $2.26 per share. This issuanceresulted in cash proceeds of $55.8 million, net of issuance costs of $0.2 million.Series B-1 Preferred StockDuring the year ended December 31, 2016, the Company issued 10,448,100 shares of Series B-1 Preferred Stock to Celgene for $3.46 per share.This issuance resulted in cash proceeds of $36.1 million, net of issuance costs of $0.1 million.Conversion of Preferred Stock Upon IPOPrior to the Company’s IPO, the holders of the Company’s Series A Preferred Stock, Series B Preferred Stock and Series B-1 Preferred Stock hadcertain voting rights, dividend rights, liquidation preferences and conversion privileges. Upon completion of the Company’s IPO, all shares ofoutstanding convertible preferred stock were automatically converted into an aggregate of 22,283,690 shares of common stock. All rights,preferences and privileges associated with the outstanding convertible preferred stock were terminated upon this conversion.The Company is now authorized to issue 5,000,000 shares of undesignated preferred stock in one or more series. As of December 31, 2017, noshares of preferred stock were issued or outstanding.F-23Table of Contents12. Stock-based Compensation2013 Stock Option and Grant PlanIn February 2013, the Company’s Board of Directors adopted and the Company’s stockholders approved the 2013 Stock Option and Grant Plan(the “2013 Plan”), as amended and restated, under which it could grant incentive stock options (“ISOs”), non-qualified stock options and restrictedstock awards to eligible employees, officers, directors, and consultants. The 2013 Plan was subsequently amended in January 2015, April 2015,July 2015, March 2016 and October 2016 to allow for the issuance of additional shares of common stock.2017 Stock Option and Incentive PlanIn January 2017, the Company’s Board of Directors adopted and the Company’s stockholders approved the 2017 Stock Option and Incentive Plan(the “2017 Plan”), which became effective immediately prior to the effectiveness of the Company’s IPO. Upon the adoption of the 2017 Plan, nofurther awards will be granted under the 2013 Plan.The 2017 Plan provides for the grant of ISOs, non-qualified stock options, restricted stock awards, restricted stock units, stock appreciation rightsand other stock-based awards. The Company’s employees, officers, directors and consultants and advisors are eligible to receive awards underthe 2017 Plan. The terms of stock options and restricted stock awards, including vesting requirements, are determined by the Board of Directors,subject to the provisions of the 2017 Plan.The Company registered on a Registration Statement on Form S-8 1,753,758 shares of common stock under the 2017 Plan, which is comprised of(i) 1,510,000 shares of common stock reserved for issuance under the 2017 Plan, plus (ii) 243,758 shares of common stock originally reserved forissuance under the 2013 Plan that became available for issuance under the 2017 Plan upon the completion of the Company’s IPO. The 2017 Planalso provides that an additional number of shares will automatically be added to the shares authorized for issuance under the 2017 Plan onJanuary 1, 2018 and each January 1 thereafter. The number of shares added each year will be equal to the lesser of (i) 4% of the outstandingshares on the immediately preceding December 31st or (ii) such amount as determined by the Compensation Committee of the Board of Directors.As of December 31, 2017, there were 1,032,252 shares available for future issuance under the 2017 Plan.2017 Employee Stock Purchase PlanIn January 2017, the Board of Directors adopted and the Company’s stockholders approved the 2017 Employee Stock Purchase Plan (the “2017ESPP”), which became effective upon the closing of the Company’s IPO. The Company reserved 302,000 shares of common stock for futureissuance under the 2017 ESPP. No offering periods under the 2017 ESPP had been initiated as of December 31, 2017.Founder AwardsFrom December 2012 to February 2013, the Company issued 1,395,659 shares of restricted stock to non-employee founders (the “Founders”). Ofthe total restricted stock awarded to the Founders, 1,043,357 shares vested over one to four years, based on each Founder’s continued servicerelationship with the Company in varying capacities as advisors, as prescribed by the grantee’s individual restricted stock purchase agreements.The remaining 352,302 shares vested upon the determination by the Board of Directors of a Founder’s achievement of certain performanceobjectives, as set forth in the agreements. These performance criteria were linked to certain milestones specific to the Company’s research anddevelopment goals, including but not limited to preclinical and clinical development milestones related to the Company’s product candidates. As ofDecember 31, 2017, all restricted stock awards issued to Founders were vested.Restricted stock awards granted to two Founders originally contained options that enabled the Founders to sell their vested shares back to theCompany at fair value upon both (i) the termination of the consulting agreement between the Founder and the Company for any reason and (ii) thedetermination by the Founder’s employer that the ownership of the restricted stock is in violation of the employer’s conflict of interest policy. Theoccurrence of these events was determined to be outside of the Founders’ and the Company’s control. As such, these restricted stock awardswere previously recorded on the consolidated balance sheet as contingently redeemable common stock, residing in temporary equity, inaccordance with the classification guidance of ASC 718, Compensation—StockF-24Table of ContentsCompensation and ASC 480, Distinguishing Liabilities from Equity. In June 2017, the restricted stock purchase agreements related to the twoFounders were amended such that these options expired on July 26, 2017. Accordingly, these restricted stock awards were reclassified fromcontingently redeemable common stock to additional paid-in capital as of that date.Stock-based Compensation ExpenseTotal stock-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2017, 2016and 2015 was as follows (in thousands): Year Ended December 31, 2017 2016 2015Research and development$2,840 $4,161 $269General and administrative1,935 828 1,083Total stock-based compensation expense$4,775 $4,989 $1,352Restricted Stock ActivityPursuant to restricted stock agreements originally issued under the terms of the 2013 Plan, the Company, at its discretion, has the option torepurchase unvested shares of restricted stock at the initial purchase price if the employees or non-employees terminate their service relationshipwith the Company. The shares are recorded in stockholders’ equity (deficit) as they vest.No shares of restricted stock were issued during the years ended December 31, 2017 or 2016. During the year ended December 31, 2015, theCompany issued 27,099 shares of restricted stock to a member of the Board of Directors at an original purchase price of $4.02 per share.The following table summarizes changes in unvested restricted stock for the year ended December 31, 2017 (in thousands, except per shareamounts): Shares Weighted-Average GrantDate Fair Value per ShareUnvested restricted stock as of December 31, 201694 $0.07Issued— $—Vested(77) $0.08Repurchased(1) $0.37Unvested restricted stock as of December 31, 201716 $—The aggregate fair value of restricted stock awards that vested during the years ended December 31, 2017, 2016 and 2015, based upon the fairvalues of the stock underlying the restricted stock awards on the day of vesting, was $1.3 million, $3.9 million and $1.1 million, respectively.Stock Option ActivityThe fair value of stock options granted to employees and directors during the years ended December 31, 2017, 2016 and 2015 was calculated onthe date of grant using the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015Risk-free interest rate2.1% 1.4% 1.8%Expected dividend yield—% —% —%Expected term (in years)6.1 6.1 6.1Expected volatility70.1% 71.9% 67.0%F-25Table of ContentsUsing the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted to employees and directorsduring the years ended December 31, 2017, 2016 and 2015 was $10.96, $5.10 and $1.70 per share, respectively.No stock options were granted to non-employees during the years ended December 31, 2017 or 2016. During the year ended December 31, 2015,the Company granted 12,195 stock options to non-employees at a weighted-average grant date fair value of $0.85 per share. This weighted-average grant date fair value was calculated using the Black-Scholes option pricing model and a weighted-average risk-free interest rate of 2.0%, aweighted-average expected dividend yield of 0.0%, a weighted-average expected term of 9.8 years and a weighted-average expected volatility of68.7%.The following table summarizes changes in stock option activity during the year ended December 31, 2017 (in thousands, except per shareamounts): Options Weighted-AverageExercise Price Weighted-AverageRemaining ContractualTerm (in years) Aggregate IntrinsicValueOutstanding at December 31, 20164,290 $3.95 8.7 $29,269Granted983 $17.19 Exercised(144) $3.20 Cancelled or forfeited(261) $10.71 Outstanding at December 31, 20174,868 $6.28 7.9 $35,178Exercisable at December 31, 20172,217 $2.79 7.2 $22,170The aggregate intrinsic value of stock options exercised during the years ended December 31, 2017, 2016 and 2015 was $1.9 million, $0.3 millionand less than $0.1 million, respectively.As of December 31, 2017, there was unrecognized stock-based compensation expense related to unvested stock options of $13.8 million, whichthe Company expects to recognize over a weighted-average period of approximately 2.4 years.13. Income TaxesThe provision for income taxes for the years ended December 31, 2017, 2016 and 2015 was comprised as follows (in thousands): Year Ended December 31, 2017 2016 2015Current taxes: Federal$— $— $—State36 — —Total current taxes36 — —Deferred taxes: Federal— — —State— — —Total deferred taxes— — —Total provision for income taxes$36 $— $—The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017 and introduced significant changes to United States income taxlaw. Among these changes, the federal statutory tax rate was reduced to 21% and net operating loss (“NOL”) carrybacks are no longer permitted.In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address theapplication of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (includingcomputations) in reasonable detail to complete the accounting for certainF-26Table of Contentsincome tax effects of the Tax Act. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, theCompany has made reasonable estimates of the effects and recorded provisional amounts in its consolidated financial statements as of and forthe year ended December 31, 2017. In accordance with SAB 118, the Company has determined that the revaluation of its deferred tax assets andassociated valuation allowance reduction of $9.4 million are provisional amounts as of December 31, 2017. The ultimate impact may differ fromthese provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions theCompany has made, additional regulatory guidance that may be issued and actions the Company may take as a result of the Tax Act. Theaccounting for the tax effects of the Tax Act will be completed during the year ended December 31, 2018.A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows: Year Ended December 31, 2017 2016 2015Income tax computed at federal statutory tax rate34.0 % 34.0 % 34.0 %Deferred tax effects from the Tax Act(57.2)% — % — %State taxes, net of federal benefit4.7 % 3.1 % 5.3 %Tax credit carryforwards26.8 % 11.7 % 4.5 %Non-deductible income (expense)(4.9)% (11.1)% 0.7 %Change in valuation allowance(1.8)% (39.4)% (44.5)%Other(1.8)% 1.7 % — %Effective tax rate(0.2)% — % — %The principal components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 were comprised as follows (inthousands): December 31, 2017 2016Deferred tax assets: Net operating loss carryforwards$26,926 $24,435Tax credit carryforwards8,432 4,039Deferred revenue31,735 —Deferred lease incentive120 553Deferred rent431 426Intangibles237 187Accrued expenses and other995 1,018Unrealized loss on available-for-sale securities112 169Stock-based compensation713 293Total deferred tax assets69,701 31,120Less: valuation allowance(30,850) (30,548)Net deferred tax assets38,851 572Deferred tax liabilities: Section 481(a) method change(38,481) —Depreciation(370) (572)Total deferred tax liabilities(38,851) (572)Net deferred taxes$— $—The Company has incurred NOLs since inception. As of December 31, 2017, the Company had federal and state NOL carryforwards of $98.5million and $98.6 million, respectively, which expire at various dates from 2032 through 2037. As of December 31, 2017, the Company had federalresearch and development tax credit carryforwards of $6.0 million which expire at various dates from 2032 through 2037. In addition, as ofDecember 31, 2017, the Company had state research and development and investment tax credit carryforwards of $2.6 million and $0.5F-27Table of Contentsmillion, respectively. The state research and development tax credit carryforwards expire at various dates from 2027 through 2032 and the stateinvestment tax credit carryforwards expire at various dates from 2019 through 2020.Management has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are principallycomprised of NOL carryforwards, tax credit carryforwards, deferred lease incentives and deferred rent. Management has determined that it is morelikely than not that the Company will not realize the benefits of its deferred tax assets, and as a result, a valuation allowance of $30.9 million hasbeen established at December 31, 2017. The increase in the valuation allowance of $0.3 million during the year ended December 31, 2017 wasprimarily due to the additional operating loss generated by the Company.NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (“IRS”) and may become subjectto an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period inexcess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code (“IRC”). This could limit the amount of tax attributes that canbe utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the Company’svalue immediately prior to the ownership change. An IRC Section 382 study, completed in August 2016, identified three previous ownershipchanges for purposes of IRC Section 382. As a result of these ownership changes, the Company’s NOL and tax credit carryforwards allocable tothe periods preceding each such ownership change are subject to limitations under IRC Section 382. Subsequent ownership changes may furtheraffect the limitation in future years.The Company had no unrecognized tax benefits as of either December 31, 2017 or 2016. During the year ended December 31, 2017, the Companycompleted a study of its research and development credit carryforwards generated during the years ended December 31, 2016 and 2015. TheCompany has not conducted a study of its research and development credit carryforwards generated during the year ended December 31, 2017.This study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed andany adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against theCompany’s research and development credit carryforwards, and if an adjustment is required, this adjustment would be offset by an adjustment tothe valuation allowance. Thus, there would be no impact to the consolidated statements of operations if an adjustment were required.Interest and penalty charges, if any, related to income taxes would be classified as a component of the provision for income taxes in theconsolidated statements of operations. As of December 31, 2017, the Company has not incurred any interest or penalty charges.The Company files income tax returns in the United States federal tax jurisdiction and the Massachusetts state tax jurisdiction. Since theCompany is in a loss carryforward position, it is generally subject to examination by federal and state tax authorities for all tax years in which aloss carryforward is available.14. Related-party TransactionsIn July 2016, the Company entered into the Celgene Collaboration Agreement and a Series B-1 Preferred Stock Purchase Agreement withCelgene. Under the Celgene Collaboration Agreement, the Company received a non-refundable upfront payment of $225.0 million. Under the SeriesB-1 Preferred Stock Purchase Agreement, Celgene purchased 10,448,100 shares of Series B-1 preferred stock for $36.1 million. These shares ofSeries B-1 preferred stock converted into 2,831,463 shares of common stock upon the completion of the Company’s IPO. In addition, an affiliateof Celgene purchased 625,000 shares of the Company’s common stock in the January 2017 IPO at the public offering price of $16.00 per share fora total of $10.0 million.15. Commitments and ContingenciesOperating LeasesIn November 2016, the Company entered into an operating lease agreement to occupy 51,000 square feet of laboratory and office space inCambridge, Massachusetts. This facility serves as the Company’s current corporate headquarters. The lease term began on November 1, 2016and extends to March 31, 2025. The Company has the option to extend the lease term for one consecutive five-year period, at the market rate, bygiving the landlord written notice of its election to exercise the extension at least twelve months prior to the original expiration of theF-28Table of Contentslease term. The Company is recording rent expense on a straight-line basis through the end of the lease term and has recorded deferred rent onthe consolidated balance sheets. The lease also provided the Company with a tenant improvement allowance of $0.5 million. The Companyrecorded the tenant improvement allowance as a deferred lease incentive and is amortizing the deferred lease incentive through a reduction of rentexpense ratably over the lease term. Leasehold improvements related to this facility are being amortized over the shorter of their useful life or thelease term. The Company provided the landlord with a security deposit in the form of a letter of credit in the amount of $1.3 million, which isrecorded as restricted cash in other non-current assets in the consolidated balance sheets.As of December 31, 2017, the future minimum lease payments due under the operating lease for the Company’s corporate headquarters are asfollows (in thousands):Years Ended December 31,Minimum Lease Payments2018$4,13920194,26320204,39120214,52320224,6592023 and thereafter10,996Total future minimum lease payments$32,971The Company leased its former corporate headquarters under an operating lease that was originally set to expire on October 15, 2018. TheCompany had the option to extend the term of the lease for an additional three-year period, at the market rate, by giving the landlord written noticeof its election to exercise the extension at least nine months prior to the original expiration of the lease term. The Company recorded rent expenseon a straight-line basis through the end of the lease term and recorded deferred rent on the consolidated balance sheets. The lease also providedthe Company with a tenant improvement allowance of $2.8 million. The Company recorded the tenant improvement allowance as a deferred leaseincentive and amortized the deferred lease incentive through a reduction of rent expense ratably over the lease term. In March 2015, the Companyentered into a three-year sublease agreement to lease additional lab and office facilities at the same location as its former corporate headquarters.On May 19, 2017, the Company entered into a Lease Termination Agreement and a Sublease Termination Agreement (collectively, the “LeaseTermination Agreements”) with its landlord related to the leases for its former corporate headquarters. As a result of the Lease TerminationAgreements, rental payments for the Company’s former corporate headquarters ceased on May 31, 2017, with the exception of certain space thatwas utilized through August 31, 2017. The Lease Termination Agreements required the Company to pay an aggregate early termination fee of $0.7million, which was paid in the second quarter of 2017. This early termination fee was recorded as a component of rent expense.During the years ended December 31, 2017, 2016 and 2015, the Company recorded total rent expense of $3.5 million, $1.8 million and $0.9 million,respectively.License and Collaboration AgreementsThe Company has entered into various license agreements for certain technology. The Company could be required to make aggregate technical,clinical development and regulatory milestone payments of up to $13.2 million and low single-digit royalty payments based on a percentage of netsales of licensed products. As of December 31, 2017, the Company made $0.2 million in aggregate milestone payments under these licenseagreements. The Company may cancel these agreements at any time by providing 30 to 90 days notice to the licensors, and all payments notpreviously due would no longer be owed.The Company has also entered into collaboration agreements with various third parties for research services and access to proprietary technologyplatforms. Under certain of these collaboration agreements, the Company could be required to make aggregate technical, clinical development andregulatory milestones payments ranging from $12.5 million to $12.9 million per product candidate and low single-digit royalty payments based on apercentage of net sales on a product-by-product basis. As of December 31, 2017, the Company made $0.3 million in aggregate milestonepayments under these certain collaboration agreements. Under a certain other collaboration agreement, the Company could be required to makeaggregate technical, clinical development and regulatory milestonesF-29Table of Contentspayments of $0.7 million. As of December 31, 2017, the Company made no milestone payments under this certain other collaboration agreement.16. 401(k) Savings PlanThe Company has a defined-contribution savings plan under Section 401(k) of the IRC (the “401(k) Plan”). The 401(k) Plan covers all employeeswho meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pretaxbasis. As of December 31, 2017, the Company was not required to make any contributions to the 401(k) Plan, nor did it make any contributions tothe 401(k) Plan through December 31, 2017.17. Net Loss per ShareFor purposes of the diluted loss per share calculation, convertible preferred stock, outstanding stock options and unvested restricted commonstock are considered to be potentially dilutive securities, however the following common stock equivalents have been excluded from thecalculation of diluted net loss per share because their effect would be anti-dilutive (in thousands): Year Ended December 31, 2017 2016 2015Series A convertible preferred stock— 12,737 12,737Series B convertible preferred stock— 6,715 6,715Series B-1 convertible preferred stock— 2,831 —Outstanding stock options4,868 4,290 2,960Unvested restricted common stock16 94 748Total4,884 26,667 23,160F-30Table of Contents18. Selected Quarterly Financial Data (Unaudited)The following tables contain selected quarterly financial information for the years ended December 31, 2017 and 2016. The Company believes thatthe following information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. Theoperating results for any quarter are not necessarily indicative of results for any future period. 2017(in thousands, except per share data)First Quarter Second Quarter Third Quarter Fourth QuarterCollaboration revenue—related party$20,289 $20,289 $18,077 $12,989Total operating expenses20,536 23,317 22,465 24,541Operating loss(247) (3,028) (4,388) (11,552)Total other income, net632 752 721 703Provision for (benefit from) income taxes— 1,104 417 (1,485)Net income (loss)$385 $(3,380) $(4,084) $(9,364)Net loss attributable to common stockholders$(409) $(3,380) $(4,084) $(9,364)Net loss per share attributable to common stockholders, basicand diluted$(0.02) $(0.11) $(0.13) $(0.29) 2016(in thousands, except per share data)First Quarter Second Quarter Third Quarter Fourth QuarterCollaboration revenue—related party$— $— $16,908 $20,289Total operating expenses10,901 12,362 13,093 15,307Operating (loss) income(10,901) (12,362) 3,815 4,982Total other income, net11 14 254 484Net (loss) income$(10,890) $(12,348) $4,069 $5,466Net (loss) income attributable to common stockholders$(12,934) $(14,392) $138 $258Net (loss) income per share attributable to commonstockholders, basic$(6.81) $(7.23) $0.06 $0.11Net (loss) income per share attributable to commonstockholders, diluted$(6.81) $(7.23) $0.03 $0.05F-31Table of ContentsEXHIBIT INDEXExhibit No. Description of Exhibit3.1* Fourth Amended and Restated Certificate of Incorporation of the Registrant3.2* Amended and Restated Bylaws of the Registrant4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1 (File No.333-215372) filed December 30, 2016)4.2 Amended and Restated Investors’ Rights Agreement by and among the Registrant and certain of its stockholders, dated April 17, 2015 asamended (incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-1 (File No. 333-215372) filed December30, 2016)10.1# 2017 Stock Option and Grant Plan and forms of award agreements thereunder (incorporated by reference to Exhibit 10.1 of the Registrant’sRegistration Statement on Form S-1/A (File No. 333-215372) filed January 17, 2017)10.2*# 2013 Stock Option and Grant Plan and forms of award agreements thereunder10.3# 2017 Employee Stock Purchase Plan, As Amended (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q(File No. 001-37998) filed November 13, 2017)10.4# Amended and Restated Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.2 of the Registrant’s QuarterlyReport on Form 10-Q (File No. 001-37998) filed November 13, 2017)10.5# Amended and Restated Employment Agreement between Richard Murray and the Registrant, dated January 6, 2016 (incorporated by referenceto Exhibit 10.4 of the Registrant’s Registration Statement on Form S-1/A (File No. 333-215372) filed January 17, 2017)10.6# Amended and Restated Employment Agreement between Kim Drapkin and the Registrant, dated November 12, 2015 (incorporated by referenceto Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1/A (File No. 333-215372) filed January 17, 2017)10.7# Amended and Restated Employment Agreement between Elizabeth Trehu and the Registrant, dated November 3, 2015 (incorporated by referenceto Exhibit 10.6 of the Registrant’s Registration Statement on Form S-1/A (File No. 333-215372) filed January 17, 2017)10.8*# Employment Agreement between Hugh Cole and the Registrant, dated August 14, 201710.9# Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.12 of the Registrant’s Registration Statement on Form S-1(File No. 333-215372) filed December 30, 2016)10.10# Form of Officer Indemnification Agreement (incorporated by reference to Exhibit 10.13 of the Registrant’s Registration Statement on Form S-1/A(File No. 333-215372) filed January 17, 2017)10.11# Senior Executive Cash Incentive Bonus Plan (incorporated by reference to Exhibit 10.14 of the Registrant’s Registration Statement on Form S-1/A(File No. 333-215372) filed January 17, 2017)10.12# Lease Agreement between ARE-770/784/790 Memorial Drive, LLC and the Registrant, dated November 1, 2016 (incorporated by reference toExhibit 10.11 of the Registrant’s Registration Statement on Form S-1 (File No. 333-215372) filed December 30, 2016)10.13 Lease Termination Agreement by and between Cambridge 1030 Mass Ave, LLC (as successor in interest to HCP/LFREP Ventures I, LLC) andthe Registrant, dated May 19, 2017 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (File No. 001-37998) filed May 23, 2017)10.14 Sublease Termination Agreement by and between Manus Biosynthesis, Inc. and the Registrant, dated May 19, 2017 (incorporated by reference toExhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-37998) filed May 23, 2017)10.15† Amended and Restated Exclusive License Agreement between Sloan Kettering Institute for Cancer Research, Memorial Sloan Kettering CancerCenter and Memorial Hospital for Cancer and the Registrant, dated September 28, 2015 (incorporated by reference to Exhibit 10.9 of theRegistrant’s Registration Statement on Form S-1 (File No. 333-215372) filed December 30, 2016)10.16† Master Research and Collaboration Agreement between Celgene Corporation, Celgene Rivot LLC and the Registrant, dated July 18, 2016(incorporated by reference to Exhibit 10.10 of the Registrant’s Registration Statement on Form S-1 (File No. 333-215372) filed December 30,2016)21.1* List of Subsidiaries of the Registrant23.1* Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as AdoptedPursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as AdoptedPursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1+ Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section906 of the Sarbanes-Oxley Act of 2002101* The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in eXtensibleBusiness Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statementsof Comprehensive Loss, (iv) Consolidated Statements of Convertible Preferred Stock, Contingently Redeemable Common Stock andStockholders’ (Deficit) Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements * Filed herewith+ Furnished herewith# Indicates a management contract or any compensatory plan, contract or arrangement† Confidential treatment granted as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, asamended.Table of ContentsTable of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned, thereunto duly authorized. JOUNCE THERAPEUTICS, INC. Date: March 8, 2018By:/s/ Richard Murray Richard Murray, Ph.D. President and Chief Executive OfficerPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated. Signature Title Date/s/ Richard Murray President, Chief Executive Officer and Director (PrincipalExecutive Officer) March 8, 2018Richard Murray, Ph.D. /s/ Kim C. Drapkin Treasurer and Chief Financial Officer(Principal Financial and Accounting Officer) March 8, 2018Kim C. Drapkin /s/ Perry A. Karsen Chairman of the Board of Directors March 8, 2018Perry A. Karsen /s/ Barbara Duncan Director March 8, 2018Barbara Duncan /s/ Cary G. Pfeffer Director March 8, 2018Cary G. Pfeffer, M.D. /s/ J. Duncan Higgons Director March 8, 2018J. Duncan Higgons /s/ Robert Kamen Director March 8, 2018Robert Kamen, Ph.D. /s/ Robert Tepper Director March 8, 2018Robert Tepper, M.D. /s/ Luis A. Diaz, Jr. Director March 8, 2018Luis A. Diaz, Jr., M.D. FOURTH AMENDED AND RESTATED ​ CERTIFICATE OF INCORPORATION ​ OF ​ JOUNCE THERAPEUTICS, INC. ​ Jounce Therapeutics, Inc., a corporation organized and existing under the laws of the ​ State of Delaware (the “Corporation”), hereby certifies as follows: ​ 1. The name of the Corporation is Jounce Therapeutics, Inc. The date of the filing​ of its original Certificate of Incorporation with the Secretary of State of the State of Delaware ​ was March 22, 2012 (the “Original Certificate”). ​ 2. This Fourth Amended and Restated Certificate of Incorporation (the “Certificate”)​ amends, restates and integrates the provisions of the Third Amended and Restated Certificate of ​ Incorporation that was filed with the Secretary of State of the State of Delaware on August 1, ​ 2016 and subsequently amended on September 23, 2016 and subsequently amended again on ​ January 13, 2017 (as amended, the “Amended and Restated Certificate”), and was duly adopted ​ in accordance with the provisions of Sections 228, 242 and 245 of the General Corporation Law ​ of the State of Delaware (the “DGCL”). ​ 3. The text of the Amended and Restated Certificate is hereby amended and restated​ in its entirety to provide as herein set forth in full. ​ ARTICLE I ​ The name of the Corporation is Jounce Therapeutics, Inc. ​ ARTICLE II ​ The address of the Corporation’s registered office in the State of Delaware is c/o The ​Corporation Trust Company, 1209 Orange Street in the City of Wilmington, County of New ​ Castle, 19801. The name of its registered agent at such address is The Corporation Trust ​ Company. ​ ARTICLE III ​ The purpose of the Corporation is to engage in any lawful act or activity for which ​ corporations may be organized under the DGCL. ​ Exhibit 3.1​ ​ ​ 2 ​ ARTICLE IV ​ ​ CAPITAL STOCK ​ The total number of shares of capital stock which the Corporation shall have authority to ​ issue is One Hundred Sixty-Five Million (165,000,000) shares, of which (i) One Hundred Sixty ​ Million (160,000,000) shares shall be a class designated as common stock, par value $0.001 per ​ share (the “Common Stock”), and (ii) Five Million (5,000,000) shares shall be a class designated ​ as undesignated preferred stock, par value $0.001 per share (the “Undesignated Preferred ​ Stock”). ​ ​ Except as otherwise provided in any certificate of designations of any series of ​ Undesignated Preferred Stock, the number of authorized shares of the class of Common Stock or ​ Undesignated Preferred Stock may from time to time be increased or decreased (but not below ​ the number of shares of such class outstanding) by the affirmative vote of the holders of a ​ majority in voting power of the outstanding shares of capital stock of the Corporation ​ irrespective of the provisions of Section 242(b)(2) of the DGCL. ​ ​ The powers, preferences and rights of, and the qualifications, limitations and restrictions ​ upon, each class or series of stock shall be determined in accordance with, or as set forth below ​ in, this Article IV. ​ ​ A. COMMON STOCK ​ ​ Subject to all the rights, powers and preferences of the Undesignated Preferred ​ Stock and except as provided by law or in this Certificate (orin any certificate of designations of ​ any series of Undesignated Preferred Stock): ​ ​ (a) the holders of the Common Stock shall have the exclusive right to ​ vote for the election of directors of the Corporation (the “Directors”) and on all other matters ​ requiring stockholder action, each outstanding share entitling the holder thereof to one vote on ​ each matter properly submitted to the stockholders of the Corporation for their vote; provided, ​ however, that, except as otherwise required by law, holders of Common Stock, as such, shall not ​ be entitled to vote on any amendment to this Certificate (or on any amendment to a certificate of ​ designations of any series of Undesignated Preferred Stock) that alters or changes the powers, ​ preferences, rights or other terms of one or more outstanding series of Undesignated Preferred ​ Stock if the holders of such affected series of Undesignated Preferred Stock are entitled to vote, ​ either separately or together with the holders of one or more other such series, on such ​ amendment pursuant to this Certificate (or pursuant to a certificate of designations of any series ​ of Undesignated Preferred Stock) or pursuant to the DGCL; ​ ​ (b) dividends may be declared and paid or set apart for payment upon ​ the Common Stock out of any assets or funds of the Corporation legally available for the ​ payment of dividends, but only when and as declared by the Board of Directors orany ​ authorized committee thereof; and ​ ​ ​ ​ 3 ​ (c) upon the voluntary or involuntary liquidation, dissolution or ​ winding up of the Corporation, the net assets of the Corporation shall be distributed pro rata to ​ the holders of the Common Stock. ​ ​ B. UNDESIGNATED PREFERRED STOCK ​ ​ The Board of Directors or any authorized committee thereof is expressly ​ authorized, to the fullest extent permitted by law, to provide by resolution or resolutions for, out ​ of the unissued shares of Undesignated Preferred Stock, the issuance of the shares of ​ Undesignated Preferred Stock in one or more series of such stock, and by filing a certificate of ​ designations pursuant to applicable law of the State of Delaware, to establish or change from ​ time to time the number of shares of each such series, and to fix the designations, powers, ​ including voting powers, full or limited, or no voting powers, preferences and the relative, ​ participating, optional or other special rights of the shares of each series and any qualifications, ​ limitations and restrictions thereof. ​ ARTICLE V ​ STOCKHOLDER ACTION ​ 1. Action without Meeting. Any action required or permitted to be taken by the ​ stockholders of the Corporation at any annual or special meeting of stockholders of the ​ Corporation must be effected at a duly called annual or special meeting of stockholders and may ​ not be taken or effected by a written consent of stockholders in lieu thereof. ​ ​ 2. Special Meetings. Exceptas otherwise required by statute and subject to the ​ rights, if any, of the holders of any series of Undesignated Preferred Stock, special meetings of ​ the stockholders of the Corporation may be called only by the Board of Directors acting pursuant ​ to a resolution approved by the affirmative vote of a majority of the Directors then in office, and ​ special meetings of stockholders may not be called by any other person or persons. Only those ​ matters set forth in the notice of the special meeting may be considered or acted upon at a special ​ meeting of stockholders of the Corporation. ​ ​ ARTICLE VI ​ DIRECTORS ​ ​ 1. General. The business and affairs of the Corporation shall be managed by or ​ under the direction of the Board of Directors except as otherwise provided herein or required by ​ law. ​ ​ 2. Election of Directors. Election of Directors need not be by written ballot unless ​ the By-laws of the Corporation (the “By-laws”) shall so provide. ​ ​ ​ ​ 4 ​ 3. Number of Directors; Term of Office. The number of Directors of the ​ Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time ​ by the Board of Directors. The Directors, other than those who may be elected by the holders of ​ any series of Undesignated Preferred Stock, shall be classified, with respect to the term for which ​ they severally hold office, into three classes. The initial Class I Directors of the Corporation ​ shall be Duncan Higgons and Robert Tepper; the initial Class II Directors of the Corporation ​ shall be Barbara Duncan and Robert Kamen; and the initial Class III Directors of the Corporation ​ shall be Cary Pfeffer, Perry Karsen and Richard Murray. The initial Class I Directors shall serve ​ for a term expiring at the annual meeting of stockholders to be held in 2018, the initial Class II ​ Directors shall serve for a term expiring at the annual meeting of stockholders to be held in 2019, ​ and the initial Class III Directors shall serve for a term expiring at the annual meeting of ​ stockholders to be held in 2020. At each annual meeting of stockholders, Directors elected to ​ succeed those Directors whose terms expire shall be elected for a term of office to expire at the ​ third succeeding annual meeting of stockholders after their election. Notwithstanding the ​ foregoing, the Directors elected to each class shall hold office until their successors are duly ​ elected and qualified or until their earlierresignation, death or removal. ​ ​ Notwithstanding the foregoing, whenever, pursuant to the provisions of Article IV of this ​ Certificate, the holders of any one or more series of Undesignated Preferred Stock shall have the ​ right, voting separately as a series or together with holders of other such series, to elect Directors ​ at an annual or special meeting of stockholders, the election, term of office, filling of vacancies ​ and other features of such directorships shall be governed by the terms of this Certificate and any ​ certificate of designations applicable to such series. ​ ​ 4. Vacancies. Subject to the rights, if any, of the holders of any series of ​ Undesignated Preferred Stock to elect Directors and to fill vacancies in the Board of Directors ​ relating thereto, any and all vacancies in the Board of Directors, however occurring, including, ​ without limitation, by reason of an increase in the size of the Board of Directors, or the death, ​ resignation, disqualification or removal of a Director, shall be filled solely and exclusively by the ​ affirmative vote of a majority of the remaining Directors then in office, even if less than a ​ quorum of the Board of Directors, and not by the stockholders. Any Director appointed in ​ accordance with the preceding sentence shall hold office for the remainder of the full term of the ​ class of Directors in which the new directorship was created or the vacancy occurred and until ​ such Director’s successor shall havebeen duly elected and qualified or until his or her earlier ​ resignation, death or removal. Subject to the rights, if any, of the holders of any series of ​ Undesignated Preferred Stock to elect Directors, when the number of Directors is increased or ​ decreased, the Board of Directors shall, subject to Article VI.3 hereof, determine the class or ​ classes to which the increased or decreased number of Directors shall be apportioned; provided, ​ however, that no decrease in the number of Directors shall shorten the term of any incumbent ​ Director. In the event of a vacancy in the Board of Directors, the remaining Directors, except as ​ otherwise provided by law, shall exercise the powers of the full Board of Directors until the ​ vacancy is filled. ​ ​ 5. Removal. Subject to the rights, if any, of any series of Undesignated Preferred ​ Stock to elect Directors and to remove any Director whom the holders of any such series have ​ ​ ​ 5 ​ the right to elect, any Director (including persons elected by Directors to fill vacancies in the ​ Board of Directors) may be removed from office (i) only with cause and (ii) only by the ​ affirmative vote of the holders of 75% or more of the outstanding shares of capital stock then ​ entitled to vote at an election of Directors. At least forty-five (45) days prior to any annual or ​ special meeting of stockholders at which it is proposed that any Director be removed from office, ​ written notice of such proposed removal and the alleged grounds thereof shall be sent to the ​ Director whose removal will be considered at the meeting. ​ ARTICLE VII ​ LIMITATION OF LIABILITY ​ A Director of the Corporation shall not be personally liable to the Corporation or its ​ stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability ​ (a) for any breach of the Director’s duty of loyalty to the Corporation or its stockholders, (b) for ​ acts or omissions not in good faith or which involve intentional misconduct or a knowing ​ violation of law, (c) under Section 174 of the DGCL or (d) for any transaction from which the ​ Director derived an improper personal benefit. If the DGCL is amended after the effective date ​ of this Certificate to authorize corporate action further eliminating or limiting the personal ​ liability of Directors, then the liability of a Director of the Corporation shall be eliminated or ​ limited to the fullest extent permitted by the DGCL, as so amended. ​ ​ Anyamendment, repeal or modification of this Article VII by either of (i) the ​ stockholders of the Corporation or (ii) an amendment to the DGCL, shall not adversely affect ​ any right or protection existing at the time of such amendment, repeal or modification with ​ respect to any acts or omissions occurring before such amendment, repeal or modification of a ​ person serving as a Director at the time of such amendment, repeal or modification. ​ ARTICLE VIII ​ AMENDMENT OF BY-LAWS ​ 1. Amendment by Directors. Except as otherwise provided by law, the By-laws of ​ the Corporation may be amended or repealed by the Board of Directors by the affirmative vote of ​ a majority of the Directors then in office. ​ ​ 2. Amendment by Stockholders. The By-laws of the Corporation may be amended ​ or repealed at any annual meeting of stockholders, or special meeting of stockholders called for ​ such purpose, by the affirmative vote of at least 75% of the outstanding shares of capital stock ​ entitled to vote on such amendment or repeal, voting together as a single class; provided, ​ however, that if the Board of Directors recommends that stockholders approve such amendment ​ or repeal at such meeting of stockholders, such amendment or repeal shall only require the ​ affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such ​ amendment or repeal, voting together as a single class. ​ ​ ​ 6 ​ ARTICLE IX ​ AMENDMENT OF CERTIFICATE OF INCORPORATION ​ The Corporation reserves the right to amend or repeal this Certificate in the manner now ​ or hereafter prescribed by statute and this Certificate, and all rights conferred upon stockholders ​ herein are granted subject to this reservation. Whenever any vote of the holders of capital stock ​ of the Corporation is required to amend or repeal any provision of this Certificate, and in ​ addition to any other vote of holders of capital stock that is required by this Certificate or by law, ​ such amendment or repeal shall require the affirmative vote of the majority of the outstanding ​ shares of capital stock entitled to vote on such amendment or repeal, and the affirmative vote of ​ the majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly ​ constituted meeting of stockholders called expressly for such purpose; provided, however, that ​ the affirmative vote of not less than 75% of the outstanding shares of capital stock entitled to ​ vote on such amendment or repeal, and the affirmative vote of not less than 75% of the ​ outstanding shares of each class entitled to vote thereon as a class, shall be required to amend or ​ repeal any provision of Article V, Article VI, Article VII, Article VIII or Article IX of this ​ Certificate. ​ ​ ​ ​ THIS FOURTH AMENDED AND RESTATED CERTIFICATE OF ​ INCORPORATION is executed as of this 1st day of February, 2017. ​ ​ ​ JOUNCE THERAPEUTICS, INC. ​ ​ By: /s/ Richard Murray ​ Name: Richard Murray ​ Title: President and Chief Executive Officer ​ ​ ​ ​ ​ Exhibit 3.2 ​ AMENDED AND RESTATED ​ BY-LAWS ​ OF ​ JOUNCE THERAPEUTICS, INC. ​ (the “Corporation”) ​ ARTICLE I ​ Stockholders ​ SECTION 1. Annual Meeting. The annual meeting of stockholders (any such meeting ​ being referred to in these By-laws as an “Annual Meeting”) shall be held at the hour, date and ​ place within or without the United States which is fixed by the Board of Directors, which time, ​ date and place may subsequently be changed at any time by vote of the Board of Directors. If no ​ Annual Meeting has been held for a period of thirteen (13) months after the Corporation’s last ​ Annual Meeting, a special meeting in lieu thereof may be held, and such special meeting shall ​ have, for the purposes of these By-laws or otherwise, all the force and effect of an Annual Meeting. ​ Any and all references hereafter in these By-laws to an Annual Meeting or Annual Meetings also ​ shall be deemed to refer to any special meeting(s) in lieu thereof. ​ SECTION 2. Notice of Stockholder Business and Nominations. ​ (a) Annual Meetings of Stockholders. ​ (1) Nominations of persons for election to the Board of Directors of the ​ Corporation and the proposal of other business to be considered by the stockholders may ​ be brought before an Annual Meeting (i) by or at the direction of the Board of Directors or ​ (ii) by any stockholder of the Corporation who was a stockholder of record at the time of ​giving of notice provided for in this By-law, who is entitled to vote at the meeting, who is ​ present (in person or by proxy) at the meeting and who complies with the notice procedures ​ set forth in this By-law as to such nomination or business. For the avoidance of doubt, the ​ foregoing clause (ii) shall be the exclusive means for a stockholder to bring nominations ​ or business properly before an Annual Meeting (other than matters properly brought under ​ Rule 14a-8 (or any successor rule) under the Securities Exchange Act of 1934, as amended ​ (the “Exchange Act”)), and such stockholder must comply with the notice and other ​ procedures set forth in Article I, Section 2(a)(2) and (3) of this By-law to bring such ​ nominations or business properly before an Annual Meeting. In addition to the other ​ requirements set forth in this By-law, for any proposal of business to be considered at an ​ Annual Meeting, it must be a proper subject for action by stockholders of the Corporation ​ under Delaware law. ​ (2) For nominations or other business to be properly brought before an Annual ​ Meeting by a stockholder pursuant to clause (ii) of Article I, Section 2(a)(1) of this By-​ law, the stockholder must (i) have given Timely Notice (as defined below) thereof in ​ ​ 2 ​ writing to the Secretary of the Corporation, (ii) have provided any updates or supplements ​ to such notice at the times and in the forms required by this By-law and (iii) together with ​ the beneficial owner(s), if any, on whose behalf the nomination or business proposal is ​ made, have acted in accordance with the representations set forth in the Solicitation ​ Statement (as defined below) required by this By-law. To be timely, a stockholder’s ​ written notice shall be received by the Secretary at the principal executive offices of the ​ Corporation not later than the close of business on the ninetieth (90th) day nor earlier than ​ the close of business on the one hundred twentieth (120th) day prior to the one-year ​ anniversary of the preceding year’s Annual Meeting; provided, however, that in the event ​ the Annual Meeting is first convened more than thirty (30) days before or more than sixty ​ (60) days after such anniversary date, or if no Annual Meeting were held in the preceding ​ year, notice by the stockholder to be timely must be received by the Secretary of the ​ Corporation not later than the close of business on the later of the ninetieth (90th) day prior ​ to the scheduled date of such Annual Meeting or the tenth (10th) day following the day on ​ which public announcement of the date of such meeting is first made (such notice within ​ such time periods shall be referred to as “Timely Notice”). Notwithstandinganything to ​ the contrary provided herein, for the first Annual Meeting following the initial public ​ offering of common stock of the Corporation, a stockholder’s notice shall be timely if ​ received by the Secretary at the principal executive offices of the Corporation not later than ​ the close of business on the later of the ninetieth (90th) day prior to the scheduled date of ​ such Annual Meeting or the tenth (10th) day following the day on which public ​ announcement of the date of such Annual Meeting is first made or sent by the Corporation. ​ Such stockholder’s Timely Notice shall set forth: ​ (A) as to each person whom the stockholder proposes to nominate for ​ election or reelection as a director, all information relating to such person that is ​ required to be disclosed in solicitations of proxies for election of directors in an ​ election contest, or is otherwise required, in each case pursuant to Regulation 14A ​ under the Exchange Act (including such person’s written consent to being named ​ in the proxy statement as a nominee and to serving as a director if elected); ​ (B) as to any other business that the stockholder proposes to bring before ​ the meeting, a brief description of the business desired to be brought before the ​ meeting, the reasons for conducting such business at the meeting, and any material ​ interest in such business of each Proposing Person (as defined below); ​ (C) (i) the name andaddress of the stockholder giving the notice, as they ​ appear on the Corporation’s books, and the names and addresses of the other ​ Proposing Persons (if any) and (ii) as to each Proposing Person, the following ​ information: (a) the class or series and number of all shares of capital stock of the ​ Corporation which are, directly or indirectly, owned beneficially or of record by ​ such Proposing Person or any of its affiliates or associates (as such terms are ​ defined in Rule 12b-2 promulgated under the Exchange Act), including any shares ​ of any class or series of capital stock of the Corporation as to which such Proposing ​ Person or any of its affiliates or associates has a right to acquire beneficial ​ ownership at any time in the future, (b) all Synthetic Equity Interests (as defined ​ below) in which such Proposing Person or any of its affiliates or associates, directly ​ ​ 3 ​ or indirectly, holds an interest including a description of the material terms of each ​ such Synthetic Equity Interest, including without limitation, identification of the ​ counterparty to each such Synthetic Equity Interest and disclosure, for each such ​ Synthetic Equity Interest, as to (x) whether or not such Synthetic Equity Interest ​ conveys any voting rights, directly or indirectly, in such shares to such Proposing ​ Person, (y) whether or not such Synthetic Equity Interest is required to be, or is ​ capable of being, settled through delivery of such shares and (z) whether or not ​ such Proposing Person and/or, to the extent known, the counterparty to such ​ Synthetic Equity Interest has entered into other transactions that hedge or mitigate ​ the economic effect of such Synthetic Equity Interest, (c) any proxy (other than a ​ revocable proxy given in response to a public proxy solicitation made pursuant to, ​ and in accordance with, the Exchange Act), agreement, arrangement, understanding ​ or relationship pursuant to which such Proposing Person has or shares a right to, ​ directly or indirectly, vote any shares of any class or series of capital stock of the ​ Corporation, (d) any rights to dividends or other distributions on the shares of any ​ class or series of capital stock of the Corporation, directly or indirectly, owned ​ beneficially by such Proposing Person that are separated or separable from the ​underlying shares of the Corporation, and (e) any performance-related fees (other ​ than an asset based fee) that such Proposing Person, directly or indirectly, is entitled ​ to based on any increase or decrease in the value of shares of any class or series of ​ capital stock of the Corporation or any Synthetic Equity Interests (the disclosures ​ to be made pursuant to the foregoing clauses (a) through (e) are referred to, ​ collectively, as “Material Ownership Interests”) and (iii) a description of the ​ material terms of all agreements, arrangements or understandings (whether or not ​ in writing) entered into by any Proposing Person or any of its affiliates or associates ​ with any other person for the purpose of acquiring, holding, disposing or voting of ​ any shares of any class or series of capital stock of the Corporation; ​ (D) (i) a description of all agreements, arrangements or understandings ​ by and among any of the Proposing Persons, or by and among any Proposing ​ Persons and any other person (including with any proposed nominee(s)), pertaining ​ to the nomination(s) or other business proposed to be brought before the meeting ​ of stockholders (which description shall identify the name of each other person who ​ is party to such an agreement, arrangement or understanding), and (ii) identification ​ of the names and addresses of other stockholders (including beneficial owners) ​ known byany of the Proposing Persons to support such nominations or other ​ business proposal(s), and to the extent known the class and number of all shares of ​ the Corporation’s capital stock owned beneficially or of record by such other ​ stockholder(s) or other beneficial owner(s); and ​ (E) a statement whether or not the stockholder giving the notice and/or ​ the other Proposing Person(s), if any, will deliver a proxy statement and form of ​ proxy to holders of, in the case of a business proposal, at least the percentage of ​ voting power of all of the shares of capital stock of the Corporation required under ​ applicable law to approve the proposal or, in the case of a nomination or ​ nominations, at least the percentage of voting power of all of the shares of capital ​ stock of the Corporation reasonably believed by such Proposing Person to be ​ ​ 4 ​ sufficient to elect the nominee or nominees proposed to be nominated by such ​ stockholder (such statement, the “Solicitation Statement”). ​ For purposes of this Article I of these By-laws, the term “Proposing Person” shall ​ mean the following persons: (i) the stockholder of record providing the notice of ​ nominations or business proposed to be brought before a stockholders’ meeting, and (ii) the ​ beneficial owner(s), if different, on whose behalf the nominations or business proposed to ​ be brought before a stockholders’ meeting is made. For purposes of this Section 2 of ​ Article I of these By-laws, the term “Synthetic Equity Interest” shall mean any transaction, ​ agreement or arrangement (or series of transactions, agreements or arrangements), ​ including, without limitation, any derivative, swap, hedge, repurchase or so-called “stock ​ borrowing” agreement or arrangement, the purpose or effect of which is to, directly or ​ indirectly: (a) give a person or entity economic benefit and/or risk similar to ownership of ​ shares of any class or series of capital stock of the Corporation, in whole or in part, ​ including due to the fact that such transaction, agreement or arrangement provides, directly ​ or indirectly, the opportunity to profit or avoid a loss from any increase or decrease in the ​ value of any shares of any class or series of capital stock of the Corporation, (b) mitigate ​ loss to, reduce the economic risk of or manage the risk ofshare price changes for, any ​ person or entity with respect to any shares of any class or series of capital stock of the ​ Corporation, (c) otherwise provide in any manner the opportunity to profit or avoid a loss ​ from any decrease in the value of any shares of any class or series of capital stock of the ​ Corporation, or (d) increase or decrease the voting power of any person or entity with ​ respect to any shares of any class or series of capital stock of the Corporation. ​ (3) A stockholder providing Timely Notice of nominations or business ​ proposed to be brought before an Annual Meeting shall further update and supplement such ​ notice, if necessary, so that the information (including, without limitation, the Material ​ Ownership Interests information) provided or required to be provided in such notice ​ pursuant to this By-law shall be true and correct as of the record date for the meeting and ​ as of the date that is ten (10) business days prior to such Annual Meeting, and such update ​ and supplement shall be received by the Secretary at the principal executive offices of the ​ Corporation not later than the close of business on the fifth (5th) business day after the ​ record date for the Annual Meeting (in the case of the update and supplement required to ​ be made as of the record date), and not later than the close of business on the eighth (8th) ​ business day prior to the date of the Annual Meeting (inthe case of the update and ​ supplement required to be made as of ten (10) business days prior to the meeting). ​ (4) Notwithstanding anything in the second sentence of Article I, ​ Section 2(a)(2) of this By-law to the contrary, in the event that the number of directors to ​ be elected to the Board of Directors of the Corporation is increased and there is no public ​ announcement naming all of the nominees for director or specifying the size of the ​ increased Board of Directors made by the Corporation at least ten (10) days before the last ​ day a stockholder may deliver a notice of nomination in accordance with the second ​ sentence of Article I, Section 2(a)(2), a stockholder’s notice required by this By-law shall ​ also be considered timely, but only with respect to nominees for any new positions created ​ by such increase, if it shall be received by the Secretary of the Corporation not later than ​ ​ 5 ​ the close of business on the tenth (10th) day following the day on which such public ​ announcement is first made by the Corporation. ​ (b) General. ​ (1) Only such persons who are nominated in accordance with the provisions of ​ this By-law shall be eligible for election and to serve as directors and only such business ​ shall be conducted at an Annual Meeting as shall have been brought before the meeting in ​ accordance with the provisions of this By-law or in accordance with Rule 14a-8 under the ​ Exchange Act. The Board of Directors or a designated committee thereof shall have the ​ power to determine whether a nomination or any business proposed to be brought before ​ the meeting was made in accordance with the provisions of this By-law. If neither the ​ Board of Directors nor such designated committee makes a determination as to whether ​ any stockholder proposal or nomination was made in accordance with the provisions of ​ this By-law, the presiding officer of the Annual Meeting shall have the power and duty to ​ determine whether the stockholder proposal or nomination was made in accordance with ​ the provisions of this By-law. If the Board of Directors or a designated committee thereof ​ or the presiding officer, as applicable, determines that any stockholder proposal or ​ nomination was not made in accordance with the provisions of this By-law, such proposal ​ or nomination shall be disregarded and shall not be presented for action at the Annual ​ Meeting. ​ (2) Except as otherwise required by law, nothing in this Article I, Section 2 ​ shall obligate the Corporation or the Board of Directors to include in any proxy statement ​ or other stockholder communication distributed on behalf of the Corporation or the Board ​ of Directors information with respect to any nominee for director or any other matter of ​ business submitted by a stockholder. ​ (3) Notwithstanding the foregoing provisions of this Article I, Section 2, if the ​ nominating or proposing stockholder (or a qualified representative of the stockholder) does ​ not appear at the Annual Meeting to present a nomination or any business, such nomination ​ or business shall be disregarded, notwithstanding that proxies in respect of such vote may ​ have been received by the Corporation. For purposes of this Article I, Section 2, to be ​ considered a qualified representative of the proposing stockholder, a person must be ​ authorized by a written instrument executed by such stockholder or an electronic ​ transmission delivered by such stockholder to act for such stockholder as proxy at the ​ meeting of stockholders and such person must produce such written instrument or ​ electronic transmission, or a reliable reproduction of the written instrument or electronic ​ transmission, to thepresiding officer at the meeting of stockholders. ​ (4) For purposes of this By-law, “public announcement” shall mean disclosure ​ in a press release reported by the Dow Jones News Service, Associated Press or comparable ​ national news service or in a document publicly filed by the Corporation with the Securities ​ and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. ​ (5) Notwithstanding the foregoing provisions of this By-law, a stockholder ​ shall also comply with all applicable requirements of the Exchange Act and the rules and ​ ​ 6 ​ regulations thereunder with respect to the matters set forth in this By-law. Nothing in this ​ By-law shall be deemed to affect any rights of (i) stockholders to have proposals included ​ in the Corporation’s proxy statement pursuant to Rule 14a-8 (or any successor rule), as ​ applicable, under the Exchange Act and, to the extent required by such rule, have such ​ proposals considered and voted on at an Annual Meeting or (ii) the holders of any series ​ of Undesignated Preferred Stock to elect directors under specified circumstances. ​ SECTION 3. Special Meetings. Except as otherwise required by statute and subject to ​ the rights, if any, of the holders of any series of Undesignated Preferred Stock, special meetings ​ of the stockholders of the Corporation may be called only by the Board of Directors acting pursuant ​ to a resolution approved by the affirmative vote of a majority of the Directors then in office. The ​ Board of Directors may postpone or reschedule any previously scheduled special meeting of ​ stockholders. Only those matters set forth in the notice of the special meeting may be considered ​ or acted upon at a special meeting of stockholders of the Corporation. Nominations of persons for ​ election to the Board of Directors of the Corporation and stockholder proposals of other business ​ shall not be brought before a special meeting of stockholders to beconsidered by the stockholders ​ unless such special meeting is held in lieu of an annual meeting of stockholders in accordance with ​ Article I, Section 1 of these By-laws, in which case such special meeting in lieu thereof shall be ​ deemed an Annual Meeting for purposes of these By-laws and the provisions of Article I, Section ​ 2 of these By-laws shall govern such special meeting. ​ SECTION 4. Notice of Meetings; Adjournments. ​ (a) A notice of each Annual Meeting stating the hour, date and place, if any, of such ​ Annual Meeting and the means of remote communication, if any, by which stockholders and ​ proxyholders may be deemed to be present in person and vote at such meeting, shall be given not ​ less than ten (10) days nor more than sixty (60) days before the Annual Meeting, to each ​ stockholder entitled to vote thereat by delivering such notice to such stockholder or by mailing it, ​ postage prepaid, addressed to such stockholder at the address of such stockholder as it appears on ​ the Corporation’s stock transfer books. Without limiting the manner by which notice may ​ otherwise be given to stockholders, any notice to stockholders may be given by electronic ​ transmission in the manner provided in Section 232 of the Delaware General Corporation Law ​ (“DGCL”). ​ (b) Notice of all special meetings of stockholders shall be given in the samemanner as ​ provided for Annual Meetings, except that the notice of all special meetings shall state the purpose ​ or purposes for which the meeting has been called. ​ (c) Notice of an Annual Meeting or special meeting of stockholders need not be given ​ to a stockholder if a waiver of notice is executed, or waiver of notice by electronic transmission is ​ provided, before or after such meeting by such stockholder or if such stockholder attends such ​ meeting, unless such attendance is for the express purpose of objecting at the beginning of the ​ meeting to the transaction of any business because the meeting was not lawfully called or ​ convened. ​ (d) The Board of Directors may postpone and reschedule any previously scheduled ​ Annual Meeting or special meeting of stockholders and any record date with respect thereto, ​ ​ 7 ​ regardless of whether any notice or public disclosure with respect to any such meeting has been ​ sent or made pursuant to Section 2 of this Article I of these By-laws or otherwise. In no event ​ shall the public announcement of an adjournment, postponement or rescheduling of any previously ​ scheduled meeting of stockholders commence a new time period for the giving of a stockholder’s ​ notice under this Article I of these By-laws. ​ (e) When any meeting is convened, the presiding officer may adjourn the meeting if ​ (i) no quorum is present for the transaction of business, (ii) the Board of Directors determines that ​ adjournment is necessary or appropriate to enable the stockholders to consider fully information ​ which the Board of Directors determines has not been made sufficiently or timely available to ​ stockholders, or (iii) the Board of Directors determines that adjournment is otherwise in the best ​ interests of the Corporation. When any Annual Meeting or special meeting of stockholders is ​ adjourned to another hour, date or place, notice need not be given of the adjourned meeting other ​ than an announcement at the meeting at which the adjournment is taken of the hour, date and place, ​ if any, to which the meeting is adjourned and the means of remote communications, if any, by ​ which stockholders and proxyholders may be deemed to be present in person and voteat such ​ adjourned meeting; provided, however, that if the adjournment is for more than thirty (30) days ​ from the meeting date, or if after the adjournment a new record date is fixed for the adjourned ​ meeting, notice of the adjourned meeting and the means of remote communications, if any, by ​ which stockholders and proxyholders may be deemed to be present in person and vote at such ​ adjourned meeting shall be given to each stockholder of record entitled to vote thereat and each ​ stockholder who, by law or under the Certificate of Incorporation of the Corporation (as the same ​ may hereafter be amended and/or restated, the “Certificate”) or these By-laws, is entitled to such ​ notice. ​ SECTION 5. Quorum. A majority of the shares entitled to vote, present in person or ​ represented by proxy, shall constitute a quorum at any meeting of stockholders. If less than a ​ quorum is present at a meeting, the holders of voting stock representing a majority of the voting ​ power present at the meeting or the presiding officer may adjourn the meeting from time to time, ​ and the meeting may be held as adjourned without further notice, except as provided in Section 4 ​ of this Article I. At such adjourned meeting at which a quorum is present, any business may be ​ transacted which might have been transacted at the meeting as originally noticed. The stockholders ​ present at a duly constituted meeting maycontinue to transact business until adjournment, ​ notwithstanding the withdrawal of enough stockholders to leave less than a quorum. ​ SECTION 6. Voting and Proxies. Stockholders shall have one vote for each share of ​ stock entitled to vote owned by them of record according to the stock ledger of the Corporation as ​ of the record date, unless otherwise provided by law or by the Certificate. Stockholders may vote ​ either (i) in person, (ii) by written proxy or (iii) by a transmission permitted by Section 212(c) of ​ the DGCL. Any copy, facsimile telecommunication or other reliable reproduction of the writing ​ or transmission permitted by Section 212(c) of the DGCL may be substituted for or used in lieu of ​ the original writing or transmission for any and all purposes for which the original writing or ​ transmission could be used, provided that such copy, facsimile telecommunication or other ​ reproduction shall be a complete reproduction of the entire original writing or transmission. ​ Proxies shall be filed in accordance with the procedures established for the meeting of ​ stockholders. Except as otherwise limited therein or as otherwise provided by law, proxies ​ authorizing a person to vote at a specific meeting shall entitle the persons authorized thereby to ​ ​ 8 ​ vote at any adjournment of such meeting, but they shall not be valid after final adjournment of ​ such meeting. A proxy with respect to stock held in the name of two or more persons shall be ​ valid if executed by or on behalf of any one of them unless at or prior to the exercise of the proxy ​ the Corporation receives a specific written notice to the contrary from any one of them. ​ SECTION 7. Action at Meeting. When a quorum is present at any meeting of ​ stockholders, any matter before any such meeting (other than an election of a director or directors) ​ shall be decided by a majority of the votes properly cast for and against such matter, except where ​ a larger vote is required by law, by the Certificate or by these By-laws. Any election of directors ​ by stockholders shall be determined by a plurality of the votes properly cast on the election of ​ directors. ​ SECTION 8. Stockholder Lists. The Secretary or an Assistant Secretary (or the ​ Corporation’s transfer agent or other person authorized by these By-laws or by law) shall prepare ​ and make, at least ten (10) days before every Annual Meeting or special meeting of stockholders, ​ a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, ​ and showing the address of each stockholder and the number of shares registered in the name of ​ each stockholder. Such list shall be open to the examination of anystockholder, for a period of at ​ least ten (10) days prior to the meeting in the manner provided by law. The list shall also be open ​ to the examination of any stockholder during the whole time of the meeting as provided by law. ​ SECTION 9. Presiding Officer. The Board of Directors shall designate a representative ​ to preside over all Annual Meetings or special meetings of stockholders, provide that if the Board ​ of Directors does not so designate such a presiding officer, then the Chairman of the Board, if one ​ is elected, shall preside over such meetings. If the Board of Directors does not so designate such ​ a presiding officer and there is no Chairman of the Board or the Chairman of the Board is unable ​ to so preside or is absent, then the Chief Executive Officer, if one is elected, shall preside over ​ such meetings, provided further that if there is no Chief Executive Officer or the Chief Executive ​ Officer is unable to so preside or is absent, then the President shall preside over such meetings. ​ The presiding officer at any Annual Meeting or special meeting of stockholders shall have the ​ power, among other things, to adjourn such meeting at any time and from time to time, subject to ​ Sections 4 and 5 of this Article I. The order of business and all other matters of procedure at any ​ meeting of the stockholders shall be determined by the presiding officer. ​ SECTION 10. Inspectors of Elections. The Corporationshall, in advance of any meeting ​ of stockholders, appoint one or more inspectors to act at the meeting and make a written report ​ thereof. The Corporation may designate one or more persons as alternate inspectors to replace any ​ inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, ​ the presiding officer shall appoint one or more inspectors to act at the meeting. Any inspector ​ may, but need not, be an officer, employee or agent of the Corporation. Each inspector, before ​ entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute ​ the duties of inspector with strict impartiality and according to the best of his or her ability. The ​ inspectors shall perform such duties as are required by the DGCL, including the counting of all ​ votes and ballots. The inspectors may appoint or retain other persons or entities to assist the ​ inspectors in the performance of the duties of the inspectors. The presiding officer may review all ​ determinations made by the inspectors, and in so doing the presiding officer shall be entitled to ​ exercise his or her sole judgment and discretion and he or she shall not be bound by any ​ ​ 9 ​ determinations made by the inspectors. All determinations by the inspectors and, if applicable, ​ the presiding officer, shall be subject to further review by any court of competent jurisdiction. ​ ARTICLE II ​ Directors ​ SECTION 1. Powers. The business and affairs of the Corporation shall be managed by ​ or under the direction of the Board of Directors except as otherwise provided by the Certificate or ​ required by law. ​ SECTION 2. Number and Terms. The number of directors of the Corporation shall be ​ fixed solely and exclusively by resolution duly adopted from time to time by the Board of ​ Directors. The directors shall hold office in the manner provided in the Certificate. ​ SECTION 3. Qualification. No director need be a stockholder of the Corporation. ​ SECTION 4. Vacancies. Vacancies in the Board of Directors shall be filled in the manner ​ provided in the Certificate. ​ SECTION 5. Removal. Directors may be removed from office only in the manner ​ provided in the Certificate. ​ SECTION 6. Resignation. A director may resign at any time by giving written notice to ​ the Chairman of the Board, if one is elected, the President or the Secretary. A resignation shall be ​ effective upon receipt, unless the resignation otherwise provides. ​ SECTION 7. Regular Meetings. The regular annual meeting of the Board of Directors ​ shall be held, without notice other than this Section 7, on the same date and at the same place as ​ the AnnualMeeting following the close of such meeting of stockholders. Other regular meetings ​ of the Board of Directors may be held at such hour, date and place as the Board of Directors may ​ by resolution from time to time determine and publicize by means of reasonable notice given to ​ any director who is not present at the meeting at which such resolution is adopted. ​ SECTION 8. Special Meetings. Special meetings of the Board of Directors may be ​ called, orally or in writing, by or at the request of a majority of the directors, the Chairman of the ​ Board, if one is elected, or the President. The person calling any such special meeting of the Board ​ of Directors may fix the hour, date and place thereof. ​ SECTION 9. Notice of Meetings. Notice of the hour, date and place of all special ​ meetings of the Board of Directors shall be given to each director by the Secretary or an Assistant ​ Secretary, or in case of the death, absence, incapacity or refusal of such persons, by the Chairman ​ of the Board, if one is elected, Chief Executive Officer or the President or such other officer ​ designated by the Chairman of the Board, if one is elected. Notice of any special meeting of the ​ Board of Directors shall be given to each director in person, by telephone, or by facsimile, ​ electronic mail or other form of electronic communication, sent to his or her business or home ​ address, at least twenty-four (24) hours in advance of the meeting, or bywritten notice mailed to ​ his or her business or home address, at least forty-eight (48) hours in advance of the meeting. Such ​ ​ 10 ​ notice shall be deemed to be delivered when hand-delivered to such address, read to such director ​ by telephone, deposited in the mail so addressed, with postage thereon prepaid if mailed, ​ dispatched or transmitted if sent by facsimile transmission or by electronic mail or other form of ​ electronic communications. A written waiver of notice signed before or after a meeting by a ​ director and filed with the records of the meeting shall be deemed to be equivalent to notice of the ​ meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such ​ meeting, except where a director attends a meeting for the express purpose of objecting at the ​ beginning of the meeting to the transaction of any business because such meeting is not lawfully ​ called or convened. Except as otherwise required by law, by the Certificate or by these By-laws, ​ neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors ​ need be specified in the notice or waiver of notice of such meeting. ​ SECTION 10. Quorum. At any meeting of the Board of Directors, a majority of the total ​ number of directors shall constitute a quorum for the transaction of business, but if less than a ​ quorum is present at a meeting, a majority of the directors present may adjourn the meeting from ​ time to time, and the meeting may be held as adjourned without further notice. Any business ​ whichmight have been transacted at the meeting as originally noticed may be transacted at such ​ adjourned meeting at which a quorum is present. For purposes of this section, the total number of ​ directors includes any unfilled vacancies on the Board of Directors. ​ SECTION 11. Action at Meeting. At any meeting of the Board of Directors at which a ​ quorum is present, the vote of a majority of the directors present shall constitute action by the ​ Board of Directors, unless otherwise required by law, by the Certificate or by these By-laws. ​ SECTION 12. Action by Consent. Any action required or permitted to be taken at any ​ meeting of the Board of Directors may be taken without a meeting if all members of the Board of ​ Directors consent thereto in writing or by electronic transmission and the writing or writings or ​ electronic transmission or transmissions are filed with the records of the meetings of the Board of ​ Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall ​ be in electronic form if the minutes are maintained in electronic form. Such consent shall be ​ treated as a resolution of the Board of Directors for all purposes. ​ SECTION 13. Manner of Participation. Directors may participate in meetings of the Board ​ of Directors by means of conference telephone or other communications equipment by means of ​ which all directors participating in the meeting can hear each other, and participationin a meeting ​ in accordance herewith shall constitute presence in person at such meeting for purposes of these ​ By-laws. ​ SECTION 14. Presiding Director. The Board of Directors shall designate a representative ​ to preside over all meetings of the Board of Directors, provided that if the Board of Directors does ​ not so designate such a presiding director or such designated presiding director is unable to so ​ preside or is absent, then the Chairman of the Board, if one is elected, shall preside over all ​ meetings of the Board of Directors. If both the designated presiding director, if one is so ​ designated, and the Chairman of the Board, if one is elected, are unable to preside or are absent, ​ the Board of Directors shall designate an alternate representative to preside over a meeting of the ​ Board of Directors. ​ ​ 11 ​ SECTION 15. Committees. The Board of Directors, by vote of a majority of the directors ​ then in office, may elect one or more committees, including, without limitation, a Compensation ​ Committee, a Nominating & Corporate Governance Committee and an Audit Committee, and may ​ delegate thereto some or all of its powers except those which by law, by the Certificate or by these ​ By-laws may not be delegated. Except as the Board of Directors may otherwise determine, any ​ such committee may make rules for the conduct of its business, but unless otherwise provided by ​ the Board of Directors or in such rules, its business shall be conducted so far as possible in the ​ same manner as is provided by these By-laws for the Board of Directors. All members of such ​ committees shall hold such offices at the pleasure of the Board of Directors. The Board of ​ Directors may abolish any such committee at any time. Any committee to which the Board of ​ Directors delegates any of its powers or duties shall keep records of its meetings and shall report ​ its action to the Board of Directors. ​ SECTION 16. Compensation of Directors. Directors shall receive such compensation for ​ their services as shall be determined by a majority of the Board of Directors, or a designated ​ committee thereof, provided that directors who are serving the Corporation as employees and who ​ receive compensation for theirservices as such, shall not receive any salary or other compensation ​ for their services as directors of the Corporation. ​ ARTICLE III ​ Officers ​ SECTION 1. Enumeration. The officers of the Corporation shall consist of a President, ​ a Treasurer, a Secretary and such other officers, including, without limitation, a Chairman of the ​ Board of Directors, a Chief Executive Officer and one or more Vice Presidents (including ​ Executive Vice Presidents or Senior Vice Presidents), Assistant Vice Presidents, Assistant ​ Treasurers and Assistant Secretaries, as the Board of Directors may determine. ​ SECTION 2. Election. At the regular annual meeting of the Board of Directors following ​ the Annual Meeting, the Board of Directors shall elect the President, the Treasurer and the ​ Secretary. Other officers may be elected by the Board of Directors at such regular annual meeting ​ of the Board of Directors or at any other regular or special meeting. ​ SECTION 3. Qualification. No officer need be a stockholder or a director. Any person ​ may occupy more than one office of the Corporation at any time. ​ SECTION 4. Tenure. Except as otherwise provided by the Certificate or by these By-​ laws, each of the officers of the Corporation shall hold office until the regular annual meeting of ​ the Board of Directors following the next Annual Meeting and until his or her successor is elected ​ and qualified or until his or her earlier resignation or removal. ​ SECTION5. Resignation. Any officer may resign by delivering his or her written ​ resignation to the Corporation addressed to the President or the Secretary, and such resignation ​ shall be effective upon receipt, unless the resignation otherwise provides. ​ ​ 12 ​ SECTION 6. Removal. Except as otherwise provided by law, the Board of Directors may ​ remove any officer with or without cause by the affirmative vote of a majority of the directors then ​ in office. ​ SECTION 7. Absence or Disability. In the event of the absence or disability of any ​ officer, the Board of Directors may designate another officer to act temporarily in place of such ​ absent or disabled officer. ​ SECTION 8. Vacancies. Any vacancy in any office may be filled for the unexpired ​ portion of the term by the Board of Directors. ​ SECTION 9. President. The President, if one is elected, shall have such powers and shall ​ perform such duties as the Board of Directors may from time to time designate. ​ SECTION 10. Chairman of the Board. The Chairman of the Board, if one is elected, shall ​ have such powers and shall perform such duties as the Board of Directors may from time to time ​ designate. ​ SECTION 11. Chief Executive Officer. The Chief Executive Officer, if one is elected, ​ shall have such powers and shall perform such duties as the Board of Directors may from time to ​ time designate. ​ SECTION 12. Vice Presidents and Assistant Vice Presidents. Any Vice President ​ (including any Executive Vice President or Senior Vice President) and any Assistant Vice ​ President shall have such powers and shall perform such duties as the Board of Directors or the ​ Chief Executive Officer may from time to timedesignate. ​ SECTION 13. Treasurer and Assistant Treasurers. The Treasurer shall, subject to the ​ direction of the Board of Directors and except as the Board of Directors or the Chief Executive ​ Officer may otherwise provide, have general charge of the financial affairs of the Corporation and ​ shall cause to be kept accurate books of account. The Treasurer shall have custody of all funds, ​ securities, and valuable documents of the Corporation. He or she shall have such other duties and ​ powers as may be designated from time to time by the Board of Directors or the Chief Executive ​ Officer. Any Assistant Treasurer shall have such powers and perform such duties as the Board of ​ Directors or the Chief Executive Officer may from time to time designate. ​ SECTION 14. Secretary and Assistant Secretaries. The Secretary shall record all the ​ proceedings of the meetings of the stockholders and the Board of Directors (including committees ​ of the Board of Directors) in books kept for that purpose. In his or her absence from any such ​ meeting, a temporary secretary chosen at the meeting shall record the proceedings thereof. The ​ Secretary shall have charge of the stock ledger (which may, however, be kept by any transfer or ​ other agent of the Corporation). The Secretary shall have custody of the seal of the Corporation, ​ and the Secretary, or an Assistant Secretary shall haveauthority to affix it to any instrument ​ requiring it, and, when so affixed, the seal may be attested by his or her signature or that of an ​ Assistant Secretary. The Secretary shall have such other duties and powers as may be designated ​ from time to time by the Board of Directors or the Chief Executive Officer. In the absence of the ​ Secretary, any Assistant Secretary may perform his or her duties and responsibilities. Any ​ ​ 13 ​ Assistant Secretary shall have such powers and perform such duties as the Board of Directors or ​ the Chief Executive Officer may from time to time designate. ​ SECTION 15. Other Powers and Duties. Subject to these By-laws and to such limitations ​ as the Board of Directors may from time to time prescribe, the officers of the Corporation shall ​ each have such powers and duties as generally pertain to their respective offices, as well as such ​ powers and duties as from time to time may be conferred by the Board of Directors or the Chief ​ Executive Officer. ​ ARTICLE IV ​ Capital Stock ​ SECTION 1. Certificates of Stock. Each stockholder shall be entitled to a certificate of ​ the capital stock of the Corporation in such form as may from time to time be prescribed by the ​ Board of Directors. Such certificate shall be signed by the Chairman of the Board, the President ​ or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant ​ Secretary. The Corporation seal and the signatures by the Corporation’s officers, the transfer agent ​ or the registrar may be facsimiles. In case any officer, transfer agent or registrar who has signed ​ or whose facsimile signature has been placed on such certificate shall have ceased to be such ​ officer, transfer agent or registrar before such certificate is issued, it may be issued by the ​ Corporation with the same effect as if he or she were such officer, transferagent or registrar at the ​ time of its issue. Every certificate for shares of stock which are subject to any restriction on transfer ​ and every certificate issued when the Corporation is authorized to issue more than one class or ​ series of stock shall contain such legend with respect thereto as is required by law. ​ Notwithstanding anything to the contrary provided in these Bylaws, the Board of Directors of the ​ Corporation may provide by resolution or resolutions that some or all of any or all classes or series ​ of its stock shall be uncertificated shares (except that the foregoing shall not apply to shares ​ represented by a certificate until such certificate is surrendered to the Corporation), and by the ​ approval and adoption of these Bylaws the Board of Directors has determined that all classes or ​ series of the Corporation’s stock may be uncertificated, whether upon original issuance, re-​ issuance, or subsequent transfer. ​ SECTION 2. Transfers. Subject to any restrictions on transfer and unless otherwise ​ provided by the Board of Directors, shares of stock that are represented by a certificate may be ​ transferred on the books of the Corporation by the surrender to the Corporation or its transfer agent ​ of the certificate theretofore properly endorsed or accompanied by a written assignment or power ​ of attorney properly executed, with transfer stamps (if necessary) affixed, and with such proof of ​ the authenticity ofsignature as the Corporation or its transfer agent may reasonably require. Shares ​ of stock that are not represented by a certificate may be transferred on the books of the Corporation ​ by submitting to the Corporation or its transfer agent such evidence of transfer and following such ​ other procedures as the Corporation or its transfer agent may require. ​ SECTION 3. Record Holders. Except as may otherwise be required by law, by the ​ Certificate or by these By-laws, the Corporation shall be entitled to treat the record holder of stock ​ as shown on its books as the owner of such stock for all purposes, including the payment of ​ dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other ​ ​ 14 ​ disposition of such stock, until the shares have been transferred on the books of the Corporation in ​ accordance with the requirements of these By-laws. ​ SECTION 4. Record Date. In order that the Corporation may determine the stockholders ​ entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof or entitled ​ to receive payment of any dividend or other distribution or allotment of any rights, or entitled to ​ exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of ​ any other lawful action, the Board of Directors may fix a record date, which record date shall not ​ precede the date upon which the resolution fixing the record date is adopted by the Board of ​ Directors, and which record date: (a) in the case of determination of stockholders entitled to vote ​ at any meeting of stockholders, shall, unless otherwise required by law, not be more than sixty ​ (60) nor less than ten (10) days before the date of such meeting and (b) in the case of any other ​ action, shall not be more than sixty (60) days prior to such other action. If no record date is fixed: ​ (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of ​ stockholders shall be at the close of business on the day next preceding the day on which notice is ​ given, or, if notice is waived, at the close of business on the day next preceding the day onwhich ​ the meeting is held; and (ii) the record date for determining stockholders for any other purpose ​ shall be at the close of business on the day on which the Board of Directors adopts the resolution ​ relating thereto. ​ SECTION 5. Replacement of Certificates. In case of the alleged loss, destruction or ​ mutilation of a certificate of stock of the Corporation, a duplicate certificate may be issued in place ​ thereof, upon such terms as the Board of Directors may prescribe. ​ ARTICLE V ​ Indemnification ​ SECTION 1. Definitions. For purposes of this Article: ​ (a) “Corporate Status” describes the status of a person who is serving or has served (i) ​ as a Director of the Corporation, (ii) as an Officer of the Corporation, (iii) as a Non-Officer ​ Employee of the Corporation, or (iv) as a director, partner, trustee, officer, employee or agent of ​ any other corporation, partnership, limited liability company, joint venture, trust, employee benefit ​ plan, foundation, association, organization or other legal entity which such person is or was serving ​ at the request of the Corporation. For purposes of this Section 1(a), a Director, Officer or Non-​ Officer Employee of the Corporation who is serving or has served as a director, partner, trustee, ​ officer, employee or agent of a Subsidiary shall be deemed to be serving at the request of the ​ Corporation. Notwithstanding the foregoing, “Corporate Status” shall not include the status of a ​ person who is serving or has served as a director,officer, employee or agent of a constituent ​ corporation absorbed in a merger or consolidation transaction with the Corporation with respect to ​ such person’s activities prior to said transaction, unless specifically authorized by the Board of ​ Directors or the stockholders of the Corporation; ​ (b) “Director” means any person who serves or has served the Corporation as a director ​ on the Board of Directors of the Corporation; ​ ​ 15 ​ (c) “Disinterested Director” means, with respect to each Proceeding in respect of ​ which indemnification is sought hereunder, a Director of the Corporation who is not and was not ​ a party to such Proceeding; ​ (d) “Expenses” means all attorneys’ fees, retainers, court costs, transcript costs, fees of ​ expert witnesses, private investigators and professional advisors (including, without limitation, ​ accountants and investment bankers), travel expenses, duplicating costs, printing and binding ​ costs, costs of preparation of demonstrative evidence and other courtroom presentation aids and ​ devices, costs incurred in connection with document review, organization, imaging and ​ computerization, telephone charges, postage, delivery service fees, and all other disbursements, ​ costs or expenses of the type customarily incurred in connection with prosecuting, defending, ​ preparing to prosecute or defend, investigating, being or preparing to be a witness in, settling or ​ otherwise participating in, a Proceeding; ​ (e) “Liabilities” means judgments, damages, liabilities, losses, penalties, excise taxes, ​ fines and amounts paid in settlement; ​ (f) “Non-Officer Employee” means any person who serves or has served as an ​ employee or agent of the Corporation, but who is not or was not a Director or Officer; ​ (g) “Officer” means any person who serves or has served the Corporation as an officer ​of the Corporation appointed by the Board of Directors of the Corporation; ​ (h) “Proceeding” means any threatened, pending or completed action, suit, arbitration, ​ alternate dispute resolution mechanism, inquiry, investigation, administrative hearing or other ​ proceeding, whether civil, criminal, administrative, arbitrative or investigative; and ​ (i) “Subsidiary” shall mean any corporation, partnership, limited liability company, ​ joint venture, trust or other entity of which the Corporation owns (either directly or through or ​ together with another Subsidiary of the Corporation) either (i) a general partner, managing member ​ or other similar interest or (ii) (A) fifty percent (50%) or more of the voting power of the voting ​ capital equity interests of such corporation, partnership, limited liability company, joint venture or ​ other entity, or (B) fifty percent (50%) or more of the outstanding voting capital stock or other ​ voting equity interests of such corporation, partnership, limited liability company, joint venture or ​ other entity. ​ SECTION 2. Indemnification of Directors and Officers. ​ (a) Subject to the operation of Section 4 of this Article V of these By-laws, each ​ Director and Officer shall be indemnified and held harmless by the Corporation to the fullest extent ​ authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any ​ such amendment, only to the extent that such amendment permits the Corporation to provide ​ broader indemnification rights thansuch law permitted the Corporation to provide prior to such ​ amendment), and to the extent authorized in this Section 2. ​ (1) Actions, Suits and Proceedings Other than By or In the Right of the ​ Corporation. Each Director and Officer shall be indemnified and held harmless by the ​ Corporation against any and all Expenses and Liabilities that are incurred or paid by such ​ ​ 16 ​ Director or Officer or on such Director’s or Officer’s behalf in connection with any ​ Proceeding or any claim, issue or matter therein (other than an action by or in the right of ​ the Corporation), which such Director or Officer is, or is threatened to be made, a party to ​ or participant in by reason of such Director’s or Officer’s Corporate Status, if such Director ​ or Officer acted in good faith and in a manner such Director or Officer reasonably believed ​ to be in or not opposed to the best interests of the Corporation and, with respect to any ​ criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. ​ (2) Actions, Suits and Proceedings By or In the Right of the Corporation. Each ​ Director and Officer shall be indemnified and held harmless by the Corporation against ​ any and all Expenses that are incurred by such Director or Officer or on such Director’s or ​ Officer’s behalf in connection with any Proceeding or any claim, issue or matter therein by ​ or in the right of the Corporation, which such Director or Officer is, or is threatened to be ​ made, a party to or participant in by reason of such Director’s or Officer’s Corporate Status, ​ if such Director or Officer acted in good faith and in a manner such Director or Officer ​ reasonably believed to be in or not opposed to the best interests of the Corporation; ​ provided, however, that no indemnification shall be made under this Section 2(a)(2) in ​ respect of any claim, issue or matter as towhich such Director or Officer shall have been ​ finally adjudged by a court of competent jurisdiction to be liable to the Corporation, unless, ​ and only to the extent that, the Court of Chancery or another court in which such ​ Proceeding was brought shall determine upon application that, despite adjudication of ​ liability, but in view of all the circumstances of the case, such Director or Officer is fairly ​ and reasonably entitled to indemnification for such Expenses that such court deems proper. ​ (3) Survival of Rights. The rights of indemnification provided by this Section ​ 2 shall continue as to a Director or Officer after he or she has ceased to be a Director or ​ Officer and shall inure to the benefit of his or her heirs, executors, administrators and ​ personal representatives. ​ (4) Actions by Directors or Officers. Notwithstanding the foregoing, the ​ Corporation shall indemnify any Director or Officer seeking indemnification in connection ​ with a Proceeding initiated by such Director or Officer only if such Proceeding (including ​ any parts of such Proceeding not initiated by such Director or Officer) was authorized in ​ advance by the Board of Directors of the Corporation, unless such Proceeding was brought ​ to enforce such Officer’s or Director’s rights to indemnification or, in the case of Directors, ​ advancement of Expenses under these By-laws in accordance with the provisions set forth ​ herein. ​ SECTION 3. Indemnification ofNon-Officer Employees. Subject to the operation of ​ Section 4 of this Article V of these By-laws, each Non-Officer Employee may, in the discretion of ​ the Board of Directors of the Corporation, be indemnified by the Corporation to the fullest extent ​ authorized by the DGCL, as the same exists or may hereafter be amended, against any or all ​ Expenses and Liabilities that are incurred by such Non-Officer Employee or on such Non-Officer ​ Employee’s behalf in connection with any threatened, pending or completed Proceeding, or any ​ claim, issue or matter therein, which such Non-Officer Employee is, or is threatened to be made, ​ a party to or participant in by reason of such Non-Officer Employee’s Corporate Status, if such ​ Non-Officer Employee acted in good faith and in a manner such Non-Officer Employee reasonably ​ ​ 17 ​ believed to be in or not opposed to the best interests of the Corporation and, with respect to any ​ criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The ​ rights of indemnification provided by this Section 3 shall exist as to a Non-Officer Employee after ​ he or she has ceased to be a Non-Officer Employee and shall inure to the benefit of his or her heirs, ​ personal representatives, executors and administrators. Notwithstanding the foregoing, the ​ Corporation may indemnify any Non-Officer Employee seeking indemnification in connection ​ with a Proceeding initiated by such Non-Officer Employee only if such Proceeding was authorized ​ in advance by the Board of Directors of the Corporation. ​ SECTION 4. Determination. Unless ordered by a court, no indemnification shall be ​ provided pursuant to this Article V to a Director, to an Officer or to a Non-Officer Employee unless ​ a determination shall have been made that 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 Corporation and, ​ with respect to any criminal Proceeding, such person had no reasonable cause to believe his or her ​ conduct was unlawful. Such determination shall be made by (a) a majority vote of the ​ Disinterested Directors, even though less than a quorum of the Board ofDirectors, (b) a committee ​ comprised of Disinterested Directors, such committee having been designated by a majority vote ​ of the Disinterested Directors (even though less than a quorum), (c) if there are no such ​ Disinterested Directors, or if a majority of Disinterested Directors so directs, by independent legal ​ counsel in a written opinion, or (d) by the stockholders of the Corporation. ​ SECTION 5. Advancement of Expenses to Directors Prior to Final Disposition. ​ (a) The Corporation shall advance all Expenses incurred by or on behalf of any ​ Director in connection with any Proceeding in which such Director is involved by reason of such ​ Director’s Corporate Status within thirty (30) days after the receipt by the Corporation of a written ​ statement from such Director requesting such advance or advances from time to time, whether ​ prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably ​ evidence the Expenses incurred by such Director and shall be preceded or accompanied by an ​ undertaking by or on behalf of such Director to repay any Expenses so advanced if it shall ​ ultimately be determined that such Director is not entitled to be indemnified against such Expenses. ​ Notwithstanding the foregoing, the Corporation shall advance all Expenses incurred by or on ​ behalf of any Director seeking advancement of expenseshereunder in connection with a ​ Proceeding initiated by such Director only if such Proceeding (including any parts of such ​ Proceeding not initiated by such Director) was (i) authorized by the Board of Directors of the ​ Corporation, or (ii) brought to enforce such Director’s rights to indemnification or advancement ​ of Expenses under these By-laws. ​ (b) If a claim for advancement of Expenses hereunder by a Director is not paid in full ​ by the Corporation within thirty (30) days after receipt by the Corporation of documentation of ​ Expenses and the required undertaking, such Director may at any time thereafter bring suit against ​ the Corporation to recover the unpaid amount of the claim and if successful in whole or in part, ​ such Director shall also be entitled to be paid the expenses of prosecuting such claim. The failure ​ of the Corporation (including its Board of Directors or any committee thereof, independent legal ​ counsel, or stockholders) to make a determination concerning the permissibility of such ​ advancement of Expenses under this Article V shall not be a defense to an action brought by a ​ Director for recovery of the unpaid amount of an advancement claim and shall not create a ​ ​ 18 ​ presumption that such advancement is not permissible. The burden of proving that a Director is ​ not entitled to an advancement of expenses shall be on the Corporation. ​ (c) In any suit brought by the Corporation to recover an advancement of expenses ​ pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses ​ upon a final adjudication that the Director has not met any applicable standard for indemnification ​ set forth in the DGCL. ​ SECTION 6. Advancement of Expenses to Officers and Non-Officer Employees Prior to ​ Final Disposition. ​ (a) The Corporation may, at the discretion of the Board of Directors of the Corporation, ​ advance any or all Expenses incurred by or on behalf of any Officer or any Non-Officer Employee ​ in connection with any Proceeding in which such person is involved by reason of his or her ​ Corporate Status as an Officer or Non-Officer Employee upon the receipt by the Corporation of a ​ statement or statements from such Officer or Non-Officer Employee requesting such advance or ​ advances from time to time, whether prior to or after final disposition of such Proceeding. Such ​ statement or statements shall reasonably evidence the Expenses incurred by such Officer or Non-​ Officer Employee and shall be preceded or accompanied by an undertaking by or on behalf of such ​ person to repay anyExpenses so advanced if it shall ultimately be determined that such Officer or ​ Non-Officer Employee is not entitled to be indemnified against such Expenses. ​ (b) In any suit brought by the Corporation to recover an advancement of expenses ​ pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses ​ upon a final adjudication that the Officer or Non-Officer Employee has not met any applicable ​ standard for indemnification set forth in the DGCL. ​ SECTION 7. Contractual Nature of Rights. ​ (a) The provisions of this Article V shall be deemed to be a contract between the ​ Corporation and each Director and Officer entitled to the benefits hereof at any time while this ​ Article V is in effect, in consideration of such person’s past or current and any future performance ​ of services for the Corporation. Neither amendment, repeal nor modification of any provision of ​ this Article V nor the adoption of any provision of the Certificate inconsistent with this Article V ​ shall eliminate or reduce any right conferred by this Article V in respect of any act or omission ​ occurring, or any cause of action or claim that accrues or arises or any state of facts existing, at the ​ time of or before such amendment, repeal, modification or adoption of an inconsistent provision ​ (even in the case of a proceeding based on such a state of facts that is commenced after such time), ​ and all rights to indemnificationand advancement of Expenses granted herein or arising out of any ​ act or omission shall vest at the time of the act or omission in question, regardless of when or if ​ any proceeding with respect to such act or omission is commenced. The rights to indemnification ​ and to advancement of expenses provided by, or granted pursuant to, this Article V shall continue ​ notwithstanding that the person has ceased to be a director or officer of the Corporation and shall ​ inure to the benefit of the estate, heirs, executors, administrators, legatees and distributes of such ​ person. ​ ​ 19 ​ (b) If a claim for indemnification hereunder by a Director or Officer is not paid in full ​ by the Corporation within sixty (60) days after receipt by the Corporation of a written claim for ​ indemnification, such Director or Officer may at any time thereafter bring suit against the ​ Corporation to recover the unpaid amount of the claim, and if successful in whole or in part, such ​ Director or Officer shall also be entitled to be paid the expenses of prosecuting such claim. The ​ failure of the Corporation (including its Board of Directors or any committee thereof, independent ​ legal counsel, or stockholders) to make a determination concerning the permissibility of such ​ indemnification under this Article V shall not be a defense to an action brought by a Director or ​ Officer for recovery of the unpaid amount of an indemnification claim and shall not create a ​ presumption that such indemnification is not permissible. The burden of proving that a Director ​ or Officer is not entitled to indemnification shall be on the Corporation. ​ (c) In any suit brought by a Director or Officer to enforce a right to indemnification ​ hereunder, it shall be a defense that such Director or Officer has not met any applicable standard ​ for indemnification set forth in the DGCL. ​ SECTION 8. Non-Exclusivity of Rights. The rights to indemnification and to ​ advancement of Expenses set forth in this Article V shall not be exclusive of any other right which ​ any Director, Officer, or Non-Officer Employee mayhave or hereafter acquire under any statute, ​ provision of the Certificate or these By-laws, agreement, vote of stockholders or Disinterested ​ Directors or otherwise. ​ SECTION 9. Insurance. The Corporation may maintain insurance, at its expense, to ​ protect itself and any Director, Officer or Non-Officer Employee against any liability of any ​ character asserted against or incurred by the Corporation or any such Director, Officer or Non-​ Officer Employee, or arising out of any such person’s Corporate Status, whether or not the ​ Corporation would have the power to indemnify such person against such liability under the DGCL ​ or the provisions of this Article V. ​ SECTION 10. Other Indemnification. The Corporation’s obligation, if any, to indemnify ​ or provide advancement of Expenses to any person under this Article V as a result of such person ​ serving, at the request of the Corporation, as a director, partner, trustee, officer, employee or agent ​ of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise ​ shall be reduced by any amount such person may collect as indemnification or advancement of ​ Expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or ​ enterprise (the “Primary Indemnitor”). Any indemnification or advancement of Expenses under ​ this Article V owed by the Corporation as a result of a person serving, at the request ofthe ​ Corporation, as a director, partner, trustee, officer, employee or agent of another corporation, ​ partnership, joint venture, trust, employee benefit plan or other enterprise shall only be in excess ​ of, and shall be secondary to, the indemnification or advancement of Expenses available from the ​ applicable Primary Indemnitor(s) and any applicable insurance policies. ​ ​ 20 ​ ARTICLE VI ​ Miscellaneous Provisions ​ SECTION 1. Fiscal Year. The fiscal year of the Corporation shall be determined by the ​ Board of Directors. ​ SECTION 2. Seal. The Board of Directors shall have power to adopt and alter the seal ​ of the Corporation. ​ SECTION 3. Execution of Instruments. All deeds, leases, transfers, contracts, bonds, ​ notes and other obligations to be entered into by the Corporation in the ordinary course of its ​ business without director action may be executed on behalf of the Corporation by the Chairman of ​ the Board, if one is elected, the President or the Treasurer or any other officer, employee or agent ​ of the Corporation as the Board of Directors or the executive committee of the Board may ​ authorize. ​ SECTION 4. Voting of Securities. Unless the Board of Directors otherwise provides, the ​ Chairman of the Board, if one is elected, the President or the Treasurer may waive notice of and ​ act on behalf of the Corporation, or appoint another person or persons to act as proxy or attorney ​ in fact for the Corporation with or without discretionary power and/or power of substitution, at ​ any meeting of stockholders or shareholders of any other corporation or organization, any of whose ​ securities are held by the Corporation. ​ SECTION 5. Resident Agent. The Board of Directors may appoint a resident agent upon ​ whom legal process may be served in any action or proceedingagainst the Corporation. ​ SECTION 6. Corporate Records. The original or attested copies of the Certificate, By-​ laws and records of all meetings of the incorporators, stockholders and the Board of Directors and ​ the stock transfer books, which shall contain the names of all stockholders, their record addresses ​ and the amount of stock held by each, may be kept outside the State of Delaware and shall be kept ​ at the principal office of the Corporation, at an office of its counsel, at an office of its transfer agent ​ or at such other place or places as may be designated from time to time by the Board of Directors. ​ SECTION 7. Certificate. All references in these By-laws to the Certificate shall be ​ deemed to refer to the Third Amended and Restated Certificate of Incorporation of the ​ Corporation, as amended and/or restated and in effect from time to time. ​ SECTION 8. Exclusive Jurisdiction of Delaware Courts. Unless the Corporation ​ consents in writing to the selection of an alternative forum, the Court of Chancery of the State of ​ Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought ​ on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed ​ by any director, officer or other employee of the Corporation to the Corporation or the ​ Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of ​ the Delaware GeneralCorporation Law or the Certificate or By-laws, or (iv) any action asserting ​ a claim against the Corporation governed by the internal affairs doctrine. Any person or entity ​ purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall ​ be deemed to have notice of and consented to the provisions of this Section 8. ​ ​ 21 ​ SECTION 9. Amendment of By-laws. ​ (a) Amendment by Directors. Except as provided otherwise by law, these By-laws ​ may be amended or repealed by the Board of Directors by the affirmative vote of a majority of the ​ directors then in office. ​ (b) Amendment by Stockholders. These By-laws may be amended or repealed at any ​ Annual Meeting, or special meeting of stockholders called for such purpose in accordance with ​ these By-Laws, by the affirmative vote of at least seventy-five percent (75%) of the outstanding ​ shares entitled to vote on such amendment or repeal, voting together as a single class; provided, ​ however, that if the Board of Directors recommends that stockholders approve such amendment ​ or repeal at such meeting of stockholders, such amendment or repeal shall only require the ​ affirmative vote of the majority of the outstanding shares entitled to vote on such amendment or ​ repeal, voting together as a single class. Notwithstanding the foregoing, stockholder approval shall ​ not be required unless mandated by the Certificate, these By-laws, or other applicable law. ​ SECTION 10. Notices. If mailed, notice to stockholders shall be deemed given when ​ deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as ​ it appears on the records of the Corporation. Without limiting the manner by which notice ​otherwise may be given to stockholders, any notice to stockholders may be given by electronic ​ transmission in the manner provided in Section 232 of the DGCL. ​ SECTION 11. Waivers. A written waiver of any notice, signed by a stockholder or ​ director, or waiver by electronic transmission by such person, whether given before or after the ​ time of the event for which notice is to be given, shall be deemed equivalent to the notice required ​ to be given to such person. Neither the business to be transacted at, nor the purpose of, any meeting ​ need be specified in such a waiver. ​ ​ Adopted by the Board of Directors on January 13, 2017, approved by the stockholders on January ​ 13, 2017, and effective as of January 26, 2017. ​ ​ ​ ​ ​ Exhibit 10.2 ​ JOUNCE THERAPEUTICS, INC. ​ 2013 STOCK OPTION AND GRANT PLAN ​ SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS ​ The name of the plan is the Jounce Therapeutics, Inc. 2013 Stock Option and Grant Plan ​ (the “Plan”). The purpose of the Plan is to encourage and enable the officers, employees, ​ directors, Consultants and other key persons of Jounce Therapeutics, Inc., a Delaware ​ corporation (including any successor entity, the “Company”) and its Subsidiaries, upon whose ​ judgment, initiative and efforts the Company largely depends for the successful conduct of its ​ business, to acquire a proprietary interest in the Company. ​ The following terms shall be defined as set forth below: ​ “Affiliate” of any Person means a Person that directly or indirectly, through one or more ​ intermediaries, controls, is controlled by or is under common control with the first mentioned ​ Person. A Person shall be deemed to control another Person if such first Person possesses ​ directly or indirectly the power to direct, or cause the direction of, the management and policies ​ of the second Person, whether through the ownership of voting securities, by contract or ​ otherwise. ​ “Award” or “Awards,” except where referring to a particular category of grant under the ​ Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock ​ Awards,Unrestricted Stock Awards, Restricted Stock Units or any combination of the foregoing. ​ “Award Agreement” means a written or electronic agreement setting forth the terms and ​ provisions applicable to an Award granted under the Plan. Each Award Agreement may contain ​ terms and conditions in addition to those set forth in the Plan; provided, however, in the event of ​ any conflict in the terms of the Plan and the Award Agreement, the terms of the Plan shall ​ govern. ​ “Board” means the Board of Directors of the Company. ​ “Cause” shall have the meaning as set forth in the Award Agreement(s). In the case that ​ any Award Agreement does not contain a definition of “Cause,” it shall mean a determination by ​ the Administrator that the grantee shall be dismissed as a result of (i) any material breach by the ​ grantee of any agreement between the grantee and the Company; (ii) the conviction of, ​ indictment for or plea of nolo contendere by the grantee to a felony or a crime involving moral ​ turpitude; or (iii) any material misconduct or willful and deliberate non-performance (other than ​ by reason of disability) by the grantee of the grantee’s duties to the Company. ​ “Chief Executive Officer” means the Chief Executive Officer of the Company or, if there ​ is no Chief Executive Officer, then the President of the Company. ​ ​ 2 ​ “Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, ​ and related rules, regulations and interpretations. ​ “Committee” means the Committee of the Board referred to in Section 2. ​ “Consultant” means any natural person that provides bona fide services to the Company ​ (including a Subsidiary), and such services are not in connection with the offer or sale of ​ securities in a capital-raising transaction and do not directly or indirectly promote or maintain a ​ market for the Company’s securities. ​ “Disability” means “disability” as defined in Section 422(c) of the Code. ​ “Effective Date” means the date on which the Plan is adopted as set forth on the final ​ page of the Plan. ​ “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules ​ and regulations thereunder. ​ “Fair Market Value” of the Stock on any given date means the fair market value of the ​ Stock determined in good faith by the Committee based on the reasonable application of a ​ reasonable valuation method not inconsistent with Section 409A of the Code. If the Stock is ​ admitted to trade on a national securities exchange, the determination shall be made by reference ​ to the closing price reported on such exchange. If there is no closing price for such date, the ​ determination shall be made by reference to the last date preceding such date for which there is a ​closing price. If the date for which Fair Market Value is determined is the first day when trading ​ prices for the Stock are reported on a national securities exchange, the Fair Market Value shall ​ be the “Price to the Public” (or equivalent) set forth on the cover page for the final prospectus ​ relating to the Company’s Initial Public Offering. ​ “Good Reason” shall have the meaning as set forth in the Award Agreement(s). In the ​ case that any Award Agreement does not contain a definition of “Good Reason,” it shall mean (i) ​ a material diminution in the grantee’s base salary except for across-the-board salary reductions ​ similarly affecting all or substantially all similarly situated employees of the Company or (ii) a ​ change of more than 50 miles in the geographic location at which the grantee provides services ​ to the Company, so long as the grantee provides at least ninety (90) days notice to the Company ​ following the initial occurrence of any such event and the Company fails to cure such event ​ within thirty (30) days thereafter. ​ “Grant Date” means the date that the Committee designates in its approval of an Award ​ in accordance with applicable law as the date on which the Award is granted, which date may not ​ precede the date of such Committee approval. ​ “Holder” means, with respect to an Award or any Shares, the Person holding such ​ Award or Shares, including the initial recipient of the Award or anyPermitted Transferee. ​ “Incentive Stock Option” means any Stock Option designated and qualified as an ​ “incentive stock option” as defined in Section 422 of the Code. ​ ​ 3 ​ “Initial Public Offering” means the consummation of the first firm commitment ​ underwritten public offering pursuant to an effective registration statement under the Securities ​ Act covering the offer and sale by the Company of its equity securities, as a result of or ​ following which the Stock shall be publicly held. ​ “Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock ​ Option. ​ “Option” or “Stock Option” means any option to purchase shares of Stock granted ​ pursuant to Section 5. ​ “Permitted Transferees” shall mean any of the following to whom a Holder may transfer ​ Shares hereunder (as set forth in Section 9(a)(ii)(A)): the Holder’s child, stepchild, grandchild, ​ parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, ​ father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive ​ relationships, any person sharing the Holder’s household (other than a tenant or employee), a ​ trust in which these persons have more than fifty percent of the beneficial interest, a foundation ​ in which these persons control the management of assets, and any other entity in which these ​ persons own more than fifty percent of the voting interests; provided, however, that any such ​ trust does not require or permit distribution of any Shares during the term of the Award ​ Agreement unless subject to its terms. Upon the death of the Holder, the term Permitted ​Transferees shall also include such deceased Holder’s estate, executors, administrators, personal ​ representatives, heirs, legatees and distributees, as the case may be. ​ “Person” shall mean any individual, corporation, partnership (limited or general), limited ​ liability company, limited liability partnership, association, trust, joint venture, unincorporated ​ organization or any similar entity. ​ “Restricted Stock Award” means Awards granted pursuant to Section 6 and “Restricted ​ Stock” means Shares issued pursuant to such Awards. ​ “Restricted Stock Unit” means an Award of phantom stock units to a grantee, which may ​ be settled in cash or Shares as determined by the Committee, pursuant to Section 8. ​ “Sale Event” means the consummation of (i) the dissolution or liquidation of the ​ Company, (ii) the sale of all or substantially all of the assets of the Company on a consolidated ​ basis to an unrelated person or entity, (iii) a merger, reorganization or consolidation pursuant to ​ which the holders of the Company’s outstanding voting power immediately prior to such ​ transaction do not own a majority of the outstanding voting power of the surviving or resulting ​ entity (or its ultimate parent, if applicable), (iv) the acquisition of all or a majority of the ​ outstanding voting stock of the Company in a single transaction or a series of related transactions ​ by a Person or group of Persons, (v) a Deemed Liquidation Event(as defined in the Company’s ​ Certificate of Incorporation (as may be amended, restated or otherwise modified from time to ​ time)), or (vi) any other acquisition of the business of the Company, as determined by the Board; ​ provided, however, that the Company’s Initial Public Offering, any subsequent public offering or ​ another capital raising event, or a merger effected solely to change the Company’s domicile shall ​ not constitute a “Sale Event.” ​ ​ 4 ​ “Section 409A” means Section 409A of the Code and the regulations and other guidance ​ promulgated thereunder. ​ “Securities Act” means the Securities Act of 1933, as amended, and the rules and ​ regulations thereunder. ​ “Service Relationship” means any relationship as a full-time employee, part-time ​ employee, director or other key person (including Consultants) of the Company or any ​ Subsidiary or any successor entity (e.g., a Service Relationship shall be deemed to continue ​ without interruption in the event an individual’s status changes from full-time employee to part-​ time employee or Consultant). ​ “Shares” means shares of Stock. ​ “Stock” means the Common Stock, par value $0.001 per share, of the Company. ​ “Subsidiary” means any corporation or other entity (other than the Company) in which ​ the Company has more than a 50 percent interest, either directly or indirectly. ​ “Ten Percent Owner” means an employee who owns or is deemed to own (by reason of ​ the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting ​ power of all classes of stock of the Company or any parent of the Company or any Subsidiary. ​ “Termination Event” means the termination of the Award recipient’s Service ​ Relationship with the Company and its Subsidiaries for any reason whatsoever, regardless of the ​ circumstances thereof, andincluding, without limitation, upon death, disability, retirement, ​ discharge or resignation for any reason, whether voluntarily or involuntarily. The following ​ shall not constitute a Termination Event: (i) a transfer to the service of the Company from a ​ Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another Subsidiary ​ or (ii) an approved leave of absence for military service or sickness, or for any other purpose ​ approved by the Committee, if the individual’s right to re-employment is guaranteed either by a ​ statute or by contract or under the policy pursuant to which the leave of absence was granted or if ​ the Committee otherwise so provides in writing. ​ “Unrestricted Stock Award” means any Award granted pursuant to Section 7 and ​ “Unrestricted Stock” means Shares issued pursuant to such Awards. ​ SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT ​ GRANTEES AND DETERMINE AWARDS ​ (a) Administration of Plan. The Plan shall be administered by the Board, or at the ​ discretion of the Board, by a committee of the Board, comprised of not less than two (2) ​ directors. All references herein to the “Committee” shall be deemed to refer to the group then ​ responsible for administration of the Plan at the relevant time (i.e., either the Board of Directors ​ or a committee or committees of the Board, as applicable). ​ (b) Powers of Committee. The Committee shall have the power andauthority to ​ grant Awards consistent with the terms of the Plan, including the power and authority: ​ ​ 5 ​ (i) to select the individuals to whom Awards may from time to time be ​ granted; ​ (ii) to determine the time or times of grant, and the amount, if any, of ​ Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock Awards, Unrestricted ​ Stock Awards, Restricted Stock Units, or any combination of the foregoing, granted to any one ​ or more grantees; ​ (iii) to determine the number of Shares to be covered by any Award and, ​ subject to the provisions of the Plan, the price, exercise price, conversion ratio or other price ​ relating thereto; ​ (iv) to determine and, subject to Section 12, to modify from time to time the ​ terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any ​ Award, which terms and conditions may differ among individual Awards and grantees, and to ​ approve the form of Award Agreements; ​ (v) to accelerate at any time the exercisability or vesting of all or any portion ​ of any Award; ​ (vi) to impose any limitations on Awards, including limitations on transfers, ​ repurchase provisions and the like, and to exercise repurchase rights or obligations; ​ (vii) subject to Section 5(a)(ii) and any restrictions imposed by Section 409A, ​ to extend at any time the period in which Stock Options may be exercised; and ​ (viii) at any time to adopt, alter and repeal such rules, guidelines and practices ​ for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to ​ interpret theterms and provisions of the Plan and any Award (including Award Agreements); to ​ make all determinations it deems advisable for the administration of the Plan; to decide all ​ disputes arising in connection with the Plan; and to otherwise supervise the administration of the ​ Plan. ​ All decisions and interpretations of the Committee shall be binding on all persons, including the ​ Company and all Holders. ​ (c) Delegation of Authority to Grant Options. Subject to applicable law, the ​ Committee, in its discretion, may delegate to the Chief Executive Officer of the Company the ​ power to designate non-officer employees to be recipients of Options, and to determine the ​ number of such Options to be received by such employees; provided, however, that the ​ resolution so authorizing the Chief Executive Officer shall specify the total number of Options ​ the Chief Executive Officer may so award and may not delegate to the Chief Executive Officer ​ the authority to set the exercise price or the vesting terms of such Options. Any such delegation ​ by the Committee shall also provide that the Chief Executive Officer may not grant Awards to ​ himself or herself (or other officers) without the approval of the Committee. The Committee ​ may revoke or amend the terms of a delegation at any time but such action shall not invalidate ​ any prior actions of the Committee’s delegate or delegates that were consistent with the terms of ​ thePlan. ​ ​ 6 ​ (d) Award Agreement. Awards under the Plan shall be evidenced by Award ​ Agreements that set forth the terms, conditions and limitations for each Award. ​ (e) Indemnification. Neither the Board nor the Committee, nor any member of either ​ or any delegate thereof, shall be liable for any act, omission, interpretation, construction or ​ determination made in good faith in connection with the Plan, and the members of the Board and ​ the Committee (and any delegate thereof) shall be entitled in all cases to indemnification and ​ reimbursement by the Company in respect of any claim, loss, damage or expense (including, ​ without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent ​ permitted by law and/or under the Company’s governing documents, including its certificate of ​ incorporation or bylaws (each, as may be amended, restated, or otherwise modified from time to ​ time), or any directors’ and officers’ liability insurance coverage which may be in effect from ​ time to time and/or any indemnification agreement between such individual and the Company. ​ (f) Foreign Award Recipients. Notwithstanding any provision of the Plan to the ​ contrary, in order to comply with the laws in other countries in which the Company and any ​ Subsidiary operate or have employees or other individuals eligible for Awards, the Committee, ​ in its sole discretion, shall have the power and authority to: (i)determine which Subsidiaries, if ​ any, shall be covered by the Plan; (ii) determine which individuals, if any, outside the United ​ States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award ​ granted to individuals outside the United States to comply with applicable foreign laws; (iv) ​ establish subplans and modify exercise procedures and other terms and procedures, to the extent ​ the Committee determines such actions to be necessary or advisable (and such subplans and/or ​ modifications shall be attached to the Plan as appendices); provided, however, that no such ​ subplans and/or modifications shall increase the share limitation contained in Section 3(a) ​ hereof; and (v) take any action, before or after an Award is made, that the Committee determines ​ to be necessary or advisable to obtain approval or comply with any local governmental ​ regulatory exemptions or approvals. ​ SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS AND OTHER ​ TRANSACTIONS; SUBSTITUTION ​ (a) Stock Issuable. The maximum number of Shares reserved and available for ​ issuance under the Plan shall be 7,500,000 Shares, subject to adjustment as provided in ​ Section 3(b). For purposes of this limitation, the Shares underlying any Awards that are forfeited, ​ canceled, reacquired by the Company prior to vesting, satisfied without theissuance of Stock or ​ otherwise terminated (other than by exercise) and Shares that are withheld upon exercise of an ​ Option or settlement of an Award to cover the exercise price or tax withholding shall be added ​ back to the Shares available for issuance under the Plan. Subject to such overall limitations, ​ Shares may be issued up to such maximum number pursuant to any type or types of Award, and ​ no more than 75,000,000 Shares may be issued pursuant to Incentive Stock Options. The Shares ​ available for issuance under the Plan may be authorized but unissued Shares or Shares reacquired ​ by the Company. Beginning on the date that the Company becomes subject to Section 162(m) of ​ the Code, Options with respect to no more than 7,5000,000 Shares shall be granted to any one ​ individual in any calendar year period. ​ ​ 7 ​ (b) Changes in Stock. Subject to Section 3(c) hereof, if, as a result of any ​ reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or ​ other similar change in the Company’s capital stock, the outstanding Shares are increased or ​ decreased or are exchanged for a different number or kind of shares or other securities of the ​ Company, or additional Shares or new or different shares or other securities of the Company or ​ other non-cash assets are distributed with respect to such Shares or other securities, in each case, ​ without the receipt of consideration by the Company, or, if, as a result of any merger or ​ consolidation, or sale of all or substantially all of the assets of the Company, the outstanding ​ Shares are converted into or exchanged for other securities of the Company or any successor ​ entity (or a parent or subsidiary thereof), the Committee shall make an appropriate and ​ proportionate adjustment in (i) the maximum number of Shares reserved for issuance under the ​ Plan, (ii) the number and kind of Shares or other securities subject to any then outstanding ​ Awards under the Plan, (iii) the repurchase price, if any, per Share subject to each outstanding ​ Award, and (iv) the exercise price for each Share subject to any then outstanding Stock Options ​ under the Plan, without changing the aggregate exercise price (i.e., the per share exercise price ​multiplied by the number of shares underlying such Stock Options) as to which such Stock ​ Options remain exercisable. The adjustment by the Committee shall be final, binding and ​ conclusive. No fractional Shares shall be issued under the Plan resulting from any such ​ adjustment, but the Committee in its discretion may make a cash payment in lieu of fractional ​ shares. ​ (c) Sale Events. ​ (i) Options. ​ (A) In the case of and subject to the consummation of a Sale Event, the ​ Plan and all outstanding Options issued hereunder shall terminate upon the effective time ​ of any such Sale Event unless assumed or continued by the successor entity, or new stock ​ options or other awards of the successor entity or parent thereof are substituted therefor, ​ with an equitable or proportionate adjustment as to the number and kind of shares and, if ​ appropriate, the per share exercise prices, as such parties shall agree (after taking into ​ account any acceleration hereunder and/or pursuant to the terms of any Award ​ Agreement). ​ (B) In the event of the termination of the Plan and all outstanding ​ Options issued hereunder pursuant to Section 3(c), each Holder of Options shall be ​ permitted, within a period of time prior to the consummation of the Sale Event as ​ specified by the Committee, to exercise all such Options which are then exercisable or ​ will become exercisable as of the effective time of theSale Event; provided, however, ​ that the exercise of Options not exercisable prior to the Sale Event shall be subject to the ​ consummation of the Sale Event. ​ (C) Notwithstanding anything to the contrary in Section 3(c)(i)(A), in ​ the event of a Sale Event, the Company shall have the right, but not the obligation, to ​ make or provide for a cash payment to the Holders of Options, without any consent of the ​ Holders, in exchange for the cancellation thereof, in an amount equal to the difference ​ between (A) the value as determined by the Committee of the consideration payable per ​ ​ 8 ​ share of Stock pursuant to the Sale Event (the “Sale Price”) times the number of Shares ​ subject to outstanding Options being cancelled (to the extent then vested and exercisable, ​ including by reason of acceleration in connection with such Sale Event, at prices not in ​ excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding ​ vested and exercisable Options. ​ (ii) Restricted Stock and Restricted Stock Unit Awards. ​ (A) In the case of and subject to the consummation of a Sale Event, all ​ Restricted Stock and unvested Restricted Stock Unit Awards (other than those becoming ​ vested as a result of the Sale Event) issued hereunder shall be forfeited immediately prior ​ to the effective time of any such Sale Event unless assumed or continued by the successor ​ entity, or awards of the successor entity or parent thereof are substituted therefor, with an ​ equitable or proportionate adjustment as to the number and kind of shares subject to such ​ awards as such parties shall agree (after taking into account any acceleration hereunder ​ and/or pursuant to the terms of any Award Agreement). ​ (B) In the event of the forfeiture of Restricted Stock pursuant to ​ Section 3(c)(ii)(A), such Restricted Stock shall be repurchased from the Holder thereof at ​ a price per share equal to the lower of the original per share purchase price paid by the ​ Holder (subject to adjustmentas provided in Section 3(b)) or the current Fair Market ​ Value of such Shares, determined immediately prior to the effective time of the Sale ​ Event. ​ (C) Notwithstanding anything to the contrary in Section 3(c)(ii)(A), in ​ the event of a Sale Event, the Company shall have the right, but not the obligation, to ​ make or provide for a cash payment to the Holders of Restricted Stock or Restricted ​ Stock Unit Awards, without consent of the Holders, in exchange for the cancellation ​ thereof, in an amount equal to the Sale Price times the number of Shares subject to such ​ Awards, to be paid at the time of such Sale Event or upon the later vesting of such ​ Awards. ​ SECTION 4. ELIGIBILITY ​ Grantees under the Plan will be such full or part-time officers and other employees, ​ directors, Consultants and key persons of the Company and any Subsidiary who are selected ​ from time to time by the Committee in its sole discretion; provided, however, that Awards shall ​ be granted only to those individuals described in Rule 701(c) of the Securities Act. ​ SECTION 5. STOCK OPTIONS ​ Upon the grant of a Stock Option, the Company and the grantee shall enter into an Award ​ Agreement. The terms and conditions of each such Award Agreement shall be determined by ​ the Committee, and such terms and conditions may differ among individual Awards and ​ grantees. ​ Stock Options granted under the Plan may be eitherIncentive Stock Options or Non-​ Qualified Stock Options. Incentive Stock Options may be granted only to employees of the ​ ​ 9 ​ Company or any Subsidiary that is a “subsidiary corporation” within the meaning of ​ Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock ​ Option, it shall be deemed a Non-Qualified Stock Option. ​ (a) Terms of Stock Options. The Committee in its discretion may grant Stock ​ Options to those individuals who meet the eligibility requirements of Section 4. Stock Options ​ shall be subject to the following terms and conditions and shall contain such additional terms and ​ conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable. ​ (i) Exercise Price. The exercise price per share for the Shares covered by a ​ Stock Option shall be determined by the Committee at the time of grant but shall not be less than ​ 100 percent of the Fair Market Value on the Grant Date. In the case of an Incentive Stock ​ Option that is granted to a Ten Percent Owner, the exercise price per share for the Shares ​ covered by such Incentive Stock Option shall not be less than 110 percent of the Fair Market ​ Value on the Grant Date. ​ (ii) Option Term. The term of each Stock Option shall be fixed by the ​ Committee, but no Stock Option shall be exercisable more than ten (10) years from the Grant ​ Date. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the term ​ of such Stock Option shall be no more than five (5) years from the Grant Date. ​ (iii)Exercisability; Rights of a Stockholder. Stock Options shall become ​ exercisable and/or vested at such time or times, whether or not in installments, as shall be ​ determined by the Committee at or after the Grant Date. The Award Agreement may permit a ​ grantee to exercise all or a portion of a Stock Option immediately at grant; provided that the ​ Shares issued upon such exercise shall be subject to restrictions and a vesting schedule identical ​ to the vesting schedule of the related Stock Option, such Shares shall be deemed to be Restricted ​ Stock for purposes of the Plan, and the optionee may be required to enter into an additional or ​ new Award Agreement as a condition to exercise of such Stock Option. An optionee shall have ​ the rights of a stockholder only as to Shares acquired upon the exercise of a Stock Option and not ​ as to unexercised Stock Options. An optionee shall not be deemed to have acquired any Shares ​ unless and until a Stock Option shall have been exercised pursuant to the terms of the Award ​ Agreement and this Plan and the optionee’s name has been entered on the books of the Company ​ as a stockholder. ​ (iv) Method of Exercise. Stock Options may be exercised by an optionee in ​ whole or in part, by the optionee giving written or electronic notice of exercise to the Company, ​ specifying the number of Shares to bepurchased. Payment of the purchase price may be made ​ by one or more of the following methods (or any combination thereof) to the extent provided in ​ the Award Agreement: ​ (A) In cash, by certified or bank check, by wire transfer of immediately ​ available funds, or other instrument acceptable to the Committee; ​ (B) If permitted by the Committee, by the optionee delivering to the ​ Company a promissory note, if the Board has expressly authorized the loan of funds to ​ the optionee for the purpose of enabling or assisting the optionee to effect the exercise of ​ ​ 10 ​ his or her Stock Option; provided, that at least so much of the exercise price as represents ​ the par value of the Stock shall be paid in cash if required by state law; ​ (C) If permitted by the Committee and the Initial Public Offering has ​ occurred (or the Stock otherwise becomes publicly-traded), through the delivery (or ​ attestation to the ownership) of Shares that have been purchased by the optionee on the ​ open market or that are beneficially owned by the optionee and are not then subject to ​ restrictions under any Company plan. To the extent required to avoid variable accounting ​ treatment under ASC 718 or other applicable accounting rules, such surrendered Shares if ​ originally purchased from the Company shall have been owned by the optionee for at ​ least six (6) months. Such surrendered Shares shall be valued at Fair Market Value on ​ the exercise date; ​ (D) If permitted by the Committee and the Initial Public Offering has ​ occurred (or the Stock otherwise becomes publicly-traded), by the optionee delivering to ​ the Company a properly executed exercise notice together with irrevocable instructions to ​ a broker to promptly deliver to the Company cash or a check payable and acceptable to ​ the Company for the purchase price; provided that in the event the optionee chooses to ​ pay the purchase price as so provided, the optionee and the broker shallcomply with such ​ procedures and enter into such agreements of indemnity and other agreements as the ​ Committee shall prescribe as a condition of such payment procedure; or ​ (E) If permitted by the Committee, and only with respect to Stock ​ Options that are not Incentive Stock Options, by a “net exercise” arrangement pursuant to ​ which the Company will reduce the number of Shares issuable upon exercise by the ​ largest whole number of Shares with a Fair Market Value that does not exceed the ​ aggregate exercise price. ​ Payment instruments will be received subject to collection. No certificates for Shares so ​ purchased will be issued to the optionee or, with respect to uncertificated Stock, no transfer to ​ the optionee on the records of the Company will take place, until the Company has completed all ​ steps it has deemed necessary to satisfy legal requirements relating to the issuance and sale of the ​ Shares, which steps may include, without limitation, (i) receipt of a representation from the ​ optionee at the time of exercise of the Option that the optionee is purchasing the Shares for the ​ optionee’s own account and not with a view to any sale or distribution of the Shares or other ​ representations relating to compliance with applicable law governing the issuance of securities, ​ (ii) the legending of the certificate (or notation on any book entry) representing the Shares to ​ evidencethe foregoing restrictions, (iii) obtaining from optionee payment or provision for all ​ withholding taxes due as a result of the exercise of the Option, and (iv) if required by the ​ Company, the optionee’s execution and delivery of any stockholders’ agreements or other ​ agreements with the Company and/or certain other stockholders of the Company relating to ​ shares of the Stock. The delivery of certificates representing the shares of Stock (or the transfer ​ to the optionee on the records of the Company with respect to uncertificated Stock) to be ​ purchased pursuant to the exercise of a Stock Option will be contingent upon (A) receipt from ​ the optionee (or a purchaser acting in his or her stead in accordance with the provisions of the ​ Stock Option) by the Company of the full purchase price for such Shares and the fulfillment of ​ any other requirements contained in the Award Agreement or applicable provisions of laws and ​ ​ 11 ​ (B) if required by the Company, the optionee shall have entered into any stockholders ​ agreements or other agreements with the Company and/or certain other of the Company’s ​ stockholders relating to the Stock. In the event an optionee chooses to pay the purchase price by ​ previously-owned Shares through the attestation method, the number of Shares transferred to the ​ optionee upon the exercise of the Stock Option shall be net of the number of Shares attested to. ​ (b) Annual Limit on Incentive Stock Options. To the extent required for “incentive ​ stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value ​ (determined as of the Grant Date) of the Shares with respect to which Incentive Stock Options ​ granted under the Plan and any other plan of the Company or its parent and any Subsidiary that ​ become exercisable for the first time by an optionee during any calendar year shall not exceed ​ $100,000 or such other limit as may be in effect from time to time under Section 422 of the ​ Code. To the extent that any Stock Option exceeds this limit, it shall constitute a Non-Qualified ​ Stock Option. ​ (c) Termination. Any portion of a Stock Option that is not vested and exercisable on ​ the date of termination of an optionee’s Service Relationship shall immediately expire and be ​ null and void. Once any portion of the Stock Option becomes vested andexercisable, the ​ optionee’s right to exercise such portion of the Stock Option (or the optionee’s representatives ​ and legatees as applicable) in the event of a termination of the optionee’s Service Relationship ​ shall continue until the earliest of: (i) the date which is: (A) twelve (12) months following the ​ date on which the optionee’s Service Relationship terminates due to death or Disability (or such ​ longer period of time as determined by the Committee and set forth in the applicable Award ​ Agreement), or (B) three (3) months following the date on which the optionee’s Service ​ Relationship terminates if the termination is due to any reason other than death or Disability (or ​ such longer period of time as determined by the Committee and set forth in the applicable Award ​ Agreement), or (ii) the Expiration Date set forth in the Award Agreement; provided that ​ notwithstanding the foregoing, an Award Agreement may provide that if the optionee’s Service ​ Relationship is terminated for Cause, the Stock Option shall terminate immediately and be null ​ and void upon the date of the optionee’s termination and shall not thereafter be exercisable. ​ SECTION 6. RESTRICTED STOCK AWARDS ​ (a) Nature of Restricted Stock Awards. The Committee may, in its sole discretion, ​ grant (or sell at par value or such other purchase price determined by the Committee) to an ​ eligible individual under Section 4 hereof a Restricted Stock Awardunder the Plan. The ​ Committee shall determine the restrictions and conditions applicable to each Restricted Stock ​ Award at the time of grant. Conditions may be based on continuing employment (or other ​ Service Relationship), achievement of pre-established performance goals and objectives and/or ​ such other criteria as the Committee may determine. Upon the grant of a Restricted Stock ​ Award, the Company and the grantee shall enter into an Award Agreement. The terms and ​ conditions of each such Award Agreement shall be determined by the Committee, and such ​ terms and conditions may differ among individual Awards and grantees. ​ (b) Rights as a Stockholder. Upon the grant of the Restricted Stock Award and ​ payment of any applicable purchase price, a grantee of Restricted Stock shall be considered the ​ record owner of and shall be entitled to vote the Restricted Stock if, and to the extent, such ​ ​ 12 ​ Shares are entitled to voting rights, subject to such conditions contained in the Award ​ Agreement. The grantee shall be entitled to receive all dividends and any other distributions ​ declared on the Shares; provided, however, that the Company is under no duty to declare any ​ such dividends or to make any such distribution. Unless the Committee shall otherwise ​ determine, certificates evidencing the Restricted Stock shall remain in the possession of the ​ Company until such Restricted Stock is vested as provided in subsection (d) below of this ​ Section, and the grantee shall be required, as a condition of the grant, to deliver to the Company ​ a stock power endorsed in blank and such other instruments of transfer as the Committee may ​ prescribe. ​ (c) Restrictions. Restricted Stock may not be sold, assigned, transferred, pledged or ​ otherwise encumbered or disposed of except as specifically provided herein or in the Award ​ Agreement. Except as may otherwise be provided by the Committee either in the Award ​ Agreement or, subject to Section 12 below, in writing after the Award Agreement is issued, if a ​ grantee’s Service Relationship with the Company and any Subsidiary terminates, the Company ​ or its assigns shall have the right, as may be specified in the relevant instrument, to repurchase ​ some or all of the Shares subject to the Award at such purchaseprice as is set forth in the Award ​ Agreement. ​ (d) Vesting of Restricted Stock. The Committee at the time of grant shall specify in ​ the Award Agreement the date or dates and/or the attainment of pre-established performance ​ goals, objectives and other conditions on which the substantial risk of forfeiture imposed shall ​ lapse and the Restricted Stock shall become vested, subject to such further rights of the Company ​ or its assigns as may be specified in the Award Agreement. ​ SECTION 7. UNRESTRICTED STOCK AWARDS ​ The Committee may, in its sole discretion, grant (or sell at par value or such other ​ purchase price determined by the Committee) to an eligible person under Section 4 hereof an ​ Unrestricted Stock Award under the Plan. Unrestricted Stock Awards may be granted in respect ​ of past services or other valid consideration, or in lieu of cash compensation due to such grantee. ​ SECTION 8. RESTRICTED STOCK UNITS ​ (a) Nature of Restricted Stock Units. The Committee may, in its sole discretion, ​ grant to an eligible person under Section 4 hereof Restricted Stock Units under the Plan. The ​ Committee shall determine the restrictions and conditions applicable to each Restricted Stock ​ Unit at the time of grant. Vesting conditions may be based on continuing employment (or other ​ Service Relationship), achievement of pre-established performance goals and objectivesand/or ​ other such criteria as the Committee may determine. Upon the grant of Restricted Stock Units, ​ the grantee and the Company shall enter into an Award Agreement. The terms and conditions of ​ each such Award Agreement shall be determined by the Committee and may differ among ​ individual Awards and grantees. On or promptly following the vesting date or dates applicable ​ to any Restricted Stock Unit, but in no event later than March 15 of the year following the year ​ in which such vesting occurs, such Restricted Stock Unit(s) shall be settled in the form of cash or ​ shares of Stock, as specified in the Award Agreement. Restricted Stock Units may not be sold, ​ assigned, transferred, pledged, or otherwise encumbered or disposed of. ​ ​ 13 ​ (b) Rights as a Stockholder. A grantee shall have the rights of a stockholder only as ​ to Shares, if any, acquired upon settlement of Restricted Stock Units. A grantee shall not be ​ deemed to have acquired any such Shares unless and until the Restricted Stock Units shall have ​ been settled in Shares pursuant to the terms of the Plan and the Award Agreement, the Company ​ shall have issued and delivered a certificate representing the Shares to the grantee (or transferred ​ on the records of the Company with respect to uncertificated stock), and the grantee’s name has ​ been entered in the books of the Company as a stockholder. ​ (c) Termination. Except as may otherwise be provided by the Committee either in ​ the Award Agreement or in writing after the Award Agreement is issued, a grantee’s right in all ​ Restricted Stock Units that have not vested shall automatically terminate upon the grantee’s ​ cessation of Service Relationship with the Company and any Subsidiary for any reason. ​ SECTION 9. TRANSFER RESTRICTIONS; COMPANY RIGHT OF FIRST REFUSAL; ​ COMPANY REPURCHASE RIGHTS ​ (a) Restrictions on Transfer. ​ (i) Non-Transferability of Stock Options. Stock Options and, prior to ​ exercise, the Shares issuable upon exercise of such Stock Option, shall not be transferable by the ​ optionee otherwise than by will, or by the laws of descent anddistribution, and all Stock Options ​ shall be exercisable, during the optionee’s lifetime, only by the optionee, or by the optionee’s ​ legal representative or guardian in the event of the optionee’s incapacity. Notwithstanding the ​ foregoing, the Committee, in its sole discretion, may provide in the Award Agreement regarding ​ a given Stock Option that the optionee may transfer by gift, without consideration for the ​ transfer, his or her Non-Qualified Stock Options to his or her family members (as defined in ​ Rule 701 of the Securities Act), to trusts for the benefit of such family members, or to ​ partnerships in which such family members are the only partners (to the extent such trusts or ​ partnerships are considered “family members” for purposes of Rule 701 of the Securities Act), ​ provided that the transferee agrees in writing with the Company to be bound by all of the terms ​ and conditions of this Plan and the applicable Award Agreement, including the execution of a ​ stock power upon the issuance of Shares. Stock Options, and the Shares issuable upon exercise ​ of such Stock Options, shall be restricted as to any pledge, hypothecation, or other transfer, ​ including any short position, any “put equivalent position” (as defined in the Exchange Act) or ​ any “call equivalent position” (as defined in the Exchange Act) prior to exercise. ​ (ii) Shares. No Shares shall be sold, assigned, transferred, pledged, ​hypothecated, given away or in any other manner disposed of or encumbered, whether ​ voluntarily or by operation of law, unless (i) the transfer is in compliance with the terms of the ​ applicable Award Agreement, all applicable securities laws (including, without limitation, the ​ Securities Act), and with the terms and conditions of this Section 9, (ii) the transfer does not ​ cause the Company to become subject to the reporting requirements of the Exchange Act, and ​ (iii) the transferee consents in writing to be bound by the provisions of the Plan and the Award ​ Agreement, including this Section 9. In connection with any proposed transfer, the Committee ​ may require the transferor to provide at the transferor’s own expense an opinion of counsel to the ​ transferor, satisfactory to the Committee, that such transfer is in compliance with all foreign, ​ federal and state securities laws (including, without limitation, the Securities Act). Any ​ ​ 14 ​ attempted transfer of Shares not in accordance with the terms and conditions of this Section 9 ​ shall be null and void, and the Company shall not reflect on its records any change in record ​ ownership of any Shares as a result of any such transfer, shall otherwise refuse to recognize any ​ such transfer and shall not in any way give effect to any such transfer of Shares. The Company ​ shall be entitled to seek protective orders, injunctive relief and other remedies available at law or ​ in equity including, without limitation, seeking specific performance or the rescission of any ​ transfer not made in strict compliance with the provisions of this Section 9. Subject to the ​ foregoing general provisions, and unless otherwise provided in the applicable Award Agreement, ​ Shares may be transferred pursuant to the following specific terms and conditions (provided that ​ with respect to any transfer of Restricted Stock, all vesting and forfeiture provisions shall ​ continue to apply with respect to the original recipient): ​ (A) Transfers to Permitted Transferees. The Holder may transfer any ​ or all of the Shares to one or more Permitted Transferees; provided, however, that ​ following such transfer, such Shares shall continue to be subject to the terms of this Plan ​ (including this Section 9) and such Permitted Transferee(s) shall, as a condition to any ​ such transfer, deliver a written acknowledgment to that effect to theCompany and shall ​ deliver a stock power to the Company with respect to the Shares. Notwithstanding the ​ foregoing, the Holder may not transfer any of the Shares to a Person whom the Company ​ reasonably determines is a direct competitor or a potential competitor of the Company or ​ any of its Subsidiaries. ​ (B) Transfers Upon Death. Upon the death of the Holder, any Shares ​ then held by the Holder at the time of such death and any Shares acquired after the ​ Holder’s death by the Holder’s legal representative shall be subject to the provisions of ​ this Plan, and the Holder’s estate, executors, administrators, personal representatives, ​ heirs, legatees and distributees shall be obligated to convey such Shares to the Company ​ or its assigns under the terms contemplated by the Plan and the Award Agreement. ​ (b) Right of First Refusal. In the event that a Holder desires at any time to sell or ​ otherwise transfer all or any part of his or her Shares (other than shares of Restricted Stock ​ which by their terms are not transferrable), the Holder first shall give written notice to the ​ Company of the Holder’s intention to make such transfer. Such notice shall state the number of ​ Shares that the Holder proposes to sell (the “Offered Shares”), the price and the terms at which ​ the proposed sale is to be made and the name and address of the proposed transferee. At any ​ time within thirty (30) days after the receipt ofsuch notice by the Company, the Company or its ​ assigns may elect to purchase all or any portion of the Offered Shares at the price and on the ​ terms offered by the proposed transferee and specified in the notice. The Company or its assigns ​ shall exercise this right by mailing or delivering written notice to the Holder within the foregoing ​ thirty (30) day period. If the Company or its assigns elect to exercise its purchase rights under ​ this Section 9(b), the closing for such purchase shall, in any event, take place within forty-five ​ (45) days after the receipt by the Company of the initial notice from the Holder. In the event that ​ the Company or its assigns do not elect to exercise such purchase right, or in the event that the ​ Company or its assigns do not pay the full purchase price within such forty-five (45) day period, ​ the Holder may, within sixty (60) days thereafter, sell the Offered Shares to the proposed ​ transferee and at the same price and on the same terms as specified in the Holder’s notice. Any ​ Shares not sold to the proposed transferee shall remain subject to the Plan. If the Holder is a ​ ​ 15 ​ party to any stockholders agreements or other agreements with the Company and/or certain other ​ of the Company’s stockholders relating to the Shares, (i) the transferring Holder shall comply ​ with the requirements of such stockholders agreements or other agreements relating to any ​ proposed transfer of the Offered Shares, and (ii) any proposed transferee that purchases Offered ​ Shares shall enter into such stockholders agreements or other agreements with the Company ​ and/or certain of the Company’s stockholders relating to the Offered Shares on the same terms ​ and in the same capacity as the transferring Holder. ​ (c) Company’s Right of Repurchase. ​ (i) Right of Repurchase for Unvested Shares Issued Upon the Exercise of an ​ Option. Upon a Termination Event, the Company or its assigns shall have the right and option to ​ repurchase from a Holder of Shares acquired upon exercise of a Stock Option which are still ​ subject to a risk of forfeiture as of the Termination Event. Such repurchase rights may be ​ exercised by the Company within the later of (A) six (6) months following the date of such ​ Termination Event or (B) seven (7) months after the acquisition of Shares upon exercise of a ​ Stock Option. The repurchase price shall be equal to the lower of the original per share price ​ paid by the Holder, subject to adjustment as provided in Section 3(b) of the Plan, or thecurrent ​ Fair Market Value of such Shares as of the date the Company elects to exercise its repurchase ​ rights. ​ (ii) Right of Repurchase With Respect to Restricted Stock. Upon a ​ Termination Event, the Company or its assigns shall have the right and option to repurchase from ​ a Holder of Shares received pursuant to a Restricted Stock Award any Shares that are still subject ​ to a risk of forfeiture as of the Termination Event. Such repurchase right may be exercised by ​ the Company within six (6) months following the date of such Termination Event. The ​ repurchase price shall be the lower of the original per share purchase price paid by the Holder, ​ subject to adjustment as provided in Section 3(b) of the Plan, or the current Fair Market Value of ​ such Shares as of the date the Company elects to exercise its repurchase rights. ​ (iii) Procedure. Any repurchase right of the Company shall be exercised by ​ the Company or its assigns by giving the Holder written notice on or before the last day of the ​ repurchase period of its intention to exercise such repurchase right. Upon such notification, the ​ Holder shall promptly surrender to the Company, free and clear of any liens or encumbrances, ​ any certificates representing the Shares being purchased, together with a duly executed stock ​ power for the transfer of such Shares to the Company or the Company’s assignee or assignees. ​Upon the Company’s or its assignee’s receipt of the certificates from the Holder, the Company or ​ its assignee or assignees shall deliver to him, her or them a check for the applicable repurchase ​ price; provided, however, that the Company may pay the repurchase price by offsetting and ​ canceling any indebtedness then owed by the Holder to the Company. ​ (d) Drag Along Right. In the event the holders of a majority of the Company’s equity ​ securities then outstanding (the “Majority Shareholders”) determine to enter into a Sale Event in ​ a bona fide negotiated transaction (a “Sale”), with any non-Affiliate of the Company or any ​ majority shareholder (in each case, the “Buyer”), a Holder of Shares, including any Permitted ​ Transferee, shall be obligated to and shall upon the written request of the Majority Shareholders: ​ (a) sell, transfer and deliver, or cause to be sold, transferred and delivered, to the Buyer, his or ​ ​ 16 ​ her Shares (including for this purpose all of such Holder’s Shares that presently or as a result of ​ any such transaction may be acquired upon the exercise of an Option (following the payment of ​ the exercise price therefor)) on substantially the same terms applicable to the Majority ​ Shareholders (with appropriate adjustments to reflect the conversion of convertible securities, the ​ redemption of redeemable securities and the exercise of exercisable securities as well as the ​ relative preferences and priorities of preferred stock); and (b) execute and deliver such ​ instruments of conveyance and transfer and take such other action, including voting such Shares ​ in favor of any Sale proposed by the Majority Shareholders and executing any purchase ​ agreements, merger agreements, indemnity agreements, escrow agreements or related documents ​ as the Majority Shareholders or the Buyer may reasonably require in order to carry out the terms ​ and provisions of this Section 9(d). ​ (e) Escrow Arrangement. ​ (i) Escrow. In order to carry out the provisions of this Section 9 of this Plan ​ more effectively, the Company shall hold any Shares issued pursuant to Awards granted under ​ the Plan in escrow together with separate stock powers executed by the Holder in blank for ​ transfer. The Company shall not dispose of the Shares except as otherwise provided in this Plan. ​ Inthe event of any repurchase by the Company (or any of its assigns), the Company is hereby ​ authorized by the Holder, as the Holder’s attorney-in-fact, to date and complete the stock powers ​ necessary for the transfer of the Shares being purchased and to transfer such Shares in ​ accordance with the terms hereof. At such time as any Shares are no longer subject to the ​ Company’s repurchase and first refusal rights, the Company shall, at the written request of the ​ Holder, deliver to the Holder a certificate representing such Shares with the balance of the Shares ​ to be held in escrow pursuant to this Section. ​ (ii) Remedy. Without limitation of any other provision of this Plan or other ​ rights, in the event that a Holder or any other Person is required to sell a Holder’s Shares ​ pursuant to the provisions of Sections 9(b) or (c) hereof and in the further event that he or she ​ refuses or for any reason fails to deliver to the Company or its designated purchaser of such ​ Shares the certificate or certificates evidencing such Shares together with a related stock power, ​ the Company or such designated purchaser may deposit the applicable purchase price for such ​ Shares with a bank designated by the Company, or with the Company’s independent public ​ accounting firm, as agent or trustee, or in escrow, for such Holder or other Person, to be held by ​ such bank or accounting firm for the benefit ofand for delivery to him, her, them or it, and/or, in ​ its discretion, pay such purchase price by offsetting any indebtedness then owed by such Holder ​ as provided above. Upon any such deposit and/or offset by the Company or its designated ​ purchaser of such amount and upon notice to the Person who was required to sell the Shares to ​ be sold pursuant to the provisions of Sections 9(b) or (c), such Shares shall at such time be ​ deemed to have been sold, assigned, transferred and conveyed to such purchaser, such Holder ​ shall have no further rights thereto (other than the right to withdraw the payment thereof held in ​ escrow, if applicable), and the Company shall record such transfer in its stock transfer book or in ​ any appropriate manner. ​ (f) Lockup Provision. If requested by the Company, a Holder shall not sell or ​ otherwise transfer or dispose of any Shares (including, without limitation, pursuant to Rule 144 ​ under the Securities Act) held by him or her for such period following the effective date of a ​ ​ 17 ​ public offering by the Company of Shares as the Company shall specify reasonably and in good ​ faith. If requested by the underwriter engaged by the Company, each Holder shall execute a ​ separate letter confirming his or her agreement to comply with this Section. ​ (g) Adjustments for Changes in Capital Structure. If, as a result of any ​ reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or ​ other similar change in the Common Stock, the outstanding Shares are increased or decreased or ​ are exchanged for a different number or kind of securities of the Company, the restrictions ​ contained in this Section 9 shall apply with equal force to additional and/or substitute securities, ​ if any, received by Holder in exchange for, or by virtue of his or her ownership of, Shares. ​ (h) Termination. The terms and provisions of Section 9(b) and Section 9(c) (except ​ for the Company’s right to repurchase Shares still subject to a risk of forfeiture upon a ​ Termination Event) shall terminate upon the closing of the Company’s Initial Public Offering or ​ upon consummation of any Sale Event, in either case as a result of which Shares are registered ​ under Section 12 of the Exchange Act and publicly-traded on any national security exchange. ​ SECTION 10. TAX WITHHOLDING ​ (a) Payment by Grantee. Each grantee shall, no later than the date as of which the ​ value ofan Award or of any Shares or other amounts received thereunder first becomes ​ includable in the gross income of the grantee for income tax purposes, pay to the Company, or ​ make arrangements satisfactory to the Committee regarding payment of, any Federal, state, or ​ local taxes of any kind required by law to be withheld by the Company with respect to such ​ income. The Company and any Subsidiary shall, to the extent permitted by law, have the right to ​ deduct any such taxes from any payment of any kind otherwise due to the grantee. The ​ Company’s obligation to deliver stock certificates (or evidence of book entry) to any grantee is ​ subject to and conditioned on any such tax withholding obligations being satisfied by the ​ grantee. ​ (b) Payment in Stock. The Company’s minimum required tax withholding obligation ​ may be satisfied, in whole or in part, by the Company withholding from Shares to be issued ​ pursuant to an Award a number of Shares having an aggregate Fair Market Value (as of the date ​ the withholding is effected) that would satisfy the minimum withholding amount due. ​ SECTION 11. SECTION 409A AWARDS. ​ To the extent that any Award is determined to constitute “nonqualified deferred ​ compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be ​ subject to such additional rules and requirements as may bespecified by the Committee from ​ time to time. In this regard, if any amount under a 409A Award is payable upon a “separation ​ from service” (within the meaning of Section 409A) to a grantee who is considered a “specified ​ employee” (within the meaning of Section 409A), then no such payment shall be made prior to ​ the date that is the earlier of (i) six (6) months and one day after the grantee’s separation from ​ service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such ​ payment from being subject to interest, penalties and/or additional tax imposed pursuant to ​ Section 409A. The Company makes no representation or warranty and shall have no liability to ​ ​ 18 ​ any grantee under the Plan or any other Person with respect to any penalties or taxes under ​ Section 409A that are, or may be, imposed with respect to any Award. ​ SECTION 12. AMENDMENTS AND TERMINATION ​ The Board may, at any time, amend or discontinue the Plan and the Committee may, at ​ any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or ​ for any other lawful purpose, but no such action shall adversely affect rights under any ​ outstanding Award without the consent of the holder of the Award. The Committee may ​ exercise its discretion to reduce the exercise price of outstanding Stock Options or effect ​ repricing through cancellation of outstanding Stock Options and by granting such holders new ​ Awards in replacement of the cancelled Stock Options. To the extent determined by the ​ Committee to be required either by the Code to ensure that Incentive Stock Options granted ​ under the Plan are qualified under Section 422 of the Code or otherwise, Plan amendments shall ​ be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders. ​ Nothing in this Section 12 shall limit the Board’s or Committee’s authority to take any action ​ permitted pursuant to Section 3(c). The Board reserves the right to amend the Plan and/or the ​ terms of any outstanding Stock Options to theextent reasonably necessary to comply with the ​ requirements of the exemption pursuant to paragraph (f)(4) of Rule 12h-1 of the Exchange Act. ​ SECTION 13. STATUS OF PLAN ​ With respect to the portion of any Award that has not been exercised and any payments in ​ cash, Stock or other consideration not received by a grantee, a grantee shall have no rights ​ greater than those of a general creditor of the Company unless the Committee shall otherwise ​ expressly so determine in connection with any Award. ​ SECTION 14. GENERAL PROVISIONS ​ (a) No Distribution; Compliance with Legal Requirements. The Committee may ​ require each person acquiring Shares pursuant to an Award to represent to and agree with the ​ Company in writing that such person is acquiring the Shares without a view to distribution ​ thereof. No Shares shall be issued pursuant to an Award until all applicable securities law and ​ other legal and stock exchange or similar requirements have been satisfied. The Committee may ​ require the placing of such stop-orders and restrictive legends on certificates for Stock and ​ Awards as it deems appropriate. ​ (b) Delivery of Stock Certificates. Stock certificates to grantees under the Plan shall ​ be deemed delivered for all purposes when the Company or a stock transfer agent of the ​ Company shall have mailed such certificates in the United States mail,addressed to the grantee, ​ at the grantee’s last known address on file with the Company; provided that stock certificates to ​ be held in escrow pursuant to Section 9 of the Plan shall be deemed delivered when the ​ Company shall have recorded the issuance in its records. Uncertificated Stock shall be deemed ​ delivered for all purposes when the Company or a stock transfer agent of the Company shall ​ have given to the grantee by electronic mail (with proof of receipt) or by United States mail, ​ addressed to the grantee, at the grantee’s last known address on file with the Company, notice of ​ ​ 19 ​ issuance and recorded the issuance in its records (which may include electronic “book entry” ​ records). ​ (c) No Employment Rights. The adoption of the Plan and the grant of Awards do not ​ confer upon any Person any right to continued employment or Service Relationship with the ​ Company or any Subsidiary. ​ (d) Trading Policy Restrictions. Option exercises and other Awards under the Plan ​ shall be subject to the Company’s insider trading policy-related restrictions, terms and conditions ​ as may be established by the Committee, or in accordance with policies set by the Committee, ​ from time to time. ​ (e) Designation of Beneficiary. Each grantee to whom an Award has been made ​ under the Plan may designate a beneficiary or beneficiaries to exercise any Award on or after the ​ grantee’s death or receive any payment under any Award payable on or after the grantee’s death. ​ Any such designation shall be on a form provided for that purpose by the Committee and shall ​ not be effective until received by the Committee. If no beneficiary has been designated by a ​ deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary ​ shall be the grantee’s estate. ​ (f) Legend. Any certificate(s) representing the Shares shall carry substantially the ​ following legend (and with respect to uncertificated Stock, the book entriesevidencing such ​ shares shall contain the following notation): ​ The transferability of this certificate and the shares of stock ​ represented hereby are subject to the restrictions, terms and ​ conditions (including repurchase and restrictions against transfers) ​ contained in the Jounce Therapeutics, Inc. 2013 Stock Option and ​ Grant Plan and any agreements entered into thereunder by and ​ between the company and the holder of this certificate (a copy of ​ which is available at the offices of the company for examination). ​ (g) Information to Holders of Options. In the event the Company is relying on the ​ exemption from the registration requirements of Section 12(g) of the Exchange Act contained in ​ paragraph (f)(1) of Rule 12h-1 of the Exchange Act, the Company shall provide the information ​ described in Rule 701(e)(3), (4) and (5) of the Securities Act to all holders of Options in ​ accordance with the requirements thereunder. The foregoing notwithstanding, the Company ​ shall not be required to provide such information unless the optionholder has agreed in writing, ​ on a form prescribed by the Company, to keep such information confidential. ​ SECTION 15. EFFECTIVE DATE OF PLAN ​ The Plan shall become effective upon adoption by the Board and shall be approved by ​ stockholders in accordance with applicable state law and the Company’s certificate of ​ incorporationand bylaws within twelve (12) months thereafter. If the stockholders fail to ​ approve the Plan within twelve (12) months after its adoption by the Board of Directors, then any ​ Awards granted or sold under the Plan shall be rescinded and no additional grants or sales shall ​ thereafter be made under the Plan. Subject to such approval by stockholders and to the ​ ​ 20 ​ requirement that no Shares may be issued hereunder prior to such approval, Stock Options and ​ other Awards may be granted hereunder on and after adoption of the Plan by the Board. No ​ grants of Stock Options and other Awards may be made hereunder after the tenth anniversary of ​ the date the Plan is adopted by the Board or the date the Plan is approved by the Company’s ​ stockholders, whichever is earlier. ​ SECTION 16. GOVERNING LAW ​ This Plan, all Awards and any controversy arising out of or relating to this Plan and all ​ Awards shall be governed by and construed in accordance with the General Corporation Law of ​ the State of Delaware as to matters within the scope thereof, and as to all other matters shall be ​ governed by and construed in accordance with the internal laws of Massachusetts, without regard ​ to conflict of law principles that would result in the application of any law other than the law of ​ the State of Massachusetts. ​ DATE ADOPTED BY THE BOARD OF DIRECTORS: February 6, 2013 ​ DATE APPROVED BY THE STOCKHOLDERS: February 6, 2013 ​ ​ 21 ​ INCENTIVE STOCK OPTION GRANT NOTICE ​ UNDER THE JOUNCE THERAPEUTICS, INC. ​ 2013 STOCK OPTION AND GRANT PLAN ​ ​ Pursuant to the Jounce Therapeutics, Inc. 2013 Stock Option and Grant Plan (the “Plan”), ​ Jounce Therapeutics, Inc., a Delaware corporation (together with any successor, the ​ “Company”), has granted to the individual named below, an option (the “Stock Option”) to ​ purchase on or prior to the Expiration Date, or such earlier date as is specified herein, all or any ​ part of the number of shares of Common Stock, par value $0.001 per share (“Common Stock”), ​ of the Company indicated below (the “Shares”), at the Option Exercise Price per share, subject to ​ the terms and conditions set forth in this Incentive Stock Option Grant Notice (the “Grant ​ Notice”), the attached Incentive Stock Option Agreement (the “Agreement”) and the Plan. This ​ Stock Option is intended to qualify as an “incentive stock option” as defined in Section 422(b) of ​ the Internal Revenue Code of 1986, as amended from time to time (the “Code”). To the extent ​ that any portion of the Stock Option does not so qualify, it shall be deemed a non-qualified stock ​ option. ​ ​ Name of Optionee: (the “Optionee”) ​ ​ No. of Shares: Shares of Common Stock ​ ​ Grant Date: ​ ​ Vesting Commencement Date: (the “Vesting Commencement Date”) ​ ​ Expiration Date: (the “Expiration Date”) ​ ​ Option Exercise Price/Share: $ (the “OptionExercise Price”) ​ ​ Vesting Schedule: twenty-five percent (25%) of the Shares shall vest and become ​ exercisable on the first anniversary of the Vesting ​ Commencement Date; provided that the Optionee continues to ​ have a Service Relationship with the Company at such time. ​ Thereafter, the remaining seventy-five percent (75%) of the ​ Shares shall vest and become exercisable in twelve (12) equal ​ quarterly installments following the first anniversary of the ​ Vesting Commencement Date, provided the Optionee continues ​ to have a Service Relationship with the Company at such time. ​ Notwithstanding anything in the Agreement to the contrary, in ​ the case of a Sale Event, this Stock Option and the Shares shall ​ be treated as provided in Section 3(c) of the Plan [provided; ​ however INSERT ANY ACCELERATED VESTING ​ PROVISION HERE]. ​ ​ Attachments: Incentive Stock Option Agreement, 2013 Stock Option and Grant Plan ​ ​ ​ 22 ​ INCENTIVE STOCK OPTION AGREEMENT ​ UNDER THE JOUNCE THERAPEUTICS, INC. ​ 2013 STOCK OPTION AND GRANT PLAN ​ ​ All capitalized terms used herein and not otherwise defined shall have the respective ​ meanings set forth in the Grant Notice and the Plan. ​ ​ 1. Vesting, Exercisability and Termination. ​ ​ (a) No portion of this Stock Option may be exercised until ​ such portion shall have vested and become exercisable. ​ ​ (b) Except as set forth below, and subject to the determination ​ of the Committee in its sole discretion to accelerate the vesting schedule hereunder, this Stock ​ Option shall be vested and exercisable on the respective dates indicated below: ​ ​ (i) This Stock Option shall initially be unvested and ​ unexercisable. ​ ​ (ii) This Stock Option shall vest and become ​ exercisable in accordance with the Vesting Schedule set forth in the Grant Notice. ​ ​ (c) Termination. Except as may otherwise be provided by the ​ Committee, if the Optionee’s Service Relationship is terminated, the period within which to ​ exercise this Stock Option will be subject to earlier termination as set forth below (and if not ​ exercised within such period, shall thereafter terminate subject, in each case, to Section 3(c) of ​ the Plan): ​ ​ (i) Termination Due to Death or Disability. If the ​ Optionee’s Service Relationship terminates by reason of such Optionee’s death or ​ Disability, this Stock Option may beexercised, to the extent exercisable on the date of ​ such termination, by the Optionee, the Optionee’s legal representative or legatee for a ​ period of twelve (12) months from the date of death or Disability or until the Expiration ​ Date, if earlier. ​ ​ (ii) Other Termination. If the Optionee’s Service ​ Relationship terminates for any reason other than death or Disability, and unless ​ otherwise determined by the Committee, this Stock Option may be exercised, to the ​ extent exercisable on the date of termination, for a period of ninety (90) days from the ​ date of termination or until the Expiration Date, if earlier; provided however, if the ​ Optionee’s Service Relationship is terminated for Cause, this Stock Option shall ​ terminate immediately upon the date of such termination. ​ ​ For purposes hereof, the Committee’s determination of the reason for termination of the ​ Optionee’s Service Relationship shall be conclusive and binding on the Optionee and his or her ​ representatives or legatees. Any portion of this Stock Option that is not vested and exercisable ​ ​ 23 ​ on the date of termination of the Service Relationship shall terminate immediately and be null ​ and void. ​ ​ (d) It is understood and intended that this Stock Option is ​ intended to qualify as an “incentive stock option” as defined in Section 422 of the Code to the ​ extent permitted under applicable law. Accordingly, the Optionee understands that in order to ​ obtain the benefits of an incentive stock option under Section 422 of the Code, no sale or other ​ disposition may be made of Shares for which incentive stock option treatment is desired within ​ the one-year period beginning on the day after the day of the transfer of such Shares to him or ​ her, nor within the two-year period beginning on the day after Grant Date of this Stock Option ​ and further that this Stock Option must be exercised within three months after termination of ​ employment as an employee (or twelve (12) months in the case of death or disability) to qualify ​ as an incentive stock option. If the Optionee disposes (whether by sale, gift, transfer or ​ otherwise) of any such Shares within either of these periods, he or she will notify the Company ​ within thirty (30) days after such disposition. The Optionee also agrees to provide the Company ​ with any information concerning any such dispositions required by the Company for tax ​ purposes. Further, to the extent this Stock Option and any other incentive stock options of the ​ Optionee havingan aggregate Fair Market Value in excess of one hundred thousand dollars ​ ($100,000) (determined as of the Grant Date) first become exercisable in any year, such options ​ will not qualify as incentive stock options. ​ ​ 2. Exercise of Stock Option. ​ ​ (a) The Optionee may exercise this Stock Option only in the ​ following manner: Prior to the Expiration Date, the Optionee may deliver a Stock Option ​ exercise notice (an “Exercise Notice”) in the form of Appendix A hereto indicating his or her ​ election to purchase some or all of the Shares with respect to which this Stock Option is then ​ exercisable. Such notice shall specify the number of Shares to be purchased. Payment of the ​ purchase price may be made by one or more of the methods described in Section 5 of the Plan, ​ subject to the limitations contained in such Section of the Plan, including the requirement that the ​ Committee specifically approve in advance certain payment methods. ​ ​ (b) Notwithstanding any other provision hereof or of the Plan, ​ no portion of this Stock Option shall be exercisable after the Expiration Date. ​ ​ 3. Incorporation of Plan. Notwithstanding anything herein to the ​ contrary, this Stock Option shall be subject to and governed by all the terms and conditions of ​ the Plan. ​ ​ 4. Transferability of Stock Option. This Stock Option is personal ​ to the Optionee and is not transferable by the Optionee in any manner other thanby will or by ​ the laws of descent and distribution. The Stock Option may be exercised during the Optionee’s ​ lifetime only by the Optionee (or by the Optionee’s guardian or personal representative in the ​ event of the Optionee’s incapacity). The Optionee may elect to designate a beneficiary by ​ providing written notice of the name of such beneficiary to the Company, and may revoke or ​ change such designation at any time by filing written notice of revocation or change with the ​ ​ 24 ​ Company; such beneficiary may exercise the Optionee’s Stock Option in the event of the ​ Optionee’s death to the extent provided herein. If the Optionee does not designate a beneficiary, ​ or if the designated beneficiary predeceases the Optionee, the legal representative of the ​ Optionee may exercise this Stock Option to the extent provided herein in the event of the ​ Optionee’s death. ​ ​ 5. Restrictions on Transfer of Shares. The Shares acquired upon ​ exercise of the Stock Option shall be subject to certain transfer restrictions and other limitations ​ including, without limitation, the provisions contained in Section 9 of the Plan. ​ ​ 6. Miscellaneous Provisions. ​ ​ (a) Equitable Relief. The parties hereto agree and declare that ​ legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable ​ relief, including specific performance and injunctive relief, may be used to enforce the ​ provisions of this Agreement. ​ ​ (b) Adjustments for Changes in Capital Structure. If, as a ​ result of any reorganization, recapitalization, reincorporation, reclassification, stock dividend, ​ stock split, reverse stock split or other similar change in the Common Stock, the outstanding ​ shares of Common Stock are increased or decreased or are exchanged for a different number or ​ kind of securities of the Company, the restrictions contained in this Agreement shall apply with ​ equal force toadditional and/or substitute securities, if any, received by the Optionee in ​ exchange for, or by virtue of his or her ownership of, this Stock Option or Shares acquired ​ pursuant thereto. ​ ​ (c) Change and Modifications. This Agreement may not be ​ orally changed, modified or terminated, nor shall any oral waiver of any of its terms be ​ effective. This Agreement may be changed, modified or terminated only by an agreement in ​ writing signed by the Company and the Optionee. ​ ​ (d) Governing Law. This Agreement shall be governed by ​ and construed in accordance with the General Corporation Law of the State of Delaware as to ​ matters within the scope thereof, and as to all other matters shall be governed by and construed ​ in accordance with the internal laws of the Commonwealth of Massachusetts, without regard to ​ conflict of law principles that would result in the application of any law other than the law of the ​ Commonwealth of Massachusetts. ​ ​ (e) Headings. The headings are intended only for ​ convenience in finding the subject matter and do not constitute part of the text of this Agreement ​ and shall not be considered in the interpretation of this Agreement. ​ ​ (f) Saving Clause. If any provision(s) of this Agreement ​ shall be determined to be illegal or unenforceable, such determination shall in no manner affect ​ the legality or enforceability of any other provision hereof. ​ ​ ​ 25 ​ (g) Notices. All notices, requests, consents and other ​ communications shall be in writing and be deemed given when delivered personally, by telex or ​ facsimile transmission or when received if mailed by first class registered or certified mail, ​ postage prepaid. Notices to the Company or the Optionee shall be addressed as set forth ​ underneath their signatures below, or to such other address or addresses as may have been ​ furnished by such party in writing to the other. ​ ​ (h) Benefit and Binding Effect. This Agreement shall be ​ binding upon and shall inure to the benefit of the parties hereto, their respective successors, ​ assigns, and legal representatives. The Company has the right to assign this Agreement, and ​ such assignee shall become entitled to all the rights of the Company hereunder to the extent of ​ such assignment. ​ ​ (i) Counterparts. For the convenience of the parties and to ​ facilitate execution, this Agreement may be executed in two or more counterparts, each of which ​ shall be deemed an original, but all of which shall constitute one and the same document. ​ ​ (j) Integration. This Agreement constitutes the entire ​ agreement between the parties with respect to this Stock Option and supersedes all prior ​ agreements and discussions between the parties concerning such subject matter. ​ ​ 7. Dispute Resolution. ​ ​ (a) Except as provided below, any disputearising out of or ​ relating to the Plan or this Stock Option, this Agreement, or the breach, termination or validity of ​ the Plan, this Stock Option or this Agreement, shall be finally settled by binding arbitration ​ conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive Arbitration ​ Rules and Procedures (the “J.A.M.S. Rules”). The arbitration shall be governed by the United ​ States Arbitration Act, 9 U.S.C. Sections 1 16, and judgment upon the award rendered by the ​ arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration shall ​ be Boston, Massachusetts. ​ ​ (b) The arbitration shall commence within sixty (60) days of ​ the date on which a written demand for arbitration is filed by any party hereto. In connection ​ with the arbitration proceeding, the arbitrator shall have the power to order the production of ​ documents by each party and any third-party witnesses. In addition, each party may take up to ​ three depositions as of right, and the arbitrator may in his or her discretion allow additional ​ depositions upon good cause shown by the moving party. However, the arbitrator shall not have ​ the power to order the answering of interrogatories or the response to requests for admission. In ​ connection with any arbitration, each party to the arbitration shall provide to the other, no later ​ than seven business days before the date of the arbitration, the identity of all persons thatmay ​ testify at the arbitration and a copy of all documents that may be introduced at the arbitration or ​ considered or used by a party’s witness or expert. The arbitrator’s decision and award shall be ​ made and delivered within six months of the selection of the arbitrator. The arbitrator’s decision ​ shall set forth a reasoned basis for any award of damages or finding of liability. The arbitrator ​ shall not have power to award damages in excess of actual compensatory damages and shall not ​ ​ 26 ​ multiply actual damages or award punitive damages, and each party hereby irrevocably waives ​ any claim to such damages. ​ ​ (c) The Company, the Optionee, each party to the Agreement ​ and any other holder of Shares issued pursuant to this Agreement (each, a “Party”) covenants and ​ agrees that such party will participate in the arbitration in good faith. This Section 7 applies ​ equally to requests for temporary, preliminary or permanent injunctive relief, except that in the ​ case of temporary or preliminary injunctive relief any party may proceed in court without prior ​ arbitration for the limited purpose of avoiding immediate and irreparable harm. ​ ​ (d) Each Party (i) hereby irrevocably submits to the ​ jurisdiction of any United States District Court of competent jurisdiction for the purpose of ​ enforcing the award or decision in any such proceeding, (ii) hereby waives, and agrees not to ​ assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any ​ claim that it is not subject personally to the jurisdiction of the above named courts, that its ​ property is exempt or immune from attachment or execution (except as protected by applicable ​ law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the ​ suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not ​ be enforced in or by such court, and (iii) herebywaives and agrees not to seek any review by any ​ court of any other jurisdiction which may be called upon to grant an enforcement of the ​ judgment of any such court. Each Party hereby consents to service of process by registered mail ​ at the address to which notices are to be given. Each Party agrees that its, his or her submission ​ to jurisdiction and its, his or her consent to service of process by mail is made for the express ​ benefit of each other Party. Final judgment against any Party in any such action, suit or ​ proceeding may be enforced in other jurisdictions by suit, action or proceeding on the judgment, ​ or in any other manner provided by or pursuant to the laws of such other jurisdiction. ​ ​ [SIGNATURE PAGE FOLLOWS] ​ ​ ​ 27 ​ ​ The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby ​ agreed to by the undersigned as of the date first above written. ​ ​ JOUNCE THERAPEUTICS, INC. ​ ​ ​ By: ​ Name: ​ Title: ​ ​ Address: ​ ​ ​ ​ ​ ​ ​ ​ The undersigned hereby acknowledges receiving and reviewing a copy of the Plan, including, ​ without limitation, Section 9 thereof, and understands that this Stock Option is subject to the ​ terms of the Plan and of this Agreement. This Agreement is hereby accepted, and the terms and ​ conditions of the Plan, the Grant Notice and this Agreement, SPECIFICALLY INCLUDING ​ THE ARBITRATION PROVISIONS SET FORTH IN SECTION 7 OF THIS AGREEMENT, ​ are hereby agreed to, by the undersigned as of the date first above written. ​ ​ OPTIONEE: ​ ​ ​ Name: ​ ​ Address: ​ ​ ​ ​ ​ ​ ​ ​ [SPOUSE’S CONSENT1 ​ I acknowledge that I have read the ​ foregoing Incentive Stock Option Agreement ​ ​ 1 A spouse’s consent is recommended only if the Optionee’s state of residence is one of the following ​ community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and ​ Wisconsin. ​ ​ 28 ​ and understand the contents thereof. ​ ​ ] ​ ​ DESIGNATED BENEFICIARY: ​ ​ ​ Beneficiary’s Address: ​ ​ ​ ​ ​ ​ ​ 29 ​ APPENDIX A ​ ​ STOCK OPTION EXERCISE NOTICE ​ ​ Jounce Therapeutics, Inc. ​ Attention: President ​ ​ Pursuant to the terms of the grant notice and stock option agreement between the ​ undersigned and Jounce Therapeutics, Inc., a Delaware corporation (the “Company”), dated ​ (the “Agreement”) under the Jounce Therapeutics, Inc. 2013 Stock Option and Grant ​ Plan, I, [Insert Name] , hereby [Circle One] partially/fully exercise such option by ​ including herein payment in the amount of $ representing the purchase price for [Fill in ​ number of Shares] Shares. I have chosen the following form(s) of payment: ​ ​ o 1. Cash ​ o 2. Certified or bank check payable ​ to Jounce Therapeutics, Inc. ​ o 3. Other (as referenced in the ​ Agreement and described in the Plan (please describe)) ​ ​ . ​ ​ In connection with my exercise of the option as set forth above, I hereby represent and ​ warrant to the Company as follows: ​ ​ (i) I am purchasing the Shares for my own account ​ for investment only, and not for resale or with a view to the distribution thereof. ​ ​ (ii) I have had such an opportunity as I have deemed ​ adequate to obtain from the Company such information as is necessary to permit me to ​ evaluate the merits and risks of my investment in the Company and have consulted with ​ my own advisers with respect to my investment in the Company. ​ ​ (iii) I have sufficient experience in business, financial ​ andinvestment matters to be able to evaluate the risks involved in the purchase of the ​ Shares and to make an informed investment decision with respect to such purchase. ​ ​ (iv) I can afford a complete loss of the value of the ​ Shares and am able to bear the economic risk of holding such Shares for an indefinite ​ period of time. ​ ​ (v) I understand that the Shares may not be registered ​ under the Securities Act of 1933, as amended (it being understood that the Shares are ​ being issued and sold in reliance on the exemption provided in Rule 701 thereunder), or ​ any applicable state securities or “blue sky” laws and may not be sold or otherwise ​ transferred or disposed of in the absence of an effective registration statement under the ​ ​ 30 ​ Securities Act of 1933, as amended and under any applicable state securities or “blue ​ sky” laws (or exemptions from the registration requirement thereof). I further ​ acknowledge that certificates representing Shares will bear restrictive legends reflecting ​ the foregoing and/or that book entries for uncertificated Shares will include similar ​ restrictive notations. ​ ​ (vi) I have read and understand the Plan and ​ acknowledge and agree that the Shares are subject to all of the relevant terms of the Plan, ​ including without limitation, the transfer restrictions set forth in Section 9 of the Plan. ​ ​ (vii) I understand and agree that the Company has a right ​ of first refusal with respect to the Shares pursuant to Section 9(b) of the Plan. ​ ​ (viii) I understand and agree that the Company has certain ​ repurchase rights with respect to the Shares pursuant to Section 9(c) of the Plan. ​ ​ (ix) I understand and agree that I may not sell or ​ otherwise transfer or dispose of the Shares for a period of time following the effective ​ date of a public offering by the Company as described in Section 9(f) of the Plan. ​ ​ (x) I understand and agree that I am subject to the ​ Company’s drag-along right pursuant to Section 9(d) of the Plan. ​ ​ (xi) I understand and agree that if, as a result of the ​ issuance of the Shares to me hereunder, I will hold shares of capital stock constituting ​ one percent (1%) or more of the Company’s then outstanding capital stock (treating for ​ this purpose all sharesof Common Stock issuable upon exercise or conversion of ​ outstanding options, warrants or convertible securities, as if exercised and/or converted or ​ exchanged), then, as a condition to my receipt of the Shares, I am required to execute an ​ adoption agreement (substantially in the form attached hereto as Appendix B) to that ​ certain Stockholders Agreement, dated February 6, 2013, by and among the Company ​ and the stockholders listed as parties thereto, as the same may be amended and/or restated ​ from time to time (the “Stockholders Agreement”), as a Key Holder and Stockholder (as ​ such terms are defined in the Stockholders Agreement), and I shall thereby be bound by, ​ and subject to, all terms and provisions of the Stockholders Agreement applicable to a ​ Key Holder and Stockholder. ​ ​ Sincerely yours, ​ ​ Name: ​ ​ Address: ​ ​ ​ ​ ​ ​ 31 ​ APPENDIX B ​ ​ ADOPTION AGREEMENT ​ ​ This Adoption Agreement (“Adoption Agreement”) is executed on , 20 , by the ​ undersigned (the “Holder”) pursuant to the terms of that certain Stockholders Agreement dated ​ as of February 6, 2013 (the “Agreement”), by and among Jounce Therapeutics, Inc., a Delaware ​ corporation (the “Company”) and certain of its Stockholders, as such Agreement may be ​ amended or amended and restated hereafter. Capitalized terms used but not defined in this ​ Adoption Agreement shall have the respective meanings ascribed to such terms in the ​ Agreement. By the execution of this Adoption Agreement, the Holder agrees as follows: ​ ​ 1.1 Acknowledgment. Holder acknowledges that Holder is acquiring ​ certain shares of the capital stock of the Company (the “Stock”) in accordance ​ with Section 8.2(b) of the Agreement, as a new party who is not a new Investor, in which case ​ Holder will be a “Key Holder” and a “Stockholder” for all purposes of the Agreement. ​ ​ 1.2 Agreement. Holder hereby (a) agrees that the Stock, and any other ​ shares of capital stock or securities required by the Agreement to be bound thereby, shall be ​ bound by and subject to the terms of the Agreement and (b) adopts the Agreement with the same ​ force and effect as if Holder were originally a party thereto. ​ ​ 1.3 Notice. Any notice required or permitted by the Agreementshall ​ be given to Holder at the address or facsimile number listed below Holder’s signature hereto. ​ ​ HOLDER ACCEPTED AND AGREED: ​ ​ By: JOUNCE THERAPEUTICS, INC. ​ Name and Title of Signatory ​ ​ Address: By: ​ ​ Title: ​ ​ Facsimile ​ Number: ​ ​ ​ ​ 32 ​ ​ NON-QUALIFIED STOCK OPTION GRANT NOTICE ​ UNDER THE JOUNCE THERAPEUTICS, INC. ​ 2013 STOCK OPTION AND GRANT PLAN ​ ​ Pursuant to the Jounce Therapeutics, Inc. 2013 Stock Option and Grant Plan (the “Plan”), ​ Jounce Therapeutics, Inc., a Delaware corporation (together with any successor, the ​ “Company”), has granted to the individual named below, an option (the “Stock Option”) to ​ purchase on or prior to the Expiration Date, or such earlier date as is specified herein, all or any ​ part of the number of shares of Common Stock, par value $0.001 per share (“Common Stock”), ​ of the Company indicated below (the “Shares”), at the Option Exercise Price per share, subject to ​ the terms and conditions set forth in this Non-Qualified Stock Option Grant Notice (the “Grant ​ Notice”), the attached Non-Qualified Stock Option Agreement (the “Agreement”) and the Plan. ​ This Stock Option is not intended to qualify as an “incentive stock option” as defined in ​ Section 422(b) of the Internal Revenue Code of 1986, as amended from time to time (the ​ “Code”). ​ ​ Name of Optionee: (the “Optionee”) ​ ​ No. of Shares: Shares of Common Stock ​ ​ Grant Date: ​ ​ Vesting Commencement Date: (the “Vesting Commencement Date”) ​ ​ Expiration Date: (the “Expiration Date”) ​ ​ Option Exercise Price/Share: $ (the “Option Exercise Price”) ​ ​ Vesting Schedule: twenty-five percent (25%) of the Shares shall vest and become ​exercisable on the first anniversary of the Vesting ​ Commencement Date; provided that the Optionee continues to ​ have a Service Relationship with the Company at such time. ​ Thereafter, the remaining seventy-five percent (75%) of the ​ Shares shall vest and become exercisable in twelve (12) equal ​ quarterly installments following the first anniversary of the ​ Vesting Commencement Date, provided the Optionee continues ​ to have a Service Relationship with the Company at such time. ​ Notwithstanding anything in the Agreement to the contrary, in ​ the case of a Sale Event, this Stock Option and the Shares shall ​ be treated as provided in Section 3(c) of the Plan [provided; ​ however INSERT ANY ACCELERATED VESTING ​ PROVISION HERE]. ​ ​ Attachments: Non-Qualified Stock Option Agreement, 2013 Stock Option and Grant Plan ​ ​ ​ 33 ​ ​ NON-QUALIFIED STOCK OPTION AGREEMENT ​ UNDER THE JOUNCE THERAPEUTICS, INC. ​ 2013 STOCK OPTION AND GRANT PLAN ​ ​ All capitalized terms used herein and not otherwise defined shall have the respective ​ meanings set forth in the Grant Notice and the Plan. ​ ​ 1. Vesting, Exercisability and Termination. ​ ​ (a) No portion of this Stock Option may be exercised until ​ such portion shall have vested and become exercisable. ​ ​ (b) Except as set forth below, and subject to the determination ​ of the Committee in its sole discretion to accelerate the vesting schedule hereunder, this Stock ​ Option shall be vested and exercisable on the respective dates indicated below: ​ ​ (i) This Stock Option shall initially be unvested and ​ unexercisable. ​ ​ (ii) This Stock Option shall vest and become ​ exercisable in accordance with the Vesting Schedule set forth in the Grant Notice. ​ ​ (c) Termination. Except as may otherwise be provided by the ​ Committee, if the Optionee’s Service Relationship is terminated, the period within which to ​ exercise this Stock Option will be subject to earlier termination as set forth below (and if not ​ exercised within such period, shall thereafter terminate subject, in each case, to Section 3(c) of ​ the Plan): ​ ​ (i) Termination Due to Death or Disability. If the ​ Optionee’s Service Relationship terminates by reason of such Optionee’s death or ​ Disability, this Stock Option may beexercised, to the extent exercisable on the date of ​ such termination, by the Optionee, the Optionee’s legal representative or legatee for a ​ period of twelve (12) months from the date of death or Disability or until the Expiration ​ Date, if earlier. ​ ​ (ii) Other Termination. If the Optionee’s Service ​ Relationship terminates for any reason other than death or Disability, and unless ​ otherwise determined by the Committee, this Stock Option may be exercised, to the ​ extent exercisable on the date of termination, for a period of ninety (90) days from the ​ date of termination or until the Expiration Date, if earlier; provided however, if the ​ Optionee’s Service Relationship is terminated for Cause, this Stock Option shall ​ terminate immediately upon the date of such termination. ​ ​ For purposes hereof, the Committee’s determination of the reason for termination of the ​ Optionee’s Service Relationship shall be conclusive and binding on the Optionee and his or her ​ ​ 34 ​ representatives or legatees and any Permitted Transferee. Any portion of this Stock Option that ​ is not vested and exercisable on the date of termination of the Service Relationship shall ​ terminate immediately and be null and void. ​ ​ 2. Exercise of Stock Option. ​ ​ (a) The Optionee may exercise this Stock Option only in the ​ following manner: Prior to the Expiration Date, the Optionee may deliver a Stock Option ​ exercise notice (an “Exercise Notice”) in the form of Appendix A hereto indicating his or her ​ election to purchase some or all of the Shares with respect to which this Stock Option is then ​ exercisable. Such notice shall specify the number of Shares to be purchased. Payment of the ​ purchase price may be made by one or more of the methods described in Section 5 of the Plan, ​ subject to the limitations contained in such Section of the Plan, including the requirement that the ​ Committee specifically approve in advance certain payment methods. ​ ​ (b) Notwithstanding any other provision hereof or of the Plan, ​ no portion of this Stock Option shall be exercisable after the Expiration Date. ​ 3. Incorporation of Plan. Notwithstanding anything herein to the ​ contrary, this Stock Option shall be subject to and governed by all the terms and conditions of ​ the Plan. ​ ​ 4. Transferability of Stock Option. This Stock Option is personal ​ to the Optionee and is not transferable by the Optionee in any mannerother than by will or by ​ the laws of descent and distribution. The Stock Option may be exercised during the Optionee’s ​ lifetime only by the Optionee (or by the Optionee’s guardian or personal representative in the ​ event of the Optionee’s incapacity). The Optionee may elect to designate a beneficiary by ​ providing written notice of the name of such beneficiary to the Company, and may revoke or ​ change such designation at any time by filing written notice of revocation or change with the ​ Company; such beneficiary may exercise the Optionee’s Stock Option in the event of the ​ Optionee’s death to the extent provided herein. If the Optionee does not designate a beneficiary, ​ or if the designated beneficiary predeceases the Optionee, the legal representative of the ​ Optionee may exercise this Stock Option to the extent provided herein in the event of the ​ Optionee’s death. ​ ​ 5. Restrictions on Transfer of Shares. The Shares acquired upon ​ exercise of the Stock Option shall be subject to certain transfer restrictions and other limitations ​ including, without limitation, the provisions contained in Section 9 of the Plan. ​ ​ 6. Miscellaneous Provisions. ​ ​ (a) Equitable Relief. The parties hereto agree and declare that ​ legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable ​ relief, including specific performance and injunctive relief, may be used toenforce the ​ provisions of this Agreement. ​ ​ ​ 35 ​ (b) Adjustments for Changes in Capital Structure. If, as a ​ result of any reorganization, recapitalization, reincorporation, reclassification, stock dividend, ​ stock split, reverse stock split or other similar change in the Common Stock, the outstanding ​ shares of Common Stock are increased or decreased or are exchanged for a different number or ​ kind of securities of the Company, the restrictions contained in this Agreement shall apply with ​ equal force to additional and/or substitute securities, if any, received by the Optionee in ​ exchange for, or by virtue of his or her ownership of, this Stock Option or Shares acquired ​ pursuant thereto. ​ ​ (c) Change and Modifications. This Agreement may not be ​ orally changed, modified or terminated, nor shall any oral waiver of any of its terms be ​ effective. This Agreement may be changed, modified or terminated only by an agreement in ​ writing signed by the Company and the Optionee. ​ ​ (d) Governing Law. This Agreement shall be governed by ​ and construed in accordance with the General Corporation Law of the State of Delaware as to ​ matters within the scope thereof, and as to all other matters shall be governed by and construed ​ in accordance with the internal laws of the Commonwealth of Massachusetts, without regard to ​ conflict of law principles that would result in the application of any law other than the law of the ​ Commonwealth ofMassachusetts. ​ ​ (e) Headings. The headings are intended only for ​ convenience in finding the subject matter and do not constitute part of the text of this Agreement ​ and shall not be considered in the interpretation of this Agreement. ​ ​ (f) Saving Clause. If any provision(s) of this Agreement ​ shall be determined to be illegal or unenforceable, such determination shall in no manner affect ​ the legality or enforceability of any other provision hereof. ​ ​ (g) Notices. All notices, requests, consents and other ​ communications shall be in writing and be deemed given when delivered personally, by telex or ​ facsimile transmission or when received if mailed by first class registered or certified mail, ​ postage prepaid. Notices to the Company or the Optionee shall be addressed as set forth ​ underneath their signatures below, or to such other address or addresses as may have been ​ furnished by such party in writing to the other. ​ ​ (h) Benefit and Binding Effect. This Agreement shall be ​ binding upon and shall inure to the benefit of the parties hereto, their respective successors, ​ assigns, and legal representatives. The Company has the right to assign this Agreement, and ​ such assignee shall become entitled to all the rights of the Company hereunder to the extent of ​ such assignment. ​ ​ (i) Counterparts. For the convenience of the parties and to ​ facilitate execution, this Agreement may beexecuted in two or more counterparts, each of which ​ shall be deemed an original, but all of which shall constitute one and the same document. ​ ​ ​ 36 ​ (j) Integration. This Agreement constitutes the entire ​ agreement between the parties with respect to this Stock Option and supersedes all prior ​ agreements and discussions between the parties concerning such subject matter. ​ ​ 7. Dispute Resolution. ​ ​ (a) Except as provided below, any dispute arising out of or ​ relating to the Plan or this Stock Option, this Agreement, or the breach, termination or validity of ​ the Plan, this Stock Option or this Agreement, shall be finally settled by binding arbitration ​ conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive Arbitration ​ Rules and Procedures (the “J.A.M.S. Rules”). The arbitration shall be governed by the United ​ States Arbitration Act, 9 U.S.C. Sections 1-16, and judgment upon the award rendered by the ​ arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration shall ​ be Boston, MA. ​ ​ (b) The arbitration shall commence within sixty (60) days of ​ the date on which a written demand for arbitration is filed by any party hereto. In connection ​ with the arbitration proceeding, the arbitrator shall have the power to order the production of ​ documents by each party and any third-party witnesses. In addition, each party may take up to ​ three depositions as of right, and the arbitrator may in his or her discretion allow additional ​ depositions upon good cause shown by the moving party. However, the arbitratorshall not have ​ the power to order the answering of interrogatories or the response to requests for admission. In ​ connection with any arbitration, each party to the arbitration shall provide to the other, no later ​ than seven business days before the date of the arbitration, the identity of all persons that may ​ testify at the arbitration and a copy of all documents that may be introduced at the arbitration or ​ considered or used by a party’s witness or expert. The arbitrator’s decision and award shall be ​ made and delivered within six months of the selection of the arbitrator. The arbitrator’s decision ​ shall set forth a reasoned basis for any award of damages or finding of liability. The arbitrator ​ shall not have power to award damages in excess of actual compensatory damages and shall not ​ multiply actual damages or award punitive damages, and each party hereby irrevocably waives ​ any claim to such damages. ​ ​ (c) The Company, the Optionee, each party to the Agreement ​ and any other holder of Shares issued pursuant to this Agreement (each, a “Party”) covenants and ​ agrees that such party will participate in the arbitration in good faith. This Section 7 applies ​ equally to requests for temporary, preliminary or permanent injunctive relief, except that in the ​ case of temporary or preliminary injunctive relief any party may proceed in court without prior ​ arbitration for the limited purpose of avoiding immediateand irreparable harm. ​ ​ (d) Each Party (i) hereby irrevocably submits to the ​ jurisdiction of any United States District Court of competent jurisdiction for the purpose of ​ enforcing the award or decision in any such proceeding, (ii) hereby waives, and agrees not to ​ assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any ​ claim that it is not subject personally to the jurisdiction of the above named courts, that its ​ property is exempt or immune from attachment or execution (except as protected by applicable ​ law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the ​ ​ 37 ​ suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not ​ be enforced in or by such court, and (iii) hereby waives and agrees not to seek any review by any ​ court of any other jurisdiction which may be called upon to grant an enforcement of the ​ judgment of any such court. Each Party hereby consents to service of process by registered mail ​ at the address to which notices are to be given. Each Party agrees that its, his or her submission ​ to jurisdiction and its, his or her consent to service of process by mail is made for the express ​ benefit of each other Party. Final judgment against any Party in any such action, suit or ​ proceeding may be enforced in other jurisdictions by suit, action or proceeding on the judgment, ​ or in any other manner provided by or pursuant to the laws of such other jurisdiction. ​ The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby ​ agreed to by the undersigned as of the date first above written. ​ ​ JOUNCE THERAPEUTICS, INC. ​ ​ ​ By: ​ Name: ​ Title: ​ ​ Address: ​ ​ ​ ​ ​ The undersigned hereby acknowledges receiving and reviewing a copy of the Plan, including, ​ without limitation, Section 9 thereof, and understands that this Stock Option is subject to the ​ terms of the Plan and of this Agreement. This Agreement is hereby accepted, and the terms and ​ conditions of the Plan, the GrantNotice and this Agreement, SPECIFICALLY INCLUDING ​ THE ARBITRATION PROVISIONS SET FORTH IN SECTION 7 OF THIS AGREEMENT, ​ are hereby agreed to, by the undersigned as of the date first above written. ​ ​ OPTIONEE: ​ ​ ​ ​ Name: ​ ​ Address: ​ ​ ​ ​ ​ ​ ​ ​ ​ 38 ​ [SPOUSE’S CONSENT(1) ​ I acknowledge that I have read the ​ foregoing Non-Qualified Stock Option Agreement ​ and understand the contents thereof. ​ ​ ] ​ DESIGNATED BENEFICIARY: ​ ​ ​ ​ ​ Beneficiary’s Address: ​ ​ ​ ​ ​ ​ (1) A spouse’s consent is recommended only if the Optionee’s state of residence is one of the following ​ community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, ​ Washington and Wisconsin. ​ ​ ​ 39 ​ ​ APPENDIX A ​ ​ STOCK OPTION EXERCISE NOTICE ​ ​ Jounce Therapeutics, Inc. ​ Attention: President ​ ​ ​ ​ Pursuant to the terms of the grant notice and stock option agreement between the ​ undersigned and Jounce Therapeutics, Inc. (the “Company”) dated (the “Agreement”) ​ under the Jounce Therapeutics, Inc. 2013 Stock Option and Grant Plan, I, [Insert Name] ​ , hereby [Circle One] partially/fully exercise such option by including herein payment ​ in the amount of $ representing the purchase price for [Fill in number of Shares] ​ Shares. I have chosen the following form(s) of payment: ​ ​ o 1. Cash ​ o 2. Certified or bank check payable to Jounce ​ Therapeutics, Inc. ​ o 3. Other (as referenced in the Agreement and ​ described in the Plan (please describe)) ​ ​ ​ In connection with my exercise of the option as set forth above, I hereby represent and ​ warrant to the Company as follows: ​ ​ (i) I am purchasing the Shares for my own account for investment ​ only, and not for resale or with a view to the distribution thereof. ​ ​ (ii) I have had such an opportunity as I have deemed adequate to ​ obtain from the Company such information as is necessary to permit me to evaluate the ​ merits and risks of my investment in the Company and have consulted with my own ​ advisers with respect to my investment in the Company. ​ ​ (iii) I have sufficient experience in business, financial and ​ investment matters to be able toevaluate the risks involved in the purchase of the Shares ​ and to make an informed investment decision with respect to such purchase. ​ ​ (iv) I can afford a complete loss of the value of the Shares and am ​ able to bear the economic risk of holding such Shares for an indefinite period of time. ​ ​ (v) I understand that the Shares may not be registered under the ​ Securities Act of 1933, as amended (it being understood that the Shares are being issued ​ and sold in reliance on the exemption provided in Rule 701 thereunder), or any applicable ​ state securities or “blue sky” laws and may not be sold or otherwise transferred or ​ ​ 40 ​ disposed of in the absence of an effective registration statement under the Securities Act ​ of 1933, as amended and under any applicable state securities or “blue sky” laws (or ​ exemptions from the registration requirement thereof). I further acknowledge that ​ certificates representing Shares will bear restrictive legends reflecting the foregoing ​ and/or that book entries for uncertificated Shares will include similar restrictive notations. ​ ​ (vi) I have read and understand the Plan and acknowledge and agree ​ that the Shares are subject to all of the relevant terms of the Plan, including without ​ limitation, the transfer restrictions set forth in Section 9 of the Plan. ​ ​ (vii) I understand and agree that the Company has a right of first ​ refusal with respect to the Shares pursuant to Section 9(b) of the Plan. ​ ​ (viii) I understand and agree that the Company has certain repurchase ​ rights with respect to the Shares pursuant to Section 9(c) of the Plan. ​ ​ (ix) I understand and agree that I may not sell or otherwise transfer ​ or dispose of the Shares for a period of time following the effective date of a public ​ offering by the Company as described in Section 9(f) of the Plan. ​ ​ (x) I understand and agree that I am subject to the Company’s drag-​ along right pursuant to Section 9(d) of the Plan. ​ ​ (xi) I understand and agree that if, as a result of the issuance of the ​ Shares to me hereunder, I will hold shares of capital stock constituting one percent (1%) ​ or more of theCompany’s then outstanding capital stock (treating for this purpose all ​ shares of Common Stock issuable upon exercise or conversion of outstanding options, ​ warrants or convertible securities, as if exercised and/or converted or exchanged), then, ​ as a condition to my receipt of the Shares, I am required to execute an adoption ​ agreement (substantially in the form attached hereto as Appendix B) to that certain ​ Stockholders Agreement, dated February 6, 2013, by and among the Company and the ​ stockholders listed as parties thereto, as the same may be amended and/or restated from ​ time to time (the “Stockholders Agreement”), as a Key Holder and Stockholder (as such ​ terms are defined in the Stockholders Agreement), and I shall thereby be bound by, and ​ subject to, all terms and provisions of the Stockholders Agreement applicable to a Key ​ Holder and Stockholder. ​ ​ Sincerely yours, ​ ​ Name: ​ ​ Address: ​ ​ ​ ​ ​ ​ 41 ​ APPENDIX B ​ ​ ADOPTION AGREEMENT ​ ​ This Adoption Agreement (“Adoption Agreement”) is executed on , 20 , by the ​ undersigned (the “Holder”) pursuant to the terms of that certain Stockholders Agreement dated ​ as of February 6, 2013 (the “Agreement”), by and among Jounce Therapeutics, Inc., a Delaware ​ corporation (the “Company”), and certain of its Stockholders, as such Agreement may be ​ amended or amended and restated hereafter. Capitalized terms used but not defined in this ​ Adoption Agreement shall have the respective meanings ascribed to such terms in the ​ Agreement. By the execution of this Adoption Agreement, the Holder agrees as follows: ​ ​ 1.1 Acknowledgment. Holder acknowledges that Holder is acquiring certain shares ​ of the capital stock of the Company (the “Stock”) in accordance with Section 8.2(b) of the ​ Agreement, as a new party who is not a new Investor, in which case Holder will be a “Key ​ Holder” and a “Stockholder” for all purposes of the Agreement. ​ ​ 1.2 Agreement. Holder hereby (a) agrees that the Stock, and any other shares of ​ capital stock or securities required by the Agreement to be bound thereby, shall be bound by and ​ subject to the terms of the Agreement and (b) adopts the Agreement with the same force and ​ effect as if Holder were originally a party thereto. ​ ​ 1.3 Notice. Any notice required or permitted by the Agreementshall be given to ​ Holder at the address or facsimile number listed below Holder’s signature hereto. ​ ​ HOLDER ACCEPTED AND AGREED: ​ ​ By: JOUNCE THERAPEUTICS, INC. ​ Name and Title of Signatory ​ ​ Address: By: ​ ​ Title: ​ ​ Facsimile ​ Number: ​ ​ ​ ​ 42 ​ ​ RESTRICTED STOCK AWARD NOTICE ​ UNDER THE JOUNCE THERAPEUTICS, INC. ​ 2013 STOCK OPTION AND GRANT PLAN ​ ​ Pursuant to the Jounce Therapeutics, Inc. 2013 Stock Option and Grant Plan (the “Plan”), ​ Jounce Therapeutics, Inc., a Delaware corporation (together with any successor, the ​ “Company”), hereby grants, sells and issues to the individual named below, the Shares at the Per ​ Share Purchase Price, subject to the terms and conditions set forth in this Restricted Stock Award ​ Notice (the “Award Notice”), the attached Restricted Stock Agreement (the “Agreement”) and ​ the Plan. The Grantee agrees to the provisions set forth herein and acknowledges that each such ​ provision is a material condition of the Company’s agreement to issue and sell the Shares to him ​ or her. The Company hereby acknowledges receipt of $[ ] in full payment for the ​ Shares. All references to share prices and amounts herein shall be equitably adjusted to reflect ​ stock splits, stock dividends, recapitalizations, mergers, reorganizations and similar changes ​ affecting the capital stock of the Company, and any shares of capital stock of the Company ​ received on or in respect of Shares in connection with any such event (including any shares of ​ capital stock or any right, option or warrant to receive the same or any security convertible into ​ or exchangeable forany such shares or received upon conversion of any such shares) shall be ​ subject to this Agreement on the same basis and extent at the relevant time as the Shares in ​ respect of which they were issued, and shall be deemed Shares as if and to the same extent they ​ were issued at the date hereof. ​ ​ Name of Grantee: (the “Grantee”) ​ No. of Shares: Shares of Common Stock (the “Shares”) ​ Grant Date: , ​ Vesting Commencement ​ Date: ​ , (the “Vesting Commencement Date”) ​ Per Share Purchase Price: $ (the “Per Share Purchase Price”) ​ Vesting Schedule: Twenty-five percent (25%) of the Shares shall vest on the first ​ anniversary of the Vesting Commencement Date; provided that the ​ Grantee continues to have a Service Relationship with the Company ​ at such time. Thereafter, the remaining seventy-five (75%) of the ​ Shares shall vest in twelve (12) equal quarterly installments ​ following the first anniversary of the Vesting Commencement Date, ​ provided the Grantee continues to have a Service Relationship with ​ the Company at such time. Notwithstanding anything in the ​ Agreement to the contrary in the case of a Sale Event, the Shares of ​ Restricted Stock shall be treated as provided in Section 3(c) of the ​ Plan [provided; however INSERT ANY ACCELERATED ​ VESTING PROVISION HERE]. ​ ​ Attachments: Restricted Stock Agreement, 2013 Stock Option and Grant Plan ​ ​ ​ 43 ​ RESTRICTED STOCK AGREEMENT ​ UNDER THE JOUNCE THERAPEUTICS, INC. ​ 2013 STOCK OPTION AND GRANT PLAN ​ ​ All capitalized terms used herein and not otherwise defined shall have the respective ​ meanings set forth in the Award Notice and the Plan. ​ ​ 1. Purchase and Sale of Shares; Vesting; Investment Representations. ​ ​ (a) Purchase and Sale. The Company hereby sells to the Grantee, and the ​ Grantee hereby purchases from the Company, the number of Shares set forth in the Award ​ Notice for the Per Share Purchase Price. ​ ​ (b) Vesting. Initially, all of the Shares are non-transferable and subject to a ​ substantial risk of forfeiture and are Shares of Restricted Stock. The risk of forfeiture shall lapse ​ with respect to the Shares on the respective dates indicated on the Vesting Schedule set forth in ​ the Award Notice. ​ ​ (c) Investment Representations. In connection with the purchase and sale of ​ the Shares contemplated by Section 1(a) above, the Grantee hereby represents and warrants to ​ the Company as follows: ​ ​ (i) The Grantee is purchasing the Shares for the Grantee’s own ​ account for investment only, and not for resale or with a view to the distribution thereof. ​ ​ (ii) The Grantee has had such an opportunity as he or she has ​ deemed adequate to obtain from the Company such information as is necessary to permit ​ him or her to evaluate the merits and risksof the Grantee’s investment in the Company ​ and has consulted with the Grantee’s own advisers with respect to the Grantee’s ​ investment in the Company. ​ ​ (iii) The Grantee has sufficient experience in business, financial and ​ investment matters to be able to evaluate the risks involved in the purchase of the Shares ​ and to make an informed investment decision with respect to such purchase. ​ ​ (iv) The Grantee can afford a complete loss of the value of the ​ Shares and is able to bear the economic risk of holding such Shares for an indefinite ​ period. ​ ​ (v) The Grantee understands that the Shares are not registered under ​ the Act (it being understood that the Shares are being issued and sold in reliance on the ​ exemption provided in Rule 701 thereunder) or any applicable state securities or “blue ​ sky” laws and may not be sold or otherwise transferred or disposed of in the absence of ​ an effective registration statement under the Act and under any applicable state securities ​ or “blue sky” laws (or exemptions from the registration requirements thereof). The ​ Grantee further acknowledges that certificates representing the Shares will bear ​ ​ 44 ​ restrictive legends reflecting the foregoing and/or that book entries for uncertificated ​ Shares will include similar restrictive notations. ​ ​ (vi) The Grantee has read and understands the Plan and ​ acknowledges and agrees that the Shares are subject to all of the relevant terms of the ​ Plan, including without limitation, the transfer restrictions set forth in Section 9 of the ​ Plan. ​ ​ (vii) The Grantee understands and agrees that the Company has a ​ right of first refusal with respect to the Shares pursuant to Section 9(b) of the Plan. ​ ​ (viii) The Grantee understands and agrees that the Company has ​ certain repurchase rights with respect to the Shares pursuant to Section 9(c) of the Plan. ​ ​ (ix) The Grantee understands and agrees that the Company has ​ certain drag-along rights with respect to the Shares pursuant to Section 9(d) of the Plan. ​ ​ (x) The Grantee understands and agrees that the Grantee may not ​ sell or otherwise transfer or dispose of the Shares for a period of time following the ​ effective date of a public offering by the Company as described in Section 9(f) of the ​ Plan. ​ ​ 2. Repurchase Right. Upon a Termination Event, the Company shall have the ​ right to repurchase Shares of Restricted Stock that are unvested as of the date of such ​ Termination Event as set forth in Section 9(c) of the Plan. ​ ​ 3. Restrictions on Transfer of Shares. The Shares (whether or not vested) shall be ​ subject to certain transferrestrictions and other limitations including, without limitation, the ​ provisions contained in Section 9 of the Plan ​ ​ 4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this ​ Restricted Stock Award shall be subject to and governed by all the terms and conditions of the ​ Plan. ​ ​ 5. Miscellaneous Provisions. ​ ​ (a) Record Owner; Dividends. The Grantee and any Permitted Transferees, ​ during the duration of this Agreement, shall be considered the record owners of and shall be ​ entitled to vote the Shares if and to the extent the Shares are entitled to voting rights. The ​ Grantee and any Permitted Transferees shall be entitled to receive all dividends and any other ​ distributions declared on the Shares; provided, however, that the Company is under no duty to ​ declare any such dividends or to make any such distribution. ​ ​ (b) Section 83(b) Election. The Grantee shall consult with the Grantee’s tax ​ advisor to determine whether it would be appropriate for the Grantee to make an election under ​ Section 83(b) of the Code with respect to this Award. Any such election must be filed with the ​ ​ 45 ​ Internal Revenue Service within thirty (30) days of the date of this Award. If the Grantee makes ​ an election under Section 83(b) of the Code, the Grantee shall give prompt notice to the ​ Company (and provide a copy of such election to the Company). A form of ​ Section 83(b) Election is attached hereto as Exhibit A. ​ ​ (c) Equitable Relief. The parties hereto agree and declare that legal ​ remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, ​ including specific performance and injunctive relief, may be used to enforce the provisions of ​ this Agreement. ​ ​ (d) Change and Modifications. This Agreement may not be orally changed, ​ modified or terminated, nor shall any oral waiver of any of its terms be effective. This ​ Agreement may be changed, modified or terminated only by an agreement in writing signed by ​ the Company and the Grantee. ​ ​ (e) Governing Law. This Agreement shall be governed by and construed in ​ accordance with the General Corporation Law of the State of Delaware as to matters within the ​ scope thereof, and as to all other matters shall be governed by and construed in accordance with ​ the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law ​ principles that would result in the application of any law other than the law of the ​ Commonwealth of Massachusetts. ​ ​ (f) Headings. The headings areintended only for convenience in finding ​ the subject matter and do not constitute part of the text of this Agreement and shall not be ​ considered in the interpretation of this Agreement. ​ ​ (g) Saving Clause. If any provision(s) of this Agreement shall be ​ determined to be illegal or unenforceable, such determination shall in no manner affect the ​ legality or enforceability of any other provision hereof. ​ ​ (h) Notices. All notices, requests, consents and other communications shall ​ be in writing and be deemed given when delivered personally, by telex or facsimile transmission ​ or when received if mailed by first class registered or certified mail, postage prepaid. Notices to ​ the Company or the Grantee shall be addressed as set forth underneath their signatures below, or ​ to such other address or addresses as may have been furnished by such party in writing to the ​ other. ​ ​ (i) Benefit and Binding Effect. This Agreement shall be binding upon and ​ shall inure to the benefit of the parties hereto, their respective successors, assigns, and legal ​ representatives. The Company has the right to assign this Agreement, and such assignee shall ​ become entitled to all the rights of the Company hereunder to the extent of such assignment. ​ ​ (j) Counterparts. For the convenience of the parties and to facilitate ​ execution, this Agreement may be executed in two or more counterparts, each of which shall be ​deemed an original, but all of which shall constitute one and the same document. ​ ​ ​ 46 ​ (k) Integration. This Agreement constitutes the entire agreement between ​ the parties with respect to this Award and supersedes all prior agreements and discussions ​ between the parties concerning such subject matter. ​ ​ 6. Dispute Resolution. ​ ​ (a) Except as provided below, any dispute arising out of or relating to the ​ Plan or the Shares, this Agreement, or the breach, termination or validity of the Plan, the Shares ​ or this Agreement, shall be finally settled by binding arbitration conducted expeditiously in ​ accordance with the J.A.M.S./Endispute Comprehensive Arbitration Rules and Procedures (the ​ “J.A.M.S. Rules”). The arbitration shall be governed by the United States Arbitration Act, 9 ​ U.S.C. Sections 1-16, and judgment upon the award rendered by the arbitrators may be entered ​ by any court having jurisdiction thereof. The place of arbitration shall be Boston, Massachusetts. ​ ​ (b) The arbitration shall commence within sixty (60) days of the date on ​ which a written demand for arbitration is filed by any party hereto. In connection with the ​ arbitration proceeding, the arbitrator shall have the power to order the production of documents ​ by each party and any third-party witnesses. In addition, each party may take up to three ​ (3) depositions as of right, and the arbitrator may in his or her discretion allow additional ​ depositions upon good cause shown by the moving party. However, the arbitratorshall not have ​ the power to order the answering of interrogatories or the response to requests for admission. In ​ connection with any arbitration, each party to the arbitration shall provide to the other, no later ​ than seven (7) business days before the date of the arbitration, the identity of all persons that may ​ testify at the arbitration and a copy of all documents that may be introduced at the arbitration or ​ considered or used by a party’s witness or expert. The arbitrator’s decision and award shall be ​ made and delivered within six (6) months of the selection of the arbitrator. The arbitrator’s ​ decision shall set forth a reasoned basis for any award of damages or finding of liability. The ​ arbitrator shall not have power to award damages in excess of actual compensatory damages and ​ shall not multiply actual damages or award punitive damages, and each party hereby irrevocably ​ waives any claim to such damages. ​ ​ (c) The Company, the Grantee, each party to the Agreement and any other ​ holder of Shares issued pursuant to this Agreement (each, a “Party”) covenants and agrees that ​ such party will participate in the arbitration in good faith. This Section 6 applies equally to ​ requests for temporary, preliminary or permanent injunctive relief, except that in the case of ​ temporary or preliminary injunctive relief any party may proceed in court without prior ​ arbitration for the limited purpose of avoiding immediateand irreparable harm. ​ ​ (d) Each Party (i) hereby irrevocably submits to the jurisdiction of any ​ United States District Court of competent jurisdiction for the purpose of enforcing the award or ​ decision in any such proceeding, (ii) hereby waives, and agrees not to assert, by way of motion, ​ as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject ​ personally to the jurisdiction of the above named courts, that its property is exempt or immune ​ from attachment or execution (except as protected by applicable law), that the suit, action or ​ proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding ​ is improper or that this Agreement or the subject matter hereof may not be enforced in or by such ​ ​ 47 ​ court, and (iii) hereby waives and agrees not to seek any review by any court of any other ​ jurisdiction which may be called upon to grant an enforcement of the judgment of any such ​ court. Each Party hereby consents to service of process by registered mail at the address to which ​ notices are to be given. Each Party agrees that its, his or her submission to jurisdiction and its, ​ his or her consent to service of process by mail is made for the express benefit of each other ​ Party. Final judgment against any Party in any such action, suit or proceeding may be enforced in ​ other jurisdictions by suit, action or proceeding on the judgment, or in any other manner ​ provided by or pursuant to the laws of such other jurisdiction. ​ ​ 7. Stockholders Agreement. The Grantee understands and agrees that if, as a ​ result of the issuance of the Shares to the Grantee hereunder, the Grantee will hold shares of ​ capital stock constituting one percent (1%) or more of the Company’s then outstanding capital ​ stock (treating for this purpose all shares of Common Stock issuable upon exercise or conversion ​ of outstanding options, warrants or convertible securities, as if exercised and/or converted or ​ exchanged), then, as a condition to Grantee’s receipt of the Shares, Grantee is required to execute ​ an adoption agreement (substantially in the form attached hereto as Exhibit B) to that certain ​Stockholders Agreement, dated February 6, 2013, by and among the Company and the ​ stockholders listed as parties thereto, as the same may be amended and/or restated from time to ​ time (the “Stockholders Agreement”), as a Key Holder and Stockholder (as such terms are ​ defined in the Stockholders Agreement), and the Grantee shall thereby be bound by, and subject ​ to, all terms and provisions of the Stockholders Agreement applicable to a Key Holder and ​ Stockholder. ​ ​ [SIGNATURE PAGE FOLLOWS] ​ ​ ​ 48 ​ ​ The foregoing Restricted Stock Agreement is hereby accepted and the terms and ​ conditions thereof are hereby agreed to by the undersigned as of the date first above written. ​ ​ JOUNCE THERAPUETICS, INC. ​ ​ ​ By: ​ Name: ​ Title: ​ ​ Address: ​ ​ ​ ​ ​ ​ ​ ​ The undersigned hereby acknowledges receiving and reviewing a copy of the Plan, including, ​ without limitation, Section 9 thereof and understands that the Shares granted hereby are subject ​ to the terms of the Plan and of this Agreement. This Agreement is hereby accepted, and the terms ​ and conditions of the Plan, the Award Notice and this Agreement, SPECIFICALLY ​ INCLUDING THE ARBITRATION PROVISIONS SET FORTH IN SECTION 6 OF THIS ​ AGREEMENT, are hereby agreed to, by the undersigned as of the date first above written. ​ ​ GRANTEE: ​ ​ ​ Name: ​ ​ Address: ​ ​ ​ ​ ​ [SPOUSE’S CONSENT(1) ​ I acknowledge that I have read the ​ foregoing Restricted Stock Agreement ​ and understand the contents thereof. ​ ​ ​ ​ ] ​ (1) A spouse’s consent is required only if the Grantee’s state of residence is one of the ​ following community property states: Arizona, California, Idaho, Louisiana, New ​ Mexico, Nevada, Texas, Washington and Wisconsin. ​ ​ 49 ​ EXHIBIT A ​ SECTION 83(B) ELECTION ​ (See Attached) ​ ​ ** Note: The 83(b) Election must be filed no later than thirty (30) days after the date on which ​ the property is transferred. The IRS has indicated that the election form should be sent to the IRS ​ address listed for the taxpayer’s state under “Are you not including a check or money order ...” ​ given in Where Do You File in the Instructions for Form 1040 and the Instructions for ​ Form 1040A (this information can also be found by clicking on your state at: ​ http://www.irs.gov/file/content/0,,id=105690,00.html) ** ​ ​ SECTION 83(B) ELECTION ​ ​ The undersigned hereby elects pursuant to §83(b) of the Internal Revenue Code of 1986, ​ as amended, to include in gross income as compensation for services the excess (if any) of the ​ fair market value of the shares described below over the amount paid for those shares. ​ ​ 1. The name, taxpayer identification number, address of the undersigned, ​ and the taxable year for which this election is being made are: ​ ​ Taxpayer’s Name: ​ ​ Taxpayer’s Social Security Number: ​ ​ Address: ​ ​ ​ Taxable Year: Calendar Year 201 ​ ​ 2. The property which is the subject of this election is shares ​ of common stock of Jounce Therapeutics, Inc. ​ ​ 3. The property was transferred to the undersigned on ​ , 201 . ​ ​ The property is subject to the following restrictions: ​ ​ The Shares will be subject to restrictions on transfer and risk of forfeitureupon ​ termination of service relationship and in certain other events ​ ​ 4. The fair market value of the property at time of transfer (determined ​ without regard to any restrictions other than nonlapse restrictions as defined in §1.83-​ 3(h) of the Income Tax Regulations) is $ per share x shares = ​ $ . ​ ​ ​ 50 ​ 5. For the property transferred, the undersigned paid $ per share ​ x shares = $ . ​ ​ 6. The amount to include in gross income is $ . ​ ​ The undersigned taxpayer will file this election with the Internal Revenue Service Office with ​ which the taxpayer files his or her annual income tax return not later than thirty (30) days after ​ the date of transfer of the property. A copy of the election will also be furnished to the person for ​ whom the services were performed. Additionally, the undersigned will include a copy of the ​ election with his or her income tax return for the taxable year in which the property is ​ transferred. The undersigned is the person performing services in connection with which the ​ property was transferred. ​ ​ Dated: , 201 ​ Taxpayer ​ ​ ​ 51 ​ EXHIBIT B ​ ADOPTION AGREEMENT ​ ​ This Adoption Agreement (“Adoption Agreement”) is executed on , ​ 20 , by the undersigned (the “Holder”) pursuant to the terms of that certain Stockholders ​ Agreement dated as of February 6, 2013 (the “Agreement”), by and among Jounce ​ Therapeutics, Inc., a Delaware corporation (the “Company”), and certain of its Stockholders, as ​ such Agreement may be amended or amended and restated hereafter. Capitalized terms used but ​ not defined in this Adoption Agreement shall have the respective meanings ascribed to such ​ terms in the Agreement. By the execution of this Adoption Agreement, the Holder agrees as ​ follows: ​ ​ 1.1 Acknowledgment. Holder acknowledges that Holder is acquiring certain shares ​ of the capital stock of the Company (the “Stock”) in accordance with Section 8.2(b) of the ​ Agreement, as a new party who is not a new Investor, in which case Holder will be a “Key ​ Holder” and a “Stockholder” for all purposes of the Agreement. ​ ​ 1.2 Agreement. Holder hereby (a) agrees that the Stock, and any other shares of ​ capital stock or securities required by the Agreement to be bound thereby, shall be bound by and ​ subject to the terms of the Agreement and (b) adopts the Agreement with the same force and ​ effect as if Holder were originally a party thereto. ​ ​ 1.3 Notice. Any notice required or permitted by the Agreement shallbe given to ​ Holder at the address or facsimile number listed below Holder’s signature hereto. ​ ​ HOLDER ACCEPTED AND AGREED: ​ ​ By: JOUNCE THERAPEUTICS, INC. ​ Name and Title of Signatory ​ ​ Address: By: ​ ​ Title: ​ ​ Facsimile ​ Number: ​ ​ ​ ​ EMPLOYMENT AGREEMENT ​ This Employment Agreement ("Agreement") is made as of the 24th day of July, 2017 ​ by and between Jounce Therapeutics, Inc. (the "Company"), and Hugh M. Cole (the ​ "Executive"). The effective date of this Agreement shall be first date of actual employment ​ with the Company. In the event that the Executive does not commence actual employment ​ with the Company, this Agreement shall become null and void and ofno further force or ​ effect. ​ 1. Employment Term. The Company and the Executive desire to continue their​ employment relationship, pursuant to this Agreement commencing as of the date hereof and ​ continuing in effect until terminated by either party in accordance with this Agreement ( the ​ "Term"). The Executive's employment with the Company will continue to be "at will," meaning ​ that the Executive's employment may be terminated by the Company or the Executive at any ​ time and for any reason subject to the terms of this Agreement. If the Executive's employment ​ with the Company is terminated for any reason during the Term, th� Company shall pay or ​ provide to the Executive (or to the Executive's authorized representative or estate) any earned ​ but unpaid base salary, unpaid expense reimbursements, accrued but unused PTO (as defined ​ below) and any vested benefits the Executive may have under anyemployee benefit plan of the ​ Company (the "Accrued Benefit"). ​ 2. Duties. The Executive will have such powers and duties as may from time to​ time be prescribed by the executive to whom the Executive reports or the Board of Directors of ​ the Company (the "Board"). The Executive shall devote the Executive's full working time and ​ efforts to the business and affairs of the Company and will not engage in outside business ​ activities, including outside board work, without the prior consent of the Board or the Chief ​ Executive Officer of the Company. Notwithstanding the foregoing, the Executive may engage in ​ religious, charitable or other community activities as long as such services and activities do not ​ interfere with the Executive's performance of Executive's duties to the Company. ​ 3. Compensation and Related Matters.​ (a) Base Salary. During the Term, the Executive's annual base salary will be​ $385,000, subject to redetermination by the Board. The annual base salary in effect at any ​ given time is referred to herein as "Base Salary." The Base Salary will be payable in a manner ​ that is consistent with the Company's usual payroll practices for senior executives. ​ (b) Starting Bonus. The Executive will receive a one-time starting bonus of​ $50,000, subject to legally required tax withholdings. Should the Executive be terminated for ​ Cause or resign voluntarily within the first twelve(12) months of his employment, Executive ​ will be required to repay the full amount of such starting bonus, provided that Executive will ​ not be required to repay such starting bonus if the Executive resigns for Good Reason as set ​ forth in this Section 4(b)(ii). ​ (c) Bonus. During the Term, the Executive will be eligible to be considered​ for annual cash bonus as determined by the Board or the Compensation Committee of the ​ Exhibit 10.8​ ​ Board (the "Compensation Committee") from time to time (the "Bonus"), with the actual ​ amount of the Bonus, if any, determined based upon the Board or the Compensation ​ Committee’s assessment of achievement of certain pre-determined performance goals. The ​ Executive’s initial annual target Bonus is 35% of the Base Salary, and such percentage is ​ subject to review and redetermination by the Board or the Compensation Committee (the ​ "Target Bonus Percentage"). The Executive’s Bonus, if any, will be paid by March 15 ​ following the applicable Bonus year. To earn a Bonus, the Executive must be employed by the ​ Company on the day such Bonus is paid. ​ (d) PTO: During the Term, the Executive is eligible to earn paid-time-off ​ ("PTO"), to be accrued on a pro rata basis and subject to the terms and conditions of the ​ Company’s policies and procedures relating to PTO. ​ (e) Other Benefits. During the Term, the Executive will be entitled to ​ continue to participate in the Company’s employee benefit plans, subject to the terms and the ​ conditions of such plans and to the Company’s ability to amend and modify such plans. ​ (f) Equity. The Executive’s equity compensation shall be governed by the ​ terms and conditions of the applicable Company equity incentive plan, as may be amended, ​ and the applicable stock option and/or restricted stock agreementsassociated with any grants ​ made to the Executive (collectively the "Equity Documents"). Provided, and notwithstanding ​ anything to the contrary in the Equity Documents, Section 5 of this Agreement shall apply in ​ the event of a Terminating Event within a Sale Event Period. ​ (g) Reimbursement of Business Expenses. The Company shall reimburse the ​ Executive​ for travel, entertainment, business development and other expenses reasonably and ​ necessarily incurred by the Executive in connection with the Company’s business. Expense ​ reimbursement shall be subject to such policies the Company may adopt from time to time, ​ included with respect to pre-approval. ​ (h) Repayment Obligation. In the event that the Executive resigns from ​ employment without Good Reason at any time prior to the one year anniversary of the ​ Executive’s original start date, the Executive shall be required to repay the Company any ​ amount of the starting and relocation bonus that the Company provided to the Executive. ​ 4. Certain Definitions. ​ (a) Sale Event: (i) the sale of all or substantially all of the assets of the ​ Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization ​ or consolidation pursuant to which the holders of the Company’s outstanding voting power ​ immediately prior to such transaction do not own a majority of the outstandingvoting power of ​ the surviving or resulting entity (or its ultimate parent, if applicable), (iii) the acquisition of all ​ or a majority of the outstanding voting stock of the Company in a single transaction or a series ​ of related transactions by a person or entity or group of persons and/or entities, or (iv) any ​ other acquisition of the business of the Company, as determined by the Board; provided, ​ however, that the Company’s initial public offering, any subsequent public offering or any ​ ​ other capital raising event, public or private, or a merger effected solely to change the ​ Company’s domicile shall not constitute a "Sale Event." ​ (b) Terminating Event. (i) termination by the Company other than for Cause ​ at any time; or (ii) termination by the Executive for Good Reason on or within the 12 month ​ period commencing with a Sale Event (such 12-month period, the "Sale Event Period") both as ​ set forth in this Section 4(b): ​ (i) Termination by the Company Other Than For Cause. Termination ​ by the Company of the Executive’s employment for any reason other than for Cause, ​ death or Disability. For purposes of this Agreement, "Cause" shall mean that the ​ Company has complied with the "Cause Process" (hereinafter defined) following, the ​ occurrence of any of the following events: ​ (A) Executive’s material breach of this Agreement or any other ​ agreement between the Company and Executive (including the Restrictive ​ Covenants (as defined below)); ​ (B) Executive’s material failure to adhere to any written policy ​ of the Company generally applicable to employees of the Company related ​ to conduct or ethics; ​ (C) Executive’s appropriation (or attempted appropriation) of a ​ business opportunity of the Company, including attempting to secure or ​ securing any personal profit in connection with any transaction entered ​ into on behalf of the Company; ​ (D) Executive’s commission of an actconstituting fraud, ​ embezzlement, breach of any fiduciary duty owed to the Company or its ​ stockholders or other dishonesty with respect to the Company; ​ (E) Executive’s willful misconduct or continued and willful ​ failure or refusal to perform any material duties reasonably requested by ​ the Board or the executive of the Company to whom Executive reports; ​ (F) Executive’s engaging in gross negligence or willful ​ misconduct in the performance of Executive’s duties for the Company. ​ "Cause Process" shall mean that (i) the Company reasonably determines, in good ​ faith, that one of the Causes has occurred; (ii) the Company notifies the Executive in ​ writing of the first occurrence of the Cause within 30 days of the Board becoming aware ​ of such condition; (iii) the Company cooperates in good faith with the Executive’s ​ efforts, for a period​ of not less than seven days following such notice (the "Cause Cure ​ Period"), to remedy the Cause; (iv) notwithstanding such efforts, the Cause continues to ​ exist; and (v) the Company terminates the Executive’s employment within 30 days after ​ the end of the Cause Cure Period, provided that the Company will not be required to ​ provide a Cause Cure Period in the event that a Cause​ (x) is incapable of being cured; or ​ (y) is required to be publicly disclosed under applicable securities law. If the Executive ​ 3 ​ ​ cures all of the applicable Cause(s) during the applicable Cause Cure Period, Cause shall ​ be deemed not to have occurred. If the Company is not required to provide a Cause Cure ​ Period, the Cause Process will be satisfied if the Company notifies the Executive in ​ writing of the first occurrence of the Cause within 30 days of the Board becoming aware ​ of such condition​ and terminates the Executive’s employment within 30 days of such ​ notice. ​ (ii) Termination by the Executive for Good Reason within the Sale ​ Event Period. Termination by the Executive of the Executive’s employment with the ​ Company for Good Reason​ within the Sale Event Period. For purposes of this ​ Agreement, "Good Reason" shall mean that the Executive has complied with the "Good ​ Reason Process" (hereinafter defined) following, the occurrence of any of the following ​ events: ​ (A) a demotion in title or any material diminution in the ​ Executive’s position, responsibilities, authority or duties; ​ (3)​ ​ a material diminution in the Executive’s base salary; or ​ (C) a thirty (30) mile change in the geographic location at ​ which the Executive is required to provides services to the Company, not including ​ business travel and short-term assignments. ​ "Good Reason Process" shall mean that (i) the Executive reasonably determines in good ​ faith that a "Good Reason" condition has occurred; (ii) the Executive notifies theCompany in ​ writing of the first occurrence of the Good Reason condition within 60 days of the first ​ occurrence of such condition; (iii) the Executive cooperates in good faith with the Company’s ​ efforts, for a period not less than 30 days following such notice (the "Cure Period"), to remedy ​ the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; ​ and (v) the Executive terminates Executive’s employment within 60 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. ​ A Terminating Event shall not be deemed to have occurred pursuant to this Section 4(b) ​ as a result of: (i) the ending of the Executive’s employment due to the Executive’s death or ​ Disability, (ii) Executive’s resignation for any reason, other than for Good Reason within the ​ Sale Event Period, (iii) the Company’s termination of the employment relationship for Cause; or ​ (iv) solely as a result of the Executive being or becoming an employee of any direct or indirect ​ successor to the business or assets of the Company rather than continuing as an employee of the ​ Company following a Sale Event. For purposes hereof, the Executive will be considered ​ "Disabled" if, as a result of the Executive’s incapacity due to physical or mental illness, the ​ Executive shall have beenabsent from Executive’s duties to the Company on a full-time basis ​ for 180 calendar days in the aggregate in any 12-month period. ​ 5. Severance and Accelerated Vesting if a Terminating Event Occurs within the ​ Sale Event Period. In the event a Terminating Event occurs within the Sale Event Period, ​ subject to the Executive signing and complying with a separation agreement in a form and ​ 4 ​ ​ manner satisfactory to the Company containing, among other provisions, a general release of ​ claims in favor of the Company and related persons and entities, confidentiality, return of ​ property and non-disparagement and reaffirmation of the Restrictive Covenants (the "Separation ​ Agreement and Release") and the Separation Agreement and Release becoming irrevocable, all ​ within 60 days after the Date of Termination, the following shall occur: ​ (a) the Company shall pay to the Executive an amount equal to the sum of ​ (i) twelve months of the Executive’s Base Salary in effect immediately prior to the ​ Terminating Event (or the Executive’s Base Salary in effect immediately prior to the Sale ​ Event, if higher); and (ii) a Bonus for the year during which the Date of Termination occurs, ​ calculated by multiplying the Executive’s Target Bonus Percentage by twelve months of the ​ Executive’s Base Salary. ​ (b) if the Executive was participating in the Company’s group health plan ​ immediately prior to the Date of Termination and elects COBRA health continuation, then the ​ Company shall pay to the Executive a lump sum cash payment in an amount equal to the ​ monthly employer contribution that the Company would have made to provide health ​ insurance to the Executive if the Executive had remained employed by the Company for twelve ​ months after the Date of Termination; and ​ (c)all stock options and other stock-based awards held by the Executive with ​ time-based vesting shall immediately accelerate and become fully exercisable or nonforfeitable ​ as of the Date of Termination. ​ The amounts payable under Section 5(a) and (b), as applicable, shall be paid out in a lump sum ​ within 60 days after the Date of Termination; provided,​ however, that if the 60-day period begins ​ in one calendar year and ends in a second calendar year, the amounts shall be paid in the second​ ​ calendar year no later than the last day of the 60-day period. ​ 6. Severance if a Terminating Event Occurs Outside the Sale Event Period. In ​ the event a Terminating Event occurs at any time other than during the Sale Event Period, ​ subject to the Executive signing the Separation Agreement and Release and the Separation ​ Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination, ​ the following shall occur: ​ (a) the Company shall pay to the Executive an amount equal to nine months ​ of the Executive’s annual Base Salary in effect immediately prior to the Terminating Event; ​ (b) if the Executive was participating in the Company’s group health plan ​ immediately prior to the Date of Termination and elects COBRA health continuation, then the ​ Company shall pay to the Executive a monthly cash payment for nine months or the ​Executive’s COBRA health continuation period, whichever ends earlier, in an amount equal to ​ the monthly employer contribution that the Company would have made to provide health ​ insurance to the Executive if the Executive had remained employed by the Company. ​ The amounts payable under Section 6(a) and (b), as applicable, shall be paid out in substantially ​ equal installments in accordance with the Company’s payroll practice over nine months ​ commencing within 60 days after the Date of Termination; provided, however, that if the 60-day ​ 5 ​ ​ period begins in one calendar year and ends in a second calendar year, the amounts payable shall ​ begin to be paid in the second calendar year by the last day of such 60-day period; provided, ​ further, that the initial payment shall include a catch-up payment to cover amounts retroactive to ​ the day immediately following the Date of Termination. Each payment pursuant to this ​ Agreement is intended to constitute a separate payment for purposes of Treasury Regulation ​ Section 1.409A-2(b)(2). ​ 7. Restrictive Covenants. The terms of the Employee Non-Competition, Non-​ Solicitation, Confidentiality and Assignment Agreement dated July 21, 2017 (the "Restrictive ​ Covenants"), appended hereto as Exhibit A, continue to be in full force and effect and are ​ incorporated by reference in this Agreement. The Executive hereby reaffirms the Restrictive ​ Covenants as material terms of this Agreement. ​ (a) Third-Party Agreements and Rights. The Executive hereby confirms that ​ the Executive is not bound by the terms of any agreement with any previous employer or other ​ party which restricts in any way the Executive’s use or disclosure of information or the ​ Executive’s engagement in any business that would prevent Executive from entering into ​ employment with or carrying out his responsibilities for the Company, or which is in any way ​ inconsistent with the terms of thisAgreement_ The Executive represents to the Company that ​ the Executive’s execution of this Agreement, the Executive’s employment with the Company ​ and the performance of the Executive’s proposed duties for the Company will not violate any ​ obligations the Executive may have to any such previous employer or other party. In the ​ Executive’s work for the Company, the Executive will not disclose or make use of any ​ information in violation of any agreements with or rights of any such previous employer or other ​ party, and the Executive will not bring to the premises of the Company any copies or other ​ tangible embodiments of non-public information belonging to or obtained from any such ​ previous employment or other party. ​ (b) Litigation and Regulatory Cooperation. During and after the Executive’s ​ employment, the Executive shall cooperate fully with the Company in the defense or prosecution ​ of any claims or actions now in existence or which may be brought in the future against or on ​ behalf of the Company which relate to events or occurrences that transpired while the Executive ​ was employed by the Company. The Executive’s full cooperation in connection with such ​ claims or actions shall include, but not be limited to, being available to meet with counsel to ​ prepare for discovery or trial and to act as a witness on behalf of the Company atmutually ​ convenient times. During and after the Executive’s employment, the Executive also shall ​ cooperate fully with the Company in connection with any investigation or review of any federal, ​ state or local regulatory authority as any such investigation or review relates to events or ​ occurrences that transpired while the Executive was employed by the Company. The Company ​ shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection ​ with the Executive’s performance of obligations pursuant to this Section 7(b). ​ (c) Relief. The Executive agrees that it would be difficult to measure any ​ damages caused to the Company which might result from any breach by the Executive of the ​ promises set forth in this Section 7, and that in any event money damages would be an ​ inadequate remedy for any such breach. Accordingly, the Executive agrees that if the Executive ​ breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in ​ 6 ​ ​ addition to all other remedies that it may have, to an injunction or other appropriate equitable ​ relief to restrain any such breach without showing or proving any actual damage to the ​ Company. In addition, in the event the Executive breaches the Restrictive Covenants during a ​ period when the Executive is receiving Severance, the Company shall have the right to suspend ​ or terminate the Severance. Such suspension or termination shall not limit the Company’s other ​ options with respect to relief for such breach and shall not relieve the Executive of Executive’s ​ duties under this Agreement. ​ (d) Protected Disclosures The Executive​ ​ understands that nothing contained ​ in this Agreement or the Restrictive Covenants limits the Executive’s ability to communicate ​ with any federal, state or local governmental agency or commission, including to provide ​ documents or other information, without notice to the Company. ​ 8. Additional Limitation. ​ (a) Anything in this Agreement to the contrary notwithstanding, in the event ​ that the amount of any compensation, payment or distribution by the Company to or for the ​ benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the ​ terms of this Agreement or otherwise, calculated in a manner consistent with Section 2800 of ​ the Code and the applicable regulations thereunder (the "Severance Payments"), wouldbe ​ subject to the excise tax imposed by Section 4999 of the Code, the following provisions shall ​ apply: ​ (i) If the Severance Payments, reduced by the sum of (A) the Excise ​ Tax and (B) the total of the federal, state, and local income and employment taxes ​ payable by the Executive on the amount of the Severance Payments which are in excess ​ of the Threshold Amount, are greater than or equal to the Threshold Amount, the ​ Executive shall be entitled to the full amount of Severance Payments. ​ (ii) If the Threshold Amount is less than (x) the Severance Payments, ​ but greater than (y) the Severance Payments reduced by the sum of (A) the Excise Tax ​ and (B) the total of the federal, state, and local income and employment taxes on the ​ amount of the Severance Payments which are in excess of the Threshold Amount, then ​ the Severance Payments shall be reduced (but not below zero) to the extent necessary so ​ that the sum of all Severance Payments shall not exceed the Threshold Amount. In such ​ event, the Severance Payments shall be reduced in the following order: (1) cash ​ payments not subject to Section 409A of the Code; (2) cash payments subject to Section ​ 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of ​ benefits. To the extent any payment is to be made over time (e.g., in installments, etc.), ​then the payments shall be reduced in reverse chronological order. ​ (b) For the purposes of this Section 8, "Threshold Amount" shall mean three ​ times the Executive’s "base amount’ within the meaning of Section 280G(b)(3) of the Code ​ and the regulations promulgated thereunder less one dollar ($1.00); and "Excise Tax" shall ​ mean the excise tax imposed by Section 4999 of the Code, and any interest or penalties ​ incurred by the Executive with respect to such excise tax. ​ 7 ​ ​ (c) The determination as to which of the alternative provisions of Section 8(a) ​ above shall apply to the Executive shall be made by a nationally recognized accounting firm ​ selected by the Company (the "Accounting Firm"), which shall provide detailed supporting ​ calculations both to the Company and the Executive within 15 business days of the Date of ​ Termination, if applicable, or at such earlier time as is reasonably requested by the Company or ​ the Executive. For purposes of determining which of the alternative provisions of Section 8(a) ​ above shall apply, the Executive shall be deemed to pay federal income taxes at the highest ​ marginal rate of federal income taxation​ ​ applicable to individuals for the calendar year in ​ which the determination is to be made, and state and local income taxes at the highest marginal ​ rates of individual taxation in the state and locality of the Executive’s residence on the Date of ​ Termination, net of the maximum reduction in federal income taxes which could be obtained ​ from deduction of such state and local taxes. Any determination by the Accounting Firm shall ​ be binding upon the Company and the Executive. ​ 9. Section 409A. ​ (a) Anything in this Agreement to the contrary notwithstanding, if at the time ​ of the Executive’s "separation from service" within the meaning of Section 409A of the Code, ​ the Company determines​ that theExecutive is a "specified employee" within the meaning of ​ Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the ​ Executive becomes entitled to under this Agreement on account of the Executive’s​ separation ​ from service would be considered deferred compensation subject to the 20 percent additional ​ tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section ​ 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be ​ provided until the date that is the earlier of (A) six months and one day after the Executive’s ​ separation from service,​ or (B) the Executive’s death. ​ (b) The parties intend that this Agreement will be administered in accordance ​ with Section 409A of the Code. To the extent that any provision of this Agreement is ​ ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in ​ such a manner so that all payments hereunder comply with Section 409A of the Code. The ​ parties agree that this Agreement may be amended, as​ reasonably requested by either party, ​ and as may be necessary to fully comply with Section 409A of the Code and all related rules ​ and regulations in order to preserve the payments and benefits provided hereunder without ​ additional cost to either party. ​ (c) All in-kind benefits provided and expenseseligible for reimbursement ​ under this Agreement shall be provided by the Company or incurred by the Executive during ​ the time periods set forth in this Agreement. All reimbursements shall be paid as soon as ​ administratively practicable, but in no event shall any reimbursement be paid after the last day ​ of the taxable year following the taxable year in which the expense was incurred. The amount ​ of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not ​ affect the in-kind benefits to be provided or the expenses eligible for reimbursement​ in any ​ other taxable​ year. Such right to reimbursement or in-kind benefits is not subject to liquidation​ ​ or exchange for another benefit. ​ 8 ​ ​ (d) To the extent that any payment or benefit described in this Agreement ​ constitutes "non-qualified deferred compensation" under Section 409A of the Code, and to the ​ extent that such payment or benefit is payable upon the Executive’s termination of ​ employment, then such payments or benefits shall be payable only upon the Executive’s ​ "separation from service." The determination of whether and when a separation from service ​ has occurred shall be made in accordance with the presumptions set forth in Treasury ​ Regulation Section I .409A-1(h). ​ (e) The Company makes no representation or warranty and shall have no ​ liability to the Executive or any other person if any provisions of this Agreement are ​ determined to constitute deferred compensation subject to Section 409A of the Code but do not ​ satisfy an exemption from, or the conditions of, such Section. ​ 10. Withholding. All payments made by the Company to the Executive under this ​ Agreement shall be net of any tax or other amounts required to be withheld by the Company ​ under applicable​ law. ​ 11. Notice and Date of Termination. ​ (a) Notice of Termination. The Executive’s employment with the Company ​ may be terminated by the Company or the Executive at any time and for any reason. During ​ the Term, any termination of the Executive’s employment (other than by reason of death) shall ​ becommunicated by written Notice of Termination from one party hereto to the other party ​ hereto in accordance with this Section 11. For purposes of this Agreement, a "Notice of ​ Termination" shall mean a notice which shall indicate the specific termination provision in this ​ Agreement​ relied upon. ​ (b) Date of Termination. "Date of Termination" shall mean: (i) if the ​ Executive’s employment is terminated by Executive’s death, the date of Executive’s death; (ii) ​ if the Executive’s employment is terminated on account of Executive’s Disability or by the ​ Company for Cause or without Cause the date on which Notice of Termination is given; (iii) if ​ the Executive’s employment is terminated by the Executive for any reason except for Good ​ Reason during a Sale Event Period, 30 days after the date on which a Notice of Termination is ​ given, and (v) if the Executive’s employment is terminated by the Executive with Good Reason ​ within a Sale Event Period, the date on which a Notice of Termination is given after the end of ​ the Cure Period. Notwithstanding the foregoing, in the event that the Executive gives a Notice ​ of Termination to the Company, the Company may unilaterally accelerate the Date of ​ Termination and such acceleration shall not result in a termination by the Company for ​ purposes of this Agreement. ​ 12. No Mitigation. The Company agrees that, if the Executive’s employment by the ​ Company isterminated during the term of this Agreement, the Executive is not required to seek ​ other employment or to attempt in any way to reduce any amounts payable to the Executive by ​ the Company pursuant to Section 5 or Section 6 hereof. Further, the amount of any payment ​ provided for in this Agreement shall not be reduced by any compensation earned by the ​ Executive as the result of employment by another employer. ​ ​ 13. Consent to Jurisdiction. The parties hereby consent to the jurisdiction of the ​ state and federal court in the Commonwealth of Massachusetts. Accordingly, with respect to any ​ such court action, the Executive (a) submits to the personal jurisdiction of such courts; (b) ​ consents to service of process; and (c) waives any other requirement (whether imposed by ​ statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process. ​ 14. Integration. This Agreement constitutes the entire agreement​ between the parties ​ with respect to compensation,​ severance pay, benefits and accelerated vesting and supersedes in ​ all respects all prior agreements between the parties concerning such subject matter, including ​ without limitation any offer letter or employment agreement relating to the Executive’s ​ employment relationship​ with the Company. Provided, and notwithstanding the foregoing, the ​ Restrictive Covenants and any other agreement relating to confidentiality, noncompetition, ​ nonsolicitation or assignment of inventions shall not be superseded by this Agreement and the ​ Executive acknowledges and agrees that any such agreement shall​ remain in full force and effect. ​ 15. Successor to the Executive. This Agreement shall inure to the benefit of and be ​ enforceable by the Executive’s personal representatives,​ executors, administrators,heirs, ​ distributees, devisees and legatees. In the event of the Executive’s death after a Terminating ​ Event but prior to the completion by the Company of all payments due the Executive under this ​ Agreement,​ the Company shall continue​ such payments to the Executive’s beneficiary ​ designated in writing to the Company prior to Executive’s death (or to Executive’s estate, if the ​ Executive fails to make such designation). ​ 16. Enforceability. If any portion or provision of this Agreement (including, without ​ limitation, any portion or provision of any Section of this Agreement) shall to any extent be ​ declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this ​ Agreement, or the application of such portion or provision in circumstances other than those as ​ to which it is so declared illegal or unenforceable, shall not​ be affected thereby, and each portion ​ and provision of this Agreement​ shall be valid and enforceable to the fullest extent permitted by ​ law. ​ 17. Waiver. No waiver of any provision hereof shall be effective unless made in ​ writing and signed by the​ waiving party. The failure of any party to require the performance of ​ any term or obligation of this Agreement, or the waiver by any party of any breach of this ​ Agreement, shall not prevent any subsequent enforcement of such term or obligation or be ​ deemed a waiver of any subsequent breach. ​ 18.Notices. Any notices, requests, demands and other communications provided for ​ by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally​ ​ recognized overnight currier service of by​ registered or certified mail, postage prepaid, return ​ receipt requested, to the Executive at the last address the Executive has filed in writing with the ​ Company, or to the Company at its main office, attention of the Board. ​ 19. Amendment. This Agreement may​ be amended or modified only by a written ​ instrument​ signed by the Executive and by a duly authorized representative of the Company. ​ 10 ​ ​ 20. Effect on Other Plans and Agreements. An election by the Executive to resign ​ for Good Reason​ during a Sale Event Period under the provisions of this Agreement shall not be ​ deemed a voluntary termination of employment by the Executive for the purpose of interpreting ​ the provisions of any of the Company’s benefit plans, programs or policies. Nothing in this ​ Agreement shall be construed to limit the rights of the Executive under the Company’s benefit ​ plans, programs or policies except as otherwise provided in Section 7 hereof, and except that the ​ Executive shall have no rights to any severance benefits under any Company severance pay plan, ​ offer letter or otherwise. In the event that the Executive is party to an agreement​ with the ​ Company providing for payments or benefits under such agreement and this Agreement, the ​ terms of this Agreement shall govern and Executive may receive payment under this Agreement ​ only and not both. Further, Section 5 and Section 6 of this Agreement are mutually exclusive ​ and in no event shall Executive be entitled to payments or benefits pursuant to Section 5 and ​ Section 6 of this Agreement. ​ 21. Governing Law. This is a Massachusetts contract and shall be construed under ​ and be governed in all respects by the laws of the Commonwealth of Massachusetts, without ​ giving effect to the conflict oflaws principles. ​ 22. Successor to Company. The Company shall require any successor (whether ​ direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of ​ the business or assets of the Company expressly to assume and agree to perform this Agreement ​ to the same extent that the Company would be required to perform it if no succession had taken ​ place. Failure of the Company to obtain an assumption of this Agreement at or prior to the ​ effectiveness of any succession shall be a material breach of this Agreement. ​ 23. Gender Neutral. Wherever used herein, a pronoun in the masculine or feminine ​ gender shall be considered as including the opposite gender unless the context clearly indicates ​ otherwise.​ ​ 24. Counterparts. This Agreement may be executed in any number of counterparts, ​ each of which when so executed and delivered shall be taken to be an original; but such ​ counterparts shall together​ constitute one and the same document. ​ 11 ​ ​ IN WITNESS WHEREOF, the parties have executed this Agreement effective on this ​ date and year first written. ​ JOUNCE THERAPEUTICS, INC. ​ ​ By: /s/ Richard Murray ​ Name: Richard Murray ​ Title: President & Chief Executive Officer ​ ​ ​ EXECUTIVE: ​ ​ /s/ Hugh M. Cole ​ Hugh M. Cole ​ Chief Business Officer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12 ​ ​ EXHIBIT A ​ Employee Non-Competition, Non-Solicitation, Confidentiality ​ and Assignment Agreement dated July 21, 2017 ​ ​ ​ ​ JOUNCE THERAPEUTICS, INC. ​ ​ Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement ​ ​ In consideration and as a condition of my employment or continued employment by Jounce Therapeutics, Inc., a Delaware ​ corporation (the “Company”), I agree as follows: ​ ​ 1. Proprietary Information. I agree that all ​ information, whether or not in writing, concerning the ​ Company’s business, technology, business relationships or ​ financial affairs which the Company has not released to the ​ general public (collectively, “Proprietary Information”) is ​ and will be the exclusive property of the Company. By ​ way of illustration, Proprietary Information may include ​ information or material which has not been made generally ​ available to the public, such as: (a) corporate information, ​ including plans, strategies, methods, policies, resolutions, ​ negotiations or litigation; (b) marketing information, ​ including strategies, methods, customer identities or other ​ information about customers, prospect identities or other ​ information about prospects, or market analyses or ​ projections; (c) financial information, including cost and ​ performance data, debt arrangements, equity structure, ​ investors and holdings, purchasing and sales data and price ​ lists; (d) operational and technological information, ​ including plans, specifications, manuals, forms, templates, ​ software, designs, methods, procedures, formulas, ​discoveries, inventions, improvements, concepts and ideas; ​ and (e) personnel information, including personnel lists, ​ reporting or organizational structure, resumes, personnel ​ data, performance evaluations and termination ​ arrangements or documents. Proprietary Information also ​ includes information received in confidence by the ​ Company from its customers or suppliers or other third ​ parties. ​ 2. Recognition of Company’s Rights. I will not, at ​ any time, without the Company’s prior written permission, ​ either during or after my employment, disclose or transfer ​ any Proprietary Information to anyone outside of the ​ Company, or use or permit to be used any Proprietary ​ Information for any purpose other than the performance of ​ my duties as an employee of the Company. I will cooperate ​ with the Company and use my best efforts to prevent the ​ unauthorized disclosure of all Proprietary Information. I ​ will deliver to the Company all copies and other tangible ​ embodiments of Proprietary Information in my possession ​ or control upon the earlier of a request by the Company or ​ termination of my employment. ​ 3. Rights of Others. I understand that the Company ​ is now and may hereafter be subject to non-disclosure or ​ confidentiality agreements with third persons which ​ require the Company to protect or refrain from use of ​ Proprietary Information. I agree to be bound by the terms ​ of such agreements in the event Ihave access to such ​ Proprietary Information. ​ 4. Commitment to Company; Avoidance of ​ Conflict of Interest. While an employee of the Company, ​ I will devote my full-time efforts to the Company’s ​ business and I will not engage in any other business activity ​ that conflicts with my duties to the Company. I will advise ​ the president of the Company or his or her nominee at such ​ time as any activity of either the Company or another ​ business presents me with a conflict of interest or the ​ appearance of a conflict of interest as an employee of the ​ Company. I will take whatever action is requested of me ​ by the Company to resolve any conflict or appearance of ​ conflict which it finds to exist. ​ 5. Developments. I will make full and prompt ​ disclosure to the Company of all inventions, discoveries, ​ designs, developments, methods, modifications, ​ improvements, processes, algorithms, databases, computer ​ programs, formulae, techniques, trade secrets, graphics or ​ images, audio or visual works and other works of ​ authorship (collectively “Developments”), whether or not ​ patentable or copyrightable, that are created, made, ​ conceived or reduced to practice by me (alone or jointly ​ with others) or under my direction during the period of my ​ employment. I acknowledge that all work performed by ​ me is on a “work for hire” basis, and I hereby do assign and ​ transfer and, to the extent any such assignmentcannot be ​ made at present, will assign and transfer, to the Company ​ and its successors and assigns all my right, title and interest ​ in all Developments that (a) relate to the business of the ​ Company or any customer of or supplier to the Company ​ or any of the products or services being researched, ​ developed, manufactured or sold by the Company or which ​ may be used with such products or services; or (b) result ​ from tasks assigned to me by the Company; or (c) result ​ from the use of premises or personal property (whether ​ tangible or intangible) owned, leased or contracted for by ​ the Company (“Company-Related Developments”), and all ​ related patents, patent applications, trademarks and ​ trademark applications, copyrights and copyright ​ applications, and other intellectual property rights in all ​ countries and territories worldwide and under any ​ international conventions (“Intellectual Property Rights”). ​ To preclude any possible uncertainty, I have set forth on ​ Exhibit A attached hereto a complete list of Developments ​ that I have, alone or jointly with others, conceived, ​ developed or reduced to practice prior to the ​ commencement of my employment with the Company that ​ I consider to be my property or the property of third parties ​ and that I wish to have excluded from the scope of this ​ Agreement (“Prior Inventions”). If disclosure of any such ​ Prior Invention would cause me to violateany prior ​ confidentiality agreement, I understand that I am not to list ​ such Prior Inventions in Exhibit A but am only to disclose ​ a cursory name for each such invention, a listing of the ​ party(ies) to whom it belongs and the fact that full ​ disclosure as to such inventions has not been made for that ​ reason. I have also listed on Exhibit A all patents and ​ patent applications in which I am named as an inventor, ​ ​ 2 ​ ​ other than those which have been assigned to the Company ​ (“Other Patent Rights”). If no such disclosure is attached, ​ I represent that there are no Prior Inventions or Other ​ Patent Rights. If, in the course of my employment with the ​ Company, I incorporate a Prior Invention into a Company ​ product, process or machine or other work done for the ​ Company, I hereby grant to the Company a nonexclusive, ​ royalty-free, paid-up, irrevocable, worldwide license (with ​ the full right to sublicense) to make, have made, modify, ​ use, sell, offer for sale and import such Prior Invention. ​ Notwithstanding the foregoing, I will not incorporate, or ​ permit to be incorporated, Prior Inventions in any ​ Company-Related Development without the Company’s ​ prior written consent. ​ This Agreement does not obligate me to assign to the ​ Company any Development which, in the sole judgment of ​ the Company, reasonably exercised, is developed entirely ​ on my own time and does not relate to the business efforts ​ or research and development efforts in which, during the ​ period of my employment, the Company actually is ​ engaged or reasonably would be engaged, and does not ​ result from the use of premises or equipment owned or ​ leased by the Company. However, I will also promptly ​ disclose to the Company any such Developments for the ​ purpose of determining whether they qualify for such ​exclusion. I understand that to the extent this Agreement ​ is required to be construed in accordance with the laws of ​ any state which precludes a requirement in an employee ​ agreement to assign certain classes of inventions made by ​ an employee, this paragraph 5 will be interpreted not to ​ apply to any invention which a court rules and/or the ​ Company agrees falls within such classes. I also hereby ​ waive all claims to any moral rights or other special rights ​ which I may have or accrue in any Company-Related ​ Developments. ​ 6. Documents and Other Materials. I will keep ​ and maintain adequate and current records of all ​ Proprietary Information and Company-Related ​ Developments developed by me during my employment, ​ which records will be available to and remain the sole ​ property of the Company at all times. ​ All files, letters, notes, memoranda, reports, records, data, ​ sketches, drawings, notebooks, layouts, charts, quotations ​ and proposals, specification sheets, program listings, ​ blueprints, models, prototypes, or other written, ​ photographic or other tangible material containing ​ Proprietary Information, whether created by me or others, ​ which come into my custody or possession, are the ​ exclusive property of the Company to be used by me only ​ in the performance of my duties for the Company. Any ​ property situated on the Company’s premises and owned ​ bythe Company, including without limitation computers, ​ disks and other storage media, filing cabinets or other work ​ areas, is subject to inspection by the Company at any time ​ with or without notice. In the event of the termination of ​ my employment for any reason, I will deliver to the ​ Company all files, letters, notes, memoranda, reports, ​ records, data, sketches, drawings, notebooks, layouts, ​ charts, quotations and proposals, specification sheets, ​ program listings, blueprints, models, prototypes, or other ​ written, photographic or other tangible material containing ​ Proprietary Information, and other materials of any nature ​ pertaining to the Proprietary Information of the Company ​ and to my work, and will not take or keep in my possession ​ any of the foregoing or any copies. ​ 7. Enforcement of Intellectual Property Rights. I ​ will cooperate fully with the Company, both during and ​ after my employment with the Company, with respect to ​ the procurement, maintenance and enforcement of ​ Intellectual Property Rights in Company-Related ​ Developments. I will sign, both during and after the term ​ of this Agreement, all papers, including without limitation ​ copyright applications, patent applications, declarations, ​ oaths, assignments of priority rights, and powers of ​ attorney, which the Company may deem necessary or ​ desirable in order to protect its rights and interests in any ​ Company-Related Development. If the Company is ​unable, after reasonable effort, to secure my signature on ​ any such papers, I hereby irrevocably designate and ​ appoint each officer of the Company as my agent and ​ attorney-in-fact to execute any such papers on my behalf, ​ and to take any and all actions as the Company may deem ​ necessary or desirable in order to protect its rights and ​ interests in any Company-Related Development. ​ 8. Non-Competition and Non-Solicitation. In ​ order to protect the Company’s Proprietary Information ​ and good will, during my employment and for a period of ​ twelve (12) months following the termination of my ​ employment for any reason (the “Restricted Period”), I will ​ not directly or indirectly, whether as owner, partner, ​ shareholder, director, consultant, agent, employee, co-​ venturer or otherwise, (1) engage, participate, or invest in, ​ be employed by, consult or otherwise associated with any ​ other business, enterprise or venture that, as its primary ​ business activity, performs research or services, or ​ develops, manufactures or markets any products that are ​ same as, similar to or competitive with the research, ​ services or products of the Company or that the Company ​ has under development or active planning (the "Restricted ​ Field"), or (2) perform or otherwise be involved in any ​ business activity related to the Restricted Field. This ​ paragraph 8 shall not prohibit any possible investment in ​ publicly tradedstock of a company representing less than ​ one percent of the stock of such company. In addition, ​ during the Restricted Period, I will not, directly or ​ indirectly, in any manner, other than for the benefit of the ​ Company, (a) call upon, solicit, divert or take away any of ​ the customers, business or prospective customers of the ​ Company or any of its suppliers, and/or (b) solicit, entice ​ or attempt to persuade any other employee or consultant of ​ the Company to leave the services of the Company for any ​ reason. I acknowledge and agree that if I violate any of the ​ provisions of this paragraph 8, the running of the Restricted ​ Period will be extended by the time during which I engage ​ in such violation(s). ​ ​ 3 ​ ​ 9. Government Contracts. I acknowledge that the ​ Company may have from time to time agreements with ​ other persons or with the United States Government or its ​ agencies which impose obligations or restrictions on the ​ Company regarding inventions made during the course of ​ work under such agreements or regarding the confidential ​ nature of such work. I agree to comply with any such ​ obligations or restrictions upon the direction of the ​ Company. In addition to the rights assigned under ​ paragraph 5, I also assign to the Company (or any of its ​ nominees) all rights which I have or acquired in any ​ Developments, full title to which is required to be in the ​ United States under any contract between the Company ​ and the United States or any of its agencies. ​ 10. Prior Agreements. I hereby represent that, ​ except as I have fully disclosed previously in writing to the ​ Company, I am not bound by the terms of any agreement ​ with any previous employer or other party to refrain from ​ using or disclosing any trade secret or confidential or ​ proprietary information in the course of my employment ​ with the Company or to refrain from competing, directly or ​ indirectly, with the business of such previous employer or ​ any other party. I further represent that my performance of ​ all the terms of this Agreement as an employee of the ​ Company does not and will not breach any agreement to ​ keep in confidenceproprietary information, knowledge or ​ data acquired by me in confidence or in trust prior to my ​ employment with the Company. I will not disclose to the ​ Company or induce the Company to use any confidential ​ or proprietary information or material belonging to any ​ previous employer or others. ​ 11. Remedies Upon Breach. I understand that the ​ restrictions contained in this Agreement are necessary for ​ the protection of the business and goodwill of the Company ​ and I consider them to be reasonable for such purpose. Any ​ breach of this Agreement is likely to cause the Company ​ substantial and irrevocable damage and therefore, in the ​ event of such breach, the Company, in addition to such ​ other remedies which may be available, will be entitled to ​ specific performance and other injunctive relief. ​ 12. Use of Voice, Image and Likeness. I give the ​ Company permission to use my voice, image or likeness, ​ with or without using my name, for the purposes of ​ advertising and promoting the Company, or for other ​ purposes deemed appropriate by the Company in its ​ reasonable discretion, except to the extent expressly ​ prohibited by law. ​ 13. Publications and Public Statements. I will ​ obtain the Company’s written approval before publishing ​ or submitting for publication any material that relates to my ​ work at the Company and/or incorporates any Proprietary ​ Information. To ensurethat the Company delivers a ​ consistent message about its products, services and ​ operations to the public, and further in recognition that ​ even positive statements may have a detrimental effect on ​ the Company in certain securities transactions and other ​ contexts, any statement about the Company which I create, ​ publish or post during my period of employment and for ​ six (6) months thereafter, on any media accessible by the ​ public, including but not limited to social media sites, ​ electronic bulletin boards and Internet-based chat rooms, ​ must first be reviewed and approved by an officer of the ​ Company before it is released in the public domain. ​ Notwithstanding the foregoing, any statement relating to ​ any Proprietary Information shall not be published or ​ posted on any media anytime during or after my ​ employment without the Company’s prior written consent. ​ 14. No Employment Obligation. I understand that ​ this Agreement does not create an obligation on the ​ Company or any other person to continue my employment. ​ I acknowledge that, unless otherwise agreed in a formal ​ written employment agreement signed on behalf of the ​ Company by an authorized officer, my employment with ​ the Company is at will and therefore may be terminated by ​ the Company or me at any time and for any reason. ​ 15. Survival and Assignment by the Company. I ​ understand that myobligations under this Agreement will ​ continue in accordance with its express terms regardless of ​ any changes in my title, position, duties, salary, ​ compensation or benefits or other terms and conditions of ​ employment. I further understand that my obligations ​ under this Agreement will continue following the ​ termination of my employment regardless of the manner of ​ such termination and will be binding upon my heirs, ​ executors and administrators. The Company will have the ​ right to assign this Agreement to its affiliates, successors ​ and assigns. I expressly consent to be bound by the ​ provisions of this Agreement for the benefit of the ​ Company or any parent, subsidiary or affiliate to whose ​ employ I may be transferred without the necessity that this ​ Agreement be resigned at the time of such transfer. ​ 16. Disclosure to Future Employers. The Company ​ has the right to provide a copy of this Agreement to any ​ future employer, partner or coventurer. ​ 17. Severability. In case any provisions (or portions ​ thereof) contained in this Agreement shall, for any reason, ​ be held invalid, illegal or unenforceable in any respect, ​ such invalidity, illegality or unenforceability shall not ​ affect the other provisions of this Agreement, and this ​ Agreement shall be construed as if such invalid, illegal or ​ unenforceable provision had never been contained herein. ​ If, moreover, any one or more of the provisionscontained ​ in this Agreement shall for any reason be held to be ​ excessively broad as to duration, geographical scope, ​ activity or subject, it shall be construed by limiting and ​ reducing it, so as to be enforceable to the extent compatible ​ with the applicable law as it shall then appear. ​ 18. Interpretation. This Agreement will be deemed ​ to be made and entered into in the Commonwealth of ​ Massachusetts, and will in all respects be interpreted, ​ enforced and governed under the laws of the ​ Commonwealth of Massachusetts. I hereby agree to ​ consent to personal jurisdiction of the state and federal ​ ​ 4 ​ ​ courts situated within Suffolk County, Massachusetts for ​ purposes of enforcing this Agreement, and waive any ​ objection that I might have to personal jurisdiction or ​ venue in those courts. ​ 19. Modification; Waiver. No modification, ​ amendment, waiver or termination of this Agreement or of ​ any provision hereof will be binding unless made in writing ​ and signed by an authorized officer of the Company. ​ Failure of the Company to insist upon strict compliance ​ with any of the terms, covenants or conditions hereof will ​ not be deemed a waiver of such terms, covenants or ​ conditions. In the event of any inconsistency between this ​ Agreement and any other contract between the Company ​ and me, the provisions of this Agreement will prevail. ​ 20. Protected Disclosures. I understand that nothing ​ contained in this Agreement limits my ability to ​ communicate with any federal, state or local governmental ​ agency or commission, including to provide documents or ​ other information, without notice to the Company. I also ​ understand that nothing in this Agreement limits my ability ​ to share compensation information concerning myself or ​ others, except that this does not permit me to disclose ​ compensation information concerning others that I obtain ​ because my job responsibilities require or allow access to ​ such information. ​ 21. Defend Trade Secrets Act of 2016. I understand ​ that pursuant tothe federal Defend Trade Secrets Act of ​ 2016, I shall not be held criminally or civilly liable under ​ any federal or state trade secret law for the disclosure of a ​ trade secret that (a) is made (i) in confidence to a federal, ​ state, or local government official, either directly or ​ indirectly, or to an attorney; and (ii) solely for the purpose ​ of reporting or investigating a suspected violation of law; ​ or (b) is made in a complaint or other document filed in a ​ lawsuit or other proceeding, if such filing is made under ​ seal. ​ ​ ​ [End of Text] ​ ​ I UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. BY SIGNING BELOW, I ​ CERTIFY THAT I HAVE READ IT CAREFULLY AND AM SATISFIED THAT I UNDERSTAND IT COMPLETELY. ​ IN WITNESS WHEREOF, the undersigned has executed this Agreement as a sealed instrument as of the date set forth ​ below. ​ ​ Signed: /s/ Hugh M. Cole ​ (Employee’s full name) ​ Type or print name: Hugh M. Cole ​ ​ Date: July 21, 2017 ​ ​ ​ EXHIBIT A ​ ​ To: Jounce Therapeutics, Inc. ​ From: Hugh M. Cole ​ Date: July 21, 2017 ​ SUBJECT: Prior Inventions ​ The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by the ​ Company that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by ​ the Company: ​ X No inventions or improvements ​ __ See below: ​ _______________________________________________________________ ​ _______________________________________________________________ ​ _______________________________________________________________ ​ __ Additional sheets attached ​ The following is a list of all patents and patent applications in which I have been named as an inventor: ​ X None ​  See below: ​ _______________________________________________________________ ​ _______________________________________________________________ ​ _______________________________________________________________ ​ ​ ​ Exhibit 21.1 ​ Subsidiaries of the Registrant ​ ​ Name Jurisdiction of Organization Percentage Ownership ​ Jounce Mass Securities, Inc. Massachusetts 100% ​ ​ ​ Exhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-215794) pertaining to the 2013 Stock Option andGrant Plan, the 2017 Stock Option and Incentive Plan, and the 2017 Employee Stock Purchase Plan of Jounce Therapeutics, Inc., of our reportdated March 8, 2018, with respect to the consolidated financial statements of Jounce Therapeutics, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2017./s/ Ernst & Young LLP Boston, MassachusettsMarch 8, 2018Exhibit 31.1CERTIFICATIONSI, Richard Murray, certify that:1. I have reviewed this Annual Report on Form 10-K of Jounce Therapeutics, 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 makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe 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 inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this report is being prepared;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes 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 aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: March 8, 2018By:/s/ Richard Murray Richard Murray, Ph.D. President and Chief Executive Officer (Principal Executive Officer)Exhibit 31.2CERTIFICATIONSI, Kim C. Drapkin, certify that:1. I have reviewed this Annual Report on Form 10-K of Jounce Therapeutics, 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 makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe 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 inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this report is being prepared;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes 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 aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: March 8, 2018By:/s/ Kim C. Drapkin Kim C. Drapkin Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)Exhibit 32.1 CERTIFICATIONS OF CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with this Annual Report on Form 10-K of Jounce Therapeutics, Inc. (the “Company”) for the year ended December 31, 2017, as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of her or hisknowledge:(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. Date: March 8, 2018By:/s/ Richard Murray Richard Murray, Ph.D. President and Chief Executive Officer (Principal Executive Officer) Date: March 8, 2018By:/s/ Kim C. Drapkin Kim C. Drapkin Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)

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