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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
Commission file number: 001-38520
MEIRAGTX HOLDINGS PLC
(Exact name of registrant as specified in its charter)
Cayman Islands
(State or other jurisdiction of
incorporation or organization)
450 East 29th Street, 14th Floor
New York, NY
(Address of principal executive offices)
98-1448305
(I.R.S. Employer
Identification No.)
10016
(Zip Code)
(646) 860-7985
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Ordinary Shares, $0.00003881 par value per share
Trading Symbol(s)
MGTX
Name of exchange on which registered
The Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☐
☒
Accelerated filer
Smaller reporting company
Emerging growth company
☐
☒
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b)
of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers
during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of June 30, 2023, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the registrant’s ordinary shares held by non-affiliates of the
registrant was approximately $259,944,229 (based upon the closing sale price of the registrant’s ordinary shares on that date on the Nasdaq Global Select Market).
As of March 7, 2024, the registrant had 64,217,166 ordinary shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement relating to its 2024 annual shareholder meeting to be filed with the SEC within 120 days after the end of the fiscal year ended
December 31, 2023 are incorporated herein by reference in Part III of this Annual Report on Form 10-K.
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PART I
CONTENTS
Business
Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2.
Item 3.
Item 4.
Properties
Legal Proceedings
Mine Safety Disclosures
PART II
Item 5.
Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of
Equity Securities
[Reserved]
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
Item 6.
Item 7.
Item 7A. Quantitative And Qualitative Disclosures About Market Risk
Item 8.
Item 9.
Item 9A. Controls And Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Financial Statements And Supplementary Data
Changes In And Disagreements With Accountants On Accounting And Financial Disclosure
PART III
Item 10. Directors, Executive Officers And Corporate Governance
Item 11.
Item 12.
Executive Compensation
Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder
Matters
Item 13. Certain Relationships And Related Transactions, And Director Independence
Item 14.
Principal Accountant Fees And Services
PART IV
Item 15.
Item 16.
Exhibits and Financial Statement Schedules
Form 10-K Summary
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (the “Form 10-K”) contains forward-looking statements that can involve substantial
risks and uncertainties. All statements other than statements of historical facts contained in this Form 10-K, including, but
not limited to, statements regarding our future results of operations and financial position, business strategy, financing,
licensing and manufacturing arrangements, prospective products, development and timing of product candidates, timing of
and expected success and efficacy of our product candidates, plans and objectives for future operations, expected future
results of anticipated products and prospects, and plans and objectives of management are forward-looking statements.
These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,”
“anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,”
“would” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this
Form 10-K are only predictions. We have based these forward-looking statements largely on our current expectations and
projections about future events and financial trends that we believe may affect our business, financial condition and results
of operations. These forward-looking statements speak only as of the date of this Form 10-K and are subject to a number of
risks, uncertainties and assumptions described under the sections in this Form 10-K entitled “Item 1A. Risk Factors” and
“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this
Form 10-K. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements
as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be
achieved or occur and actual results could differ materially from those projected in the forward-looking statements.
Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it
is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do
not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new
information, future events, changed circumstances or otherwise. Thus, one should not assume that our silence over time
means that actual events are bearing out as expressed or implied in such forward-looking statements.
You should read this Form 10-K and the documents that we reference in this Form 10-K and have filed as exhibits to this
Form 10-K, completely and with the understanding that our actual future results may be materially different from what we
expect.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.
These statements are based upon information available to us as of the date of this Form 10-K, and while we believe such
information forms a reasonable basis for such statements, such information may be limited or incomplete, and our
statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant
information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these
statements. These statements should not be relied upon as representing our views as of any date subsequent to the date of
this Form 10-K.
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RISK FACTOR SUMMARY
We are providing the following summary of the principal risk factors contained in this Form 10-K to enhance the
readability and accessibility of our risk factor disclosures. We encourage you to carefully review in their entirety the full
risk factors set forth in the section of this Form 10-K captioned “Item 1A. Risk Factors” for additional information
regarding the material factors that make an investment in our ordinary shares speculative or risky. These risks and
uncertainties include, among others, the following:
● We have incurred significant losses since inception and anticipate that we will incur continued losses for
the foreseeable future, and may never achieve or maintain profitability.
● There is no guarantee that we will receive in a timely fashion or at all the additional milestone payments
contemplated under the Asset Purchase Agreement or the revenues associated with our manufacture of
the commercial supply of the RPGR Product under the Supply Agreement.
● We will require additional capital to fund our operations, which may not be available on acceptable
terms, if at all.
● We may not have sufficient cash flows or cash on hand to satisfy our debt obligations or covenants under
our financing arrangements, or we may not be able to effectively manage our business in compliance
with such covenants.
● Our review of potential strategic transactions may not result in an executed or consummated transaction
or other strategic alternative and may not result in anticipated benefits to us or our shareholders, and the
process of reviewing strategic transactions or its conclusion could be disruptive and distracting to our
business operations and management.
● We are heavily dependent on the success of our product candidates, which are still in development, and
if none of them receive regulatory approval or are successfully commercialized, our business may be
harmed.
● It is difficult to predict the time and cost of product candidate development on our novel gene therapy
platform. Very few gene therapies have been approved in the United States or in Europe.
● Because gene therapy is novel and the regulatory landscape that governs any product candidates we may
develop is uncertain and may change, we cannot predict the time and cost of obtaining regulatory
approval, if we receive it at all, for any product candidates we may develop.
● Clinical trials are expensive, time-consuming, difficult to design and implement, and involve an
uncertain outcome. Further, we may encounter substantial delays in our clinical trials.
● The affected populations for our product candidates may be smaller than we or third parties currently
project, which may affect the addressable markets for our product candidates.
● We and our contract manufacturers for plasmid are subject to significant regulation with respect to
manufacturing our products. Our manufacturing facilities and the third-party manufacturing facilities
which we rely on may not continue to meet regulatory requirements and have limited capacity.
● Enacted and future healthcare legislation may increase the difficulty and cost for us to obtain marketing
approval of and commercialize our product candidates and may affect the prices we may set.
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● We are subject to regulation and other legal obligations relating to data privacy and protection.
Compliance with these requirements is complex and costly. The actual or perceived failure to comply
with such obligations could materially harm our business, results of operations, and financial condition..
● We face significant competition in an environment of rapid technological change, and there is a
possibility that our competitors may achieve regulatory approval before us or develop therapies that are
safer or more advanced or effective than ours, which may harm our financial condition and our ability to
successfully market or commercialize any product candidates we may develop.
● We depend on proprietary technology licensed from others. If we lose our existing licenses or are unable
to acquire or license additional proprietary rights from third parties, we may not be able to continue
developing our product candidates.
● If we are unable to obtain and maintain patent protection for our technology and product candidates or if
the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete
effectively in our markets.
● We may need to expand our organization, and we may experience difficulties in managing this growth,
which could disrupt our operations.
● Our future success depends on our ability to retain our key personnel and to attract, retain and motivate
qualified personnel.
BASIS OF PRESENTATION
Unless the context otherwise requires, references in this Form 10-K to “Meira,” “MeiraGTx,” “we,” “us”, “our” or “the
Company” refer to MeiraGTx Holdings plc and its subsidiaries.
We have proprietary rights to trademarks, trade names and service marks appearing in this Form 10-K that are important to
our business. Solely for convenience, the trademarks, trade names and service marks may appear in this Form 10-K
without the ® and TM symbols, but any such references are not intended to indicate, in any way, that we forgo or will not
assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks,
trade names and service marks. All trademarks, trade names and service marks appearing in this Form 10-K are the
property of their respective owners.
INDUSTRY AND OTHER DATA
We obtained the industry, market and competitive position data in this Form 10-K from our own internal estimates and
research as well as from industry and general publications and research, surveys and studies conducted by third parties.
Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable,
although they do not guarantee the accuracy or completeness of such information. While we believe that each of these
studies and publications is reliable, we have not independently verified market and industry data from third-party sources.
While we believe our internal company research as to such matters is reliable and the market definitions are appropriate,
neither such research nor these definitions have been verified by any independent source.
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ITEM 1. BUSINESS
Overview
PART I
We are a vertically integrated, clinical-stage gene therapy company with a broad pipeline of late stage clinical
programs supported by end-to-end manufacturing capabilities. We have an internally developed manufacturing platform
process, internal plasmid production for good manufacturing practices, or GMP, two GMP viral vector production facilities
as well as an in-house Quality Control hub for stability and release, all fit for Investigational New Drug application (IND)
through commercial supply. We have core capabilities in viral vector design and optimization and a potentially
transformative riboswitch gene regulation platform technology that allows for the precise, dose-responsive control of gene
expression by oral small molecules. We are focusing the riboswitch platform on delivery of metabolic peptides including
glucagon-like peptide-1 (GLP-1), glucose-dependent insulinotropic polypeptide (GIP), glucagon and peptide YY (PYY)
using oral small molecules, as well as cell therapy for oncology and autoimmune diseases. Although initially focusing on
the eye, central nervous system, and salivary gland, we have developed the technology to apply genetic medicine to more
common diseases, increasing efficacy, addressing novel targets, and expanding access in some of the largest disease areas
where the unmet need remains great.
We own and operate manufacturing facilities in London, United Kingdom and Shannon, Ireland that we expect
can supply our current clinical and preclinical programs, as well as our third party supply obligations, through regulatory
approval and, should they be approved, provide sufficient capacity for commercial production. Completed in early 2018
and designed to meet global regulatory requirements, including GMP, our 29,000 square foot flexible and scalable viral
vector manufacturing facility in London, United Kingdom has two cell production suites, three independent viral vector
production suites providing multi-product and multi-viral vector manufacturing capabilities and an integrated, flexible fill-
and-finish suite. In May 2018, we were granted a license to manufacture gene therapy product candidates in our GMP
compliant manufacturing facility by the United Kingdom’s Medicines and Healthcare products Regulatory Agency, or
MHRA. The MHRA re-certified the facility in the second quarter of 2020.
Our second, large scale GMP viral vector manufacturing facility and our first GMP plasmid and DNA production
facility in Shannon, Ireland, both of which are designed to meet GMP requirements, came online in 2022. The campus
encompasses 150,000 square feet. It is the first commercial-scale gene therapy manufacturing site in Ireland and is unique
in its scale and integrated capabilities. The site contains three facilities, one built to be flexible and scalable for viral vector
production for clinical and commercial supply, in addition, a facility to manufacture plasmid DNA – the critical starting
material for producing gene therapy products – and thirdly, a Quality Control (QC) hub performing advanced biochemical
quality control testing for MeiraGTx clinical and commercial programs. In June 2023, we received a
Manufacturer’s/Importer’s Authorization (MIA) for QC testing of commercial products in our GMP compliant
manufacturing facility in Shannon from the Irish Health Products Regulatory Authority (“HRPA”). In September 2023, we
received a second MIA from the HRPA for QC testing of investigational medicinal products. We believe that our second
viral vector manufacturing facility and bringing GMP plasmid and DNA production in-house will provide greater
flexibility and efficiency as we advance our product candidates through development, and should they be approved,
commercial production.
We have also established a comprehensive platform designed for the efficient clinical development of the next
generation of gene therapies and manufacturing in accordance with GMP requirements. We believe that our deep
understanding of disease models informs our development of potency assays for the GMP production of our product
candidates, and our experienced teams in viral vector design and optimization work closely with our process development
team to design viral vectors and develop proprietary production cell lines for efficient scaling of manufacturing processes.
Our wholly-owned facilities have now produced GMP clinical trial material for six different indications, using multiple
AAV serotypes, including administration into the eye, salivary gland and central nervous system.
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We have also developed a potentially transformative technology to precisely and specifically control gene
expression levels via dose-response to orally delivered small molecules. This completely novel technology allows us to
control the expression of any DNA sequence using a bespoke oral small molecule, circumventing the need for
manufacturing of biologics outside the body or stabilization for long term activity. With this riboswitch platform, we can
control the precise timing of production of any mRNA from any DNA sequence - and therefore regulate the protein or
peptide produced within the body dependent on the dose of the chosen oral small molecule. The need for injection of
stabilized drug product is replaced by an oral small molecule that can repeatedly activate mRNA production every time it is
dosed. This platform opens a whole array of targets that are not currently druggable, particularly in the area of metabolism
where many of the known peptide agonists have proven difficult to address pharmaceutically. We can deliver the sequence
that is the most physiologically active without the need for modification to extend the half-life or manufacturing outside the
body.
Relationship with Janssen Pharmaceuticals, Inc.
On January 30, 2019, we and our wholly-owned subsidiary MeiraGTx UK II Limited entered into a Collaboration,
Option and License Agreement with Janssen Pharmaceuticals, Inc., one of the Janssen Pharmaceutical Companies of
Johnson & Johnson (“Janssen”), as further amended by that certain First Amendment to Collaboration, Option and License
Agreement, dated as of December 16, 2021 (the “Collaboration Agreement”), for, among other things, the research,
development and commercialization of gene therapies for the treatment of IRDs, including botaretigene sparoparvovec, or
bota-vec (formerly referred to as AAV-RPGR), for the treatment of X-linked retinitis pigmentosa related to mutations in the
retinitis pigmentosa GTPase regulator gene, or XLRP-RPGR (the “RPGR Product”), and two genetic forms of
achromatopsia. Under the Collaboration Agreement, Janssen paid us a non-refundable upfront fee of $100.0 million in
March 2019 and a milestone payment of $30.0 million in December 2021. We also received funding for certain research,
manufacturing, clinical development and commercialization costs, and had the opportunity to obtain potential additional
milestone payments upon the achievement of such milestones and royalties on future net sales of products.
On December 20, 2023 (the “Closing Date”), we and MeiraGTx UK II Limited entered into and consummated an
Asset Purchase Agreement (the “Asset Purchase Agreement”) with Janssen pursuant to which we sold and assigned to
Janssen, and Janssen purchased and assumed, that certain License Agreement, dated February 5, 2019, by and between
UCL Business Plc (now UCL Business Ltd.) (“UCLB”), on the one hand, and MeiraGTx UK II Limited and our wholly-
owned subsidiary MeiraGTx Limited, on the other hand (the “UCLB RPGR License Agreement”), relating to the research,
development, manufacture and exploitation of the RPGR Product, and other related assets as described in the Asset
Purchase Agreement. In connection with entering into the Asset Purchase Agreement, we and MeiraGTx UK II Limited
entered into a Termination Agreement with Janssen on the Closing Date terminating the Collaboration Agreement.
MeiraGTx UK II Limited and Janssen also entered into a Supply Agreement on the Closing Date pursuant to
which MeiraGTx UK II Limited agreed to manufacture and supply the RPGR Product for Janssen (the “Supply
Agreement”). Under the Supply Agreement, MeiraGTx UK II Limited, together with its affiliates, will manufacture
commercial supply of the RPGR Product for Janssen for an initial term of four years, with Janssen having an option to
extend the Supply Agreement for a fifth year upon written notification to us.
Under the Asset Purchase Agreement, Janssen paid us a non-refundable upfront cash purchase price of $65.0
million in December 2023. Additionally, pursuant to and subject to the terms and conditions set forth in the Asset Purchase
Agreement, Janssen agreed to pay us future contingent consideration of up to an aggregate of $350.0 million, as follows: (i)
a milestone payment of $50.0 million in connection with the achievement of the initiation of the extension study for the
Phase 3 LUMEOS clinical trial for the RPGR Product, which milestone was achieved during the first quarter of 2024; (ii)
$10.0 million upon completion of certain specified development services for the drug substance for the RPGR Product; (iii)
$5.0 million upon completion of certain specified development services for the drug product for the RPGR Product; (iv)
$175.0 million upon the first commercial sale of an RPGR Product in the United States; (v)
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$75.0 million upon the first commercial sale of an RPGR Product in at least one of the United Kingdom, France, Germany,
Spain and Italy; (vi) $25.0 million upon completion of the transfer of certain manufacturing technology for drug substance
and drug product from us to Janssen; and (vii) $10.0 million upon regulatory approval of a Janssen-selected manufacturing
facility in each of the United States and European Union for commercial manufacture of the RPGR Product. Janssen is also
responsible for any royalty or milestone amounts that become payable on the RPGR Product under the UCLB RPGR
License Agreement.
Strategic Investment from Sanofi
On October 30, 2023, we entered into an Investment Agreement (the “Investment Agreement”) with Sanofi
Foreign Participations B.V. (the “Sanofi Foreign Participations”), a wholly-owned subsidiary of Sanofi, and solely for the
limited purposes set forth therein, Sanofi, pursuant to which, among other things and subject to the terms and conditions
specified therein, we issued an aggregate of 4.0 million of our ordinary shares at a purchase price of $7.50 per share for
gross proceeds of $30.0 million. The Investment Agreement also provides Sanofi Foreign Participations and its affiliates
with a right of first negotiation for use of our riboswitch gene regulation technology for certain Immunology and
Inflammation (I&I), including modulation of IL-4 and IL-13, and Central Nervous System (CNS) targets, as well as for
GLP-1 and other gut peptides for metabolic disease, and for our Phase 2 xerostomia program, in each case, on the terms set
forth therein.
Our Pipeline
Our initial focus is on three distinct areas of unmet medical need: ocular diseases, including inherited retinal
diseases, or IRDs, as well as large degenerative ocular diseases, severe forms of xerostomia and neurodegenerative
diseases. Utilizing our product development platform, we have assembled a pipeline of gene therapies to treat these serious
diseases. Our criteria for selecting our initial product candidates included:
● unmet medical need;
● high potential for meaningful clinical benefit;
● promising preclinical data using multiple animal models as well as human stem cell derived organoids;
● compartmentalized anatomy of target tissue and the partially immune protected nature of target tissue; and
● understanding of the disease state from natural history studies and detailed long-term characterization of
patients prior to entry into gene therapy treatment studies.
A summary of our product candidates and the status of such product candidates as of March 1, 2024 is described
below.
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In addition to these clinical and preclinical programs, we have preclinical and research programs in other
indications and novel molecular technologies that we aim to advance into clinical development, including:
● riboswitch gene regulation—use of our proprietary RNA shape regulation cassette to precisely control gene
expression with novel small molecules, potentially transforming gene therapy technology into a delivery
mechanism for a broad array of biologic drugs;
● geographic atrophy age related macular degeneration, or dry AMD—use of gene therapy technology to
introduce light sensitive molecules into rod photoreceptors in order to restore some aspects of vision lost in
this disease;
● other ocular conditions—glaucoma and uveitis;
● central nervous systems/peripheral nervous system diseases—brain-derived neurotrophic factor gene therapy
for treatment of genetic obesity disorders, as well as the development of gene therapy product candidates for
other central nervous system diseases; and
● inflammatory/autoimmune diseases—use of gene therapy technology for the local delivery of
immunomodulatory therapeutics, including osteoarthritis, gout and certain rare inflammatory disorders.
Our Salivary Gland Programs
The clinical focus of our salivary gland program is xerostomia, a chronic and debilitating disorder of the salivary
glands in which saliva production is impaired. Xerostomia may be caused by a number of different insults to the salivary
glands, including radiation therapy for head and neck cancer and certain autoimmune diseases.
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AAV-hAQP1 for the Treatment of Radiation-Induced Grade 2/3 Xerostomia
Radiation-induced xerostomia, or RIX, is a severe and debilitating long-term side effect of radiation treatment for
head and neck cancer. Chronic RIX results in severe side effects, including difficulty swallowing, or dysphagia, oral
discomfort, malnutrition, oral mucositis, changes in taste, increased oral infections and dental cavities, resulting in a
significant negative impact on patient quality of life. Current treatment options for RIX are few and are of limited benefit.
The sialogogues pilocarpine (approved for RIX) and cevimeline (used off-label) are minimally effective in patients with
grade 2/3 RIX where the gland structure and function have been significantly impaired. No new medications for RIX have
been approved in over 20 years.
Worldwide, there are approximately 650,000 new cases of head and neck cancer diagnosed each year, with
approximately 54,000 cases in the U.S. alone, making it the fifth most common malignancy. Approximately 85% of
patients who receive radiation treatment for head and neck cancer experience reduced saliva production during treatment,
and approximately 40% of those patients who remain cancer free for two or more years after treatment continue to suffer
from grade 2 or 3 RIX. There are approximately 170,000 such patients in the U.S., with approximately 15,000 new cases
of persistent grade 2 or 3 RIX each year in the U.S.
Salivary glands are an attractive target organ for gene therapy treatments because they are self-contained, partially
immune protected and easily accessible, allowing for non-invasive delivery of small vector doses.
We are developing AAV-hAQP1 to treat RIX by introducing a water conducting channel into the remaining
epithelial cells of these damaged glands, thereby increasing water flow into the mouth. Adequate water secretion by
surviving epithelial cells has the potential to deliver the protective exocrine proteins produced by remaining gland cells into
the mouth.
The key to our approach is that, unlike the water conducting acinar cells, the water impermeable duct cells of the
glands appear to be resistant to ionizing radiation exposure. As a consequence of this relative resistance to radiation
treatment, salivary glands damaged by radiation treatment tend to contain mostly water impermeable ductal epithelial cells.
To make these duct cells permeable to water, AAV-hAQP1 introduces the gene for the human aquaporin water channel, or
hAQP1. We have demonstrated that this has the potential to convey water permeability and cause ductal cells to generate
an osmotic gradient, and secrete fluid into the lumen of the duct.
The proof of concept for this mechanism and its ability to increase the volume of fluid secreted by damaged
salivary glands was observed in a Phase 1 clinical trial conducted by the NIH in patients with chronic grade 2 or 3 RIX.
The trial was designed as a short-term dose escalation trial of a gene therapy using adenovirus as the vector to deliver the
hAQP1 to the remaining epithelial cells in the parotid gland of 11 patients suffering from chronic RIX. There were no
reported severe adverse events among the patients treated, two out of three patients in each of the first three cohorts in this
clinical trial were observed to have objective increases in saliva volume produced by the treated parotid gland, with
increases in parotid flow ranging from 60% to 540%, and all but one of these patients showed a decrease in symptoms of
dry mouth as measured by subjective visual analog scales, validated in other forms of xerostomia. The results of this study
were published in Proceedings of the National Academy of Sciences in 2012.
We are currently conducting a Phase 1 dose escalation clinical trial of AAV-hAQP1 at the NIH in patients with
grade 2 or 3 RIX who remain cancer free for at least five years after receiving radiation treatment. In this trial we are using
AAV2 to deliver the hAQP1 gene, as we believe AAV2 efficiently transfects the salivary gland cells and does not spread
beyond the target cells. The aim of the trial is to determine the safety of inserting hAQP1 locally into the salivary glands of
RIX patients, as well as to measure changes in salivary flow resulting from the introduction of this channel. This clinical
trial is being conducted in conjunction with the National Institute of Dental and Craniofacial Research at the United States
National Institutes of Health, or the NIH, Dental Clinic.
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In the third quarter of 2019, we also initiated an open-label, multi-center Phase 1 dose escalation clinical trial of a
single administration of our product candidate AAV-hAQP1 to one or both parotid glands in patients with grade 2 or 3 RIX.
In December 2021, we announced preliminary data from this Phase 1 clinical trial. The announcement included data from
seven patients treated in cohorts 1, 2 and 3 of the unilateral dose escalation phase of the clinical trial. Six of the seven
patients who reached 90 days following treatment reported their symptoms of dry mouth as better following treatment
pursuant to a validated patient reported assessment of xerostomia symptoms, constituting clinically meaningful
improvement. One patient who reported the maximum response evaluable at 12-months had reached the 24-month time
point and reported the same level of response. In March 2022, we completed enrollment of the study. A total of 24
patients received either unilateral (n=12) or bilateral (n=12) treatment in one of eight escalating dose cohorts of three
patients each.
In June 2023, we announced additional positive clinical data from the completed Phase 1 dose escalation clinical
trial of AAV-hAQP1. All unilaterally and bilaterally treated participants had undergone their 12-month assessment, with
four having completed their 24-month assessment and three having completed their 36-month assessment in the long-term
follow-up study. The investigational gene therapy AAV-hAQP1 was observed to be well tolerated in the Phase 1 trial, with
no dose limiting toxicity or treatment-related serious adverse events observed, and patient reported assessments of
xerostomia symptoms and whole salivary flow rate improved. All subjects are to be followed for one year post-treatment in
the present study and for an additional four years in the long-term follow-up study, per U.S. Food and Drug
Administration, or FDA, guidelines. The study’s primary endpoint is safety. Secondary endpoints include change from
baseline in patient reported measures of xerostomia symptoms as well as whole salivary flow rates. Based on the safety
and efficacy data observed for AAV-hAQP1 in the Phase 1 clinical trial, we initiated in June 2023 a randomized, double-
blind, placebo-controlled Phase 2 study evaluating two active doses of AAV-hAQP1 for the treatment of grade 2 or 3 RIX
with participants currently being enrolled and dosed.
The FDA granted orphan drug designation to AAV-hAQP1 for the treatment of symptoms of grade 2 and grade 3
late xerostomia from parotid gland hypofunction caused by radiotherapy for cancer of the oral cavity.
AAV-hAQP1 for the Treatment of Sjogren’s Syndrome
The destruction of salivary tissue resulting in chronic xerostomia may also be caused by chronic autoimmune
disease. Sjogren’s syndrome is an autoimmune disease in which a patient’s immune system may target the salivary glands.
Chronic inflammation of the salivary glands results in long term damage and chronic xerostomia in many Sjogren’s
patients. Data from preclinical studies in animal models of Sjogren’s syndrome and data from explants of minor salivary
glands of Sjogren’s patients suggest that Sjogren’s syndrome may also be treatable with our AAV-hAQP1 vector.
Supported by data from our preclinical studies and our ongoing RIX clinical trials, we are currently conducting IND-
enabling studies of AAV-hAQP1 for xerostomia caused by Sjogren’s syndrome.
Our Neurodegenerative Disease Programs
Relying on our expertise in viral vector design, delivery, production and manufacturing, we are aiming to develop
and optimize vectors to effectively treat both genetic and sporadic forms of certain neurodegenerative diseases.
AAV-GAD for the Treatment of Parkinson’s Disease
Our first target indication is Parkinson’s disease, where we have Phase 2 clinical data from a successful
randomized, double-blind, sham-controlled trial.
Affecting nearly one million Americans and 10 million worldwide, Parkinson’s disease is the second-most
common neurodegenerative disease after Alzheimer’s disease and is the 14th-leading cause of death in the United States. It
is associated with a progressive loss of motor control (e.g., shaking or tremor at rest and lack of facial expression), as
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well as non-motor symptoms (e.g., depression and anxiety). There is no cure for Parkinson’s disease and 60,000 new cases
are diagnosed each year in the United States alone.
Our product candidate targeting Parkinson’s disease, AAV-GAD, is designed to deliver the glutamic acid
decarboxylase, or GAD, gene to the subthalamic nucleus in order to increase production of GABA, the primary inhibitory
neurotransmitter in the human brain. GAD is the rate-limiting enzyme in the synthesis of GABA, therefore we believe that
increasing subthalamic nucleus GAD expression through gene therapy has the potential to address the dysregulation of
motor circuits and improve symptoms in Parkinson’s disease patients without affecting other brain regions, which can be
responsible for complications of existing therapies.
Clinical Development of AAV-GAD
In a blinded Phase 2 clinical trial of AAV-GAD in patients with medically refractory Parkinson’s disease, 45
patients were randomized 1:1 to receive either AAV-GAD gene therapy delivered by injection into the subthalamic nucleus
on both sides of the brain or bilateral sham surgery. Subjects were followed for one year and all results remained blinded
until the final treated patient reached the 6-month primary endpoint. The trial met the primary endpoint, of six-month
change from baseline in double-blind assessment of off-medication motor scores of the Unified Parkinson’s Disease Rating
Scale, or UPDRS. At the six-month endpoint, UPDRS score for the AAV-GAD group decreased by 8.1 points (SD 1.7,
23.1%; p<0.0001) and by 4.7 points in the sham group (1.5, 12.7%; p=0.003). The AAV-GAD group showed a
significantly greater improvement from baseline in UPDRS scores compared with the sham group over the six-month
course of the study (RMANOVA, p=0.04). An improvement in complications of medical therapy as measured by the
UPDRS part 4 was observed in the AAV-GAD group at both six and 12 months. A significant decline in duration of
disabling dyskinesia was observed only in the AAV-GAD treated patients.
AAV-GAD was reported to be well-tolerated, with no significant adverse events related to the therapy and no
speech or cognitive complications observed. The results of the trial were published in the March 2011 issue of The Lancet
Neurology, the August 2014 issue of the Journal of Clinical Investigation and the April 2017 issue of JCI Insight, building
upon publications of the Phase 1 trial data in The Lancet and the Proceedings of the National Academy of Sciences. In
addition, in research published in the November 28, 2018 issue of Science Translational Medicine, fifteen patients treated
with AAV-GAD gene therapy were observed to have expressed a treatment-related reorganization of functional brain
connectivity that was related to disease symptom improvement. These flurodeoxyglucose positron emission tomography
analyses provided objective biological evidence of improvements in abnormal brain networks associated with Parkinson’s
disease following AAV-GAD gene therapy.
These results were observed in patients treated in both Phase 1 and Phase 2 studies. Blinded analyses showed
significant improvements in abnormal thalamic metabolism, a key node in the movement circuitry, in the AAV-GAD
treated patients. This pattern of brain network activity was not seen in untreated hemispheres or patients in the sham arm.
Furthermore, a specific pattern of brain network activity was identified in those subjects with clinical improvements in the
sham arm, which was different from the pattern observed in AAV-GAD responders.
We filed an IND for AAV-GAD in May 2022, and we have completed dosing patients in an AAV-GAD Phase 1
bridging study with material that has been manufactured with our in-house proprietary manufacturing process at our GMP
manufacturing facility in London. The objective of the AAV-GAD trial is to evaluate the safety and tolerability of delivery
of AAV-GAD into the subthalamic nuclei of participants with Parkinson’s disease.
Neurodegenerative Disease Preclinical Development Pipeline
In addition to our clinical stage Parkinson’s disease program, we continue to conduct research to develop our
preclinical pipeline of gene therapy product candidates for the treatment of other serious diseases of the central nervous
system, including AAV-UPF1 to address motor neuron death in amyotrophic lateral sclerosis (ALS), and an Alzheimer’s
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disease program focused on endosomal trafficking dysfunction. Each of these programs is directed towards the underlying
cell biology that may be driving neurogeneration in these diseases.
ALS
ALS is a devastating, progressive, neurodegenerative disease leading to the loss of motor neurons, which are the
neurons that control the ability to move, speak, swallow and ultimately to breathe. The gradual paralysis in ALS invariably
leads to death. While 10% of ALS cases are caused by inherited genetic mutations, most ALS occurs sporadically, with no
known genetic cause. Mutations in over 20 genes have been identified that cause the inherited ALS cases.
Characterization of these disease-causing genes has implicated several cellular pathways in the disease, with a prominent
role emerging for genes involved in the cellular control of RNA. Many new regulatory roles are being discovered for
RNA, particularly in neurons.
We have designed a viral vector product candidate, AAV-UPF1, with the aim of increasing UPF1 expression in
the motor neurons of ALS patients. In preclinical studies, we observed that administration of AAV-UPF1 reduced motor
neuron death thought to be driven by the toxic effects of several different genetic causes of ALS including, TDP-43, FUS
and C9orf72. Improvements in ALS-like symptoms related to limb strength and mobility in rodent models of ALS have
also been observed following administration of AAV-UPF1.
We believe that gene therapy using AAV-UPF1 may increase UPF1 levels in cells affected by ALS, and we intend
to deliver our viral vector product candidate to the central nervous system via intrathecal injection, or injection into the
spinal canal.
Alzheimer’s Disease
With the world population aging, Alzheimer’s disease has emerged as an extremely common and costly disease.
While some treatments that have temporary effects on Alzheimer’s disease symptoms are available, there is currently no
approved treatment that halts the progression of the disease.
Our Alzheimer’s disease program focuses on the endosomal trafficking pathway. In preclinical studies, we
observed that increasing levels of key retromer proteins may reverse endosomal trafficking defects. We are identifying
suitable retromer targets for gene augmentation in pre-symptomatic Alzheimer’s patients.
There are several reasons why gene therapy is, in principle, well suited for Alzheimer’s disease and other
neurodegenerative diseases. The first relates to the pathophysiology, time course, and anatomical spread of these disorders.
Neurodegenerative diseases generally begin locally in selectively vulnerable regions with “cell sickness” years before
rampant cell death and wide-spread anatomical distribution. To be most effective, we believe interventions should be
administrated early and will benefit from local delivery. Even then, however, an intervention must maintain its efficacy for
years because, unlike other cells in the body, neurons do not typically divide over the course of their life. We believe AAV-
delivered gene therapy products may have a durable effect. In the best case scenario, one delivery successfully taken up by
targeted neurons would be sufficient for years of efficacy.
An important component of our approach is the development and validation of surrogate markers of endosomal
dysfunction and predictive markers of Alzheimer’s disease. In particular, several well studied biomarkers linked to
Alzheimer’s disease, such as amyloid-beta and tau, have also been shown to be biomarkers of endosomal trafficking
dysfunction in neurons. Such biomarkers could potentially be used to identify patients with Alzheimer’s disease, as well as
demonstrate potential product efficacy in the absence of Alzheimer’s disease symptoms. By targeting endosomal
trafficking dysregulation we aim to address the underlying cause of Alzheimer’s disease as well as other neurodegenerative
diseases, such as certain forms of Parkinson’s disease.
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Our Ophthalmology Programs
Under our ophthalmology programs, we aim to provide treatments for eye diseases with durable, long-term
clinical benefit that will halt vision loss in patients. We have three Phase 1/2 clinical programs targeting IRDs, including
AAV-CNGB3 and AAV-CNGA3 for the treatment of achromatopsia, or ACHM, related to mutations in CNGB3 and
CNGA3 genes, respectively, and AAV-RPE65 for retinal dystrophy related to mutations in the RPE65 gene, or RPE65
deficiency. We have completed enrollment and dosing in all three of these programs. In addition to these three programs,
AAV-AIPL1 has been manufactured and released for compassionate use under an MHRA specials license in the United
Kingdom, or UK, to treat patients with Leber congenital amaurosis 4, or LCA4, caused by mutations in the AIPL1 gene.
We also have preclinical programs that apply novel approaches to both wet and dry AMD, glaucoma and uveitis, as well as
several other IRDs including retinol dehydrogenase 12, or RDH12, mutation-associated retinal dystrophy and Stargardt
disease related to mutations in the ABCA4 gene.
We chose diseases of the eye as our first area of clinical focus because we believe the eye is ideally suited for gene
therapy for the following reasons.
● The eye is easily accessible and has highly compartmentalized anatomy, which allows for accurate delivery
of vectors to specific tissues using direct visualization and microsurgical techniques.
● The structure of the eye allows for efficient delivery to specific cell subtypes with small volumes of vector,
making the dose per patient much lower than is needed for systemic treatment.
● Anatomical barriers and unique structure of the eye make the immune response to the intraocular
administration of vectors more attenuated than systemic administration.
● Largely non-dividing cell populations in the eye make good targets for potentially stable, long-term gene
delivery and expression.
● The retina, a structure in the back of the eye, is visible and there are many well validated structural and
functional readouts allowing the detailed assessment of the therapeutic impact of the gene therapy treatment.
Our strategy for developing gene therapies targeting eye diseases was to begin with a number of monogenic IRDs
that are good candidates for gene replacement therapies and expand to more common eye diseases over time. We have
taken a portfolio approach to the development of IRDs because, while some of these genetic defects are rare, IRDs as a
class are one of the most common causes of blindness in working age adults and there are multiple synergies at the clinical,
regulatory and commercial levels between many of these diseases caused by different gene mutations.
We believe that the deep scientific and clinical understanding of IRDs driving our approach to gene therapy
development helps us to optimize our product candidates for each specific genetic mutation and phenotype. We develop
our viral vectors by selecting and modifying proprietary cell specific promoters, selecting appropriate capsids for
transfection of target cells and refining the vector for efficient production and scalable manufacturing. Not only does this
allow us to synergistically target a portfolio of inherited eye conditions, we also believe it has potential to be applied to the
development of gene therapies for other diseases.
Our longstanding relationships with leading institutions in retinal disease treatment, including the Moorfields Eye
Hospital in London, the University of Michigan Kellogg Eye Center, Massachusetts Eye and Ear, the Medical College of
Wisconsin & Froedtert Hospital and the Casey Eye Institute at the Oregon Health & Science University, provide us with
access to experts whose guidance and insight informs our development strategy, as well potential patients for our clinical
trials.
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We intend to leverage our platform to take advantage of the many synergies across our ophthalmology programs,
including identification, diagnosis and characterization of patients, specialized surgical techniques, clinical and regulatory
process, vector production and GMP manufacturing.
AAV-RPE65 for the Treatment of RPE65-Associated Retinal Dystrophy
We are developing AAV-RPE65 for the treatment of retinal dystrophy associated with mutations in the RPE65
gene. RPE65-associated retinal dystrophy causes rod photoreceptor dysfunction and impaired vision from birth. Absence
of RPE65 results in severe dysfunction of rods and causes impaired vision in dim lighting conditions. Although cone
photoreceptors are generally preserved during childhood in RPE65-deficient patients, the lack of function and degeneration
of the rods eventually results in the loss of cones and degeneration of the whole retina over time. Consequently, most
RPE65-associated retinal dystrophy patients experience central vision loss progressing to complete blindness by early
adulthood.
Based on an estimated prevalence of approximately one in 500,000 people in the United States (U.S.) suffering
from Leber congenital amaurosis, or LCA, related to mutations in the RPE65 gene, and approximately one in 70,000
people in the United States having retinitis pigmentosa, or RP, due to mutations in the RPE65 gene, RPE65-deficiency
occurs in approximately one in 125,000 people in the United States. There are estimated to be approximately 6,000
RPE65-deficiency patients in the United States, Japan and Germany, France, Spain, Italy and the UK, with almost 30% of
those patients being under the age of 30 and approximately 50 new cases being diagnosed annually. We have developed a
gene therapy candidate optimized for safety and potency for the treatment of RPE65-associated retinal dystrophy, AAV-
RPE65. AAV-RPE65 is an AAV2/5 viral vector, in which a codon optimized RPE65 gene is driven by a novel synthetic
retinal pigment epithelium cell specific promoter.
The FDA has approved the first gene treatment for RPE65-associated retinal dystrophy, Luxturna, a commercially
available product developed by Spark Therapeutics, Inc., which was purchased by Roche. While RPE65-associated retinal
dystrophy primarily causes a loss of rod function initially leading to impaired vision in dim light, these patients ultimately
experience complete blindness because of degeneration of the cone rich fovea. To prevent blindness, therefore, we believe
it is critical to treat the central retina in order to maintain structural integrity in this region and save central vision. We aim
to treat as extensive an area of the central retina as possible, including the cone rich fovea. Thus, in addition to improving
rod function, we aim to provide sufficient RPE65 protein to the cells in the central retina to prevent the degeneration of
both rods and cones in this region, and thereby prevent the progression to complete blindness.
Clinical Development of AAV-RPE65
We conducted a natural history study in patients with RPE65-associated retinal dystrophy with approximately 30
patients enrolled that has allowed us to collect structural and functional data on prospectively defined endpoints, including
functional tests, retinal imaging, and electrophysiological assessments.
Our Phase 1/2 clinical trial enrolled RPE65-associated retinal dystrophy patients in the UK and U.S. Dosing in
the Phase 1/2 clinical trial was completed in June 2018. The primary endpoint of this open-label, dose-escalation clinical
trial is safety. Secondary endpoints include the outcomes of a range of functional tests, detailed structural analysis of the
retina and quality of life measures. A total of 15 patients were treated in this clinical trial, including nine adult patients in
three dose escalation cohorts and six pediatric patients in the pediatric extension arm of the trial.
In May 2019, we announced positive topline safety and efficacy data from the Phase 1/2 trial of AAV-RPE65.
Additional data from this study were presented at the Retina Subspecialty Day of the American Academy of
Ophthalmology Annual Meeting in October 2019.
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AAV-RPE65 met the study’s primary endpoint of safety and tolerability. Additionally, AAV-RPE65 demonstrated
statistically significant improvement across several secondary endpoints assessing clinical activity. Significant
improvement in vision was demonstrated at six months after AAV-RPE65 treatment, as measured by assessments of vision-
guided mobility, retinal sensitivity, visual acuity and contrast sensitivity. Larger improvements from baseline in functional
vision were observed between treated and control eyes at lower light levels. We believe these outcomes address the core
functional manifestation of RPE65-associated retinal dystrophy, which typically causes vision impairment beginning in
early childhood that is most pronounced in low-light conditions, and is consistent with the proposed mechanism of action
of AAV-RPE65.
We continue to evaluate the initiation of a Phase 3 clinical trial for AAV-RPE65.
The FDA granted orphan drug designation and the European Commission (based on the European Medicines
Agency’s, or EMA, opinion) granted orphan designation to AAV-RPE65 for the treatment of LCA caused by mutations in
the RPE65 gene. The FDA also granted AAV-RPE65 rare pediatric disease designation for the treatment of inherited
retinal dystrophy due to biallelic RPE65 mutations.
AAV-CNGB3 and AAV-CNGA3 for the Treatment of Achromatopsia
Achromatopsia, or ACHM, is an IRD that specifically prevents cone photoreceptors from functioning. ACHM
patients are legally blind from birth and usually suffer from severely reduced visual acuity of 20/200 or worse, a disabling
sensitivity to light, or photoaversion, total color blindness and involuntary back and forth eye movements, or nystagmus.
ACHM patients suffer significant vision loss due to the complete lack of cone function. ACHM occurs in approximately
one in 30,000 people in the United States. The CNGB3 and CNGA3 genes are the two most common genes that have been
identified as causing ACHM, together accounting for up to 92% of ACHM cases, with CNGB3 slightly more common than
CNGA3 in most geographic territories.
There are estimated to be approximately 12,000 patients with ACHM caused by mutations in CNGB3 in the
United States, Japan, Germany, France, Spain, Italy and the UK, with about 25% of those patients being under the age of
18 and approximately 125 new cases being diagnosed annually. We believe the availability of a therapeutic option may
increase patient identification and the estimated prevalence of ACHM.
ACHM is predominantly a stationary disease, which means that ACHM patients’ retinas contain non-functioning
cones that survive intact for many decades. This is in contrast to many IRDs in which the entire retina slowly degenerates
over a patient’s life. This extended survival of cones with their potential for light sensitivity presents a wide window of
opportunity to introduce a normal copy of the mutated gene via a gene therapy product candidate and thereby restore cone
function. While the stationary nature of ACHM means that cones remain present for decades, the functional connections
between active cones and the visual cortex in the brain are thought to become fixed in teenage years. Therefore, we
believe that younger individuals are likely to benefit most from gene therapy treatment for ACHM because of their greater
visual plasticity. Another debilitating symptom of ACHM, which lasts throughout life, is photoaversion. A disabling and
ubiquitous symptom of ACHM, photoaversion is the avoidance of light due to discomfort in the presence of levels of light
equivalent to a normally lit room or daylight. ACHM patients often avoid light and wear dark glasses, which further
diminishes their already very poor vision. We believe it is possible that restoration of cone function in adult patients might
have an impact on photoaversion even if brain plasticity is limited.
We believe that gene therapy treatment for ACHM in which we aim to restore cone function via a gene
replacement strategy may offer benefits across a range of ages, which we aim to define in our clinical development
programs.
We have designed specifically optimized gene therapy viral vector candidates to treat ACHM caused by mutations
in each of CNGB3 and CNGA3, with which we aim to address the majority of patients suffering from ACHM.
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Our product candidates are delivered via subretinal injection covering the central macula region of the eye, where most of
the cones in the retina are located.
We have also conducted a natural history study in ACHM including over 90 patients that allows us to collect
structural and functional data on prospectively defined endpoints, including functional tests, retinal imaging and
electrophysiological assessments. We believe access to these ACHM patients has enabled us to efficiently enroll the most
appropriate patients into our CNGB3 and CNGA3 Phase 1/2 clinical trials. In addition to giving us access to patients and
potentially accelerated enrollment in our treatment studies, we believe the prospective natural history data on each treated
patient allow us to gather robust data from our Phase 1/2 clinical trials in a condensed timeframe.
Clinical Development of AAV-CNGB3 for the Treatment of ACHM Caused by Mutations in the CNGB3 Gene
We have developed a product candidate, AAV-CNGB3, to treat ACHM caused by mutations in the CNGB3 gene.
Mutations in the CNGB3 gene prevent cone photoreceptors from functioning because CNGB3’s gene product is integral to
the formation of a specific membrane channel that enables cones’ electrical response to light. CNGB3 is a gene exclusively
expressed in cones and our aim is to replace the absent function of the mutant CNGB3 gene with a normal copy of the gene
in cones of IRD patients and thereby restore cone function. In order to drive expression of the functional CNGB3 gene
specifically in cones and not in other cells of the retina, we use the cone specific human cone arrestin, or CAR, promoter to
drive the expression of a codon optimized CNGB3 cDNA. Codon optimization improves protein expression by increasing
translation efficiency. To transfect cone photoreceptors, we use the AAV8 capsid, which enables the efficient delivery of
the CNGB3 gene cargo to those photoreceptors. As the vast majority of the cones in the eye are located centrally and
concentrated in the macula, we treat this central region of the retina through subretinal injection to deliver the viral vector
product candidate to the photoreceptors in which its activity is required.
We have completed enrollment and dosing of the Phase 1/2 clinical trial of AAV-CNGB3 in both adult and
pediatric patients. In this trial, AAV-CNGB3 was delivered via subretinal injection of up to 0.5mL targeting the central
region of the retina, including the macula and fovea, where most of the cones are located. One eye is treated in each
patient. The primary endpoint of this open-label, dose-escalation clinical trial is safety. Secondary endpoints include the
outcomes of a range of functional and structural assessments.
Dosing was completed in this clinical trial in May 2019. In the dose escalation portion of the trial, we treated 11
adults. We also treated 12 children in the pediatric expansion cohorts. Six months following treatment, patients could
participate in a long term follow up study in which they were followed for safety and indication of benefit.
Our gene therapy product candidate AAV-CNGB3 was granted orphan drug designation by the FDA and orphan
designation by the European Commission for the treatment of achromatopsia caused by mutations in the CNGB3 gene, rare
pediatric disease designation by the FDA for the treatment of achromatopsia caused by mutations in the CNGB3 gene, and
Fast Track designation by the FDA for the treatment of achromatopsia caused by CNGB3 mutations. We were granted
PRIME designation by the EMA in October 2018 based on data from the first adult treatment cohort along with preclinical
data.
Clinical Development of AAV-CNGA3 for the Treatment of ACHM Caused by Mutations in the CNGA3 Gene
We are also developing AAV-CNGA3 to treat ACHM caused by mutations in the CNGA3 gene. We have
designed a synthetic promoter to drive high levels of CNGA3 expression specifically in cones because we believe a larger
amount of CNGA3 protein is required to restore cone function as compared to CNGB3. AAV-CNGA3 utilizes this
proprietary pan cone promoter to drive a codon optimized CNGA3 gene sequence. We believe this novel promoter can
drive sufficient expression of CNGA3 in cones to restore light sensitivity to these cones in CNGA3 deficient patients. We
use the AAV8 capsid to transfect cone photoreceptors in the back of the eye and we target the cones concentrated in the
central region of the retina via a subretinal injection that covers the macula.
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We have completed enrollment and dosing of the open-label, dose-escalation Phase 1/2 clinical trial of AAV-
CNGA3 in patients with ACHM due to mutations in the CNGA3 gene. Six months following treatment, patients could
participate in a long term follow up study in which they were followed for safety and indication of benefit.
Our gene therapy product candidate AAV-CNGA3 was granted orphan drug designation by the FDA and orphan
designation by the European Commission, rare pediatric disease designation by the FDA, and in January 2021, was granted
Fast Track designation by the FDA for the treatment of ACHM caused by CNGA3 mutations.
AAV-AIPL1 for the Treatment of LCA4
LCA4 is an IRD that causes profound visual impairment from birth, with all children being legally blind (often
light perception only) from birth. Despite the severe lack of retinal function, there is a narrow window of relative
preservation of central retinal structure until four years of age. AIPL1 is a key protein for the maintenance of
photoreceptor structure and function. LCA4 is rare, representing approximately 5% of all LCA cases.
There are currently no approved treatments for LCA4, and we believe an effective intervention will require
introducing a normal functional copy of the AIPL1 gene into rod and cone photoreceptors early in a patient’s life while
some retinal structure remains in order to activate function and survival of the photoreceptors that are still present. We
believe gene therapy has the potential to be the only effective way to address the disease’s root cause.
LCA4’s extremely rapid progression (e.g., no targetable central retina beyond four years of age), rarity and early
age of onset all make the standard process of seeking regulatory approval through clinical development challenging
because adult safety trials would not yield meaningful data given the early onset of the disease.
To address LCA4, we developed a viral vector to replace the AIPL1 gene in all photoreceptors by using the AIPL1
cDNA driven by the rhodopsin kinase promoter, which is active in both rods and cones.
We have manufactured and released AAV-AIPL1 for compassionate use under an MHRA specials license in the
UK to treat eight children with LCA4. A specials license allows physicians to prescribe a treatment of AAV-AIPL1 for
patients with LCA4 that they deem appropriate. We play no role in the physician’s treatment decision. In research
published in the March 2024 issue of Molecular Therapy Nucleic Acids, AAV-AIPL1 was reported to have effectively
rescued molecular features of AIPL1-associated LCA4 in a study involving LCA4 patient-derived retinal organoids. We
intend to use any data produced by the compassionate use treatment to inform any potential clinical development plan as
well as any interactions with the regulatory agencies that would enable us to make this intervention more widely available
to the LCA4 patient population.
As the manufacturer of AAV-AIPL1 under a specials license, we have a record retention requirement and a
continuing obligation to inform the MHRA of any suspected adverse reaction to our medicinal product which is a serious
adverse reaction.
The UK’s Human Medicines Regulations 2012 allow for the manufacture and supply of medicinal products not
authorized for marketing to patients with special needs at the request of the healthcare professional responsible for the
patient’s care (these products are referred to as “specials”). A special may only be supplied in: (i) response to an
unsolicited order from a healthcare professional responsible for the care of the patient, (ii) if the product is manufactured
and assembled in accordance with the specifications of that healthcare professional to fulfil the special needs of the
individual patient that cannot be met by products already authorized for marketing and (iii) if the product is manufactured
under a specials license granted by the MHRA.
Manufacturing a special also imposes a five year record retention requirement subject to review by the MHRA,
including details of any suspected adverse reaction to the product so sold or supplied of which the person is aware or
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subsequently becomes aware, as well as a continuing obligation to notify the MHRA of any suspected adverse reaction to
the medicinal product which is a serious adverse reaction.
The FDA granted orphan drug designation and the European Commission granted orphan designation to AAV-
AIPL1 for treatment of inherited retinal dystrophy due to defects in the AIPL1 gene.
Ophthalmology Preclinical Development Pipeline
We also have a preclinical IRD development pipeline focused on diseases caused by mutations in additional
genes. In order to expand our gene therapy pipeline for retinal diseases, we are also developing treatments for certain
multifactorial eye diseases, which are diseases caused by multiple genetic or environmental factors.
AAV-RDH12 for the Treatment of RDH12 Mutation-Associated Retinal Dystrophy
Disease-causing sequence variants in RDH12 cause severe retinal dystrophy most often resulting in the clinical
diagnosis of Leber congenital amaurosis (LCA) and early onset severe retinal dystrophy (EOSRD); although RDH12
variants have also been associated with a clinical diagnosis of RP. Sequence variants in RDH12 account for 3.4%–10.5%
of LCA/EOSRD. Individuals with RDH12 deficiency exhibit widespread retinal degeneration impacting both rods and
cones, with early macular involvement. Most people with RDH12–LCA/EOSRD experience marked central visual loss by
their late teens to twenties. AAV-RDH12 is an AAV based gene therapy designed to deliver a functional copy of the
RDH12 gene to the retina of patients with genetically defined RDH12 deficiency.
We received orphan drug designation from the FDA and orphan designation from the European Commission for
AAV-RDH12 for the treatment of RDH12-associated retinal dystrophy.
We currently have an ongoing natural history study for patients with RDH12 mutation-associated retinal
dystrophy. This will allow us to collect structural and functional data for up to five years on prospectively defined
endpoints including functional tests, retinal imaging and electrophysiological assessments. We believe access to these
patients and their data will enable us to efficiently enroll the most appropriate patients into a clinical trial for AAV-RDH12.
Wet and Dry Neovascular Age Related Macular Degeneration (AMD)
We are developing pre-clinical programs relating to neovascular age related macular degeneration, or wet AMD.
We use a gene therapy product candidate to deliver an antibody targeting the vascular endothelial growth factor receptor 2,
or anti-VEGFR2, with the aim of blocking disease related vascular formation in the eye.
Additionally, we are developing a novel approach designed to treat advanced dry AMD patients who have lost
central vision through our innovative “rod-to-cone” technology. By genetically engineering rods with molecules that will
improve their speed of response to light, we aim to effectively transform a patch of rod photoreceptors in the outer part of
the retina to behave more like cone photoreceptors, thus improving vision. There is no currently approved therapy that
impacts disease progression of dry AMD. The best available treatment for patients after they lose central vision and acuity
is support and rehabilitation services to help them better utilize the remaining peripheral part of their retina.
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Our Strengths
In addition to our three core therapeutic areas of focus, our ongoing clinical development programs, and our broad
pipeline of preclinical programs, we have core capabilities in viral vector design and optimization, gene therapy
manufacturing and a potentially transformative riboswitch gene regulation platform technology that allows for the precise,
dose-responsive control of gene expression by oral small molecules. Utilizing the following key strengths, we aim to
develop, commercialize and expand our portfolio of product candidates.
● Deep Expertise in Gene Therapy Development: We believe our expertise in viral vector design,
optimization and process development allows us to efficiently advance gene therapy products candidates
from preclinical development to GMP manufacturing and clinical development through commercialization.
● Potentially Transformative Gene Regulation Platform Technology: We have developed a proprietary
riboswitch technology platform to enable us to control the expression of any DNA sequence in the body
using a bespoke oral small molecule, circumventing the need for manufacturing of biologics outside the body
or stabilization for long term activity. We believe the capacity for temporal control of gene expression has
the potential to transform the way gene and cell therapy can be used, including opening a whole array of
targets that are not currently druggable, particularly in the area of metabolism where many of the known
peptide agonists have proven difficult to address pharmaceutically.
● Manufacturing Capabilities and Capacity: We have manufacturing facilities in London, United Kingdom
and Shannon, Ireland, which we expect can supply our current clinical and preclinical programs, as well as
our third party supply obligations, through regulatory approval and, should they be approved, provide
sufficient capacity for their commercial production. Our 29,000 square foot flexible and scalable viral vector
manufacturing facility in London has two cell production suites, three independent viral vector production
suites providing multi-product and multi-viral vector manufacturing capabilities and an integrated, flexible
fill-and-finish suite. Our second, large scale GMP viral vector manufacturing facility and our first GMP
plasmid and DNA production facility in Shannon, Ireland came online in 2022 and stretches over 150,000
square feet. It is the first commercial-scale gene therapy manufacturing site in Ireland and is unique in its
scale and integrated capabilities. The site contains three facilities, one built to be flexible and scalable for
viral vector production for clinical and commercial supply, in addition, a facility to manufacture plasmid
DNA – the critical starting material for producing gene therapy products – and thirdly, a QC hub performing
advanced biochemical quality control testing for our clinical and commercial programs.
● Robust and Diverse Clinical and Preclinical Pipeline: Applying our portfolio approach to gene therapy
product development, our initial focus is on treatments for ocular disorders, including IRDs and large
degenerative ocular diseases, as well as salivary gland disorders and neurodegenerative diseases. We also
have a broad preclinical development pipeline.
● Relationships with Leading Institutions: Our longstanding relationships with leading institutions and
experts provides us with guidance on development strategy and access to potential patients for our clinical
trials.
● Natural History Study Data: We sponsor ongoing prospective long-term natural history studies in IRDs
that facilitate our ability to efficiently enroll our treatment studies, potentially reducing clinical trial timelines
and providing insight into the appropriate endpoints for clinical studies to support potential regulatory
approval.
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Our Strategy
Our goal is to develop and commercialize innovative gene therapy products to treat serious disorders and broaden
the scope of indications that may be treatable by our gene therapies. Our strategy to achieve this goal is to:
● successfully complete clinical development, obtain regulatory approval and commercialize our pipeline of
gene therapy product candidates;
● continue to advance the development of our preclinical pipeline product candidates;
● utilize our viral vector design and optimization capabilities to identify and develop new gene therapies for
serious diseases;
● advance the development of our potentially transformative proprietary technology for regulating the activity
of gene therapy products using small molecules and initiate clinical trials of new regulatable product
candidates; and
● continue to pursue and evaluate further strategic collaborations with additional biotechnology and
pharmaceutical companies to leverage our capabilities, manufacturing capacity and proprietary gene
regulation technology.
Gene Therapy Overview
Gene therapy uses a delivery vehicle, referred to as a vector, to insert a functionally active gene into cells in the
body. The gene encodes a therapeutic protein that may block disease pathways or may enhance a deficient pathway. Gene
therapy has been studied for over 50 years, with a variety of different viral vectors employed to deliver therapeutic genes.
Since the first clinical study of therapeutic gene transfer in humans in 1990, thousands of gene therapy studies covering a
broad range of disease targets have been initiated. In recent years, the first gene therapies have received regulatory
approval, including approval by the FDA of Luxturna, marketed by Spark Therapeutics, Inc. which was purchased by
Roche, for treatment of RPE65-associated retinal dystrophy, and Zolgensma, marketed by AveXis, Inc., a Novartis
company, for the treatment of spinal muscular atrophy, resulting in a growing acceptance of gene therapy technology as a
potentially safe and effective therapeutic approach.
Our current programs use adeno-associated virus, or AAV, as the vector for delivering gene sequences into a
patient’s cells. The key components of an AAV vector include: (i) the capsid, or the outer viral protein shell that encloses
the target DNA, which is responsible for binding to the cell surface and allowing the therapeutic gene that it is carrying to
enter the cell; (ii) the therapeutic gene, or transgene, that encodes the therapeutic protein; and (iii) the promoter, or the
DNA sequence that drives the expression of the transgene. AAV is a good vector for gene therapy delivery because of its
relative safety and broad applicability. AAV is less immunogenic, or less prone to causing an immune reaction, than
previous generations of gene therapy vectors, such as adenoviral vectors and AAV does not readily integrate into the
genome of the target cell, reducing the potential for oncogenesis, or the induction of cancer. AAV vectors can transfer a
therapeutic gene into, or transduce, numerous cell types. Slight differences in capsid proteins can modulate the efficiency
with which different capsids deliver genes to different cells, thus allowing different AAV capsids to be selected to most
effectively target particular cell types.
The therapeutic gene sequence that enters the targeted cell includes both the protein coding region and an
engineered promoter sequence that is used to drive functional gene expression. These engineered promoters may be
designed to drive different levels of gene expression or to limit gene expression to specific cell types. Additional aspects of
the transgene sequence may be engineered for optimal gene expression, such as codon usage and synthetic introns, which
may enhance levels of therapeutic protein expression.
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Gene therapy can be used to address monogenic diseases, which result in mutations in a single gene in a patient’s
genome. In such cases, the viral vector is used to deliver a normal copy of the gene to the cells that are defective due to the
lack of the gene function. The normal gene then drives production of the missing protein and offers a therapeutic benefit in
patients with the disease. This gene replacement approach underlies all of our IRD programs.
In addition to replacing a gene that is defective or missing in a monogenic disease, gene therapy can also provide a
therapeutic impact by adding a particular new gene function to cells and thereby change cell behavior and function in other
types of diseases. This is the aim of our salivary gland programs, where our treatment is designed to promote water to flow
through otherwise impermeable cells in damaged salivary glands and increase saliva flow into the mouth. Additionally,
gene therapy may be used to deliver a therapeutic protein that may block a disease pathway or enhance a deficient cellular
pathway in multifactorial diseases such as wet AMD and neurodegenerative diseases, including ALS and Alzheimer’s
disease.
Importantly, AAV vectors enable targeting of therapeutic genes to non-dividing cells, in which they are thought to
remain for the rest of the cell’s life. This means that a single treatment may offer patients a durable effect and long-term
benefit. The specific cells of the eye, salivary gland and the neurons that we target in our current gene therapy programs
are largely non-dividing cells and preclinical evidence has shown that they can be effectively targeted by the specific AAV
capsids that we use, enabling us to potentially achieve a durable impact on each of the diseases that we treat.
Our Competitive Advantage in IRDs: Vector Engineering, Natural History Studies and Relationships with Leading
Institutions
IRDs as a class are the most common cause of blindness in the working age population worldwide and a leading
cause of impaired vision in children in developed countries. There are approximately 200,000 people in each of the U.S.,
EU and UK affected by IRDs. However, IRDs may be caused by mutations in over 300 identified genes, and in many
cases each genetically defined IRD may be a small patient population. Meaningful clinical trials for these sorts of rare
indications are especially challenging because they require access to sufficient patients and baseline data on each patient in
order to secure clear indicators of efficacy as a result of intervention. We seek to address this problem by sponsoring
prospectively designed natural history studies in each of the indications that we are treating in our Phase 1/2 trials.
For each of the natural history studies, baseline assessments are made upon enrollment, with follow up
assessments at later time points. A broad range of assessments are used, including functional tests, retinal imaging and
electrophysiological assessments. The same assessments used for each natural history study are used in our corresponding
clinical trial targeting the same indication, allowing us to compare the impact of our product candidates on the progression
of these diseases on a population, as well as individual patient basis.
We expect the natural history studies will enhance our understanding of disease progression for each indication
that we are targeting and allow us to identify optimal windows for intervention, provide specific functional and structural
parameters to quantify treatment effects and define clinical endpoints. These studies also provide us with a source of
potential patients for our treatment studies and have facilitated efficient enrollment of these studies. These patients are not
only genotyped, but also have up to five years of detailed functional and structural assessment data prior to enrollment into
an appropriate treatment study.
We also have longstanding active relationships and clinical site agreements with leading institutions in retinal
disorder treatments, including, among others, Moorfields Eye Hospital in London, the University of Michigan Kellogg Eye
Center, Massachusetts Eye and Ear, the Medical College of Wisconsin & Froedtert Hospital and the Casey Eye Institute at
the Oregon Health & Science University. These institutions and others where we have active relationships are among the
premier treatment centers for the indications that we are pursuing and provide us with access to potential patients for our
clinical trials and experts in IRDs who offer strategic guidance and expertise for our development
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strategy. They provide services with respect to our preclinical and clinical studies. Participants enrolled at the University
of Michigan Kellogg Eye Center and Massachusetts Eye and Ear Hospital may travel to the Medical College of
Wisconsin & Froedtert Hospital for adaptive optic assessments. The Casey Eye Institute at the Oregon Health & Science
University provides certain reading center and other clinical services with respect to our clinical trials.
Our Gene Regulation Platform
We have developed a potentially transformative technology designed to precisely and specifically control gene
therapy expression levels via dose-response to orally delivered small molecules. The aim of this gene regulation platform
is to transform gene therapy into a generalizable mechanism for the delivery of biologic drugs. The idea is that the gene
encoding a particular biologic drug or a therapeutic antibody or peptide would be delivered to target cells in the body, but
these transgenes would only be activated in the presence of a specific, proprietary small molecule. The therapeutic protein
would be manufactured by the patient’s body only in the presence of the small molecule so that intermittent production of
the therapeutic protein would be achieved by dosing with the small molecule drug.
This temporal regulation of gene expression by exogenous small molecules has long been a goal of gene therapy
researchers. The ability to regulate transgenes by introducing temporal control has the potential to transform the gene
therapy field and the biologics industry as a whole. Our approach focuses on riboswitches to regulate gene expression
rather than on the modulation of transcription factor activity.
Riboswitches are pieces of RNA that fold into alternative shapes depending on the binding of a specific small
molecule to that RNA sequence. One RNA shape allows the gene containing the riboswitch to be active, while the
alternative shape inactivates the gene. Riboswitches are used extensively by bacteria, but none have been identified in
mammalian cells to date.
We designed de-novo mammalian riboswitches that we have observed respond to small molecules, and
demonstrated the ability to switch genes on and off in mammalian cells and in vivo in mice and non-human primates. Our
riboswitch contains a stretch of RNA sequence, called an aptamer, that binds to a specific small molecule. The riboswitch
is inserted into the therapeutic transgene cDNA. In the absence of the specific small molecule, the unbound riboswitch
folds into the shape that drives the destruction of the RNA message and no therapeutic protein is produced in the absence
of the small molecule. However, when the small molecule is present and binds to the riboswitch it adopts the alternative
RNA shape, causing stable messages to be formed and the therapeutic protein to be produced.
One of the features of our mammalian riboswitch is its unprecedented dynamic range of greater than 5,000-fold.
We believe this technology is viable for a therapeutic product and is also the first instance of a proprietary system for
screening randomized aptamers and small molecules within mammalian cells for functional interactions.
Using our proprietary technology, we have demonstrated the ability to regulate multiple genes in vitro and in vivo
in multiple tissue types using multiple small molecules.
Using this technology in vivo, we have delivered ongoing efficacious levels of multiple therapeutic antibodies
with a daily small molecule dose.
We have also delivered peptides and growth factors such as erythropoietin (EPO), human growth hormone (hGH),
and parathyroid hormone (PTH) - rescuing hematocrit, little mouse growth or calcium to physiological levels, respectively,
with daily oral dosing of our small molecule. In addition, we have now delivered combinations of gut peptides such as
GLP-1, GIP and PYY, and we have shown that the efficacy with respect to glucose control is better than constitutively
active expression of those peptides.
In cell therapy, we can control any chimeric antigen receptor (CAR) or receptor or cell fate determining factor to a
specific level at a specific time, thus allowing us to precisely control the cell fate of transplanted cells. We can
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knock our regulation mechanism into T-cells to regulate CAR expression in CAR-T, and have demonstrated reduced
exhaustion, improved T-cell profile, improved cytotoxicity, and 3-4x increased potency in tumor killing, in vivo, compared
to existing CAR-T therapies.
For gene editing nucleases, we can very tightly regulate nuclease expression from 0% to close to 100% activity
using our small molecules, allowing transient expression of DNA editors to achieve efficient editing, avoiding undesirable
constitutive expression of the nuclease.
The riboswitch platform provides the ability to express any mRNA and therefore any protein or peptide in the
body on an ongoing basis via the dosing of an oral pill. We are now applying this to metabolic peptides that are agonists of
muscle metabolism and fat browning – which are not readily made sufficiently stable to be injectable recombinant drugs.
This opens an entire array of targets that are not currently druggable, particularly in the area of metabolism where many of
the known peptide agonists have proven difficult to address pharmaceutically. We express the natural peptide sequence that
is the most physiologically active, without the need for modification to extend the half-life, or manufacturing outside the
body.
In October 2023, we announced that under the terms of the Investment Agreement we entered into with Sanofi
and Sanofi Foreign Participations, Sanofi has a right of first negotiation for use of our riboswitch gene regulation
technology for certain Immunology and Inflammation (I&I), including modulation of IL-4 and IL-13, and Central Nervous
System (CNS) targets, as well as for GLP-1 and other gut peptides for metabolic disease, and for our Phase 2 xerostomia
program.
Our Manufacturing Capabilities
We own and operate a GMP manufacturing facility situated in London, United Kingdom. Supporting our global
approach to clinical development and market supply, we designed the 29,000 square foot facility to meet multiple
regulatory standards, including the MHRA, EMA and FDA standards.
Our London facility is flexible and scalable, with eleven independent air handling units, two cell culture suites and
three separate viral vector production suites, which allows us to produce multiple product candidates in parallel, as well as
sequentially at different scales. This allows us to accommodate up to three independent parallel manufacturing streams of
viral vector products that are isolated within dedicated production areas.
Our London manufacturing facility includes an integrated analytical department and in-house analytical tool kit
that allows for in-house release of clinical and commercial manufactured products. It is also equipped with dedicated areas
for microbiology, molecular biology, and cell-based analytics. Our analytical department can perform product related
assays, allowing us to retain and gain expertise that is normally lost to third parties. The close integration allows for rapid
turnaround and flexibility in scheduling of key assays, reducing lead times for product candidate releases. Further, our
dedicated product fill and finish suite allows us to manufacture a full range of clinical and commercial products under one
roof and in our control.
Our second, large scale GMP viral vector manufacturing facility and our first GMP plasmid and DNA production
facility in Shannon, Ireland came online in 2022. The campus encompasses 150,000 square feet and contains three
facilities, one built to be flexible and scalable for viral vector production for clinical and commercial supply, in addition, a
facility to manufacture plasmid DNA – the critical starting material for producing gene therapy products – and thirdly, a
QC hub performing advanced biochemical quality control testing for MeiraGTx clinical and commercial programs.
We believe that building a second viral vector manufacturing facility and bringing GMP plasmid and DNA
production, as well as QC analytics, in-house provides greater flexibility and efficiency as we advance our product
candidates through development, and should they be approved, commercial production.
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We have more than 200 highly trained multidisciplinary staff on our manufacturing team with backgrounds in a
diverse array of manufacturing sciences, technologies, analytics and production working together to expedite delivery of
gene therapy products.
We believe our facilities can supply our current clinical and preclinical programs, as well as our third party supply
obligations, through regulatory approval and, should they be approved, provide sufficient capacity, for commercial
production. Strategically, we believe our facilities will minimize our dependence on third-party contract manufacturers,
which we believe provides a significant strategic, clinical and commercial advantage, as well as significantly reduce the
cost of goods sold for our programs.
We have identified and licensed a proprietary HEK-293 cell line that is well characterized and that we have
banked in hundreds of vials. The specific cell line, size of the bank, culture media, and cryopreservation agents have been
selected to facilitate bridging between process development platforms and targets. Our HEK-293 cells are suitable for both
the adherent culture platform and the bioreactor process. We believe the ability to use the same cell line throughout the
product and process development lifecycle will allow us to use a bracketed approach to process validation and
comparability, which we believe may reduce the time and costs related to their implementation.
Our significant investment in the development of our internal manufacturing capacity and expertise to allow for
better control over our process development timelines, costs, product quality and intellectual property provides us with a
key competitive advantage.
Competition
The biotechnology and pharmaceutical industries are characterized by rapidly changing technologies, significant
competition and a strong emphasis on intellectual property. This is true in the field of gene therapy generally, and in the
treatments for our key disease areas. While we believe that the strength of our team, gene therapy expertise, scientific
knowledge and intellectual property provide us with competitive advantages, we face competition from several sources,
including large and small biopharmaceutical companies, academic research institutions, government agencies and public
and private research institutions. Not only must we compete with other companies that are focused on gene therapy, but
any product candidates that we successfully develop and commercialize will compete with existing therapies and new
therapies that may become available in the future.
Many of our competitors have significantly greater financial resources and expertise in research and development,
manufacturing, preclinical testing, clinical trials, regulatory approvals and product marketing than we do. These
competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing
clinical trial sites and patient registration for clinical trials and acquiring technologies complementary to, or necessary for,
clinical programs. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more
resources being concentrated among a smaller number of our competitors. Smaller or early stage companies may also
prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
There are other organizations working to improve existing therapies or to develop new therapies for our initially
selected disease indications. Depending on how successful these efforts are, it is possible they may increase the barriers to
adoption and success for our product candidates, if approved. These efforts include Luxturna, marketed by Spark
Therapeutics, Inc., which has been approved to treat RPE65-associated retinal dystrophy. We are not aware of any other
gene therapy product candidates in clinical development targeting xerostomia. We are aware of other ALS gene therapies
utilizing different treatment mechanisms to treat different genetically defined subsets of ALS patients, as well as gene
therapy product candidates being developed for the treatment of Parkinson’s disease, including those being developed by
Voyager Therapeutics, Inc. and Eli Lilly and Company.
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We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced
technologies become available. We expect any treatments that we develop and commercialize to compete on the basis of,
among other things, efficacy, safety, convenience of administration and delivery, price, the level of generic competition and
the availability of reimbursement from government and other third-party payors.
Intellectual Property
Our success depends in large part upon our ability to secure and maintain proprietary protection for our
technologies and products and to operate without infringing the proprietary rights of others. Our policy is to protect our
proprietary position by, among other methods, filing or collaborating with our licensors to file U.S. and foreign patent
applications related to our proprietary technology, inventions and improvements that are important to the development and
implementation of our business. We also use other forms of protection, such as confidential information and trademark
protection, particularly where we do not believe patent protection is appropriate or obtainable. Our patent portfolio
comprises a combination of issued patents and pending patent applications that are owned or licensed from third parties.
As of December 31, 2023, we own, co-own, have an exclusive license, or an exclusive option to license 500
United States and foreign issued or allowed patents and 483 patent applications, pending in the United States and
internationally. For any individual patent, the term depends on the applicable law in the country in which the patent is
granted. In most countries where we have filed patent applications or in-licensed patents and patent applications, patents
have a term of 20 years from the application filing date or earliest claimed non-provisional priority date. In the United
States, the patent term is 20 years but may be shortened if a patent is terminally disclaimed over another patent that expires
earlier. The term of a U.S. patent may also be lengthened by a patent term adjustment, in order to address administrative
delays by the United States Patent and Trademark Office in granting a patent. In the United States, the term of a patent that
covers an FDA-approved drug or biologic may be eligible for patent term extension in order to restore the period of a
patent term lost during the premarket FDA regulatory review process. The Drug Price Competition and Patent Term
Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the natural
expiration of the patent. The patent term restoration period is generally equal to the regulatory review period for the
approved product which period occurs after the date the patent is issued, subject to certain exceptions. Only one patent
may be extended for a regulatory review period for any product, and the application for the extension must be submitted
prior to the expiration of the patent. In the future, we may decide to apply for restoration of patent term for one of our
currently owned or licensed patents to extend its current expiration date, depending on the expected length of the clinical
trials and other factors involved in the filing of the relevant Biologics License Application.
Company-Owned Intellectual Property
We own eight patent families relating to gene regulation platform technologies developed by us with a combined
160 United States and foreign issued patents and 132 pending patent applications.
The first patent family includes 54 issued patents in the United States (two patents), African Regional Intellectual
Property Organization, Albania, Australia, Austria, Belgium, Bulgaria, China, Croatia, Cyprus, Czech Republic, Denmark,
Estonia, Eurasian Patent Organization, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, India, Ireland,
Israel (two patents), Italy, Japan (two patents), Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Monaco,
Netherlands, New Zealand, North Macedonia, Norway, Philippines, Poland, Portugal, Romania, San Marino, Serbia,
Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland/Liechtenstein, Turkey and the United Kingdom and 22 pending
patent applications with claims directed to compositions of matter and methods of use in the United States, African
Regional Intellectual Property Organization, Australia, Brazil, Canada, China, Egypt, Eurasian Patent Organization,
European Patent Organization, Hong Kong (two applications), Indonesia, Japan, Republic of Korea, Mexico, New Zealand,
Philippines, Singapore, South Africa (three applications) and Vietnam. Patents issued from this
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family are expected to expire February 2, 2036, not including any patent term adjustments that may extend the patent term
in certain jurisdictions.
The second patent family includes 46 issued patents in the United States, Albania, Australia, Austria, Belgium,
Bulgaria, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong,
Hungary, Iceland, Ireland, Israel, Italy, Japan, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Monaco,
Netherlands, North Macedonia, Norway, Poland, Portugal, Romania, San Marino, Serbia, Singapore, Slovakia, Slovenia,
Spain, Sweden, Switzerland/Liechtenstein, Turkey and the United Kingdom and 15 pending patent applications with claims
directed to compositions of matter and methods of use in the United States, African Regional Intellectual Property
Organization, Brazil, Canada, Egypt, Eurasian Patent Organization, India, Indonesia (two applications), Republic of Korea,
New Zealand, Philippines (two applications), South Africa and Vietnam. Patents issued from this family are expected to
expire February 2, 2037, not including any patent term adjustments that may extend the patent term in certain jurisdictions.
The third patent family includes nine issued patents in the United States, African Regional Intellectual Property
Organization, China, India, Indonesia, Japan, Malaysia, Mexico and Singapore and 14 pending patent applications with
claims directed to compositions of matter and methods of use in the United States, Australia, Brazil, Canada, Egypt,
Eurasian Patent Organization, European Patent Organization, Hong Kong, Israel, Republic of Korea, New Zealand,
Philippines, South Africa and Vietnam. Patents issued from this family are expected to expire February 2, 2037, not
including any patent term adjustments that may extend the patent term in certain jurisdictions.
The fourth patent family includes 45 issued patents in the United States, Albania, Australia, Austria, Belgium,
Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Malaysia, Monaco, Netherlands, New
Zealand, North Macedonia, Norway, Poland, Portugal, Republic of Korea, Romania, San Marino, Serbia, Slovakia,
Slovenia, Spain, Sweden, Switzerland/Liechtenstein, Turkey and the United Kingdom and 16 pending patent applications
with claims directed to compositions of matter and methods of use in the United States, African Regional Industrial
Property Organization, Australia, Brazil, Egypt, Eurasian Patent Organization, Hong Kong, India, Indonesia, Israel,
Mexico, New Zealand, Philippines, Singapore, South Africa and Vietnam. Patents issued from this family are expected to
expire August 3, 2037, not including any patent term adjustments that may extend the patent term in certain jurisdictions.
The fifth patent family includes three issued patents in the United States, Australia and Japan and 22 pending
patent applications with claims directed to compositions of matter and methods of use in the United States, African
Regional Industrial Property Organization, Australia, Brazil, Canada, China, Egypt, Eurasian Patent Organization,
European Patent Organization, Hong Kong, India, Indonesia, Israel, Republic of Korea, Malaysia, Mexico, New Zealand
(two applications), Philippines, Singapore, South Africa and Vietnam. Patents issued from this family are expected to
expire on March 2, 2038, not including any patent term adjustments that may extend the patent term in certain jurisdictions.
The sixth patent family includes three issued patents in African Regional Industrial Property Organization, Japan
and Mexico and 20 pending patent applications with claims directed to compositions of matter and methods of use in the
United States, Australia, Brazil, Canada, China, Egypt, Eurasian Patent Organization, European Patent Organization, Hong
Kong, India, Indonesia, Israel, Republic of Korea, Malaysia, New Zealand (two applications), Philippines, Singapore,
South Africa and Vietnam. Patents issued from this family are expected to expire on February 21, 2038, not including any
patent term adjustments that may extend the patent term in certain jurisdictions.
The seventh patent family includes 22 pending patent applications with claims directed to compositions of matter
and methods of use in the United States, African Regional Industrial Property Organization, Australia, Brazil, Canada,
China, Egypt, Eurasian Patent Organization, European Patent Organization, Hong Kong, India, Indonesia, Israel, Japan,
Republic of Korea, Malaysia, Mexico, New Zealand, Philippines, Singapore, South Africa and Vietnam.
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Patents issued from this family are expected to expire on March 24, 2041, not including any patent term adjustments that
may extend the patent term in certain jurisdictions.
The eighth patent family includes one pending Patent Cooperation Treaty patent application with claims directed
to compositions of matter and methods of use. Patents issued from this family are expected to expire on December 15,
2042, not including any patent term adjustments that may extend the patent term in certain jurisdictions.
Licensed Intellectual Property
Certain of our issued patents and pending patent applications are exclusively licensed to us from UCLB, Brandeis
University (“Brandeis”) and the National Institute of Dental and Craniofacial Research (“NIDCR”).
UCLB
The UCLB portfolio includes two licensed patent families relating to our RPE65 and CNGA3 gene therapy
programs and one optioned patent family relating to our dry AMD gene therapy program with a combined 104 United
States and foreign issued patents and 39 pending patent applications.
The first patent family, with claims directed to compositions of matter and methods of use relating to our RPE65
program, and the AAV-RPE65 product candidate includes 49 issued patents in the United States, Albania, Australia,
Austria, Belgium, Bulgaria, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Greece, Hong Kong, Hungary, Iceland, India, Ireland, Israel (two patents), Italy, Japan, Latvia, Lithuania, Luxembourg,
Malta, Malaysia, Mexico, Monaco, Netherlands, North Macedonia, Norway, Philippines, Poland, Portugal, Romania, San
Morino, Serbia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland/Liechtenstein, Turkey and the United
Kingdom and 10 pending patent applications in the United States, Brazil, Canada, European Patent Organization, Hong
Kong, Mexico, New Zealand (two applications), Nigeria and Thailand. Patents issued from this family are expected to
expire February 8, 2036, not including any patent term extensions or adjustments that may extend the patent term in certain
jurisdictions.
The second patent family includes 3 issued patents in the United States, Indonesia and Japan and 20 pending
patent applications with claims directed to compositions of matter and methods of use relating to our achromatopsia
program and the AAV-CNGA3 product candidate in the United States, African Regional Intellectual Property Organization,
Australia, Brazil, Canada, China, Egypt, Eurasian Patent Convention, European Patent Organization, Hong Kong, India,
Israel, Republic of Korea, Malaysia, Mexico, New Zealand, Philippines, Singapore, South Africa and Vietnam. Patents
issued from this family are expected to expire January 14, 2039, not including any patent term extensions or adjustments
that may extend the patent term in certain jurisdictions.
The third patent family, which we have exclusively optioned, with claims directed to compositions of matter and
methods of use relating to our dry AMD gene therapy program, includes 52 issued patents in African Regional Intellectual
Property Organization, Albania, Austria, Australia, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, Eurasian Patent Organization, Finland, France, Germany, Greece, Hong, Kong, Hungary, Iceland,
Indonesia, Ireland, Israel, Italy, Japan, Republic of Korea, Latvia, Lithuania, Luxembourg, Malta, Malaysia, Mexico,
Monaco, Netherlands, New Zealand, Nigeria, North Macedonia, Norway, Poland, Portugal, Romania, San Marino, Serbia,
Singapore, Slovakia, Slovenia, Spain, South Africa, Sweden, Switzerland/Liechtenstein, Turkey and the United Kingdom
and 9 pending applications in the United States, Australia, Brazil, China, Hong Kong, Philippines, Singapore, Thailand and
Vietnam. Patents issued from this family are expected to expire February 19, 2036, not including any patent term
extensions or adjustments that may extend the patent term in certain jurisdictions.
On December 20, 2023, we and MeiraGTx UK II Limited sold and assigned to Janssen the rights to a fourth
patent family related to the RPGR Product, which had been previously licensed from UCLB.
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Brandeis
The licensed Brandeis portfolio includes one patent family with claims directed to compositions of matter and
methods of use relating to our ALS gene therapy program and the AAV-UPF1 product candidate.
This patent family includes 17 issued patents in the United States (two patents), Austria, Australia, Belgium,
Denmark, France, Germany, Hong Kong, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland/Liechtenstein
and the United Kingdom and 4 pending patent applications in the United States, Canada European Patent Organization and
Hong Kong. Patents issued from this family are expected to expire October 8, 2033, not including any patent term
extensions or adjustments that may extend the patent term in certain jurisdictions.
NIDCR
The exclusively licensed NIDCR portfolio includes one patent family with claims directed to compositions of
matter and methods of use relating to our Sjogren’s Syndrome gene therapy program. This patent family includes 16
issued patents in the United States, Australia, Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy,
Netherlands, Norway, Spain, Sweden, Switzerland/Liechtenstein and the United Kingdom. Patents issued from this family
are expected to expire August 30, 2033, not including any patent term extensions or adjustments that may extend the patent
term in certain jurisdictions.
License Agreements
License Agreements with UCLB
We previously entered into several license agreements with UCLB, covering the following inherited retinal
disease programs: (a) ACHM caused by mutations in CNGB3; (b) ACHM caused by mutations in CNGA3; (c) XLRP
caused by mutations in RPGR; and (d) RPE65-mediated IRD (together, the “Licensed Gene Therapy Programs”). The
terms of these license agreements were set forth in (i) the license agreement, dated February 4, 2015, as amended, between
Athena Vision Ltd. and UCLB (the “First UCLB License Agreement”); (ii) the license agreements, dated July 29, 2017, as
amended, between MeiraGTx UK II Limited and UCL Business Plc (the “Second UCLB License Agreement”); and (iii)
the license agreement, dated March 15, 2018, among MeiraGTx Limited, MeiraGTx UK II Limited and UCL Business Plc
(the “Third UCLB License Agreement” and, collectively, the “prior UCLB license agreements”). In January and February
2019, we amended and restated the prior UCLB license agreements to establish a new standalone license agreement (each,
a “Stand-Alone UCLB Agreement”) for each of the Licensed Gene Therapy Programs. We have removed from each of the
Stand-Alone UCLB Agreements our obligation to pay UCLB a share of certain sublicensing revenues as was provided
under the First UCLB License Agreement and have aligned the material terms of the Stand-Alone UCLB Agreements to
track those under the Third UCLB License Agreement as previously disclosed and a summary of which is set forth below
as is now reflected in each of the Stand-Alone UCLB Agreements.
Under the terms of the Third UCLB License Agreement, we paid an initial upfront payment of £6,994, and issued
to UCLB £100,000 of our ordinary shares.
Under each of the Stand-Alone UCLB Agreements, UCLB granted us an exclusive, worldwide, and sublicensable
license under certain intellectual property rights controlled by UCLB relating to one of the Licensed Gene Therapy
Programs to develop and commercialize licensed products in a relevant field of gene therapy. We must use diligent efforts
to develop and commercialize the licensed products.
Under the terms of each Stand-Alone UCLB Agreement, we are required to pay UCLB sales milestone payments
of up to a total of £39.8 million in the aggregate and an annual management fee of £50 thousand until certain royalty
payments have been paid. Additionally, pursuant to the Stand-Alone UCLB Agreement related to CNGB3, we paid UCLB
an upfront payment of £1.5 million and issued £1.5 million of the Company’s ordinary shares.
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Commencing on the first commercial sale of licensed products under each Stand-Alone UCLB Agreement, we
must make low single-digit percentage royalty payments to UCLB on net sales of such products. Our royalty obligations
under each agreement continue on a licensed product-by-licensed product and country-by-country basis until the latest to
occur of the expiration of the last valid claim of a patent claiming such licensed product in such country, the expiration of
any regulatory exclusivity for all licensed products in such country, or the tenth anniversary of first commercial sale of
such licensed product in such country.
Each Stand-Alone UCLB Agreement will remain in effect on a country-by-country basis until the expiration of
the last payment obligation in such country. Each Stand-Alone UCLB Agreement may be terminated: (a) by either party in
the event of the other party’s material breach that remains uncured for 30 days (or for 14 days in the case of breaches
related to payment obligations), (b) by either party for the other party’s insolvency, (c) immediately by UCLB if we are in
persistent breach of the agreement and the parties fail to agree upon a mechanism to remedy such persistent breach (or we
do not comply with such agreed upon mechanism), or (d) immediately by UCLB if we undergo certain change of control
events or if we enter into a sublicense with certain prohibited persons, which may adversely affect UCL’s and/or UCLB’s
reputation. Each Stand-Alone UCLB Agreement may also be terminated or converted to a non-exclusive license by UCLB
upon three months’ notice if we, based on an independent expert determination, fail to use diligent efforts to develop and
commercially exploit licensed products and do not cure such failure within a certain cure period.
As noted above, on December 20, 2023, we and MeiraGTx UK II Limited entered into and consummated an Asset
Purchase Agreement with Janssen pursuant to which we sold and assigned to Janssen, and Janssen purchased and assumed,
the UCLB RPGR License Agreement relating to the research, development, manufacture and exploitation of the RPGR
Product, and other related assets as described in the Asset Purchase Agreement. Janssen is responsible for any royalty or
milestone amounts that become payable on the RPGR Product under the UCLB RPGR License Agreement.
License Agreement between BRI-Alzan Inc. and Brandeis
In May 2013, BRI-Alzan Inc., or BRI-Alzan, entered into a license agreement with Brandeis, or the Brandeis
Agreement. On December 31, 2015, we entered into an Agreement and Plan of Merger, or the BRI-Alzan Merger
Agreement, with BRI-Alzan, and the Brandeis Agreement was assigned to us as a result of such merger. Pursuant to the
terms of the BRI-Alzan Merger Agreement, we agreed to make cash payments to the sellers of BRI-Alzan upon the
achievement of certain milestones, subject to an aggregate cap of $4.5 million. In addition, we agreed to make low single-
digit percentage royalty payments to the sellers of BRI-Alzan on net sales of any product for the therapeutic or
prophylactic treatment of ALS that is covered by a valid claim of the patent rights licensed under the Brandeis Agreement.
The BRI-Alzan Merger Agreement includes customary confidentiality, indemnification, non-competition and non-
solicitation provisions.
Pursuant to the Brandeis Agreement, Brandeis granted us an exclusive, worldwide license under certain patent
rights with claims directed to compositions of matter and methods of use relating to our ALS gene therapy program and the
AAV-UPF1 product candidate to develop and commercialize licensed products.
We must use commercially reasonable efforts to develop and commercialize licensed products. We also acquired
non-exclusive, worldwide licenses to certain know-how controlled by Brandeis to exploit licensed products. We are
required to pay Brandeis developmental and regulatory milestone payments of up to a total of $1.0 million in the aggregate.
We are also required to pay Brandeis annual license maintenance fees ranging from $15,000 to $100,000 depending on the
development stage of the licensed product. Commencing on the first commercial sale of licensed products, we must make
low single-digit percentage royalty payments to Brandeis on net sales of such products. In addition, we must pay Brandeis
mid-teen percentages of sublicensing revenues.
The Brandeis Agreement will remain in effect on a country-by-country basis until the earlier of: (a) 1 year after
the date that we, our affiliates or sublicensees last sell any licensed product in such country or (b) until the expiration of the
last–to-expire of the licensed patent rights in such country. The Brandeis Agreement may be terminated by Brandeis
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for our insolvency or for our material breach that remains uncured for 60 days (or for 30 days in the case of breaches
related to payment obligations). Such material breach may be cured only once in any 12-month period. Brandeis may also
terminate any license granted under the Brandeis Agreement if we fail to timely achieve certain regulatory milestone
events.
Trade Secrets
We also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our
competitive advantage. We require inventors who are identified on any company-owned patent applications to assign
rights to us. We also rely on confidentiality agreements with our employees, consultants and other advisors to protect our
proprietary information. Our policy is to require third parties that receive material confidential information to enter into
confidentiality agreements with us.
Trademarks
Our trademark MeiraGTx has been registered in the U.S., UK and EU.
Government Regulation and Product Approval
Governmental authorities in the U.S., at the federal, state and local level, and other countries extensively regulate,
among other things, the research, development, testing, manufacture, labeling, packaging, promotion, storage, advertising,
distribution, marketing, post-approval monitoring and reporting and export and import of products such as those we are
developing. The processes for obtaining regulatory approvals in the United States and in foreign countries and
jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities,
are extensive and require the expenditure of substantial time and financial resources.
FDA Approval Process
We expect our product candidates to be regulated as biologics. Biological products, including gene therapy
products, are subject to extensive regulation by the FDA under the Federal Food, Drug, and Cosmetic Act, or FDCA, and
the Public Health Service Act, or PHSA, and other federal, state, local and foreign statutes and regulations. Both the
FDCA and the PHSA and their corresponding regulations govern, among other things, the research, development, safety,
testing, packaging, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-
approval monitoring and reporting, sampling, and import and export of biological products.
U.S. Biological Products Development Process
Our products must be approved by the FDA through the Biologics License Application, or BLA, process before
they may be legally marketed in the United States. The process required by the FDA before a biologic may be marketed in
the United States generally involves the following:
● completion of extensive nonclinical studies, sometimes referred to as preclinical laboratory tests, and
preclinical studies and applicable requirements for the humane use of laboratory animals and formulation
studies in accordance with applicable regulations, including good laboratory practices, or GLPs;
● submission to the FDA of an IND which must become effective before clinical trials may begin;
● approval by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site
before the trial is commenced;
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● performance of adequate and well controlled human clinical trials according to the FDA’s regulations
commonly referred to as good clinical practices, or GCPs, and any additional requirements for the protection
of human research subjects and their health information, to establish the safety and efficacy of the proposed
biological product for its intended use;
● preparation and submission to the FDA of a BLA for marketing approval that includes substantive evidence
of safety, purity, potency and efficacy from results of nonclinical testing and clinical trials;
● a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;
● satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological
product is produced to assess compliance with current GMP, or cGMP, to assure that the facilities, methods
and controls are adequate to preserve the biological product’s identity, strength, quality and purity;
● potential FDA audit of the nonclinical and clinical study sites that generated the data in support of the BLA;
● FDA review and approval, or licensure, of the BLA prior to any commercial marketing or sale of the product
in the United States; and
● compliance with any post-approval requirements, including the potential requirement to conduct post-
approval studies.
Before testing any biological product candidate, including a gene therapy product, in humans, the product
candidate enters the preclinical testing stage. Preclinical tests, also referred to as nonclinical studies, include laboratory
evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and
activity of the product candidate. The conduct of certain preclinical tests must comply with certain federal regulations and
requirements, including GLPs. The clinical trial sponsor must submit the results of the preclinical tests, together with
manufacturing and controls, information about product chemistry, analytical data, any available clinical data or literature
and a proposed clinical protocol, to the FDA as part of the IND. Some preclinical testing, such as reproductive toxicity
tests and carcinogenicity in animals, may continue even after the IND is submitted. The IND automatically becomes
effective 30 days after receipt by the FDA, after which human clinical trials may begin unless the FDA places the clinical
trial on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any
outstanding concerns before the clinical trial can begin. The FDA may also impose clinical holds on a biological product
candidate at any time before or during clinical trials due to safety concerns or non-compliance. If the FDA imposes a
clinical hold, trials may not recommence without FDA authorization and then only under terms authorized by the FDA.
In addition to the IND submission process, sponsors of certain human clinical trials of cells containing
recombinant or synthetic nucleic acid molecules, including human gene transfer studies, are subject to evaluation and
assessment by an institutional biosafety committee, or IBC, a local institutional committee that reviews and oversees
research utilizing recombinant or synthetic nucleic acid molecules at that institution, pursuant to the National Institutes of
Health’s Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules, or NIH Guidelines. The
IBC assesses the safety of the research and identifies any potential risk to the public health or the environment, and such
review may result in some delay before initiation of a clinical trial. While the NIH Guidelines are not mandatory unless the
research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic
nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines
voluntarily follow them.
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Clinical trials involve the administration of the biological product candidate to healthy volunteers or patients
under the supervision of qualified investigators, generally physicians not employed by or under the study sponsor’s control.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing
procedures, subject selection and exclusion criteria, the efficacy measurements to be evaluated and the parameters to be
used to monitor subject safety, including stopping rules that assure a clinical trial will be stopped if certain adverse events
should occur. Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND.
Clinical trials must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP
requirements, including the requirement that all research subjects provide informed consent. Further, each clinical trial
must be reviewed and approved by an independent institutional review board, or IRB, at or servicing each institution at
which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of study participants
and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are
reasonable in relation to anticipated benefits. The IRB also approves the form and content of the informed consent that
must be signed by each clinical trial subject or his or her legal representative and must monitor the clinical trial until
completed.
Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:
● Phase 1. The biological product candidate is initially introduced into healthy human subjects and tested for
safety. In the case of some products for severe or life-threatening diseases, especially when the product may
be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often
conducted in patients.
● Phase 2. The biological product candidate is evaluated in a limited patient population to identify possible
adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted
diseases and to determine dosage tolerance, optimal dosage and dosing schedule.
● Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy, potency, and safety in an
expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended
to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling.
In most cases, the FDA requires two adequate and well controlled Phase 3 clinical trials to demonstrate the safety
and efficacy of a biological product. In some instances, a single Phase 3 trial, together with other confirmatory evidence
may be sufficient to support a BLA submission. Post-approval clinical trials, sometimes referred to as Phase 4 clinical
trials, may be conducted after initial marketing approval. These clinical trials are used to gain additional experience from
the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up. The FDA
recommends that sponsors observe subjects for potential gene therapy-related delayed adverse events for a 15-year period,
including a minimum of five years of annual examinations followed by ten years of annual queries, either in person or by
questionnaire.
During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all
clinical activities, clinical data, and clinical trial investigators. Annual progress reports detailing the results of the clinical
trials must be submitted to the FDA. Written IND safety reports must be promptly submitted to the FDA, the NIH and the
investigators for serious and unexpected adverse events, any findings from other trials, tests in laboratory animals or in
vitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious
suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor must submit an IND safety
report within 15 calendar days after the sponsor determines that the information qualifies for reporting. The sponsor also
must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after
the sponsor’s initial receipt of the information. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed
successfully within any specified period, if at all. The FDA or the sponsor or its data safety monitoring board may suspend
or permanently discontinue a clinical trial at any time on various grounds, including a
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finding that the research subjects or patients are being exposed to an unacceptable health risk or the clinical trial is not
being conducted in accordance with FDA regulations. Similarly, an IRB can suspend or terminate approval of a clinical
study at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the
biological product candidate has been associated with unexpected serious harm to patients. The FDA and the IRB may
also halt, terminate or impose other conditions if either believes the patients are subject to unacceptable risk.
There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results
to public registries. Sponsors of clinical trials of FDA-regulated products, including biologics, are required to register and
disclose certain clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the
product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is
then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after
completion. Disclosure of the results of these trials can be delayed until the new product or new indication being studied
has been approved.
Concurrent with clinical trials, companies usually complete additional animal trials and must also develop
additional information about the physical characteristics of the biological product candidate as well as finalize a process for
manufacturing the product in commercial quantities in accordance with GMP and cGMP requirements, as applicable. To
help reduce the risk of the introduction of adventitious agents with use of biological products, the PHSA emphasizes the
importance of manufacturing control for products whose attributes cannot be precisely defined. The manufacturing process
must be capable of consistently producing quality batches of the product candidate and, among other things, the sponsor
must develop methods for testing the identity, strength, quality, potency and purity of the final biological product.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that
the biological product candidate does not undergo unacceptable deterioration over its shelf life.
U.S. Review and Approval Processes
After the completion of clinical trials of a biological product candidate, FDA approval of a BLA must be obtained
before commercial marketing and distribution of the biological product. The BLA must include results of product
development, laboratory and animal trials, human trials, information on the manufacture, pharmacology, chemistry and
controls of the product, proposed labeling and other relevant information. In addition, under the Pediatric Research Equity
Act, or PREA, a BLA or supplement to a BLA must contain data to assess the safety and effectiveness of the biological
product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and
administration for each pediatric subpopulation for which the product is safe and effective.
A sponsor who is planning to submit a marketing application for a drug or biological product that includes a new
active ingredient, new indication, new dosage form, new dosing regimen or new route of administration must submit an
initial Pediatric Study Plan, or PSP, within sixty days after an end-of-Phase 2 meeting or as may be agreed between the
sponsor and FDA. The initial PSP must include, among other things, an outline of the pediatric study or studies that the
sponsor plans to conduct, including to the extent practicable study objectives and design, age groups, relevant endpoints
and statistical approach, or a justification for not including such detailed information, and any request for a deferral of
pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with
supporting information, along with any other information specified in FDA regulations. The FDA and the sponsor must
reach agreement on the PSP. A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the
pediatric plan need to be considered based on data collected from nonclinical studies, early phase clinical trials, and/or
other clinical development programs. The FDA may grant deferrals for submission of data or full or partial waivers. A
deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before
pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric
clinical trials begin. Unless otherwise required by regulation, PREA does not apply to any biological product for an
indication for which orphan drug designation has been granted.
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Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be accompanied by a user
fee. The FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual program fee for products.
Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first
human drug application filed by a small business. Additionally, no user fees are assessed on BLAs for products designated
as orphan drugs, unless the product also includes a non-orphan indication.
Within 60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is
substantially complete before the agency accepts it for filing. The FDA may refuse to file any BLA that it deems
incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the
BLA must be resubmitted with the additional information. The resubmitted application is also subject to an initial review
before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive
review of the BLA. The FDA’s goal is to complete the review of standard BLAs within ten months after it accepts an
application for filing, or, if the application qualifies for priority review, six months after the FDA accepts the application
for filing. In both standard and priority reviews, the review process is often significantly extended by FDA requests for
additional information or clarification.
The FDA reviews the BLA to determine, among other things, whether the proposed product is safe and potent, or
effective, for its intended use, and has an acceptable purity profile, and whether the product is being manufactured in
accordance with cGMP requirements to assure and preserve the product’s identity, safety, strength, quality, potency and
purity. The FDA may refer applications for novel biological products or biological products that present difficult questions
of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review,
evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA
is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when
making decisions. During the biological product approval process, the FDA also will determine whether a Risk Evaluation
and Mitigation Strategy, or REMS, is necessary to assure the safe use of the biological product candidate. If the FDA
concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS; the FDA will not approve the BLA
without a REMS, if required.
Before approving a BLA, the FDA will inspect the facilities at which the product is manufactured. The FDA will
not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP
requirements and adequate to assure consistent production of the product within required specifications. Additionally,
before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were
conducted in compliance with IND study requirements and GCP requirements. To assure cGMP and GCP compliance, an
applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production,
and quality control.
Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the BLA
does not satisfy its regulatory criteria for approval and deny approval. If the agency decides not to approve the BLA in its
present form, the FDA will issue a complete response letter that usually describes all of the specific deficiencies in the
BLA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or major,
for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended
actions that the applicant might take to place the application in a condition for approval. If a complete response letter is
issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the
application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA,
the FDA will issue an approval letter. Under the current PDUFA guidelines, the FDA has committed to reviewing such
resubmissions in two or six months of receipt depending on the type of information included.
If regulatory approval of a product is granted, such approval will be granted for particular indications and may
entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the
BLA with a REMS, to ensure the benefits of the product outweigh its potential risks. A REMS is a safety strategy to
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manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to
such medicines by managing their safe use, and could include medication guides, physician communication plans, or
elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The FDA also may condition approval on, among other things, changes to proposed labeling or the development of
adequate controls and specifications. The requirement for a REMS can materially affect the potential market and
profitability of the product.
Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing
requirements is not maintained or if problems occur after the product reaches the marketplace. Changes to some of the
conditions established in an approved BLA, including changes in indications, product labeling, manufacturing processes or
facilities, require submission and FDA approval of a new BLA or BLA supplement before the change can be implemented.
A BLA supplement for a new indication typically requires clinical data similar to that in the original application, and the
FDA uses the same procedures and actions in reviewing BLA supplements as it does in reviewing BLAs. The FDA may
require one or more Phase 4 post-market studies or surveillance to further assess and monitor the product’s safety and
effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-
marketing studies.
Orphan Drug Designation
The FDA may grant orphan drug designation to drugs or biologics intended to treat a rare disease or condition that
affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the United
States, there is no reasonable expectation that the cost of developing and marketing the drug or biologic for this type of
disease or condition will be recovered from its sales in the United States. Orphan drug designation must be requested
before submitting a BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its
potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in or
shorten the duration of the regulatory review and approval process.
In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant
funding towards clinical trial costs, tax advantages and BLA user-fee waivers. In addition, if a product receives the first
FDA approval for the indication for which it has orphan drug designation, the product is entitled to orphan drug
exclusivity, which means the FDA may not approve any other application, including a full BLA, to market the same drug
or biologic for the same disease or condition for a period of seven years, except in limited circumstances, such as a
showing of clinical superiority over the product with orphan exclusivity or where the manufacturer with orphan exclusivity
is unable to assure sufficient quantities of the approved orphan drug-designated product. Competitors, however, may
receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for
the same product but for a different disease or condition for which the orphan product has exclusivity. Orphan product
exclusivity also could block the approval of one of our products for seven years if a competitor obtains approval of the
same biological product as defined by the FDA or if our product candidate is determined to be contained within the
competitor’s product for the same indication or disease. If a drug or biological product designated as an orphan product
receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product
exclusivity. In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the
request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the
product to meet the needs of patients with the rare disease or condition.
Expedited Development and Review Programs
The FDA has a Fast Track program that is intended to expedite or facilitate the process for reviewing new
biological product candidates that meet certain criteria. Specifically, biological product candidates are eligible for Fast
Track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the
potential to address unmet medical needs for the disease or condition. Fast Track designation applies to the combination of
the product candidate and the specific indication for which it is being studied. The sponsor of a Fast Track product
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candidate has opportunities for more frequent interactions with the review team during product development and, once a
BLA is submitted, the application may be eligible for priority review. A Fast Track product candidate may also be eligible
for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete
application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA
agrees to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any
required user fees upon submission of the first section of the application.
In addition, the FDA established a Breakthrough Therapy designation which is intended to expedite the
development and review of products that are intended to treat serious or life-threatening diseases or conditions. A
Breakthrough Therapy-designated product candidate is defined as a drug or biologic that is intended, alone or in
combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, and
preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies
on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical
development. The designation includes all of the features of Fast Track designation, as well as more intensive FDA
interaction and guidance.
Any product candidate submitted to the FDA for marketing, including a product that has received a Fast Track or
Breakthrough Therapy designation, may be eligible for other types of FDA programs intended to expedite development
and review, such as priority review and accelerated approval. An application seeking marketing approval for a biologic
product is eligible for priority review if the biologic has the potential to provide safe and effective therapy where no
satisfactory alternative therapy exists or there is potential for a significant improvement in the treatment, diagnosis or
prevention of a disease compared to marketed products. The FDA will attempt to direct additional resources to the
evaluation of an application for a new biological product designated for priority review in an effort to facilitate the review.
Priority review means the FDA’s goal is to take action on an application within six months (compared to 10 months under
standard review).
Additionally, product candidates studied for their safety and effectiveness in treating serious or life-threatening
illnesses and that provide meaningful therapeutic benefit over existing treatments may be eligible for accelerated approval
upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict a
clinical benefit, or on a clinical endpoint that can be measured earlier than the irreversible morbidity or mortality that is
reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the
severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of
accelerated approval, the FDA will generally require that the sponsor perform adequate and well-controlled confirmatory
clinical trials to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit,
and may require that such confirmatory trials are underway prior to granting any accelerated approvals. Failure to conduct
required confirmatory trials in a timely manner, or to confirm a clinical benefit during post-marketing trials, will allow the
FDA to withdraw the approved biologic product from the market on an expedited basis. In addition, the FDA currently
requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the
timing of the commercial launch of the product. Fast Track designation, priority review and accelerated approval do not
change the standards for approval but may expedite the development or approval process.
Furthermore, as part of its implementation of the 21st Century Cures Act, the FDA established the Regenerative
Medicine Advanced Therapy, or RMAT, designation, to facilitate an efficient development program for, and expedite
review of, certain drugs and biological products. A biological product is eligible for RMAT designation if it qualifies as a
RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any
combination product using such therapies or products, with limited exceptions, and is intended to treat, modify, reverse, or
cure a serious or life-threatening disease or condition and for which preliminary clinical evidence indicates that the
biological product has the potential to address unmet medical needs for such a disease or condition. Like Breakthrough
Therapy designation, RMAT designation provides potential benefits that include more frequent meetings with FDA to
discuss the development plan for the product candidate, and eligibility for rolling review and priority
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review. Products granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or
intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a
meaningful number of sites, including through expansion to additional sites. RMAT-designated products that receive
accelerated approval may, as appropriate, fulfill their post-approval requirements through the submission of clinical
evidence, clinical trials, patient registries, or other sources of real world evidence (such as electronic health records);
through the collection of larger confirmatory data sets; or via post-approval monitoring of all patients treated with such
therapy prior to approval of the therapy.
Fast Track designation, priority review, accelerated approval, Breakthrough Therapy designation and RMAT
designation do not change the standards for approval but may expedite the development or approval process. Even if these
designations are received, the FDA may later decide that a product candidate no longer meets the conditions for
qualification.
Post-Approval Requirements
Once a BLA is approved, a product will be subject to rigorous and extensive FDA regulation including, among
other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, adverse event
reporting and advertising, manufacturing, and marketing and promotion. Biological products may be marketed only for the
approved indications and in accordance with the provisions of the approved labeling. While physicians may prescribe a
product for uses in patient populations that are not described in the product’s approved labeling, or “off-label” uses,
manufacturers may only promote a product for the approved indications and in accordance with the provisions of the
approved label of such product. However, companies may share truthful and not misleading information that is otherwise
consistent with a product’s FDA approved labeling. The FDA and other agencies actively enforce the laws and regulations
prohibiting the promotion of “off-label” uses, and a company that is found to have improperly promoted “off-label” uses
may be subject to significant liability.
After approval, most changes to the approved product, such as adding new indications or other labeling claims,
are subject to prior FDA review and approval. There also are continuing user fee requirements, under which the FDA
assesses an annual program fee for each product identified in an approved BLA. Manufacturers are also required to comply
with applicable requirements in the cGMP regulations, including quality control and quality assurance and maintenance of
records and documentation. Other post-approval requirements applicable to biological products, include reporting of
cGMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping
requirements, reporting of adverse effects, reporting updated safety and efficacy information, and complying with
electronic record and signature requirements.
After a BLA is approved, the product also may be subject to official lot release. As part of the manufacturing
process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution.
If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA
together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the
manufacturer’s tests performed on the lot. The FDA also may perform certain confirmatory tests on lots of some products,
such as viral vaccines, before releasing the lots for distribution by the manufacturer. In addition, the FDA conducts
laboratory research related to the regulatory standards on the safety, purity, potency, and effectiveness of biological
products.
The FDA may require one or more Phase 4 post-market trials or surveillance to further assess and monitor the
product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the
results of these post-marketing studies. We also must comply with the FDA’s advertising and promotion requirements,
such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or in patient
populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored
scientific and educational activities, and promotional activities involving the Internet. Biologics may be marketed only for
the approved indications and in accordance with the provisions of the approved labeling.
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Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements
may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible
civil or criminal sanctions. Failure to comply with the applicable U.S. requirements at any time during the product
development process, approval process or after approval, may subject an applicant or manufacturer to administrative or
judicial civil or criminal sanctions and adverse publicity. FDA sanctions could include refusal to approve pending
applications, withdrawal of an approval, clinical hold, warning or untitled letters, product recalls, product seizures, total or
partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective
advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties.
Biological product manufacturers and other entities involved in the manufacture and distribution of approved
biological products are required to register their establishments with the FDA and certain state agencies, and are subject to
periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP requirements and
other laws. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and
quality control to maintain cGMP compliance. Discovery of problems with a product after approval may result in
restrictions on a product, manufacturer, or holder of an approved BLA, including withdrawal of the product from the
market. In addition, changes to the manufacturing process or facility generally require prior FDA approval before being
implemented and other types of changes to the approved product, such as adding new indications and additional labeling
claims, are also subject to further FDA review and approval.
Biosimilars and Exclusivity
The Biologics Price Competition and Innovation Act of 2009, or BPCIA, created an abbreviated approval
pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological
product. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product
and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies,
and a clinical trial or trials. Interchangeability requires that a product is biosimilar to the reference product and the product
must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient
and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be
alternated or switched after one has been previously administered without increasing safety risks or risks of diminished
efficacy relative to exclusive use of the reference biologic. However, complexities associated with the larger, and often
more complex, structures of biological products, as well as the processes by which such products are manufactured, pose
significant hurdles to implementation of the abbreviated approval pathway that are still being worked out by the FDA.
Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years
following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar
product may not be made effective by the FDA until 12 years from the date on which the reference product was first
licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference
product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data
from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product. The BPCIA
also created certain exclusivity periods for biosimilars approved as interchangeable products.
A biological product can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if
granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the
end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in
accordance with an FDA-issued “Written Request” for such a study.
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Other Healthcare Laws and Compliance Requirements
Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal
government and by authorities in the states and foreign jurisdictions in which they conduct their business, which may
constrain the financial arrangements and relationships through which we conduct our research, as well as, sell, market and
distribute any products for which we obtain marketing approval. Such laws include, without limitation, federal and state
anti-kickback, fraud and abuse, false claims and transparency laws and regulations regarding drug pricing and payments or
other transfers of value made to physicians and other licensed healthcare professionals. If their operations are found to be
in violation of any of such laws or any other governmental regulations that apply, they may be subject to penalties,
including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or
restructuring of operations, exclusion from participation in federal and state healthcare programs, integrity oversight and
reporting obligations to resolve allegations of non-compliance and imprisonment.
Coverage and Reimbursement
Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical or biological
product for which we obtain regulatory approval. Sales of any product depend, in part, on the extent to which such product
will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial
insurance and managed healthcare organizations, and the level of reimbursement for such product by third-party payors.
Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis.
For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be
particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement
for the product itself or the treatment or procedure in which the product is used may not be available, which may impact
physician utilization.
In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-
containment programs, including price controls, restrictions on coverage and reimbursement and requirements for
substitution of generic products. Third party payors are increasingly challenging the prices charged for medical products
and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical or biological
products, medical devices and medical services, in addition to questioning safety and efficacy. Adoption of price controls
and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and
measures, could further limit sales of any product. Decreases in third-party reimbursement for any product or a decision by
a third-party payor not to cover a product could reduce physician usage and patient demand for the product.
Healthcare Reform
The United States and some foreign jurisdictions are considering or have enacted a number of reform proposals to
change the healthcare system. There is significant interest in promoting changes in healthcare systems with the stated
goals of containing healthcare costs, improving quality or expanding access. In the United States, the pharmaceutical
industry has been a particular focus of these efforts and has been significantly affected by federal and state legislative
initiatives, including those designed to limit the pricing, coverage, and reimbursement of pharmaceutical and
biopharmaceutical products, especially under government-funded health care programs, and increased governmental
control of drug pricing.
In March 2010, the Patient Protection and Affordable Care Act, or the ACA, was signed into law, which
substantially changed the way healthcare is financed by both governmental and private insurers in the United States, and
significantly affected the pharmaceutical industry. The ACA contained a number of provisions of particular import to the
pharmaceutical and biotechnology industries, including, but not limited to, those governing enrollment in federal
healthcare programs, a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate
Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, and annual fees based on
pharmaceutical companies’ share of sales to federal health care programs.
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Since its enactment, there have been judicial, Congressional and executive branch challenges to certain aspects of
the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by
several states without specifically ruling on the constitutionality of the ACA.
Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate
reductions of Medicare payments to providers, which was temporarily suspended from May 1, 2020 through March 31,
2022, and reduced payments to several types of Medicare providers. Moreover, there has recently been heightened
governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted
in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things,
bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs,
and reform government program reimbursement methodologies for drug products. On August 16, 2022, the Inflation
Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA requires manufacturers of certain drugs
to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;
imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in
2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The
IRA permits the Secretary of the Department of Health and Human Services, or HHS, to implement many of these
provisions through guidance, as opposed to regulation, for the initial years. On August 29, 2023, HHS announced the list of
the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is
currently subject to legal challenges. While the impact of the IRA on the pharmaceutical industry cannot yet be fully
determined, it is likely to be significant. At the state level, legislatures have increasingly passed legislation and
implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement
constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and,
in some cases, designed to encourage importation from other countries and bulk purchasing.
Additionally, on May 30, 2018, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina
Right to Try Act of 2017, or the Right to Try Act, was signed into law. The law, among other things, provides a federal
framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical
trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek
treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access
program. There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients
as a result of the Right to Try Act.
U.S. Data Privacy and Security Laws
In the United States, numerous federal and state laws and regulations, including data breach notification laws,
health information privacy and security laws, including the Health Insurance Portability and Accountability Act of 1996, as
amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations
promulgated thereunder, or collectively, HIPAA, and federal and state and consumer protection laws and regulations (e.g.,
Section 5 of the Federal Trade Commission Act), govern the collection, use, disclosure, and protection of health-related
and other personal information could apply to our operations or the operations of our partners. In addition, certain state
laws, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act, or collectively, the
CCPA, govern the privacy and security of personal information, including health-related information in certain
circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant
ways and may not have the same effect, thus complicating compliance efforts. Failure to comply with these laws, where
applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. Privacy and
security laws, regulations, and other obligations are constantly evolving, may conflict with each other to make compliance
efforts more challenging, and can result in investigations, proceedings, or actions that lead to significant penalties and
restrictions on data processing.
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U.S. Foreign Corrupt Practices Act
The U.S. Foreign Corrupt Practices Act of 1977, or FCPA, prohibits U.S. corporations and individuals from
engaging in certain activities to obtain or retain business or secure any improper advantage, or to influence a person
working in an official capacity. It is illegal to pay, offer to pay or authorize the payment of anything of value to any
employee or official of a foreign government or public international organization, or political party, political party official,
or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official
capacity. The scope of the FCPA also includes employees and officials of state-owned or controlled enterprises, which
may include healthcare professionals in many countries. Equivalent laws have been adopted in other foreign countries that
impose similar obligations.
Government Regulation Outside of the United States
In addition to regulations in the United States, we may be subject to a variety of regulations in other jurisdictions,
for instance in the UK or EU, governing, among other things, clinical trials, marketing authorizations, or MA, post-MA
requirements and any commercial sales and distribution of our products. Because biologically sourced raw materials are
subject to unique contamination risks, their use may be restricted in some countries. In addition, ethical, social and legal
concerns about gene therapy, genetic testing, genetic research and gene-editing technology, could result in additional
regulations restricting or prohibiting the processes we may use.
Whether or not we obtain FDA approval of a product, we must obtain the requisite approvals from regulatory
authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries.
The requirements and process governing the conduct of clinical trials, product licensing, pricing, promotion and
reimbursement vary from country to country. Approval by one regulatory authority does not ensure approval by regulatory
authorities in other jurisdictions. If we fail to comply with applicable foreign regulatory requirements, we may be subject
to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products,
operating restrictions and criminal prosecution.
Non-Clinical Studies and Clinical Trials
Similar to the United States, the various phases of non-clinical and clinical research abroad are subject to
significant regulatory controls.
Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or
biological substances. Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles
of GLP, as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g.,
radio-pharmaceutical precursors for radio-labeling purposes). In particular, non-clinical studies, both in vitro and in vivo,
must be planned, performed, monitored, recorded, reported and archived in accordance with the GLP principles, which
define a set of rules and criteria for a quality system for the organizational process and the conditions for non-clinical
studies. These GLP standards reflect the Organization for Economic Co-operation and Development requirements.
Clinical trials of medicinal products in the EU must be conducted in accordance with EU and national regulations
and the International Council for Harmonization of Technical Requirements for Human Use, or ICH, guidelines on GCPs,
as well as the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of
Helsinki. Additional GCP guidelines from the European Commission, focusing in particular on traceability, apply to
clinical trials of advanced therapy medicinal products, or ATMPs. If the sponsor of the clinical trial is not established
within the EU, it must appoint an EU entity within the EU to act as its legal representative. The sponsor must take out a
clinical trial insurance policy, and in most EU member states, the sponsor is liable to provide ‘no fault’ compensation to
any study subject injured in the clinical trial.
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The regulatory landscape related to clinical trials in the EU has been subject to recent changes. The EU Clinical
Trials Regulation, or CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became
applicable on January 31, 2022. Unlike directives, the CTR is directly applicable in all EU member states without the need
for member states to further implement it into national law. The CTR notably harmonizes the assessment and supervision
processes for clinical trials throughout the EU via a Clinical Trials Information System, which contains a centralized EU
portal and database.
While the EU Clinical Trials Directive required a separate clinical trial application, or CTA, to be submitted in
each member state in which the clinical trial takes place, to both the competent national health authority and an
independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only
requires the submission of a single application for multi-center trials. The CTR allows sponsors to make a single
submission to both the competent authority and an ethics committee in each member state, leading to a single decision per
member state. The CTA must include, among other things, a copy of the trial protocol and an investigational medicinal
product dossier containing information about the manufacture and quality of the medicinal product under investigation.
The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states
concerned, and a separate assessment by each member state with respect to specific requirements related to its own
territory, including ethics rules. Each member state’s decision is communicated to the sponsor via the centralized EU
portal. Once the CTA is approved, clinical study development may proceed.
The CTR foresees a three-year transition period. The extent to which ongoing and new clinical trials will be
governed by the CTR varies. Clinical trials for which an application was submitted (i) prior to January 31, 2022 under the
EU Clinical Trials Directive, or (ii) between January 31, 2022 and January 31, 2023 and for which the sponsor has opted
for the application of the EU Clinical Trials Directive remain governed by the said Directive until January 31, 2025. After
this date, all clinical trials (including those which are ongoing) will become subject to the provisions of the CTR.
Medicines used in clinical trials must be manufactured in accordance with GMP. Other national and EU-wide
regulatory requirements may also apply.
During the development of a medicinal product, the EMA and national regulators within the EU provide the
opportunity for dialogue and guidance on the development program. At the EMA level, this is usually done in the form of
scientific advice, which is given by the Scientific Advice Working Party of the Committee for Medicinal Products for
Human Use, or CHMP. A fee is incurred with each scientific advice procedure. Advice from the EMA is typically
provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical
testing and clinical trials, and pharmacovigilance plans and risk-management programs. Advice is not legally binding with
regard to any future marketing authorization application of the product concerned.
Marketing Authorizations
In the EU, medicinal products can only be placed on the market after obtaining an MA. To obtain regulatory
approval of an investigational chemical or biological product in the EU, we must submit a marketing authorization
application, or MAA. The process for doing this depends, among other things, on the nature of the medicinal product.
There are two types of MAs – “Centralized MAs” and “National MAs.”
“Centralized MAs” are issued by the European Commission through the centralized procedure, based on the
opinion of the CHMP of the EMA, and are valid across the entire territory of the EU. The centralized procedure is
compulsory for certain types of product candidates, such as: (i) medicinal products derived from biotechnology processes,
such as genetic engineering, (ii) medicinal products containing a new active substance indicated for the treatment of certain
diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative or autoimmune diseases, and other immune dysfunctions
and viral diseases, (iii) designated orphan medicines and (iv) ATMPs, such as gene therapy, somatic cell therapy or tissue-
engineered medicines. The centralized procedure is optional for product candidates
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containing a new active substance not yet authorized in the EU, or for product candidates that constitute a significant
therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.
The Committee for Advanced Therapies, or CAT, is responsible in conjunction with the CHMP for the evaluation
of advanced therapy medicinal products, or ATMPs. The CAT is primarily responsible for the scientific evaluation of
ATMPs and prepares a draft opinion on the quality, safety and efficacy of each ATMP for which an MAA is submitted.
The CAT’s opinion is then taken into account by the CHMP when giving its final recommendation regarding the
authorization of a product in view of the balance of benefits and risks identified. Although the CAT’s draft opinion is
submitted to the CHMP for final approval, the CHMP may depart from the draft opinion, if it provides detailed scientific
justification. The CHMP and CAT are also responsible for providing guidelines on ATMPs and have published numerous
guidelines, including specific guidelines on gene therapies and cell therapies. These guidelines provide additional
guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include,
among other things, the preclinical studies required to characterize ATMPs; the manufacturing and control information that
should be submitted in an MAA; and post-approval measures required to monitor patients and evaluate the long term
efficacy and potential adverse reactions of ATMPs. Although these guidelines are not legally binding, we believe that our
compliance with them is likely necessary to gain and maintain approval for any of our product candidates.
Under the centralized procedure, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days.
This excludes so-called clock stops, during which additional written or oral information is to be provided by the applicant
in response to questions asked by the CHMP. At the end of the review period, the CHMP provides an opinion to the
European Commission. If this opinion is favorable, the Commission may then adopt a decision to grant an MA.
“National MAs” are issued by the competent authorities of the EU member states, only cover their respective
territory, and are available for product candidates not falling within the mandatory scope of the centralized procedure.
Where a product has already been authorized for marketing in an EU member state, this national MA can be recognized in
another member state through the mutual recognition procedure. If the product has not received a national MA in any
member state at the time of application, it can be approved simultaneously in various member states through the
decentralized procedure. Under the decentralized procedure an identical dossier is submitted to the competent authorities of
each of the member states in which the MA is sought, one of which is selected by the applicant as the reference member
state.
MAs have an initial duration of five years. After these five years, the authorization may be renewed on the basis
of a reevaluation of the risk-benefit balance. Once renewed, the MA is valid for an unlimited period unless the European
Commission or the national competent authority decides, on justified grounds relating to pharmacovigilance, to proceed
with one additional five-year renewal
In exceptional cases, the CHMP might perform an accelerated review of an MAA in no more than 150 days (not
including clock stops). Innovative products that target an unmet medical need and are expected to be of major public
health interest may be eligible for a number of expedited development and review programs, such as the Priority Medicine,
or PRIME, scheme, which provides incentives similar to the Breakthrough Therapy designation in the U.S. PRIME is a
voluntary scheme aimed at enhancing the EMA’s support for the development of medicines that target unmet medical
needs. It is based on increased interaction and early dialogue with companies developing promising medicines, to optimize
their product development plans and speed up their evaluation to help them reach patients earlier. Product developers that
benefit from PRIME designation can expect to be eligible for accelerated assessment but this is not guaranteed. Many
benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive
regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements,
and accelerated MAA assessment once a dossier has been submitted. Importantly, a dedicated contact and rapporteur from
the CHMP is appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s
committee level. An initial meeting initiates these relationships and includes a team of multidisciplinary experts at the
EMA to provide guidance on the overall development and regulatory strategies.
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Moreover, in the EU, the European Commission may grant a so-called “conditional MA” prior to obtaining the
comprehensive clinical data required for a full MA. Such conditional MAs may be granted for product candidates
(including medicines designated as orphan medicinal products), if (i) the risk-benefit balance of the product candidate is
positive, (ii) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data,
(iii) the product fulfills an unmet medical need and (iv) the benefit to public health of the immediate availability on the
market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required. A
conditional MA may contain specific obligations to be fulfilled by the MA holder, including obligations with respect to the
completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data. Conditional MAs are
valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the
need for additional or modified conditions and/or specific obligations. The MA can be converted into a standard MA once
the MA holder fulfils the obligations that were imposed and the complete data confirm that the medicine’s benefits
continue to outweigh its risks. The timelines for the centralized procedure described above also apply with respect to the
review by the CHMP of applications for a conditional MA.
The European Commission may also grant a so-called “marketing authorization under exceptional circumstances.”
Such MA is intended for products for which the applicant can demonstrate that it is unable to provide comprehensive data
on the efficacy and safety under normal conditions of use even after the product has been authorized, because the
indications for which the product in question is intended are encountered so rarely that the applicant cannot reasonably be
expected to provide comprehensive evidence, or in the present state of scientific knowledge, comprehensive information
cannot be provided, or it would be contrary to generally accepted principles of medical ethics to collect such information.
Consequently, MAs under exceptional circumstances may be granted subject to certain specific obligations, which may
include the following:
● the applicant must complete an identified program of studies within a time period specified by the competent
authority, the results of which form the basis of a reassessment of the benefit/risk profile;
● the medicinal product in question may be supplied on medical prescription only and may in certain cases be
administered only under strict medical supervision, possibly in a hospital and in the case of a radio-
pharmaceutical, by an authorized person; and
● the package leaflet and any medical information must draw the attention of the medical practitioner to the
fact that the particulars available concerning the medicinal product in question are as yet inadequate in
certain specified respects.
An MA under exceptional circumstances is subject to annual review to reassess the risk-benefit balance in an
annual reassessment procedure. Continuation of the authorization is linked to the annual reassessment and a negative
assessment could potentially result in the MA being suspended or revoked. The renewal of an MA of a medicinal product
under exceptional circumstances, however, follows the same rules as a “normal” MA. Thus, an MA under exceptional
circumstances is granted for an initial five years, after which the authorization will become valid indefinitely, unless the
EMA decides that safety grounds merit one additional five-year renewal. An MA under exceptional circumstances should
not be granted when a conditional MA is more appropriate.
The EU medicines rules expressly permit the EU member states to adopt national legislation prohibiting or
restricting the sale, supply or use of any medicinal product containing, consisting of or derived from a specific type of
human or animal cell, such as embryonic stem cells. While the products we have in development do not make use of
embryonic stem cells, it is possible that the national laws in certain EU member states may prohibit or restrict us from
commercializing our products, even if they have been granted an MA.
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Data and Marketing Exclusivity
The EU also provides opportunities for market exclusivity. Upon receiving MA, reference products generally
receive eight years of data exclusivity and an additional two years of market exclusivity. If granted, data exclusivity
prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of
the reference product when applying for a generic or biosimilar MA in the EU during a period of eight years from the date
on which the reference product was first authorized in the EU. The market exclusivity period prevents a successful generic
or biosimilar applicant from commercializing its product in the EU until ten years have elapsed from the initial MA of the
reference product in the EU. The overall ten-year market exclusivity period may be extended to a maximum of eleven
years if during the first eight years of those ten years, the MA holder obtains an authorization for one or more new
therapeutic indications, which, during the scientific evaluation prior to their authorization, are held to bring a significant
clinical benefit over existing therapies. However, there is no guarantee that a product will be considered by the EU
regulatory authorities to be a new chemical or biological entity, and products may not qualify for data exclusivity.
There is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal
product but that do not meet the definition of a generic medicinal product, for example, because of differences in raw
materials or manufacturing processes. For such products, the results of appropriate preclinical or clinical trials must be
provided, and guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types
of biological product. There are no such guidelines for complex biological products, such as gene or cell therapy medicinal
products, and so it is unlikely that biosimilars of those products will currently be approved in the EU. However, guidance
from the EMA states that they will be considered in the future in light of the scientific knowledge and regulatory
experience gained at the time.
Orphan Medicinal Products
The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the United
States. A medicinal product may be designated as orphan if its sponsor can establish that (1) the product is intended for the
diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition
affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits
derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment; and (3) there
exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or
if such a method exists, the product will be of significant benefit to those affected by the condition.
Orphan designation entitles a party to incentives such as reduction of fees or fee waivers, protocol assistance, and
access to the centralized MA procedure. The application for orphan designation must be submitted before the MAA. The
applicant will receive a fee reduction for the MAA if the orphan designation has been granted, but not if the designation is
still pending at the time the MA is submitted. Upon grant of an MA and assuming the requirement for orphan designation
are also met at the time the MA is granted, orphan medicinal products are entitled to a ten-year period of market exclusivity
for the approved therapeutic indication, which means that regulatory authorities cannot accept another MA or grant an MA
or accept an application to extend an existing MA in respect of a similar medicinal product for the same indication for a
period of ten years. The period of market exclusivity is extended by two years for orphan medicinal products that have also
complied with an agreed pediatric investigation plan, or PIP. Orphan designation does not convey any advantage in, or
shorten the duration of, the regulatory review and approval process.
The ten-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the
product no longer meets the criteria for which it received orphan designation, including where it is shown that the product
is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has
increased above the orphan designation threshold. Additionally, an MA may be granted to a similar product for the same
indication at any time if (1) the second applicant can establish that its product, although similar, is
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safer, more effective or otherwise clinically superior, (2) the applicant consents to a second orphan medicinal product
application; or (3) the applicant cannot supply enough orphan medicinal product.
Pediatric Development
In the EU, MAAs for new medicinal products have to include the results of trials conducted in the pediatric
population, in compliance with a PIP agreed with the EMA’s Pediatric Committee, or PDCO. The PIP sets out the timing
and measures proposed to generate data to support a pediatric indication of the product candidate for which an MA is being
sought. The PDCO can grant a deferral of the obligation to implement some or all of the measures of the PIP until there
are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide
pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product
is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in
adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for
pediatric patients. Once the MA is obtained in all EU member states and study results are included in the product
information, even when negative, the product is eligible for a six-months supplementary protection certificate extension (if
any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan
market exclusivity is granted.
Post-Approval Requirements
Similar to the United States, both MA holders and manufacturers of medicinal products are subject to
comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of
the member states. The holder of an MA must establish and maintain a pharmacovigilance system and appoint an
individual qualified person for pharmacovigilance who is responsible for the establishment and maintenance of that system,
and oversees the safety profiles of medicinal products and any emerging safety concerns. Key obligations include
expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.
All new MAAs must include a risk management plan, or RMP, describing the risk management system that the
company will put in place and documenting measures to prevent or minimize the risks associated with the product. The
regulatory authorities may also impose specific obligations as a condition of the MA. Such risk-minimization measures or
post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the
conduct of additional clinical trials or post-authorization safety studies.
The advertising and promotion of medicinal products is also subject to laws concerning promotion of medicinal
products, interactions with physicians, misleading and comparative advertising and unfair commercial practices. All
advertising and promotional activities for the product must be consistent with the approved summary of product
characteristics, and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription
medicines is also prohibited in the EU. Although general requirements for advertising and promotion of medicinal
products are established under EU directives, the details are governed by regulations in each member state and can differ
from one country to another.
Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing
approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing
of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory
requirements may result in administrative, civil or criminal penalties. These penalties could include delays or refusal to
authorize the conduct of clinical trials or to grant MA, product withdrawals and recalls, product seizures, suspension,
withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials,
operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.
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The aforementioned EU rules are generally applicable in the European Economic Area, or EEA, which consists of
the 27 EU member states plus Iceland, Liechtenstein and Norway.
Pricing and Reimbursement
Even if a medicinal product obtains an MA in the EU, there can be no assurance that reimbursement for such
product will be secured on a timely basis or at all. Governments influence the price of medicinal products through their
pricing and reimbursement rules and control of national healthcare systems that fund a large part of the cost of those
products to consumers. Member states are free to restrict the range of pharmaceutical products for which their national
health insurance systems provide reimbursement, and to control the prices and reimbursement levels of pharmaceutical
products for human use. Some jurisdictions operate positive and negative list systems under which products may only be
marketed once a reimbursement price has been agreed to by the government. Member states may approve a specific price
or level of reimbursement for the pharmaceutical product, or alternatively adopt a system of direct or indirect controls on
the profitability of the company responsible for placing the pharmaceutical product on the market, including volume-based
arrangements, caps and reference pricing mechanisms. To obtain reimbursement or pricing approval, some of these
countries may require the completion of clinical trials that compare the cost-effectiveness of a particular product candidate
to currently available therapies. Other EU member states allow companies to fix their own prices for medicines, but
monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription
medicines, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.
In addition, in some countries, cross border imports from low-priced markets exert a commercial pressure on pricing within
a country.
Healthcare Reform
Political, economic and regulatory developments are occurring in the EU and may affect the ability of
pharmaceutical companies to profitably commercialize their products, once approved. In addition to continuing pressure on
prices and cost containment measures, legislative developments at the EU or member state level may result in significant
additional requirements or obstacles. The delivery of healthcare in the EU, including the establishment and operation of
health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU,
law and policy. National governments and health service providers have different priorities and approaches to the delivery
of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary
constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by
relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to
develop and market products, this could restrict or regulate post-approval activities and affect the ability of pharmaceutical
companies to commercialize their products. In international markets, reimbursement and healthcare payment systems vary
significantly by country, and many countries have instituted price ceilings on specific products and therapies.
In the EU, potential reductions in prices and changes in reimbursement levels could be the result of different
factors, including reference pricing systems, parallel distribution and parallel trade. It could also result from the application
of external reference pricing mechanisms, which consist of arbitrage between low-priced and high-priced countries.
Reductions in the pricing of medicinal products in one EU member state could affect the price in other EU member states.
Health Technology Assessment, or HTA, of medicinal products in the EU is an essential element of the pricing
and reimbursement decision-making process in a number of EU member states. The outcome of HTA has a direct impact
on the pricing and reimbursement status granted to the medicinal product. A negative HTA by a leading and recognized
HTA body concerning a medicinal product could undermine the prospects to obtain reimbursement for such product not
only in the EU member state in which the negative assessment was issued, but also in other EU member states.
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In 2011, Directive 2011/24/EU was adopted at the EU level. This Directive establishes a voluntary network of
national authorities or bodies responsible for HTA in the individual EU member states. The network facilitates and
supports the exchange of scientific information concerning HTAs. Further to this, on December 13, 2021, Regulation No
2021/2282 on HTA, amending Directive 2011/24/EU, was adopted. While the Regulation entered into force in January
2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take
place in the interim. Once applicable, it will have a phased implementation depending on the concerned products. The
Regulation intends to boost cooperation among EU member states in assessing health technologies, including new
medicinal products, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas. It
will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together
in four main areas, including joint clinical assessment of the innovative health technologies with the highest potential
impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification
of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other
areas. Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social,
ethical) aspects of health technology, and making decisions on pricing and reimbursement.
Brexit and the Regulatory Framework in the United Kingdom
The UK formally left the EU on January 31, 2020, commonly referred to as “Brexit”. Since the end of the Brexit
transition period on January 1, 2021, Great Britain (England, Scotland and Wales) has not been directly subject to EU laws,
however under the terms of the Protocol on Ireland and Northern Ireland, EU laws have generally applied to Northern
Ireland. On February 27, 2023, the UK Government and the European Commission reached a political agreement in the
“Windsor Framework” which will revise the Protocol on Ireland and Northern Ireland in order to address some of the
perceived shortcomings in its operation. Under the changes, Northern Ireland will be reintegrated under the regulatory
authority of the MHRA with respect to medicinal products. The UK Government has confirmed that the Windsor
Framework will come into effect on January 1, 2025 at which point the MHRA will be solely responsible for authorizing
medicines for the Northern Ireland market.
UK Clinical Trials
It is currently unclear to what extent the UK will seek to align its regulations with the EU. The UK regulatory
framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through
secondary legislation), and after Brexit, EU laws on clinical trials (including the CTR) are not directly applicable in Great
Britain (i.e., the UK excluding Northern Ireland). On January 17, 2022, the MHRA launched an eight-week consultation on
reframing the UK legislation for clinical trials which aimed to streamline clinical trials approvals, enable innovation,
enhance clinical trials transparency, enable greater risk proportionality, and promote patient and public involvement in
clinical trials. The MHRA published its consultation outcome on March 21, 2023 in which it confirmed that it would
update the existing legislation. The resulting legislative changes will ultimately determine the extent to which the UK
regulations align with the CTR. Under the terms of the Protocol on Ireland and Northern Ireland, provisions of the CTR
which relate to the manufacture and import of investigational medicinal products and auxiliary medicinal products
currently apply in Northern Ireland.
UK Marketing Authorizations
The MHRA is now the UK’s standalone regulator for MAAs. All existing centralized procedure MAs were
automatically converted into UK MAs effective in Great Britain and issued with a UK MA number on January 1, 2021
(unless MA holders opted out of this scheme by January 21, 2021). As a result of the implementation of the Protocol on
Ireland and Northern Ireland, centralized procedure MAs remain valid for marketing products in Northern Ireland.
Companies established in the UK can no longer use the centralized procedure and instead must follow one of the UK
national authorization procedures or one of the remaining post-Brexit international cooperation procedures to obtain an
MA to market products in the UK. A new international recognition framework has applied since January 1, 2024, whereby
the MHRA will have regard to decisions on the approval of MAs made by the EMA and certain other
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regulators when determining an application for a new Great Britain MA. Additionally, the ‘Unfettered Access Procedure’
enables MA holders in Northern Ireland to seek recognition in Great Britain. Post Brexit, the MHRA has updated various
aspects of the regulatory regime for medicines in the UK, including: introducing the Innovative Licensing and Access
Procedure to accelerate the time to market and facilitate patient access for innovative medicines; updates to the UK
national approval procedure, introducing a 150-day objective for assessing applications for MAs in the UK, Great Britain
and Northern Ireland and a rolling review process for MA applications (rather than a consolidated full dossier submission).
UK Orphan Designation
Post-Brexit, the UK has retained the EU Regulation which governs the designation of medicinal products as
orphan medicinal products and which establishes incentives thereto (Regulation (EC) No. 141/2000) as part of UK law by
virtue of the EU (Withdrawal) Act 2018.
The MHRA is responsible for reviewing applications from companies for orphan designation at the time of a
MAA. If a medicinal product has been designated orphan in the EU under Regulation (EC) 141/2000, a Great Britain
orphan MAA can be made under regulation 50G of the Human Medicines Regulation 2012 (as amended). A UK-wide
orphan MAA can only be considered in the absence of an active EU orphan designation.
If a UK-wide orphan MA is granted and the medicinal product subsequently receives EU orphan designation, the
MA holder would need to submit a variation to change this to a Great Britain orphan MA.
UK Specials Regulation
The UK’s Human Medicines Regulations 2012 allow for the manufacture and supply of medicinal products not
authorized for marketing to patients with special needs at the request of the healthcare professional responsible for the
patient’s care (these products are referred to as “specials”). A special may only be supplied: (i) in response to an
unsolicited order from a healthcare professional responsible for the care of the patient, (ii) if the product is manufactured
and assembled in accordance with the specifications of that healthcare professional to fulfil the special needs of the
individual patient which cannot be met by products already authorized for marketing, and (iii) if the product is
manufactured under a specials license granted by the UK’s MHRA.
Manufacturing a special also imposes a five year record retention requirement subject to review by the MHRA,
including details of any suspected adverse reaction to the product so sold or supplied of which the person is aware or
subsequently becomes aware, as well as a continuing obligation to notify the MHRA of any suspected adverse reaction to
the medicinal product which is a serious adverse reaction.
Privacy and Data Protection Laws
We are also subject to laws and regulations in non-U.S. countries in which we are established or in which we run
clinical trials, as well as countries in which we may sell, market and distribute products for which we obtain marketing
approval. These laws and regulations cover data privacy and the protection of health-related and other personal data. Laws
and regulations in the EU and other jurisdictions apply broadly to the collection, use, storage, disclosure, processing and
security of personal data, and have generally become more stringent over time.
For example, the EU General Data Protection Regulation, or GDPR, imposes strict requirements for processing
the personal data of individuals within the European Economic Area, or EEA, or in the context of our activities in the EEA.
The GDPR allows EU member states to make additional laws and regulations further regulating the processing of genetic,
biometric or health data. Failure to comply with the requirements of GDPR and the applicable national data protection
laws of the EU member states may result in fines of up to €20 million or up to 4% of the total worldwide
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annual turnover of a noncompliant undertaking in the preceding financial year, whichever is higher, and other
administrative penalties and may expose us to compensation claims from affected individuals.
Further, from January 1, 2021, we are subject to the GDPR and also the UK General Data Protection Regulation,
which, together with the amended UK Data Protection Act 2018 (collectively, the UK GDPR), retains the GDPR in UK
national law. The UK GDPR mirrors the fines under the GDPR, e.g. fines up to the greater of £17.5 million or 4% of the
total worldwide annual turnover of a noncompliant undertaking for the preceding financial year. The European
Commission has adopted an adequacy decision in favor of the UK, enabling data transfers from EU member states to the
UK without additional safeguards. However, the UK adequacy decision will automatically expire in June 2025 unless the
European Commission re-assesses and renews/extends that decision, and it continues to remain under review by the
Commission during this period.
Employees
As of December 31, 2023, we had 425 employees, 419 of which are full-time employees. None of our employees
is subject to a collective bargaining agreement or represented by a trade or labor union. We consider our relationship with
our employees to be good.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and
integrating our existing and new employees, advisors and consultants. The principal purposes of our equity incentive plans
are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase
shareholder value and the success of our company by motivating such individuals to perform to the best of their abilities
and achieve our objectives.
Corporate Information
MeiraGTx Holdings plc was formed on May 1, 2018 under the laws of the Cayman Islands. Our predecessor,
MeiraGTx Limited, a limited company under the laws of England and Wales, was formed on March 20, 2015. In
connection with our initial public offering (“IPO”), we reorganized whereby MeiraGTx Limited became a wholly owned
subsidiary of MeiraGTx Holdings plc.
Available Information
Our website can be found at http://www.meiragtx.com. From time to time, we may use our website as a channel of
distribution of material company information. Financial and other material information is routinely posted and accessible
under the Investors and Media section of our website at http://www.meiragtx.com.
We file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and
Exchange Commission (“SEC”). Our SEC filings are available to the public over the Internet at the SEC’s website at
http://www.sec.gov. Our SEC filings are also available without charge under the Investors and Media section of our website
at http://www.meiragtx.com. We make this information available on our website as soon as reasonably practicable after we
electronically file such information with, or furnish it to, the SEC. Our website and the information contained on or
connected to that site are not incorporated into this Form 10-K.
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ITEM 1A.
RISK FACTORS
Investing in our ordinary shares involves a high degree of risk. You should consider carefully the risks described below,
together with the other information included or incorporated by reference in this Form 10-K. If any of the following risks
occur, our business, financial condition, results of operations and future growth prospects could be materially and
adversely affected. In these circumstances, the market price of our ordinary shares could decline. Other events that we do
not currently anticipate or that we currently deem immaterial may also affect our business, prospects, financial condition
and results of operations.
Risks Related to Our Financial Position and Need for Additional Capital
We have incurred significant losses since inception and anticipate that we will incur continued losses for the foreseeable
future, and may never achieve or maintain profitability.
We are a clinical stage company with limited operating history. We were formed and began operations in 2015.
We have never been profitable and do not expect to be profitable in the foreseeable future. We have incurred net losses
since inception, including net losses of approximately $84.0 million and $129.6 million for the years ended December 31,
2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of approximately $554.2 million.
Since our inception, we have devoted substantially all of our resources to developing our technology platform, establishing
our viral vector manufacturing facilities and plasmid and DNA production facility, developing manufacturing processes,
advancing the product candidates in our ophthalmology, salivary gland and neurodegenerative disease programs, research
and development activities, building our intellectual property portfolio, organizing and staffing our company, developing
our business plans, raising capital, securing debt financing and providing general and administrative support for these
operations. We have not yet demonstrated an ability to successfully complete large-scale, pivotal clinical trials, obtain
marketing approval, manufacture product at a commercial scale, or arrange for a third party to do so on our behalf, or
conduct sales and marketing activities necessary for successful product commercialization. Given the length of time
typically needed to develop a new drug from the time it enters Phase 1 clinical trials to when it is approved for treating
patients, if ever, predictions about our future success or viability may not be as accurate as they could be if we had a longer
operating history or a history of successfully developing and commercializing genetic medicine products.
We expect to continue to incur significant expenses and additional operating losses for the foreseeable future as
we seek to advance product candidates through preclinical and clinical development, expand our research, development
and manufacturing activities, develop new product candidates, build and expand our intellectual product portfolio,
complete clinical trials, seek regulatory approval and, if we receive regulatory approval, commercialize our products.
Furthermore, the costs of advancing product candidates into each succeeding clinical phase tend to increase substantially
over time, including the ongoing Phase 2 AQUAx2 clinical trial of AAV-hAQP1 for the treatment of patients with
radiation-induced xerostomia. In addition, we expect to continue incurring increasing research and development costs
associated with our clinical activities for AAV-GAD for the treatment of Parkinson’s disease and research, preclinical and
clinical activities for our riboswitch platform. The total costs to advance any of our product candidates to marketing
approval in even a single jurisdiction would be substantial. Because of the numerous risks and uncertainties associated with
gene therapy product development, we are unable to accurately predict the timing or amount of increased expenses or
whether we will be able to begin generating revenue from the commercialization of products or achieve or maintain
profitability.
Before we generate any revenue from product sales, each of our programs and product candidates will require
additional preclinical and/or clinical development, potential regulatory approval in multiple jurisdictions, manufacturing,
building of a commercial organization, substantial investment and significant marketing efforts. Our expenses could
increase beyond expectations if we are required by the FDA, MHRA, EMA, or other regulatory authorities to perform
preclinical studies and clinical trials in addition to those that we currently anticipate. These risks are further described
under “—Risks Related to Discovery, Development, Clinical Testing, Manufacturing and Regulatory Approval” and “—
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Risks Related to Commercialization.” As a result, we expect to continue to incur net losses for the foreseeable future.
These net losses have had, and will continue to have, an adverse effect on our shareholders’ equity and working capital.
As we continue to build our business, we expect our financial condition and operating results may fluctuate
significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control.
Accordingly, you should not rely upon the results of any particular quarterly or annual period as indications of future
operating performance. If we are unable to develop and commercialize one or more of our product candidates either alone
or with collaborators, or if revenues from any product candidate that receives marketing approval are insufficient, we will
not achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability. If we
are unable to achieve and then maintain profitability, the value of our equity securities will be adversely affected.
There is no guarantee that we will receive in a timely fashion or at all the additional milestone payments contemplated
under the Asset Purchase Agreement or the revenues associated with our manufacture of the commercial supply of the
RPGR Product under the Supply Agreement.
On December 20, 2023, we and MeiraGTx UK II Limited entered into and consummated the Asset Purchase
Agreement with Janssen pursuant to which we sold and assigned to Janssen, and Janssen purchased and assumed, the
UCLB RPGR License Agreement relating to the research, development, manufacture and exploitation of the RPGR
Product, and other related assets as described in the Asset Purchase Agreement. MeiraGTx UK II Limited and Janssen also
entered into a Supply Agreement on December 20, 2023 pursuant to which MeiraGTx UK II Limited, together with its
affiliates, will manufacture commercial supply of the RPGR Product for Janssen for an initial term of four years, with
Janssen having an option to extend the Supply Agreement for a fifth year upon written notification to us.
Under the Asset Purchase Agreement, Janssen paid us a non-refundable upfront cash purchase price of $65.0
million in December 2023. Additionally, pursuant to and subject to the terms and conditions set forth in the Asset Purchase
Agreement, Janssen agreed to pay us future contingent consideration of up to an aggregate of $350.0 million, as follows: (i)
a milestone payment of $50.0 million in connection with the achievement of the initiation of the extension study for the
Phase 3 LUMEOS clinical trial for the RPGR Product, which milestone was achieved during the first quarter of 2024; (ii)
$10.0 million upon completion of certain specified development services for the drug substance for the RPGR Product; (iii)
$5.0 million upon completion of certain specified development services for the drug product for the RPGR Product; (iv)
$175.0 million upon the first commercial sale of an RPGR Product in the United States; (v) $75.0 million upon the first
commercial sale of an RPGR Product in at least one of the United Kingdom, France, Germany, Spain and Italy; (vi) $25.0
million upon completion of the transfer of certain manufacturing technology for drug substance and drug product from us
to Janssen; and (vii) $10.0 million upon regulatory approval of a Janssen-selected manufacturing facility in each of the
United States and European Union for commercial manufacture of the RPGR Product.
In connection with the sale and assignment of the UCLB RPGR License Agreement relating to the research,
development, manufacture and exploitation of the RPGR Product to Janssen, Janssen has control and broad discretion over
all aspects of the development and commercialization of the RPGR Product and we will have little, if any, influence over
how such activities will be conducted. Janssen will also be responsible for seeking regulatory approval and initiating the
first commercial sale in the relevant jurisdictions of the RPGR Product, as well as obtaining regulatory approval of its
manufacturing facilities in the relevant jurisdictions for the purposes of conducting commercial manufacture of the RPGR
Product. These regulatory approvals and initiation of the first commercial sales in the relevant jurisdictions would entitle us
to receive milestone payments up to an aggregate of $260.0 million. Our receipt of these milestones is dependent on
Janssen’s ability to successfully develop and commercialize the RPGR Product and obtain the necessary regulatory
approvals for its manufacturing facilities. If these regulatory approvals or commercial sales do not occur in a timely fashion
or at all, then such milestone payments, and any revenues we may receive from manufacturing commercial supply of the
RPGR Product, may be delayed or we may not receive such payments. Additionally, certain of these milestone based
payments are payable upon our achievement of the specified development services, completion of the transfer of certain
manufacturing technology to Janssen and our ability to manufacture sufficient commercial supply of the RPGR Product in
a timely fashion. In the event we are not successful in completing these activities in a timely fashion or at all, we will
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not receive the milestone payments associated with the relevant milestone under the Asset Purchase Agreement or receive
revenue for commercial supply of the RPGR Product under the Supply Agreement. In each of these circumstances, our
anticipated cash inflows from these activities would be reduced or eliminated, which would have an adverse effect on our
revenue and financial position.
We will require additional capital to fund our operations, which may not be available on acceptable terms, if at all.
We expect to spend substantial amounts to complete the development of, seek regulatory approvals for and
commercialize our product candidates, as well as continue to expand our manufacturing and supply chain capabilities. This
will require additional capital, which we may raise through equity offerings, debt financings, marketing and distribution
arrangements and other collaborations, strategic alliances and licensing arrangements or other sources. Our ability to raise
additional capital when needed has been and may in the future be adversely affected by external factors beyond our control,
including changes in the political climate, geopolitical actions, changes in market interest rates, potential reforms and
changes to government regulations, the effect of healthcare reform legislation, including those that may limit pricing of
pharmaceutical products and drugs, market prices and conditions, prospects for favorable or unfavorable clinical trial
results, new product initiatives, the manufacturing and distribution of new products, product safety and efficacy issues, new
collaborations and strategic alliances and licensing arrangements. Adequate additional financing may not be available to us
on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative effect on our financial
condition and our ability to pursue our business strategy. In addition, attempting to secure additional financing has diverted
and may in the future divert the time and attention of our management from day-to-day activities and harm our product
candidate development efforts. If we are unable to raise capital when needed or on acceptable terms, we would be forced to
delay, reduce or eliminate certain of our research and development programs.
Our operations have consumed significant amounts of cash since inception. As of December 31, 2023, our cash
and cash equivalents were $129.6 million. In addition, we received a milestone payment of $50.0 million in the first quarter
of 2024 from Janssen and expect to receive $10.1 million from receivables which we expect to collect in the first quarter of
2024 from Janssen in connection with the Collaboration Agreement. Based on our cash, cash equivalents and accounts
receivable – related party at December 31, 2023 and the near-term milestone payments we have received and expect to
receive under the Asset Purchase Agreement, we estimate that such funds will be sufficient to enable us to fund our
operating expenses and capital expenditure requirements into the first quarter of 2026. This estimate does not include the
$285.0 million in milestones we are eligible to receive under the Asset Purchase Agreement upon first commercial sale of
an RPGR Product in the United States and in at least one of the United Kingdom, France, Germany, Spain and Italy, for
completion of the transfer of certain manufacturing technology to Janssen and upon regulatory approval of a Janssen-
selected manufacturing facility in each of the United States and European Union for commercial manufacture of the RPGR
Product. This estimate is based on assumptions that may prove to be wrong, and we could use our available capital
resources sooner than we currently expect. Changing circumstances could cause us to spend more than expected or
consume capital significantly faster than we currently anticipate, such as inflation or other factors that may significantly
increase our business costs. Because the length of time and activities associated with successful development of our
product candidates is uncertain, we are unable to estimate the actual funds we will require for development and any
approved marketing and commercialization activities. Our future funding requirements, both near and long-term, will
depend on many factors, including, but not limited to:
● the progress, timing, costs and results of our clinical development for our radiation-induced xerostomia
product candidate, AAV-hAQP1, and for our product candidate for the treatment of Parkinson’s disease,
AAV-GAD;
● the progress, timing, costs and results of our ongoing clinical development for our CNGB3
achromatopsia gene therapy product candidate, AAV-CNGB3, for our CNGA3 achromatopsia gene
therapy product candidate, AAV-CNGA3, for our RPE65-associated retinal dystrophy product candidate,
AAV-RPE65, and to continue to conduct our ongoing natural history studies for IRDs;
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● the development of our product candidate for the treatment of ALS, AAV-UPF1, for our product
candidate for the treatment of xerostomia associated with Sjogren’s syndrome, AAV-hAQP1, and our
product candidate for the treatment of neovascular age related macular degeneration, or wet AMD;
● the development of our potentially transformative gene regulation technology designed to precisely and
specifically control gene therapy expression levels via dose-response to orally delivered small
molecules;
● the extent to which we receive the milestone payments under the Asset Purchase Agreement with
Janssen;
● continuing our current research programs and our preclinical development of product candidates from
our current research programs;
● seeking to identify, assess, acquire and/or develop additional research programs and additional product
candidates;
● the preclinical testing and clinical trials for any product candidates we identify and develop;
● the outcome, timing and cost of meeting regulatory requirements established by the FDA, MHRA, EMA
and other regulatory authorities;
● the cost of expanding and protecting our intellectual property portfolio, including filing, prosecuting,
defending and enforcing our patent claims and other intellectual property rights;
● the cost of defending potential intellectual property disputes, including patent infringement actions
brought by third parties against us or any of our product candidates;
● the effect of competing technological and market developments;
● the cost of further developing and scaling our manufacturing facilities and processes;
● the cost and timing of completion of commercial-scale manufacturing facilities and activities;
● the cost of making royalty, milestone or other payments under current and any future in-license
agreements;
● our ability to establish and maintain strategic collaborations, licensing or other agreements and the
financial terms of such agreements;
● the extent to which we in-license or acquire rights to other products, product candidates and
technologies;
● the cost of establishing sales, marketing and distribution capabilities for our product candidates in
regions where we choose to commercialize our products; and
● the initiation, progress, timing and results of our commercialization of our product candidates, if
approved for commercial sale.
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Raising additional capital through the sale of equity or convertible debt securities will dilute your ownership
interest, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a
shareholder. For example, in connection with entering into the Financing Agreement (as defined below), we issued
warrants to Perceptive (as defined below), to purchase 400,000 ordinary shares at an exercise price of $15.00 per share and
300,000 ordinary shares at an exercise price of $20.00 per share. Additional debt financing or preferred equity financing, if
available, may involve agreements that include covenants further limiting or restricting our ability to take specific actions,
such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through
collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be
required to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on
terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when
needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization
efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market
ourselves.
We may not have sufficient cash flows or cash on hand to satisfy our debt obligations or covenants under our financing
arrangements, or we may not be able to effectively manage our business in compliance with such covenants.
On August 2, 2022, we, as borrower, and our wholly-owned subsidiaries MeiraGTx UK II Limited and MeiraGTx
Ireland DAC, as guarantors (the “Subsidiary Guarantors”), entered into a senior secured financing arrangement (the
“Financing Agreement”) by and among us, the Subsidiary Guarantors, the lenders and other parties from time to time party
thereto and Perceptive Credit Holdings III, LP, as administrative agent and lender (“Perceptive”). On December 19, 2022,
the Financing Agreement was converted to a notes purchase agreement and guaranty (as converted, the “Notes Purchase
Agreement”) between the same parties and under substantially the same terms and conditions as the Financing Agreement,
subject to certain customary note constitution terms. On August 10, 2023, the same parties entered into a Consent and
Amendment to Amended and Restated Notes Purchase Agreement and Guaranty (the “First Consent and Amendment”),
which amends the Notes Purchase Agreement. The Notes Purchase Agreement provides for an initial $75.0 million notes
issuance (the “Tranche 1 Notes”). Pursuant to the First Consent and Amendment, we may request in our sole discretion,
and Perceptive has agreed to subscribe to purchase upon such request, an additional $25.0 million notes issuance (the
“Tranche 2 Notes”, together with the Tranche 1 Notes, the “Notes”) at any time before August 2, 2024, subject to the terms
of the Notes Purchase Agreement. Previously, the Company’s request for issuance of the Tranche 2 Notes was to be
determined at Perceptive’s sole discretion. The Notes incur interest, subject to certain provisions therein, at a fluctuating
rate per annum equal to 10.00% plus the secured overnight financing rate administered by the Federal Reserve Bank of
New York for a one-month tenor, subject to a 1.00% floor. The Notes Purchase Agreement matures on August 2, 2026 and
is interest-only during the term. The Notes Purchase Agreement also contains various restrictions and covenants, including,
among other things, covenants regarding the incurrence of additional indebtedness, limitations on liens, limitations on
certain investments, limitations on making distributions, dividends and other payments, mergers, consolidations and
acquisitions, dispositions of assets, maintenance of at least $3.0 million in a U.S. bank account, transactions with affiliates,
changes to governing documents, changes to certain agreements and leases and changes in control. Our obligations under
the Notes Purchase Agreement are secured by our London, UK and Shannon, Ireland manufacturing facilities, $3.0 million
of our cash and the bank accounts of the Subsidiary Guarantors, and the issued and outstanding equity interests of the
Subsidiary Guarantors.
There can be no assurance that our cash and cash equivalents available under the Notes Purchase Agreement and
under any future financings, together with any funds generated by our operations, will be sufficient to satisfy our debt
payment obligations. Our inability to generate funds, obtain financing sufficient to satisfy our debt payment obligations or
remain in compliance with the debt covenants may result in such obligations being accelerated by our lenders, which
would likely have a material adverse effect on our business, financial condition and results of operations.
The covenants may restrict our current and future operations, particularly our ability to respond to certain changes
in our business or industry, or take future actions. Additionally, our ability to comply with these restrictive covenants may
be impacted by events beyond our control, such as economic conditions or major central bank policy actions. Our Notes
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Purchase Agreement provides that our breach or failure to satisfy certain covenants constitutes an event of default. Upon
the occurrence of an event of default, in addition to an increase in the rate of interest on the Notes of 3% per annum,
Perceptive could elect to declare all amounts outstanding thereunder to be immediately due and payable, proceed against
the assets we provided as collateral, and, if such debt were accelerated, we may not have sufficient cash on hand or be able
to sell sufficient collateral to repay it, which would have an immediate adverse effect on our business and operating results.
This could potentially cause us to cease operations and result in a complete loss of your investment in our ordinary shares.
Our review of potential strategic transactions may not result in an executed or consummated transaction or other
strategic alternative and may not result in anticipated benefits to us or our shareholders, and the process of reviewing
strategic transactions or its conclusion could be disruptive and distracting to our business operations and management.
In October 2023, we announced that we had been approached by multiple parties with strategic interest in certain
of our assets, and that we were actively pursuing these options. In October 2023 and December 2023 we announced
transactions with Sanofi and Janssen, respectively, as described above. We have, and may continue to, opportunistically
identify and evaluate strategic opportunities regarding our assets. There can be no assurance that we will be successful in
our efforts to pursue or advance such options, or identify similar opportunities, or that any potential transaction would be
consummated or, if consummated, will provide the anticipated benefits to us or otherwise enhance shareholder value. Any
such potential transaction would be dependent upon a number of factors beyond our control, including, without limitation,
market conditions, industry trends, the interest of third parties in our assets and whether the terms of any strategic
transaction would be acceptable to us. The process of reviewing potential strategic alternatives is time consuming and may
be distracting and disruptive to our business operations and long-term planning, which may cause concern to our current or
potential customers, employees, investors, strategic partners and other constituencies and may have a material impact on
our business and operating results or result in increased volatility in our share price.
We are heavily dependent on the success of our product candidates, which are still in development, and if none of them
receive regulatory approval or are successfully commercialized, our business may be harmed.
Our future success and ability to generate product revenue is substantially dependent on our ability to successfully
develop, manufacture, obtain regulatory approval for and successfully commercialize our product candidates. We currently
have no products that are approved for commercial sale and may never be able to develop marketable products. We have
invested and expect to continue to invest a meaningful portion of our efforts and expenditures over the next few years in
the development of AAV-hAQP1, AAV-GAD, AAV-CNGB3, AAV-CNGA3, AAV-RPE65 and our riboswitch gene
regulation technology platform, which will require additional clinical development, management of clinical and
manufacturing activities, regulatory approval in multiple jurisdictions, manufacturing sufficient supply, building of a
commercial organization, substantial investment and significant marketing efforts before we can generate any revenues
from any commercial sales. We cannot be certain that our product candidates will be successful in clinical trials, receive
regulatory approval or be successfully commercialized even if we receive regulatory approval. Even if we receive approval
to market our product candidates from the FDA, MHRA or other regulatory bodies, we cannot be certain that our product
candidates will be successfully commercialized by us or our collaborators, widely accepted in the marketplace or more
effective than other commercially available alternatives. Additionally, the research, testing, manufacturing, labeling,
approval, sale, marketing and distribution of gene therapy products are and will remain subject to extensive and evolving
regulation by the FDA, MHRA and other regulatory authorities. We are not permitted to market our product candidates in
the United States until they receive approval of a biologics license application, or BLA, from the FDA, we cannot market
them in the UK or EU until we receive approval for an MA, from the MHRA or European Commission, respectively, and
we cannot market them in other countries until we receive any other required regulatory approval in those countries.
Because some of our product candidates are based on similar technology, if any of our product candidates show
unexpected adverse events or a lack of efficacy in the indications we intend to treat, or if we experience other regulatory or
developmental issues, our development plans and business could be significantly harmed. Further, competitors may be
developing products with similar technology and may experience problems with their products that could identify problems
that would potentially harm our business.
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We may not be successful in our efforts to identify additional product candidates.
Part of our strategy involves identifying novel product candidates. The process by which we identify product
candidates may fail to yield product candidates for clinical development for a number of reasons, including those discussed
in these risk factors and also:
● we may not be able to assemble sufficient resources to acquire or discover additional product candidates;
● competitors may develop alternatives that render our potential product candidates obsolete or less
attractive;
● potential product candidates we develop may nevertheless be covered by third parties’ patents or other
exclusive rights;
● potential product candidates may, on further study, be shown to have harmful side effects, toxicities or
other characteristics that indicate that they are unlikely to be products that will receive marketing
approval and achieve market acceptance;
● potential product candidates may not be effective in treating their targeted diseases;
● the market for a potential product candidate may change so that the continued development of that
product candidate is no longer reasonable;
● a potential product candidate may not be capable of being produced in commercial quantities at an
acceptable cost, or at all; or
● the regulatory pathway for a potential product candidate may be too complex and difficult to navigate
successfully or economically.
In addition, we may choose to focus our efforts and resources on a potential product candidate that ultimately
proves to be unsuccessful. As a result, we may fail to capitalize on viable commercial products or profitable market
opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other diseases that
may later prove to have greater commercial potential, or relinquish valuable rights to such product candidates through
collaboration, licensing or other royalty arrangements in cases in which it would have been advantageous for us to retain
sole development and commercialization rights. If we are unable to identify additional suitable product candidates for
clinical development, this would adversely impact our business strategy and our financial position and share price and
could potentially cause us to cease operations.
Risks Related to Discovery, Development, Clinical Testing, Manufacturing and Regulatory Approval
It is difficult to predict the time and cost of product candidate development on our novel gene therapy platform. Very few
gene therapies have been approved in the United States or in Europe.
We have concentrated a portion of our research and development efforts on our gene therapy platform, which uses
both transduction and gene control technology. Our future success depends on the successful development of these novel
therapeutic approaches. To date, very few products that utilize gene transfer have been approved in the United States or
Europe.
Our gene therapy platform is based on a suite of viral vectors which we can deploy with gene therapy constructs,
which relies on the ability of AAV to efficiently transmit a therapeutic gene to certain kinds of cells. The mechanism of
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action by which these vectors target particular tissues is still not completely understood. Therefore, it is difficult for us to
determine that our vectors will be able to properly deliver gene transfer constructs to enough tissue cells to reach
therapeutic levels. We cannot be certain that animal models will exist for some of the diseases we expect to pursue, that our
viral vectors will be able to meet safety and efficacy levels needed to be therapeutic in humans or that they will not cause
significant adverse events or toxicities. Furthermore, prior work conducted by a third party in non-human primates suggests
that intravenous, or IV, delivery of certain AAV vectors at very high doses may result in severe toxicity. The indications
that we target do not use IV administration for viral vector delivery and do not use doses as high as those tested in these
publications, and to date we have not observed the severe toxicities described in these publications with the naturally
occurring AAV vectors that we use. However, we cannot be certain that we will be able to avoid triggering toxicities in our
future preclinical studies or clinical trials. Any such results could impact our ability to develop a product candidate. As a
result of these factors, it is more difficult for us to predict the time and cost of product candidate development, and we
cannot predict whether the application of our gene therapy platform, or any similar or competitive gene therapy platforms,
will result in the identification, development, and regulatory approval of any product candidates, or that other gene therapy
technologies will not be considered better or more attractive. There can be no assurance that any development problems we
experience in the future related to our gene therapy platform or any of our research programs will not cause significant
delays or unanticipated costs, or that such development problems can be solved. Any of these factors may prevent us from
completing our preclinical studies or clinical trials or commercializing any product candidates we may develop on a timely
or profitable basis, if at all.
In addition, because our gene regulation technology is still in the research stage, we have not yet been able to
assess safety in humans, and there may be long-term effects from treatment that we cannot predict at this time.
Because gene therapy is novel and the regulatory landscape that governs any product candidates we may develop is
uncertain and may change, we cannot predict the time and cost of obtaining regulatory approval, if we receive it at all,
for any product candidates we may develop.
The regulatory requirements that will govern any novel gene therapy product candidates we develop are not
entirely clear and may change. Within the broader genetic medicine field, very few therapeutic products have received MA
from the FDA, MHRA and European Commission. Even with respect to more established products that fit into the
categories of gene therapies or cell therapies, the regulatory landscape is still developing. Regulatory requirements
governing gene therapy products and cell therapy products have changed frequently and will likely continue to change in
the future. Moreover, there is substantial, and sometimes uncoordinated, overlap in those responsible for regulation of
existing gene therapy products and cell therapy products, which could impact the timing and cost of any regulatory
approval. For example, in the United States, the FDA has established the Office of Therapeutic Products within its Center
for Biologics Evaluation and Research, or CBER, to consolidate the review of gene therapy and related products, and the
Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review. Gene therapy clinical trials may
also be subject to review and oversight by an institutional biosafety committee and/or an institutional review board, or IRB,
which are local institutional committees or boards, as applicable, that review, approve and oversee basic and clinical
research conducted at the institution participating in the clinical trial.
In the EU, the EMA’s Committee for Advanced Therapies, or CAT, is responsible for assessing the quality, safety,
and efficacy of ATMPs. ATMPs include gene therapy medicines, somatic-cell therapy medicines and tissue-engineered
medicines. The role of the CAT is to prepare a draft opinion on an application for MA for a gene therapy medicinal
candidate that is submitted to the EMA. In the EU, the development and evaluation of a gene therapy product must be
considered in the context of the relevant EU guidelines. The EMA may issue new guidelines concerning the development
and MA for gene therapy products and require that we comply with these new guidelines. As a result, the procedures and
standards applied to gene therapy products and cell therapy products may be applied to any gene therapy product candidate
we may develop, but that remains uncertain at this point.
Post Brexit, MAAs for ATMPs in Great Britain are regulated nationally and assessed in accordance with the
general provisions in place for the licensing of medicines, taking the specific requirements for this group of medicines into
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account. In Northern Ireland, ATMPs continue to be authorized according to the EU’s centralized procedure. Definitions
for individual classes of ATMPs remain unchanged and classification of ATMPs are undertaken by the MHRA in
accordance with EU legislation and current guidance from CAT. Data, traceability, exemptions from licensing, packaging
and post-authorization requirements remain in line with EU requirements transposed into UK law. However, if the EMA
issues new guidance on ATMPs going forward, there is a risk of regulatory divergence with the MHRA and separate
procedures and standards with which we may need to comply.
Adverse developments in preclinical studies or clinical trials conducted by others in the field of gene therapy and
gene regulation products may cause the FDA, MHRA and other regulatory bodies to revise the requirements for approval
of any product candidates we may develop or limit the use of products utilizing gene regulation technologies, either of
which could harm our business. In addition, the clinical trial requirements of the FDA, MHRA and other regulatory
authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary
substantially according to the type, complexity, novelty, and intended use and market of the potential products. The
regulatory approval process for product candidates such as ours can be more expensive and take longer than for other,
better known, or more extensively studied pharmaceutical or other product candidates. Further, as we are developing novel
treatments for diseases or conditions in which there may be limited clinical experience with novel endpoints and
methodologies, there is heightened risk that the FDA, MHRA, EMA or other regulatory bodies may not consider the
clinical trial endpoints we pursue to provide clinically meaningful results, and the resulting clinical data and results may be
more difficult to analyze. The prospectively designed natural history studies with the same endpoints as our corresponding
clinical trials may not be accepted by the FDA, MHRA, EMA or other regulatory authorities. Regulatory agencies
administering existing or future regulations or legislation may not allow production and marketing of products utilizing
gene regulation technology in a timely manner or under technically or commercially feasible conditions. In addition,
regulatory action or private litigation could result in expenses, delays, or other impediments to our research programs or the
commercialization of resulting products.
The regulatory review committees and advisory groups described above and the new guidelines they promulgate
may lengthen the regulatory review process, require us to perform additional preclinical studies or clinical trials, increase
our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and
commercialization of these treatment candidates, or lead to significant post-approval limitations or restrictions. As we
advance our research programs and develop future product candidates, we will be required to consult with these regulatory
and advisory groups and to comply with applicable guidelines. If we fail to do so, we may be required to delay or
discontinue development of any product candidates we identify and develop.
Clinical trials are expensive, time-consuming, difficult to design and implement, and involve an uncertain outcome.
Further, we may encounter substantial delays in our clinical trials.
The clinical trials and manufacturing of our product candidates are, and the manufacturing and marketing of our
products, if approved, will be, subject to extensive and rigorous review and regulation by numerous government authorities
in the United States and in other countries where we intend to test and market our product candidates. Before obtaining
regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through lengthy,
complex and expensive preclinical testing and clinical trials that our product candidates are both safe and effective for use
in each target indication. In particular, because our product candidates are subject to regulation as biological drug products,
we will need to demonstrate that they are safe, pure, and potent for use in their target indications. Each product candidate
must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.
Clinical testing is expensive, can take many years to complete and is subject to uncertainty. We cannot guarantee
that any clinical trials will be conducted as planned or completed on schedule, if at all. Failure can occur at any time during
the clinical trial process. Even if our future clinical trials are completed as planned, we cannot be certain that their results
will support the safety and effectiveness of our product candidates for their targeted indications. Our future clinical trial
results may not be successful.
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In addition, even if such trials are successfully completed, we cannot guarantee that the FDA, MHRA, EMA or
other regulatory authorities will interpret the results as we do, and more trials could be required before we submit our
product candidates for approval. To the extent that the results of the trials are not satisfactory to the FDA, MHRA, EMA or
other regulatory authorities for support of an MAA, we may be required to expend significant resources, which may not be
available to us, to conduct additional trials in support of potential approval of our product candidates.
To date, we have not completed any clinical development programs required for the approval of any of our product
candidates. Although we are currently conducting several clinical development programs, we may experience delays in
conducting any clinical trials and we do not know whether our ongoing and future clinical trials will begin on time, need to
be redesigned, be able to recruit and enroll patients on time or be completed on schedule, or at all. Events that may prevent
successful or timely completion of clinical development include:
● inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the
initiation of clinical trials;
● delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for
advanced clinical trials;
● delays in developing suitable assays for screening patients for eligibility for trials with respect to certain
product candidates;
● delays in reaching consensus with the FDA, MHRA or other regulatory authorities as to the design or
implementation of our clinical trials and obtaining regulatory allowance or approval to commence a
clinical trial;
● inability to reach an agreement on acceptable terms with clinical trial sites or prospective contract
research organizations, or CROs, the terms of which can be subject to extensive negotiation and may
vary significantly among different clinical trial sites;
● our inability to recruit and train clinical trial investigators with the appropriate competencies and
experience to conduct the clinical trials, administer our product candidates and oversee clinical trial
staff;
● delays in obtaining IRB or ethics committee approval or positive opinion at each site;
● inability to recruit suitable patients to participate in a clinical trial;
● inability to develop and validate any companion diagnostic we may decide to use in connection with a
clinical trial, if applicable;
● delays in sufficiently developing, designing and manufacturing equipment or medical devices used to
administer our product candidates in our clinical trials, if applicable;
● patients not completing a clinical trial or returning for post-treatment follow-up;
● clinical sites, CROs, or other third parties deviating from trial protocol or dropping out of a trial;
● failures to conduct clinical trials in accordance with good clinical practice, or GCP, requirements, or
other applicable regulatory guidelines;
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● addressing patient safety concerns that arise during the course of a trial, including occurrence of adverse
events associated with the product candidate;
● having an insufficient number of clinical trial sites; or
● inability to manufacture sufficient quantities of our product candidates for use in clinical trials, or to
manufacture such product candidates to acceptable quality standards.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent
our ability to receive marketing approval or commercialize our product candidates or significantly increase the cost of such
trials, including:
● we may experience changes in regulatory requirements or guidance, or receive feedback from regulatory
authorities that requires us to modify the design of our clinical trials;
● clinical trials of our product candidates may produce negative or inconclusive results, and we may
decide, or regulators may require us, to conduct additional clinical trials or abandon development
programs;
● the number of patients required for clinical trials of our product candidates may be larger than we
anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop
out of these clinical trials at a higher rate than we anticipate;
● our third-party contractors may fail to comply with regulatory requirements or meet their contractual
obligations to us in a timely manner, or at all;
● we or our investigators might have to suspend or terminate clinical trials of our product candidates for
various reasons, including non-compliance with regulatory requirements, a finding that our product
candidates have undesirable side effects or other unexpected characteristics, or a finding that the
participants are being exposed to unacceptable health risks;
● the cost of clinical trials of our product candidates may be greater than we anticipate, and we may not
have funds to cover the costs;
● the supply or quality of our product candidates or other materials necessary to conduct clinical trials of
our product candidates may be insufficient or inadequate;
● business interruptions resulting from geopolitical actions, including war and terrorism, or a widespread
health emergency, such as the COVID-19 pandemic, or natural disasters including earthquakes,
typhoons, floods and fires, or from economic or political instability; and
● any future collaborators that conduct clinical trials may face any of the above issues, and they may
conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us.
If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that
we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other
testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we
may:
● incur unplanned costs;
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● be delayed in obtaining marketing approval for our product candidates or not obtain marketing approval
at all;
● obtain marketing approval in some countries and not in others;
● obtain marketing approval for indications or patient populations that are not as broad as intended or
desired;
● obtain marketing approval with labeling that includes significant use or distribution restrictions or safety
warnings, including boxed warnings;
● be subject to additional post-marketing testing requirements; or
● have the product removed from the market after obtaining marketing approval.
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 being conducted, by the Data Safety Monitoring Board, or DSMB, for such trial or by the FDA,
MHRA or other foreign regulatory authorities. Such authorities 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 the clinical trial operations or trial site by the FDA, MHRA or other regulatory authorities resulting
in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from
using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the
clinical trial.
Our product candidates will require extensive clinical testing before we are prepared to submit a BLA or MAA for
regulatory approval. We cannot predict with any certainty if or when we might complete the clinical development for our
product candidates and submit a BLA or MAA for regulatory approval of any of our product candidates or whether any
such BLA or MAA will be approved. We may also seek feedback from the FDA, MHRA, EMA or other regulatory
authorities on our clinical development program, and the FDA, MHRA, EMA or such regulatory authorities may not
provide such feedback on a timely basis, or such feedback may not be favorable, which could further delay our
development programs.
If we experience delays in the commencement or completion of our clinical trials, or if we terminate a clinical trial
prior to completion, the commercial prospects of our product candidates could be harmed, and our ability to generate
revenues from our product candidates may be delayed. In addition, any delays in our clinical trials could increase our costs,
slow down the development and approval process and jeopardize our ability to commence product sales and generate
revenues. Any of these occurrences may harm our business, financial condition and results of operations. In addition, many
of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead
to the denial of regulatory approval of our product candidates.
In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and
additional government regulations may be enacted. For instance, the regulatory landscape related to clinical trials in the EU
recently evolved. The CTR adopted in April 2014 became applicable on January 31, 2022 and repeals the EU Clinical
Trials Directive. While the EU Clinical Trials Directive required a separate CTA to be submitted in each member state in
which the clinical trial takes place, to both the competent national health authority and an independent ethics committee,
the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each
member state, leading to a single decision per member state. The assessment procedure of the CTA has been harmonized as
well, including a joint assessment by all member states concerned, and a separate assessment by each member state with
respect to specific requirements related to its own territory, including ethics rules. Each member state’s decision is
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communicated to the sponsor via the centralized EU portal. Once the CTA is approved, clinical study development may
proceed. The CTR foresees a three-year transition period. The extent to which ongoing and new clinical trials will be
governed by the CTR varies. Clinical trials for which an application was submitted (i) prior to January 31, 2022 under the
EU Clinical Trials Directive, or (ii) between January 31, 2022 and January 31, 2023 and for which the sponsor has opted
for the application of the EU Clinical Trials Directive remain governed by said Directive until January 31, 2025. After this
date, all clinical trials (including those which are ongoing) will become subject to the provisions of the CTR. Compliance
with the CTR requirements by us and our third-party service providers, such as CROs, may impact our development plans.
It is currently unclear to what extent the UK will seek to align its regulations with the EU. The UK regulatory
framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through
secondary legislation). On January 17, 2022, the MHRA launched an eight-week consultation on reframing the UK
legislation for clinical trials, which aimed to streamline clinical trials approvals, enable innovation, enhance clinical trials
transparency, enable greater risk proportionality, and promote patient and public involvement in clinical trials. The MHRA
published its consultation outcome on March 21, 2023 in which it confirmed that it would update the existing legislation.
The resulting legislative changes, which are yet to be published, will ultimately determine the extent to which the UK
regulations align with the (EU) CTR. Under the terms of the Protocol on Ireland and Northern Ireland, provisions of the
(EU) CTR which relate to the manufacture and import of investigational medicinal products and auxiliary medicinal
products currently apply in Northern Ireland. A decision by the UK not to closely align its regulations with the new
approach adopted in the EU may have an effect on the cost of conducting clinical trials in the UK as opposed to other
countries.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or
policies governing clinical trials, our development plans may also be impacted.
Pandemics, epidemics or outbreaks of an infectious disease have impacted and may in the future materially and
adversely impact our business, including our preclinical studies, clinical trials, manufacturing capabilities and
regulatory approvals.
We have and may in the future experience disruptions from pandemics, epidemics or outbreaks of an infectious
disease that could severely impact our business, preclinical studies, clinical trials and laboratory and manufacturing
activities, including, for example, delays or difficulties in enrolling patients in our clinical trials, delays or difficulties in
clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff, diversion of
healthcare resources away from the conduct of clinical trials, interruption of key clinical trial activities due to limitations
on travel imposed or recommended by regulatory authorities or others, interruption or delays in the operations of the FDA,
MHRA, EMA or other regulatory authorities, interruption of, or delays in, the manufacturing of our product candidates,
interruptions in preclinical studies due to restricted or limited operations at our laboratory facilities, limitations on
employee resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, and
interruption or delays to our sourced discovery and clinical activities. For example, as a result of the COVID-19 pandemic,
we restricted onsite activities and also experienced some delays in enrolling, treating and monitoring patients in our clinical
trials, as well as limited disruptions to our supply chain.
The extent to which any future outbreaks or any variants of COVID-19 or another pandemic may impact our
business, preclinical studies, clinical trials and laboratory and manufacturing activities will depend on future developments,
which are highly uncertain and cannot be predicted with confidence, such as the duration of any pandemic, the timing,
distribution and effectiveness of vaccines, vaccination rates, travel restrictions and physical distancing requirements in the
countries where we do business, business closures or business disruptions, and the effectiveness of actions taken in the
countries where we do business to contain and treat any such disease, respond to the reduction in global economic activity
and resume normal economic and operating conditions. If we or any of the third parties with whom we engage experience
prolonged shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timelines
presently planned could be materially and negatively impacted. Furthermore, the magnitude of the economic impact of any
pandemic including sustained inflation, supply chain disruptions, and major central bank policy actions may result in
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significant disruption of global financial markets, which could materially affect our performance, financial condition,
results of operations, and cash flows, as well as our ability to raise additional capital. Additionally, major central bank
policy actions may have a negative impact on our payment obligations under the Note Purchase Agreement.
The affected populations for our product candidates may be smaller than we or third parties currently project, which
may affect the addressable markets for our product candidates.
Our projections of the number of people who have the diseases we are seeking to treat, as well as the subset of
people with these diseases who have the potential to benefit from treatment with our product candidates, are estimates
based on our knowledge and understanding of these diseases. The total addressable market opportunity for our product
candidates will ultimately depend upon a number of factors including the diagnosis and treatment criteria included in the
final label, if approved for sale in specified indications, acceptance by the medical community, patient access and product
pricing and reimbursement. Incidence and prevalence estimates are frequently based on information and assumptions that
are not exact and may not be appropriate, and the methodology is forward-looking and speculative. The process we have
used in developing an estimated incidence and prevalence range for the indications we are targeting has involved collating
limited data from multiple sources. Accordingly, the incidence and prevalence estimates included, or supporting the
information, in our SEC filings and other materials should be viewed with caution. Further, the data and statistical
information included, or supporting the information, in our SEC filings and other materials, including estimates derived
from them, may differ from information and estimates made by our competitors or from current or future studies conducted
by independent sources.
The use of such data involves risks and uncertainties and is subject to change based on various factors. Our
estimates may prove to be incorrect and new studies may change the estimated incidence or prevalence of the diseases we
seek to address. The number of patients with the diseases we are targeting in the United States, the UK, the EU and
elsewhere may turn out to be lower than expected or may not be otherwise amenable to treatment with our products, or new
patients may become increasingly difficult to identify or access, all of which would harm our results of operations and our
business.
Negative public opinion of gene therapy and increased regulatory scrutiny of gene therapy and genetic research may
adversely impact public perception of our current and future product candidates.
Our potential therapeutic products involve introducing genetic material into patients’ cells. The clinical and
commercial success of our potential products will depend in part on public acceptance of the use of gene therapy and gene
regulation for the prevention or treatment of human diseases. Public attitudes may be influenced by claims that gene
therapy and gene regulation are unsafe, unethical, or immoral, and, consequently, our products may not gain the acceptance
of the public or the medical community. Public attitudes may adversely impact our ability to enroll clinical trials.
Moreover, our success will depend upon physicians prescribing, and their patients being willing to receive, treatments that
involve the use of product candidates we may develop in lieu of, or in addition to, existing treatments with which they are
already familiar and for which greater clinical data may be available.
More restrictive government regulations or negative public opinion would have a negative effect on our business
or financial condition and may delay or impair the development and commercialization of our product candidates or
demand for any products once approved. For example, on November 28, 2023, the FDA announced that it was
investigating reports of T-cell malignancies, including CAR- positive lymphoma, in patients who received treatment with
BCMA- or CD19-directed autologous CAR-T cell immunotherapies, and in January 2024, the FDA required the
manufacturers of certain CAR-T therapies to add boxed warnings to product labeling cautioning against the risk of T-cell
malignancies. Although none of our current product candidates utilize the same technology as these CAR-T
immunotherapies, our product candidates use a viral delivery system. Adverse events in our clinical trials, even if not
ultimately attributable to our product candidates, and the resulting publicity could result in increased governmental
regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates or
the halting of clinical trials, stricter labeling requirements for those product candidates that are approved and a decrease in
demand for any such product
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candidates. The risk of cancer remains a concern for gene therapy and we cannot assure that it will not occur in any of our
planned or future clinical trials. In addition, there is the potential risk of delayed adverse events following exposure to gene
therapy products due to persistent biological activity of the genetic material or other components of products used to carry
the genetic material. If any such adverse events occur, commercialization of our product candidates or further advancement
of our clinical trials could be halted or delayed, which would have a negative impact on our business and operations.
We may fail to maintain the benefits of certain regulatory designations that we have obtained for our product
candidates, and may in the future seek and fail to obtain such designations for other of our current or potential future
product candidates. Even if such designations are obtained, they may not lead to faster development or regulatory
review or approval, and they do not increase the likelihood that our product candidates will receive marketing approval.
A sponsor may seek approval of its product candidate under programs designed to accelerate the FDA’s review
and approval of drugs and biological products that meet certain criteria. For example, the FDA has a Fast Track designation
program that is intended to expedite or facilitate the process for reviewing product candidates that meet certain criteria.
Specifically, investigational drugs and biological products are eligible for Fast Track designation if they are intended to
treat a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical needs. Fast
Track designation applies to the combination of the product candidate and the specific indication for which it is being
studied. The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the review
team during product development and, once a BLA is submitted, the application may be eligible for priority review. In
addition, the Fast Track product may be eligible for rolling review, where the FDA may consider for review sections of the
BLA on a rolling basis before the complete application is submitted if the sponsor provides a schedule for the submission
of the sections of the application, the FDA agrees to accept sections of the application and determines that the schedule is
acceptable, and the sponsor pays any required user fees upon submission of the first section of the application. Even if Fast
Track designation is granted, it may be rescinded if the product no longer meets the qualifying criteria. In August 2018,
AAV-CNGB3 was issued Fast Track designation by the FDA for the treatment of achromatopsia caused by CNGB3
mutations. In January 2021, AAV-CNGA3 was issued Fast Track designation by the FDA for the treatment of
achromatopsia caused by CNGA3 mutations.
Similarly, the EMA has established the PRIME scheme to expedite the development and review of product
candidates that show a potential to address to a significant extent an unmet medical need, based on early clinical data. In
February 2018, AAV-CNGB3 in the treatment of achromatopsia associated with defects in CNGB3 was admitted to the
PRIME scheme of the EMA.
A sponsor may also seek an RMAT designation for its product candidates. In 2017, the FDA established the
RMAT designation as part of its implementation of the 21st Century Cures Act. A biological product is eligible for RMAT
designation if it qualifies as an RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human
cell and tissue product, or any combination product using such therapies or products, with limited exceptions, and is
intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition and for which preliminary
clinical evidence indicates that the biological product has the potential to address unmet medical needs for such a disease
or condition. In a February 2019 guidance, the FDA also stated that certain gene therapies that lead to a sustained effect on
cells or tissues may meet the definition of a regenerative medicine therapy. RMAT designation provides potential benefits
that include more frequent meetings with the FDA to discuss the development plan for the product candidate, and
eligibility for rolling review and priority review, provided the applicable criteria are met. Products granted RMAT
designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably
likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites, including
through expansion to additional sites. RMAT-designated products that receive accelerated approval may, as appropriate,
fulfill their post-approval requirements through the submission of clinical evidence, clinical trials, patient registries, or
other sources of real world evidence (such as electronic health records); through the collection of larger confirmatory data
sets; or via post-approval monitoring of all patients treated with such therapy prior to approval of the therapy.
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Such regulatory designations are within the discretion of the FDA, MHRA, EMA and other regulatory authorities.
Accordingly, even if we believe one of our product candidates meets the criteria for such regulatory programs and we seek
such designations, the FDA, MHRA, EMA or other applicable regulatory authority may disagree and instead determine not
to make such designation for such product candidate. We cannot be sure that our evaluation of our product candidates as
qualifying for such regulatory designations will meet the regulatory authority’s expectations. In any event, the receipt of
such regulatory designations for a product candidate may not result in a faster development process, review, or approval
compared to product candidates considered for approval under conventional regulatory procedures and does not assure
ultimate approval by the regulatory authorities. In addition, even if additional product candidates are granted such
regulatory designations, the regulatory authority may later decide that such product candidates no longer meet the
conditions for qualification or decide that the time period for review or approval will not be shortened, as applicable.
We have received orphan drug designation and orphan designation from the FDA and European Commission,
respectively, for AAV-CNGB3, AAV-CNGA3, AAV-RPE65, AAV-AIPL1, AAV-RDH12 and orphan drug designation
from the FDA for AAV-hAQP1, and we may seek orphan drug designation or orphan designation for additional product
candidates in the future, but any orphan drug designations or orphan designations we have received or may receive in
the future may not confer marketing exclusivity or other expected benefits.
Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is intended to
treat a rare disease or condition, defined as one occurring in a patient population of fewer than 200,000 in the United
States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the
cost of developing the drug will be recovered from sales in the United States. In the EU, the European Commission grants
orphan designation on the basis of the EMA’s Committee for Orphan Medicinal Products opinion. A medicinal product
may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or
chronically debilitating condition; (2) either (a) such condition affects no more than five in 10,000 persons in the EU when
the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient
return in the EU to justify investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment, of
such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to
those affected by the condition.
In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant
funding towards clinical trial costs, tax credits for qualified clinical testing, and user-fee waivers. In addition, if a product
receives the first FDA approval of that drug for the disease or condition for which it has orphan drug designation, the
product is entitled to orphan drug exclusivity, which means the FDA may not approve any other application to market the
same drug for the same disease or condition for a period of seven years, except in limited circumstances, such as a showing
of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assure the
availability of sufficient quantities of the orphan drug to meet the needs of patients with the rare disease or condition.
Under the FDA’s regulations, the FDA will deny orphan drug exclusivity to a designated drug upon approval if the FDA
has already approved another drug with the same principal molecular structural features, in the case of a biologic, for the
same indication, unless the drug is demonstrated to be clinically superior to the previously approved drug. In the EU,
orphan designation entitles a party to financial incentives such as reduction of fees or fee waivers, protocol assistance, and
access to the centralized MA procedure. Moreover, upon grant of an MA and assuming the requirement for orphan
designation are also met at the time the MA is granted, orphan medicinal products are entitled to a ten-year period of
market exclusivity for the approved therapeutic indication. The period of market exclusivity is extended by two years for
orphan medicinal products that have also complied with an agreed PIP. This period may be reduced to six years if, at the
end of the fifth year, the orphan designation criteria are no longer met, including where it is shown that the product is
sufficiently profitable not to justify maintenance of market exclusivity, or where the prevalence of the condition has
increased above the orphan designation threshold. In the EU, an MA for an orphan designated product will not be granted
if a similar product has been approved in the EU for the same therapeutic indication, unless the applicant can establish that
(i) its product, although similar to the orphan medicinal product already authorized is safer, more effective or otherwise
clinically superior; (ii) the MA holder for the orphan medicinal product grants its consent; or (iii) if the MA holder of the
orphan medicinal product is unable to supply sufficient quantities of product. A similar medicine is a product containing
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a similar active substance or substances as those contained in an already authorized product. Similar active substance is
defined as an identical active substance, or an active substance with the same principal molecular structural features (but
not necessarily all of the same molecular features) and which acts via the same mechanism.
The MHRA is responsible for reviewing applications from companies for orphan designation at the time of an
MAA. If a medicinal product has been designated orphan in the EU under Regulation (EC) 141/2000, a Great Britain
orphan MAA can be made under regulation 50G of the Human Medicines Regulation 2012 (as amended). A UK-wide
orphan MAA can only be considered in the absence of an active EU orphan designation. If a UK-wide orphan MA is
granted and the medicinal product subsequently receives EU orphan designation, the MA holder would need to submit a
variation to change this to a Great Britain orphan MA.
We have obtained orphan drug designation from the FDA and orphan designation from the European Commission
for AAV-CNGB3 for the treatment of achromatopsia caused by mutations in the CNGB3 gene, for AAV-CNGA3 for the
treatment of achromatopsia due to autosomal-recessive CNGA3 gene mutations, for AAV-RPE65 for the treatment of
Leber congenital amaurosis, for AAV-AIPL1 for the treatment of inherited retinal dystrophy due to defects in AIPL1 gene
and for AAV-RDH12 for the treatment of retinol dehydrogenase 12 (RDH12) mutation-associated retinal dystrophy, and we
obtained orphan drug designation from the FDA for AAV-hAQP1 for the treatment of grade 2 and grade 3 late xerostomia
from parotid gland hypofunction caused by radiotherapy. We may seek orphan drug designation and orphan designation for
other current and future product candidates. Even with orphan drug designation and orphan designation, we may not be the
first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with developing
pharmaceutical products, which could prevent us from marketing our product candidates if another company is able to
obtain orphan drug exclusivity before we do. In addition, exclusive marketing rights in the United States and the EU may
be unavailable if we seek approval for a disease or condition broader than the orphan drug-designated and orphan-
designated disease or condition or may be lost in the United States or EU if the FDA or foreign authorities later determine
that the request for designation was materially defective or if we are unable to assure sufficient quantities of the drug to
meet the needs of patients with the rare disease or condition following approval.
Further, even if we obtain orphan drug exclusivity, that exclusivity may not effectively protect our product
candidates from competition because different biologics with different active principal molecular structural features can be
approved for the same disease or condition. In addition, the FDA can subsequently approve products with the same
principal molecular structural features, in the case of a biologic, for the same disease or condition if the FDA concludes
that the later product is safer, more effective, or makes a major contribution to patient care. Likewise, in the EU and Great
Britain, the European Commission or MHRA, respectively, can authorize a similar product for the same therapeutic
indication, if it concludes that the later product is safer, more effective or clinically superior; if the MA holder for the initial
orphan medicinal product grants its consent; or if such MA holder is unable to supply sufficient quantities of the product.
Neither orphan drug designation nor orphan designation shortens the development time or regulatory review time of a drug
nor gives the drug any advantage in the regulatory review or approval process. In addition, while we intend to seek orphan
drug designation and orphan designation for other existing and future product candidates, we may never receive such
designations. There have been legal challenges to aspects of the FDA’s regulations and policies concerning the exclusivity
provisions of the Orphan Drug Act, and future challenges could lead to changes that affect the protections afforded our
product candidates in ways that are difficult to predict. It is uncertain how ongoing and future challenges might affect our
business.
We and our contract manufacturers for plasmid are subject to significant regulation with respect to manufacturing our
products. Our manufacturing facilities and the third-party manufacturing facilities which we rely on may not continue
to meet regulatory requirements and have limited capacity.
We currently have relationships with a limited number of suppliers for the manufacturing of plasmid, a component
of our viral vectors and product candidates. We also have GMP manufacturing facilities in London, United Kingdom and
Shannon, Ireland, which we expect can supply our current clinical and preclinical programs, as well as our third party
supply obligations, through regulatory approval and, should they be approved, provide sufficient capacity for their
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commercial production. However, if we experience slowdowns or problems with our facilities or are unable to establish or
scale our internal manufacturing capabilities, we will need to continue to contract with manufacturers that can produce the
preclinical, clinical and commercial supply of our products. Each supplier may require licenses to manufacture such
components if such processes are not owned by the supplier or in the public domain and we may be unable to transfer or
sublicense the intellectual property rights we may have with respect to such activities.
All entities involved in the preparation of therapeutics for clinical trials or commercial sale, including our existing
contract manufacturers for components of our product candidates, are subject to extensive regulation. Components of a
finished therapeutic product approved for commercial sale or used in late-stage clinical trials must be manufactured in
accordance with GMP. These regulations govern manufacturing processes and procedures (including record keeping) and
the implementation and operation of quality systems to control and assure the quality of investigational products and
products approved for sale. Poor control of production processes can lead to the introduction of adventitious agents or other
contaminants, or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in
final product testing. We or our contract manufacturers must supply all necessary documentation in support of a BLA or
MAA on a timely basis. Generally, our facilities and quality systems and the facilities and quality systems of some or all of
our third-party contractors must successfully complete a pre-approval inspection for compliance with the applicable
regulations as a condition of regulatory approval of our product candidates or the product candidates that we manufacture
for third parties. In addition, certain regulatory authorities may, at any time, audit or inspect a manufacturing facility
involved with the preparation of our product candidates or the product candidates that we manufacture for third parties or
the associated quality systems for compliance with the regulations applicable, if and when approved, to the activities being
conducted. If these facilities do not successfully complete a pre-approval plant inspection, FDA, MHRA or other
regulatory approval of the product candidates will not be granted.
If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our
product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant
regulatory authority may require remedial measures that may be costly and/or time-consuming for us or a third party to
implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales or the
temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we
contract could harm our business. If we or any of our third-party manufacturers fail to maintain regulatory compliance, the
FDA, MHRA or other regulatory authorities can impose regulatory sanctions including, among other things, refusal to
approve a pending application for a new drug product or biologic product, or revocation of a pre-existing approval. As a
result, our business, financial condition and results of operations may be harmed. Additionally, if supply from one
approved manufacturer is interrupted, there could be a significant disruption in commercial supply. An alternative
manufacturer would need to be qualified through a BLA and/or MAA supplement which could result in further delay.
Regulatory agencies may also require additional studies if a new manufacturer is relied upon for clinical or commercial
production. Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical
and commercial timelines.
These factors could cause the delay of clinical trials, regulatory submissions, required approvals or
commercialization of our product candidates, cause us to incur higher costs and prevent us from commercializing our
products successfully. Furthermore, if our suppliers fail to meet contractual requirements, and we are unable to secure one
or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed, or
we could lose potential revenue.
Any contamination in our manufacturing process, shortages of raw materials or failure of our plasmid supplier to
deliver necessary components, or other issues with the manufacturing process, could result in delays in our clinical
development or marketing schedules.
Given the nature of biologics manufacturing, there is a risk of contamination. Any contamination could adversely
affect our ability to produce product candidates on schedule and could, therefore, harm our results of operations and cause
reputational damage. Some of the raw materials required in our manufacturing process are derived from biologic sources.
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Such raw materials are difficult to procure and may be subject to contamination or recall. In addition, our manufacturing
process is complex, and the manufacturing batch cycle period can be several weeks long. Each batch cycle may not yield
planned quantities or meet the required standards. A material shortage, contamination, recall or restriction on the use of
biologically derived substances in the manufacture of our product candidates, failure of manufacturing equipment or
systems or other issues with our manufacturing process, could adversely impact or disrupt the commercial manufacturing
or the production of clinical material, which could adversely affect our development timelines and our business, financial
condition, results of operations and prospects.
Expanding our manufacturing capacity has and will continue to be costly and we may be unsuccessful in doing so in a
timely manner, which could delay our current and future clinical development programs, or delay the
commercialization of our product candidates.
In addition to our existing manufacturing facilities in London, United Kingdom and Shannon, Ireland, we may
lease, operate, purchase, or construct additional facilities to supply our clinical and preclinical programs, as well as to meet
our third party supply obligations, or conduct expanded manufacturing or other related activities in the future. Expanding
our manufacturing capacity to produce the preclinical, clinical and commercial supply of our products and their
components, as well as our obligations under the Supply Agreement with Janssen if the RPGR Product is successfully
commercialized, has required and will continue to require substantial additional expenditures, time, and various regulatory
approvals and permits, as well as hiring, training and retraining employees and managerial personnel to staff our
manufacturing and supply chain operations. Start-up costs can be large and may exceed our expectations, and scale-up
entails significant risks related to process development and manufacturing yields. In addition, we may face difficulties or
delays in developing or acquiring the necessary production equipment and technology to manufacture sufficient quantities
of our product candidates for use in clinical trials and, should they be approved, to supply the commercial market at
reasonable costs and in compliance with applicable regulatory requirements. We may not successfully expand, establish or
sustain sufficient manufacturing capabilities or manufacture our products economically or in compliance with GMP and
other regulatory requirements, and we and our collaborators may not be able to build or procure additional capacity in the
required timeframe to meet the requirements of our clinical programs or to meet potential commercial demand for our
product candidates. This could also delay or require us to discontinue one or more of our clinical development programs or
could interfere with our efforts to successfully commercialize our products. As a result, our business, prospects, operating
results, and financial condition could be materially harmed.
If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed
or otherwise adversely affected.
The timely completion of clinical trials in accordance with their protocols depends, among other things, on our
ability to enroll a sufficient number of patients who remain in the study until its conclusion. We may encounter delays in
enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials, and even once
enrolled we may be unable to retain a sufficient number of patients to complete any of our trials. This may result in
increased costs, program delays or both, which could have a harmful effect on our ability to develop our product
candidates, or could render further development impossible. The enrollment of patients depends on many factors,
including:
● the size and nature of the patient population;
● the patient eligibility criteria defined in the protocol;
● 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 or side effects that may arise in development;
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● our ability to recruit clinical trial investigators with the appropriate competencies and experience;
● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied
in relation to other available therapies, including any new products that may be approved for the
indications we are investigating;
● our ability to obtain and maintain patient consents;
● the risk that patients enrolled in clinical trials will drop out of the trials before completion; and
● business interruptions resulting from geopolitical actions, including war and terrorism, or widespread
health emergencies, such as the COVID-19 pandemic, or natural disasters including earthquakes,
typhoons, floods and fires, or from economic or political instability.
In addition, other clinical trials for product candidates that are in the same therapeutic areas as our product
candidates or approved products for the same clinical indications (such as Luxturna marketed by Spark Therapeutics, Inc.
for the treatment of RPE65-associated retinal disease) may reduce the number and type of patients available to us.
Furthermore, although we have conducted and may in the future conduct natural history studies to better characterize the
patient populations we seek to address, any natural history studies we may undertake could fail to provide us with patients
for our clinical trials, because patients enrolled in the natural history studies may not be good candidates for our clinical
trials or may choose to not enroll in our clinical trials.
Our product candidates may cause serious adverse events or undesirable side effects or have other properties which may
delay or prevent their regulatory approval, limit the commercial profile of an approved label, or, result in significant
negative consequences following marketing approval, if any.
Serious adverse events or undesirable side effects caused by our product candidates could cause us or regulatory
authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of
regulatory approval by the FDA, MHRA or other authorities. Results of our clinical trials could reveal a high and
unacceptable severity and prevalence of side effects, toxicities or unexpected characteristics, including death. A risk in any
gene therapy product based on viral vectors is the risk of insertional mutagenesis.
If unacceptable side effects or deaths arise in the development of our product candidates, we, the FDA, the IRBs
at the institutions in which our studies are conducted, DSMB, or other regulatory bodies could suspend or terminate our
clinical trials or the FDA, MHRA or other regulatory authorities could order us to cease clinical trials or deny approval of
our product candidates for any or all targeted indications. Undesirable side effects or deaths in clinical trials with our
product candidates may cause the FDA or comparable foreign regulatory authorities to place a clinical hold on the
associated clinical trials, to require additional studies, or otherwise to delay or deny approval of our product candidates for
any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled
patients to complete the trial or result in potential product liability claims. In addition, these side effects may not be
appropriately recognized or managed by the treating medical staff. We expect to have to train medical personnel using our
product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of
our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates
could result in patient injury or death. Any of these occurrences may harm our business, financial condition and prospects
significantly.
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If any of our product candidates receives marketing approval, and we or others later identify undesirable side
effects caused by any such product, including during any long-term follow-up observation period recommended or required
for patients who receive treatment using our products, a number of potentially significant negative consequences could
result, including:
● regulatory authorities may withdraw approvals of such product;
● we may be required to recall a product or change the way such product is administered to patients;
● additional restrictions may be imposed on the marketing of the particular product or the manufacturing
processes for the product;
● regulatory authorities may require additional warnings on the label, such as a “black box” warning or
contraindication;
● we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a
medication guide outlining the risks of such side effects for distribution to patients or similar risk
management measures;
● the product could become less competitive;
● we could be sued and held liable for harm caused to patients; and
● our reputation may suffer.
Any of these events could prevent us from achieving or maintaining market acceptance of the particular product
candidate, if approved, and could significantly harm our business, results of operations and prospects.
Success in preclinical studies or clinical trials may not be indicative of results in future clinical trials.
Results from previous preclinical studies or clinical trials are not necessarily predictive of future clinical trial
results, and interim results of a clinical trial are not necessarily indicative of final results. Our product candidates may fail
to show the desired safety and efficacy in clinical development despite positive results in preclinical studies or having
successfully advanced through initial clinical trials.
Success in preclinical testing and early clinical trials does not ensure that later clinical trials will generate the same
results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate.
Frequently, product candidates that have shown promising results in early clinical trials have subsequently
suffered significant setbacks in later clinical trials. In addition, the design of a clinical trial can determine whether its
results will support approval of a product and flaws in the design of a clinical trial may not become apparent until the
clinical trial is well advanced. We have limited experience designing clinical trials and may be unable to design and
execute a clinical trial to support regulatory approval. There is a high failure rate for drugs and biologic products
proceeding through clinical trials. Data obtained from preclinical and clinical activities are subject to varying
interpretations, which may delay, limit or prevent regulatory approval, which could negatively impact our business,
financial condition, results of operations and prospects.
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The regulatory approval processes of the FDA, MHRA, competent authorities in the EU and other regulatory
authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain
regulatory approval for our product candidates, our business will be substantially harmed.
The time required to obtain approval by the FDA, MHRA, European Commission and other regulatory authorities
is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous
factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the
type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical
development and may vary among jurisdictions. For instance, the EU pharmaceutical legislation is currently undergoing a
complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European
Commission in November 2020. The European Commission’s proposal for revision of several legislative instruments
related to medicinal products (potentially reducing the duration of regulatory data protection, revising the eligibility for
expedited pathways, etc.) was published on April 26, 2023. The proposed revisions remain to be agreed and adopted by the
European Parliament and European Council and the proposals may therefore be substantially revised before adoption,
which is not expected before early 2026. The revisions may however have a significant impact on the pharmaceutical
industry in the long term.
We have not obtained regulatory approval for any product candidate and it is possible that none of our product
candidates in clinical programs or any other product candidates we may seek to develop in the future will ever obtain
regulatory approval. Neither we nor any future collaborator is permitted to market any of our product candidates in the
United States, the UK or the EU until we receive regulatory approval of a BLA from the FDA or of an MAA from the
MHRA or European Commission, respectively. It is possible that the FDA may refuse to accept for substantive review any
BLAs, or the MHRA or EMA any of our MAAs, that we submit for our product candidates or may conclude after review
of our data that our application is insufficient to obtain marketing approval of our product candidates.
Prior to obtaining approval to commercialize a product candidate in the United States, the UK, the EU or
elsewhere, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to
the satisfaction of the FDA, MHRA, EMA or foreign regulatory agencies, that such product candidates are safe and
effective for their intended uses, or with respect to biologics in the United States, that such product candidates are safe,
pure, and potent for their intended uses. Results from nonclinical studies and clinical trials can be interpreted in different
ways. Even if we believe the nonclinical or clinical data for our product candidates are promising, such data may not be
sufficient to support approval by the FDA, MHRA, European Commission or other regulatory authorities. The FDA,
MHRA or EMA may also require us to conduct additional preclinical studies or clinical trials for our product candidates
either prior to or post-approval, or it may object to elements of our clinical development program. Depending on the extent
of these or any other FDA, MHRA or EMA required studies, approval of any regulatory approval applications that we
submit may be delayed by several years, or may require us to expend significantly more resources than we have available.
Of the large number of potential products in development, only a small percentage successfully complete the
FDA, MHRA, or other foreign regulatory approval processes and are commercialized. The lengthy approval process as
well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market
our product candidates, which would significantly harm our business, results of operations and prospects.
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Even if we obtain FDA, MHRA or European Commission approval for our product candidates in the United States, UK
or EU, we may never obtain approval for or commercialize them in any other jurisdiction, which would limit our ability
to realize their full market potential.
In order to market any products in any particular jurisdiction, we must establish and comply with numerous and
varying regulatory requirements on a country-by-country basis regarding safety and efficacy. Approval by the FDA in the
United States, the MHRA in Great Britain or the competent authorities in the EU does not ensure approval by regulatory
authorities in other countries or jurisdictions. However, the failure to obtain approval in one jurisdiction may negatively
impact our ability to obtain approval elsewhere. In addition, clinical trials conducted in one country may not be accepted
by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval
in any other country.
Approval processes vary among countries and can involve additional product testing and validation and additional
administrative review periods. Seeking foreign regulatory approval could result in difficulties and increased costs for us
and require additional preclinical studies or clinical trials which could be costly and time consuming. Regulatory
requirements can vary widely from country to country and could delay or prevent the introduction of our products in those
countries. We do not have any product candidates approved for sale in any jurisdiction, including in international markets,
and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with
regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in
international markets are delayed, our target market will be reduced and our ability to realize the full market potential of
any product we develop will be unrealized.
Even if we receive regulatory approval of one or more of our product candidates, we will be subject to ongoing
regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may
be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our
product candidates.
Any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-
approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import,
advertising and promotional activities for such product, among other things, will be subject to extensive and ongoing
requirements of and review by the FDA, MHRA and other regulatory authorities. These requirements include submissions
of safety and other post-marketing information and reports, establishment registration and drug listing requirements,
continued compliance with GMP and similar requirements relating to manufacturing, quality control, quality assurance and
corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and
recordkeeping and GCP requirements for any clinical trials that we conduct post-approval.
The FDA, MHRA and other regulatory authorities closely regulate the post-approval marketing and promotion of
genetic therapy medicines to ensure they are marketed only for the approved indications and in accordance with the
provisions of the approved labeling. The FDA, MHRA and other regulatory authorities impose stringent restrictions on
manufacturers’ communications regarding off-label use and if we market our products for uses beyond their approved
indications, we may be subject to enforcement action for off-label marketing. Violations of the U.S. federal Food, Drug,
and Cosmetic Act, or FDCA, relating to the promotion of prescription drugs may lead to FDA enforcement actions and
investigations alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection
laws. Similar risks apply in foreign jurisdictions.
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In addition, later discovery of previously unknown adverse events or other problems with our products,
manufacturers or manufacturing processes, including adverse events of unanticipated severity or frequency, or with our
manufacturing processes or third-party manufacturers, or failure to comply with regulatory requirements, may yield various
results, including:
● restrictions on manufacturing such products;
● restrictions on the labeling or marketing of a product;
● restrictions on product distribution or use;
● requirements to conduct post-marketing studies or clinical trials;
● warning letters or holds on clinical trials;
● withdrawal of the products from the market;
● refusal to approve pending applications or supplements to approved applications that we submit;
● recall of products;
● fines, restitution or disgorgement of profits or revenues;
● suspension or withdrawal of marketing approvals;
● refusal to permit the import or export of our products;
● product seizure or detention; or
● injunctions or the imposition of civil or criminal penalties.
The FDA’s and foreign regulatory authorities’ policies may change and additional government regulations may be
enacted that could prevent, limit or delay regulatory approval of our product candidates. We also cannot predict the
likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either
in the United States or in other countries. 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 be subject to
enforcement action, which would adversely affect our business, prospects and ability to achieve or sustain profitability.
Interim, “topline” and preliminary data from our clinical trials that we announce or publish from time to time may
change as more patient data become available and are subject to audit and verification procedures that could result in
material changes in the final data.
From time to time, we may publicly disclose preliminary or topline data from our clinical trials, which is based on
a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change
following a more comprehensive review of the data related to the particular study or trial. We also make assumptions,
estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the
opportunity to fully and carefully evaluate all data. As a result, the topline or preliminary results that we report may differ
from future results of the same studies, or different conclusions or considerations may qualify such results, once additional
data have been received and fully evaluated. Topline and preliminary data also remain subject to audit and verification
procedures that may result in the final data being materially different from the topline or preliminary data we previously
published. As a result, topline and preliminary data should be viewed with caution until the final data are available.
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From time to time, we may also disclose interim data from our clinical trials. Interim data from these trials that
we may complete are subject to the risk that one or more of the clinical outcomes may materially change as subject
enrollment continues and more data become available. Adverse differences between interim data and topline, preliminary,
or final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors
could result in volatility in the price of our ordinary shares.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates,
calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the
value of the particular program, the approvability or commercialization of the particular product candidate or product and
our company in general. In addition, the information we choose to publicly disclose regarding a particular clinical trial is
based on what is typically extensive information, and you or others may not agree with what we determine is material or
otherwise appropriate information to include in our disclosure. If the interim, topline, or preliminary data that we report
differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to
obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating
results, prospects or financial condition.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on
product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
Because we have limited financial and managerial resources, we focus on research programs and product
candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other
product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation
decisions may cause us to fail to timely capitalize on viable commercial products or profitable market opportunities. Our
spending on current and future research and development programs and product candidates for specific indications may not
yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a
particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing
or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development
and commercialization rights to such product candidate.
Changes in funding for, or disruptions caused by global health concerns impacting, the FDA and other government
or regulatory agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise
prevent new products and services from being developed, approved or commercialized in a timely manner, which
could negatively impact our business.
The ability of the FDA and foreign regulatory authorities to review and approve new products can be affected by a
variety of factors, including government budget and funding levels, disruptions caused by global health concerns such as
the COVID-19 pandemic, ability to hire and retain key personnel, including those with experience relating to novel gene
therapy product candidates, acceptance of the payment of user fees, statutory, regulatory, and policy changes and other
events that may otherwise affect the FDA’s or foreign regulatory authorities’ ability to perform routine functions. Average
review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result. In addition,
government funding of other government agencies that fund research and development activities is subject to the political
process, which is inherently fluid and unpredictable.
Disruptions at the FDA and other government or regulatory agencies such as the EMA, following its relocation to
Amsterdam and related reorganization (including staff changes), may also slow the time necessary for new product
candidates to be reviewed and/or approved, which would adversely affect our business. For example, in recent years, the
U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough
critical FDA employees and stop critical activities.
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Risks Related to Healthcare Laws and Other Legal Compliance Matters
Enacted and future healthcare legislation may increase the difficulty and cost for us to obtain marketing approval of
and commercialize our product candidates and may affect the prices we may set.
In the United States, the UK, the EU and other jurisdictions, there have been, and we expect there will continue to
be, a number of legislative and regulatory changes and proposed changes to the healthcare system that could affect our
future results of operations. In particular, there have been and continue to be a number of initiatives at the U.S. federal and
state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in March 2010, the
Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or
collectively the ACA, was enacted, which substantially changed the way healthcare is financed by both governmental and
private insurers. Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology
industries include the following:
● an annual, non-deductible fee payable by any entity that manufactures or imports certain branded
prescription drugs and biologic agents (other than those designated as orphan drugs), which is
apportioned among these entities according to their market share in certain government healthcare
programs;
● a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program
are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer
Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level,
thereby potentially increasing a manufacturer’s Medicaid rebate liability;
● a licensure framework for follow on biologic products;
● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct
comparative clinical effectiveness research, along with funding for such research; and
● establishment of a Center for Medicare & Medicaid Innovation at the Centers for Medicare & Medicaid
Services, or CMS, to test innovative payment and service delivery models to lower Medicare and
Medicaid spending, potentially including prescription drug spending.
Since its enactment, there have been judicial, Congressional and executive branch challenges to certain aspects of
the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by
several states without specifically ruling on the constitutionality of the ACA. In addition, other legislative changes have
been proposed and adopted in the United States since the ACA was enacted, including aggregate reductions of Medicare
payments to providers, which was temporarily suspended from May 1, 2020 through March 31, 2022, and reduced
payments to several types of Medicare providers. Moreover, there has recently been heightened governmental scrutiny
over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional
inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency
to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government
program reimbursement methodologies for drug products. More recently, in August 2022, the IRA was signed into law.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare
beginning in 2026, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and
Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap
discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of the HHS to
implement many of these provisions through guidance, as opposed to regulation, for the initial years. In August 2023, HHS
announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price
negotiation program
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is currently subject to legal challenges. While the impact of the IRA on the pharmaceutical industry cannot yet be fully
determined, it is likely to be significant. For that and other reasons, it is currently unclear how the IRA will be effectuated.
These new laws or any other similar laws introduced in the future may result in additional reductions in Medicare and other
health care funding, which could negatively affect our customers and accordingly, our financial operations.
Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.
For example, CMS may develop new payment and delivery models, such as bundled payment models. In addition, recently
there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed
products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal legislation designed
to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and
review the relationship between pricing and manufacturer patient programs. We expect that additional U.S. federal
healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal
government will pay for healthcare products and services, which could result in reduced demand for our product candidates
or additional pricing pressures.
Individual states in the United States have also increasingly passed legislation and implemented regulations
designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints,
discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some
cases, designed to encourage importation from other countries and bulk purchasing. Legally mandated price controls on
payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial
condition and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding
procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and
other healthcare programs. This could reduce the ultimate demand for our product candidates or put pressure on our
product pricing.
In addition, FDA regulations and guidance may be revised or reinterpreted by the FDA in ways that may
significantly affect our business and our products. Any new regulations or guidance, or revisions or reinterpretations of
existing regulations or guidance, may impose additional costs or lengthen FDA review times for our product candidates.
We cannot determine how changes in regulations, statutes, policies, or interpretations when and if issued, enacted or
adopted, may affect our business in the future.
Such changes would likely require substantial time and impose significant costs, or could reduce the potential
commercial value of our product candidates, and could materially harm our business and our financial results. In addition,
delays in receipt of or failure to receive regulatory clearances or approvals for any other products would harm our business,
financial condition, and results of operations.
In the UK and EU, similar political, economic and regulatory developments may affect our ability to profitably
commercialize our product candidates, if approved. In addition to continuing pressure on prices and cost containment
measures, legislative developments at the UK or the EU or member state level may result in significant additional
requirements or obstacles that may increase our operating costs. The delivery of healthcare in the UK and the EU,
including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost
exclusively a matter for national law and policy. National governments and health service providers have different
priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In
general, however, the healthcare budgetary constraints in the UK and in most EU member states have resulted in
restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-
increasing national regulatory burdens on those wishing to develop and market products, this could prevent or delay
marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to
commercialize our product candidates, if approved.
On December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending
Directive 2011/24/EU, was adopted. While the Regulation entered into force in January 2022, it will only begin to apply
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from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim. Once
applicable, it will have a phased implementation depending on the concerned products. The Regulation intends to boost
cooperation among EU member states in assessing health technologies, including new medicinal products, and provide the
basis for cooperation at the EU level for joint clinical assessments in these areas. It will permit EU member states to use
common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint
clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific
consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to
identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU member states
will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and
making decisions on pricing and reimbursement.
In markets outside of the United States, the UK and the EU, reimbursement and healthcare payment systems vary
significantly by country, and many countries have instituted price ceilings on specific products and therapies.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation
or administrative action in the United States, the UK the EU or any other jurisdiction. If we or any third parties we may
engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or
if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any regulatory
approval that may have been obtained and we may not achieve or sustain profitability.
Our business operations and current and future relationships with investigators, healthcare professionals, consultants,
third-party payors, patient organizations and customers will be subject to applicable healthcare regulatory laws, which
could expose us to penalties.
Our business operations and current and future arrangements with investigators, healthcare professionals,
consultants, third-party payors, patient organizations and customers, may expose us to broadly applicable fraud and abuse
laws and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and
relationships through which we conduct our operations, including how we research, market, sell and distribute our product
candidates, if approved. Such laws include:
● the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from
knowingly and willfully soliciting, offering, receiving or providing any remuneration (including any
kickback, bribe, or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce
or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or
recommendation of, any good, facility, item or service, for which payment may be made, in whole or in
part, under U.S. federal and state healthcare programs such as Medicare and Medicaid. A person or
entity does not need to have actual knowledge of the statute or specific intent to violate it in order to
have committed a violation;
● the U.S. federal civil and criminal false claims and civil monetary penalties laws, including the civil
False Claims Act, which, among other things, impose criminal and civil penalties, including through
civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or
causing to be presented, to the U.S. federal government, claims for payment or approval that are false or
fraudulent, knowingly making, using or causing to be made or used, a false record or statement material
to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal
an obligation to pay money to the U.S. federal government. In addition, the government may assert that
a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute
constitutes a false or fraudulent claim for purposes of the False Claims Act;
● the U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created
additional federal criminal statutes which prohibit, among other things, knowingly and willfully
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executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly
and willfully falsifying, concealing or covering up a material fact or making any materially false
statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual
knowledge of the statute or specific intent to violate it in order to have committed a violation;
● the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and
medical devices;
● the U.S. Public Health Service Act, which prohibits, among other things, the introduction into interstate
commerce of a biological product unless a biologics license is in effect for that product;
● federal consumer protection and unfair competition laws, which broadly regulate marketplace activities
and activities that potentially harm consumers;
● the U.S. Physician Payments Sunshine Act and its implementing regulations, which requires certain
manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare,
Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to
the government information related to certain payments and other transfers of value to physicians
(defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician
practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified nurse
anesthetists, anesthesiologist assistants and certified nurse midwives), and teaching hospitals, as well as
ownership and investment interests held by physicians and their immediate family members;
● analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which
may apply to our business practices, including but not limited to, research, distribution, sales and
marketing arrangements and claims involving healthcare items or services reimbursed by any third-party
payor, including private insurers; state laws that require pharmaceutical companies to comply with the
pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance
promulgated by the U.S. federal government, or otherwise restrict payments that may be made to
healthcare providers and other potential referral sources; state laws and regulations that require drug
manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts
and other remuneration and items of value provided to healthcare professionals and entities; and state
and local laws that require the registration of pharmaceutical sales representatives; and
● similar healthcare laws and regulations in the UK, EU and other jurisdictions, including reporting
requirements detailing interactions with and payments to healthcare providers.
Ensuring that our internal operations and future business arrangements with third parties comply with applicable
healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude
that our business practices do not comply with current or future statutes, regulations, agency guidance or case law
involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in
violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may
be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from
government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or
jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement,
individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring
of our operations. If any of the physicians or other providers or entities with whom we expect to do business are found to
not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including
exclusions from government funded healthcare programs and imprisonment, which could affect our ability to operate our
business. Further, defending against any such actions can be costly, time-consuming and may require significant personnel
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resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our
business may be impaired.
We are subject to regulation and other legal obligations relating to data privacy and protection. Compliance with these
requirements is complex and costly. The actual or perceived failure to comply with such obligations could materially
harm our business.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state,
federal and foreign laws, requirements and regulations governing the collection, use, access to, confidentiality, disclosure,
storage, processing, retention and security of personal information such as information that we may collect in connection
with clinical trials in the U.S. and abroad.
In the U.S., HIPAA imposes privacy, security and breach reporting obligations with respect to individually
identifiable health information upon “covered entities” (health plans, health care clearinghouses and certain health care
providers), and their respective business associates, individuals or entities that create, receive, maintain or transmit
protected health information in connection with providing a service for or on behalf of a covered entity, as well as their
covered subcontractors. Most healthcare providers, including research institutions and other vendors from which we may
obtain health-related information, are subject to privacy and security regulations promulgated under HIPAA. We do not
believe that we are currently acting as a covered entity or business associate under HIPAA and thus are not directly subject
to its requirements or penalties. However, depending on the facts and circumstances, we could face substantial criminal
penalties if we knowingly receive individually identifiable health information from a HIPAA-covered healthcare provider
or research institution that has not satisfied HIPAA’s requirements for disclosure of individually identifiable health
information.
In addition, certain state laws govern the privacy and security of health information in certain circumstances, some
of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have
the same effect, thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in
the imposition of significant civil and/or criminal penalties and private litigation. Further, we may also be subject to other
state laws governing the privacy, processing and protection of personal information. For example, the CCPA requires
covered businesses that process the personal information of California residents to, among other things: provide certain
disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information;
receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt
out of certain disclosures of their personal information; and enter into specific contractual provisions with service providers
that process California resident personal information on the business’s behalf. Similar laws have been passed in other
states, and are continuing to be proposed at the state and the federal level, reflecting a trend toward more stringent privacy
legislation in the United States. HIPAA, the CCPA and other domestic privacy and data protection laws and regulations
may increase our compliance costs and potential liability.
Our operations abroad may also be subject to increased scrutiny or attention from data protection authorities. For
example, the GDPR imposes stringent requirements for processing the personal data of individuals within the EEA, or in
the context of our activities within the EEA. Companies that must comply with the GDPR face increased compliance
obligations and risk, including more robust regulatory enforcement of data protection requirements and, among other
things, potential fines for noncompliance of up to €20 million or up to 4% of the total worldwide annual turnover of the
relevant undertaking in the preceding financial year, whichever is higher, and other administrative penalties.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries
that have not been found to provide adequate protection to such personal data, including the U.S. Case law from the Court
of Justice of the European Union states that reliance on the standard contractual clauses – a standard form of contract
approved by the European Commission as an adequate personal data transfer mechanism – alone may not necessarily be
sufficient in all circumstances and that transfers must be assessed on a case-by-case basis. The European Commission
adopted its Adequacy Decision in relation to the new EU-US Data Privacy Framework (“DPF”), on July 10, 2023,
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rendering the DPF effective as a GDPR transfer mechanism to U.S. entities self-certified under the DPF. We expect the
existing legal complexity and uncertainty regarding international personal data transfers to continue. In particular, we
expect the adequacy of the DPF as an approved GDPR transfer mechanism to be challenged and international transfers to
the United States and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators. If,
owing to the restriction or perceived restriction of personal data transfers, we are otherwise unable to transfer personal data
between and among countries and regions in which we operate, it could affect the manner in which we provide our
services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our
financial results.
Further, we are subject to the UK GDPR, which imposes separate but similar obligations to those under the GDPR
and comparable penalties, including fines of up to £17.5 million or 4% of a noncompliant undertaking’s global annual
revenue for the preceding financial year, whichever is greater. On October 12, 2023, the UK Extension to the DPF came
into effect (as approved by the UK Government), as a data transfer mechanism from the UK to U.S. entities self-certified
under the DPF. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional
laws and regulations that may affect how we conduct business.
Although we work to comply with applicable laws, regulations and standards, as well as our contractual
obligations and other legal obligations, relating to data privacy and security, these requirements are evolving and may be
modified, interpreted and applied in an inconsistent manner from one jurisdiction and/or organization to another, and may
conflict with one another or other legal obligations with which we must comply. Any failure or perceived failure by us or
our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such
requirements or adequately address privacy data and security concerns, even if unfounded, could result in additional costs,
claims by and liability to third parties, government investigations and enforcement actions, damage to our reputation, and
other adverse affects on our business, financial condition and results of operations.
We are subject to environmental, health and safety laws and regulations, and we may become exposed to liability and
substantial expenses in connection with environmental compliance or remediation activities.
Our operations, including our development, testing and manufacturing activities, are subject to numerous
environmental, health and safety laws and regulations. These laws and regulations govern, among other things, the
controlled use, handling, release and disposal of and the maintenance of a registry for, hazardous materials and biological
materials, such as chemical solvents, human cells, carcinogenic compounds, mutagenic compounds and compounds that
have a toxic effect on reproduction, laboratory procedures and exposure to blood-borne pathogens. If we fail to comply
with such laws and regulations, we could be subject to fines or other sanctions. Additionally, if environmental regulations
are enacted that restrict our ability to use one or more of the materials or compounds necessary to manufacture our product
candidates, and we are unable to find suitable alternatives or such alternatives require additional testing or will extend the
manufacturing timeline, then we may be unable to manufacture our product candidates in a timely manner, or at all.
We may be subject to environmental liability inherent in our current and historical activities, including liability
relating to releases of or exposure to hazardous or biological materials. Environmental, health and safety laws and
regulations are becoming more stringent. We may be required to incur substantial expenses in connection with future
environmental compliance or remediation activities, in which case, our production efforts or those of our third-party
manufacturers may be interrupted or delayed.
Due to our international operations, we are subject to anti-corruption laws, as well as export control laws, customs laws,
sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil
or criminal penalties, other remedial measures and legal expenses.
Our operations are subject to anti-corruption laws, including the UK Bribery Act 2010, or Bribery Act; the U.S.
Foreign Corrupt Practices Act, or FCPA; and other anti-corruption laws that apply in countries where we do business and
may do business in the future. The Bribery Act, FCPA, and these other laws generally prohibit us, our officers and our
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employees and intermediaries from bribing, being bribed by, or providing prohibited payments or anything else of value to
government officials or other persons to obtain or retain business or gain some other business advantage. We may in the
future operate in jurisdictions that pose a high risk of potential Bribery Act or FCPA violations, and we may participate in
collaborations and relationships with third parties whose actions could potentially subject us to liability under the Bribery
Act, FCPA, or local anti-corruption laws. In addition, we cannot predict the nature, scope, or effect of future regulatory
requirements to which any of our international operations might be subject or the manner in which existing laws might be
administered or interpreted.
We also are subject to other laws and regulations governing any international operations, including regulations
administered by the governments of the UK and the U.S., and authorities in the EU, including applicable export control
regulations, economic sanctions on countries and persons, customs requirements and currency exchange regulations, or,
collectively, the Trade Control laws.
There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-
corruption laws, including the Bribery Act, the FCPA, or other legal requirements, including Trade Control laws. If we are
not in compliance with the Bribery Act, the FCPA, and other anti-corruption laws or Trade Control laws, we may be
subject to criminal and civil penalties, disgorgement, and other sanctions and remedial measures and legal expenses. Any
investigation of any potential violations of the Bribery Act, the FCPA, other anti-corruption laws, or Trade Control laws by
UK, U.S., or other authorities, even if it is ultimately determined that we did not violate such laws, could be costly and
time-consuming, require significant personnel resources, and harm our reputation.
We have established internal controls to detect and prevent violations of applicable anti-corruption laws and to
remedy any weaknesses identified. There can be no assurance, however, that the policies and procedures will be followed
at all times or effectively detect and prevent violations of the applicable laws by one or more of our employees,
consultants, agents, or collaborators and, as a result, we could be subject to fines, penalties, or prosecution.
Risks Related to Commercialization
We face significant competition in an environment of rapid technological change, and there is a possibility that our
competitors may achieve regulatory approval before us or develop therapies that are safer or more advanced or effective
than ours, which may harm our financial condition and our ability to successfully market or commercialize any product
candidates we may develop.
The development and commercialization of new gene therapy products is highly competitive. Moreover, the gene
regulation and manufacturing fields are characterized by rapidly changing technologies and a strong emphasis on
intellectual property. We may face competition with respect to any product candidates that we may seek to develop or
commercialize in the future from major pharmaceutical companies, specialty pharmaceutical companies, and
biotechnology companies worldwide. Potential competitors also include academic institutions, government agencies, and
other public and private research organizations that conduct research, seek patent protection, and establish collaborative
arrangements for research, development, manufacturing, and commercialization.
There are a number of large pharmaceutical and biotechnology companies that currently market and sell products
or are pursuing the development of products for the treatment of the disease indications for which we have research
programs, including inherited retinal diseases and neurodegenerative diseases. Some of these competitive products and
therapies are based on scientific approaches that are similar to our approach, and others are based on entirely different
approaches. Differences in the scientific approaches may create confusion or uncertainty among clinical trial investigators
or patient populations, which could delay or hinder enrollment or initiation of our clinical trials.
Our platform and products focus on the development of gene therapies and gene regulation technology. In 2017,
the FDA approved the first gene treatment for RPE65-associated retinal disease, Luxturna, a commercially available
product developed by Spark Therapeutics, Inc., which was purchased by Roche. There are a number of other companies
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developing ocular gene therapy products, including Applied Genetic Technologies Corporation, and 4D Molecular
Therapeutics, Inc. There are a number of companies developing gene therapy products for neurodegenerative diseases,
including Voyager Therapeutics, Inc., Brain Neurotherapy Bio, Inc., and Eli Lilly and Company. In addition to competition
from other gene therapies, any products we may develop may also face competition from other types of therapies, such as
small molecule, antibody, or protein therapies. Many of our current or potential competitors, either alone or with their
collaboration partners, have greater financial resources and expertise in research and development, manufacturing,
preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do.
Mergers and acquisitions in the pharmaceutical, biotechnology, and gene therapy industries may result in even more
resources being concentrated among a smaller number of our competitors. These competitors also compete with us in
recruiting and retaining qualified scientific, manufacturing and management personnel and establishing clinical trial sites
and patient enrollment in clinical trials, as well as in acquiring technologies complementary to, or necessary for, our
programs. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize
products that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive
than any products that we may develop, limiting demand or the price we are able to charge, or that could render any
products that we may develop obsolete or non-competitive. Our competitors also may obtain FDA, MHRA or other
regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our
competitors establishing a strong market position before we are able to enter the market. In addition, as a result of the
expiration or successful challenge of our patent rights, we could face more litigation with respect to the validity and/or
scope of patents relating to our competitors’ products.
The successful commercialization of our product candidates will depend in part on the extent to which governmental
authorities and health insurers establish coverage, adequate reimbursement levels and pricing policies. Failure to
obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our
ability to market those products and decrease our ability to generate revenue.
The availability of coverage and adequacy of reimbursement by governmental healthcare programs such as
Medicare and Medicaid, private health insurers and other third-party payors are essential for most patients to be able to
afford medical services and pharmaceutical products such as our product candidates, assuming FDA approval. Our ability
to achieve acceptable levels of coverage and reimbursement for our products or procedures using our products by
governmental authorities, private health insurers and other organizations will have an effect on our ability to successfully
commercialize our product candidates. Obtaining coverage and adequate reimbursement for our products may be
particularly difficult because of the higher prices often associated with drugs administered under the supervision of a
physician. Separate reimbursement for the product itself or the treatment or procedure in which our product is used may not
be available. A decision by a third-party payor not to cover or separately reimburse for our products or procedures using
our products, could reduce physician utilization of our products if approved. Assuming there is such coverage by a third-
party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find
unacceptably high. We cannot be sure that coverage and reimbursement in the United States, the UK, the EU or elsewhere
will be available for our product candidates or any product that we may develop, and any reimbursement that may become
available may not be adequate or may be decreased or eliminated in the future.
Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and
many third-party payors may refuse to provide coverage and reimbursement for particular drugs or biologics when an
equivalent generic drug, biosimilar or a less expensive therapy is available. It is possible that a third-party payor may
consider our product candidates as substitutable and only offer to reimburse patients for the less expensive product. Even if
we show improved efficacy or improved convenience of administration with our product candidates, pricing of existing
third-party therapeutics may limit the amount we will be able to charge for our product candidates. These payors may deny
or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels
that are too low to enable us to realize an appropriate return on our investment in our product candidates. If reimbursement
is not available or is available only at limited levels, we may not be able to successfully commercialize our product
candidates and may not be able to obtain a satisfactory financial return on our product candidates.
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There is significant uncertainty related to the insurance coverage and reimbursement of newly-approved products.
In the United States, third-party payors, including private and governmental payors, such as the Medicare and Medicaid
programs, play an important role in determining the extent to which new drugs and biologics will be covered. The
Medicare and Medicaid programs increasingly are used as models in the United States for how private payors and other
governmental payors develop their coverage and reimbursement policies for drugs and biologics. Some third-party payors
may require pre-approval of coverage for new or innovative devices or drug therapies before they will reimburse healthcare
providers who use such therapies. We cannot predict at this time what third-party payors will decide with respect to the
coverage and reimbursement for our product candidates.
No uniform policy for coverage and reimbursement for products exists among third-party payors in the United
States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the
coverage determination process is often a time-consuming and costly process that will require us to provide scientific and
clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and
adequate reimbursement will be applied consistently or obtained in the first instance. Furthermore, rules and regulations
regarding reimbursement change frequently, in some cases on short notice.
Outside the United States, international operations are generally subject to extensive governmental price controls
and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe and other
countries have and will continue to put pressure on the pricing and usage of our product candidates. In many countries, the
prices of medical products are subject to varying price control mechanisms as part of national health systems. Other
countries allow companies to fix their own prices for medical products but monitor and control company profits.
Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge
for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our product
candidates may be reduced compared with the United States and may be insufficient to generate commercially-reasonable
revenue and profits.
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or
reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly
approved products and, as a result, they may not cover or provide adequate payment for our product candidates. We expect
to experience pricing pressures in connection with the sale of our product candidates due to the trend toward managed
health care, the increasing influence of health maintenance organizations and additional legislative changes. The downward
pressure on healthcare costs in general, particularly prescription drugs and biologics and surgical procedures and other
treatments, has become intense. As a result, increasingly high barriers are being erected to the entry of new products.
Even if our product candidates receive marketing approval, they may fail to achieve market acceptance by
physicians, patients, third-party payors or others in the medical community necessary for commercial success.
If our product candidates receive marketing approval, they may nonetheless fail to gain sufficient market
acceptance by physicians, patients, third-party payors and others in the medical community. If they do not achieve an
adequate level of acceptance, we may not generate significant product revenues or become profitable. The degree of market
acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including but
not limited to:
● the efficacy and potential advantages compared to alternative treatments;
● effectiveness of sales and marketing efforts;
● the cost of treatment in relation to alternative treatments, including any similar generic treatments;
● our ability to offer our product candidates for sale at competitive prices;
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● the convenience and ease of administration;
● the willingness of the target patient population to try new therapies and of physicians to prescribe these
therapies;
● the strength of marketing and distribution support, and publicity concerning our products or competing
products and treatments;
● the timing of market introduction of competitive products;
● the availability of third-party coverage and adequate reimbursement;
● product labeling or product insert requirements of the FDA, MHRA, EMA or other regulatory
authorities, including any limitations or warnings contained in a product’s approved labeling;
● the prevalence and severity of any side effects; and
● any restrictions on the use of our product together with other medications.
Because we expect sales of our product candidates, if approved, to generate substantially all of our product
revenues for a substantial period, the failure of these product candidates to find market acceptance would harm our
business and could require us to seek additional financing.
If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration
with third parties, we may not be successful in commercializing our product candidates or realizing the synergies in
the target indications of our programs, even if they are approved.
We do not have any infrastructure for the sales, marketing or distribution of our products, and the cost of
establishing and maintaining such an organization may exceed the cost-effectiveness of doing so or we may seek
collaborative arrangements or external funding to commercialize our product candidates. There are significant expenses
and risks involved with establishing our own sales, marketing and distribution capabilities, including our ability to hire,
retain and appropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales
and marketing personnel, and effectively manage a geographically dispersed sales and marketing team. Any failure or
delay in the development of such capabilities could delay any product launch, which would adversely impact the
commercialization of our product candidates. Additionally, if any commercial launch is delayed or does not occur for any
reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and
our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
We may not have the resources in the foreseeable future to allocate to the sales and marketing of our product
candidates in certain markets. Therefore, our future sales in these markets will largely depend on our ability to enter into
and maintain collaborative relationships for such capabilities, the collaborator’s strategic interest in the product and such
collaborator’s ability to successfully market and sell the product. We may pursue collaborative arrangements regarding the
sale and marketing of AAV-hAQP1, AAV-GAD, our IRD programs, our riboswitch gene regulation platform technology or
other future gene therapy programs, if approved, for the United States and/or certain markets overseas; however, there can
be no assurance that we will be able to establish or maintain such collaborative arrangements, or if able to do so, that they
will have effective sales forces.
If we are unable to build our own sales force or negotiate or maintain a collaborative relationship for the
commercialization of our product candidates, we may be forced to delay potential commercialization or reduce the scope of
our sales or marketing activities. If we elect to increase our expenditures to fund commercialization activities
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internationally, we will need to obtain additional capital, which may not be available to us on acceptable terms, or at all.
We could enter into arrangements with collaborative partners at an earlier stage than otherwise would be ideal and we may
be required to relinquish rights or otherwise agree to terms unfavorable to us, any of which may have an adverse effect on
our business, operating results and prospects.
Some indications targeted by our ophthalmology programs are rare, but we anticipate realizing synergies in
commercializing our IRD product candidates, should they be approved. Failure to realize synergies in our sales, marketing
and distribution efforts may harm our commercialization efforts.
If we or our collaborators are unable to establish or maintain adequate sales, marketing and distribution
capabilities, we will not be successful in commercializing our product candidates and may not become profitable and may
incur significant additional losses. We will be competing with many companies that currently have extensive and well-
funded marketing and sales operations. Without an internal team or the support of a third party to perform marketing and
sales functions, we may be unable to compete successfully against these more established companies.
If any of our products are commercialized outside of the United States, the UK or the EU, a variety of risks associated
with international operations could adversely affect our business.
If any of our products are approved for commercialization, we have entered into, and intend to enter into,
agreements with third parties to market them in certain jurisdictions outside the United States, the UK and the EU. We
expect that we and our third-party collaborators will be subject to additional risks related to international pharmaceutical
operations, including:
● different regulatory requirements for drug and biologic approvals and rules governing drug and biologic
commercialization in foreign countries;
● tighter restrictions on data privacy and security and the collection and use of patient data;
● reduced or loss of protection for intellectual property rights;
● foreign reimbursement, pricing and insurance regimes;
● unexpected changes in tariffs, trade barriers and regulatory requirements;
● economic weakness, including inflation, or political instability in particular foreign economies and
markets;
● foreign currency fluctuations, which could result in increased operating expenses and reduced revenues,
and other obligations incident to doing business in another country;
● business interruptions resulting from geopolitical actions, including war and terrorism, or widespread
health emergencies, such as the COVID-19 pandemic, or natural disasters including earthquakes,
typhoons, floods and fires, or from economic or political instability;
● greater difficulty with enforcing our contracts;
● potential noncompliance with the FCPA, the Bribery Act and similar anti-bribery and anticorruption
laws in other jurisdictions;
● production shortages resulting from any events affecting raw material supply or manufacturing
capabilities abroad; and
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● workforce uncertainty in countries where labor unrest is more common than in the United States and
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad.
We have no prior experience in these areas and we may rely on other third parties to help us establish our
international commercialization operations. In addition, there are complex regulatory, tax, labor and other legal
requirements imposed by individual countries in Europe with which we and our third-party collaborators will need to
comply. If we are unable to successfully manage the challenges of international expansion and operations, our business and
operating results could be harmed.
Any product candidates for which we intend to seek approval as biologic products may face competition sooner than
anticipated.
The ACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCIA,
which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an
FDA-licensed reference biological product. Under the BPCIA, an application for a biosimilar product may not be
submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In
addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which
the reference product was first licensed by the FDA. During this 12-year period of exclusivity, another company may still
market a competing version of the reference product if the FDA approves a full BLA for the competing product containing
the sponsor’s own pre-clinical data and data from adequate and well-controlled clinical trials to demonstrate the safety,
purity and potency of the other company’s product.
We believe that any of our product candidates approved as a biological product under a BLA should qualify for
the 12-year period of exclusivity. However, there is a risk that any of our product candidates approved as a biological
product under a BLA would not qualify for the 12-year period of exclusivity or that this exclusivity could be shortened due
to Congressional action or otherwise, or that the FDA will not consider our product candidates to be reference products for
competing products, potentially creating the opportunity for generic competition sooner than anticipated. Jurisdictions
outside the United States have established abbreviated pathways for regulatory approval of biological products that are
biosimilar to earlier approved reference products. For example, the EU has had an established regulatory pathway for
biosimilars since 2006. Moreover, the extent to which a biosimilar, once licensed, will be substituted for any one of our
reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and
will depend on a number of marketplace and regulatory factors that are still developing.
If competitors are able to obtain marketing approval for biosimilars referencing our products, our products may
become subject to competition from such biosimilars, with the attendant competitive pressure and consequences.
Risks Related to Our Dependence on Third Parties
If our GMP manufacturing facilities are unable to supply our product candidates for all of our current preclinical,
clinical and potential commercial needs, including our third party supply obligations, we will be forced to seek out third-
party manufacturers. We currently contract with third parties for the manufacture of plasmid used in producing product
candidates. Relying on third parties increases the risk that we will not have sufficient quantities of such materials,
product candidates, or any medicines that we may develop and commercialize, or that such supply will not be available
to us at an acceptable cost, which could delay, prevent, or impair our development or commercialization efforts.
We produce our product candidates in our GMP viral vector manufacturing facility completed in early 2018 and
our second, large scale GMP viral vector manufacturing facility and our first GMP plasmid and DNA production facility
came online in 2022. However, if our current facilities are damaged, suffer any form of delay or regulatory challenges, we
experience slowdowns or problems with our facilities or we are unable to scale our internal manufacturing capabilities to
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meet demand for our product candidates, we will need to contract with third-party manufacturers to produce our product
candidates. We have also agreed to manufacture commercial supply of the RPGR Product for Janssen, if and when
approved, under the Supply Agreement. If we fail to meet our obligations under the Supply Agreement, we may not be
able to find a third-party manufacturer suitable to us or Janssen to perform such manufacturing obligations, which could
negatively impact our receipt of revenues under the Supply Agreement. While we now have our own plasmid
manufacturing capabilities in our Shannon, Ireland facilities, we also rely on third-party manufacturers from time to time
for the manufacture of plasmid used in the production of some product candidates. We do not have a long-term supply
agreement with any of the third-party manufacturers, and we purchase our required supply on a purchase order basis.
We and our third-party manufacturers may also encounter difficulties or delays in manufacturing of our product
candidates or the plasmid used in the production of our product candidates. Geopolitical actions, natural disaster or a
widespread health emergency could impact our supply chain. To the extent that we or our third-party manufacturers are
located in geographies affected by these matters, it may result in the temporary closing of manufacturing facilities and may
increase the costs associated with manufacturing our product candidates.
We may be unable to establish any agreements with third-party manufacturers or to do so on acceptable terms.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails
additional risks, including:
● the possible breach of the manufacturing agreement by the third party, including failure to provide
appropriate quantities in a timely manner;
● the possible termination or nonrenewal of the agreement by the third party at a time that is costly or
inconvenient for us; and
● reliance on the third party for regulatory compliance, quality assurance, safety, and pharmacovigilance
and related reporting.
We and our third-party manufacturers may not be able to comply with GMP regulations or similar regulatory
requirements that might be required by the FDA, MHRA or EMA. Our failure, or the failure of our third-party
manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines,
injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocations, seizures or recalls of
product candidates or medicines, operating restrictions, and criminal prosecutions, any of which could adversely affect
supplies of our candidates and harm our business, financial condition, results of operations, and prospects.
Any therapies that we may develop may compete with other product candidates and products for access to
manufacturing facilities. There are a limited number of manufacturers that operate under GMP or similar regulations and
that might be capable of manufacturing for us. Any performance failure on the part of our existing or future manufacturers
could delay clinical development or marketing approval.
Our current and anticipated future dependence upon others for the manufacture of any product candidates we may
develop or any components required for the manufacture of our product candidates may adversely affect our future profit
margins and our ability to commercialize any product candidates that receive marketing approval on a timely and
competitive basis.
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We have in the past, and may in the future, collaborate with third parties for the development, manufacture and
commercialization of our product candidates. We may not succeed in establishing and maintaining collaborative
relationships, which may significantly limit our ability to develop and commercialize our product candidates
successfully, if at all.
We have entered into collaboration agreements with third parties for the development and commercialization of
our product candidates, including the Collaboration Agreement with Janssen for the development and commercialization of
AAV-CNGB3, AAV-CNGA3 and bota-vec, which Collaboration Agreement was terminated in December 2023 in
connection with our entering into the Asset Purchase Agreement with Janssen. In addition, in October 2023 we provided
Sanofi and its affiliates with a right of first negotiation for use of our riboswitch gene regulation technology for certain
Immunology and Inflammation (I&I), including modulation of IL-4 and IL-13, and Central Nervous System (CNS) targets,
as well as for GLP-1 and other gut peptides for metabolic disease, and for our Phase 2 xerostomia program, under the
Investment Agreement. We may seek additional collaborative relationships in the future. Failure to obtain a collaborative
relationship for our product candidates may significantly impair their commercial potential. We also may need to enter into
collaborative relationships to provide funding to support our other research and development programs. The process of
establishing and maintaining collaborative relationships is difficult, time-consuming and involves significant uncertainty,
such as:
● a collaboration partner may shift its priorities and resources away from our product candidates due to a
change in business strategies, or a merger, acquisition, sale or downsizing;
● a collaboration partner may seek to renegotiate or terminate their relationships with us due to
unsatisfactory clinical results, manufacturing issues, a change in business strategy, a change of control
or other reasons;
● a collaboration partner may cease development in therapeutic areas which are the subject of our strategic
collaboration;
● a collaboration partner may not devote sufficient capital or resources towards our product candidates;
● a collaboration partner may change the success criteria for a product candidate thereby delaying or
ceasing development of such candidate;
● a significant delay in initiation of certain development activities by a collaboration partner will also
delay payment of milestones tied to such activities, thereby impacting our ability to fund our own
activities;
● a collaboration partner could develop a product that competes, either directly or indirectly, with our
product candidate;
● a collaboration partner with commercialization obligations may not commit sufficient financial or
human resources to the marketing, distribution or sale of a product;
● a collaboration partner with manufacturing responsibilities may encounter regulatory, resource or quality
issues and be unable to meet demand requirements;
● a collaboration partner may terminate a strategic alliance;
● a dispute may arise between us and a partner concerning
the research, development or
commercialization of a product candidate resulting in a delay in milestones, royalty payments or
termination of an alliance
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and possibly resulting in costly litigation or arbitration which may divert management attention and
resources; and
● a partner may use our products or technology in such a way as to make us subject to litigation with a
third party.
If any collaborator fails to fulfill its responsibilities in a timely manner, or at all, our research, clinical
development, manufacturing or commercialization efforts related to that collaboration could be delayed or terminated, or it
may be necessary for us to assume responsibility for expenses or activities that would otherwise have been the
responsibility of our collaborator. If we are unable to establish and maintain collaborative relationships on acceptable terms
or to successfully transition terminated collaborative agreements, we may have to delay or discontinue further development
of one or more of our product candidates, undertake development and commercialization activities at our own expense or
find alternative sources of capital.
We have relied, and we expect to continue to rely, on third parties to conduct, supervise and monitor our preclinical
studies and clinical trials, and if these third parties perform in an unsatisfactory manner, our business could be harmed.
We expect to rely on CROs, clinical trial sites, and other vendors to ensure our preclinical studies and clinical
trials are conducted properly and on time. We may also engage third parties such as clinical data management
organizations, medical institutions and clinical investigators to conduct or assist in our clinical trials or other preclinical
and clinical research and development work. While we will have agreements governing their activities, we will have
limited influence over their actual performance. We will control only certain aspects of our third-party service providers’
activities. Nevertheless, we will be responsible for ensuring that each of our preclinical studies and clinical trials is
conducted in accordance with applicable protocol, legal, quality, regulatory and scientific standards, including among other
things, GCP requirements for clinical trials and good laboratory practice requirements for certain preclinical studies. Our
reliance on these third parties does not relieve us of our regulatory responsibilities. For example, we are conducting the
Phase 2 AQUAx2 clinical trial of AAV-hAQP1 for the treatment of patients with radiation-induced xerostomia at multiple
clinical trial sites in North America and the United Kingdom. If any locations terminate the clinical trial, we may be
required to find another party to conduct any new trials. We may be unable to find a new party to conduct new trials of our
product candidates or obtain clinical supply of our product candidates or AAV vectors for such trials. If we elect to
internalize some or all activities related to the conduct of our preclinical studies or clinical trials that are currently
performed by our third-party service providers, or if we are required to do so due to a service provider’s termination of our
relationship, then we may be required to source additional technology and personnel in order to perform the relevant
activities. We may be unsuccessful in our efforts to internalize some or all relevant activities, either on the desired timeline
or at all.
Our third-party service providers are not our employees, and we are therefore unable to directly monitor whether
or not they devote sufficient time, attention, expertise and resources to our clinical and nonclinical programs. These third-
party service providers may also have relationships with other commercial entities, including our competitors, for whom
they may also be conducting clinical trials or other drug development activities that could harm our competitive position. If
our third-party service providers do not successfully carry out their contractual duties or obligations or fail to meet
expected deadlines, or if the quality or accuracy of the preclinical or clinical data they obtain is compromised due to the
failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons, our preclinical studies or
clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or
successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our
product candidates could be harmed, our costs could increase, and our ability to generate revenues could be delayed.
If our relationship with any CROs terminate, we may not be able to enter into arrangements with alternative CROs
or do so on commercially reasonable terms. Switching or adding additional CROs involves substantial cost and requires
management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a
result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Though
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we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter
challenges or delays in the future or that these delays or challenges will not have an adverse impact on our business,
financial condition and prospects.
Risks Related to Intellectual Property
We depend on proprietary technology licensed from others. If we lose our existing licenses or are unable to acquire or
license additional proprietary rights from third parties, we may not be able to continue developing our product
candidates.
We currently in-license certain intellectual property from research institutions, universities and other third parties.
We may also enter into additional agreements, including license agreements, with other parties in the future that impose
diligence, development and commercialization timelines, milestone payments, royalties, insurance and other obligations on
us. If we fail to comply with our obligations to any of our current or future collaborators, our counterparties may have the
right to terminate these agreements, in which event we might not be able to develop, manufacture or market any product
candidate that is covered by these agreements, which could adversely affect the value of the product candidate being
developed under any such agreement. Termination of these agreements or reduction or elimination of our rights under these
agreements may result in our having to negotiate new or reinstated agreements with less favorable terms, or cause us to
lose our rights under these agreements, including our rights to important intellectual property or technology.
We may rely on other third parties from whom we license proprietary technology to file and prosecute patent
applications and maintain patents and otherwise protect the intellectual property we license from them. We may have
limited control over these activities or any other intellectual property that may be related to our in-licensed intellectual
property. For example, we cannot be certain that such activities by these licensors will be conducted in compliance with
applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. We
may have limited control over the manner in which our licensors initiate an infringement proceeding against a third-party
infringer of the intellectual property rights, or defend certain of the intellectual property that may be licensed to us. It is
possible that the licensors’ infringement proceedings or defense activities may be less vigorous than if we conduct them
ourselves. The licensing and acquisition of third-party intellectual property rights is a competitive practice, and companies
that may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire
third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product
candidates. More established companies may have a competitive advantage over us due to their larger size and cash
resources or greater clinical development and commercialization capabilities. There can be no assurance that we will be
able to successfully complete such negotiations and ultimately acquire the rights to the intellectual property surrounding
the additional product candidates that we may seek to acquire.
If we are unable to obtain and maintain patent protection for our technology and product candidates or if the scope
of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.
We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the
intellectual property related to our proprietary technologies, product candidate development programs and product
candidates. Our success depends in part on our ability to secure and maintain patent protection in the United States and
other countries with respect to our current product candidates and any future product candidates we may develop. We seek
to protect our proprietary position by filing or collaborating with our licensors to file patent applications in the United
States and abroad related to our proprietary technologies, development programs and product candidates. The patent
prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or
desirable patent applications at a reasonable cost or in a timely manner. Moreover, the issuance, scope, validity,
enforceability and commercial value of our patent rights are uncertain.
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It is also possible that we might fail to identify patentable aspects of our research and development output before it
is too late to obtain patent protection. We may not have the right to control the preparation, filing, and prosecution of patent
applications, or to maintain the rights to patents licensed to third parties. Therefore, these patents and patent applications
may not be prosecuted and enforced in a manner consistent with the best interests of our business. The patent applications
that we own or in-license may fail to result in issued patents with claims that cover our proprietary products and
technology, including current product candidates, any future product candidates we may develop, and our gene regulation
technology in the United States or in other countries, in whole or in part. Alternately, our existing patents and any future
patents we obtain may not be sufficiently broad to prevent others from using our technology or from developing competing
products and technologies. There is no assurance that all potentially relevant prior art relating to our patents and patent
applications has been found, which can prevent a patent from issuing from a pending patent application or later invalidate
or narrow the scope of an issued patent. For example, publications of discoveries in the scientific literature often lag behind
the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until
18 months after filing or, in some cases, not at all. Therefore, we cannot know with certainty whether we were the first to
make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent
protection of such inventions. In addition, obtaining and maintaining our patent protection depends on compliance with
various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies,
and our patent protection could be reduced or eliminated for non-compliance with these requirements. Even if patents do
successfully issue and even if such patents cover our current product candidates, any future product candidates we may
develop and our gene regulation technology, third parties may challenge their validity, enforceability or scope thereof,
which may result in such patents being narrowed, invalidated, or held unenforceable. Any successful challenge to these
patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful
commercialization of any of our product candidates or gene regulation technology. Our competitors may be able to
circumvent our patents by developing similar or alternative product candidates in a non-infringing manner. Further, if we
encounter delays in regulatory approvals, the period of time during which we could market a product candidate and our
gene regulation technology under patent protection could be reduced.
If the patent applications we hold or have in-licensed with respect to our development programs and product
candidates fail to issue, if their validity, breadth or strength of protection is threatened, or if they fail to provide meaningful
exclusivity for any of our current or future product candidates or technology, it could dissuade companies from
collaborating with us to develop product candidates, encourage competitors to develop competing products or technologies
and threaten our ability to commercialize future product candidates. Any such outcome could harm our business.
The patent position of biotechnology and pharmaceutical companies is uncertain, involves complex legal and
factual questions, and is characterized by the existence of large numbers of patents and frequent litigation based on
allegations of patent or other intellectual property infringement or violation. In addition, the laws of jurisdictions outside
the United States may not protect our rights to the same extent as the laws of the United States. Changes in either the patent
laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or
narrow the scope of our patent protection.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned
and licensed patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may
result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in
whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology
and products, or limit the duration of the patent protection of our technology and products. Thus, even if our patent
applications issue as patents, they may not issue in a form that will provide us with meaningful protection, prevent
competitors from competing with us or otherwise provide us with any competitive advantage. Moreover, patents have a
limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed. Various
extensions may be available; however, the life of a patent, and the protection it affords, is limited. Without patent
protection for our current or future product candidates, we may be open to competition from generic versions of such
products. Given the amount of time required for the development, testing and regulatory review of new product candidates,
patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our
owned
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and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products
similar or identical to ours.
Third parties may assert claims against us alleging infringement of their patents and proprietary rights, or we may need
to become involved in lawsuits to defend or enforce our patents, either of which could result in substantial costs or loss
of productivity, delay or prevent the development and commercialization of our product candidates, prohibit our use of
proprietary technology or sale of products or put our patents and other proprietary rights at risk.
Our commercial success depends, in part, upon our ability to develop, manufacture, market and sell our product
candidates without alleged or actual infringement, misappropriation or other violation of the patents and proprietary rights
of third parties. However, our research, development and commercialization activities may be subject to claims that we
infringe or otherwise violate patents or other intellectual property rights owned or controlled by third parties. Litigation
relating to infringement or misappropriation of patent and other intellectual property rights in the pharmaceutical and
biotechnology industries is common, including patent infringement lawsuits, interferences, oppositions and inter partes
reviews, and reexamination proceedings before the U.S. Patent and Trademark Office, or USPTO, and corresponding
foreign patent offices. In addition, many companies in intellectual property-dependent industries, including the
biotechnology and pharmaceutical industries, have employed intellectual property litigation as a means to gain an
advantage over their competitors. Numerous U.S., EU and foreign issued patents and pending patent applications, which
are owned by third parties, exist in the fields in which we are developing product candidates, and as the biotechnology and
pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject
to claims of infringement of the intellectual property rights of third parties. Some claimants may have substantially greater
resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and
for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and
settlements by enforcing patent rights may target us.
We may be subject to third-party claims including infringement, interference or derivation proceedings, post-grant
review and inter partes review before the USPTO or similar adversarial proceedings or litigation in other jurisdictions.
Even if such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid,
enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize the
applicable product candidate unless we obtained a license under the applicable patents, or until such patents expire or are
finally determined to be invalid or unenforceable. In addition, third parties may obtain patents in the future and claim that
use of our technologies infringes upon these patents, and the holders of any such patents may be able to prohibit our use of
those compositions, formulations, methods of treatment, prevention or use or other technologies, effectively blocking our
ability to develop and commercialize the applicable product candidate until such patent expires or is finally determined to
be invalid or unenforceable or unless we obtained a license.
In addition, defending such claims would cause us to incur substantial expenses and, if we are not successful in
defending such claims, it could cause us to pay substantial damages if we are found to be infringing a third party’s patent
rights. These damages potentially include increased damages (possibly treble damages) and attorneys’ fees if we are found
to have infringed such rights willfully. Further, if a patent infringement suit is brought against us or our third-party service
providers, our development, manufacturing or sales activities relating to the product or product candidate that is the subject
of the suit may be delayed or terminated. As a result of patent infringement claims, or in order to avoid potential
infringement claims, we may choose to seek, or be required to seek, a license from the third party, which may require
payment of substantial royalties or fees, or require us to grant a cross-license under our intellectual property rights. These
licenses may not be available on reasonable terms or at all. Even if a license can be obtained on reasonable terms, the rights
may be nonexclusive, which would give our competitors access to the same intellectual property rights. If we are unable to
enter into a license on acceptable terms, we could be prevented from commercializing one or more of our product
candidates, or forced to modify such product candidates, or to cease some aspect of our business operations, which could
harm our business significantly. We might also be forced to redesign or modify our product candidates so that we no longer
infringe the third-party intellectual property rights, which may result in significant cost or delay to us, or which redesign or
modification could be impossible or technically infeasible. Even if we were ultimately to prevail, any of these events
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could require us to divert substantial financial and management resources that we would otherwise be able to devote to our
business.
Competitors may infringe our patents or other intellectual property. If we or one of our licensors were to initiate
legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could
counterclaim that our patent is invalid or unenforceable. If a defendant were to prevail on a legal assertion of invalidity or
unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may
cause us to incur significant expenses and could distract our technical and management personnel from their normal
responsibilities. In addition, because of the substantial amount of discovery required in connection with intellectual
property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this
type of litigation. Such litigation or proceedings could substantially increase our operating losses and reduce our resources
available for development activities. We may not have sufficient financial or other resources to adequately conduct such
litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more
effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation
and continuation of patent litigation or other proceedings could have an adverse effect on our ability to compete in the
marketplace.
We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a
third-party patent, which might adversely affect our ability to develop, manufacture and market our product candidates.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including but not limited to the
identification of relevant patents, analysis of the scope of relevant patent claims or determination of the expiration of
relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent
and pending application in the United States, the UK, the EU and elsewhere that is relevant to or necessary for the
commercialization of our product candidates in any jurisdiction. For example, in the United States, applications filed
before November 29, 2000 and certain applications filed after that date that will not be filed outside the United States
remain confidential until patents issue. Patent applications in the United States, the UK, the EU and elsewhere are
published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being
commonly referred to as the priority date. Therefore, patent applications covering our product candidates could be filed by
others without our knowledge. Additionally, pending patent applications that have been published can, subject to certain
limitations, be later amended in a manner that could cover our product candidates or the use of our product candidates.
After issuance, the scope of patent claims remains subject to construction as determined by an interpretation of the law, the
written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a
patent or a pending application may be incorrect, which may negatively impact our ability to market our product
candidates. We may incorrectly determine that our product candidates are not covered by a third-party patent or may
incorrectly predict whether a third party’s pending application will issue with claims of relevant scope. Our determination
of the expiration date of any patent in the United States, the UK, the EU or elsewhere that we consider relevant may be
incorrect, which may negatively impact our ability to develop and market our product candidates. Our failure to identify
and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates.
If we fail to correctly identify or interpret relevant patents, we may be subject to infringement claims. We cannot
guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we fail in any such
dispute, in addition to being forced to pay monetary damages, we may be temporarily or permanently prohibited from
commercializing our product candidates. We might, if possible, also be forced to redesign our product candidates in a
manner that no longer infringes third-party intellectual property rights. Any of these events, even if we were ultimately to
prevail, could require us to divert substantial financial and management resources that we would otherwise be able to
devote to our business.
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Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our
ability to protect our product candidates.
Obtaining and enforcing patents in the biotechnology and genetic medicine industries involve both technological
complexity and legal complexity. In addition, the Leahy-Smith America Invents Act, or the AIA, which was passed in
September 2011, resulted in significant changes to the U.S. patent system.
An important change introduced by the AIA is that, as of March 16, 2013, the United States transitioned from a
“first-to-invent” to a “first-to-file” system for deciding which party should be granted a patent when two or more patent
applications are filed by different parties claiming the same invention. Under a “first-to-file” system, assuming the other
requirements for patentability are met, the first inventor to file a patent application generally will be entitled to a patent on
the invention regardless of whether another inventor had made the invention earlier. A third party that files a patent
application in the USPTO after that date but before us could therefore be awarded a patent covering an invention of ours
even if we made the invention before it was made by the third party. This will require us to be cognizant of the time from
invention to filing of a patent application and diligent in filing patent applications, but circumstances could prevent us from
promptly filing patent applications on our inventions.
In addition, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not
have been invalidated if first challenged by the third party as a defendant in a district court action because of a lower
evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to
invalidate a patent claim. An adverse determination in any such proceeding could reduce the scope of, or invalidate, our
owned or in-licensed patent rights, allow third parties to commercialize our technology or products and compete directly
with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing
third-party patent rights.
Additionally, the U.S. Supreme Court has ruled on several patent cases in recent years either narrowing the scope
of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations, and
there are other open questions under patent law that courts have yet to decisively address. In addition to increasing
uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with
respect to the value of patents, once obtained. Depending on decisions by Congress, the federal courts and the USPTO, the
laws and regulations governing patents could change in unpredictable ways and could weaken our ability to obtain new
patents or to enforce our existing patents and patents that we might obtain in the future. In addition, the European patent
system is relatively stringent in the type of amendments that are allowed during prosecution, but, the complexity and
uncertainty of European patent laws has also increased in recent years. Complying with these laws and regulations could
limit our ability to obtain new patents that may be important for our business.
We enjoy only limited geographical protection with respect to certain patents and we may not be able to protect our
intellectual property rights throughout the world.
Filing, prosecuting and defending patents covering our product candidates in all countries throughout the world
would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be
less extensive than those in the United States. In-licensing patents covering our product candidates in all countries
throughout the world may similarly be prohibitively expensive, if such opportunities are available at all. And in- licensing
or filing, prosecuting and defending patents even in only those jurisdictions in which we develop or commercialize our
product candidates may be prohibitively expensive or impractical. Competitors may use our and our licensors’ technologies
in jurisdictions where we have not obtained patent protection or licensed patents to develop their own products and, further,
may export otherwise infringing products to territories where we and our licensors have patent protection, but enforcement
is not as strong as that in the United States, the UK or the EU. These products may compete with our product candidates,
and our or our licensors’ patents or other intellectual property rights may not be effective or sufficient to prevent them from
competing.
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The laws of some jurisdictions do not protect intellectual property rights to the same extent as the laws or
regulations in the United States, the UK and the EU, and many companies have encountered significant difficulties in
protecting and defending proprietary rights in such jurisdictions. Moreover, the legal systems of certain countries,
particularly certain developing countries, do not favor the enforcement of patents, trade secrets or other forms of
intellectual property, which could make it difficult for us to prevent competitors in some jurisdictions from marketing
competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign
jurisdictions, whether or not successful, are likely to result in substantial costs and divert our efforts and attention from
other aspects of our business, and additionally could put at risk our or our licensors’ patents of being invalidated or
interpreted narrowly, could increase the risk of our or our licensors’ patent applications not issuing, or could provoke third
parties to assert claims against us. We may not prevail in any lawsuits that we initiate, while damages or other remedies
may be awarded to the adverse party, which may be commercially significant. If we prevail, damages or other remedies
awarded to us, if any, may not be commercially meaningful. Accordingly, our efforts, or the efforts of our licensors or
collaborators, to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial
advantage from the intellectual property that we develop or license.
Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount
of time.
The term of any individual patent depends on applicable law in the country where the patent is granted. In the
United States, provided all maintenance fees are timely paid, a patent generally has a term of 20 years from its application
filing date or earliest claimed non-provisional filing date. Extensions may be available under certain circumstances, but the
life of a patent and, correspondingly, the protection it affords is limited. Even if we or our licensors obtain patents covering
our product candidates, when the terms of all patents covering a product expire, our business may become subject to
competition from competitive medications, including generic medications. Given the amount of time required for the
development, testing and regulatory review and approval of new product candidates, patents protecting such candidates
may expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio
may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries
under similar legislation, thereby potentially extending the term of marketing exclusivity for our product candidates,
our business may be harmed.
In the United States, a patent that covers an FDA-approved drug or biologic may be eligible for a term extension
designed to restore the period of the patent term that is lost during the premarket regulatory review process conducted by
the FDA. Depending upon the timing, duration and conditions of FDA marketing approval of our product candidates, one
or more 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, or the Hatch-Waxman Act, which permits a patent term extension of up to five years for a
patent covering an approved product as compensation for effective patent term lost during product development and the
FDA regulatory review process. In the UK and the EU, our product candidates may be eligible for term extensions based
on similar legislation. In each of these jurisdictions, however, we may not receive an extension if we fail to apply within
applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements.
Even if we are granted such extension, the duration of such extension may be less than our request. If we are unable to
obtain a patent term extension, or if the term of any such extension is less than our request, the period during which we can
enforce our patent rights for that product will be essentially shortened and our competitors may obtain approval to market
competing products sooner. The resulting reduction in revenue from applicable products could be substantial.
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Our proprietary rights may not adequately protect our technologies and product candidates, and do not necessarily
address all potential threats to our competitive advantage.
The degree of future protection afforded by our intellectual property rights is uncertain because intellectual
property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive
advantage. The following examples are illustrative:
● others may be able to make products that are the same as or similar to our product candidates but that
are not covered by the claims of the patents that we own or have exclusively licensed;
● others, including inventors or developers of our owned or in-licensed patented technologies who may
become involved with competitors, may independently develop similar technologies that function as
alternatives or replacements for any of our technologies without infringing our intellectual property
rights;
● we or our licensors or our other collaboration partners might not have been the first to conceive and
reduce to practice the inventions covered by the patents or patent applications that we own, license or
will own or license;
● we or our licensors or our other collaboration partners might not have been the first to file patent
applications covering certain of the patents or patent applications that we or they own or have obtained a
license, or will own or will have obtained a license;
● we or our licensors may fail to meet obligations to the U.S. government with respect to in-licensed
patents and patent applications funded by U.S. government grants, leading to the loss of patent rights;
● issued patents that we own or exclusively license may not provide us with any competitive advantage, or
may be held invalid or unenforceable, as a result of legal challenges by our competitors; and
● our competitors might conduct research and development activities in countries where we do not have
patent rights, or in countries where research and development safe harbor laws exist, and then use the
information learned from such activities to develop competitive products for sale in our major
commercial markets.
Our reliance on third parties may require us to share our trade secrets, which increases the possibility that our trade
secrets will be misappropriated or disclosed, and confidentiality agreements with employees and third parties may not
adequately prevent disclosure of trade secrets and protect other proprietary information.
We consider proprietary trade secrets, confidential know-how and unpatented know-how to be important to our
business. We may rely on trade secrets and confidential know-how to protect our technology, especially where patent
protection is believed by us to be of limited value. However, trade secrets and confidential know-how are difficult to
protect, and we have limited control over the protection of trade secrets and confidential know-how used by our licensors,
collaborators and suppliers. Because we have relied in the past on third parties to manufacture our product candidates,
because we may continue to do so in the future, and because we expect to collaborate with third parties on the development
of our current product candidates and any future product candidates we develop, we may, at times, share trade secrets with
them. We also conduct joint research and development programs that may require us to share trade secrets under the terms
of our research and development partnerships or similar agreements. Under such circumstances, trade secrets and
confidential know-how can be difficult to maintain as confidential.
To protect this type of information against disclosure or appropriation by competitors, our policy is to require our
employees, consultants, contractors and advisors to enter into confidentiality agreements and, if applicable, material
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transfer agreements, consulting agreements or other similar agreements with us prior to beginning research or disclosing
proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential
information, including our trade secrets. However, current or former employees, consultants, contractors and advisers may
unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not
provide an adequate remedy in the event of unauthorized disclosure of confidential information. We may also be subject to
claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential
information of their former employers or other third parties. The need to share trade secrets and other confidential
information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into
the technology of others, or are disclosed or used in violation of these agreements. Given that our competitive position is
based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use
or disclosure would impair our competitive position and may have an adverse effect on our business and results of
operations. Enforcing a claim that a third party obtained illegally and is using trade secrets and/or confidential know-how is
expensive, time consuming and unpredictable, and the enforceability of confidentiality agreements may vary from
jurisdiction to jurisdiction. Courts outside the United States are sometimes less willing to protect proprietary information,
technology and know-how.
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in
our markets of interest and our business may be adversely affected.
If our trademarks and trade names are not adequately protected, then we may not be able to build name
recognition in our markets of interest and our business may be adversely affected. Our trademark MeiraGTx has been
registered in the EU, UK and United States. We may not be able to protect our rights to these trademarks and trade names,
which we need to build name recognition among potential partners or customers in our markets of interest. At times,
competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and
possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims
brought by owners of other registered trademarks or trademarks that incorporate variations of our unregistered trademarks
or trade names. Over the long term, if we are unable to successfully register our trademarks and trade names and establish
name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our
business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade
secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and
diversion of resources and could adversely impact our financial condition or results of operations.
We may need to license or acquire additional intellectual property from third parties, and such intellectual property may
not be available or may not be available on commercially reasonable terms.
The growth of our business may depend in part on our ability to acquire or in-license additional proprietary rights.
For example, our programs may involve product candidates or equipment that may require the use of additional proprietary
rights held by third parties. Our product candidates may also require specific formulations to work effectively and
efficiently. These formulations may be covered by intellectual property rights held by others. We may develop products
containing our compositions and pre-existing pharmaceutical compositions. These pharmaceutical products may be
covered by intellectual property rights held by others. We may be required by the FDA, MHRA, EMA or other foreign
regulatory authorities to provide a companion diagnostic test or tests with our product candidates. These diagnostic test or
tests may be covered by intellectual property rights held by others. We may be unable to acquire or in-license any relevant
third-party intellectual property rights that we identify as necessary or important to our business operations. We may fail to
obtain any of these licenses at a reasonable cost or on reasonable terms, if at all, which would harm our business. We may
need to cease use of the compositions or methods covered by such third-party intellectual property rights, and may need to
seek to develop alternative approaches that do not infringe on such intellectual property rights which may entail additional
costs and development delays, even if we were able to develop such alternatives, which may not be feasible. Even if we are
able to obtain a license under such intellectual property rights, any such license may be non-exclusive, which may allow
our competitors access to the same technologies licensed to us.
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Risks Related to Employee Matters and Managing Growth
We may need to expand our organization, and we may experience difficulties in managing this growth, which could
disrupt our operations.
As of December 31, 2023, we had 425 employees. If we seek to expand our organization, we may have difficulty
identifying, hiring and integrating new personnel. Future growth would impose significant additional responsibilities on
our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants
and contractors. Also, our management may need to divert a disproportionate amount of its attention away from our day-to-
day activities and devote a substantial amount of time to managing these growth activities. We may not be able to
effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, give rise to
operational mistakes, loss of business opportunities or strategic opportunities related to our assets, loss of employees and
reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and
may divert financial resources from other projects, such as the development of product candidates. If our management is
unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or
grow revenues could be reduced, and we may not be able to implement our business strategy. Our future financial
performance and our ability to commercialize our product candidates and compete effectively will depend, in part, on our
ability to effectively manage any future growth. Our expected growth could require significant capital expenditures and
may divert financial resources from other projects, such as the development of additional product candidates. If our
management is unable to effectively manage our expected growth, our expenses may increase more than expected, our
potential ability to generate revenue could be reduced and we may not be able to implement our business strategy. Many of
the biotechnology companies that we compete against for qualified personnel and consultants have greater financial and
other resources, different risk profiles and a longer history in the industry than we do. If we are unable to continue to attract
and retain high-quality personnel and consultants, the rate and success at which we can discover and develop product
candidates and operate our business will be limited.
Our future success depends on our ability to retain our key personnel and to attract, retain and motivate qualified
personnel.
Our industry has experienced a high rate of turnover of management personnel in recent years. We are highly
dependent on the development, regulatory, commercialization and business development expertise of Alexandria Forbes,
Ph.D., our President and Chief Executive Officer, Rich Giroux, our Chief Operating Officer and Chief Financial Officer
and Stuart Naylor, Ph.D., our Chief Development Officer, as well as the other principal members of our management,
scientific and clinical teams. Although we have formal employment agreements with certain of our executive officers,
these agreements do not prevent them from terminating their employment with us at any time and, for certain of our
executive officers, entitle them to receive severance payments in connection with their voluntary resignation of
employment.
If we lose one or more of our executive officers or key employees, our ability to implement our business strategy
successfully could be seriously harmed. Furthermore, replacing executive officers and key employees may be difficult and
may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills
and experience required to develop, gain regulatory approval of and commercialize product candidates successfully.
Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these
additional key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology
companies for similar personnel. In addition, we rely on consultants and advisors, including scientific and clinical advisors,
to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may
be engaged by entities other than us and may have commitments under consulting or advisory contracts with other entities
that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to
develop and commercialize product candidates will be limited.
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Potential product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization
of any products that we may develop.
The use of our product candidates in clinical trials and the sale of any products for which we obtain marketing
approval exposes us to the risk of product liability claims. Product liability claims might be brought against us by
consumers, health care providers, pharmaceutical companies or others selling or otherwise coming into contact with our
products. On occasion, large judgments have been awarded in class action lawsuits based on products that had
unanticipated adverse effects. If we cannot successfully defend against product liability claims, we could incur substantial
liability and costs. In addition, regardless of merit or eventual outcome, product liability claims may result in:
● impairment of our business reputation and significant negative media attention;
● withdrawal of participants from our clinical trials;
● significant time, costs and diversion of management resources to defend the related litigation;
● substantial monetary awards to patients or other claimants;
● inability to commercialize our product candidates;
● product recalls, withdrawals or labeling, marketing or promotional restrictions;
● decreased demand for our product candidates, if approved for commercial sale; and
● loss of revenue.
Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to
significant uninsured liabilities.
We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we
currently maintain include general liability, clinical product and clinical trial liability, employment practices liability,
property, transit, auto, workers’ compensation, umbrella, cyber and directors’ and officers’ insurance. Any additional
product liability insurance coverage we acquire in the future may not be sufficient to reimburse us for any expenses or
losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and restrictive, and in the future
we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses
due to liability. If we obtain marketing approval for our product candidates or manufacture commercial products for third
parties, we intend to acquire insurance coverage to include, as necessary, the sale, manufacture and supply of commercial
products; however, we may be unable to obtain product liability insurance on commercially reasonable terms or in
adequate amounts. A successful product liability claim or series of claims brought against us could cause our share price to
decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business,
including preventing or limiting the commercialization of any product candidates we develop. We do not carry specific
biological or hazardous waste insurance coverage, and our property, casualty and general liability insurance policies
specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure or contamination.
Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an
amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended.
Operating as a public company may make it more difficult and more expensive for us to obtain director and
officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified
people to serve on our board of directors, our board committees or as executive officers. If we are unable to maintain
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existing insurance with adequate levels of coverage, any significant uninsured liability may require us to pay substantial
amounts, which would adversely affect our cash position and results of operations.
Our employees and independent contractors, including consultants, vendors, and any third parties we may engage in
connection with development and commercialization may engage in misconduct or other improper activities, including
noncompliance with regulatory standards and requirements, which could harm our business.
Misconduct by our employees and independent contractors, including consultants, vendors, and any third parties
we may engage in connection with development and commercialization, could include intentional, reckless or negligent
conduct or unauthorized activities that violate: (i) applicable laws and regulations of the FDA, MHRA, EMA and other
regulatory or governmental authorities, including those laws that require the reporting of true, complete and accurate
information to such authorities; (ii) manufacturing standards; (iii) data privacy and security, fraud and abuse and other
healthcare laws and regulations; or (iv) laws that require the reporting of true, complete and accurate financial information
and data. Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws
and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and
regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission,
customer incentive programs and other business arrangements. Activities subject to these laws could also involve the
improper use or misrepresentation of information obtained in the course of clinical trials, creation of fraudulent data in
preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions
and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other
third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or
unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from
a failure to comply with such laws or regulations. Additionally, we are subject to the risk that a person or government could
allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not
successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and
results of operations, including the imposition of significant civil, criminal and administrative penalties, damages,
monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid, other U.S. federal healthcare
programs or healthcare programs in other jurisdictions, integrity oversight and reporting obligations to resolve allegations
of non-compliance, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits
and future earnings, and curtailment of our operations.
Our business and operations may suffer in the event of system failures and our systems and those of our business
partners and service providers may be vulnerable to cybersecurity risks.
Our information technology, or IT, systems, including manufacturing systems, as well as those of our business
partners and service providers, are vulnerable to damage from computer viruses, unauthorized access, hardware and
software failures, natural disasters, terrorism, war and telecommunication and electrical failures. If such an event were to
occur, it could result in a material disruption of our product candidate development programs or manufacturing operations.
For example, the loss of preclinical study or clinical trial data from completed, ongoing or planned trials could result in
delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. A significant
interruption to our manufacturing operations could delay the completion of clinical trials and increase the costs of those
trials, or impede our ability to meet any third party supply obligations. To the extent that any disruption or security breach
were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or
proprietary information, we could incur liability and the further development of our product candidates could be delayed.
In the ordinary course of our business, we, our business partners and our service providers collect, process and
store sensitive data, including intellectual property, clinical trial data, proprietary business information, personal data and
personally identifiable information of our clinical trial subjects and employees. The secure processing, maintenance and
transmission of this information is critical to our operations. Increased cybersecurity threats pose a risk to this information,
in addition to our and our business partners’ and service providers’ systems and networks. Attacks upon information
technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being
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conducted by sophisticated and organized groups, governments and individuals with a wide range of motives and expertise.
We may also face increased cybersecurity risks due to our reliance on internet technology and by allowing some of our
employees to work remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and
often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement
adequate preventative measures. We may also experience security breaches that may remain undetected for an extended
period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers
increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or
obfuscate forensic evidence.
Despite our security measures, our IT and infrastructure may be vulnerable to cyber-attacks by hackers or internal
bad actors, or breached due to employee error, a technical vulnerability, malfeasance or other disruptions that could have a
negative impact, including loss or destruction of data (including confidential or critical business information). In addition,
there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls
or procedures, will be fully effective in protecting our systems and information. Although, to our knowledge, we have not
experienced any such material security breach to date, we may experience cybersecurity incidents such as malware
infections, ransomware, phishing attempts, thefts of personal, confidential, proprietary or other critical business
information and other attempts at compromising our IT that are typical for a company of our size in our market. Any
security breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost
or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability
under laws that protect the privacy of personal information, significant regulatory penalties, and such an event could
disrupt our operations, damage our reputation, result in significant expenses in implementing future security measures and
cause a loss of confidence in us and our ability to conduct clinical trials, which could adversely affect our reputation and
financial results, and delay clinical development of our product candidates.
The UK’s withdrawal from the EU has resulted in changes to regulatory requirements and has had and may continue to
have a negative effect on global economic conditions, financial markets and our business, which could reduce the price
of our shares.
Following a national referendum and enactment of legislation by the government of the UK, the UK formally
withdrew from the EU on January 31, 2020, commonly referred to as “Brexit”. Since the end of the Brexit transition period
on January 1, 2021, Great Britain (England, Scotland and Wales) has not been directly subject to EU laws, however under
the terms of the Protocol on Ireland and Northern Ireland, EU laws have generally applied to Northern Ireland. On
February 27, 2023, the UK Government and the European Commission reached a political agreement in the “Windsor
Framework” which will revise the Protocol on Ireland and Northern Ireland in order to address some of the perceived
shortcomings in its operation. Under the changes, Northern Ireland will be reintegrated under the regulatory authority of
the MHRA with respect to medicinal products. These changes will commence January 1, 2025 at which point the MHRA
will be solely responsible for authorizing medicines for the Northern Ireland market. There could be additional uncertainty
and risk around what these changes will mean to our business.
More generally, it is currently unclear to what extent the UK Government will seek to align its regulations with
the EU. The EU laws that have been transposed into UK law through secondary legislation remain applicable in Great
Britain. However, new legislation such as the CTR is not applicable in Great Britain. Whilst the EU-UK Trade and
Cooperation Agreement, or TCA, includes the mutual recognition of GMP inspections of manufacturing facilities for
medicinal products and GMP documents issued, it does not contain wholesale mutual recognition of UK and EU
pharmaceutical regulations and product standards. There may be divergent local requirements in Great Britain from the EU
in the future, which may impact clinical and development activities that occur in the UK in the future. Similarly, clinical
trial submissions in the UK cannot be bundled with those of EU member states within the EMA Clinical Trial Information
System, or CTIS, adding further complexity, cost and potential risk to future clinical and development activity
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in the UK. Significant political and economic uncertainty remains about how much the relationship between the UK and
EU will differ as a result of the UK’s withdrawal.
Companies established in Great Britain cannot use the centralized procedure and instead must follow one of the
UK national authorization procedures or one of the remaining post-Brexit international cooperation procedures to obtain an
MA to market products in Great Britain. While centrally authorized MAs are currently recognized in Northern Ireland, the
MA holder must be located in the EU for these products to be on the Northern Ireland market. A new international
recognition framework has applied since January 1, 2024, whereby the MHRA will have regard to decisions on the
approval of MAs made by the EMA and certain other regulators when determining an application for a new Great Britain
MA. Since January 1, 2024, the new International Recognition procedure (IRP) has replaced the EC Decision Reliance
Procedure which allows the MHRA to conduct targeted assessments by recognizing approvals from trusted partner
agencies such as the European Commission. The MHRA’s mutual recognition or decentralized procedures is also
incorporated under the umbrella of the IRP. Additionally, the ‘Unfettered Access Procedure’ enables an MA holder in
Northern Ireland to seek recognition in Great Britain.
The full impact of these new arrangements and requirements, both on our existing processes and our ability to
adjust our business and operations to operate successfully in the UK and EU, as well as more broadly on UK-EU cross-
border trade and the economy, are expected to become clearer in the coming years. In particular, it remains to be seen
whether the initial implementation of, and adjustment of UK-EU trading processes for, the TCA could disrupt or otherwise
negatively impact our business and operations. These negative impacts could include amongst others a decrease in foreign
direct investment in the UK, an increase of our costs, disruption of our supply chains, restrictions on our ability to access
capital and depression on economic activity or economic instability, which could in turn lead to a reduction in asset
valuations, currency exchange rates and credit ratings.
In addition, the TCA has imposed additional restrictions on the free movement of people between the UK and the
EU, which could have a material adverse effect on us, since we compete in these jurisdictions for well qualified employees
in all aspects of our business. Any impact on our ability to attract new employees and to retain existing employees in their
current jurisdictions could decrease our competitiveness. Any of these factors could have an adverse effect on our business,
financial condition, results of operations, and prospects.
Risks Related to Our Ordinary Shares
The market price of our ordinary shares may be volatile and fluctuate substantially, which could result in substantial
losses for purchasers of our ordinary shares.
Our share price is likely to be volatile. The stock market in general and the market for smaller biopharmaceutical
companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of
particular companies. As a result of this volatility, you may not be able to sell your ordinary shares at or above your
purchase price. The market price for our ordinary shares may be influenced by many factors, including:
● the success of competitive products or technologies;
● actual or expected changes in our growth rate relative to our competitors;
● results of clinical trials of our product candidates or those of our competitors;
● developments related to our existing or any future collaborations;
● regulatory or legal developments in the United States and other countries;
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● development of new product candidates that may address our markets and make our product candidates
less attractive;
● changes in physician, hospital or healthcare provider practices that may make our product candidates
less useful;
● announcements by us, our partners or our competitors of significant acquisitions, strategic partnerships,
joint ventures, collaborations or capital commitments;
● the impact of any potential strategic transactions related to our assets;
● 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 any of our product candidates or clinical development programs;
● failure to meet or exceed financial estimates and projections of the investment community or that we
provide to the public;
● the results of our efforts to discover, develop, acquire or in-license additional product candidates or
products;
● actual or expected changes in estimates as to financial results, development timelines, recommendations
by securities analysts or shifting investor perceptions;
● 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;
● changes in accounting principles; and
● the other factors described in this “Item 1A. Risk Factors” section and elsewhere in this Form 10-K.
In addition, the stock market in general, and Nasdaq and biopharmaceutical companies in particular, have
experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating
performance of these companies. In the past, when the market price of a security has been volatile, holders of that security
have sometimes instituted securities class action litigation against the issuer. This risk is especially relevant for us because
biopharmaceutical companies have experienced significant stock price volatility in recent years and during the COVID-19
pandemic. If any of the holders of our ordinary shares were to bring such a lawsuit against us, we could incur substantial
costs defending the lawsuit and the attention of our senior management would be diverted from the operation of our
business. Any adverse determination in litigation could also subject us to significant liabilities. Broad market and industry
factors may negatively affect the market price of our ordinary shares, as well as general economic, political and market
conditions such as recessions, interest rate changes or international currency fluctuations, regardless of our actual operating
performance. Further, a decline in the financial markets and related factors beyond our control may cause the price of our
ordinary shares to decline rapidly and unexpectedly. If the market price of our ordinary shares does not exceed your
purchase price, you may not realize any return on your investment in us and may lose some or all of your investment.
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Our executive officers, directors and principal shareholders, if they choose to act together, have the ability to
significantly influence all matters submitted to shareholders for approval.
As of December 31, 2023, our executive officers, directors and shareholders who owned more than 5% of our
outstanding ordinary shares and their respective affiliates, in the aggregate, hold ordinary shares representing
approximately 54.4% of our outstanding ordinary shares. In addition, in connection with entering into the Financing
Agreement, we issued to an affiliate of Perceptive Advisors, LLC, our largest shareholder that employs a director serving
on our board, warrants to purchase an aggregate of 700,000 of our ordinary shares.
As a result, if these shareholders choose to act together, they would be able to significantly influence all matters
submitted to our shareholders for approval, as well as our management and affairs. For example, these persons, if they
choose to act together, would significantly influence the election of directors, the composition of our management and
approval of any merger, consolidation, sale of all or substantially all of our assets or other business combination that other
shareholders may desire. Any of these actions could adversely affect the market price of our ordinary shares.
We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting
companies may make our ordinary shares less attractive to investors.
We are a smaller reporting company, and we will remain a smaller reporting company until the fiscal year
following the determination that our voting and non-voting ordinary shares held by non-affiliates is more than $250 million
measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during
the most recently completed fiscal year and our voting and non-voting ordinary shares held by non-affiliates is more than
$700 million measured on the last business day of our second fiscal quarter. Smaller reporting companies are able to
provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404,
and have certain other reduced disclosure obligations, including, among other things, not being required to provide selected
financial data, supplemental financial information or risk factors.
We may choose to take advantage of some, but not all, of the available exemptions for smaller reporting
companies. We cannot predict whether investors will find our ordinary shares less attractive if we rely on these exemptions.
If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our
ordinary shares and our share price may be more volatile.
Anti-takeover provisions in our organizational documents and Cayman Islands law may discourage or prevent a change
of control, even if an acquisition would be beneficial to our shareholders, which could depress the price of our ordinary
shares and prevent attempts by our shareholders to replace or remove our current management.
Our memorandum and articles of association contain provisions that may discourage unsolicited takeover
proposals that shareholders may consider to be in their best interests. Our board of directors is divided into three classes
with staggered, three-year terms. Our board of directors has the ability to designate the terms of and issue preferred shares
without shareholder approval. We are also subject to certain provisions under Cayman Islands law that could delay or
prevent a change of control. Together these provisions may make more difficult the removal of management and may
discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our ordinary
shares.
There may be difficulties in enforcing foreign judgments against our management or us.
Certain of our directors and management reside outside the United States. A significant portion of our assets and
such persons’ assets are located outside the United States. As a result, it may be difficult or impossible for investors to
effect service of process upon us within the United States or other jurisdictions, including judgments predicated upon the
civil liability provisions of the federal securities laws of the United States.
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In particular, investors should be aware that there is uncertainty as to whether the courts of the Cayman Islands or
any other applicable jurisdictions would recognize and enforce judgments of U.S. courts obtained against us or our
directors or management predicated upon the civil liability provisions of the securities laws of the United States or any
state in the United States or entertain original actions brought in the Cayman Islands or any other applicable jurisdiction’s
courts against us or our directors or officers predicated upon the securities laws of the United States or any state in the
United States.
The rights of our shareholders differ from the rights typically offered to shareholders of a U.S. corporation.
Our corporate affairs and the rights of holders of ordinary shares are governed by Cayman Islands law, including
the provisions of the Cayman Islands Companies Act (as amended), or the Companies Act, the common law of the Cayman
Islands and by our memorandum and articles of association. We are also subject to the federal securities laws of the United
States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary
responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the
Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent
in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but
are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our
directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some
jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to
the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of
corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in
a Federal court of the United States.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face
of actions taken by management, members of the board of directors or controlling shareholders than they would as public
shareholders of a United States company.
We expect to be treated as resident in the UK for tax purposes, but may be treated as a dual resident company for UK tax
purposes.
Our board of directors conducts our affairs so that the central management and control of the company is
exercised in the UK. As a result, we expect to be treated as resident in the UK for UK tax purposes. Accordingly, we expect
to be subject to UK taxation on our income and gains, except where an exemption applies.
However, we may be treated as a dual resident company for UK tax purposes. As a result, our right to claim
certain reliefs from UK tax may be restricted, and changes in law or practice in the UK could result in the imposition of
further restrictions on our right to claim UK tax reliefs.
We may be classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes, which
could result in adverse U.S. federal income tax consequences to U.S. investors in our ordinary shares.
Based on the current and anticipated value of our assets, including goodwill, and the current and anticipated
composition of our income, assets and operations, we do not believe we were a PFIC for the taxable year ended on
December 31, 2023, and do not expect to be a PFIC for the current taxable year. However, the application of the PFIC rules
is subject to uncertainty in several respects, and we cannot assure you that the U.S. Internal Revenue Service, or the IRS,
will not take a contrary position. Furthermore, a separate determination must be made after the close of each taxable year
as to whether we are a PFIC for that year. Accordingly, we cannot assure you that we were not a PFIC for our taxable year
ended on December 31, 2023 or that we will not be a PFIC for our current taxable year or any future taxable year. A non-
U.S. company will be considered a PFIC for any taxable year if (i) at least 75% of its gross income is passive income
(including interest income), or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the
assets during a taxable year) is attributable to assets that produce or are held for the production of passive income. The
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value of our assets generally is determined by reference to the market price of our ordinary shares, which may fluctuate
considerably. In addition, the composition of our income and assets is affected by how, and how quickly, we spend any
cash we raise. If we were to be classified as a PFIC for any taxable year during which a U.S. holder holds our ordinary
shares, certain materially adverse U.S. federal income tax consequences could apply to such U.S. holder.
If a United States person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse
U.S. federal income tax consequences.
If a U.S. holder of our ordinary shares is treated as owning (directly, indirectly or constructively) at least 10% of
the value or voting power of our ordinary shares, such U.S. holder may be treated as a “United States shareholder” with
respect to each “controlled foreign corporation” in our group (if any). If our group includes one or more U.S. subsidiaries,
certain of our non-U.S. subsidiaries could be treated as controlled foreign corporations (regardless of whether we are
treated as a controlled foreign corporation). A United States shareholder of a controlled foreign corporation may be
required to report annually and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global
intangible low-taxed income” and investments in U.S. property by controlled foreign corporations, regardless of whether
we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign
corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United
States shareholder that is a U.S. corporation. Failure to comply with these reporting obligations may subject you to
significant monetary penalties and may prevent the statute of limitations from starting with respect to your U.S. federal
income tax return for the year for which reporting was due. We cannot provide any assurances that we will assist investors
in determining whether any of our non-U.S. subsidiaries is treated as a controlled foreign corporation or whether such
investor is treated as a United States shareholder with respect to any of such controlled foreign corporations. Further, we
cannot provide any assurances that we will furnish to any United States shareholders information that may be necessary to
comply with the aforementioned reporting and tax payment obligations. U.S. holders of our ordinary shares should consult
their tax advisors regarding the potential application of these rules to their investment in our ordinary shares.
Changes in tax laws or challenges to our tax position could adversely affect our results of operations and financial
condition.
We are subject to complex tax laws that are subject to change or differing interpretations, including on a
retroactive basis. Any such changes in tax laws, regulations and treaties, or the interpretation thereof, tax policy initiatives
and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate could adversely
affect our tax position, including our effective tax rate or tax payments.
We have significant U.S. federal and state net operating losses, or NOLs, and UK carryforward tax losses which we may
not be able to realize or which may be restricted under applicable law. We also benefit from certain tax incentive
regimes, such as research and development tax credits. Any adverse change to these regimes, the application thereof or
challenges to the tax position we have adopted under these rules could adversely affect our results of operations and
financial condition.
As of December 31, 2023, we had federal and state NOL carryforwards in the United States of $65.5 million and
$14.7 million, respectively, and cumulative carryforward tax losses in the UK of $169.6 million, which we expect to be
available to reduce future taxable income subject to any relevant restrictions (including those in the U.S. and UK that limit
the percentage of taxable income that can be reduced by NOLs and carried forward losses). All of the Company’s
carryforward tax losses will be indefinitely carried forward. U.S. federal NOLs generated after December 31, 2017 are not
subject to expiration but such NOLs may only offset 80% of taxable income for taxable years beginning after December
31, 2020. As of December 31, 2023, we also had orphan drug and research and development credits in the U.S. in the
amount of $20.3 million and research and development credits in the UK of $3.4 million. The UK carryforward tax losses
will continue indefinitely, subject to relevant restrictions, under current UK legislation.
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The NOLs and carryforward tax losses are subject to review and possible adjustment by the applicable tax
authorities. Additionally, NOLs and UK carryforward tax losses, and research and development tax credits, may become
subject to limitations in the event of certain cumulative changes in the ownership interest of significant shareholders, as
determined under Sections 382 of the United States Internal Revenue Code, as well as the Corporation Tax Act 2010 Part
14 under the UK tax rules. This could limit the amount of NOLs or carryforward tax losses that we can utilize annually to
offset future taxable income or tax liabilities. We have conducted a review of changes in the ownership interest of
significant shareholders and determined that as of December 31, 2021, there were no limitations in the UK. However, for
U.S. federal tax purposes, we have determined that ownership changes occurred in August 2016 and June 2018. We are still
in the process of determining the annual limitation on NOLs as a result of such ownership changes. Subsequent ownership
changes and changes to the U.S. federal or state or UK tax rules in respect of the utilization of NOLs and carryforward tax
losses may further affect the limitation in future years.
General Risk Factors
We may engage in acquisitions that could disrupt our business, cause dilution to our shareholders or reduce our
financial resources.
We have, and may in the future, enter into transactions to acquire other businesses, products or technologies. If we
do identify suitable candidates, we may not be able to make such acquisitions on favorable terms, or at all. Any
acquisitions we make may not strengthen our competitive position, and these transactions may be viewed negatively by
customers or investors. We may decide to incur debt in connection with an acquisition or issue our ordinary shares or other
equity securities to the shareholders of the acquired company, which would reduce the percentage ownership of our
existing shareholders. We could incur losses resulting from undiscovered liabilities of the acquired business that are not
covered by the indemnification we may obtain from the seller. In addition, we may not be able to successfully integrate the
acquired personnel, technologies and operations into our existing business in an effective, timely and nondisruptive
manner. Acquisitions may also divert management attention from day-to-day responsibilities, increase our expenses and
reduce our cash available for operations and other uses. We cannot predict the number, timing or size of future acquisitions
or the effect that any such transactions might have on our operating results.
Exchange rate fluctuations may adversely affect our results of operations and financial condition.
Owing to the international scope of our operations, fluctuations in exchange rates may adversely affect us,
particularly between the U.S. dollar on the one hand, and the pound sterling and euro on the other hand. As a result, our
business and the market price of our securities may be affected by such fluctuations, which may have a significant impact
on our results of operations and cash flows from period to period. Currently, we do not have any exchange rate hedging
arrangements in place.
Our management team has broad discretion as to the use of the net proceeds from public and private equity or debt
financings and the investment of these proceeds may not yield a favorable return. We may invest the proceeds in ways
with which our shareholders disagree.
We have broad discretion in the application of any net proceeds we have received in the past or may receive in the
future pursuant to existing or future equity and debt financings, including under our “at-the-market” equity offering
program. Shareholders may not agree with our decisions, and our use of the proceeds and our existing cash and cash
equivalents may not improve our results of operation or enhance the value of our ordinary shares. Our ability to apply
certain proceeds may be restricted. For example, the proceeds provided under our Notes Purchase Agreement may be used
for working capital and general corporate purposes. In addition, in October 2023, we announced a $30.0 million strategic
investment by Sanofi through the purchase of 4.0 million ordinary shares at a price of $7.50 per share. Our failure to apply
any such funds effectively could have a material adverse effect on our business, delay the development of our product
candidates and cause the market price of our ordinary shares to decline. In addition, until the net proceeds are used, they
may be placed in investments that do not produce significant income or that may lose value. Additionally, our existing
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cash and cash equivalents are subject to general credit, liquidity, market and interest rate risks, which have been and may,
in the future, be exacerbated by a U.S. and/or global financial crises. We may realize losses in the fair value of certain of
our investments or a complete loss of these investments if the credit markets tighten, which would have an adverse effect
on our results of operations, liquidity and financial condition.
We incur substantial costs as a result of operating as a public company, and our management is required to devote
substantial time to new compliance initiatives and corporate governance practices.
As a public company, and particularly since we no longer qualify as an emerging growth company and if we no
longer qualify as a smaller reporting company or a non-accelerated filer in the future, we incur and will continue to incur
significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of
2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, The Nasdaq Global Select listing requirements
and other applicable securities rules and regulations impose various requirements on public companies, including
establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our
management and other personnel need to devote a substantial amount of time to these compliance initiatives. Moreover,
these rules and regulations increase our legal and financial compliance costs.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by
our management on our internal control over financial reporting. However, while we are a non-accelerated filer, we will not
be required to include an attestation report on internal control over financial reporting issued by our independent registered
public accounting firm. To achieve compliance with Section 404, we engage in a process to document and evaluate our
internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to
dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess and document the
adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate
through testing whether such controls are functioning as documented, and implement a continuous reporting and
improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we, or our
independent registered public accounting firm, if we no longer qualify as a non-accelerated filer, will not be able to
conclude that our internal control over financial reporting is effective as required by Section 404. In addition, any testing
by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting
firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or
that may require prospective or retroactive changes to our financial statements or identify other areas for further attention
or improvement. If we identify one or more material weaknesses or determine we have inadequate internal controls, it
could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial
statements.
If securities or industry analysts cease to publish research or reports about our business, or if they issue an adverse or
misleading opinion regarding our ordinary shares, our share price and trading volume could decline.
The trading market for our ordinary shares relies in part on the research and reports that industry or securities
analysts publish about us or our business. We do not control these analysts. Furthermore, if any of the analysts who cover
us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our share
performance, or if any of our preclinical studies or clinical trials and operating results fail to meet the expectations of
analysts, our share price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish
reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or
trading volume to decline.
Expectations relating to environmental, social and governance factors may impose additional costs and expose us to
new risks.
There is an increasing focus from the SEC, stock exchanges, certain investors and other stakeholders concerning
corporate responsibility, specifically related to environmental, social and governance factors. The SEC is considering and
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in some cases has proposed rules regarding new disclosure requirements relating to environmental, social and governance
factors, and the SEC approved in 2021 new Nasdaq listing and disclosure requirements relating to board diversity that are
applicable to us. Some investors may use these factors to guide their investment strategies and, in some cases, may choose
not to invest in us if they believe our policies and disclosures relating to corporate responsibility are inadequate. Third-
party providers of corporate responsibility ratings and reports on companies have varied and in some cases inconsistent
standards. In addition, the criteria by which companies’ corporate responsibility practices are assessed are evolving, which
could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.
Alternatively, if we elect not to or are unable to satisfy such new criteria or do not meet the criteria of a specific third-party
provider, some investors may conclude that our policies with respect to corporate responsibility are insufficient. We may
face reputational damage in the event that our corporate responsibility procedures or standards do not meet the standards
set by various constituencies. Furthermore, if our competitors’ corporate responsibility performance is perceived to be
greater than ours, potential or current investors may elect to invest with our competitors instead. In addition, in the event
that we communicate or disclose certain initiatives and goals regarding environmental, social and governance matters, we
could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of
such initiatives or goals or be subject to litigation for such failures. If we fail to satisfy the expectations of investors and
other stakeholders or our initiatives are not executed as planned, our reputation and financial results could be adversely
affected.
Because we do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future, capital
appreciation, if any, would be your sole source of gain.
Under Cayman Islands law, we may only make distributions by way of dividend out of profits, or out of our share
premium account (provided that immediately following the date that the dividend is proposed to be paid we are able to pay
our debts as they fall due in the ordinary course of business). We have never declared or paid any cash dividends on our
ordinary shares. We currently anticipate that we will retain future earnings for the development, operation and expansion of
our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, the Notes
Purchase Agreement prohibits us from paying dividends during its term and the terms of existing and future financing
agreements may also preclude us from paying dividends. As a result, capital appreciation, if any, of our ordinary shares
would be your sole source of gain on an investment in our ordinary shares for the foreseeable future. See the “Dividend
Policy” section of this Form 10-K for additional information.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 1C.
CYBERSECURITY
Cybersecurity Risk Management and Strategy
We have implemented and maintain a cybersecurity risk management program that includes processes designed
for the identification, assessment and mitigation of cybersecurity risks in order to protect the confidentiality, integrity and
availability of our critical systems and information. We have designed and assessed our program based on the Center for
Internet Security (CIS) Controls standard and the National Institute of Standards and Technology Cybersecurity
Framework (NIST CSF).
Our cybersecurity risk management program is integrated into our overall enterprise risk management program,
and includes:
● risk assessments designed to help identify material cybersecurity risks to our critical systems,
information, products, services, and our broader enterprise IT environment;
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● security controls and mitigation measures designed to manage and mitigate material risks from
cybersecurity threats to our critical systems and information;
● an IT and security team responsible for managing (1) our cybersecurity risk assessment processes, (2)
our security controls and mitigation measures, and (3) our response to cybersecurity incidents;
● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of
our security controls;
● cybersecurity awareness training of our employees, IT and security personnel and senior management;
● a cybersecurity incident response plan that includes procedures for responding to cybersecurity
incidents; and
● a risk-based approach to identifying and overseeing third party cybersecurity risks, including evaluating
the cybersecurity processes of service providers and other vendors, and reviewing available security
certifications and independent audit reports.
Although, to our knowledge, we have not experienced any material cybersecurity breach to date, we may
experience cybersecurity incidents and face risks from cybersecurity threats that, if realized, are reasonably likely to
materially affect us, including our operations, business strategy, results of operations or financial condition. For more
information regarding how cybersecurity risks may affect us, see “Item 1A Risk Factors.”
Cybersecurity Governance
Our Board considers cybersecurity risk as part of its risk oversight function and has delegated oversight of
cybersecurity and other IT risks to the Audit Committee. The Audit Committee oversees management’s implementation of
our cybersecurity risk management program.
The Audit Committee receives reports from management on our cybersecurity risks at least semi-annually. In
addition, management updates the Audit Committee regarding cybersecurity matters, as necessary, including any material
cybersecurity incidents, as well as any incidents with lesser impact potential. The Audit Committee reports to the full
Board regarding its activities and the full Board periodically receives briefings from management on our cybersecurity risk
management program.
Our management team is responsible for assessing and managing risks from cybersecurity threats. The Vice
President, Global IT and Senior Vice President, Risk and Internal Controls have primary responsibility for our overall
cybersecurity risk management program and supervise both our internal cybersecurity personnel and our external
cybersecurity consultants. They provide briefings to the management team, including the Chief Financial Officer/Chief
Operating Officer and the General Counsel and Secretary, as well as the Board and the Audit Committee. Their briefings
include topics such as threat intelligence and other information obtained from governmental, public or private sources,
including external consultants engaged by us. The briefings also cover alerts and reports produced by security tools
deployed in our IT environment. Our Vice President, Global IT has over 20 years’ experience leading teams in
cybersecurity, and designing and securing critical IT infrastructure in the healthcare, biotech and sports entertainment
sectors. Our Senior Vice President, Risk and Internal Controls has more than 30 years’ experience designing, implementing
and leading risk management, internal control and compliance programs, including cybersecurity, data privacy and
business resilience, in global organizations.
Our management team, including the Vice President, Global IT and Senior Vice President, Risk and Internal
Controls, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary
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responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity
personnel and our external cybersecurity consultants. Our Vice President, Global IT has more than 15 years’ experience
leading teams in cybersecurity, designing and securing critical IT infrastructure in the sports entertainment, healthcare and
biotech sectors. Our Senior Vice President, Risk and Internal Controls has more than 30 years’ experience designing,
implementing and leading risk management, internal control and compliance programs including cybersecurity, data
privacy and business resilience.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and
incidents through various means, which may include briefings from internal security personnel; threat intelligence and
other information obtained from governmental, public or private sources, including external consultants engaged by us; and
alerts and reports produced by security tools deployed in the IT environment.
ITEM 2.
PROPERTIES
Our principal office is located at 450 East 29th Street, New York, New York, USA, where we lease 22,721 square
feet of office and laboratory space. We lease this office space under a lease that terminates on October 31, 2026.
We own a long leasehold interest in the ground rights where our 29,000 square foot GMP viral vector
manufacturing facility is located, at 92 Britannia Walk, London, United Kingdom. The long leasehold interest expires in
2126, and there is no facility rent due. We also own the buildings housing our second, large scale GMP viral vector
manufacturing facility and our first GMP plasmid and DNA production facility located in Buildings 2 and 3, Block K,
Airport Avenue, Shannon Free Zone, Shannon Ireland. The Shannon campus encompasses an aggregate of 150,000 square
feet. We entered into a lease for each property providing for a long leasehold interest that expires in 2211.
Additionally, we lease an 11,306 square foot office facility located at 34-38 Provost Street, London, United
Kingdom and 6,679 square feet of laboratory facilities at 15 Ebenezer Street, London, United Kingdom. The office space
lease terminates on September 8, 2029 and the laboratory leases terminate on May 24, 2027.
ITEM 3.
LEGAL PROCEEDINGS
We are not subject to any material legal proceedings.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5.
AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
Market Information
Our ordinary shares trade on the Nasdaq Global Select Market under the symbol “MGTX.”
Holders of Record
As of February 29, 2024, there were 52 holders of record. The actual number of shareholders of our ordinary
shares is greater than this number of record holders and includes shareholders who are beneficial owners but whose
ordinary shares are held in street name by brokers and other nominees. This number of holders of record also does not
include shareholders whose ordinary shares may be held in trust by other entities.
Dividend Policy
We have never declared or paid any cash dividends on our ordinary shares. We intend to retain future earnings, if
any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends in the
foreseeable future. In addition, the Notes Purchase Agreement prohibits us from paying dividends during its term and the
terms of existing and future financing agreements may also preclude us from paying dividends. However, if we do pay a
cash dividend on our ordinary shares in the future, we will only pay such dividend out of our profits or share premium
(subject to solvency requirements) as permitted under Cayman Islands law.
Recent Sales of Unregistered Securities
On October 30, 2023, we entered into the Investment Agreement with Sanofi Foreign Participations, and solely
for the limited purposes set forth therein, Sanofi, pursuant to which we, in a private placement, issued an aggregate of 4.0
million ordinary shares of the Company at a purchase price of $7.50 per share for gross proceeds of $30.0 million.
The ordinary shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the
Securities Act of 1933, as amended.
ITEM 6.
[RESERVED]
ITEM 7.
RESULTS OF OPERATIONS
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
You should read the following discussion and analysis of financial condition and operating results together with
our financial statements and the related notes appearing in this Form 10-K. Some of the information contained in this
discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and
strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.
As a result of many important factors, including those set forth in the section of this Form 10-K captioned “Item 1A. Risk
Factors” and elsewhere in this Form 10-K, our actual results could differ materially from the results described in, or
implied by, the forward-looking statements contained in the following discussion and analysis. For convenience of
presentation some of the numbers have been rounded in the text below.
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Overview
We are a vertically integrated, clinical-stage gene therapy company with a broad pipeline of late stage clinical
programs supported by end-to-end manufacturing capabilities. We have an internally developed manufacturing platform
process, internal plasmid production for GMP, two GMP viral vector production facilities as well as an in-house Quality
Control hub for stability and release, all fit for IND through commercial supply. We have core capabilities in viral vector
design and optimization and a potentially transformative riboswitch gene regulation platform technology that allows for the
precise, dose-responsive control of gene expression by oral small molecules. We are focusing the riboswitch platform on
delivery of metabolic peptides including GLP-1, GIP, glucagon and PYY using oral small molecules, as well as cell
therapy for oncology and autoimmune diseases. Although initially focusing on the eye, central nervous system, and
salivary gland, we have developed the technology to apply genetic medicine to more common diseases, increasing efficacy,
addressing novel targets, and expanding access in some of the largest disease areas where the unmet need remains great.
We are an exempted company incorporated under the laws of the Cayman Islands in 2018, and prior to that, we
commenced operations as MeiraGTx Limited, a private limited company incorporated under the laws of England and
Wales in 2015. Our discussion of our financial condition and results of operations is based upon our financial statements,
which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).
Since our formation, we have devoted substantially all of our resources to developing our technology platform, establishing
our viral vector manufacturing facilities and our GMP plasmid and DNA production facility and developing manufacturing
processes, advancing the product candidates in our ophthalmology, salivary gland and neurodegenerative disease programs,
building our intellectual property portfolio, organizing and staffing our company, developing our business plan, raising
capital, and providing general and administrative support for these operations. To date, we have financed our operations
primarily with cash on hand and proceeds from the sales of our Series A ordinary shares, Convertible Preferred C Shares
and ordinary shares, debt financing and upfront and milestone payments in connection with the Collaboration Agreement
and Asset Purchase Agreement. Through December 31, 2023, we received gross proceeds of approximately $562.9 million
from sales of our ordinary shares, Series A ordinary shares and convertible preferred C shares, gross proceeds of
approximately $75.0 million from issuance of debt, $130.0 million from the Collaboration Agreement with Janssen, and
$65.0 million from the Asset Purchase Agreement with Janssen. As of December 31, 2023, we had cash, cash equivalents
and restricted cash of $130.6 million, as well as $10.1 million we expect to receive from Janssen in the first quarter of 2024
in connection with the Collaboration Agreement.
We are a clinical stage company and have not generated any product revenues to date. We have ongoing clinical
development programs and a broad pipeline of preclinical programs. Since inception, we have incurred significant
operating losses. Our net losses for the years ended December 31, 2023 and 2022 were $84.0 million and $129.6 million,
respectively. As of December 31, 2023, we had an accumulated deficit of $554.2 million. We do not expect to generate
revenue from sales of products for several years, if at all. Under the Collaboration Agreement, we received an upfront
payment in the amount of $100.0 million in March 2019 and a milestone payment in the amount of $30.0 million in
December 2021. Additionally, pursuant to the Collaboration Agreement, we received research and development funding for
certain research, manufacturing and clinical development costs. On December 20, 2023, we entered into an Asset Purchase
Agreement with Janssen pursuant to which the Company sold and assigned to Janssen a License Agreement between the
Company and UCLB relating to the research, development, manufacture and exploitation of the RPGR Product, and other
related assets as described in the Asset Purchase Agreement. In connection with entering into the Asset Purchase
Agreement, we entered into a Termination Agreement with Janssen terminating the Collaboration Agreement. The
Company and Janssen also entered into a Supply Agreement on December 20, 2023 pursuant to which the Company
agreed to manufacture and supply the RPGR Product for Janssen. In December 2023, we received a non-refundable upfront
payment of $65.0 million in connection with the Asset Purchase Agreement.
Our total operating expenses were $151.1 million and $132.3 million for the years ended December 31, 2023 and
2022, respectively. We expect to continue incurring increasing costs associated with our clinical activities for AAV-hAQP1
for the treatment of radiation-induced xerostomia and xerostomia associated with Sjogren’s syndrome, as well as
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for AAV-GAD for the treatment of Parkinson’s disease. We also incurred expenses during the year ended December 31,
2023 and expect to continue to incur expenses related to research activities in additional therapeutic areas to expand our
pipeline, developing our potentially transformative gene regulation technology, hiring additional personnel as needed in
manufacturing, research, clinical operations, quality and other functional areas, and associated cash and share-based
compensation expense, as well as the further development of internal manufacturing capabilities and capacity and other
associated costs including the management of our intellectual property portfolio.
On August 2, 2022 we, as borrower, and the Subsidiary Guarantors, entered into the Financing Agreement by and
among the Company, the Subsidiary Guarantors, the lenders and other parties from time to time party thereto and
Perceptive, as administrative agent and lender. On December 19, 2022, the Financing Agreement was converted to a Notes
Purchase Agreement between the same parties and under substantially the same terms and conditions as the Financing
Agreement, subject to certain customary note constitution terms. On August 10, 2023, the Company and the Subsidiary
Guarantors entered into the First Consent and Amendment with Perceptive.
The Notes Purchase Agreement provides for the issuance of the Tranche 1 Notes in an initial amount of $75.0
million. Pursuant to the First Consent and Amendment, we may request in our sole discretion, and Perceptive has agreed to
subscribe to purchase upon such request, the issuance of the Tranche 2 Notes in an additional amount of $25.0 million at
any time before August 2, 2024. Previously, our request for the issuance of the Tranche 2 Notes was to be determined at
Perceptive’s sole discretion. The Notes Purchase Agreement matures on August 2, 2026 and is interest-only during the
term. We have the option to redeem outstanding principal notes at any time along with an applicable early redemption fee.
Outstanding amounts under the Notes Purchase Agreement bear interest at a fluctuating rate per annum equal to 10.00%
plus the secured overnight financing rate administered by the Federal Reserve Bank of New York for a one-month tenor,
subject to a 1.00% floor.
On November 9, 2022, we entered into a securities purchase agreement with Johnson & Johnson Innovation –
JJDC, Inc. (“JJDC”), the investment arm of Johnson & Johnson, pursuant to which we, in a private placement, agreed to
issue and sell to JJDC an aggregate of 3,742,514 ordinary shares at a purchase price of $6.68 per share for gross proceeds
of approximately $25.0 million.
On May 3, 2023, we entered into a securities purchase agreement with certain accredited investors, pursuant to
which we, in a private placement, agreed to issue and sell an aggregate of 10,773,913 ordinary shares at a purchase price of
$5.75 per share, for gross proceeds of approximately $62.0 million. The closing occurred on May 5, 2023.
On October 30, 2023, we entered into the Investment Agreement with Sanofi Foreign Participations, and solely
for the limited purposes set forth therein, Sanofi, pursuant to which, among other things and subject to the terms and
conditions specified therein, we issued an aggregate of 4,000,000 ordinary shares of the Company at a purchase price of
$7.50 per share for gross proceeds of $30.0 million. The Investment Agreement also provides Sanofi Foreign Participations
and its affiliates with a right of first negotiation for use of our riboswitch gene regulation technology for certain
Immunology and Inflammation (I&I), including modulation of IL-4 and IL-13, and Central Nervous System (CNS) targets,
as well as for GLP-1 and other gut peptides for metabolic disease, and for our Phase 2 xerostomia program, in each case,
on the terms set forth therein.
On December 20, 2023, we entered into an Asset Purchase Agreement with Janssen pursuant to which the
Company sold and assigned to Janssen a License Agreement between the Company and UCLB relating to the research,
development, manufacture and exploitation of the RPGR Product, and other related assets as described in the APA. In
connection with entering into the Asset Purchase Agreement, we entered into a Termination Agreement with Janssen
terminating the Collaboration Agreement. The Company and Janssen also entered into a Supply Agreement on December
20, 2023 pursuant to which we agreed to manufacture and supply the RPGR Product for Janssen. Under the Asset Purchase
Agreement, Janssen paid the Company a non-refundable upfront cash payment of $65.0 million in December 2023 and a
milestone payment of $50.0 million in the first quarter of 2024 in connection with the achievement of the initiation of the
extension study for the Phase 3 LUMEOS clinical trial for the RPGR Product.
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Additionally, pursuant to and subject to the terms and conditions set forth in the Asset Purchase Agreement, Janssen agreed
to pay the Company additional future contingent consideration of up to an aggregate of $300.0 million.
We will require additional capital in the future, which we may raise through equity offerings, debt financings,
marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or other
sources to enable us to complete the development and potential commercialization of our product candidates. Furthermore,
we expect to continue incurring costs associated with being a public company. Adequate additional financing may not be
available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative effect
on our financial condition and our ability to pursue our business strategy. In addition, attempting to secure additional
financing may divert the time and attention of our management from day-to-day activities and harm our product candidate
development efforts. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay,
reduce or eliminate certain of our research and development programs.
Based on our cash, cash equivalents and accounts receivable – related party at December 31, 2023 and the near-
term milestone payments we have received and expect to receive under the Asset Purchase Agreement, we estimate that
such funds will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the first
quarter of 2026. This estimate does not include the $285.0 million in milestones we are eligible to receive under the Asset
Purchase Agreement upon first commercial sale of an RPGR Product in the United States and in at least one of the United
Kingdom, France, Germany, Spain and Italy, for completion of the transfer of certain manufacturing technology to Janssen
and upon regulatory approval of a Janssen-selected manufacturing facility in each of the United States and European Union
for commercial manufacture of the RPGR Product. We have based these estimates on assumptions that may prove to be
wrong, and we may use our available capital resources sooner than we currently expect. See “Liquidity and Capital
Resources.” Because of the numerous risks and uncertainties associated with the development of our product candidates,
any future product candidates, our platform and technology and because the extent to which we may enter into
collaborations with third parties for development of any of our product candidates is unknown, we are unable to estimate
the amounts of increased capital outlays and operating expenses associated with completing the research and development
of our product candidates.
Adequate additional funds may not be available to us on acceptable terms, or at all. To the extent that we raise
additional capital through the sale of equity or convertible securities, your ownership interest will be diluted, and the terms
of these securities may include liquidation or other preferences that adversely affect your rights as a shareholder. Any
future debt financing or preferred equity or other financing, if available, may involve agreements that include covenants
limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or
declaring dividends and may require the issuance of warrants, which could potentially dilute your ownership interests.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third
parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or
product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds
through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminate our product
development programs or any future commercialization efforts or grant rights to develop and market product candidates
that we would otherwise prefer to develop and market ourselves.
Because of the numerous risks and uncertainties associated with drug development, we are unable to predict the
timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are
able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to
sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be
forced to reduce or terminate our operations.
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Highlights and Recent Developments
Recent Development Highlights and Anticipated Milestones
AAV-hAQP1 for the Treatment of Grade 2/3 Radiation-Induced Xerostomia:
Grade 2/3 radiation-induced xerostomia (RIX) is a severely debilitating consequence of radiation treatment for head and
neck cancer that affects approximately 30-40% of all patients treated with radiation for head and neck cancer. This is a
completely unmet need with no treatment options, and a large addressable market with over 170,000 patients currently in
the U.S., and an additional 15,000 new patients in the U.S. each year. Treatment with AAV-hAQP1 involves a small dose
locally delivered to the salivary gland via a non-invasive procedure, that can be delivered in a dental office or oncology
center where these patients are seen at least annually following radiation treatment. The small local dose of AAV-hAQP1
that we manufacture in-house allows for a low cost of goods, and the potential long term durability and ease of delivery
make this large addressable market a compelling commercial opportunity.
● We continue to enroll and dose participants at multiple sites in the U.S. and Canada in the AQUAx2 Phase 2
randomized, double-blind, placebo-controlled study.
● We aligned with FDA on requirements for the ongoing Phase 2 AQUAx2 clinical trial for Grade 2/3 radiation-
induced xerostomia to be considered pivotal to support potential BLA filing.
● Received Clinical Trial Authorization approval from MHRA for AQUAx2 study in the UK.
● We will deliver an oral presentation of the Phase 1 AQUAx study at the American Academy of Oral Medicine
2024 annual meeting (AAOM) taking place from April 17-20, 2024.
Title: Results of a Phase 1, Open-label, Dose-escalation Study of Gene Therapy with AAV2-hAQP1 as Treatment
for Grade 2 and 3 Radiation-induced Late Xerostomia and Parotid Gland Hypofunction
ID: 196
AAV-AIPL1 Specials License in UK:
LCA4 is an ultra rare and severe inherited retinal disease (IRD) resulting from mutations in the
aryl hydrocarbon receptor interacting protein-like 1 gene (AIPL1). Children with LCA4 are blind from birth due to the
absence of AIPL1, a retinal photoreceptor-specific protein expressed in cones and rods. By the age of 4 years old, retinal
degeneration is complete. We have developed AAV-AIPL1 to deliver the AIPL1 gene to the retina of children with LCA4.
This product candidate, manufactured at our London facility, is available for treatment of children with LCA4 under a
Specials License from the MHRA.
● Our AAV-AIPL1 gene therapy has been made available at 3 different hospitals in the UK with 8 patients aged 1 to
3 years old treated to date via a Specials License under MHRA regulations.
● Meaningful responses have been observed in all 8 of the children treated to date.
● Given the positive results, we intend to use data produced under the Specials License to engage with regulatory
agencies to enable us to make this intervention more widely available to the LCA4 patient population globally.
● We intend to host a webinar in the second quarter of 2024 to present the data from the LCA4 children treated with
AAV-AIPL1 to date.
● Our AAV-AIPL1 for treatment of inherited retinal dystrophy due to defects in the AIPL1 gene has been granted
orphan drug designation by the FDA and orphan designation by the European Commission.
AAV-GAD for the Treatment of Parkinson’s Disease:
Parkinson’s is the second most common neurodegenerative disease after Alzheimer’s with approximately 90,000 patients
diagnosed annually in the U.S. Most Parkinson’s patients respond to dopamine replacement therapy, however, after about
5 years even higher doses of dopamine no longer manage the motor symptoms of the disease, leaving little effective
treatment for this large population of patients. One treatment that has efficacy in this patient population is deep
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brain stimulation (DBS), which requires multiple surgeries and in-dwelling hardware with onerous safety and tolerability
issues. In contrast, our gene therapy treatment for Parkinson’s involves the delivery of a very small dose of AAV-GAD
encoding the enzyme that converts the activating neurotransmitter glutamate to the calming neurotransmitter GABA, to the
specific nucleus of the brain targeted by DBS. We have demonstrated that localized treatment with AAV-GAD leads to a
change in circuitry to the motor cortex which results in alleviation of motor symptoms. This is a one-time treatment,
involving no in-dwelling hardware or subsequent tuning, no off target side effects, and with a small dose of viral vector that
has a low cost of goods.
● We have completed dosing patients in the AAV-GAD clinical trial under a new IND using material manufactured
in our GMP facility in London, UK using our proprietary production process.
● The AAV-GAD trial is a three-arm, randomized, double-blind, sham-controlled Phase 1 clinical bridging study
with subjects randomized to one of two doses of AAV-GAD or sham control.
● The objective of the AAV-GAD trial (NCT05603312) is to evaluate the safety and tolerability of AAV-mediated
delivery of glutamic acid decarboxylase (GAD) gene transfer into the subthalamic nuclei (STN) of participants
with Parkinson’s disease.
Riboswitch Gene Regulation Technology Platform:
Our riboswitch technology allows for repeatable, long-term delivery of any messenger RNA (mRNA) from the DNA
template encoding any peptide or protein on stimulation by bespoke orally delivered small molecules.
● We continue to make significant progress in moving the first regulated mRNA and protein targets towards the
clinic, initially focusing on two areas, cell therapy and metabolic disease.
● For obesity and metabolic disease, we have successfully delivered multiple combinations of gut peptides in vivo
including GLP-1, GIP, PYY, Glucagon and Amylin, as well as novel peptides that drive muscle metabolism, via
the riboswitch platform that allows daily dosing with a small molecule to activate physiologically relevant peptide
combinations within the body. This provides a platform for addressing not just weight loss via reduced appetite,
but also muscle strength, fat metabolism and cardiovascular health in metabolic disease, with daily oral small
molecules.
● In CAR-T for both oncology and autoimmune disease, precise control of the CAR via our riboswitch platform has
demonstrated significant impact on CAR-T efficacy, with a 3-4 fold improvement in in vivo potency of cells with
regulated CAR compared to the currently approved CAR-T with unregulated constitutively active CAR. In
addition, our regulated CAR-T display a normal naïve T-cell profile, lacking exhaustion markers and retaining
proliferation and killing ability in vitro in contrast to CAR-T with unregulated constitutive CAR expression.
● We intend to present data from our riboswitch gene regulation technology platform at an R&D day in the second
half of 2024.
Asset Purchase Agreement with Jannsen:
● On December 20, 2023, we entered into an asset purchase agreement with Janssen related to bota-vec for the
treatment of XLRP for a total of up to $415 million; the agreement enabled us to receive $130 million in near-
term milestone payments, which included a $65 million upfront payment that was received upon signing of the
agreement.
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● On February 13, 2024, we announced the achievement of the first near-term milestone payments under the asset
purchase agreement with Janssen which triggered a $50 million payment; we anticipate receiving the remaining
$15 million in near-term milestone payments later in 2024.
● We will receive up to a further $285 million upon first commercial sales of bota-vec in the U.S. and EU, for
manufacturing technology transfer and upon regulatory approval of a Janssen-selected manufacturing facility in
each of the United States and European Union for commercial manufacture of bota-vec.
● We also entered into a commercial supply agreement with Janssen for bota-vec manufacturing, which we
anticipate will generate additional revenue upon product launch.
Strategic Investment from Sanofi:
● On October 30, 2023, Sanofi purchased $30 million of our ordinary shares at a price of $7.50 per share.
● Sanofi received a right of first negotiation (ROFN) for the use of our riboswitch gene regulation technology for
certain Central Nervous System (CNS) and Immunology and Inflammation (I&I) targets, including IL-4 and IL-
13, as well as for GLP-1 and other gut peptides for obesity, and for our Phase 2 xerostomia program.
End-to-End Manufacturing Infrastructure:
We have comprehensive end-to end-manufacturing capabilities with a commercial ready platform process and GMP-
licensed manufacturing and QC facilities in both the UK and Ireland, comprising the following:
● Two flexible and scalable viral vector manufacturing facilities both fit for commercial production of viral vectors,
one approximately 30,000 sq. ft. in London, UK, with the second approximately 150,000 sq. ft. in Shannon,
Ireland.
● In-house plasmid production facility (Shannon) under the same quality systems as the GMP approved production
and QC facilities. Plasmid produced in-house is therefore GMP grade as a starting material for GMP vector
production.
● In-house QC facility (Shannon) for full stability and release of manufactured viral vectors, which received both a
Commercial and Clinical license from the Irish HPRA in 2023.
● MSAT facility (London) for the development of our proprietary platform process for viral vector production, as
well as development and validation of the QC assays required for viral vector release and stability. Over the past
8 years, our MSAT team have built immense data lakes of information supporting our platform process developed
using multiple different capsids and vector genomes with both yield and full ratio at the top of the range
published in the industry.
● As part of the Janssen transaction in the fourth quarter of 2023, we entered into a commercial supply agreement
with Janssen for the manufacture of bota-vec.
● Our infrastructure, manufacturing and assay development capabilities and proprietary production process
continues to attract the attention of potential strategic and manufacturing partners.
Components of Our Results of Operations
License revenue – related party
Our license revenue consisted of the amortization of the upfront and milestone payments we received in
connection with the Collaboration Agreement.
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Operating expenses
Our operating expenses since inception have consisted primarily of general and administrative costs and research
and development costs.
General and administrative expenses
General and administrative expenses consist primarily of salaries and other related costs, including share-based
compensation, for personnel in our executive, finance, legal, business development and administrative functions. General
and administrative expenses also include legal fees relating to intellectual property and corporate matters; professional fees
for accounting, auditing, tax and consulting services; insurance costs; travel expenses; and office facility-related expenses,
which include direct depreciation costs.
We have incurred and expect to continue to incur increased expenses associated with being a public company,
including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with
Nasdaq and SEC requirements; director and officer insurance costs; and investor and public relations costs.
Research and development expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our
discovery efforts, and the development of our product candidates, and include:
● employee-related expenses, including salaries, benefits and travel of our research and development
personnel;
● expenses incurred in connection with third-party vendors that conduct clinical and preclinical studies and
manufacture the drug product for the clinical trials and preclinical activities;
● acquisition and impairment of in process research and development;
● costs associated with clinical and preclinical activities including costs related to facilities, supplies, rent,
insurance, certain legal fees, share-based compensation, and depreciation; and
● expenses incurred with the development and operation of our manufacturing facilities.
We expense research and development costs as incurred.
Research and development activities are central to our business model. We expect to continue incurring increasing
research and development costs associated with our clinical activities for AAV-hAQP1 for the treatment of radiation-
induced xerostomia and xerostomia associated with Sjogren’s syndrome, as well as for AAV-GAD for the treatment of
Parkinson’s disease. In addition, we expect to continue to incur expenses related to research activities in additional
therapeutic areas to expand our pipeline and developing our potentially transformative gene regulation technology.
We cannot determine with certainty the duration and costs of future clinical trials of our product candidates or any
other product candidate we may develop or if, when, or to what extent we will generate revenue from the
commercialization and sale of any product candidate for which we obtain marketing approval. We may never succeed in
obtaining marketing approval for any product candidate. The duration, costs and timing of clinical trials and development
of our existing product candidates or any other product candidate we may develop will depend on a variety of factors,
including:
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● the scope, rate of progress, expense and results of clinical trials of our existing product candidates, as well as
of any future clinical trials of other product candidates and other research and development activities that we
may conduct;
● uncertainties in clinical trial design and patient enrollment rates;
● the actual probability of success for our product candidates, including the safety and efficacy, early clinical
data, competition, manufacturing capability and commercial viability;
● significant and changing government regulation and regulatory guidance;
● the timing and receipt of any marketing approvals; and
● the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property
rights.
A change in the outcome of any of these variables with respect to the development of a product candidate could
mean a significant change in the costs and timing associated with the development of that product candidate. For example,
if the FDA or another U.S. or foreign regulatory authority were to require us to conduct clinical trials beyond those that we
anticipate will be required for the completion of clinical development of a product candidate, or if we experience
significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend
significant additional financial resources and time on the completion of clinical development.
Other non-operating income (expense)
Other non-operating income (expense) includes the following:
Foreign currency gain (loss)
Our consolidated financial statements are presented in U.S. dollars, which is our reporting currency. The financial
position and results of operations of our subsidiaries MeiraGTx UK II Limited, MeiraGTx Ireland DAC, MeiraGTx
Netherlands B.V., MeiraGTx B.V. and MeiraGTx Belgium are measured using the foreign subsidiaries’ local currency as
the functional currency. These entities’ cash accounts holding U.S. dollars and intercompany payables and receivables are
remeasured based upon the exchange rate at the date of remeasurement with the resulting gain or loss included in the
consolidated statement of operations and comprehensive loss.
Interest income
Interest income is comprised on interest earned on our interest-bearing bank accounts..
Interest expense
Interest expense consists of interest expense and amortization of the debt discount in connection with the debt
financing described in Note 13 to our consolidated financial statements.
Gain on sale of nonfinancial assets
The gain on sale of nonfinancial assets represents the value allocated to the nonfinancial assets sold and assigned
to Janssen including the UCLB RPGR License Agreement relating to the research, development, manufacture
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and exploitation of the RPGR Product, and other related assets pursuant to the Asset Purchase Agreement, net of carrying
value.
Other comprehensive (loss) income
Other comprehensive (loss) income includes the following:
Foreign currency translation (loss) gain
Expenses of subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the
period. Assets and liabilities have been translated at the rates of exchange on the consolidated balance sheet date. The
resulting translation gain adjustments are recorded directly as a separate component of shareholders’ equity and as other
comprehensive loss on the consolidated statements of operations and comprehensive loss.
Critical Accounting Policies and Use of Estimates
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 GAAP. The preparation of these
consolidated financial statements requires us to make estimates and judgements that affect the reporting amounts of assets,
liabilities and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On
an ongoing basis, we evaluate our estimates and judgements, including those related to license and collaboration revenue,
share-based compensation and accrued expenses. We base our estimates on historical experience, known trends and events
and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for
making judgements about the carrying value of assets and liabilities that are not readily apparent from our sources. Actual
results may differ from these estimates under different assumptions.
While our significant accounting policies are described in more detail in the notes to our financial statements
appearing in this Form 10-K, we believe that the following accounting policies are those most critical to the judgments and
estimates used in the preparation of our financial statements.
Collaboration Arrangements
We evaluate our collaborative arrangements pursuant to Accounting Standards Codification (“ASC”) 808,
Collaborative Arrangements (“ASC 808”) and ASC 606, Revenue from Contracts with Customers (“ASC 606”). We
consider the nature and contractual terms of collaborative arrangements and assess whether the arrangement involves a
joint operating activity pursuant to which we are an active participant and are exposed to significant risks and rewards with
respect to the arrangement. If we are an active participant and exposed to significant risks and rewards with respect to the
arrangement, we account for the arrangement as a collaboration under ASC 808. To date, we have entered into two separate
collaboration agreements, both of which are with Janssen, which were determined to be within the scope of ASC 808.
ASC 808 does not address recognition or measurement matters related to collaborative arrangements. Payments
between participants pursuant to a collaborative arrangement that are within the scope of other authoritative accounting
literature on income statement classification are accounted for using the relevant provisions of that literature. If we
conclude that some or all aspects of the arrangement are within the scope of ASC 808 and do not represent a transaction
with a customer, we recognize our allocation of the shared costs incurred with respect to the jointly conducted activities
pursuant to ASC 730, Research and Development. If we concluded that some or all aspects of the arrangement represent a
transaction with a customer, we account for those aspects of the arrangement within the scope of ASC 606. If the payments
are not within the scope of other authoritative accounting literature, the income statement classification for the payments is
based on an analogy to authoritative accounting literature or if there is no appropriate analogy, a reasonable, rational and
consistently applied accounting policy election. Payments received from a collaboration partner to which
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this policy applies may include upfront payments in respect of a license of intellectual property, development and
commercialization-based milestones, and royalties.
Revenue Recognition
We evaluate the promised goods or services to determine which promises, or group of promises, represent
performance obligations in our contracts with customers. In contemplation of whether a promised good or service meets
the criteria required of a performance obligation, we consider the stage of development of the underlying intellectual
property, the capabilities and expertise of the customer relative to the underlying intellectual property, and whether the
promised goods or services are integral to or dependent on other promises in the contract. When accounting for an
arrangement that contains multiple performance obligations, we must develop judgmental assumptions, which may include
market conditions, reimbursement rates for personnel costs, development timelines and probabilities of regulatory success
to determine the stand-alone selling price for each performance obligation identified in the contract.
When we conclude that a contract should be accounted for as a combined performance obligation and recognized
over time, we must then determine the period over which revenue should be recognized and the method by which to
measure revenue. We generally recognize revenue using a cost-based input method.
At inception, we determine whether contracts are within the scope of ASC 606 or other topics. For contracts that
are determined to be within the scope of ASC 606, we recognize revenue when the customer or collaborator obtains control
of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for
those goods or services. To determine revenue recognition, we perform the following five steps:
i.
identify the contract(s) with a customer;
ii.
identify the performance obligations in the contract;
iii. determine the transaction price;
iv. allocate the transaction price to the performance obligations within the contract; and
v.
recognize revenue when (or as) the entity satisfies a performance obligation.
We only apply the five-step model to contracts when we determine that it is probable we will collect the
consideration we are entitled to in exchange for the goods or services we transfer to the customer.
At contract inception, we assess the goods or services promised within the contract to determine whether each
promised good or service is a performance obligation. The promised goods or services for our arrangements typically
consist of a license to our intellectual property and research, development and manufacturing services. We may provide
options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to
exercise such options, unless the option provides a material right to the customer. Performance obligations are promises in
a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together
with other readily available resources, and (ii) is separately identifiable from other promises in the contract. Goods or
services that are not individually distinct performance obligations are combined with other promised goods or services until
such combined group of promises meet the requirements of a performance obligation.
We determine transaction prices based on the amount of consideration we expect to receive for transferring the
promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. At contract
inception for arrangements that include variable consideration, we estimate the probability and extent of consideration we
expect to receive under the contract utilizing either the most likely amount method or expected amount method, whichever
best estimates the amount expected to be received. We then consider any constraints on the variable
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consideration and include in the transaction price variable consideration to the extent it is deemed probable that a
significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with
the variable consideration is subsequently resolved.
We then allocate the transaction price to each performance obligation based on the relative standalone selling price
and recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation
when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations
which consist of licenses and other promises, we utilize judgment to assess the nature of the combined performance
obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if
over time, the appropriate method of measuring progress. We evaluate the measure of progress each reporting period and, if
necessary, adjust the measure of performance and related revenue recognition.
If there are multiple performance obligations, we allocate the transaction price to each performance obligation
based on their estimated standalone selling prices (“SSP”). We estimate the SSP for each performance obligation by
considering information such as market conditions, entity-specific factors, and information about our customer that is
reasonably available. We consider estimation approaches that allow us to maximize the use of observable inputs. These
estimation approaches may include the adjusted market assessment approach, the expected cost plus a margin approach or
the residual approach. We also consider whether to use a different estimation approach or a combination of approaches to
estimate the SSP for each performance obligation. Developing certain assumptions (e.g., treatable patient population,
expected market share, probability of success and product profitability, and discount rate based on weighted-average cost
of capital) to estimate the SSP of a performance obligation requires significant judgment.
We record amounts as accounts receivable when the right to consideration is deemed unconditional. When
consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or
services to the customer under the terms of a contract, a contract liability is recorded as deferred revenue.
Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in our
consolidated balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance
sheet date are classified as deferred revenue – related party, current. Amounts not expected to be recognized as revenue
within the 12 months following the balance sheet date are classified as deferred revenue – related party.
Research and Development
Research and development costs are charged to expense as incurred. These costs include, but are not limited to,
employee-related expenses, including salaries, benefits and travel of our research and development personnel; expenses
incurred under agreements with contract research organizations and investigative sites that conduct clinical and preclinical
studies and manufacture the drug product for the clinical studies and preclinical activities; acquisition of in-process
research and development; facilities; supplies; rent, insurance, certain legal fees, stock-based compensation, depreciation
and other costs associated with clinical and preclinical activities and regulatory operations. Research funding under
collaboration agreements and refundable research and development credits / tax credits received are recorded as an offset to
these costs.
Costs for certain development activities, such as outside research programs funded by us, are recognized based on
an evaluation of the progress to completion of specific tasks with respect to their actual costs incurred. Payments for these
activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and
are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be.
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Share-Based Compensation
Options
We grant share options to employees, non-employee members of our board of directors and non-employee
consultants as compensation for services performed. Share-based compensation are accounted for in accordance with ASC
718, Compensation—Stock Compensation, or ASC 718. ASC 718 requires all share-based payments, including grants of
share options, to be recognized in the statement of operations and comprehensive loss based on their grant date fair values.
The grant date fair value of share options is estimated using the Black-Scholes option valuation model.
Using this model, fair value is calculated based on assumptions with respect to (i) the fair value of our ordinary
shares on the grant date; (ii) expected volatility of our ordinary share price, (iii) the periods of time over which recipients
are expected to hold their options prior to exercise (expected term), (iv) expected dividend yield on our ordinary shares,
and (v) risk-free interest rates.
Our ordinary shares were not traded on a public exchange prior to our IPO in June 2018. Therefore, we believe
that our future volatility will differ materially during the expected term from the volatility that would be calculated from
our historical share prices to date. Consequently, expected volatility is based on an analysis of our Company and guideline
companies in accordance with ASC 718. The expected dividend yield is zero as we have never paid dividends and do not
currently anticipate paying any in the foreseeable future. Risk-free interest rates are based on quoted U.S. Treasury rates
for securities with maturities approximating the option’s expected term.
Restricted Share Units
The Company grants restricted share units (“RSUs”) to employees, non-employee members of our board of
directors and non-employee consultants as compensation for services performed. Awards of RSUs are accounted for in
accordance with ASC 718, Compensation - Stock Compensation, or ASC 718. ASC 718 requires all share-based payments,
including grants of RSUs, to be recognized in the consolidated statement of operations and comprehensive loss based on
their grant date fair values. The grant date fair value of RSUs is determined using the closing market price of the
Company’s ordinary shares on the date of grant.
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Results of Operations
Comparison of the Years Ended December 31, 2023 and 2022
License revenue - related party
Operating expenses:
General and administrative
Research and development
Total operating expenses
Loss from operations
Other non-operating income (expense)
Foreign currency gain (loss)
Interest income
Interest expense
Gain on sale of nonfinancial assets
Fair value adjustments
Net loss
Other comprehensive (loss) income:
Foreign currency translation (loss) gain
Comprehensive loss
License revenue – related party
2023
$
14,017
2022
(in thousands)
15,920
$
Change
$
(1,903)
47,293
103,785
151,078
(137,061)
9,300
2,272
(13,245)
54,208
499
(84,027)
(7,482)
(91,509)
$
$
46,550
85,725
132,275
(116,355)
(9,452)
777
(4,946)
—
361
(129,615)
8,718
(120,897)
$
$
$
$
743
18,060
18,803
(20,706)
18,752
1,495
(8,299)
54,208
138
45,588
(16,200)
29,388
License revenue was $14.0 million for the year ended December 31, 2023, compared to $15.9 million for the year
ended December 31, 2022. This decrease is a result of the Company recognizing the deferred revenue progress of the
$100.0 million upfront payment and the $30.0 million milestone payment received in connection with the Collaboration
Agreement through the termination date of the Collaboration Agreement on December 20, 2023.
General and administrative expenses
General and administrative expenses were $47.3 million for the year ended December 31, 2023, compared to
$46.6 million for the year ended December 31, 2022. The increase of $0.7 million was primarily due to an increase of $4.1
million in legal and accounting fees, $2.2 million in payroll and payroll-related costs, $0.4 million in share-based
compensation and $0.1 million in rent and facilities costs. These increases were partially offset by a decrease of $4.2
million in other general and administrative costs, $1.3 million in insurance, $0.3 million in consulting fees and $0.3 million
in depreciation.
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Research and development expenses
Research and development expenses for the years ended December 31, 2023 and 2022 were as follows (in
thousands):
Clinical Programs
$
Botaretigene sparoparvovec
AAV-hAQP1
AAV-CNGB3 / AAV-CNGA3
AAV-GAD
AAV-RPE65
Manufacturing
Preclinical Programs
Gene regulation
Neurodegenerative diseases
Preclinical ocular diseases
Other research and development
expenses
Gross research and development
expenses
Collaboration Agreement
reimbursement
Research and development
expenses
For The Years Ended December 31,
2023
2022
Change
$
55,518
15,772
2,184
7,598
—
50,221
8,324
2,242
2,849
29,506
$
36,918
9,068
5,743
10,148
3,751
36,258
12,462
3,546
13,999
26,389
174,214
158,282
(70,429)
(72,557)
18,600
6,704
(3,559)
(2,550)
(3,751)
13,963
(4,138)
(1,304)
(11,150)
3,117
15,932
2,128
$
103,785
$
85,725
$
18,060
Clinical program expenses represent the direct costs for each clinical trial plus the cost of the clinical trial material
charged from the manufacturing costs.
Manufacturing expenses represent the costs to manufacture clinical trial material, including payroll, facilities,
manufacturing supplies, raw materials, quality control and quality assurance. Upon completion of the manufacture of a
batch of clinical trial material, the standard cost of manufacturing the batch of clinical trial material is charged to the
clinical programs. A year to date true-up of the standard batch cost has been reflected in the fourth quarter.
Preclinical program expenses represent the direct costs for each group of preclinical programs.
Other research and development expenses represent costs that are not allocated to a specific clinical or preclinical
program, such as payroll and payroll related costs, share-based compensation, travel, rent and facilities costs, depreciation
and other non-program specific expenses.
Research and development expenses for the year ended December 31, 2023 were $103.8 million, compared to
$85.7 million for the year ended December 31, 2022. The increase of $18.1 million was primarily due to an increase of
$15.4 million in clinical trial expenses primarily related to the bota-vec and AAV-hAQP1 programs, $14.0 million of
manufacturing costs, $3.1 million of other research and development expenses and a decrease of $2.1 million in research
funding provided under the Collaboration Agreement with Janssen. These increases were partially offset by a decrease of
$16.6 million in expenses related to our preclinical programs primarily related to preclinical ocular diseases in the year
ended December 31, 2023 compared to the year ended December 31, 2022.
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Foreign currency gain (loss)
Foreign currency gain was $9.3 million for the year ended December 31, 2023 compared to a loss of $9.5 million
for the year ended December 31, 2022. The change of $18.8 million was primarily due to the strengthening of the U.S.
dollar against the pound sterling and euro during the year ended December 31, 2023 as it relates to the valuation of our
intercompany payables and receivables.
Interest income
Interest income was $2.3 million for the year ended December 31, 2023 compared to $0.8 million for the year
ended December 31, 2022. The increase was due to higher interest rates and cash balances during 2023.
Interest expense
Interest expense was $13.2 million for the year ended December 31, 2023 compared to $4.9 million for the year
ended December 31, 2022. The increase was primarily due to the interest expense and amortization of the debt discount in
connection with the debt financing described in Note 13 to our consolidated financial statements included elsewhere in this
Form 10-K. Twelve months of interest was recorded during the year ended December 31, 2023 compared to five months of
interest recorded during the year ended December 31, 2022.
Gain on sale of nonfinancial assets
The gain on sale of nonfinancial assets was $54.2 million for the year ended December 31, 2023 compared to $0
for the year ended December 31, 2022. This increase was a result of the recognition of the value allocated to the
nonfinancial assets sold and assigned to Janssen including the UCLB RPGR License Agreement relating to the research,
development, manufacture and exploitation of the RPGR Product, and other related assets pursuant to the APA, net of
carrying value.
Other Comprehensive (Loss) Income – Foreign Currency Translation (Loss) Gain
Foreign currency translation adjustments resulted in a translation loss of $7.5 million for the year ended December
31, 2023 compared to a translation gain of $8.7 million for the year ended December 31, 2022. The change in the amount
of $16.2 million was primarily due to a strengthening of the U.S. dollar against the pound sterling and euro during the year
ended December 31, 2023.
Liquidity and Capital Resources
Since our inception, we have incurred significant operating losses. For the year ended December 31, 2023, we
used $105.4 million in cash flows from operations. We did not generate positive cash flows from operations during the year
and there are no assurances that we will generate positive cash flows in the future. Additionally, there are no assurances
that we will be successful in obtaining an adequate level of financing for the development and commercialization of our
product candidates. We expect to incur significant expenses and operating losses for the foreseeable future as we advance
the preclinical and clinical development of our product candidates. We expect that our research and development and
general and administrative costs will increase in connection with conducting preclinical studies and clinical trials for our
product candidates, building out internal capacity to have products manufactured to support preclinical studies and clinical
trials as well as to manufacture commercial products, expanding our intellectual property portfolio, and providing general
and administrative support for our operations. As a result of these incurred and expected expenses we will need additional
capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing
arrangements, or other sources.
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We do not currently have any approved products and have never generated any revenue from product sales. We
have historically financed our operations primarily through cash on hand and proceeds from the sale of our ordinary shares,
series A ordinary shares and convertible preferred C shares. In March 2019 and December 2021, we received a
$100.0 million upfront payment and a $30.0 million milestone payment, respectively, in connection with the Collaboration
Agreement, which also provided us with research funding, and we were eligible to receive additional potential milestone
payments and royalties. On December 20, 2023, we entered into an Asset Purchase Agreement with Janssen pursuant to
which the Company sold and assigned to Janssen a License Agreement between the Company and UCLB relating to the
research, development, manufacture and exploitation of the RPGR Product, and other related assets as described in the
Asset Purchase Agreement. In connection with entering into the Asset Purchase Agreement, we entered into a Termination
Agreement with Janssen terminating the Collaboration Agreement. The Company and Janssen also entered into a Supply
Agreement on December 20, 2023 pursuant to which the Company agreed to manufacture and supply the RPGR Product
for Janssen. In December 2023, we received a non-refundable upfront payment of $65.0 million in connection with the
Asset Purchase Agreement, and in the first quarter of 2024 we received a milestone payment of $50.0 million in connection
with the achievement of the initiation of the extension study for the Phase 3 LUMEOS clinical trial for the RPGR Product.
Additionally, on August 2, 2022, we, as borrower, and our Subsidiary Guarantors, entered into a Financing
Agreement by and among us, the Subsidiary Guarantors, the lenders and other parties from time to time party thereto and
Perceptive, as administrative agent and lender. On December 19, 2022, the Financing Agreement was converted to a Notes
Purchase Agreement between the same parties and under substantially the same terms and conditions as the Financing
Agreement, subject to certain customary note constitution terms.
The Notes Purchase Agreement provides for the issuance of the Tranche 1 Notes in an initial amount of $75.0
million. Pursuant to the First Consent and Amendment, we may request, in our sole discretion, and Perceptive has agreed
to subscribe to purchase upon such request, the issuance of the Tranche 2 Notes in an additional amount of $25.0 million at
any time before August 2, 2024. Previously, our request for the issuance of the Tranche 2 Notes was to be determined at
Perceptive’s sole discretion. The Notes Purchase Agreement matures on August 2, 2026 and is interest-only during the
term. We have the option to redeem outstanding principal notes at any time along with an applicable early redemption fee.
Outstanding amounts under the Notes Purchase Agreement bear interest at a fluctuating rate per annum equal to 10.00%
plus the secured overnight financing rate administered by the Federal Reserve Bank of New York for a one-month tenor,
subject to a 1.00% floor.
Our obligations under the Notes Purchase Agreement are secured by our London, UK and Shannon, Ireland
manufacturing facilities, $3.0 million of our cash and the bank accounts of the Subsidiary Guarantors, and the issued and
outstanding equity interests of the Subsidiary Guarantors.
The Notes Purchase Agreement imposes certain covenants and restrictions on us and the Subsidiary Guarantors,
including restrictions pertaining to: (i) the incurrence of additional indebtedness, (ii) limitations on liens, (iii) limitations on
certain investments, (iv) making distributions, dividends and other payments, (v) mergers, consolidations and acquisitions,
(vi) dispositions of assets, (vii) our maintenance of at least $3.0 million in a U.S. bank account, (viii) transactions with
affiliates, (ix) changes to governing documents, (x) changes to certain agreements and leases and (xi) changes in control;
however, certain of these restrictions contain exceptions which allow us to license, sell and monetize assets in our AAV-
hAQP1 program in development to treat radiation-induced xerostomia, our AAV-GAD program in development to treat
Parkinson’s disease and our gene regulation platform technologies.
In connection with entering into the Financing Agreement, we granted warrants (the “Warrants”) to Perceptive to
purchase up to (i) 400,000 ordinary shares of the Company at an exercise price of $15.00 per share and (ii) 300,000
ordinary shares of the Company at an exercise price of $20.00 per share. The Warrants will expire on August 2, 2027.
Based on our current cash, cash equivalents and accounts receivable – related party at December 31, 2023 and the
near-term milestone payments we have received and expect to receive under the Asset Purchase Agreement, we
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estimate that we will be able to fund our operating expenses and capital expenditure requirements into the first quarter of
2026. This estimate does not include the $285.0 million in milestones we are eligible to receive under the Asset Purchase
Agreement upon first commercial sale of an RPGR Product in the United States and in at least one of the United Kingdom,
France, Germany, Spain and Italy, for completion of the transfer of certain manufacturing technology to Janssen and upon
regulatory approval of a Janssen-selected manufacturing facility in each of the United States and European Union for
commercial manufacture of the RPGR Product. We have based these estimates on assumptions that may prove to be wrong,
and we could utilize our available capital resources sooner than we expect.
Cash Flows
We had $130.6 million and $115.5 million of cash, cash equivalents, and restricted cash as of December 31, 2023
and 2022, respectively.
The following table summarizes our sources and uses of cash for the period presented:
Net cash used in operating activities
Net cash provided by (used in) investing activities
Net cash provided by financing activities
Net increase (decrease) in cash, cash equivalents and
restricted cash
Operating Activities
For the Years Ended December 31,
2023
2022
(in thousands)
$
(105,365) $
34,034
84,023
(73,098)
(44,963)
95,200
$
12,692
$
(22,861)
During the year ended December 31, 2023, our cash used in operating activities of $105.4 million was primarily
due to our net loss of $84.0 million as we incurred expenses associated with research activities on our clinical programs,
manufacturing of our clinical trial materials, preclinical research programs and general and administrative expenses. The
net loss included net non-cash gains of $20.4 million, which consisted of $54.2 million of a gain on sale of nonfinancial
assets, $27.7 million of share-based compensation, $13.7 million of depreciation and amortization, $9.3 million of a
foreign currency gain, $1.1 million of amortization of the debt discount, $1.1 million impairment related to acquired in-
process research and development and right-of-use assets, $0.5 million of a fair value upward adjustment, $0.2 million of
net change in right-of-use assets and liabilities and $0.2 million of amortization of interest on asset retirement obligations.
Additionally, operating assets, consisting of accounts receivable-related party, prepaid expenses, tax incentive receivable,
other current assets and other assets, decreased by $6.0 million and operating liabilities, consisting of accounts payable,
accrued expenses, and deferred revenue-related party, decreased by $6.9 million.
During the year ended December 31, 2022, our cash used in operating activities of $73.1 million was primarily
due to our net loss of $129.6 million as we incurred expenses associated with research activities on our clinical programs,
manufacturing of our clinical trial materials, preclinical research programs and general and administrative expenses. The
net loss included non-cash charges of $46.9 million, which consisted of $28.6 million of share-based compensation, $9.5
million of a foreign currency loss, $8.7 million of depreciation and amortization, $0.4 million of a fair value downward
adjustment, $0.2 million of negative net change in right-of-use assets and liabilities, $0.2 million of amortization of interest
on asset retirement obligations and $0.4 million of amortization of the debt discount. Additionally, operating assets,
consisting of accounts receivable-related party, prepaid expenses, tax incentive receivable, other current assets and other
assets, decreased by $5.2 million and operating liabilities, consisting of accounts payable, accrued expenses, and deferred
revenue-related party, decreased by $4.4 million.
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Investing Activities
Net cash provided by investing activities for the year ended December 31, 2023 of $34.0 million consisted of
$54.2 million from proceeds from the sale of nonfinancial assets and $20.2 million of purchases of property and equipment
for our manufacturing, laboratory and process development facilities.
Net cash used in investing activities for the year ended December 31, 2022 of $45.0 million consisted of
purchases of property and equipment for our manufacturing, laboratory and process development facilities and buildout
costs of our new facilities in Ireland.
Financing Activities
Net cash provided by financing activities was $84.0 million for the year ended December 31, 2023, which
consisted primarily of $92.0 million from the issuance of ordinary shares, which was offset by $6.4 million of issuance
costs and $1.5 million of payments for withholdings of shares for income taxes.
Net cash provided by financing activities was $95.2 million for the year ended December 31, 2022, which
consisted primarily of $75.0 million from issuance of the Tranche 1 Notes, $25.0 million from the issuance of ordinary
shares and $0.2 million in exercise of share options, which was offset by $2.8 million of payments for withholdings of
shares for income taxes, and issuance costs of $2.2 million.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements under applicable SEC rules and do not have any
holdings in variable interest entities.
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ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to market risks in the ordinary course of our business. These risks primarily include foreign
currency exchange rate sensitivities and interest rate risk.
Foreign Currency Exchange Risk
We currently operate in the United States, the United Kingdom and the European Union. Our activities in these
jurisdictions expose us to currency exchange rate fluctuations primarily between the U.S. Dollar and the British pound
sterling and euro. When the U.S. Dollar strengthens against these currencies, the U.S. Dollar value of non-U.S. Dollar
based losses increases. To the extent that our international activities recorded in local currencies increase in the future, our
exposure to fluctuations in currency exchange rates will correspondingly increase. With respect to our foreign currency
exposures as of December 31, 2023, we estimate a 10% unfavorable movement in foreign currency exchange rates would
have the effect of creating an additional foreign currency loss of approximately $7.4 million within other non-operating
income (expense) for the year ended December 31, 2023.
Interest Rate Risk
We are exposed to market risk as a result of changes in interest rates applicable to borrowings under our Notes
Purchase Agreement. Borrowings under the Notes Purchase Agreement bear interest at a fluctuating rate per annum equal
to 10.00% plus the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York for
a one-month tenor, subject to a 1.00% floor. See Note 13 to our consolidated financial statements included elsewhere in this
Form 10-K. We may use interest rate cap derivatives, interest rate swaps or other interest rate hedging instruments to
economically hedge and manage interest rate risk with respect to our variable floating rate debt. As of December 31, 2023,
the annual interest rate was 15.32% and the outstanding balance of the Tranche 1 Notes was $75.0 million. Assuming no
change in the outstanding borrowings under the Notes Purchase Agreement, we estimate that a hypothetical 1% increase in
the SOFR would increase our annual interest expense by approximately $0.8 million for the year ended December 31,
2023.
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ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID 42)
Consolidated:
Balance Sheets
Statements of Operations and Comprehensive Loss
Statements of Shareholders' Equity
Statements of Cash Flows
Notes to Consolidated Financial Statements
F-1
F-2
F-5
F-6
F-7
F-6
F-7
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of MeiraGTx Holdings plc and subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of MeiraGTx Holdings plc and subsidiaries (the
“Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive
loss, shareholders' equity and cash flows for each of the two years in the period ended December 31, 2023, and the related
notes (collectively referred 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, 2023 and 2022,
and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in
conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. The Company is not required 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 to obtain an understanding of internal control
over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company'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 and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements
that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F-2
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Accrued Clinical Trial Costs
Description of the
Matter
As discussed in Note 2 to the consolidated financial statements, the Company records costs for
clinical trial activities based upon estimates of costs incurred through the balance sheet date that have
yet to be invoiced by the contract research organizations and other vendors.
Auditing the Company’s accruals for clinical trial costs is challenging due to the fact that
information necessary to estimate the accruals is accumulated from multiple sources. In addition, in
certain circumstances, the estimate of services that have been incurred during the reporting period
requires judgment because the timing and pattern of vendor invoicing does not correspond to the
level of services provided and there may be delays in invoicing from clinical study sites and other
vendors.
How We
Addressed the
Matter in Our
Audit
To test the accrued clinical trial costs, our audit procedures included, among others, testing the
completeness and accuracy of the underlying data used in the estimates and evaluating the
significant assumptions including, but not limited to, patient enrollment and costs per patient, and
rate of progress, which are used by management to estimate the recorded accruals.
To assess the reasonableness of the significant assumptions, we corroborated the progress of clinical
trials with the Company’s clinical team and obtained information directly from third parties related
to active patient progress and currently enrolled patients. We also tested subsequent invoices
received from such third parties and inspected the Company’s contracts with third parties and any
pending change orders to assess the costs per patient and impact to the accrual through the balance
sheet date.
Accounting for Asset Purchase and Related Agreements with Janssen Pharmaceuticals Inc.
Description of the
Matter
As discussed in Note 11 to the consolidated financial statements, the Company concurrently entered
into various agreements with Janssen Pharmaceuticals, Inc. including but not limited to an Asset
Purchase Agreement, a Supply Agreement, and a Termination Agreement that terminated an existing
Collaboration, Option and License Agreement, as amended (collectively, the “Agreements”). These
Agreements resulted in the recognition of deferred revenue in the amount of $36.9 million and a gain
on sale of nonfinancial assets in the amount of $54.2 million as of and for the year ended December
31, 2023.
Accounting for the Agreements required the Company to make significant judgments, including but
not limited to the identification of performance obligations, including determining whether the
Agreements included a customer option for additional goods and services or whether it included a
material right, as well as the standalone selling price of each identified performance obligation and
nonfinancial asset to be transferred. The standalone selling price of the performance obligations and
nonfinancial assets to be transferred were not directly observable; therefore, the Company estimated
the standalone selling prices using an adjusted market assessment or a cost plus a margin approach.
The estimated standalone selling prices were sensitive to changes in certain assumptions within the
models such as expected market share and product profitability. In developing these assumptions,
management considered both observable and unobservable inputs and changes to these assumptions
could have a material effect on the estimated relative standalone selling price of each performance
obligation and nonfinancial asset and the timing and pattern of income recognition. As a result,
F-3
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How We
Addressed the
Matter in Our
Audit
auditing the identification of performance obligations and nonfinancial assets to be transferred and
the related standalone selling prices required especially complex auditor judgment.
To audit the Company’s accounting for the Agreements, we tested the completeness of the identified
performance obligations and nonfinancial assets and evaluated the reasonableness of the allocation of
the total consideration among the identified performance obligations and nonfinancial assets. Our
audit procedures included, among others, reading the Agreements and evaluating whether the terms
of the contracts (including future purchase options) resulted in the existence of one or more material
rights. We tested and evaluated the accuracy and completeness of the underlying data used in
management's calculation of the standalone selling price for each performance obligation and
nonfinancial asset transferred by comparing the significant assumptions described above to current
industry trends using available industry information and other relevant factors. We also performed a
sensitivity analysis of the significant assumptions to evaluate the effect that a change in the estimated
standalone selling price of certain performance obligations resulting from changes in the significant
assumptions would have on the allocation of transaction price to each performance obligation, as well
as on the gain on sale of nonfinancial assets recognized during the period.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2016.
Jericho, New York
March 15, 2024
F-4
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
December 31,
2023
December 31,
2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Accounts receivable - related party
Prepaid expenses
Tax incentive receivable
Other current assets
Total Current Assets
Property, plant and equipment, net
Intangible assets, net
In-process research and development
Restricted cash
Other assets
Equity method and other investments
Right-of-use assets - operating leases, net
Right-of-use assets - finance leases, net
TOTAL ASSETS
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Accrued expenses
Lease obligations, current
Deferred revenue - related party, current
Other current liabilities
Total Current Liabilities
Deferred revenue - related party
Lease obligations
Asset retirement obligations
Deferred income tax liability
Note payable, net
Other long-term liabilities
TOTAL LIABILITIES
COMMITMENTS AND CONTINGENCIES (Note 14)
SHAREHOLDERS' EQUITY:
Ordinary Shares, $0.00003881 par value, 1,288,327,750
authorized, 63,601,015 and 48,477,209 shares issued and
outstanding at December 31, 2023 and December 31, 2022, respectively
Capital in excess of par value
Accumulated other comprehensive (loss) income
Accumulated deficit
Total Shareholders' Equity
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
$
$
$
129,566
10,138
5,625
13,277
1,016
159,622
115,896
1,118
—
1,083
1,917
6,766
15,910
24,432
326,744
16,042
42,639
4,193
2,926
1,278
67,078
34,017
12,952
2,401
—
72,119
—
188,567
2
693,841
(1,435)
(554,231)
138,177
326,744
$
$
$
$
115,516
21,334
8,133
7,689
1,667
154,339
109,266
1,335
742
—
1,402
6,326
20,109
24,718
318,237
16,616
39,818
3,884
15,123
6,631
82,072
27,436
17,331
2,179
186
71,033
262
200,499
2
581,893
6,047
(470,204)
117,738
318,237
See Notes to Consolidated Financial Statements
F-5
Table of Contents
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
For the Years Ended December 31,
2023
2022
License revenue - related party
$
14,017
$
15,920
Operating expenses:
General and administrative
Research and development
Total operating expenses
Loss from operations
Other non-operating income (expense):
Foreign currency gain (loss)
Interest income
Interest expense
Gain on sale of nonfinancial assets
Fair value adjustment
Net loss
Other comprehensive (loss) income:
Foreign currency translation (loss) gain
Comprehensive loss
Net loss
Basic and diluted net loss per ordinary share
Weighted-average number of ordinary shares outstanding
47,293
103,785
151,078
(137,061)
9,300
2,272
(13,245)
54,208
499
(84,027)
(7,482)
(91,509)
(84,027)
(1.49)
56,486,525
$
$
$
46,550
85,725
132,275
(116,355)
(9,452)
777
(4,946)
—
361
(129,615)
8,718
(120,897)
(129,615)
(2.87)
45,177,857
$
$
$
See Notes to Consolidated Financial Statements
F-6
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
(in thousands, except share amounts)
Ordinary
Shares
Amount
Capital in Excess
of Par Value
Accumulated Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Shareholders'
Equity
Balance at December 31, 2021
Share-based compensation activity
Warrants issued in connection with note payable
Issuance of shares in connection with private placement, net of issuance costs of $119
Other comprehensive income
Net loss for the year ended December 31, 2022
Balance at December 31, 2022
Share-based compensation activity
Issuance of shares in connection with asset acquisitions
Issuance of shares in connection with private placements, net of issuance costs of $6,418
Other comprehensive income
Net loss for the year ended December 31, 2023
Balance at December 31, 2023
44,548,925
185,770
$
—
3,742,514
—
—
48,477,209
309,755
40,138
14,773,913
—
—
$
63,601,015
$
2
—
—
—
—
—
2
—
—
—
—
—
$
2
$
528,659
26,080
2,273
24,881
—
—
581,893
26,207
209
85,532
—
—
$
693,841
See Notes to Consolidated Financial Statements
F-7
$
(2,671)
—
—
—
8,718
—
6,047
—
—
—
(7,482)
—
$ (340,589)
—
—
—
—
(129,615)
(470,204)
—
—
—
—
(84,027)
$ (554,231)
(1,435)
$
185,401
26,080
2,273
24,881
8,718
(129,615)
117,738
26,207
209
85,532
(7,482)
(84,027)
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense
Foreign currency (gain) loss
Depreciation and amortization
Net change in right-of-use assets and liabilities
Loss on disposal of equipment, furniture and fixtures
Loss on equity method investment
Amortization of interest on asset retirement obligations
Amortization of debt discount
Fair value adjustment
Impairment of acquired in-process research and development and right-of-use assets
Gain on sale of nonfinancial assets
(Increase) decrease in operating assets:
Accounts receivable - related party
Prepaid expenses
Tax incentive receivable
Other current assets
Other assets, net
Increase (decrease) in operating liabilities:
Accounts payable
Accrued expenses
Other current liabilities
Deferred revenue - related party
Net cash used in operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Proceeds from sale of nonfinancial assets
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Exercise of share options
Payments of withholdings on shares withheld for income taxes
Proceeds from the issuance of ordinary shares
Proceeds from issuance of note payable
Payment of issuance costs
Net cash provided by financing activities
Net increase (decrease) in cash, cash equivalents and restricted cash
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of the year
Cash, cash equivalents and restricted cash at end of the year
Supplemental disclosure of non-cash transactions:
Fixed asset acquisition included in accounts payable and accrued expenses
Right-of-use assets obtained in exchange for lease liabilities
Asset retirement obligations incurred in connection with leases
Warrants issued in connection with note payable
Issuance of shares in connection with asset acquisition
Supplemental disclosure of cash flow information:
Cash paid for interest
For the Years Ended December 31,
2023
2022
$
(84,027)
$
(129,615)
27,716
(9,300)
13,730
(222)
13
6
177
1,083
(499)
1,149
(54,208)
9,975
2,690
(5,148)
222
(1,809)
2,330
(382)
(1,355)
(7,506)
(105,365)
(20,174)
54,208
34,034
10
(1,519)
91,950
—
(6,418)
84,023
12,692
2,441
115,516
130,649
$
2,607
$
— $
— $
— $
$
209
13,054
$
$
$
$
$
$
$
$
28,623
9,452
8,723
(153)
—
—
168
444
(361)
—
—
1,032
(329)
4,139
519
(173)
3,737
12,610
4,006
(15,920)
(73,098)
(44,963)
—
(44,963)
231
(2,774)
25,000
75,000
(2,257)
95,200
(22,861)
674
137,703
115,516
7,106
1,793
9
2,273
—
329
See Notes to Consolidated Financial Statements
F-6
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Principal Business Activity
The Company
MeiraGTx Holdings plc and subsidiaries (the “Company” or “Meira Holdings”), an exempted company incorporated
under the laws of the Cayman Islands, is a vertically integrated, clinical-stage gene therapy company with a broad
pipeline of late stage clinical programs supported by end-to-end manufacturing capabilities. The Company has an
internally developed manufacturing platform process, internal plasmid production for GMP, two GMP viral vector
production facilities as well as an in-house Quality Control hub for stability and release, all fit for IND through
commercial supply. The Company has core capabilities in viral vector design and optimization and a potentially
transformative riboswitch gene regulation platform technology that allows for the precise, dose-responsive control of
gene expression by oral small molecules. The Company is focusing the riboswitch platform on delivery of metabolic
peptides including GLP-1, GIP, glucagon and PYY using oral small molecules, as well as cell therapy for oncology
and autoimmune diseases. Although initially focusing on the eye, central nervous system, and salivary gland, the
Company has developed the technology to apply genetic medicine to more common diseases, increasing efficacy,
addressing novel targets, and expanding access in some of the largest disease areas where the unmet need remains
great. The Company also owns and operates a good manufacturing practices, or GMP, multi-product, multi-viral vector
manufacturing facility in London, United Kingdom (“UK”), which includes fill and finish capabilities and can supply
the Company’s clinical and potential commercial material. Additionally, the Company’s second, large scale viral
vector manufacturing facility and its first plasmid and DNA production facility in Shannon, Ireland, both of which are
designed to meet GMP requirements, came online in 2022.
Asset Purchase and Related Agreements with Janssen Pharmaceuticals, Inc.
On January 30, 2019, the Company entered into a collaboration, option and license agreement with Janssen
Pharmaceuticals, Inc. (“Janssen”), one of the Janssen Pharmaceuticals Companies of Johnson & Johnson (the
“Collaboration Agreement”), for the research, development and commercialization of gene therapies for the treatment
of inherited retinal diseases (“IRD”). Under the terms of the Collaboration Agreement, the Company received an
upfront payment of $100.0 million in March 2019 and a $30.0 million milestone payment in December 2021. The
Company also received funding for certain research, manufacturing, clinical development and commercialization
costs, and had the potential to obtain additional milestone payments upon the achievement of such milestones and
royalties on future net sales of products. On December 20, 2023, the Company entered into an Asset Purchase
Agreement (“Asset Purchase Agreement”) with Janssen pursuant to which the Company sold and assigned to Janssen,
and Janssen purchased and assumed, that certain License Agreement, dated February 5, 2019, by and between UCL
Business Plc (now UCL Business Ltd.) (“UCLB”), on the one hand, and MeiraGTx UK II Limited and MeiraGTx
Limited, on the other hand (the “UCLB RPGR License Agreement”), relating to the research, development,
manufacture and exploitation of the RPGR Product, and other related assets as described in the Asset Purchase
Agreement. In connection with entering into the Asset Purchase Agreement, the Company entered into a Termination
Agreement with Janssen terminating the Collaboration Agreement. The Company and Janssen also entered into a
Supply Agreement on December 20, 2023 pursuant to which the Company agreed to manufacture and supply the
RPGR Product for Janssen.
Under the Asset Purchase Agreement, Janssen paid the Company a non-refundable upfront cash payment of $65.0
million in December 2023. Additionally, pursuant to and subject to the terms and conditions set forth in the Asset
Purchase Agreement, Janssen agreed to pay the Company future contingent consideration of up to an aggregate of
$350.0 million, as follows: (i) a milestone payment of $50.0 million in connection with the achievement of the
initiation of the extension study for the Phase 3 LUMEOS clinical trial for the RPGR Product, which milestone was
achieved during the first quarter of 2024; (ii) $10.0 million upon completion of certain specified development services
for the drug substance for the RPGR Product; (iii) $5.0 million upon completion of certain specified development
services for the drug product for the RPGR Product; (iv) $175.0 million upon the first commercial sale of an RPGR
Product in the United States; (v) $75.0 million upon the first commercial sale of an RPGR Product in at
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
least one of the United Kingdom, France, Germany, Spain and Italy; (vi) $25.0 million upon completion of the transfer
of certain manufacturing technology for drug substance and drug product from the Company to Janssen; and (vii)
$10.0 million upon regulatory approval of a Janssen-selected manufacturing facility in each of the United States and
European Union for commercial manufacture of the RPGR Product. Janssen is also responsible for any royalty or
milestone amounts that become payable on the RPGR Product under the UCLB RPGR License Agreement.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in conformity with accounting principles
generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is
meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting
Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards
Board (“FASB”).
Liquidity
The Company has not yet achieved profitable operations. There is no assurance that profitable operations, if ever
achieved, could be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing,
and commercialization of the Company’s product candidates will require significant additional financing. The
Company’s accumulated deficit at December 31, 2023 totaled $554.2 million, and management expects to incur
substantial losses in future periods. The success of the Company is subject to certain risks and uncertainties, including
among others, uncertainty of product development; competition in the Company’s field of use; uncertainty of capital
availability; uncertainty in the Company’s ability to enter into agreements with collaborative partners; expanding and
protecting the Company’s intellectual property portfolio; dependence on third parties; and dependence on key
personnel. For the year ended December 31, 2023, the Company used $105.4 million in cash flows from operations
and there are no assurances that the Company will generate positive cash flows in the future. Additionally, there are no
assurances that the Company will be successful in obtaining an adequate level of financing for the development and
commercialization of its product candidates.
As of December 31, 2023, the Company had cash, cash equivalents and restricted cash in the amount of $130.6
million, which consisted of depository and money market accounts held at large international banks. The Company
estimates that its cash and cash equivalents on hand and accounts receivable – related party at December 31, 2023 will
be sufficient to cover its expenses for at least the next twelve months from the date of issuance of these consolidated
financial statements.
Risks and Uncertainties
The Company operates in an industry that is subject to intense competition, government regulation and rapid
technological change. The Company’s operations are subject to significant risk and uncertainties including financial,
operational, technological, regulatory and other risks, including the potential risk of business failure.
The Company’s capital resources and operations to date have been funded primarily with the proceeds from the
Collaboration Agreement, Asset Purchase Agreement and private and public equity offerings, as well as the proceeds
from the debt financing described in Note 13. In the future, the Company may seek to raise additional capital through
equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances
and licensing arrangements or other sources to enable it to complete the development and potential commercialization
of its product candidates.
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies
Consolidation
The accompanying consolidated financial statements include the accounts of Meira Holdings and its wholly owned
subsidiaries:
MeiraGTx Limited, a limited company incorporated under the laws of England and Wales;
MeiraGTx, LLC, a Delaware limited liability company (“Meira LLC”);
MeiraGTx UK II Limited, a limited company incorporated under the laws of England and Wales (“Meira UK II”);
MeiraGTx Ireland DAC, a designated activity company incorporated under the laws of Ireland (“Meira Ireland”);
MeiraGTx Netherlands B.V., a private company with limited liability incorporated under the laws of the Netherlands
(“Meira Netherlands”);
MeiraGTx Belgium, a private company with limited liability incorporated under the laws of Belgium (“Meira
Belgium”);
BRI-Alzan, Inc., a Delaware corporation (“BRI-Alzan”);
MeiraGTx Bio Inc., a Delaware corporation (“Meira Bio”);
MeiraGTx B.V., a private company with limited liability incorporated under the laws of the Netherlands (“Meira
B.V.”);
MeiraGTx Neurosciences, Inc., a Delaware corporation (“Meira Neuro”);
MeiraGTx Therapeutics, Inc., a Delaware corporation (“Meira Therapeutics”); and
MeiraGTx UK Limited, a limited company incorporated under the laws of England and Wales (“Meira UK”).
All intercompany balances and transactions between the consolidated companies have been eliminated in
consolidation.
Use of Estimates
Management considers many factors in selecting appropriate financial accounting policies and controls, and in
developing the estimates and assumptions that are used in the preparation of these consolidated financial statements.
Management must apply significant judgment in this process. In addition, other factors may affect estimates, including
expected business and operational changes, sensitivity and volatility associated with the assumptions used in
developing estimates, and whether historical trends are expected to be representative of future trends. The estimation
process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management
must select an amount that falls within that range of reasonable estimates. This process may result in actual results
differing materially from those estimated amounts used in the preparation of the financial statements if these results
differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such
assumptions are reasonable when made. In preparing these consolidated financial statements, management used
significant estimates in the following areas, among others: collaboration revenue, fair value of nonfinancial assets,
stand-alone selling price and material rights in connection with the Asset Purchase and Commercial Supply
Agreements, the accounting for research and development costs, share-based compensation, leases, asset retirement
obligations, fair value of financial instruments and tax incentive receivable.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of
purchase to be cash equivalents. Cash and cash equivalents consist of checking and money market accounts held at
large international banks that are readily convertible into cash.
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Restricted Cash
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Restricted cash represents a guarantee put in place as required by the terms of the research and innovation grant from
IDA Ireland which offers financial assistance in establishing the Company’s operations in Shannon, Ireland. The
following table provides a reconciliation of the components of cash and cash equivalents and restricted cash reported
in the Company’s consolidated balance sheets to the total of the amount presented in the consolidated statements of
cash flows (in thousands):
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents and restricted cash in the
condensed consolidated statement of cash flows
December 31,
2023
December 31,
2022
$
129,566 $
1,083
115,516
—
$
130,649
$
115,516
Financial Instruments
The carrying value of accounts receivable-related party, tax incentive receivable, other current assets, and accounts
payable reported in the consolidated balance sheets equal or approximate fair value due to their short maturities.
Tax Incentive Receivable
Meira UK II is eligible to participate in a UK research and development tax incentive programs under which it is
eligible to receive a cash refund from His Majesty’s Revenue & Customs (“HMRC”) for a percentage of the qualified
research and development costs expended by Meira UK II under the small and medium sized enterprises (“SME”)
program and the research and development expenditures credit (“RDEC”) program. The SME cash refund is available
to companies with less than 500 employees and annual aggregate revenue of less than 100.0 million euros or total
aggregate assets less than 86.0 million euros during the reimbursable period. The Company’s estimate of the amount of
cash refund it expects to receive related to the SME and RDEC programs is included in tax incentive receivable in the
accompanying consolidated balance sheets and such amounts are recorded as a reduction of research and development
expense in the statements of operations. During the years ended December 31, 2023 and 2022, the Company recorded
reductions to research and development expenses of $2.9 million and $6.8 million, respectively.
In addition, the Company incurs Value Added Tax (“VAT”) on services provided by UK and EU vendors, which it is
entitled to reclaim. The Company’s estimate of the amount of cash refund it expects to receive related to VAT was $0.6
million and $1.1 million as of December 31, 2023 and 2022, respectively, which is included in other current assets in
the accompanying consolidated balance sheets.
Fair Value Measurements
Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an
orderly transaction between market participants at the measurement date and in the principal or most advantageous
market for that asset or liability. The fair value should be calculated based on assumptions that market participants
would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of
liabilities should include consideration of non-performance risk including the Company’s own credit risk.
The Company follows ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, for application to
financial assets and liabilities. In addition to defining fair value, the standard expands the disclosure requirements
around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair
value measurement is reported in one of the three levels which are determined by the lowest level input that is
significant to the fair value measurement in its entirety. These levels are:
● Level 1: Observable inputs such as quoted prices in active markets for identical assets the reporting entity has
the ability to access as of the measurement date;
● Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or
indirectly; and
● Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to
develop its own assumptions.
The table below represents the values of the Company’s financial assets and liabilities that are required to be measured
at fair value on a recurring basis (in thousands):
Description
Cash equivalents
Restricted cash
Description
Cash equivalents
Other long-term liabilities
December 31,
2023
Fair Value Measurement Using:
Significant
Observable Inputs
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
(Level 3)
$
$
46,868
1,083
$
$
46,868
1,083
$
$
— $
— $
—
—
December 31,
2022
Fair Value Measurement Using:
Significant
Observable Inputs
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
(Level 3)
$
$
57,336
262
$
$
57,336
262
$
$
— $
— $
—
—
Equity Method and Other Investments
The Company accounts for equity investments under the equity method of accounting when the requirements for
consolidation are not met, and the Company has significant influence over the operations of the investee. Equity
method investments are initially recorded at cost and subsequently adjusted for the Company’s share of net income or
loss and cash contributions and distributions and are included in equity method and other investments in the
accompanying consolidated balance sheets. Equity investments that do not result in consolidation and are not
accounted for under the equity method are measured at fair value, with any changes in fair value recognized in net
income (loss). For any such investments that do not have readily determinable fair values, the Company elects the
measurement alternative to measure the investments at cost minus impairment, if any, plus or minus changes resulting
from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. If it is determined that a loss in value of the equity method investment is
other than temporary, an impairment loss is measured based on the excess of the carrying amount of an investment
over its estimated fair value. Impairment analyses are based on current plans, intended holding periods, and available
information at the time the analysis is prepared.
Concentrations of Credit Risk
The Company maintains its cash and cash equivalents primarily in depository and money market accounts within two
large financial institutions in the United States and one large financial institution in the United Kingdom and Ireland.
Cash balances deposited at these major financial banking institutions exceed the insured limit. The
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Company has not experienced any losses on its bank deposits and believes these deposits do not expose the Company
to any significant credit risk.
Intangible Assets
Intangible assets consist of purchased rights to licensed technology as it relates to the Company’s manufacturing
processes and has future alternative use in the Company’s operations. The licensed technology is being amortized on a
straight-line basis over 7 years, which represents the estimated periods of benefit and the expected pattern of
consumption (see Note 6).
Property, Plant and Equipment, Net
Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the
straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are depreciated
over the lesser of their useful lives or the term of the lease (see Note 5).
The estimated useful lives of the asset categories are as follows:
Asset Category
Computer and office equipment
Laboratory equipment
Manufacturing equipment
Furniture and fixtures
Leasehold improvements
Useful Lives
3 years
5 years
7 years
5 years
lesser of useful life or
remaining term of lease
Expenditures for leasehold improvements are capitalized, and expenditures for maintenance and repairs are expensed
to operations as incurred.
ASC Topic 360, Property, Plant and Equipment, addresses the financial accounting and reporting for impairment or
disposal of long-lived assets. The Company reviews the recorded values of long-lived assets for impairment whenever
events or changes in business circumstances indicate that the carrying amount of an asset or group of assets may not be
fully recoverable. The Company did not record any material impairment charges in 2023 or 2022.
Leases
The Company accounts for leases in accordance with ASC 842. The Company determines if an arrangement is a lease
at contract inception. A lease exists when a contract conveys the right to control the use of identified property, plant, or
equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions:
(1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment),
and (2) the Company has the right to control the use of the identified asset. The Company accounts for the lease and
non-lease components as a single lease component.
From time to time the Company enters into direct financing lease arrangements that include a lessee obligation to
purchase the leased asset at the end of the lease term, a bargain purchase option, or provides for minimum lease
payments with a present value of 90% or more of the fair value of the leased asset at the date of lease inception.
Operating leases where the Company is the lessee are included in right-of-use (“ROU”) assets – operating leases and
lease obligations are included on the Company’s consolidated balance sheets. The lease obligations are initially and
subsequently measured at the present value of the unpaid lease payments at the lease commencement date and
subsequent reporting periods.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Finance leases where the Company is the lessee are included in ROU assets – finance leases, net and lease obligations
on the Company’s consolidated balance sheets. The lease obligations are initially measured in the same manner as for
operating leases and are subsequently measured at amortized cost using the effective interest method.
Key estimates and judgments include how the Company determined (1) the discount rate used to discount the unpaid
lease payments to present value, (2) lease term and (3) lease payments.
ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that
rate cannot be readily determined, its incremental borrowing rate. As most of the Company’s leases where it is the
lessee do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information
available at commencement date in determining the present value of lease payments. The Company’s incremental
borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount
equal to the lease payments under similar terms. The Company uses the implicit rate when readily determinable.
The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional
periods covered by either a lessee option to extend (or not to terminate) the lease that is reasonably certain to be
exercised, or an option to extend (or not to terminate) the lease controlled by the lessor.
The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease
payments made at or before the lease commencement date less any lease incentives received.
For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the
lease liability, minus any accrued lease payments, less the unamortized balance of lease incentives received. Lease
expense for lease payments is recognized on a straight-line basis over the lease term.
For finance leases, the ROU asset is subsequently amortized using the straight-line method from the lease
commencement date to the earlier of the end of its useful life or the end of the lease term unless the lease transfers
ownership of the underlying asset, or the Company is reasonably certain to exercise an option to purchase the
underlying asset. In those cases, the ROU asset is amortized over the useful life of the underlying asset. Amortization
of the ROU asset is recognized and presented separately from interest expense on the lease liability.
The Company has elected not to recognize ROU assets and lease liabilities for all short-term leases that have a lease
term of 12 months or less at lease commencement. Lease payments associated with short-term leases are recognized as
an expense on a straight-line basis over the lease term.
Asset Retirement Obligations
Accounting for asset retirement obligations requires legal obligations associated with the retirement of long-lived
assets to be recognized at fair value when incurred and capitalized as part of the related long-lived asset. In the
absence of quoted market prices, the Company estimates the fair value of its asset retirement obligations using Level 3
present value techniques, in which estimates of future cash flows associated with retirement activities are discounted
using a credit-adjusted risk-free rate. Asset retirement obligations currently reported on the Company’s consolidated
balance sheets were measured during a period of historically low interest rates. The impact on measurements of new
asset retirement obligations using different rates in the future may be significant.
The Company uses estimates to determine the asset retirement obligations at the end of the lease term and discounts
such asset retirement obligations using an estimated discount rate. Interest on the discounted asset retirement
obligation is amortized over the term of the lease using the effective interest method and is recorded as interest
expense in the consolidated statements of operations and comprehensive loss.
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The change in asset retirement obligations is as follows (in thousands):
For the Years Ended December 31,
2023
2022
Balance at beginning of period
Additional asset retirement obligations incurred during
the period
Amortization of interest
Effects of exchange rate changes
Balance at end of period
$
2,179 $
—
177
45
2,401
$
$
2,081
9
168
(79)
2,179
IDA Ireland Grant
In August 2021, Meira Ireland entered into an agreement pursuant to which it received a grant from IDA
Ireland for financial assistance in establishing its operations in Shannon, Ireland. Under the terms of the grant, Meira
Ireland is eligible to receive the lesser of €1.0 million or €10,000 for each job created (the “employment grant”) and
the lesser of €1.2 million or 4% of the actual expenditure on the provision of machinery and equipment (the “capital
grant”). Meira Ireland may apply for a drawdown of the employment grant once a job has been created and the
position has been held for a period of at least one month, and may apply for a drawdown of the capital grant once an
eligible asset has been purchased and installed, conditioned on the creation of a cumulative number of jobs by the end
of the immediately preceding year. An aggregate of 100 jobs must be created to receive the maximum benefit under
the capital grant. An application for a drawdown must be accompanied by an audit certification for compliance with
the terms of the grant. The Company has a guarantee in place with a bank in favor of IDA Ireland, pursuant to which it
restricts cash in the amount of claims made under the grant such that the Company maintains the funds to cover any
portion of the grant income that may become repayable in the future. This amount is presented as restricted cash in the
accompanying consolidated balance sheet. All expenditures must be completed by December 31, 2024, and the
agreement terminates on the later of five years from the date of the last payment from the grant or five years from
completion of the capital investment, which is expenditure of at least €30.0 million on eligible machinery and
equipment.
The Company recognizes grant income when there is reasonable assurance that the Company will comply
with the conditions attached to the grant and that it will receive the grant. Grant income from the employment grant is
recognized as a deduction from the amount of the related expense, and grant income from the capital grant is deducted
from the carrying amount of the related asset and recognized in income over the asset’s useful life in the form of a
reduced depreciation charge. The Company received its first drawdown under the grant in 2023, which was comprised
of $0.6 million (€0.5 million) for the employment grant and $0.4 million (€0.4 million) for the capital grant. During
the year ended December 31, 2023, the Company recognized $1.0 million of grant income as a reduction of research
and development expenses in the accompanying consolidated statements of operations and comprehensive loss.
During the five-year period ending on the termination of the grant agreement, Meira Ireland must maintain
compliance with the terms of the grant. If the total number of jobs is less than 100 at the time of IDA Ireland’s annual
review, the Company may have to repay a portion of the capital grant, and if a job for which the Company received
employment grant funding remains vacant for a period in excess of six calendar months, the Company may have to
repay the employment grant received for that job.
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Share-Based Compensation Expense
Options
The Company grants share options to employees, non-employee members of the Company’s board of directors and
non-employee consultants as compensation for services performed. Employee and non-employee members of the
board of directors’ awards of share-based compensation are accounted for in accordance with ASC 718, Compensation
– Stock Compensation, or ASC 718. The Company accounts for forfeitures of stock option awards as they occur. ASC
718 requires all share-based payments to employees and non-employee directors, including grants of share options, to
be recognized in the consolidated statement of operations and comprehensive loss based on their grant date fair values.
The grant date fair value of share options is estimated using the Black-Scholes option valuation model.
Using this model, fair value is calculated based on assumptions with respect to (i) the fair value of the Company’s
ordinary shares on the grant date; (ii) expected volatility of the Company’s ordinary share price, (iii) the periods of
time over which the optionees are expected to hold their options prior to exercise (expected term), (iv) expected
dividend yield on the Company’s ordinary shares, and (v) risk-free interest rates.
The assumptions underlying these valuations represented management’s best estimate, which involved inherent
uncertainties and the application of management’s judgment. As a result, if the Company had used different
assumptions or estimates, the fair value of its ordinary shares and its share-based compensation expense could have
been materially different.
The expected term of share options granted to the optionees is determined using the average of the vesting period and
contractual life of the option, an accepted method for the Company’s option grants under the Securities and Exchange
Commission’s (“SEC”) Staff Accounting Bulletin No. 107 and No. 110, Share-Based Payment.
The Company believes that its future volatility could differ materially during the expected term from the volatility that
would be calculated from its historical share prices to date. Consequently, expected volatility is based on an analysis of
guideline companies and the Company’s own volatility in accordance with ASC 718. The expected dividend yield is
zero as the Company has never paid dividends and does not currently anticipate paying any in the foreseeable future.
Risk-free interest rates are based on quoted U.S. Treasury rates for securities with maturities approximating the
option’s expected term.
Restricted Share Units
The Company grants restricted share units (“RSUs”) to employees, non-employee members of the Company’s board
of directors and non-employee consultants as compensation for services performed. Awards of RSUs are accounted for
in accordance with ASC 718, Compensation – Stock Compensation, or ASC 718. ASC 718 requires all share-based
payments to employees, non-employee members of the Company’s board of directors and non-employee consultants,
including grants of RSUs, to be recognized in the consolidated statement of operations and comprehensive loss based
on their grant date fair values. The grant date fair value of RSUs is determined using the closing market price of the
Company’s ordinary shares on the date of grant.
Collaboration Arrangements
The Company evaluates its collaborative arrangements pursuant to ASC 808, Collaborative Arrangements (“ASC
808”) and ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company considers the nature and
contractual terms of collaborative arrangements and assesses whether the arrangement involves a joint operating
activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards with
respect to the arrangement. If the Company is an active participant and is exposed to significant risks and rewards
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
with respect to the arrangement, the Company accounts for the arrangement as a collaboration under ASC 808. To
date, the Company has entered into two separate collaboration agreements, both of which are with Janssen, which
were determined to be within the scope of ASC 808.
ASC 808 does not address recognition or measurement matters related to collaborative arrangements. Payments
between participants pursuant to a collaborative arrangement that are within the scope of other authoritative
accounting literature on income statement classification are accounted for using the relevant provisions of that
literature. If the Company concludes that some or all aspects of the arrangement are within the scope of ASC 808 and
do not represent a transaction with a customer, the Company recognizes its allocation of the shared costs incurred with
respect to the jointly conducted activities pursuant to ASC 730, Research and Development. If the Company concludes
that some or all aspects of the arrangement represent a transaction with a customer, the Company accounts for those
aspects of the arrangement within the scope of ASC 606. If the payments are not within the scope of other
authoritative accounting literature, the income statement classification for the payments is based on an analogy to
authoritative accounting literature or if there is no appropriate analogy, a reasonable, rational and consistently applied
accounting policy election. Payments received from a collaboration partner to which this policy applies may include
upfront payments in respect of a license of intellectual property, development and commercialization-based
milestones, and royalties.
Refer to the discussion in Note 11 for further information related to the accounting for the Collaboration Agreement.
Revenue Recognition
The Company evaluates the promised goods or services to determine which promises, or group of promises, represent
performance obligations in contracts with the Company’s. In contemplation of whether a promised good or service
meets the criteria required of a performance obligation, the Company considers the stage of development of the
underlying intellectual property, the capabilities and expertise of the customer relative to the underlying intellectual
property, and whether the promised goods or services are integral to or dependent on other promises in the contract.
When accounting for an arrangement that contains multiple performance obligations, the Company must develop
judgmental assumptions, which may include market conditions, reimbursement rates for personnel costs, development
timelines and probabilities of regulatory success to determine the stand-alone selling price for each performance
obligation identified in the contract.
When the Company concludes that a contract should be accounted for as a combined performance obligation and
recognized over time, the Company must then determine the period over which revenue should be recognized and the
method by which to measure revenue. The Company generally recognizes revenue using a cost-based input method.
At inception, the Company determines whether contracts are within the scope of ASC 606 or other topics. For
contracts that are determined to be within the scope of ASC 606, the Company recognizes revenue when its customer
or collaborator obtains control of promised goods or services, in an amount that reflects the consideration which the
Company expects to receive in exchange for those goods or services. To determine revenue recognition the Company
performs the following five steps:
i.
ii.
iii.
iv.
identify the contract(s) with a customer;
identify the performance obligations in the contract;
determine the transaction price;
allocate the transaction price to the performance obligations within the contract; and
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
v.
recognize revenue when (or as) the entity satisfies a performance obligation.
The Company only applies the five-step model to contracts when it determines that it is probable it will collect the
consideration it is entitled to in exchange for the goods or services it transfers to the customer.
At contract inception, the Company assesses the goods or services promised within the contract to determine whether
each promised good or service is a performance obligation. The promised goods or services in the Company’s
arrangements typically consist of a license to the Company’s intellectual property and research, development and
manufacturing services. The Company may provide options to additional items in such arrangements, which are
accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a
material right to the customer. Performance obligations are promises in a contract to transfer a distinct good or service
to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and
(ii) is separately identifiable from other promises in the contract. Goods or services that are not individually distinct
performance obligations are combined with other promised goods or services until such combined group of promises
meet the requirements of a performance obligation.
The Company determines transaction price based on the amount of consideration the Company expects to receive for
transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of
both. At contract inception for arrangements that include variable consideration, the Company estimates the
probability and extent of consideration it expects to receive under the contract utilizing either the most likely amount
method or expected amount method, whichever best estimates the amount expected to be received. The Company then
considers any constraints on the variable consideration and includes in the transaction price variable consideration to
the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not
occur when the uncertainty associated with the variable consideration is subsequently resolved.
The Company then allocates the transaction price to each performance obligation based on the relative standalone
selling price and recognizes as revenue the amount of the transaction price that is allocated to the respective
performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied.
For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the
nature of the combined performance obligation to determine whether the combined performance obligation is satisfied
over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company
evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and
related revenue recognition.
If there are multiple performance obligations, the Company allocates the transaction price to each performance
obligation based on their estimated standalone selling prices (“SSP”). The Company estimates the SSP for each
performance obligation by considering information such as market conditions, entity-specific factors, and information
about its customer that is reasonably available. The Company considers estimation approaches that allow it to
maximize the use of observable inputs. These estimation approaches may include the adjusted market assessment
approach, the expected cost plus a margin approach or the residual approach. The Company also considers whether to
use a different estimation approach or a combination of approaches to estimate the SSP for each performance
obligation. Developing certain assumptions (e.g., treatable patient population, expected market share, probability of
success and product profitability, and discount rate based on weighted-average cost of capital) to estimate the SSP of a
performance obligation requires significant judgment.
The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. When
consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or
services to the customer under the terms of a contract, a contract liability is recorded as deferred revenue.
Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the
Company’s consolidated balance sheet. Amounts expected to be recognized as revenue within the 12 months
F-17
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
following the balance sheet date are classified as deferred revenue – related party, current. Amounts not expected to be
recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue –
related party.
The Company’s collaboration and revenue arrangements include the following:
Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the
arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the
license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are
bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance
obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if
over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable,
up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the
measure of performance and related revenue recognition.
Milestone Payments: At the inception of an agreement that includes research and development milestone payments,
the Company evaluates each milestone to determine when and how much of the milestone to include in the transaction
price. The Company first estimates the amount of the milestone payment that the Company could receive using either
the expected value or the most likely amount approach. The Company primarily uses the most likely amount approach
as that approach is generally most predictive for milestone payments with a binary outcome. Then, the Company
considers whether any portion of that estimated amount is subject to the variable consideration constraint (that is,
whether it is probable that a significant reversal of cumulative revenue would not occur upon resolution of the
uncertainty.) The Company updates the estimate of variable consideration included in the transaction price at each
reporting date which includes updating the assessment of the likely amount of consideration and the application of the
constraint to reflect current facts and circumstances.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on a level of sales,
and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize
revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of
the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any
revenue related to sales-based royalties or milestone payments based on the level of sales.
Research and Development Services: The Company is incurring research and development costs, with Janssen
responsible for up to 100% of the costs, depending on the type of research and development services being performed.
The Company records costs associated with the development activities as research and development expenses in the
consolidated statement of operations and comprehensive loss consistent with ASC 730, Research and Development.
The reimbursement of the research and development costs by Janssen is representative of the joint risk sharing nature
of the arrangement. The Company considered the guidance in ASC 808 and recognizes the payments received from
Janssen as a reduction to research and development expense when the related costs are incurred.
Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug
product for either clinical development or commercial supply at the customer’s discretion are generally considered
options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted
for as separate performance obligations at the outset of the arrangement.
Customer Options: Customer options are evaluated at contract inception to determine whether those options provide a
material right (i.e., an optional good or service offered for free or at a discount) to the customer. If the customer
options represent a material right, the material right is treated as a separate performance obligation at the outset of the
arrangement. The Company allocates the transaction price to material rights based on the standalone selling price. As a
practical alternative to estimating the standalone selling price of a material right when the underlying goods or services
are both (i) similar to the original goods or services in the contract and (ii) provided in accordance
F-18
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
with the terms of the original contract, the Company allocates the total amount of consideration expected to be
received from the customer to the total goods or services expected to be provided to the customer. Amounts allocated
to any material right are recognized as revenue when or as the related future goods or services are transferred or when
the option expires.
Research and Development
Research and development costs are charged to expense as incurred. These costs include, but are not limited to,
employee-related expenses, including salaries, benefits and travel of the Company’s research and development
personnel; expenses incurred under agreements with contract research organizations and investigative sites that
conduct clinical and preclinical studies and for the drug product for the clinical studies and preclinical activities;
facilities; supplies; rent, insurance, certain legal fees, share-based compensation, depreciation, other costs associated
with clinical and preclinical activities and regulatory operations and acquisition of in process research and
development write-offs. Research funding under collaboration agreements and refundable research and development
credits / tax credits are recorded as an offset to these costs.
Costs for certain development activities, such as Company funded outside research programs, are recognized based on
an evaluation of the progress to completion of specific tasks with respect to their actual costs incurred. Payments for
these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs
incurred, and are reflected in the consolidated financial statements as prepaid or accrued research and development
expenses, as the case may be.
Foreign Currencies
The Company’s consolidated financial statements are presented in U.S. dollars, the reporting currency of the
Company. The financial position and results of operations of Meira UK II, Meira Ireland, Meira Netherlands, Meira
Belgium and Meira B.V. are measured using the foreign subsidiaries’ local currency as the functional currency. These
entities’ cash accounts holding U.S. dollars and intercompany payables and receivables are remeasured based upon the
exchange rate at the date of remeasurement with the resulting gain or loss included in the consolidated statements of
operations and comprehensive loss. Expenses of such subsidiaries have been translated into U.S. dollars at average
exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the
consolidated balance sheet dates. The resulting translation gain and loss adjustments are recorded directly as a separate
component of shareholders’ equity and as other comprehensive (loss) income on the consolidated statements of
operations and comprehensive loss.
Income Taxes
Income taxes are recorded in accordance with ASC Topic 740, Income Taxes, or ASC 740, 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 the financial statements or tax returns. Deferred tax assets
and liabilities are determined based on the difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Realization of
net deferred tax assets is dependent on future taxable income. Valuation allowances are provided if, based upon the
weight of available evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized.
Realization of net deferred tax assets is dependent on future taxable income (see Note 10).
The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax
positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely
than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based
upon the technical merits of the tax position as well as consideration of the available facts and circumstances.
F-19
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022, the Company recorded unrecognized tax positions of $2.0 and $0.9 million,
respectively. No interest and penalties have been accrued relative to the unrecognized tax positions.
The Company is required to estimate income taxes in each of the jurisdictions in which it operates.
Net Loss per Ordinary Share
Basic net loss per ordinary share is computed by dividing net loss by the weighted average number of shares of the
Company’s ordinary shares outstanding during the period of computation. Diluted net loss per ordinary share is
computed similar to basic net loss per share except that the denominator is increased to include the number of
additional ordinary shares that would have been outstanding if the ordinary share equivalents had been issued at the
beginning of the year and if the additional ordinary shares were dilutive (treasury stock method) or the two-class
method, whichever is more dilutive. For all periods presented, basic and diluted net loss per ordinary share are the
same as any additional ordinary share equivalents would be anti-dilutive.
The following securities are considered to be ordinary share equivalents, but were not included in the computation of
diluted net loss per ordinary share because to do so would have been anti-dilutive:
Share options
Restricted share units
Deferred share units
Warrants
Restricted ordinary shares subject to forfeiture
Other Comprehensive Income (Loss)
December 31,
December 31,
2023
8,226,707
2,661,250
185,000
700,000
—
11,772,957
2022
6,858,409
2,182,500
110,000
700,000
14,049
9,864,958
Other comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from
transactions and other events and circumstances from non-owner sources. The only component of other
comprehensive income (loss) impacting the Company is foreign currency translation.
Segment Information
Management has concluded it has a single reporting segment for purposes of reporting financial condition and results
of operations.
The Company’s license revenue, research funding and deferred revenue from the Collaboration Agreement were
generated in the United Kingdom.
The following table summarizes long-lived assets by geographical area (in thousands):
United States
United Kingdom
European Union
December 31,
2023
December 31,
2022
$
$
11,071
33,798
112,487
157,356
$
$
14,382
36,775
105,013
156,170
F-20
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Recent Accounting Pronouncements Adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of
Credit Losses on Financial Instruments, which adds a new Topic 326 to the Codification and removes the thresholds
that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans,
receivables, and held-to-maturity debt securities. Under current GAAP, companies generally recognize credit losses
when it is probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and
will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis
of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s
contractual life. ASU 2016-13 also amends the credit loss measurement guidance for available-for-sale debt securities
and beneficial interests in securitized financial assets. The guidance is applicable for fiscal years beginning after
December 15, 2019 and interim periods within those years, however, the FASB extended the effective date for smaller
reporting companies to fiscal years beginning after December 15, 2022. The Company adopted this standard effective
January 1, 2023 and it did not have an impact on the Company’s consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to
the SEC’s Disclosure Update and Simplification Initiative. This update includes a number of amendments to clarify or
improve disclosure and presentation requirements of a variety of topics in order to allow users to more easily compare
entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the
requirements and to align the requirements in the FASB accounting standard codification with the SEC’s regulations.
The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure
requirement from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company
is currently evaluating the impact of these amendments.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting - Improvements to Reportable Segment
Disclosures, which updates reportable segment disclosure requirements, primarily through enhanced disclosures about
significant segment expenses and information used to assess segment performance. The amendments in this update are
effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after
December 15, 2024. Early adoption is permitted. The Company is still in the process of determining the effect this
ASU will have on the consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires that an
entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for
reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus
federal income tax expense and taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024.
The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial
statements.
3. Equity Method and Other Investments
The Company’s investments consist of the following (in thousands):
Investee
Visiogene LLC
Other
Total equity method and
other investments
Investment Type
Equity Method Investment
Equity Investment
December 31, 2023
Ownership Percentage Carrying Value Cost Basis
5,150 $ 5,165
1,500
1,616
25 % $
1.6 %
$
6,766 $ 6,665
F-21
Table of Contents
Visiogene LLC
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On January 4, 2021, the Company and Visiogene LLC (“Visiogene”) entered into a License and Investment Agreement
(“Visiogene License Agreement”) for an exclusive, worldwide license to certain of Visiogene’s intellectual property
relating to ocular gene therapy. Concurrently, the Company and Visiogene entered into a Preferred Unit Purchase
Agreement (“Visiogene Unit Agreement”) pursuant to which the Company purchased 3,000,000 Visiogene preferred
units. In connection with the two Visiogene agreements, the Company paid $5.0 million in cash and issued to
Visiogene 75,000 ordinary shares of the Company with a fair market value of $1.2 million based on the closing price
of the Company’s ordinary shares on the date of closing.
The Company accounted for the payments under the Visiogene License Agreement and Visiogene Unit Agreement as a
basket transaction and allocated $1.0 million to the Visiogene License Agreement and the remaining $5.2 million was
allocated to the Visiogene preferred units. The $1.0 million allocated to the Visiogene License Agreement was
expensed as acquired in-process research and development as the Company determined there was no alternative future
use. The Company accounts for this investment using the equity method of accounting.
During the years ended December 31, 2023 and 2022, the Company recorded de minimis research and development
expenses related to the Company’s share of Visiogene’s losses.
Other Equity Investment
During the years ended December 31, 2023 and 2022, the Company recognized a $0.5 million increase in carrying
value and $0.3 million impairment, respectively due to a change in the value of the Company’s investment. The
change in carrying value was recorded as a fair value adjustment for the years ended December 31, 2023 and 2022.
4. Prepaid Expenses
Prepaid expenses at December 31, 2023 and 2022 consist of the following (in thousands):
Clinical trial costs
Dues and license fees
Insurance
Research and development
Facilities costs
Consulting
Manufacturing costs
Other
December 31,
2023
December 31,
2022
1,530
1,439
861
685
630
243
38
199
5,625
$
$
3,411
909
1,485
1,220
539
—
347
222
8,133
$
$
F-22
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Property, Plant and Equipment, net
Property, plant and equipment, net at December 31, 2023 and 2022 consist of the following (in thousands):
Leasehold improvements
Manufacturing equipment
Laboratory equipment
Computer and office equipment
Furniture and fixtures
Less: Accumulated depreciation and amortization
December 31,
2023
December 31,
2022
103,082
22,646
15,389
7,370
734
149,221
(33,325)
115,896
$
$
91,053
17,373
13,804
6,787
642
129,659
(20,393)
109,266
$
$
In connection with certain operating leases, the Company has determined that it has asset retirement obligations in the
aggregate amount of $3.9 million at the end of those leases. The Company discounted the asset retirement obligations
using an 8% discount rate and recorded an asset retirement obligation in the aggregate amount of $1.8 million, which
is included in leasehold improvements and is being amortized over the term of the respective leases.
Depreciation and amortization expense related to property, plant and equipment was $12.3 million and $7.3 million for
the years ended December 31, 2023 and 2022, respectively.
6.
Intangible Assets
In November 2020, the Company entered into a non-exclusive, royalty-free technology license agreement that required
the Company to pay an upfront payment to the licensor of $2.1 million. The Company accounted for the transaction as
an asset acquisition and recorded an intangible asset as it was determined to have alternative future uses in connection
with the Company’s manufacturing capabilities.
The following table presents the details of the Company’s intangible assets as of December 31, 2023 and 2022 (in
thousands):
Licensed Technology
Less: Accumulated amortization
December 31,
2023
December 31,
2022
$
$
2,000
(882)
1,118
$
$
1,900
(565)
1,335
The intangible asset is being amortized over a period of seven years. Amortization expense of $0.3 million and $0.2
million was recorded as a component of research and development expenses for the years ended December 31, 2023
and 2022, respectively.
F-23
Table of Contents
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023, the expected amortization expense for the next four years is as follows (in thousands):
2024
2025
2026
2027
Total amortization
7. Accrued Expenses
Amortization
Expense
$
$
285
285
285
263
1,118
Accrued expenses at December 31, 2023 and 2022 were comprised of the following (in thousands):
Compensation and benefits
Clinical trial costs
Professional fees
Research and development
Interest on Tranche 1 Notes
Manufacturing costs
Consulting
Fixed assets
Rent and facilities costs
Other
8. Share-Based Compensation
Equity Incentive Plans
December 31,
2023
December 31,
2022
$
$
12,129
8,713
6,499
5,834
2,936
2,634
2,104
1,472
142
176
42,639
$
$
9,600
13,041
732
7,400
—
4,326
694
3,093
—
932
39,818
The Company’s 2018 Incentive Award Plan and 2016 Equity Incentive Plan (collectively, the “Plans”), were adopted
by the Company’s board of directors and shareholders. Under the Plans, the Company has granted share options and
restricted share units (“RSUs”) to selected officers, employees, non-employee members of the Company’s board of
directors and non-employee consultants. The Company’s board of directors or a committee thereof administers the
Plans. Upon the adoption of the 2018 Incentive Award Plan, the Company ceased issuing awards under the 2016
Equity Incentive Plan. The number of shares available for issuance under the 2018 Incentive Award Plan are increased
on January 1 of each calendar year beginning in 2019 and ending in and including 2028, by an amount equal to the
lesser of (A) 4% of the ordinary shares outstanding on the final day of the immediately preceding calendar year and
(B) a smaller number of shares determined by the Company's board of directors. Under the 2018 Incentive Award Plan
the Company initially reserved up to 3,054,996 shares for issuance, which has been increased to 11,110,748 as of
December 31, 2023. As of December 31, 2023, 310,488 shares remain available for future issuance. In January 2024,
the number of shares available for issuance under the 2018 Incentive Award Plan increased by 2,544,040 shares. Also,
in January 2024, the Company’s board of directors approved up to 2,675,000 options and restricted share units to be
granted to certain executives, employees and consultants, in each case, under the 2018 Incentive Award Plan.
F-24
Table of Contents
Options
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the Company’s share option activity related to employees, non-employee members of the board of
directors and non-employee consultants as of and for the years ended December 31, 2023 and 2022 is as follows (in
thousands, except share and per share amounts):
Outstanding at December 31, 2022
Granted
Exercised
Forfeited
Outstanding at December 31, 2023
Options exercisable at December 31, 2023
Options vested and expected to vest at December
31, 2023
Aggregate intrinsic value of options outstanding as
of December 31, 2023
Aggregate intrinsic value of options exercisable as
of December 31, 2023
Number of
Options
6,858,409
1,546,840
$
$
(3,864) $
(174,678) $
$
$
8,226,707
5,709,190
Weighted-
Average
Exercise
Price
14.03
8.49
2.64
14.95
12.96
13.30
Weighted-
Average
Remaining
Contractual
Term (years)
6.86 years
6.35 years
5.40 years
8,226,707
$
12.96
6.35 years
$
$
2,262
2,228
Options granted under the Plans have a maximum contractual term of ten years. Options granted generally vest 25%
on the first anniversary of the date of grant and the balance ratably over the next 36 months. Options granted to
directors when they join the board generally vest in 36 equal monthly installments following the date of grant, and
annual options granted to directors generally vest on the earlier of the first anniversary of the date of grant or the day
before the Company’s next annual meeting of shareholders after the date of grant.
The company recorded the following share-based compensation expense in connection with the options for the years
ended December 31, 2023 and 2022 (in thousands):
Research and development
General and administrative
Total share-based compensation
Years Ended December 31,
2022
2023
$
$
8,577
5,054
13,631
$
$
10,431
5,654
16,085
The total fair value of options vested during the years ended December 31, 2023 and 2022 was $15.3 million and
$16.2 million, respectively.
The weighted average grant date fair value of options granted during the years ended December 31, 2023 and 2022
was $5.67 and $12.81, respectively. The grant date fair values of the share options granted were estimated using the
Black-Scholes option valuation model with the following ranges of assumptions (see Note 2):
F-25
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Risk-free interest rate
Expected volatility
Expected dividend yield
Expected term (in years)
2023
2022
3.86 - 4.48% 1.56 - 4.23%
72%
0%
3.6 - 6.1
80%
0%
5.5 - 6.1
As of December 31, 2023, the total compensation expense relating to unvested options granted that had not yet been
recognized was $18.3 million, which is expected to be recognized over a period of 3.7 years. The Company will issue
shares upon exercise of options from ordinary shares reserved under the Plans.
Restricted Share Units
A summary of the Company’s RSU activity related to employees, non-employee members of the board of directors
and non-employee consultants for the years ended December 31, 2023 and 2022 is as follows:
Outstanding at December 31, 2022
Granted
Vested
Outstanding at December 31, 2023
Number of
Restricted
Share Units
2,182,500
1,097,500
(618,750)
2,661,250
Weighted-
Average
Grant Date
Fair Value
$
$
$
$
18.59
8.52
15.17
15.24
RSUs granted generally vest 50% on the second anniversary of the date of grant and 25% on the third and fourth
anniversaries of the date of grant. Annual RSUs granted to directors generally vest in a single installment on the
earliest to occur of the first anniversary of the grant date or the day immediately prior to the date of the next annual
meeting of the Company’s shareholders occurring after the date of grant. The RSUs granted to the directors in June
2021 will be paid on or within 30 days after the date a director ceases to serve on the board. For RSUs granted in
future years, the directors may elect whether to defer the payment of their annual RSU awards under the Deferred
Compensation Plan for Non-Employee Directors, which was adopted by the board on December 17, 2021. The related
share-based compensation expense, which is recognized ratably over the requisite service period, is included in general
and administrative and research and development expenses, as applicable, in the consolidated statements of operations
and comprehensive loss.
The company recorded the following share-based compensation expense in connection with the RSUs for the years
ended December 31, 2023 and 2022 (in thousands):
Research and development
General and administrative
Total share-based compensation
Years Ended December 31,
2022
2023
$
$
4,203
9,882
14,085
$
$
3,734
8,804
12,538
As of December 31, 2023, the total compensation expense relating to unvested RSUs granted that had not yet been
recognized was $25.3 million, which is expected to be recognized over a period of 3.4 years
To satisfy employee minimum statutory tax withholding requirements for restricted share units that vest, the Company
withholds a portion of the vesting ordinary shares. During the years ended December 31, 2023 and 2022,
F-26
Table of Contents
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the Company withheld 237,859 and 128,812 ordinary shares with a total value of approximately $1.5 million and $2.8
million, respectively. These amounts are presented as a cash outflow from financing activities in the accompanying
consolidated statement of cash flows.
During the years ended December 31, 2023 and 2022 the Company recognized total share-based compensation
expense in the accompanying consolidated statements of operations and comprehensive loss as follows (in thousands):
Research and development
General and administrative
Total share-based compensation
Years Ended December 31,
2022
2023
$
$
12,780
14,936
27,716
$
$
14,165
14,458
28,623
During the year ended December 31, 2023, the Company modified certain awards for six participants and recognized
$0.3 million related to the modifications, $0.1 million of which was recognized in research and development expense
and $0.2 million was recognized in general and administrative expense. During the year ended December 31, 2022, the
Company modified certain awards for three participants and recognized $0.3 million related to the modifications, $0.2
million of which was recognized in research and development expense and $0.1 million was recognized in general and
administrative expense. The terms of such modifications included, on an award-by-award basis, acceleration of the
vesting period and/or extensions of the post-employment period to exercise.
The Company does not expect to realize any tax benefits from its share option activity or the recognition of share-
based compensation expense because the Company currently has net operating losses and has a full valuation
allowance against its deferred tax assets. Accordingly, no amounts related to excess tax benefits have been reported in
cash flows from operations or cash flows from financing activities for the years ended December 31, 2023 and 2022.
F-27
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Ordinary Shares
2023
May 2023 Private Placement
On May 3, 2023, the Company entered into a securities purchase agreement with certain accredited investors, pursuant
to which the Company, in a private placement, agreed to issue and sell an aggregate of 10,773,913 ordinary shares at a
purchase price of $5.75 per share, for gross proceeds of approximately $62.0 million and incurred issuance costs of
approximately $4.1 million. The closing occurred on May 5, 2023.
Sanofi Private Placement
On October 30, 2023, the Company entered into an Investment Agreement with Sanofi Foreign Participations B.V., a
wholly-owned subsidiary of Sanofi, and solely for the limited purposes set forth therein, Sanofi, pursuant to which, the
Company, in a private placement, issued an aggregate of 4,000,000 ordinary shares, at a purchase price of $7.50 per
share for gross proceeds of $30.0 million and incurred issuance costs of approximately $2.3 million.
2022
Private Placement
On November 9, 2022, the Company entered into a securities purchase agreement with Johnson & Johnson Innovation
– JJDC, Inc. (“JJDC”), the investment arm of Johnson & Johnson, pursuant to which the Company, in a private
placement, agreed to issue and sell to JJDC an aggregate of 3,742,514 ordinary shares at a purchase price of $6.68 per
share, for gross proceeds of approximately $25.0 million.
10. Income Taxes
For the years ended December 31, 2023 and 2022, the Company recognized a tax benefit of $0.
As of December 31, 2023, the Company had U.S. federal and state net operating losses (“NOLs”) and foreign
carryforward tax losses which are available to reduce future taxable income of (in thousands):
United Kingdom
United States
Ireland
Other
Federal
$ 169,599
65,549
$
47,681
$
29,399
$
State/City
$
—
14,741
$
—
$
—
$
All of the Company’s carryforward tax losses will be indefinitely carried forward. Also, as of December 31, 2023, the
Company had orphan drug and research and development credits in the U.S. in the amount of $20.3 million which will
begin to expire in 2036 and research and development credits of $3.4 million in the UK which can be carried forward
indefinitely. Due to changes in apportionment and legislative changes, state NOLs decreased by $114.0 million, and
Netherlands NOLs increased by $3.7 million. The U.S. NOLs and UK carryforward tax losses may become subject to
an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders, as
defined under Section 382 of the Internal Revenue Code, as well as UK tax rules. This could limit the amount of NOLs
and carryforward tax losses that the Company can utilize annually to offset future taxable income or tax liabilities. As
of December 31, 2022, the Company had performed such an analysis and determined that there were no limitations in
the UK. However, for U.S. purposes, the Company determined that a
F-28
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
change of ownership occurred in April 2016 and again in June 2018, but there was not a limit for utilizing these losses
to offset the 2022 income.
The Company’s pre-tax income (loss) is as follows (in thousands):
United Kingdom
United States
Ireland
Other
F-29
$
$
December 31, 2023 December 31, 2022
(54,636)
(54,513)
(16,661)
(3,805)
(129,615)
12,881
(63,017)
(29,965)
(3,926)
(84,027) $
$
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company is subject to the corporate tax rate in the UK as a limited UK corporation.
The following table summarizes a reconciliation of income tax benefit compared with the amounts at the UK statutory
income tax rate (in thousands):
Statutory rate
Permanent differences - other
RTP and other adjustment
State and local rate, net of federal
tax
U.K. tax credit
U.S. tax credit
Foreign tax rate differential
UK rate change (25% & 19%,
respectively)
US state rate change
Section 162(m) deferred adjustment
Disallowed interest
Change in valuation allowance
Actual income tax benefit effective
tax rate
December 31, 2023
December 31, 2022
(19,746)
2,391
(1,165)
23.50 %
(2.85)%
1.39 %
(24,627)
2,323
1,244
19.00 %
(1.79)%
(0.96)%
(698)
(4,028)
(9,830)
4,558
0.83 %
4.79 %
11.70 %
(5.42)%
239
15,394
2,728
2,812
7,345
(0.28)%
(18.32)%
(3.25)%
(3.35)%
(8.74)%
(5,660)
2,296
(2,436)
195
(1,973)
(3)
1,386
—
27,255
4.37 %
(1.77)%
1.88 %
(0.15)%
1.52 %
0.00 %
(1.07)%
0.00 %
(21.03)%
—
0.00 %
—
0.00 %
The Expense/(Benefit) for income taxes from continuing operations consists of the following (in thousands):
December 31, 2023 December 31, 2022
Current Tax Expense/(Benefit)
United Kingdom
United States
Other
Total Current
Deferred Tax Expense/(Benefit)
United Kingdom
United States
Ireland
Netherlands
Total Deferred
Change in Valuation Allowance
Total Income Tax Expense/(Benefit)
F-30
—
—
—
—
2,393
(6,251)
(3,963)
(1,840)
(9,661)
9,661
—
—
—
—
—
(8,708)
(17,466)
(1,498)
1,717
(25,955)
25,955
—
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred Tax Assets/(Liabilities) (in thousands):
December 31, 2023
December 31, 2022
Deferred Tax Assets:
Net operating loss carryforwards
Capitalized research and development
Share-based compensation
R&D credit
Lease liability
Other
Deferred tax assets
Deferred Tax Liabilities:
Indefinite-lived intangibles and fixed assets
Depreciation
Right of use assets
Less: valuation allowance
Net deferred tax liability
$
$
70,650
19,606
14,290
21,687
4,070
1,121
131,424
—
(1,763)
(3,777)
(125,884)
$
— $
74,350
16,288
13,684
10,837
6,461
3,745
125,365
(186)
(2,935)
(6,207)
(116,223)
(186)
ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available
evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After
consideration of all the evidence, both positive and negative, the Company has recorded a full valuation allowance,
after consideration of the reversal of the deferred tax liabilities for the ROU assets and fixed assets, against its deferred
tax assets at December 31, 2023 and 2022 because the Company's management has determined that is it more likely
than not that these assets will not be fully realized.
Changes to the UK corporation tax rates have been announced which will impact future accounting periods. Finance
Act 2021 increases the UK corporation tax rate from 19% to 25% effective April 1, 2023 for companies with profits in
excess of GBP 250,000. As the Company does not expect to be able to utilize its carryforward tax losses in the UK
until after April 2023, the deferred tax has been calculated using a tax rate of 25%.
As of December 31, 2023 and 2022, the Company recorded unrecognized tax positions of $2.0 million and $0.9
million, respectively. The unrecognized tax positions are netted with deferred tax assets above with full valuation
allowance. The changes to unrecognized tax positions for 2023 and 2022 were as follows (in thousands):
Unrecognized tax benefits as of January 1
Gross increases/(decreases) related to current year
Gross increases/(decreases) related to prior years
Foreign currency translation
Unrecognized tax positions as of December 31
December 31, 2023 December 31, 2022
666
937 $
$
279
756
(8)
336
—
—
937
2,029 $
$
The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. As of
December 31, 2023 and 2022, the Company had no accrued interest or penalties related to uncertain tax positions and
no amounts have been recognized in the Company's statements of operations and comprehensive loss.
The Company files income tax returns in the United States, UK, various foreign jurisdictions and various U.S. state
jurisdictions. In the U.S., all years remain subject to examination. The earliest year subject to examination in the UK
is 2020.
F-31
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MeiraGTx Holdings plc is a UK tax resident with no earnings in its foreign subsidiaries and the Company does not
expect any temporary basis difference in its investment in these subsidiaries to reverse in the foreseeable future.
Therefore, the Company has not recorded deferred taxes on the outside basis difference in its foreign subsidiaries. It is
not probable to compute the amounts, if any.
11. Related Party Transactions
Relationship with Janssen Pharmaceuticals, Inc.
Collaboration Agreement
On January 30, 2019, the Company entered into a Collaboration Agreement with Janssen for the research,
development and commercialization of gene therapies for the treatment of IRD. Under the agreement, Janssen paid the
Company a non-refundable upfront fee of $100.0 million. Janssen and the Company agreed to collaborate to develop
the Company’s clinical programs in retinitis pigmentosa and two genetic forms of achromatopsia and Janssen had the
exclusive right to commercialize these three product candidates (“Clinical IRD Product Candidates”) globally.
Pursuant to the Collaboration Agreement, the Company and Janssen also agreed on a research collaboration to develop
a pipeline of preclinical inherited retinal disease gene therapy candidates (“Research IRD Product Candidates”). The
parties agreed to select and prioritize the Research IRD Product Candidates and Janssen had the right to opt-in for a
fee for each of the specified targets (each an “Option Target”) to obtain certain development, manufacturing and
commercialization rights for the Research IRD Product Candidates.
Unless terminated earlier under certain termination clauses, the Collaboration Agreement was to continue in effect, on
a product-by-product and country-by-country basis, until such time as the royalty terms expired in such country. The
Company had determined enforceable rights existed in the Collaboration Agreement as the termination clauses were
substantive termination penalties by way of the non-refundable upfront fee and the reversion of any licensed
intellectual property granted to Janssen upon the termination of the agreement.
Under the Collaboration Agreement, the Company and Janssen were jointly developing Clinical IRD Product
Candidates to permit Janssen to commercialize such Clinical IRD Product Candidates under an exclusive license from
the Company. In general, the Company had the primary responsibility to develop each Clinical IRD Product Candidate
in accordance with the development plan for each Clinical IRD Product Candidate, including where applicable,
conducting any necessary research in order to submit the applicable regulatory filings to regulatory authorities. The
Company agreed to manufacture these products in its GMP manufacturing facilities for both clinical and commercial
supply. Janssen agreed to pay 100% of the clinical and commercialization costs of the products and the Company was
eligible to receive untiered 20% royalties on net sales of products and additional development and commercialization
milestones up to $340.0 million. The Company received a milestone payment of $30.0 million in December 2021. In
connection with entering into the Asset Purchase Agreement, the Company entered into a Termination Agreement with
Janssen terminating the Collaboration Agreement.
Asset Purchase and Related Agreements
On December 20, 2023, the Company entered into the Asset Purchase Agreement with Janssen pursuant to which the
Company sold and assigned to Janssen, and Janssen purchased and assumed, the UCLB RPGR License Agreement
relating to the research, development, manufacture and exploitation of the RPGR Product, and other related assets as
described in the Asset Purchase Agreement. Simultaneously, the Company and Janssen also entered into a Supply
Agreement pursuant to which the Company agreed to manufacture and supply the RPGR Product for Janssen. Under
the Supply Agreement, MeiraGTx UK II, together with its affiliates, will manufacture commercial supply of the RPGR
Product for Janssen for an initial term of four years, with Janssen having an option to extend
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the Supply Agreement for a fifth year upon written notification. Janssen may terminate the Supply Agreement for
convenience upon 90 days’ written notice with payment of a termination fee. Under the Asset Purchase Agreement,
Janssen paid the Company a non-refundable upfront fee of $65.0 million in December 2023 and the Company is
eligible to receive fees from commercial supply of the RPGR Product and in addition, milestones of up to $350.0
million, as follows: (i) a milestone payment of $50.0 million in connection with the achievement of the initiation of the
extension study for the Phase 3 LUMEOS clinical trial for the RPGR Product, which milestone was achieved during
the first quarter of 2024; (ii) $10.0 million upon completion of certain specified development services for the drug
substance for the RPGR Product; (iii) $5.0 million upon completion of certain specified development services for the
drug product for the RPGR Product; (iv) $175.0 million upon the first commercial sale of an RPGR Product in the
United States; (v) $75.0 million upon the first commercial sale of an RPGR Product in at least one of the United
Kingdom, France, Germany, Spain and Italy; (vi) $25.0 million upon completion of the transfer of certain
manufacturing technology for drug substance and drug product from the Company to Janssen; and (vii) $10.0 million
upon regulatory approval of a Janssen-selected manufacturing facility in each of the United States and European
Union for commercial manufacture of the RPGR Product. Janssen is also responsible for any royalty or milestone
amounts that become payable on the RPGR Product under the UCLB RPGR License Agreement.
Revenue Recognition under the Janssen Agreements
Collaboration Agreement
The Company evaluated the potential performance obligations in the Collaboration Agreement pursuant to ASC 606,
which included the exclusive license to Clinical IRD Product Candidates, the research, development and
manufacturing services (“the services”), and the participation in various joint committees and determined that none of
the performance obligations by themselves were distinct. Goods and services that are not distinct are bundled with
other goods or services in the contract until a bundle of goods or services that is distinct is created. The services, when
combined with the licenses, represent a bundle and should be accounted for as a single performance obligation due to
the relevance of the services to the value of the early-stage license and the potential for the intellectual property to be
significantly modified during the services period. The Company also evaluated whether or not the right to purchase
exclusive option rights for specified Research IRD Product Candidates represents future performance obligations and
concluded that these represent a separate buyer decision at market rates, rather than a material right performance
obligation. As such, these options have been excluded from the initial allocation of transaction price and the Company
will account for these options as separate contracts when and if Janssen elects to exercise the options.
Under ASC 606, the Company recognized collaboration revenue using the cost-to-cost input method, which it believes
best depicts the transfer of control to the customer. Under the cost-to-cost input method, the extent of progress towards
completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying
the combined performance obligation by the potential product candidate. Under this method, revenue is being recorded
as a percentage of the estimated transaction price based on the extent of progress towards completion. Under ASC 606,
the estimated transaction price includes variable consideration subject to constraints. The Company does not include
variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue
recognized will occur when any uncertainty associated with the variable consideration is resolved. The estimate of the
Company’s measure of progress and estimate of variable consideration to be included in the transaction price will be
updated at each reporting date as a change in estimate. The amount related to the unsatisfied portion will be recognized
as that portion is satisfied over time.
Under ASC 606 the Company accounts for (i) the licenses it conveyed with respect to the Clinical IRD Product
Candidates and (ii) its obligations to perform services as a single performance obligation under the Collaboration
Agreement with Janssen on a product candidate basis. Janssen’s right to purchase exclusive options to obtain certain
development, manufacturing and commercialization rights are accounted for separately as they do not represent
material rights, based on the criteria of ASC 606. Upon the exercise of any purchased option by Janssen, the
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
contract promises associated with an Option Target would use a separate cost-to-cost model for purposes of revenue
recognition under ASC 606.
In 2019, the Company received a $100.0 million non-refundable upfront fee from Janssen and during the year ended
December 31, 2021, the Company received a $30.0 million milestone payment. The Company allocated these amounts
plus other variable consideration not subject to constraint to each identified performance obligation using a
combination of methods allowable under ASC 606. The Company applies the practical expedient in Topic 606 and
does not include disclosures regarding amounts for variable consideration allocated to wholly-unsatisfied performance
obligations or wholly-unsatisfied distinct goods that form part of a single performance obligation, if any. This variable
consideration includes expected reimbursement of research and development costs.
Asset Purchase and Related Agreements
The agreements entered into in December 2023 were executed at the same time and were negotiated with a single
commercial objective; therefore, the contracts were combined and accounted for as a single contract. These
agreements were accounted for as a termination of the existing Collaboration Agreement and the creation of a new
contract where the transaction price includes the remaining deferred revenue – related party from the terminated
agreement of $30.6 million, the fixed upfront payment of $65.0 million under the Asset Purchase Agreement, and an
aggregate of $1.8 million estimated variable consideration for transition services, offset by a credit of $5.1 million for
pre-funded inventory, totaling $92.3 million. The transaction price was allocated to four performance obligations on a
relative SSP basis, subject to certain exceptions for discounts and variable consideration. As the SSPs are not directly
observable for any of the distinct goods and services, the SSPs were estimated based on a valuation. The total
transaction price of $92.3 million was allocated to the performance obligations with respect to SSPs as follows:
process performance qualification (“PPQ”) services in the amount of $2.9 million, material rights representing the
commercial supply of RPGR Product and an in-substance contract renewal option in the amount of $6.9 million,
manufacturing technology transfer in the amount of $28.7 million, and the sale of nonfinancial assets representing the
sale and transfer of all the Company’s right, title, and interest in the intellectual property related to the RPGR Product
and the assignment of the UCLB RPGR License Agreement to Janssen in the amount of $53.8 million.
The transaction price allocated to PPQ services will be recognized over time using an inputs method measure of
progress. The transaction price allocated to the material right for the commercial supply of RPGR Product will be
recorded as deferred revenue until Janssen exercises its option to purchase supply and the Company transfers control
of such supply to Janssen. The transaction price allocated to the in-substance renewal option (material right) will be
recorded as deferred revenue until Janssen exercises the option and the Company transfers control of the underlying
goods or services to Janssen. The Company will account for the exercise of the in-substance renewal option (material
right) as a continuation of the existing contract (i.e., a change in the transaction price). The transaction price allocated
to the technology transfer will be recognized over time using an inputs method measure of progress. The Company
will recognize a gain for the difference between the carrying amount of the nonfinancial assets and the consideration
allocated to that unit of account when control of the nonfinancial assets transfers in accordance with ASC 610-20,
Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets.
During the year ended December 31, 2023, the Company recognized a gain of $54.2 million related to the sale of
nonfinancial assets which is included in other income in the consolidated statement of operations and comprehensive
loss.
As of December 31, 2023, the aggregate transaction price allocated to unsatisfied performance obligations was $36.9
million which the Company expects to recognize over an estimated period of approximately 4.0 years.
F-34
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the deferred revenue recognition is as follows (in thousands):
Deferred revenue at December 31, 2021
Deferred revenue recognized as license revenue during the year ended December 31, 2022
Effects of exchange rate changes
Deferred revenue at December 31, 2022
Deferred revenue recognized as license revenue during the year ended December 31, 2023
Effects of exchange rate changes
Remaining deferred revenue under the Collaboration Agreement
Standalone selling price allocated to performance obligations
Effects of exchange rate changes
Deferred revenue at December 31, 2023
$
$
$
64,866
(15,920)
(6,387)
42,559
(14,017)
2,033
30,575
7,469
(1,101)
36,943
During the years ended December 31, 2023 and 2022, the Company recognized $14.0 million and $15.9 million,
respectively, of deferred revenue – related party in connection with the Collaboration Agreement as license revenue.
The remaining deferred revenue – related party from the terminated Collaboration Agreement of $30.6 million was
included in the overall transaction price of the agreements entered into in December 2023.
The Company also recognized $70.4 million and $73.3 million during the years ended December 31, 2023 and 2022,
respectively, related to the reimbursement of research and development expenses under the Collaboration Agreement.
Private Placement
On February 27, 2019, in connection with a private placement, the Company issued 2,898,550 ordinary shares to JJDC,
the investment arm of Johnson & Johnson and owner of Janssen, on the same terms and conditions as the other
investors in the offering. After the offering, JJDC became a related party. On November 9, 2022, the Company entered
into a securities purchase agreement with JJDC, pursuant to which the Company, in a private placement, agreed to issue
and sell to JJDC an aggregate of 3,742,514 ordinary shares at a purchase price of $6.68 per share, for gross proceeds of
approximately $25.0 million.
Debt Financing
On August 2, 2022 the Company, as borrower, and Meira UK II and Meira Ireland, as guarantors (the “Subsidiary
Guarantors”), entered into a senior secured financing arrangement (the “Financing Agreement”) by and among the
Company, the Subsidiary Guarantors, the lenders and other parties from time to time party thereto and Perceptive
Credit Holdings III, LP, as administrative agent and lender (“Perceptive”). On December 19, 2022, the Financing
Agreement was converted to a notes purchase agreement and guaranty (the “Notes Purchase Agreement”) between the
same parties and under substantially the same terms and conditions as the Financing Agreement, subject to certain
customary note constitution terms. Perceptive Advisors, LLC, an affiliate of Perceptive, is a 18.0% holder of the
ordinary shares of the Company. Additionally, Ellen Hukkelhoven, Ph.D., a director of the Company, is an employee
of Perceptive Advisors, LLC. Refer to the discussion in Note 13 for further information related to the accounting for
the debt financing.
May 2023 Private Placement
On May 3, 2023, the Company issued 10,773,913 ordinary shares in a private placement for gross proceeds of $62.0
million, excluding offering costs of approximately $4.1 million. Perceptive Advisors, LLC and Adage Capital
Partners, L.P. a greater than 5% holder of the ordinary shares of the Company, purchased 4,347,826 and 1,565,217 of
the ordinary shares, respectively, issued on the same terms and conditions as the other investors in the offering.
F-35
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12. Leases
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company has commitments under operating leases for laboratory, warehouse, clinical trial sites and office space.
The Company also has finance leases for manufacturing space and office equipment. The Company’s leases have
initial lease terms ranging from 3 years to 191 years. Certain lease agreements contain provisions for future rent
increases. Payments due under the lease contracts include fixed payments.
Total rent expense recorded under these leases was $5.5 million and $5.3 million for the years ended December 31,
2023 and 2022, respectively.
On August 4, 2020, Meira Ireland entered into two agreements with Shannon Commercial Enterprises DAC trading as
Shannon Commercial Properties, to acquire two properties in the Shannon Free Zone in Shannon, Ireland for an
aggregate price of €18 million, or approximately $21.2 million. These properties were acquired to serve as the
Company’s second, large scale GMP viral vector manufacturing facility and its first GMP plasmid and DNA
production facility.
The closing for the first building occurred in August 2020 and the closing for the second building occurred in January
2021. The total cost of the first and second buildings, including taxes and legal fees, was €11.9 million and €7.5
million, or approximately $13.8 million and $8.9 million, respectively, and have been recorded as right of use assets in
the consolidated balance sheets. There is no corresponding lease liability as the Company paid the full cost on the date
of the closings.
At the closings, Meira Ireland entered into a lease for each property providing for a long leasehold interest of
approximately 191 years.
The leases also include customary terms and conditions, with a nominal annual lease cost and annual maintenance fees
of approximately €0.3 million, or approximately $0.4 million, in the aggregate, which amount is subject to change
depending on the annual maintenance costs within the Shannon Free Zone development.
During the year ended December 31, 2022, the Company recognized three operating leases for locations in connection
with its clinical trials for its IRD product candidates and office and warehouse space, with initial lease terms between 3
years and 9 years. Payments due under the lease contracts include fixed payments. In conjunction with these operating
leases, the Company recognized initial operating lease right-of-use assets in the amount of $1.8 million and
corresponding lease liabilities in the amount of $1.8 million which are included in the right-of-use assets and lease
obligations in the consolidated balance sheets as of December 31, 2022.
The components of lease cost for the years ended December 31, 2023 and 2022 are as follows (in thousands):
Finance lease cost
Amortization of right-of-use assets
Interest on lease liabilities
Total finance lease cost
Operating lease cost
Short-term lease cost
Total lease cost
Years Ended December 31,
2023
2022
1,124
$
—
1,124
5,473
159
6,756
$
1,103
1
1,104
5,307
154
6,565
$
$
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amounts reported in the consolidated balance sheets for leases where the Company is the lessee as of December 31,
2023 and 2022 were as follows (in thousands):
Operating leases
Right-of-use asset
Capitalized lease obligations
Finance leases
Right-of-use asset
Capitalized lease obligations
Weighted-average remaining lease term
Operating leases
Finance leases
Weighted-average discount rate
Operating leases
Finance leases
December 31,
2023
December 31,
2022
$
$
$
$
15,910
17,145
24,432
—
$
$
$
$
20,109
21,215
24,718
—
4.3 years
174.8 years
8.8 %
8.0 %
5.6 years
175.8 years
8.8 %
8.0 %
Other information related to leases as of the years ended December 31, 2023 and 2022 are as follows (in thousands):
Cash paid for amounts included in the measurement of
lease liabilities
Operating cash flows from finance leases
Operating cash flows from operating leases
Financing cash flows from finance leases
Right-of-use assets obtained in exchange for lease
liabilities
Operating leases
Years Ended December 31,
2022
2023
$
$
$
$
5,662
— $
$
— $
52
5,384
—
— $
1,793
Future minimum lease payments under non-cancellable leases as of December 31, 2023 are as follows (in thousands):
2024
2025
2026
2027
2028
Thereafter
Total undiscounted lease payments
Less: Imputed interest
Total lease liabilities
13. Debt Financing
$
Operating Leases
5,565
5,524
5,623
1,626
1,335
706
20,379
(3,234)
17,145
$
$
On August 2, 2022 the Company, and the Subsidiary Guarantors, entered into the Financing Agreement with
Perceptive. On December 19, 2022, the Financing Agreement was converted to a Notes Purchase Agreement between
the same parties and under substantially the same terms and conditions as the Financing Agreement, subject to certain
customary note constitution terms. The Company and the Subsidiary Guarantors entered into a
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MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Consent and Amendment with Perceptive on August 10, 2023 (the “First Consent and Amendment), and the Company
and the Subsidiary Guarantors entered into a second Consent and Amendment with Perceptive on December 20, 2023.
The Notes Purchase Agreement provides for an initial $75.0 million notes issuance (the “Tranche 1 Notes”). Pursuant
to the First Consent and Amendment, the Company may request in its sole discretion, and Perceptive has agreed to
subscribe to purchase upon such request, an additional $25.0 million notes issuance (the “Tranche 2 Notes”) at any
time before August 2, 2024 subject to the terms of the Notes Purchase Agreement. Previously, the Company’s request
for issuance of the Tranche 2 Notes was to be determined at Perceptive’s sole discretion. The Notes Purchase
Agreement matures on August 2, 2026 and is interest-only during the term. The Company has the option to redeem
outstanding principal notes at any time along with an applicable early redemption fee. Under each of the First Consent
and Amendment and the Second Consent and Amendment, the Notes Purchase Agreement was amended to increase
the applicable early redemption fee. Outstanding amounts under the Notes Purchase Agreement bear interest at a
fluctuating rate per annum equal to 10.00% plus the secured overnight financing rate administered by the Federal
Reserve Bank of New York for a one-month tenor, subject to a 1.00% floor. The annual interest rate was 15.32% at
December 31, 2023. As of December 31, 2023, the outstanding balance of the Tranche 1 Notes was $75.0 million plus
accrued interest of $3.0 million. During the years ended December 31, 2023 and 2022, the Company recorded interest
expense of $11.3 million and $4.0 million, respectively.
The Company’s obligations under the Notes Purchase Agreement are secured by the Company’s London, UK and
Shannon, Ireland manufacturing facilities, $3.0 million of the Company’s cash and the bank accounts of the Subsidiary
Guarantors, and the issued and outstanding equity interests of the Subsidiary Guarantors.
The Notes Purchase Agreement imposes certain covenants and restrictions on the Company and the Subsidiary
Guarantors, including restrictions pertaining to: (i) the incurrence of additional indebtedness, (ii) limitations on liens,
(iii) limitations on certain investments, (iv) making distributions, dividends and other payments, (v) mergers,
consolidations and acquisitions, (vi) dispositions of assets, (vii) the Company’s maintenance of at least $3.0 million in
a U.S. bank account, (viii) transactions with affiliates, (ix) changes to governing documents, (x) changes to certain
agreements and leases and (xi) changes in control; however, certain of these restrictions contain exceptions which
allow the Company to license, sell and monetize assets in its AAV-hAQP1 program in development to treat radiation-
induced xerostomia, its AAV-GAD program in development to treat Parkinson’s disease and its gene regulation
platform technologies.
In connection with entering into the Financing Agreement, the Company granted warrants to Perceptive to purchase up
to (i) 400,000 ordinary shares of the Company at an exercise price of $15.00 per share and (ii) 300,000 ordinary shares
of the Company at an exercise price of $20.00 per share. The warrants are exercisable immediately and expire on
August 2, 2027. The Company recorded a debt discount of $2.3 million for the allocated fair value of the warrants.
The Company also capitalized certain lender and legal costs associated with the Notes Purchase Agreement totaling
$2.1 million, which were recorded as a discount to the loan. The aggregate discount of $4.4 million is being amortized
to interest expense over the term of the Notes Purchase Agreement. The Company amortized $1.1 million and $0.4
million of the discount to interest expense during the years ended December 31, 2023 and 2022, respectively. At
December 31, 2023, the remaining unamortized discount was $2.9 million.
14. Commitments and Contingencies
There were no new material commitments or contingencies entered into during the year ended December 31, 2023.
F-38
Table of Contents
15. Employee Benefit Plans
United States
MEIRAGTX HOLDINGS PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On January 1, 2017, Meira LLC adopted a defined contribution retirement plan that complies with Section 401(k) of
the Internal Revenue Code. All Meira LLC employees over the age of 21 are eligible to participate in the plan after
three consecutive months of service. Employees are able to defer a portion of their pay into the plan on the first day of
the month or after the day all age and service requirements have been met. The plan provides for a Company matching
contribution. All eligible employees receive an employer matching contribution equal to the lesser of the amount the
employee contributes to the plan or 6% of their salary up to the annual IRS limit.
United Kingdom
On August 1, 2016, Meira UK II adopted a defined contribution group personal pension plan that complies with
HMRC for tax relief. All Meira UK II employees are eligible to participate in the plan upon joining the company and
providing the required services. All eligible employees, if they elect to join the pension scheme, receive an employer
pension contribution equal to 7.5% to 10.0% of their pensionable earnings. Currently, employees are required to
contribute 0.5%, to meet minimum legal pension funding levels of 8%, but may make optional contributions up to the
annual allowance HMRC limits.
Netherlands
Meira Netherlands operates a defined contribution pension. All of its employees participate in the plan. All eligible
employees receive an employer pension contribution and are also required to contribute.
Ireland
On November 20, 2020, MeiraGTx Ireland adopted a defined contribution pension plan. All MeiraGTx Ireland
employees are eligible to participate in the plan upon joining the Company. All eligible employees, if they elect to join
the pension scheme, receive an employer pension contribution. The Company’s current contribution, exclusive of an
employee match, is 4.5%, which exceeds Revenue Ireland requirements.
Belgium
Meira Belgium operates a defined contribution pension plan. All eligible employees receive an employer pension
contribution of 8% of their annual salary. Employees do not make contributions to the plan.
During the years ended December 31, 2023 and 2022, employer contributions to all plans were $2.5 million and $2.0
million, respectively.
16. Subsequent Event
In the first quarter of 2024, the Company received a milestone payment of $50.0 million in connection with the Asset
Purchase Agreement with Janssen for the achievement of the initiation of the extension study for the Phase 3
LUMEOS clinical trial for the RPGR Product.
F-39
Table of Contents
ITEM 9.
FINANCIAL DISCLOSURE
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
Not Applicable.
ITEM 9A.
CONTROLS AND PROCEDURES
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired
control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource
constraints and that management is required to apply judgment in evaluating the benefits of possible controls and
procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief
Financial Officer (principal financial officer), evaluated, as of the end of the period covered by this Form 10-K, the
effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer
(principal executive officer) and Chief Financial Officer (principal financial officer) concluded that our disclosure controls
and procedures were effective at the reasonable assurance level at the end of the period covered by this Form 10-K.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as
defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed under the
supervision of our Chief Executive Officer and Chief Financial Officer, and affected by our board of directors,
management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP and includes policies
and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being
made only in accordance with authorizations of our management and directors and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures
may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023.
In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on its assessment and those
criteria, management has concluded that we maintained effective internal control over financial reporting as of December
31, 2023.
124
Table of Contents
Exemption from Attestation Report of the Registered Public Accounting Firm on Internal Control Over Financial
Reporting
This Form 10-K does not include an attestation report on our internal control over financial reporting from our
independent registered public accounting firm since we qualify as an “smaller reporting company” as defined under SEC
rules.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-
15(f) under the Exchange Act) during the quarter ended December 31, 2023 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
ITEM 9B.
OTHER INFORMATION
During the three months ended December 31, 2023, none of our directors or “officers” (as defined in Rule 16a-
1(f) under the Exchange Act) adopted, modified or terminated a “Rule 10b5-1 trading arrangement” and/or “non-Rule
10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
125
Table of Contents
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item is incorporated by reference to our definitive proxy statement for our 2024
annual shareholder meeting to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023.
ITEM 11.
EXECUTIVE COMPENSATION
The information required by this Item is incorporated by reference to our definitive proxy statement for our 2024
annual shareholder meeting to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023.
ITEM 12.
RELATED STOCKHOLDER MATTERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
Securities Authorized for Issuance Under Equity Compensation Plans (as of December 31, 2023)
The following table provides information as of December 31, 2023 regarding our ordinary shares that may be
issued under the MeiraGTx Holdings plc 2016 Equity Incentive Plan, as amended (the “2016 Plan”), the MeiraGTx
Holdings plc 2018 Incentive Award Plan (the “2018 Plan”) and the MeiraGTx Holdings plc 2018 Employee Stock
Purchase Plan (the “2018 ESPP”).
Plan category:
Equity compensation plans approved
by shareholders
2016 Plan(1)
2018 Plan (2) (3)
2018 ESPP (4)
Equity compensation plans not
approved by shareholders
Total
Weighted-Average Number of Securities
Available for Future
Issuance Under Equity
Number of Securities Exercise Price of
to be Issued Upon
Exercise of
Outstanding
Options,
Outstanding Options, Warrants, and
Warrants, and Rights
(a)
Rights
(b)
Compensation Plans
(excludes securities
reflected in column(a))
(c)
1,150,966
9,921,991
$
$
—
—
$
11,072,957
5.26
14.21
—
—
12.96
—
310,488
2,523,103
—
2,833,591
(1) In connection with our IPO, we assumed the 2016 Plan. As the 2016 Plan was previously approved by our
shareholders and, as we will not make future grants or awards under these plans, it is listed as “approved by
shareholders.” As such, the securities remaining available under the 2016 Plan have been excluded from the table
above.
(2) Pursuant to the terms of the 2018 Plan, the number of ordinary shares available for issuance under the 2018 Plan
automatically increases on each January 1, until and including January 1, 2028, by an amount equal to the lesser of:
(a) 4% of the aggregate number of ordinary shares outstanding on the final day of the immediately preceding
calendar year and (b) such smaller number of ordinary shares as is determined by our board of directors.
(3) The weighted average exercise price of outstanding awards does not take into account the shares issuable upon vesting
of outstanding restricted share units which have no exercise price. At December 31, 2023 there were a total of
2,661,250 shares subject to restricted share units included in the Number of Securities to be Issued Upon Exercise of
Outstanding Options, Warrants and Rights.
(4) Pursuant to the terms of the 2018 ESPP, the number of ordinary shares available for issuance under the 2018 ESPP
automatically increases on each January 1, until and including January 1, 2028, by an amount equal to the lesser of:
(a) 1% of the aggregate number of ordinary shares outstanding on the final day of the immediately preceding
calendar year and (b) such smaller number of ordinary shares as is determined by our board of directors, subject to the
limit set forth in the 2018 ESPP.
126
Table of Contents
Other
The remaining information required by this Item is incorporated by reference to our definitive proxy statement for
our 2024 annual shareholder meeting to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023.
ITEM 13.
INDEPENDENCE
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
The information required by this Item is incorporated by reference to our definitive proxy statement for our 2024
annual shareholder meeting to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item is incorporated by reference to our definitive proxy statement for our 2024
annual shareholder meeting to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023.
127
Table of Contents
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT INDEX
PART IV
Exhibit Number
Exhibit Description
Incorporated by Reference
Form File No.
Exhibit
Filing
Date
Filed/
Furnished
Herewith
3.1
4.1
4.2
4.3
4.4
10.1#
10.2#
10.3#
10.4#
10.5
10.6
10.7#
10.8#
10.9#
10.10†
Amended and Restated Memorandum and
Articles of Association of the Registrant.
Specimen Share Certificate evidencing the
ordinary shares of the Registrant.
Shareholder Agreement.
Description of Securities.
Form of Warrant Agreement, dated August 2,
2022, issued by MeiraGTx Holdings plc to
certain warrant holders.
2016 Equity Incentive Plan, as amended, and
form of option agreements thereunder.
10-Q
001-38520
3.1
8/7/19
S-1
333-224914
10-K
001-38520
10-K
001-38520
4.1
4.2
4.3
5/29/18
3/11/20
3/11/20
10-Q
001-38520
4.1
11/10/22
S-1/A 333-224914
10.1
5/29/18
2018 Incentive Award Plan and forms of award
agreements thereunder.
S-1/A 333-224914
Non-Employee Director Compensation Program.
10-Q
001-38520
10.2
10.4
5/29/18
08/10/23
Form of Indemnification Agreement for Directors
and Officers.
S-1/A 333-224914
10.4
5/29/18
License and Sub-Lease Agreement, dated
May 31, 2019, between MeiraGTx LLC and
Imclone Systems, LLC.
Lease Agreement, effective February 2, 2016,
among MeiraGTx Limited, Moorfields Eye
Hospital NHS, Foundation Trust and Kadmon
Corporation LLC.
Employment Agreement, dated February 15,
2016, between MeiraGTx Limited and
Alexandria Forbes, Ph.D., as amended.
Employment Agreement, dated February 15,
2016 between MeiraGTx Limited and Richard
Giroux, as amended.
Employment Agreement, dated April 27, 2015,
between MeiraGTx Limited and Stuart Naylor,
Ph.D., as amended.
Agreement and Plan of Merger, dated
December 31, 2015, among MeiraGTx
Acquisition Corporation, BRI-Alzan, Inc., F-
Prime Inc., Gregory Petsko, Dagmar Ringe,
Brandeis University and MeiraGTx Limited.
10-Q
001-38520
10.2
8/7/19
S-1
333-224914
10.6
5/14/18
S-1/A 333-224914
10.7
5/29/18
S-1/A 333-224914
10.8
5/29/18
S-1/A 333-224914
10.9
5/29/18
S-1/A 333-224914
10.14
5/29/18
10.11#
2018 Employee Share Purchase Plan.
S-1/A 333-224914
10.15
5/29/18
128
Table of Contents
Exhibit Number
Exhibit Description
Incorporated by Reference
10.12#
10.13#
10.14#
10.15
10.16
10.17
10.18
10.19†
10.20†
10.21†
10.22†
10.23†
10.24†
Form File No.
Exhibit
Filing
Date
Filed/
Furnished
Herewith
10-K
001-38520
10.12
3/26/19
UK Sub-Plan Under the 2018 Incentive Award
Plan.
Form of Option Grant Notice and Option
Agreement Under the UK Sub-Plan to the 2018
Incentive Award Plan.
Form of Change in Control Agreement.
10-K
001-38520
10-K
001-38520
10.13
10.14
3/26/19
3/11/21
Lease agreement by and between Moorfields Eye
Hospital NHS Foundation Trust and MeiraGTx
UK II Limited, dated July 30, 2018.
Lease agreement by and between Moorfields Eye
Hospital NHS Foundation Trust and MeiraGTx
UK II Limited, dated July 30, 2018.
Transfer of Title, dated December 14, 2018, and
Lease, dated October 12, 2001, relating to the
Pharmacy Manufacturing Unit, Britannia Walk,
London, England.
Overage Deed, dated December 14, 2018,
between Moorfields Eye Hospital NHS
Foundation Trust and MeiraGTx UK II Limited
relating to the Pharmacy Manufacturing Unit,
Britannia Walk, London, England.
Consulting Agreement, dated October 5, 2018,
between MeiraGTx Holdings plc, Vector
Consulting LLC, Michael G. Kaplitt, Matthew
During, and Stephen B. Kaplitt.
License Agreement (RPE65), dated January 29,
2019, as amended and restated by and among
UCL Business Plc, MeiraGTx UK II Limited and
MeiraGTx Limited.
License Agreement (CNGB3), dated January 29,
2019, as amended and restated by and among
UCL Business Plc, MeiraGTx Holdings plc,
MeiraGTx UK II Limited and MeiraGTx
Limited.
License Agreement (CNGA3), dated January 29,
2019, as amended and restated by and among
UCL Business Plc, MeiraGTx UK II Limited and
MeiraGTx Limited.
Amendment No. 4 to Exclusive License
Agreement, dated January 29, 2019, between
UCLB and MeiraGTx Limited.
Collaboration, Option and License Agreement,
dated January 30, 2019, by and among Janssen
Pharmaceuticals, Inc., MeiraGTx UK II Limited
and MeiraGTx Holdings plc.
10-Q
001-38520
10.4
8/8/18
10-Q
001-38520
10.5
8/8/18
8-K
001-38520
10.1
12/14/18
8-K
001-38520
10.2
12/14/18
10-K
001-38520
10.19
3/26/19
10-K
001-38520
10.20
3/26/19
10-K
001-38520
10.21
3/26/19
10-K
001-38520
10.22
3/26/19
10-K
001-38520
10.24
3/26/19
10-K
001-38520
10.25
3/26/19
10.25††
First Amendment to Collaboration, Option and
License Agreement, dated December 16, 2021.
10-K
001-3852
10.26
3/10/22
129
Table of Contents
Exhibit Number
Exhibit Description
Incorporated by Reference
10.26
10.27
10.28#
10.29#
10.30
10.31
10.32#
10.33#
10.34††
Registration Rights Agreement, dated
February 26, 2019, by and among MeiraGTx
Holdings plc and the investors named therein.
Agreement for Lease with Landlord’s
Refurbishment Works, dated May 29, 2019,
between MeiraGTx UK II Limited and Provost 1
Limited and Provost 2 Limited, including agreed
form of Lease between MeiraGTx UK II Limited
and Provost 1 Limited and Provost 2 Limited.
Form of Restricted Share Unit Grant Notice and
Restricted Share Unit Agreement Under the 2018
Incentive Award Plan.
Form of Restricted Share Unit Grant Notice and
Restricted Share Unit Agreement Under the UK
Sub-Plan to the 2018 Incentive Award Plan.
Particulars and Conditions of Sale of Building 2,
Block K, Shannon Free Zone, Shannon, County
Clare, Ireland, dated as of August 4, 2020, by and
between Shannon Commercial Enterprises DAC
trading as Shannon Commercial Properties and
MeiraGTx Ireland DAC, including agreed form
of Lease between Shannon Commercial
Enterprises DAC and MeiraGTx Ireland DAC.
Particulars and Conditions of Sale of Building 3,
Block K, Shannon Free Zone, Shannon, County
Clare, Ireland, dated as of August 4, 2020, by and
between Shannon Commercial Enterprises DAC
trading as Shannon Commercial Properties and
MeiraGTx Ireland DAC, including agreed form
of Lease between Shannon Commercial
Enterprises DAC and MeiraGTx Ireland DAC.
Deferred Compensation Plan for Non-Employee
Directors.
Form of Restricted Share Unit Grant Notice and
Restricted Share Unit Agreement for Non-
Employee Directors Under the 2018 Incentive
Award Plan.
Credit Agreement and Guaranty, dated August 2,
2022, by and among MeiraGTx Holdings plc, as
borrower, MeiraGTx UK II Limited and
MeiraGTx Ireland DAC, as guarantors, the
lenders and other parties from time to time party
thereto and Perceptive Credit Holdings III, LP, as
administrative agent and lender.
130
Form File No.
Exhibit
Filing
Date
Filed/
Furnished
Herewith
8-K
001-38520
10.2
2/26/19
10-Q
001-38520
10.3
8/7/19
10-K
001-38520
10.30
3/11/20
10-K
001-38520
10.31
3/11/20
10-Q
001-38520
10.1
11/5/20
10-Q
001-38520
10.2
11/5/20
10-K
001-38520
10.35
3/10/22
10-K
001-38520
10.36
3/10/22
10-Q
001-38520
10.1
11/10/22
Table of Contents
Exhibit Number
Exhibit Description
Incorporated by Reference
Form File No.
Exhibit
Filing
Date
Filed/
Furnished
Herewith
10.35
10.36††
10.37
10.38
10.39
10.40
10.41
10.42
10.43
10.44
Amendment No. 1 to Credit Agreement and
Guaranty, dated December 19, 2022, by and
among MeiraGTx Holdings plc, as borrower,
certain subsidiary guarantors and lenders party
thereto, and Perceptive Credit Holdings III, LP,
as administrative agent.
Amended and Restated Notes Purchase
Agreement and Guaranty, dated December 19,
2022, by and among MeiraGTx Holdings plc, as
issuer, the subsidiary guarantors and noteholders
from time to time party thereto, and Perceptive
Credit Holdings III, LP, as administrative agent.
Tranche 1 Note, dated December 19, 2022, by
and among MeiraGTx Holdings plc, as issuer, the
subsidiaries guarantors and noteholders from
time to time party thereto, and Perceptive Credit
Holdings III, LP, as administrative agent.
Consent and Amendment to Amended and
Restated Notes Purchase Agreement and
Guaranty, dated August 10, 2023, by and among
MeiraGTx Holdings plc, as issuer, the subsidiary
guarantors and noteholders from time to time
party thereto, and Perceptive Credit Holdings III,
LP, as administrative agent and noteholder.
Consent and Amendment to Amended and
Restated Notes Purchase Agreement and
Guaranty, dated December 20, 2023, by and
among MeiraGTx Holdings plc, as issuer, the
subsidiary guarantors and noteholders from time
to time party thereto, and Perceptive Credit
Holdings III, LP, as administrative agent and
noteholder.
Securities Purchase Agreement, dated November
9, 2022, by and among MeiraGTx Holdings plc
and Johnson & Johnson Innovation – JJDC, Inc.
Registration Rights Agreement, dated November
15, 2022, by and among MeiraGTx Holdings plc
and Johnson & Johnson Innovation – JJDC, Inc.
First Amendment to Registration Rights
Agreement, dated May 12, 2023, by and among
MeiraGTx Holdings plc and Johnson & Johnson
Innovation – JJDC, Inc.
Securities Purchase Agreement, dated May 3,
2023, by and among MeiraGTx Holdings plc and
the Investors named therein.
Registration Rights Agreement, dated May 5,
2023, by and among MeiraGTx Holdings plc and
the Investors named therein.
131
10-K
001-38520
10.36
3/14/23
10-K
001-38520
10.37
3/14/23
10-K
001-38520
10.38
3/14/23
8-K
001-38520
10.1
8/10/23
*
10-K
001-38520
10.39
3/14/23
10-K
001-38520
10.40
3/14/23
10-Q
001-38520
10.3
8/10/23
S-3
333-273672
10.1
8/3/23
S-3
333-273672
10.2
8/3/23
Table of Contents
Exhibit Number
Exhibit Description
Incorporated by Reference
Form File No.
Exhibit
Filing
Date
Filed/
Furnished
Herewith
8-K
001-38520
10.1
10/30/23
8-K
001-38520
10.2
10/30/23
*
*
*
*
*
*
**
**
*
*
*
*
*
*
*
*
10.45
10.46
10.47††
10.48††
21
23.1
31.1
31.2
32.1
32.2
97.1
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
Investment Agreement, dated October 30, 2023,
by and among MeiraGTx Holdings plc, Sanofi
Foreign Participations B.V. and Sanofi.
Registration Rights Agreement, dated October
30, 2023, by and between MeiraGTx Holdings
plc and Sanofi Foreign Participations B.V.
Asset Purchase Agreement, dated December 20,
2023, by and among Janssen Pharmaceuticals,
Inc., MeiraGTx UK II Limited and MeiraGTx
Holdings plc.
Termination Agreement, dated December 20,
2023, by and among Janssen Pharmaceuticals,
Inc., MeiraGTx UK II Limited and MeiraGTx
Holdings plc.
List of Subsidiaries.
Consent of Ernst & Young LLP.
Certification of Chief Executive Officer pursuant
to Rules 13a-14(a)/15d-14(a) under the Securities
Exchange Act of 1934, as amended.
Certification of Chief Financial Officer pursuant
to Rules 13a-14(a)/15d-14(a) under the Securities
Exchange Act of 1934, as amended.
Certification of Chief Executive Officer pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
Policy for Recovery of Erroneously Awarded
Compensation.
Inline XBRL Instance Document.
Inline XBRL Taxonomy Extension Schema
Document.
Inline XBRL Taxonomy Extension Calculation
Linkbase Document.
Inline XBRL Taxonomy Definition Linkbase
Document.
Inline XBRL Taxonomy Label Linkbase
Document.
Inline XBRL Taxonomy Extension Presentation
Linkbase Document.
Cover Page Interactive Data File (formatted as
Inline XBRL and contained in Exhibit 101).
132
Table of Contents
* Filed herewith
** Furnished herewith
# Management contract or compensation plan or arrangement
† Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933, as amended
†† Portions of this exhibit (indicated by asterisks) have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K
Certain agreements filed as exhibits to this Form 10-K contain representations and warranties that the parties
thereto made to each other. These representations and warranties have been made solely for the benefit of the other parties
to such agreements and may have been qualified by certain information that has been disclosed to the other parties to such
agreements and that may not be reflected in such agreements. In addition, these representations and warranties may be
intended as a way of allocating risks among parties if the statements contained therein prove to be incorrect, rather than as
actual statements of fact. Accordingly, there can be no reliance on any such representations and warranties as
characterizations of the actual state of facts. Moreover, information concerning the subject matter of any such
representations and warranties may have changed since the date of such agreements.
ITEM 16.
FORM 10-K SUMMARY
None.
133
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
SIGNATURES
Date: March 15, 2024
MeiraGTx Holdings plc (Registrant)
By:
/s/ Alexandria Forbes
Alexandria Forbes
President and Chief Executive Officer and
Director (Principal Executive Officer)
134
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of Registrant and in the capacities and on the dates indicated.
Signature
Title
/s/ Alexandria Forbes, Ph.D.
President and Chief Executive Officer and Director
(Principal Executive Officer)
Alexandria Forbes, Ph.D.
/s/ Richard Giroux
Richard Giroux
Chief Financial Officer
(Principal Financial and Accounting Officer)
Date
March 15, 2024
March 15, 2024
/s/ Keith R. Harris, Ph.D.
Chairman of the Board and Director
March 15, 2024
Keith R. Harris, Ph.D.
/s/ Ellen Hukkelhoven, Ph.D.
Director
Ellen Hukkelhoven, Ph.D.
/s/ Martin Indyk, Ph.D.
Director
Martin Indyk, Ph.D.
/s/ Lord Mendoza
Director
Lord Mendoza
/s/ Nicole Seligman
Director
Nicole Seligman
/s/ Thomas E. Shenk, Ph.D.
Director
Thomas E. Shenk, Ph.D.
/s/ Debra Yu, M.D.
Director
Debra Yu, M.D.
135
March 15, 2024
March 15, 2024
March 15, 2024
March 15, 2024
March 15, 2024
March 15, 2024
CONSENT AND AMENDMENT
Exhibit 10.39
This CONSENT AND AMENDMENT (this “Agreement”) is made and entered into as of December 20,
2023 by and among MEIRAGTX HOLDINGS PLC an exempted company with limited liability incorporated under the
laws of the Cayman Islands with registration number 336306 (the “Issuer”), certain Subsidiaries (as defined in the Notes
Purchase Agreement, defined below) of the Issuer that are signatories hereto, and PERCEPTIVE CREDIT HOLDINGS
III, LP, acting in its capacities as (i) a Noteholder (as defined in the Notes Purchase Agreement) and (ii) the administrative
agent for the Noteholders (also as defined in the Notes Purchase Agreement) (in such capacity, the “Administrative Agent”).
WHEREAS, the Issuer, its Subsidiaries parties hereto, the Noteholders and the Administrative Agent are
each party to that certain Amended and Restated Notes Purchase Agreement and Guaranty, dated as of August 2, 2022, as
amended and restated as of December 19, 2022 (as amended or otherwise modified from time to time, the “Notes Purchase
Agreement”), pursuant to which the Noteholders have extended credit to the Issuer on the terms set forth therein;
WHEREAS, the Issuer has advised the Administrative Agent that the Issuer proposes to enter into certain
agreements and transaction involving its program for botaretigene sparoparvovec, formerly referred to as AAV-RPGR, for
the treatment of X-linked retinitis pigmentosa related to mutations in the RPGR gene (the “RPGR Program”) that will
include, among other things, the sale and transfer of all its right, title and interest in the RPGR Program pursuant to the terms
of that certain Asset Purchase Agreement, dated on or about the date hereof, by and among Issuer, MeiraGTx UK II Limited
and Janssen Pharmaceuticals, Inc. (the “APA”; with such sale and transfer being herein referred to as the “RPGR Program
Restructuring”); and
WHEREAS, the Issuer has requested that the Noteholders and the Administrative Agent consent to the
proposed RPGR Program Restructuring and make certain amendments to the Notes Purchase Agreement, and the
Noteholders and the Administrative Agent are willing to do so, all subject to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.
Definitions. Capitalized terms used herein without definition shall have the meanings assigned to
such terms in the Notes Purchase Agreement.
2.
Consent. Effective as of the Effective Date (as defined below), the Administrative Agent and the
Noteholders hereby consent to the RPGR Program Restructuring and the related transactions set forth in the APA and the
Related Transaction Agreements (defined below).
3.
Amendment to Notes Purchase Agreement. Effective as of the Effective Date, the definition of
“Early Redemption Fee” set forth in the Notes Purchase Agreement is hereby amended and restated in its entirety to read as
follows: “Early Redemption Fee” means, with respect to any redemption of all or any portion of the outstanding principal
amount of the Notes on any Early Redemption Date, whether pursuant to clause (a) or (b) of Section 3.03 or otherwise,
occurring (i) at any time prior to the second anniversary of the Closing Date, an amount equal to five and thirty-three
hundredths percent (5.33%) of the aggregate outstanding principal amount of the Notes being redeemed; (ii) at any time after
the second anniversary of the Closing Date and on or prior to the third anniversary of the Closing Date, an
amount equal to two and one half percent (2.5%) of the aggregate outstanding principal amount of the Notes being
redeemed; and (iii) thereafter, zero percent (0%) of the aggregate outstanding principal amount of the Notes being redeemed.
4.
Conditions to Effectiveness. This Agreement shall become effective only upon, and shall be
subject to, the prior or simultaneous satisfaction or waiver of each of the following conditions precedent in a manner
reasonably satisfactory to the Administrative Agent (the date of satisfaction or waiver of all such conditions being referred to
as the “Effective Date”):
receipt by the Administrative Agent of counterpart signatures to this Agreement duly
executed and delivered by the Issuer, its Subsidiaries party hereto, the Noteholders party hereto and the Administrative
Agent;
(a)
(b)
delivery to the Administrative Agent of copies of the APA and all other material agreements
related to the RPGR Program Restructuring, including the supply agreement and technology transfer plan (collectively, the
“Related Transaction Agreements”), each of which shall be in form and substance reasonably satisfactory to the
Administrative Agent;
consummation of the RPGR Program Restructuring and all related transactions on terms
and conditions materially consistent with the terms and conditions set forth in (and delivered to the Administrative Agent in
accordance with) the APA and the Related Transaction Agreements referenced in clause (ii) above;
(c)
of the Effective Date; and
(d)
the representations and warranties set forth below in Section 5 shall be true and correct as
(e)
the payment of all fees, costs and expenses due and payable pursuant to Section 14.03 of
the Notes Purchase Agreement (including without limitation the reasonable fees and expenses of Morrison & Foerster LLP,
counsel to the Administrative Agent and the Noteholders related to the negotiation, preparation, execution and delivery of
this Agreement and other matters in respect of the Notes Purchase Agreement to the extent accrued on or prior to the
Effective Date).
5.
Representations and Warranties, etc. The Issuer and each other Obligor party hereto represents
and warrants as follows:
(a)
The execution, delivery and performance of this Agreement and the amendments and
modifications to the Notes Purchase Agreement contemplated hereby have been duly authorized by all necessary or required
corporate or other organizational action, and each of this Agreement, the Notes Purchase Agreement and each other Notes
Document, in each case as amended or otherwise modified hereby, constitutes a legal, valid and binding agreement of each
Obligor party thereto, enforceable against such Obligor in accordance with its respective terms, except as enforcement may
be limited by (i) bankruptcy, insolvency, reorganization, restructuring, moratorium or similar laws of general applicability
affecting the enforcement of creditors’ rights generally and (ii) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(b)
The execution, delivery and performance of this Agreement by the Obligors party hereto,
and the resulting modifications to the Notes Purchase Agreement or any other Notes Document, as the case may be, do not
(i) violate or conflict with any Law, (ii) result in the creation or imposition of any Lien (other than Permitted Liens) on any
asset of such Obligor or any of its Subsidiaries or (iii) except as could not reasonably be expected to result in a Material
Adverse Effect, violate, or result in a default under, any Material Agreement binding upon such Obligor or any of its
Subsidiaries.
2
(c)
No authorization or approval or other action by, and no notice to or filing with, any
Governmental Authority or any other Person (other than those that have been duly obtained or made and which are in full
force and effect) is required for the due execution, delivery and performance by any Obligor party to this Agreement, the
Notes Purchase Agreement or any other Notes Document, in each case as amended or otherwise modified hereby.
(d)
and is continuing that constitutes an Event of Default.
Both immediately before and after giving effect to this Agreement, no event has occurred
6.
No Implied Amendment or Waiver; Notes Documents, etc.
(a)
Except as set forth in this Agreement, this Agreement shall not, by implication or otherwise,
limit, impair, constitute a waiver of or otherwise affect any rights or remedies of any Secured Party under the Notes Purchase
Agreement or any other Notes Document, or alter, modify, amend or in any way affect any of the terms, obligations or
covenants contained in the Notes Purchase Agreement or any other Notes Document, all of which shall continue in full force
and effect. Nothing in this Agreement shall be construed to imply any willingness on the part of any Secured Party to agree
to or grant any similar or future amendment, consent or waiver of any of the terms and conditions of the Notes Purchase
Agreement or any other Notes Document.
(b)
This Agreement, together with the Notes Purchase Agreement and the other Notes
Documents, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any
and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall
constitute a Notes Document executed pursuant to the Notes Purchase Agreement and shall (unless otherwise expressly
indicated therein) be construed, administered and applied in accordance with all the terms and provisions of the Notes
Purchase Agreement.
the Notes Purchase Agreement, respectively, are incorporated herein by reference mutatis mutandis.
(c)
The jurisdiction and waiver of jury trial provisions set forth in Sections 14.10 and 14.11 of
7.
Counterparts. This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or electronic
transmission (in PDF format) shall be effective as delivery of a manually executed counterpart hereof. Any signature
(including, without limitation, (i) any electronic symbol or process attached to, or associated with, a contract or other record
and adopted by a Person with the intent to sign, authenticate or accept such contract or record and (ii) any facsimile or .pdf
signature) hereto through electronic means, shall have the same legal validity and enforceability as a manually executed
signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the
Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records
Act, or any similar state law based on the Uniform Electronic Transactions Act, and the parties hereto hereby waive any
objection to the contrary.
8.
Governing Law, etc. This Agreement and the rights and obligations of the parties hereunder shall
be governed by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts
of laws that would result in the application of the laws of any other jurisdiction; provided that Section 5-1401 of the New
York General Obligations Law shall apply. This Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their respective successors and permitted assigns.
[Remainder of Page Intentionally Left Blank.]
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized as of the day and year first above written.
ISSUER:
MEIRAGTX HOLDINGS PLC
By /s/ Richard Giroux
Name: Richard Giroux
Title: Chief Financial Officer and Chief Operating
Officer
SUBSIDIARY GUARANTORS:
MEIRAGTX UK II LIMITED
By /s/ Richard Giroux
Name: Richard Giroux
Title: Chief Financial Officer and Chief Operating
Officer
MEIRAGTX IRELAND DAC
By /s/ Richard Giroux
Name: Richard Giroux
Title: Chief Financial Officer and Chief Operating
Officer
Signature Page to Amendment
PERCEPTIVE CREDIT HOLDINGS III, LP, as the
Administrative Agent and Noteholder
By: PERCEPTIVE CREDIT OPPORTUNITIES GP,
LLC, its general partner
By /s/ Sandeep Dixit
Name: Sandeep Dixit
Title: Chief Credit Officer
By /s/ Sam Chawla
Name: Sam Chawla
Title: Portfolio Manager
Signature Page to Amendment
Certain information marked as [***] has been excluded from this exhibit because it is both not material
and is the type that the registrant treats as private or confidential.
Exhibit 10.47
ASSET PURCHASE AGREEMENT
Dated as of December 20, 2023
by and among
JANSSEN PHARMACEUTICALS, INC.,
MEIRAGTX UK II LIMITED
and
MEIRAGTX HOLDINGS PLC
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; INTERPRETATION
Section 1.1. Definitions
Section 1.2.
Interpretation
ARTICLE II PURCHASE AND SALE
Section 2.1. Purchase and Sale of Purchased Assets
Section 2.2. Purchased Assets; Excluded Assets
Section 2.3. Assumption of Certain Obligations
Section 2.4. Excluded Liabilities
Section 2.5. Closing; Closing Deliverables
Section 2.6. Contingent Consideration
Section 2.7. Third Party Consents
Section 2.8. Purchase Price Allocation
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1. Organization, Standing and Power
Section 3.2. Authority; Noncontravention
Section 3.3. Good Title; Sufficiency of Assets
Section 3.4.
Intellectual Property
Section 3.5. Contracts
Section 3.6. Taxes
Section 3.7. Brokers and Other Advisors
Section 3.8. Continued Solvency
Section 3.9. No Other Representations or Warranties
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.1. Organization, Standing and Power
Section 4.2. Authority; Noncontravention
Section 4.3. Capital Resources
Section 4.4. Brokers and Other Advisors
Section 4.5. Antitrust
Section 4.6. No Other Representations or Warranties
i
Page
1
1
17
18
18
18
19
19
20
22
25
26
26
26
26
27
28
30
30
31
31
31
31
31
32
32
33
33
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ARTICLE V ADDITIONAL AGREEMENTS
Section 5.1. Confidentiality; Non-Solicitation
Section 5.2. Certain Tax Matters
Section 5.3. Public Announcements
Section 5.4. Expenses
Section 5.5. Misallocated Assets
Section 5.6. Unblocking Licenses; Grant-Back License
Section 5.7. Technology Transfer Plan
Section 5.8. Additional Covenants of Seller
Section 5.9. Further Assurances
Section 5.10. Insurance
Section 5.11. Access to Books and Records
ARTICLE VI INDEMNIFICATION
Indemnification of Buyer
Indemnification of Seller Indemnified Parties
Indemnification Claims
Section 6.1.
Section 6.2.
Section 6.3.
Section 6.4. Termination of Indemnification
Section 6.5. Limitations
Section 6.6.
[***]
Section 6.7. Exclusive Remedies
Section 6.8. Purchase Price Adjustments
Section 6.9. No Consequential Damages
ARTICLE VII GENERAL PROVISIONS
Section 7.1. Rules of Construction
Section 7.2. Notices
Section 7.3. Consents and Approvals
Section 7.4. Counterparts
Section 7.5. Entire Agreement; No Third-Party Beneficiaries
Section 7.6. Assignment
Section 7.7. Governing Law; Judicial Resolution; Waiver of Jury Trial; Specific Performance
Section 7.8. Severability
Section 7.9. Amendment
Section 7.10. Appendices, Schedules and Exhibits
ii
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33
36
37
38
38
39
41
41
42
42
42
42
42
43
43
45
45
46
46
46
46
46
46
46
47
47
47
47
48
49
49
49
Annexes
RPGR Product
Annex 1.1
Annex 2.2(a)(iii) Books and Records
Annex 2.8
Purchase Price Allocation Schedule
Schedules
Disclosure Schedules
Exhibits
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Form of Amended and Restated Transition Services Agreement
Form of Assignment and Assumption Amendment
Bill of Sale
Form of Supply Agreement
Technology Transfer Plan
Form of Termination Agreement
Form of UCLB Assignment and Assumption Agreement
Form of Press Release
iii
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this “Agreement”) dated as of December 20, 2023, is entered into
by and among Janssen Pharmaceuticals, Inc., a Pennsylvania corporation located at 1125 Trenton-Harbourton
Road, Titusville, NJ 08560, United States of America (“Buyer”), on one hand, and MeiraGTx UK II Limited, a
company organized and existing under the laws of England and Wales, located at 34-38 Provost Street, London
N1 7NG, United Kingdom and MeiraGTx Holdings plc, a Cayman Islands corporation located at 450 East 29th
Street, 14th Floor, New York, NY 10016, United States of America, on the other hand (MeiraGTx UK II Limited
and MeiraGTx Holdings plc, together, “Seller”). Buyer and Seller are sometimes individually referred to herein
as a “Party” and are sometimes collectively referred to herein as the “Parties”.
RECITALS
WHEREAS, the Parties are party to that certain Collaboration, Option and License Agreement,
dated January 30, 2019, by and between Buyer and Seller, as amended by that certain First Amendment to the
Collaboration, Option and License Agreement, dated December 16, 2021 (collectively, the “Collaboration
Agreement”), pursuant to which, among other things, the Parties Developed the RPGR Product;
WHEREAS, in furtherance of the foregoing, Seller desires to sell and transfer (or cause to be sold
and transferred) to Buyer, and Buyer wishes to purchase from Seller, all of Seller’s and its Affiliates’ right, title
and interest in, to and under the Purchased Assets upon the terms and subject to the conditions set forth herein;
and
WHEREAS, in connection with Buyer’s purchase of the Purchased Assets, Seller and Buyer
further wish to terminate the Collaboration Agreement, subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual benefits to be derived from this Agreement,
and of the representations, warranties, conditions, agreements and promises contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound (subject as aforesaid in the prior paragraph), hereby agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1.
corresponding meanings set forth below:
Definitions. For purposes of this Agreement, the following terms shall have the
“Acquisition” has the meaning set forth in Section 2.1.
“Action” means any claim, action, cause of action or suit, litigation, assessment, arbitration,
mediation, investigation, audit, hearing, charge, complaint, demand, notice or
proceeding (in each case, whether in contract, tort or otherwise, whether at law or in equity, and whether civil or
criminal) to, from, by or before any Governmental Authority.
“Affiliate” means, with respect to a Party, any Person that, directly or indirectly, controls, is
controlled by, or is under common control with that Party, for so long as such control exists. For the purpose of
this definition, “control” means any of the following: (a) direct or indirect ownership of fifty percent (50%) or
more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty
percent (50%) or more of the equity interest in the case of any other type of legal entity; (b) status as a general
partner in any partnership; or (c) any other arrangement whereby the entity or person controls or has the right to
control the board of directors or equivalent governing body of a corporation or other entity, or the ability to cause
the direction of the management or policies of a corporation or other entity, whether through ownership of voting
securities, by contract or otherwise. In the case of entities organized under the laws of certain countries, the
maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and
in such case, such lower percentage shall be substituted in the preceding sentence; provided that such foreign
investor has the power to direct the management and policies of such entity.
“Agreement” has the meaning set forth in the preamble hereof.
“Approval of Manufacturing Facilities” means (a) the approval by the FDA of the Prior Approval
Supplement located at the Buyer-selected facility (other than a Seller facility) in the United States for commercial
Manufacture of any RPGR Product and; (b) the approval by the EMA of the type II variation at the Buyer-selected
facility (other than a Seller facility) in the EU for commercial Manufacture of any RPGR Product.
“Amended and Restated Transition Services Agreement” means that certain amendment and
restatement to the Transition Services Agreement, substantially in the form of Exhibit A.
“Assignment and Assumption Agreement” means that certain Assignment and Assumption
Agreement, by and between Seller and Janssen Research & Development, LLC, dated as of September 29, 2023;
provided that, from and after the Closing, as the same is further amended or restated.
“Assignment and Assumption Amendment” means that certain amendment to the Assignment and
Assumption Agreement, substantially in the form of Exhibit B.
“Assumed Liabilities” has the meaning set forth in Section 2.3.
“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq.
“Bill of Sale” means the bill of sale and assignment and assumption agreement by and between
Buyer or its Affiliate, on the one hand, and Seller, on the other hand, substantially in the form of Exhibit C.
2
“BLA” means: (a) a Biologics License Application as defined in the FDCA and the regulations
promulgated thereunder; (b) an MAA in the EU; or (c) any equivalent or comparable application, registration or
certification in any other country or region.
“Business” means the business of Researching, Developing, Manufacturing and otherwise
Exploiting the RPGR Product as conducted by or proposed to be conducted by or on behalf of Seller (or any of its
Affiliates) as of the Closing Date.
“Business Day” means any day other than (a) a Saturday or Sunday; or (b) a day on which banking
institutions located in New York, New York or London, United Kingdom are permitted or required by applicable
Law to remain closed.
“Buyer” has the meaning set forth in the preamble hereof.
“Buyer Indemnified Party” has the meaning set forth in Section 6.1.
“Change of Control” means, with respect to a Party, (a) a merger or consolidation of such Party
with a Third Party that results in the voting securities of such Party outstanding immediately prior thereto, or any
securities into which such voting securities have been converted or exchanged, ceasing to represent at least fifty
percent (50%) of the combined voting power of the surviving entity or the parent of the surviving entity
immediately after such merger or consolidation; (b) a transaction or series of related transactions in which a Third
Party, together with its Affiliates, becomes the beneficial owner of fifty percent (50%) or more of the combined
voting power of the outstanding securities of such Party; or (c) the sale or other transfer to a Third Party of all or
substantially all of such Party’s assets or business to which the subject matter of this Agreement relates.
“Clinical Development Records” means all records, accounts, notes, reports and data that are (a) (i)
prepared by Seller (or any of its Affiliates or it or their respective employees or subcontractors), (ii) owned (or
purported to be owned) by, or in the possession or control of, Seller (or any of its Affiliates) as of the Closing, and
(iii) primarily related to the RPGR Product (or the Exploitation thereof), or (b) (i) to be prepared by Seller (or any
of its Affiliates or its or their respective employees or subcontractors) after the Closing pursuant to the Amended
and Restated Transition Services Agreement and in connection with the conduct of any Clinical Trial for the
RPGR Product ongoing as of the Closing, (ii) once prepared by Seller (or any of its Affiliates or its or their
respective employees or subcontractors), will be owned (or purported to be owned) by, or in the possession or
control of, Seller (or any of its Affiliates) as of the Closing, and (iii) primarily related to the RPGR Product (or the
Exploitation thereof), provided, however, in each case ((a) and (b)), excluding any records, accounts, notes,
reports or data that constitute embodiments of Manufacturing Intellectual Property, Seller [***] Technology or
Know-How that is necessary for, or actually used by or on behalf of Seller (or any of its Affiliates) as of the
Closing in, the Exploitation of any Other Seller Product.
“Clinical Study” means a (a) Phase 1 Study; (b) Phase ½ Study; (c) Phase 2 Study; (d) Phase 3
Study; (e) Pivotal Study; or (f) other prospective study (including a non-interventional study or Natural History
Study) or post-Regulatory Approval study, in each case of this subsection (f) in humans to obtain information
regarding a disease state or product,
3
including information relating to the safety, tolerability, pharmacological activity, pharmacokinetics, dose ranging
or efficacy of the product.
“Closing” has the meaning set forth in Section 2.5(a).
“Closing Date” has the meaning set forth in Section 2.5(a).
“Closing Purchase Price” means an amount equal to $65,000,000.
“CNGA3 Product” means (a) Seller’s Gene Therapy Product [***] for the treatment of the CNGA3
Target Indication by expressing the CNGA3 Target; [***].
“CNGA3 Target” means the [***].
“CNGA3 Target Indication” means the inherited retinal disease resulting from the loss of function
of the CNGA3 Target.
“CNGB3 Product” means (a) Seller’s Gene Therapy Product [***] for the treatment of the CNGB3
Target Indication by expressing the CNGB3 Target; [***].
“CNGB3 Target” means the [***].
“CNGB3 Target Indication” means the inherited retinal disease resulting from the loss of function
of the CNGB3 Target.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collaboration Agreement” has the meaning set forth in the recitals hereof.
“Commercialize” means to market, promote, detail, conduct medical affairs, distribute, import,
export, offer to sell, use or sell biopharmaceutical products or conduct other commercialization activities,
including activities directed to obtaining Pricing Approvals, conducting pre- and post-Regulatory Approval
activities and launching and promoting such biopharmaceutical products in each country, as applicable.
“Completion of PPQ” means (a) the Completion of PPQ for Drug Substance and Method Transfer;
(b) the completion of all activities described in [***]; and (c) initiation of ICH Drug Product stability studies on
all Drug Product PPQ Batches, [***].
“Completion of PPQ for Drug Substance and Method Transfer” means (a) the initiation of ICH
Drug Substance stability studies for [***] Drug Substance PPQ Batches, [***]; and (b) the completion of all
activities described in [***].
“Completion of Technology Transfer for Drug Product and Drug Substance” means [***].
“Confidential Information” means all confidential Know-How and other confidential information
and data of a Party that is disclosed by or on behalf of a Party or any of its Affiliates (the “Disclosing Party”) or
otherwise made available to the other Party or its
4
Affiliates (the “Receiving Party”) under this Agreement, whether made available orally, in writing or in electronic
form, including information comprising or relating to concepts, discoveries, inventions, data, designs or formulae
in relation to this Agreement or of a financial, commercial, business, operational or technical nature.
“Confidentiality Agreement” means the Mutual Confidentiality and Nondisclosure Agreement
[***].
“Contemplated Transactions” means the transactions contemplated by this Agreement and any
Related Document, including the Acquisition.
“Contract” means any loan or credit agreement, bond, debenture, note, mortgage, indenture, lease,
supply agreement, license agreement, development agreement, distribution agreement or other legally binding
contract, agreement, obligation, commitment, arrangement, understanding, instrument, permit, franchise or
license, whether oral or written.
“Control” means, with respect to any Intellectual Property Rights, the legal authority or right
(whether by ownership, license or otherwise, other than pursuant to this Agreement) of a Party to grant a license
or a sublicense of or under such Intellectual Property Rights to another Person, or to otherwise disclose such
Intellectual Property Rights to another Person, without (a) violating any applicable Law; (b) breaching the terms
of any agreement with a Third Party or misappropriating the proprietary or trade secret information of a Third
Party; or (c) incurring payment obligations by reason of licensing, sublicensing or providing access to the other
Party with respect thereto (unless such other Party agrees in writing to bear all such costs arising from the license,
sublicense or access to such item by such other Party). Notwithstanding anything to the contrary in this
Agreement, in the event of a Change of Control of a Party, (i) any Intellectual Property Rights Controlled by any
acquiring entity (and not Controlled by such Party or its Affiliates) immediately prior to the effective date of such
Change of Control; and (ii) any Intellectual Property Rights independently developed or acquired by or on behalf
of any acquiring entity without access to or use of any Intellectual Property Rights used or made available under
this Agreement or pre-acquisition employees of such Party or its pre-acquisition Affiliates, in each case ((i) and
(ii)) shall not be deemed to be Controlled by such Party or its Affiliates after the effective date of such Change of
Control for purposes of this Agreement.
“Covered Losses” has the meaning set forth in Section 6.5(a).
“Develop” means any and all drug development activities, other than Research activities,
conducted before or after obtaining Regulatory Approval that are reasonably related to or leading to the
development, preparation and submission of data and information to a Regulatory Authority for the purpose of
obtaining, supporting or expanding Regulatory Approval or to the appropriate body for obtaining, supporting or
expanding Pricing Approval, including all activities related to pharmacokinetic profiling, design and conduct of
Clinical Studies, regulatory affairs, regulatory strategy, safety matters, statistical analysis, report writing, and
Regulatory Filing creation and submission (including the services of outside advisors and consultants in
connection therewith).
“Development Milestone Event” has the meaning set forth in Section 2.6(a).
5
“Development Milestone Payment” has the meaning set forth in Section 2.6(a).
“Disclosing Party” has the meaning set forth in the definition of Confidential Information.
“Disclosure Schedules” means the Schedules delivered by Seller to Buyer contemporaneously with
this Agreement and appended hereto, setting forth disclosures in respect of the representations and warranties
contained in Article III of this Agreement.
“Dollars” or “$” means United States dollars.
“EMA” means European Medicines Agency.
“Enforceable” means, with respect to any Contract stated to be Enforceable by or against any
Person, that such Contract is a legal, valid and binding obligation of such Person enforceable by or against such
Person in accordance with its terms, except to the extent that enforcement of the rights and remedies created
thereby is subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws of general
application affecting the rights and remedies of creditors and to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
“EU” means the European Union, as its membership may be constituted from time to time, and any
successor thereto; except that, for purposes of this Agreement, the EU will be deemed to include France,
Germany, Italy, Spain and the United Kingdom, irrespective of whether any such country leaves the European
Union.
“European Commission” means the executive of the EU that promotes its general interest.
“Excluded Assets” has the meaning set forth in Section 2.2(b).
“Excluded Liabilities” has the meaning set forth in Section 2.4.
“Exploit” means to make, have made, import, use, sell, offer for sale, and otherwise dispose of,
including to research, develop, test, register, modify, enhance, improve, manufacture, have manufactured, store,
formulate, optimize, export, transport, distribute, commercialize, promote, market, have sold and otherwise
dispose of. “Exploitation” means the act of Exploiting a product or product candidate.
“FDCA” means the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 et seq.
“FDA” means the U.S. Food and Drug Administration, or any successor entity thereto.
“First Commercial Sale” means, with respect to a product, and on a country-by-country basis, the
first commercial sale in an arm’s length transaction of such product to a Third Party by Buyer (or any of its
Affiliates, its or their licensees under any of the rights transferred to
6
Buyer under this Agreement, or its or their sublicensees under the licenses granted to Buyer pursuant to Section
5.6(a)) in such country following receipt of applicable Regulatory Approval and Pricing Approval of such product
in such country. For clarity, First Commercial Sale of a product shall not include: (a) any distribution or other sale
solely where the product is supplied without charge or at the actual manufacturing cost thereof (without allocation
of indirect costs or any markup); (b) any sale by Buyer to its Affiliates or its or their licensees or sublicensees for
further resale by such Affiliate, licensee or sublicensee; or (c) sales for clinical trial purposes, early access or
compassionate use programs.
“Fraud” means [***].
“Fundamental Representations” means the representations and warranties set forth in [***].
“GAAP” means the United States generally accepted accounting principles in effect from time to
time, consistently applied.
“Gene Therapy Product” means any [***] product that delivers [***] for purposes of [***].
“Governmental Authority” means any applicable government authority, court, tribunal, arbitrator,
agency, department, legislative body, commission or other instrumentality of: (a) any government of any country
or territory; (b) any nation, state, province, county, city or other political subdivision thereof; (c) any supranational
body; or (d) any arbitrator with binding authority.
[***]
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996 as amended by
the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery
and Reinvestment Act of 2009), as the same may be amended, modified, or supplemented from time to time, and
any successor statute thereto, and any and all rules or regulations promulgated from time to time thereunder.
“HIPAA and Other Health Privacy Laws” means (a) HIPAA; and (b) any other supranational,
federal, state or local Laws governing the privacy and security of health information or breach of same, each as
may be amended, modified, or supplemented from time to time and any successor statute thereto.
“Improved RPGR Product” means for the RPGR Product, any Gene Therapy Product that: (a)
contains [***]; and (b) [***].
“IND” means an Investigational New Drug Application (including any amendments thereto) filed
with the FDA pursuant to 21 CFR Part 312 before the commencement of a clinical trial of a product, or a similar
application filed with an applicable Regulatory Authority outside of the United States such as a clinical trial
application or a clinical trial exemption, or any other equivalent or related regulatory submission, license or
authorization.
7
“Indemnified Party” has the meaning set forth in Section 6.3(a).
“Indemnifying Party” has the meaning set forth in Section 6.3(a).
“Initiation” means, with respect to a Clinical Study, the administration of the first dose to first
patient in such clinical study on a bilateral basis; provided that, for the purposes of this definition, “bilateral basis”
means that a dose has been administered to a patient for the treatment of each eye in such study participant.
“Insolvency Event” means, in relation to either Party, any one of the following: (a) that Party
becomes insolvent according to applicable Law; (b) that Party is the subject of voluntary or involuntary
bankruptcy proceedings instituted on behalf of or against such Party (except for involuntary bankruptcy
proceedings, which are dismissed within sixty (60) days); (c) an administrative receiver, receiver and manager,
interim receiver, custodian, sequestrator, or similar officer is appointed in respect of that Party; (d) a notice shall
have been issued to convene a meeting for the purpose of passing a resolution to wind up that Party, or such a
resolution shall have been passed other than a resolution for the solvent reconstruction or reorganization of that
Party; (e) a resolution shall have been passed by that Party or that Party’s directors to make an application for an
administration order or to appoint an administrator; or (f) that Party proposes or makes any general assignment,
composition, or arrangement with or for the benefit of all or some of that Party’s creditors or makes or suspends or
threatens to suspend making payments to all or some of that Party’s creditors.
“Intellectual Property Rights” means any and all rights, title and interests in and to any Know-How
(including Inventions), Patents, and all other intellectual property, however denominated, throughout the world,
including any and all registrations, applications, recordings, licenses, common-law rights, statutory rights,
administrative rights, and contractual rights relating to any of the foregoing, including the right to sue and collect
for past, present and future infringement, misappropriation or violation of any of the foregoing.
“Invention” means any process, method, composition of matter, article of manufacture, discovery,
improvement, or finding, including Know-How, patentable or otherwise, that is first developed, generated,
conceived or reduced to practice as a result of a Party (acting solely or jointly with the other Party) exercising its
rights or carrying out its obligations in accordance with the Collaboration Agreement, whether directly or via its
Affiliates, employees, agents or independent contractors, including all rights, title and interests in and to the
Intellectual Property Rights in and to any of the foregoing.
“Janssen Arising IP” has the meaning given such term in the Supply Agreement.
“Know-How” means any non-public or proprietary information and all other proprietary rights
(including technical and scientific information) that may exist or be created under the laws of any jurisdiction in
the world, including technical information, know-how, data (including pharmacological, toxicological, non-
clinical and clinical data, analytical and quality control data, Manufacturing data and descriptions, market data,
financial data or descriptions), Materials, research results, inventions (whether patentable or not), discoveries,
trade secrets, specifications, instructions, processes, formulae, expertise, other technology applicable to
8
compounds, formulations, compositions or products, to their Manufacture, Development, registration, use or
Commercialization, methods of assaying or testing them or processes for their Manufacture, formulations
containment, compositions incorporating or comprising them, including all biological, chemical, pharmacological,
biochemical, toxicological, pharmaceutical, physical and analytical, safety, quality control, Manufacturing,
preclinical and clinical data, Regulatory Filings or Regulatory Materials and copies thereof, relevant to the
Development, Manufacture, use or Commercialization of or which may be useful in studying, testing,
development, production or formulation of products, or intermediates for the synthesis thereof, but excluding
Patents.
“Law” means any applicable law, statute, code, ordinance, rule or regulation, enforceable guideline
or other requirement, order, injunction, judgment, writ, stipulation, award, arbitration award, decree, other
pronouncement having the effect of law, constitution or treaty enacted, promulgated, issued, enforced or entered
by any Governmental Authority applicable to any Party or such Party’s businesses, properties or assets, as may be
amended from time to time.
“Liabilities” means, with respect to any Person, any and all damages, debts, liabilities, obligations,
losses, claims, interest obligations, deficiencies, judgments, assessments, awards, fines, fees, penalties, costs and
expenses, whether accrued or fixed, absolute or contingent, known or unknown, matured or unmatured or
determined or determinable, due or to become due, whether directly incurred or consequential, whether or not
required under GAAP to be accrued on the financial statements of such Person, and including those arising under
any Law, Action or Order and those arising under any contract, agreement, arrangement, commitment or
undertaking.
“Licensed Intellectual Property” means (a) the Licensed Know-How; and (b) the Licensed Patents.
“Licensed Know-How” means (a) all Know-How (other than any Purchased Know-How or UCLB
Know-How) that is (i) owned or otherwise Controlled by Seller (or any of its Affiliates) as of the Closing, and (ii)
(A) necessary or reasonably useful for the Exploitation of the RPGR Product or (B) otherwise actually used by or
on behalf of Seller (or any of its Affiliates) in the Exploitation of the RPGR Product prior to the Closing,
including (1) the Licensed Manufacturing Know-How and (2) any Know-How embodied by any books, records or
files that are (x) primarily related to the Purchased Assets, any RPGR Product or Assumed Liabilities but (y)
excluded from the Purchased Assets pursuant to Section 2.2(a)(iii); and (b) any SUPPLIER Results; provided,
however, in each case ((a) and (b)), excluding any Seller [***] Technology.
“Licensed Manufacturing Know-How” means any Know-How (other than any Purchased Know-
How or UCLB Know-How) that is (a) owned or otherwise Controlled by Seller (or any of its Affiliates) as of the
Closing; and (b) (i) necessary or reasonably useful for the Manufacturing Process or (ii) otherwise actually used
by or on behalf of Seller (or any of its Affiliates) in the Manufacturing Process prior to the Closing.
“Licensed Manufacturing Patents” means any Patents (other than any UCLB Patents) that are (a)
owned or otherwise Controlled by Seller (or any of its Affiliates) as of the
9
Closing; and (b) claim or cover (i) the method of Manufacture of an RPGR Product; or (ii) the Licensed
Manufacturing Know-How.
“Licensed Patents” means any Patents (other than any UCLB Patents) that (a) are owned or
otherwise Controlled by Seller (or any of its Affiliates) as of the Closing; and (b) claim or cover (i) an RPGR
Product (including the Exploitation thereof) or (ii) the Licensed Know-How, including the Licensed
Manufacturing Patents and the SUPPLIER Arising Patents; provided, however, in each case ((i) and (ii)),
excluding any Patents that claim or cover any Seller [***] Technology.
“Lien” means any lien (statutory or otherwise), security interest, pledge, hypothecation, mortgage,
assessment, lease, claim, levy, license, sublicense, option, defect in title, charge, or any other Third Party right,
license or property interest of any kind, or any conditional sale or other title retention agreement, right of first
option, right of first refusal or similar restriction, any covenant not to sue, or any restriction on use, transfer,
receipt of income or exercise of any other attribute of ownership or any agreement to give any of the foregoing in
the future or similar encumbrance of any kind or nature whatsoever.
“Losses” has the meaning set forth in Section 6.1.
“MAA” means an application for the authorization or approval to market an RPGR Product in any
country or group of countries outside the United States, as defined by applicable Law and filed with the
Regulatory Authority of a given country or group of countries.
“Major European Countries” means each of the United Kingdom, France, Germany, Spain, and
Italy.
“Manufacture” or “Manufacturing” means activities directed to producing, manufacturing,
processing, sourcing of materials, filling, finishing, packaging, labeling, quality assurance testing and release,
shipping and storage of a product.
“Manufacturing Intellectual Property” means the [***].
“Manufacturing Process” means the [***].
“Material Adverse Effect” means [***].
“Materials” means any tangible compositions of matter, articles of manufacture, assays, chemical,
biological or physical materials, and other similar materials, including media composition.
“Natural History Study” means a combined Phase 1 Study and Phase 2 Study.
“Non-Assignable Right” has the meaning set forth in Section 2.7.
“Order” means any writ, judgment, injunction, order, decree, stipulation, ruling, decision, verdict,
determination or award, of or by, or any settlement under the jurisdiction of, any Governmental Authority (in each
such case whether preliminary or final).
10
“Other Seller Product” means (a) any proprietary compound, construct, product or service that is
owned or otherwise Controlled by Seller (or any of its Affiliates) as of the Closing, including any of the foregoing
relating to any of Seller’s other clinical programs [***] or any of Seller’s [***] technology [***]; provided,
however, excluding (i) the RPGR Product; or (ii) any product owned by any Third Party that is commercially
available for use in the Development or Commercialization of any products; (b) the CNGA3 Product; or (c) the
CNGB3 Product.
[***]
“Party” or “Parties” has the meaning set forth in the preamble hereof.
“Patents” means any and all (a) patents; (b) pending patent applications, including all provisionals
applications, divisionals, continuations, substitutions, continuations-in-part, divisions and renewals, and all patents
granted thereon; (c) all patents-of-addition, reissues, reexaminations and extensions or restorations by existing or
future extension or restoration mechanisms, including supplementary protection certificates or the equivalent
thereof; (d) inventor’s certificates; (e) any other form of government-issued right substantially similar to any of
the foregoing; and (f) all United States and foreign counterparts of any of the foregoing.
“Permitted Liens” means, collectively, (i) statutory Liens for Taxes, assessments and governmental
charges not yet due and payable or that are being contested in good faith; (ii) Liens of carriers, warehousemen,
mechanics, material men and other Liens imposed by law arising or incurred in the ordinary course of business for
amounts that are not yet due and payable and, if required under GAAP, for which appropriate reserves have been
created or that are being contested in good faith by appropriate proceedings and that are not resulting from any
breach, violation or default by Seller of any Contract or applicable Law; (iii) non-exclusive licenses granted in the
ordinary course of business; (iv) easements, rights of way, zoning ordinances and other similar Liens affecting real
property; and (v) Liens arising under original purchase price conditional sales contracts and equipment leases with
Third Parties entered into in the ordinary course of business.
“Person” means an individual, corporation, partnership, limited liability company, joint venture,
association, trust, unincorporated organization or other entity or any Governmental Authority.
“Personal Information” means any information, in any form, that could be used, directly, indirectly
or in combination with other information, to directly or indirectly allow identification of or contact with a natural
person. Such information includes information covered by any applicable Law or Privacy Obligations, and any
privacy policy or notice of Seller relating to the security, privacy, or Processing of personal information in any
form.
“Phase 1 Study” means a clinical study of an investigational product in patients with the primary
objective of characterizing its safety, tolerability, and pharmacokinetics and identifying a recommended dose and
regimen for future studies. The investigational product can be administered to patients as a single agent or in
combination with other investigational or marketed agents and shall be deemed commenced when the first patient
in such study has received his or her initial dose of a product. A “Phase 1 Study” shall include any clinical trial
11
that would satisfy the requirements of 21 C.F.R. § 312.21(a), or a comparable clinical study prescribed by the
relevant Regulatory Authority in a country other than the United States.
“Phase 1/2 Study” means a combined Phase 1 Study and Phase 2 Study.
“Phase 2 Study” means a clinical study of an investigational product in patients with the primary
objective of characterizing its activity in a specific disease state as well as generating more detailed safety,
tolerability, and pharmacokinetics information. The investigational product can be administered to patients as a
single agent or in combination with other investigational or marketed agents and shall be deemed commenced
when the first patient in such study has received his or her initial dose of a product. A “Phase 2 Study” shall
include any clinical trial that would satisfy the requirements of 21 C.F.R. § 312.21(b), or a comparable clinical
study prescribed by the relevant Regulatory Authority in a country other than the United States.
“Phase 3 Study” means a clinical study of an investigational product in patients that incorporates
accepted endpoints for confirmation of statistical significance of efficacy and safety with the aim to obtain
Regulatory Approval in any country as described in 21 C.F.R. § 312.21(c), or a comparable clinical study
prescribed by the relevant Regulatory Authority in a country other than the United States. The investigational
product can be administered to patients as a single agent or in combination with other investigational or marketed
agents and shall be deemed commenced when the first patient in such study has received his or her initial dose of
a product. For clarity, Phase 3 Studies include clinical studies of approved products for unapproved indications.
“Phase 3 Extension Study” means the Phase 3 extension study of patients assigned from cohort 2 to
the immediate treatment arm of the clinical study identified as NCT04794101 on clinicaltrials.gov and titled
“Follow-up Gene Therapy Trial for the Treatment of X-linked Retinitis Pigmentosa Associated with Variants in
the RPGR Gene.”
“Pivotal Study” means a human clinical study in any country that is prospectively designed to
generate data intended to satisfy the requirements of 21 C.F.R. § 312.21(c) in the U.S. or a similar clinical study
prescribed by a Regulatory Authority from another country, from time to time, pursuant to applicable Law. For
clarity, a Pivotal Study may be a Phase 2 Study, a Phase 1/2 Study, or a Phase 3 Study.
“Pre-Closing Tax Period” means (i) any Tax period ending on or before the Closing Date; and (ii)
with respect to a Tax period that commences on or before but ends after the Closing Date, the portion of such
period up to and including the Closing Date.
“Pricing Approval” means, with respect to a product and any country or regulatory jurisdiction, any
pricing and reimbursement approvals that are commercially necessary to conduct a launch of such product in such
country or regulatory jurisdiction (even if such approvals are not legally required to launch such product in such
country or regulatory jurisdiction). For purposes of illustration, the following pricing and reimbursement
approvals are examples of those that are currently necessary to conduct a launch of a drug or biological product:
in France, publication of the reimbursed price level in the official journal and
12
registration on a reimbursement list by or on behalf of Comité Economique des Produits de Santé or Haute
Autorité de Santé (or a successor agency); in Italy, publication of reimbursement in the Government’s Official
Gazette (by Agenzia Italiana del Farmaco or a successor agency); in Germany, execution of contract with the head
association of sick funds (GKV-Spitzenverband, Gesetzlichen Krankenversicherung, or a successor agency); in
Spain, authorization by La Comisión Interministerial de Precios de los Medicamentos or La Comisión Nacional
para el Uso Racional de los Medicamentos (or a successor agency) for national patient access to reimbursement
by or on behalf of a Governmental Authority; and in the United Kingdom, a recommendation by the National
Institute for Health and Care Excellence (or a successor agency) to obtain mandatory funding to enable broad
market access.
“Prior Approval Supplement” has the meaning given to it in section 506A of the Federal Food,
Drug, and Cosmetic Act and §314.70(b) in the Code of Federal Regulations.
“Privacy Obligations” means all applicable Law, Contracts, self-regulatory standards, or written
policies, notices or terms of use of Seller that are related to privacy, security, data protection or Processing of
Personal Information (including the Federal Trade Commission Act, the CAN-SPAM Act, the Telephone
Consumer Protection Act (TCPA), the Telemarketing and Consumer Fraud and Abuse Prevention Act, the
Children’s Online Privacy Protection Act (COPPA), the Computer Fraud and Abuse Act, the Gramm Leach Bliley
Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Transaction Act, the California Consumer
Privacy Act (CCPA), state data security laws, state unfair or deceptive trade practices laws, state biometric privacy
acts, state social security number protection laws, state data breach notification laws, the EU General Data
Protection Regulation (GDPR) and any rules relating to the Payment Card Industry Data Security Standards,
direct marketing, online behavioral adverting, e-mails, text messages or telemarketing, data localization, and
contract terms relating to the protection or Processing of Personal Information, and any rules and regulations
relating to privacy, data security, and data protection) as well as any Laws concerning requirements for website
and mobile application privacy policies and practices, data or web scraping, cybersecurity disclosures in public
filings, or call or electronic monitoring or recording. For avoidance of doubt, Privacy Obligations include HIPAA
and Other Health Privacy Laws.
“Process” or “Processing” means any operation or set of operations which is performed on
Personal Information or on sets of Personal Information, whether or not by automated means, such as the receipt,
access, acquisition, collection, recording, organization, compilation, structuring, storage, adaptation or alteration,
retrieval, consultation, use, disclosure by transfer, transmission, dissemination or otherwise making available,
alignment or combination, restriction, disposal, erasure or destruction.
“Purchase Price” means (a) the Closing Purchase Price; and (b) the Development Milestone
Payments pursuant to Section 2.6.
“Purchase Price Allocation” has the meaning set forth in Section 2.8.
“Purchased Assets” has the meaning set forth in Section 2.2(a).
“Purchased Contract” means the UCLB License.
13
“Purchased Intellectual Property” means (a) the Purchased Know-How; and (b) the right to recover
for past, present and future infringement, misappropriation or violation of any of the foregoing.
“Purchased Know-How” means (a) the Know-How embodied by, contained in or constituting the
Clinical Development Records; (b) the Know-How embodied by, contained in or constituting the Purchased
Regulatory Documentation; (c) the Know-How embodied by, contained in or constituting the Purchased Research
Records; and (d) any other Know-How (other than as set forth in the foregoing clause (a), (b) or (c)) that is (i)
owned (or purported to be owned) by Seller (or any of its Affiliates) as of the Closing; and (ii) primarily related to
any RPGR Product (or the Exploitation thereof); provided, however, in each case ((a), (b), (c) or (d)), excluding
any Know-How that is (A) Manufacturing Intellectual Property or Seller [***] Technology; or (B) necessary for,
or actually used by or on behalf of Seller (or any of its Affiliates) as of the Closing in, the Exploitation of any
Other Seller Product.
“Purchased Regulatory Documentation” means, with respect to any RPGR Product, all (a)
applications for and documentation comprising the Regulatory Filings for any RPGR Product; (b) material
correspondence submitted to or received from Governmental Authorities in connection with the Regulatory
Filings for any RPGR Product; and (c) source Clinical Study data and safety data submitted to Regulatory
Authorities in connection with the Regulatory Filings for any RPGR Product, in each case ((a), (b) or (c)), to the
extent (i) owned (or purported to be owned) by, and in the possession or control of, Seller (or any of its Affiliates)
as of the Closing (or, in connection with any Clinical Trial for any RPGR Product ongoing as of the Closing and
generated pursuant to the Amended and Restated Transition Services Agreement, after the Closing), and (ii)
primarily related to any RPGR Product (or the Exploitation thereof); provided, however, in each case ((a), (b) or
(c)), excluding (A) any laboratory notebooks, internal audit reports or batch records (other than those batch
records contained in the Regulatory Filings); and (B) any applications, documents, correspondence or data that
constitute embodiments of Manufacturing Intellectual Property or Seller [***] Technology.
“Purchased Research Records” means all records, accounts, notes, reports and data that are (a)
prepared by Seller (or any of its Affiliates or it or their respective employees or subcontractors); (b) owned (or
purported to be owned) by, and in the possession or control of, Seller (or any of its Affiliates) as of the Closing;
and (c) primarily related to any RPGR Product (or the Exploitation thereof) provided, however, in each case,
excluding any records, accounts, notes, reports or data that constitute embodiments of Manufacturing Intellectual
Property or Seller [***] Technology.
“Quality Agreement” means that certain quality agreement to the Supply Agreement, containing
allocation of tasks and responsibilities with respect to quality control and assurance.
“Receiving Party” has the meaning set forth in the definition of Confidential Information.
14
“Regulatory Approval” means, with respect to each product in any country or jurisdiction, the
approval of the applicable Regulatory Authority necessary for the marketing and sale of such product in such
country or jurisdiction by the relevant Regulatory Authority, excluding separate pricing or reimbursement
approvals that may be required, as it may be amended or updated from time to time.
“Regulatory Authority” means any Governmental Authority responsible for granting Regulatory
Approvals for products, including the FDA, EMA, European Commission and any corresponding national or
regional regulatory authorities.
“Regulatory Filing” means, with respect to any product, any application or submission to a
Regulatory Authority of any appropriate regulatory application, and shall include any submission to a regulatory
advisory board, MAA, and any supplement or amendment thereto. For the avoidance of doubt, Regulatory Filings
shall include any BLA or the corresponding application in any other country or group of countries.
“Regulatory Materials” means any notifications, communication, correspondence, registrations,
approvals, or other filings made to, received from or otherwise conducted with a Regulatory Authority related to
Developing, Manufacturing, or otherwise Commercializing a biopharmaceutical product in a particular country or
jurisdiction, other than Regulatory Filings.
“Related Documents” means, other than this Agreement, all agreements, certificates and
documents signed and delivered by either Party in connection with this Agreement, including (a) the Bill of Sale;
(b) the UCLB Consent; (c) the Supply Agreement (together with the Quality Agreement); (d) the Termination
Agreement; (e) the Assignment and Assumption Agreement (including the Assignment and Assumption
Amendment); (f) the Transition Services Agreement (including the Amended and Restated Transition Services
Agreement); and (g) the UCLB Assignment and Assumption Agreement.
“Representatives” means, with respect to any Person, such Person’s directors, officers, equity
holders, members, managers, employees, counsel, consultants, accountants, financial advisors, lenders and other
agents and representatives.
“Research” means activities, other than Development, Manufacturing and Commercialization,
related to the advance, design, delivery, discovery, generation, identification, optimization, profiling,
characterization, production, process development, cell line development, pre-clinical development or non-clinical
or pre-clinical studies of drug candidates and products, including such non-clinical studies and other material
Development activities to be undertaken to generate data sufficient to enable the filing of an IND.
“RPGR Confidential Information” has the meaning set forth in Section 5.1(a)(iii).
“RPGR Product” means (a) Seller’s Gene Therapy Product [***] for the treatment of the RPGR
Target Indication by expressing the RPGR Target as more fully described in Annex 1.1; or (b) [***].
“RPGR Target” means the [***].
15
“RPGR Target Indication” means the inherited retinal disease resulting from the loss of function of
the RPGR Target.
“Seller” has the meaning set forth in the preamble hereof.
“Seller Indemnified Party” has the meaning set forth in Section 6.2.
“Seller [***] Technology” means Seller’s [***] technology, [***].
“Seller’s Knowledge” means, with respect to any matter in question, [***].
“SUPPLIER Arising IP” has the meaning given such term in the Supply Agreement.
“SUPPLIER Arising Patents” has the meaning given such term in the Supply Agreement.
“SUPPLIER Results” has the meaning given such term in the Supply Agreement.
“Supply Agreement” means that supply agreement for the supply of RPGR Products from Seller to
Buyer, substantially in the form of Exhibit D.
“Tax” or “Taxes” means (whether disputed or not) all (a) federal, state, local and foreign income,
franchise, windfall or other profits, gross receipts, property, escheat or unclaimed property, ad valorem, sales, use,
excise, withholding, payroll, employment, social security, unemployment compensation, disability, severance,
capital gain, alternative minimum, estimated, transfer and other taxes and similar governmental charges, including
any interest, penalties and additions with respect thereto, and including any obligations to indemnify or otherwise
assume or succeed to the Tax liability of any other Person.
“Tax Return” means all returns, requests for extensions of time, claims for refund, declarations of
estimated Tax payments, reports, estimates, information returns and statements, filed or to be filed with any
Taxing Authority in connection with the determination, assessment, collection or administration of any Taxes,
including any amendments thereto as well as any related or supporting information with respect to any of the
foregoing.
“Taxing Authority” means any federal, state, local or foreign government, any subdivision, agency,
commission or authority thereof, or any quasi-governmental body exercising tax regulatory authority.
“Technology Transfer Plan” means the written plan pursuant to which Seller shall disclose to Buyer
the technical details relating to the Manufacturing Process and such other information, as set forth in Exhibit E.
“Termination Agreement” means the agreement to terminate the Collaboration Agreement by and
between Buyer and Seller, substantially in the form of Exhibit F.
“Territory” means worldwide.
16
“Third Party” means any Person other than: (a) Seller or Buyer; or (b) any Affiliates of Seller or
Buyer.
“Third Party Claim” has the meaning set forth in Section 6.3(a).
“Transfer Taxes” has the meaning set forth in Section 5.2(a).
“Transition Services Agreement” means that certain Transition Services Agreement, by and
between Seller and Buyer, dated as of September 27, 2023; provided that, from and after the Closing, as the same
is further amended or restated.
“UCLB Assignment and Assumption Agreement” means the assignment and assumption
agreement to Buyer from Seller, substantially in the form of Exhibit G.
“UCLB Consent” means the consent to assign the UCLB License to Buyer.
“UCLB Intellectual Property” means the UCLB Know-How, UCLB Materials and UCLB Patents.
“UCLB Know-How” means the Know-how (as defined in the UCLB License) licensed to Seller or
its Affiliates under Section 2.1 of the UCLB License.
“UCLB License” means that certain License Agreement, dated February 5, 2019, by and between
UCL Business Ltd. (as successor to UCL Business Plc), on the one hand, and MeiraGTx UK II Limited and
MeiraGTx Limited, on the other hand and relating to RPGR Products.
“UCLB Materials” means the Materials (as defined in the UCLB License) licensed to Seller or its
Affiliates under Section 2.1 of the UCLB License.
“UCLB Patents” means the Patents (as defined in the UCLB License) licensed to Seller or its
Affiliates under Section 2.1 of the UCLB License.
Section 1.2.
Interpretation. When a reference is made in this Agreement to an Article, a
Section, Exhibit, Schedule or Annex, such reference shall be to an Article of, a Section of, or an Exhibit, Schedule
or Annex to, this Agreement unless otherwise indicated. The table of contents and headings contained in this
Agreement, any Related Document or in any Exhibit, Schedule or Annex hereto are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement, such Related Document or such
Exhibit, Schedule or Annex. Whenever the words “include”, “includes” or “including” are used in this
Agreement or any Related Document, they shall be deemed to be followed by the words “without limitation.”
The word “or,” when used in this Agreement, has the inclusive meaning represented by the phrase “and/or.” The
words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this Agreement. “Extent” in the phrase “to the
extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if”.
For purposes of this Agreement and the Related Documents, the phrases “delivered or made available to Buyer
prior to the Closing Date”, “has made available to Buyer prior to the Closing
17
Date” and similar expressions in respect of any document or information will be construed for all purposes of this
Agreement and the Related Documents as meaning that a copy of such document or information was delivered by
or on behalf of Seller to Buyer or its Representatives. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any
Contract or Law defined or referred to herein or in any Contract that is referred to herein means (a) in the case of
any Law, such Law, as amended, modified, codified, replaced or reenacted from time to time, and any comparable
Law that from time to time replaces such Law by succession and any rules or regulations promulgated by an
applicable Governmental Authority thereunder and (b) in the case of any Contract, such Contract and all
amendments, modifications and attachments thereto and instruments incorporated therein. References to a Person
or Party are also to its permitted successors and assigns.
ARTICLE II
PURCHASE AND SALE
Section 2.1.
Purchase and Sale of Purchased Assets. Pursuant to the terms and subject to the
conditions of this Agreement, at the Closing, Seller shall, and shall cause its Affiliates to, sell, convey, deliver,
transfer and assign to Buyer (or its designated Affiliate), free and clear of all Liens (other than Permitted Liens),
and Buyer (or its designated Affiliate) shall purchase, take delivery of and acquire from Seller and its Affiliates all
of Seller’s and its Affiliates’ right, title and interest in, to and under all of the Purchased Assets and agree to
assume, satisfy and discharge when due all Assumed Liabilities. The purchase and sale of the Purchased Assets
hereunder is referred to herein as the “Acquisition.”
Section 2.2.
Purchased Assets; Excluded Assets.
(a)
The term “Purchased Assets” means all of Seller’s and its Affiliates’ right, title and interest
in the assets, properties and rights set forth below:
(i)
(ii)
the Purchased Intellectual Property;
the Purchased Contract;
(iii)
any books, records and files in whatever form or medium (e.g., audio, electronic,
visual or print), solely to the extent (A) owned (or purported to be owned) by, and in the possession or
control of, Seller (or any of its Affiliates) as of the Closing; and (B) primarily related to the Purchased
Assets, any RPGR Product or Assumed Liabilities including those set forth on Annex 2.2(a)(iv); provided,
however, in each case, excluding any books, records or files that (1) constitute embodiments of
Manufacturing Intellectual Property or Seller [***] Technology or (2) are necessary for, or actually used
by or on behalf of Seller (or any of its Affiliates) as of the Closing in, the Exploitation of any Other Seller
Product;
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(iv)
any and all (A) causes of action or claims of Seller (or any of its Affiliates),
including remedies thereunder; and (B) amounts due to Seller (or any of its Affiliates) in respect of,
actions or claims, in each case ((A) or (B)), solely to the extent exclusively relating to or arising from one
or more of the Purchased Assets and arising in respect of, or otherwise attributable to, the period after the
Closing Date; and
(v)
all goodwill and other intangible assets primarily related to any Purchased Assets or
any RPGR Product (other than any goodwill or other intangible assets specifically related to any
Manufacturing Intellectual Property, Seller [***] Technology or Other Seller Product).
(b)
Except as otherwise expressly set forth in this Agreement (including the licenses granted to
Buyer under the Licensed Intellectual Property pursuant to Section 5.6(a)) or the Related Documents, Buyer shall
not acquire any right, title or interest in, to or under (i) any Manufacturing Intellectual Property, Seller [***]
Technology or Other Seller Product, or (ii) any of Seller’s (or any of its Affiliates’) Intellectual Property Rights,
assets, properties or rights that are not Purchased Assets (collectively, the “Excluded Assets”).
Section 2.3.
Assumption of Certain Obligations. Subject to the terms and conditions set forth
herein, Buyer agrees, effective at the Closing and from and after the Closing Date, to assume and to timely satisfy
and discharge the following Liabilities of Seller and its Affiliates, to the extent not previously performed or
discharged (collectively, the “Assumed Liabilities”):
(a)
all Liabilities under the Purchased Contract, to the extent arising after the Closing, except
for any Liabilities that arise out of or relate to conduct under the Purchased Contract that occurred prior to the
Closing;
(b)
all Liabilities to the extent arising out of or relating to the Research, Development,
Manufacture, Commercialization or other Exploitation of any RPGR Product or the use or ownership of any
Purchased Assets after the Closing, except for (i) any Liabilities to the extent arising out of or relating to conduct
that occurred prior to Closing and (ii) any Liabilities to the extent arising out of or relating to any Excluded Asset
(other than, in each case ((i) and (ii)), with respect to any Liabilities to the extent (A) arising out of or relating to
any practice of the Licensed Intellectual Property by or on behalf of Buyer (or any of its Affiliates or its or their
sublicensees under the Licensed Intellectual Property) after the Closing pursuant to the licenses granted to Buyer
under Section 5.6(a); or (B) allocated to Buyer (or any of its Affiliates) pursuant to the Collaboration Agreement
or the Termination Agreement, as applicable); and
(c)
any Liabilities expressly allocated to Buyer (or any of its Affiliates) pursuant to the
Termination Agreement (including pursuant to any terms of the Collaboration Agreement that survive pursuant to
the Termination Agreement).
Section 2.4.
Excluded Liabilities. Buyer shall not be the successor to Seller or any of its
Affiliates and Buyer expressly does not assume and shall not become liable to pay, perform or discharge, any
Liability whatsoever of Seller or any of its Affiliates, including any
19
Liabilities arising out of or otherwise relating in any way to the Business or any of the Purchased Assets, other
than the Assumed Liabilities (collectively, the “Excluded Liabilities”). Notwithstanding anything to the contrary
in this Agreement, without limiting the foregoing, the Excluded Liabilities shall include:
(a)
any Liabilities for (i) Taxes relating to, or arising out of or imposed on the Business or the
Purchased Assets for any Pre-Closing Tax Period, (ii) Taxes of Seller or any of its Affiliates for any taxable
period, and (iii) the payment of Tax as a result of Seller or any of its Affiliates being a member of an affiliated,
consolidated, combined or unitary group, as a result of any Tax sharing or Tax allocation agreement, arrangement
or understanding (other than any Contract entered into in the ordinary course of business the principal purpose of
which is not the allocation of or sharing of Taxes), or as a result of being liable for another Person’s Taxes as a
transferee or successor, by Contract (other than any Contract entered into in the ordinary course of business the
principal purpose of which is not the allocation of or sharing of Taxes) or otherwise;
(b)
(c)
all Liabilities under the Purchased Contract, to the extent arising prior to the Closing;
any Liabilities expressly allocated to Seller (or any of its Affiliates) pursuant to the
Termination Agreement (including pursuant to any terms of the Collaboration Agreement that survive pursuant to
the Termination Agreement); and
(d)
all Liabilities to the extent arising out of or relating to any Excluded Asset, other than with
respect any Liabilities to the extent (i) arising out of or relating to any practice of the Licensed Intellectual
Property by or on behalf of Buyer (or any of its Affiliates or its or their sublicensees under the Licensed
Intellectual Property) after the Closing pursuant to the licenses granted to Buyer under Section 5.6(a) or (ii)
allocated to Buyer (or any of its Affiliates) pursuant to the Collaboration Agreement or the Termination
Agreement, as applicable.
Section 2.5.
Closing; Closing Deliverables.
(a)
Closing. The closing of the Acquisition (the “Closing”) shall take place simultaneously
with the execution of this Agreement, or at such other time and date mutually agreed upon by the Parties,
remotely by exchange of electronic copies of the agreements, documents, certificates and other instruments set
forth in this Section 2.5, or at such time and place as the Parties may mutually agree in writing. The date on
which the Closing occurs is referred to herein as the “Closing Date”.
(b)
Seller Closing Deliverables. Simultaneously with the execution of this Agreement, Seller
shall deliver or cause to be delivered to Buyer or to Buyer’s designee:
(i)
(ii)
the Bill of Sale, duly executed by Seller and, if applicable, its Affiliates;
a duly completed and accurate applicable Internal Revenue Service Form W-8;
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(iii)
the UCLB Consent, duly executed by MeiraGTx UK II Limited, MeiraGTx Limited
and UCL Business Ltd.;
(iv)
the UCLB Assignment and Assumption Agreement, duly executed by MeiraGTx
UK II Limited and MeiraGTx Limited;
(v)
the Supply Agreement, duly executed by Seller;
(vi)
the Termination Agreement, duly executed by Seller;
(vii)
the Amended and Restated Transition Services Agreement, duly executed by Seller;
(viii)
the Assignment and Assumption Amendment, duly executed by Seller; and
(ix)
all other instruments of assignment and other transfer documentation as reasonably
requested by Buyer, in form and substance reasonably satisfactory to Buyer and Seller, pursuant to which
all right, title and interest in and to Purchased Intellectual Property and other Purchased Assets are
transferred to Buyer.
(c)
Buyer Closing Deliverables. Simultaneously with the execution of this Agreement, Buyer
shall deliver or cause to be delivered to Seller:
(i)
the payments required pursuant to Section 2.5(d), subject to the timing as set forth in
Section 2.5(d);
(ii)
the Bill of Sale, duly executed by Buyer or its Affiliate;
(iii)
the Supply Agreement, duly executed by Buyer;
(iv)
the UCLB Consent, duly executed by Buyer;
(v)
the UCLB Assignment and Assumption Agreement, duly executed by Buyer;
(vi)
the Termination Agreement, duly executed by Buyer;
(vii)
the Amended and Restated Transition Services Agreement, duly executed by Buyer;
(viii)
the Assignment and Assumption Amendment, duly executed by Buyer or its
and
Affiliate.
(d)
Payments by Buyer at Closing. In consideration of the sale, conveyance, delivery, transfer
and assignment of the Purchased Assets to Buyer and Seller’s other covenants and obligations under this
Agreement, the Supply Agreement, the Termination Agreement and the other Related Documents, at the Closing,
[***], upon the terms and subject to the conditions hereof, Buyer and its applicable Affiliates shall pay, or cause
to be paid, to Seller, in cash by
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wire transfer of immediately available funds to the account or accounts specified by Seller to Buyer [***], an
amount equal to the Closing Purchase Price.
Section 2.6.
Contingent Consideration.
(a)
Subject to this Section 2.6 and Section 6.6, Buyer shall make the non-creditable, non-
refundable payments described in Table 1 below (each, “Development Milestone Payment”) following
achievement by or on behalf of Buyer (or any of its Affiliates, its or their licensees under any of the rights
transferred to Buyer under this Agreement, its or their sublicensees under the licenses granted to Buyer pursuant
to Section 5.6(a) or its or their subcontractors acting on behalf of Buyer or its Affiliates) of the corresponding
event (each a “Development Milestone Event”) described in the row to the left of such payment in the table below.
No.
Development Milestone Event
Development Milestone Payment
(US Dollars)
Table 1
1
2(a)
2(b)
3
4
5(a)
Initiation of Phase 3 Extension Study for an RPGR Product
$50,000,000
Completion of PPQ for Drug Substance and Method Transfer $10,000,000
Completion of PPQ
First Commercial Sale of an RPGR Product in the United
States
$5,000,000
$175,000,000
First Commercial Sale of an RPGR Product in a Major
European Country
$75,000,000
Completion of Technology Transfer for Drug Substance and
Drug Product
$25,000,000
5(b)
Approval of Manufacturing Facilities
RPGR Target Development Milestone Cap
$10,000,000
$350,000,000
(b)
Buyer shall make the Development Milestone Payments provided in Table 1 above to Seller
upon the first (1st) achievement of the corresponding Development Milestone Event. [***]. Each Development
Milestone Payment will be payable only once, even if the corresponding Development Milestone Event occurs:
(A) more than once; (B) with respect to more than one (1) RPGR Product that treats the RPGR Target Indication;
or (C) for Development Milestone Events set forth in Table 1 above, with respect to more than one (1)
22
indication. The aggregate total of all Development Milestone Payments shall not exceed the amount identified as
the “RPGR Target Development Milestone Cap” in Table 1 above.
(c)
With respect to each of:
(i)
Development Milestone Event No. 1, Development Milestone Event No. 2(a) and
Development Milestone Event No. 2(b), (A) Seller shall provide Buyer with written notice of the
achievement of such Development Milestone Event, together with an invoice for the corresponding
Development Milestone Payment; and (B) if Buyer confirms that such Development Milestone Event has
been achieved, Buyer shall make the corresponding Development Milestone Payment to Seller within
[***] after Buyer’s receipt of such undisputed invoice therefor; and
(ii)
Development Milestone Event No. 3, Development Milestone Event No. 4,
Development Milestone Event No. 5(a) and Development Milestone Event No. 5(b), (A) Buyer shall
provide Seller with written notice of the achievement of such Development Milestone Event within [***];
(B) after receipt of such notice, Seller shall submit an invoice to Buyer for the corresponding Development
Milestone Payment; and (C) Buyer shall make the corresponding Development Milestone Payment to
Seller within [***] after Buyer’s receipt of such undisputed invoice therefor.
For the avoidance of doubt, all Development Milestone Payments shall be non-creditable and non-
refundable.
(d)
(e)
[***].
Subject to the terms and conditions of this Agreement (including this Section 2.6 and the
Technology Transfer Plan) and the Related Documents (including the Supply Agreement and the Termination
Agreement), as applicable, the Parties acknowledge and agree that:
(i)
it is the intention of the Parties that the Research, Development, Manufacture,
Commercialization and other Exploitation of the RPGR Products shall be exercised by Buyer and its
Affiliates [***];
(ii)
Buyer and its Affiliates shall have complete control and sole discretion with respect
to the Research, Development, Manufacture, Commercialization and other Exploitation of the RPGR
Products and that this may have a material effect upon the achievability of the Development Milestone
Event and the payment of the Development Milestone Payments that may be payable hereunder and such
control and discretion by Buyer and its Affiliates could result in the Development Milestone Payment not
being made;
(iii)
the achievement of any Development Milestone Event is uncertain and that Buyer
and its Affiliates may not achieve any results requiring the payment of any Development Milestone
Payment at all, and it is therefore not assured that Buyer will be required to pay any Development
Milestone Payment;
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(iv)
[***];
(v)
except as set forth in the UCLB License as of the date hereof, whether or not Buyer
(or any of its Affiliates) Researches, Develops, Manufactures, Commercializes or otherwise Exploits any
RPGR Product, Buyer and its Affiliates are not prohibited from Researching, Developing, Manufacturing,
marketing, selling, Exploiting or acquiring assets, businesses, or other products that may compete with any
RPGR Product or any other products of Buyer, Seller or its or their Affiliates; and
(vi)
except as otherwise set forth in this Agreement or any Related Documents, as
applicable, neither Buyer nor any of its Affiliates or Representatives has furnished or provided, whether
written or oral, any assurances or commitments regarding the achievability of the condition to the payment
of the Development Milestones Events or the likelihood thereof and Seller has not relied on, and expressly
disclaims any rights with respect to, any such statements.
(f)
Except as otherwise expressly set forth in this Agreement or any Related Documents,
Development Milestone Payments (if, when and as achieved), together with the Closing Purchase Price, constitute
all consideration that Seller may receive in connection the Contemplated Transaction, and in no event may Seller
receive any other consideration (including commercial milestone payments or royalties) in connection with the
Contemplated Transaction, whether under this Agreement, the Collaboration Agreement or any other agreement.
(g)
Except as otherwise set forth in Section 2.4 and Section 6.1, as between the Parties, Buyer
shall be solely responsible for any royalty obligations, milestone payments, remittance of sublicensing income,
and any other payments of any type that are or become due under the Purchased Contract or any other agreement
between Buyer and a Third Party, on account of any activities by or on behalf of any of Buyer or its Affiliates in
accordance with this Agreement or any Related Document (including any Research, Development, Manufacture,
Commercialization or other Exploitation of any RPGR Product by or on behalf of Buyer or any of its Affiliates
hereunder).
(h)
Notwithstanding anything to the contrary set forth herein, Buyer acknowledges and agrees
that until the date all Development Milestone Events have been achieved, it shall not assign its title and interest in
all or substantially all of the Purchased Assets to a Third Party, without the prior written consent of Seller,
including by sale of stock, by operation of Law, in connection with a merger or sale of substantially all of the
assets or other similar change of control transaction; unless such Third Party assumes all of Buyer’s obligations
under this Agreement (including, for clarity, with respect to any Development Milestone Event that has not yet
been achieved as of the date of such assignment, the obligation to pay the corresponding Development Milestone
Payment to Seller in the event that such Development Milestone Event is achieved by such Third Party in
accordance with this Section 2.6, as applicable), which assignment and assumption is evidenced by a signed
written agreement that is enforceable by Seller against such Third Party, with Seller as an express third party
beneficiary of such agreement. For clarity, nothing in this Section 2.6(h) shall restrict Buyer’s ability to license or
sub-license any Purchased Asset (including to sublicense its licenses or rights under
24
the UCLB License in accordance with the terms therein) so long as Buyer retains all obligations under this
Agreement.
(i)
Notwithstanding anything to the contrary set forth herein, any undisputed payments or
portions thereof due hereunder which are not paid when due will bear interest at the rate per annum equal to the
lesser of: (A) [***]; or (B) the highest rate permitted by applicable Law, calculated on the number of days such
payment is paid after the date such payment is due, and compounded monthly.
Section 2.7.
Third Party Consents. If the assignment or transfer of any asset included in the
Purchased Assets or any claim, right or benefit arising thereunder or resulting therefrom, without the consent of a
Third Party, would constitute a breach or other contravention of the rights of such Third Party, would be
ineffective with respect to any party to an agreement concerning such asset, claim, right or benefit, or, upon
assignment or transfer, would in any way adversely affect the rights of Seller or, upon transfer, Buyer (each, a
“Non-Assignable Right”), then Seller shall, at Seller’s sole cost and expense, use its commercially reasonable
efforts to obtain such consent after the execution of this Agreement until the earlier of [***], and Buyer shall use
its commercially reasonable efforts to assist and cooperate with Seller in connection therewith. If any such
consent cannot be obtained prior to the Closing, then, notwithstanding anything to the contrary in this Agreement
or any Related Document, (i) this Agreement and the related instruments of transfer shall not constitute an
assignment or transfer of the applicable Non-Assignable Right, and Seller shall use its commercially reasonable
efforts, at Seller’s sole cost and expense, to obtain such consent as soon as possible after the Closing (subject to
the preceding sentence), and (ii) at Buyer’s election, (A) the Non-Assignable Right shall be an Excluded Asset
and Buyer shall have no Liability whatsoever with respect to any such Non-Assignable Right or any Liability with
respect thereto (other than with respect to (1) if such Non-Assignable Right is under the Licensed Intellectual
Property, any Liabilities to the extent arising out of or relating to any practice of such Licensed Intellectual
Property by or on behalf of Buyer (or any of its Affiliates or its or their sublicensees under the Licensed
Intellectual Property) after the Closing pursuant to the licenses granted to Buyer under Section 5.6(a), or (2) any
Liabilities with respect to such Non-Assignable Right to the extent allocated to Buyer (or any of its Affiliates)
pursuant to the Collaboration Agreement or the Termination Agreement, as applicable); or (B) Seller shall, at its
sole cost and expense, use its commercially reasonable efforts to obtain for Buyer substantially all of the practical
benefit of such Non-Assignable Right, including by (1) entering into appropriate and reasonable alternative
arrangements on terms mutually agreeable to Buyer and Seller; (2) subject to the consent and control of Buyer,
enforcement, at the cost and for the account of Buyer, of any and all rights of Seller against the other party thereto
arising out of the breach or cancellation thereof by such other party or otherwise; and (3) if such Non-Assignable
Right is Know-How or a Patent, licensing such Intellectual Property Right to Buyer in accordance with Section
5.6(a). Notwithstanding anything to the contrary set forth herein, none of Seller, Buyer or any of their respective
Affiliates shall be required to make any payments to any Third Party, commence any litigation or offer or grant
any accommodation (financial or otherwise) to any Third Party in connection with the performance of its or their
respective Affiliates’ obligations under this Section 2.7. Notwithstanding the foregoing, the terms of Section 2.6
of this Agreement and Section 2.6 of the Amended and Restated Transition Services Agreement will control with
respect to the consents described therein in the event of any conflict with this Section 2.7.
25
Section 2.8.
Purchase Price Allocation. In accordance with Section 1060 of the Code, Buyer
and Seller agree that the purchase price, the Assumed Liabilities (and any other amounts treated as consideration
for U.S. federal income Tax purposes) will be allocated as shown on Annex 2.8 (the “Purchase Price Allocation”).
Buyer and Seller shall file all Tax Returns and conduct all audits, claims, investigations, inquiries or other
proceedings in respect of Taxes in a manner consistent with Purchase Price Allocation, unless otherwise required
pursuant to a final determination within the meaning of Section 1313 of the Code or any analogous provision of
applicable Law. In the event that the Purchase Price Allocation is disputed by any Governmental Authority, the
Party receiving notice of the dispute shall promptly notify the other Party in writing of such notice and resolution
of the dispute.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Disclosure Schedules, Seller represents and warrants to Buyer as follows:
Section 3.1.
Organization, Standing and Power. Seller is duly organized or incorporated, and
validly existing under the laws of its jurisdiction of formation or incorporation and has all requisite power and
authority to own, lease or otherwise hold and operate its properties and other assets and to carry on its business as
presently conducted, except where the failure to have such power or authority, individually or in the aggregate,
has not been and would not reasonably be expected to be material to the Business. Seller is duly qualified or
licensed to do business and is in good standing (in jurisdictions that recognize the concept of good standing) in
each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes
such qualification or licensing necessary, except as has not been and would not reasonably be expected to be
material to the Business.
Section 3.2.
Authority; Noncontravention.
(a)
Seller has all requisite corporate, limited liability company or other similar organizational
power and authority to execute and deliver this Agreement and the Related Documents to which it is or will be a
party and to consummate the Contemplated Transactions. The execution and delivery of this Agreement and the
Related Documents by Seller and the consummation by Seller of the Contemplated Transactions have been duly
authorized by all necessary action on the part of Seller and no other corporate proceedings on the part of Seller are
necessary to authorize this Agreement, the Related Documents or to consummate the Contemplated Transactions.
Each of this Agreement and the Related Documents has been duly executed and delivered by Seller and, assuming
the due authorization, execution and delivery by Buyer, constitutes a legal, valid and binding obligation of Seller,
Enforceable against Seller in accordance with its terms.
(b)
The board of directors of Seller, by unanimous written consent or in a duly called meeting,
duly adopted resolutions: (i) approving this Agreement, the other Related Documents and the Contemplated
Transactions; and (ii) authorizing Seller to enter into this
26
Agreement and to consummate the Contemplated Transactions, on the terms and subject to the conditions set forth
in this Agreement and the Related Documents.
(c)
No votes or consent of holders of any class or series of capital stock are necessary to
approve and adopt this Agreement, the Related Documents and the Contemplated Transactions and no other
approval is required on behalf of Seller for the execution, delivery or performance of this Agreement, the other
Related Documents and the Contemplated Transactions.
(d)
The execution and delivery of this Agreement and the Related Documents by Seller do not,
and the consummation of the Contemplated Transactions and compliance by Seller with the provisions of this
Agreement and the Related Documents will not, materially conflict with, or result in any material violation or
material breach of, or material default (with or without notice or lapse of time, or both) under, or give rise to a
right of, or result in, termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or
result in the creation of any Lien (other than Permitted Liens) in or upon the Purchased Assets, the Licensed
Intellectual Property or, to Seller’s Knowledge, the UCLB Intellectual Property under, or give rise to any payment
under or any increased, additional, accelerated or guaranteed rights or entitlements under, or require any action by
or notice to any Person under, (i) Seller’s organizational documents, (ii) any Contract to which Seller is a party or
any of its properties or other assets is subject or (iii) any Law or Order applicable to Seller, the Business, the
Purchased Assets, the Licensed Intellectual Property or, to Seller’s Knowledge, the UCLB Intellectual Property.
(e)
The execution and delivery of this Agreement and the Related Documents, and the
consummation of the Contemplated Transactions and compliance by Seller with the provisions of this Agreement
and the Related Documents, do not require the consent or waiver from any lender or creditor, nor does the
execution and delivery of this Agreement and the Related Documents, and the consummation of the Contemplated
Transactions and compliance by Seller with the provisions of this Agreement and the Related Documents, result in
any repayment or repurchase obligation or any other indebtedness of Seller.
(f)
No consent, approval, order or authorization of, action by or in respect of, or registration,
declaration or filing with, any Governmental Authority is required by or with respect to Seller, the Business, the
Purchased Assets, the Licensed Intellectual Property or, to Seller’s Knowledge, the UCLB Intellectual Property,
for, or in connection with, (i) the execution and delivery of this Agreement by Seller; (ii) the transfer of the
Purchased Assets to Buyer; or (iii) the consummation of the Contemplated Transactions.
Section 3.3.
Good Title; Sufficiency of Assets.
(a)
Seller has sole and exclusive, good and marketable title to, or, in the case of property held
under a lease or other Contract, a sole and exclusive and Enforceable leasehold interest in, or adequate rights to
use, all of the Purchased Assets free and clear of all Liens (other than Permitted Liens), and has the complete and
unrestricted power and unqualified right to sell, assign, transfer and deliver to Buyer, as applicable, the Purchased
Assets. There are no adverse claims of ownership to the Purchased Assets and Seller has not received written
notice that any
27
Person has asserted a claim of ownership or right of possession or use in or to any of the Purchased Assets, nor are
there any facts, circumstances or conditions on which, to Seller’s Knowledge, such a claim could be brought in the
future. At the Closing, Buyer will acquire from Seller sole and exclusive, good and marketable title to, or, in the
case of property held under a lease or other Contract, a sole and exclusive and Enforceable leasehold interest in, or
adequate rights to use, all of the Purchased Assets, free and clear of all Liens (other than Permitted Liens).
(b)
Subject to the Contract as set forth on the Disclosure Schedule Section 3.3(b), Seller has
adequate rights to use [***] to perform its obligations under the this Agreement and the other Related Documents
and, [***], has the right to sublicense, transfer and deliver to Buyer, as applicable, [***].
(c)
The Purchased Assets, the UCLB Intellectual Property and the Licensed Intellectual
Property constitute, together with the rights, transfers and services provided under the Related Documents and the
Surviving Terms (as defined in the Termination Agreement) all of the Intellectual Property Rights, properties,
interests, assets and rights of Seller or any of its Affiliates that (i) are owned or Controlled by Seller or its
Affiliates at the Closing and (ii) (A) are necessary for the Exploitation of any RPGR Product in the same manner
as Seller prior to the Closing; or (B) were actually used by or on behalf of Seller (or any of its Affiliates) in
connection with, the Exploitation of any RPGR Product prior to the Closing, in each case ((A) or (B)), other than
the Seller [***] Technology (including any Patents that claim or cover any Seller [***] Technology).
Section 3.4.
Intellectual Property.
(a)
Seller exclusively owns all rights, title and interests in and to, and has the right to transfer to
Buyer or its Affiliates under the terms of this Agreement, all Purchased Intellectual Property free and clear of all
Liens, other than Permitted Liens. Seller either owns, or has a valid written license or other right to use, (i) all
Licensed Intellectual Property and (ii) prior to the Closing, the UCLB Intellectual Property. Other than the
Excluded Assets, immediately following the Closing, Buyer shall have the same rights, title and interests in and to
each item of Purchased Intellectual Property and the UCLB Intellectual Property as held by Seller or its Affiliates
immediately prior to the Closing, in each case, without the payment of any additional amounts or consideration,
except for (A) any amounts that may become due and payable by Buyer (or any of its Affiliates) under the UCLB
License or this Agreement following the Closing; or (B) any other fees, royalties or payments which Seller would
otherwise have been required to pay had the transactions contemplated herein not occurred. Immediately
following the Closing, Buyer shall have the right to use each item of Licensed Intellectual Property as licensed by
Seller to Buyer immediately prior to the Closing, without the payment of any additional amounts or consideration,
except for any fees, royalties or payments which Seller would otherwise have been required to pay had the
transactions contemplated herein not occurred.
(b)
The UCLB Patents represent all of the Patents owned or in-licensed by Seller (or any of its
Affiliates) as of the Closing that claim or cover the composition of matter of any RPGR Product. Other than the
Purchased Intellectual Property, the UCLB Patents, the Licensed Intellectual Property and the Seller [***]
Technology (including any Patents that claim
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or cover any Seller [***] Technology), there is no other Intellectual Property Rights owned or in-licensed by
Seller (or any of its Affiliates) as of the Closing that are primarily related to any RPGR Product. The Seller [***]
Technology is not necessary for the Research, Development, Manufacture, Commercialization or Exploitation of
any RPGR Product.
(c)
There are no (i) trademarks, trade dress, trade names, logos, brands, design rights or service
marks owned or in-licensed by Seller, or purported to be owned or in-licensed by Seller, as of the Closing that
were created for or necessary for the Commercialization of the RPGR Product, or (ii) copyright registrations
owned or purported to be owned by Seller as of the Closing relating to the RPGR Product or that were filed for, or
necessary for, the Commercialization of, the RPGR Product.
(d)
As of the Closing, Seller and its Affiliates are in material compliance with and have not
materially breached, violated or defaulted under, or received written notice that it has materially breached,
violated or defaulted under, any of the terms or conditions of (i) the Purchased Contract or (ii) any other license,
sublicense or other Contract (A) to which any Seller (or any of its Affiliates) is a Party and (B) pursuant to which
Seller (or any of its Affiliates) Control any of the Licensed Intellectual Property as of the Closing, nor has there
been or is there any event or occurrence that would constitute such a material breach, violation or default (with or
without the lapse of time, giving of notice or both) of any of Seller’s or its Affiliate’s obligations under any such
Contract.
(e)
Seller and its Affiliates have taken commercially reasonable efforts to protect the
confidentiality of all material Know-How related to any RPGR Product within the Purchased Intellectual Property
and UCLB Intellectual Property and, to Seller’s Knowledge, no such Know-How has been disclosed by Seller or
any of its Affiliates to any Third Party other than UCL Business Ltd. (or any of its predecessors, successors or its
or their respective affiliates) in accordance with the UCLB License, except (i) pursuant to valid and appropriately
protective confidentiality and nondisclosure obligations; (ii) as required or requested pursuant to applicable Law,
including to any Governmental Authority; or (iii) in connection with publications, presentations or public press
releases made by Seller or any of its Affiliates in the ordinary course of business; provided that such publications,
presentations or public press releases are consistent with the publications, presentations or public press releases
that a similarly situated pharmaceutical company would make, acting reasonably under the same circumstances.
(f)
Except as set forth in the UCLB License, no college, university or other educational or
research institution or agency, Governmental Authority or other organization has sponsored Research or
Development conducted by Seller or has any claim of right or license to, or ownership of, or other Lien upon any
Purchased Intellectual Property or, to Seller’s Knowledge, UCLB Intellectual Property.
(g)
The execution and delivery of this Agreement and the Related Documents by Seller do not,
and the consummation of the Contemplated Transactions and compliance by Seller with the provisions of this
Agreement and any Related Document will not, conflict with, or result in any violation of, breach of, or
default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination,
cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Lien
(other than
29
Permitted Liens) in or upon, any Purchased Assets, Licensed Intellectual Property or, to Seller’s Knowledge, any
UCLB Intellectual Property.
(h)
The Manufacturing Process used in the Manufacture of the RPGR Product as conducted by
or on behalf of Seller as of the Closing does not infringe or misappropriate any Intellectual Property Rights of any
Third Party.
Section 3.5.
Contracts. The Purchased Contract is Enforceable in accordance with its terms
against Seller and, to Seller’s Knowledge, the other parties thereto, and, subject to obtaining any necessary
consents disclosed pursuant to Section 3.2(d) and Section 3.2(f), will continue to be so Enforceable in accordance
with its terms following the consummation of the Contemplated Transactions, and has been negotiated in good
faith on an “arm’s length” transaction basis. The Purchased Contract, together with the Contracts listed in the
Assignment and Assumption Agreement (including the Assignment and Assumption Amendment), are the only
material Contracts to which Seller (or any of its Affiliates) is a party as of the Closing that primarily relate to the
Exploitation of any RPGR Product, other than any Contracts that [***].
Section 3.6.
Taxes.
(a)
Seller has timely and properly filed all Tax Returns with respect to the Business or the
Purchased Assets that are required to be filed and timely and properly paid all Taxes in respect thereof shown
thereon as due and payable. All such Tax Returns are true, complete, and accurate in all material respects and
prepared in accordance with applicable Law.
(b)
Seller has established adequate reserves for the payment of, and will timely pay when due,
all Taxes, including all Taxes that arise from or with respect to the Business, any RPGR Product or the Purchased
Assets and are incurred or attributable to the Pre-Closing Tax Period.
(c)
There are no liens for Taxes upon any of the Purchased Assets other than liens for Taxes not
yet due and payable or that are being contested in good faith.
(d)
As of the date of this Agreement, Seller is not the subject of an audit, investigation, or other
proceeding relating to the payment of or failure to pay any amount of Taxes in respect of the Purchased Assets or
the Business, and Seller has not received written notice from any Taxing Authority that such an audit,
investigation, or other proceeding will be initiated in the future.
(e)
Seller has not entered into an agreement or waiver extending any statute of limitations
relating to the assessment, payment or collection of a material amount of Taxes in respect of the Purchased Assets
or the Business that will be in effect after the Closing.
(f)
No claim has been made to Seller by any Taxing Authority in a jurisdiction where Seller
does not file Tax Returns in respect of the Purchased Assets or the Business that Seller is subject to taxation by
that jurisdiction.
(g)
Seller has not been a member of an “affiliated group” within the meaning of Section
1504(a) of the Code filing a consolidated United States federal income Tax Return or
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any other group filing Tax Returns on a combined, consolidated or unitary basis. Seller is not party to any
Contract relating to Tax sharing or Tax allocation other than a Contract entered into in the ordinary course of
business and the principal purpose of which was not the sharing or allocation of Taxes. Seller has no Liability for
the Taxes of any Person under Treasury Regulation 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferee or successor, by Contract (other than a Contract entered into in the ordinary course of
business and the principal purpose of which was not the sharing or allocation of Taxes) or otherwise.
(h)
None of the Purchased Assets is a “United States real property interest” as defined in
Section 897(c) of the Code.
Section 3.7.
Brokers and Other Advisors. Except for Evercore Inc., no broker, investment
banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar
fee or commission in connection with the Contemplated Transactions based upon arrangements made by or on
behalf of Seller.
Section 3.8.
Continued Solvency. Seller (a) is able to pay its debts as they become due; (b) is
solvent and will be solvent immediately following the Closing; and (c) immediately following the Closing, will
possess sufficient assets to discharge, or provide appropriate reserves for the discharge of, all of its Liabilities with
respect to this Agreement. Seller is not engaged in business or a transaction, and it is not about to engage in
business or a transaction, for which its remaining assets and capital are or will be insufficient to discharge, or
provide appropriate reserves for the discharge of, all of its Liabilities with respect to this Agreement. Seller does
not intend to incur, or believe that it will incur, Liabilities that would be beyond its ability to pay as such
Liabilities matured. Seller has not entered into this Agreement for the purpose of hindering, delaying or
defrauding its creditors.
Section 3.9.
No Other Representations or Warranties. The representations and warranties made
by Seller in this Article III are the exclusive representations and warranties made by Seller under this Agreement.
Except for the representations and warranties contained in this Article III or in any Related Document, (a) none of
the Buyer or any other Person has made or makes any other representation or warranty, either written or oral, on
behalf of Seller, and Seller hereby disclaims any other express or implied representations or warranties with
respect to any matter whatsoever; and (b) without limiting the foregoing clause (a), Buyer acknowledges that
Buyer has not relied on any representation or warranty from Seller or any of its Affiliates or Representatives in
determining to enter into this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 4.1.
Organization, Standing and Power. Buyer is a corporation duly organized and
validly existing under the laws of the State of Pennsylvania and has all requisite corporate power and authority to
carry on its business as now being conducted, except where the failure to have such power or authority or possess
such governmental licenses, permits,
31
authorizations or approvals, individually or in the aggregate, has not been and would not reasonably be expected
to be material to Buyer, taken as a whole. Buyer is duly qualified or licensed to do business and is in good
standing (in jurisdictions that recognize the concept of good standing) in each jurisdiction in which the nature of
its business or the ownership, leasing or operation of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified or licensed or to be in good standing
individually or in the aggregate has not been and would not reasonably be expected to be material to Buyer.
Section 4.2.
Authority; Noncontravention.
(a)
Buyer has all requisite corporate power and authority to execute and deliver this Agreement
and the Related Documents to which it is or will be a party and to consummate the Contemplated Transactions.
The execution and delivery of this Agreement and the Related Documents by Buyer and the consummation by
Buyer of the Contemplated Transactions have been duly authorized by all necessary corporate action on the part
of Buyer and no other corporate proceedings on the part of Buyer are necessary to authorize this Agreement, the
Related Documents or to consummate the Contemplated Transactions. This Agreement and the Contemplated
Transactions do not require approval of the holders of any shares of capital stock of Buyer. Each of this
Agreement and the Related Documents has been duly executed and delivered by Buyer and, assuming the due
authorization, execution and delivery by Seller, constitutes an Enforceable obligation of Buyer in accordance with
its terms.
(b)
The execution and delivery of this Agreement and the Related Documents by Buyer do not,
and the consummation of the Contemplated Transactions and compliance by Buyer with the provisions of this
Agreement and the Related Documents will not, conflict with, or result in any violation or breach of, or
default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in cancellation or
acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Lien in or upon any
of the properties or other assets of Buyer under (i) the certificate of incorporation or bylaws of Buyer; (ii) any
Contract to which Buyer is a party or any of its respective properties or other assets is subject; or (iii) any Law or
Order applicable to Buyer or its properties or other assets, except in the case of clause (ii), where the conflict,
violation, breach, default, termination, cancellation, acceleration or creation of a Lien, individually or in the
aggregate, would prevent, materially impede or materially delay the consummation by Buyer of the Contemplated
Transactions (including the payments required to be made pursuant to Article II).
(c)
No consent, approval, order or authorization of, action by or in respect of, or registration,
declaration or filing with, any Governmental Authority is required by or with respect to Buyer in connection with
the execution and delivery of this Agreement by Buyer or the consummation by Buyer of the Contemplated
Transactions.
Section 4.3.
Capital Resources. Buyer has access to sufficient funds to consummate the
Contemplated Transactions on the terms contemplated by this Agreement including the payment of the Purchase
Price and any Development Milestone Payments and all fees and expenses payable by Buyer in connection with
the Contemplated Transactions.
32
Section 4.4.
Brokers and Other Advisors. No broker, investment banker, financial advisor or
other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the Contemplated Transactions based upon arrangements made by or on behalf of Buyer.
Section 4.5.
Antitrust. The Contemplated Transactions under this Agreement will not require
any Party to file or cause to be filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, with the United
States Federal Trade Commission and/or the Antitrust Division of the United States Department of Justice.
Section 4.6.
No Other Representations or Warranties. The representations and warranties made
by Buyer in this Article IV are the exclusive representations and warranties made by Buyer under this Agreement.
Except for the representations and warranties contained in this Article IV or in any Related Document, none of the
Buyer or any other Person has made or makes any other representation or warranty, either written or oral, on
behalf of Buyer, and Buyer hereby disclaims any other express or implied representations or warranties with
respect to any matter whatsoever.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1.
Confidentiality; Non-Solicitation.
(a)
Confidentiality.
(i)
Each of Buyer and Seller acknowledges that certain confidential or proprietary
information was provided to them in connection with this Agreement and the consummation of the
Contemplated Transactions under the Confidentiality Agreement; provided, however, that, effective upon
the Closing, the Confidentiality Agreement shall terminate with respect to any Confidential Information
included in or related to the Purchased Assets and the terms of this Section 5.1(a) shall govern with respect
to such Confidential Information.
(ii)
Notwithstanding anything to the contrary, the obligations under this Section 5.1(a)
shall not apply to any information to the extent that such information:
(A)
(B)
is (at the time of disclosure) or becomes (after the time of disclosure) known to the
public or part of the public domain through no breach of this Agreement by the
Receiving Party or its Affiliates;
was known to, or was otherwise in the possession of, the Receiving Party or its
Affiliates, as evidenced by written records of the Receiving Party and its Affiliates
kept in the ordinary course of business, prior to the time of disclosure by the
Disclosing Party or any of its Affiliates (provided, however, that this Section 5.1(a)
(ii)(B) will not apply to Purchased Assets, UCLB Know-
33
(C)
(D)
How or Licensed Know-How in each case constituting Confidential Information);
is disclosed to the Receiving Party or any of its Affiliates on a non-confidential
basis by a Third Party who is entitled to disclose it without breaching any
confidentiality obligation to the Disclosing Party or any of its Affiliates; or
is independently developed by or on behalf of the Receiving Party or its Affiliates
outside of its performance under this Agreement, as evidenced by written records of
the Receiving Party and its Affiliates kept in the ordinary course of business,
without the use of the Confidential Information disclosed by the Disclosing Party or
its Affiliates to the Receiving Party or its Affiliates under this Agreement.
Specific aspects or details of Confidential Information shall not be deemed to be within the
public domain or in the possession of the Receiving Party merely because the Confidential
Information is embraced by more general information in the public domain or in the
possession of the Receiving Party. Further, any combination of Confidential Information
shall not be considered in the public domain or in the possession of the Receiving Party
merely because individual elements of such Confidential Information are in the public
domain or in the possession of the Receiving Party, unless the combination and its
principles are in the public domain or in the possession of the Receiving Party.
(iii)
The Parties acknowledge and agree that, as between the Parties, (A) this Agreement
and all of the respective terms of this Agreement shall be treated as Confidential Information of both
Parties and that each Party shall be deemed to be the Receiving Party with respect thereto; (B) following
the Closing, any Confidential Information contained or included in the Purchased Know-How and UCLB
Know-How (the “RPGR Confidential Information”) shall be the Confidential Information of Buyer, and
Buyer shall be deemed to be the Disclosing Party and Seller shall be deemed to be the Receiving Party
with respect thereto; and (C) the Licensed Know-How shall be deemed the Confidential Information of
Seller, and Seller shall be deemed to be the Disclosing Party and Buyer shall be deemed to be the
Receiving Party with respect thereto.
(iv)
Except to the extent expressly authorized by this Agreement (including pursuant to
Section 5.1(a)(v)), any Related Document or otherwise agreed in writing by the Parties, the Parties agree
that, from the Closing until the date that is [***] following the Closing, subject to the other provisions of
this Section 5.1(a), (A) each Party will, and will cause its Affiliates to, maintain in confidence, not publish
or otherwise disclose and otherwise safeguard, any and all Confidential Information of the other Party,
using such degree of care that such Party uses with respect to its own confidential information (which shall
in no event be less than a reasonable degree of
34
care); and (B) the Receiving Party may only use such Confidential Information for the purposes of this
Agreement (or any Related Document) and in connection with the performance of its obligations or
exercise of rights granted or reserved in this Agreement (or any Related Document).
(v)
Notwithstanding anything contained in this Agreement to the contrary, the
Receiving Party and its Affiliates may only disclose to Third Parties the Disclosing Party’s Confidential
Information to the extent such disclosure is necessary in the following instances: (A) in connection with
the performance of its obligations or exercise of rights granted or reserved in this Agreement or any
Related Document, under non-disclosure and non-use provisions no less restrictive than those in this
Agreement; (B) in connection with Regulatory Filings or audits by Regulatory Authorities for any RPGR
Product; (C) in connection with prosecuting or defending litigation as permitted by this Agreement or any
Related Document; (D) in complying with applicable court orders or governmental regulations (including
securities regulations); (E) in the case of any Party, in communication with its employees, directors,
officers, agents, contractors, consultants, and professional advisers, Affiliates, potential or actual
collaborators, partners, and licensees (including potential co-marketing and co-promotion contractors), and
potential or actual investment bankers, acquirers, lenders or investors, each of the foregoing whom, on a
need-to-know basis and prior to disclosure, must be bound by similar obligations of confidentiality and
non-use no less restrictive than those contained in this Section 5.1(a); (F) as permitted in accordance with
Section 5.3; or (G) as mutually agreed to in writing by the Parties.
(vi)
If the Receiving Party is required to disclose Confidential Information of the
Disclosing Party pursuant to applicable Law (including the rules of the Securities and Exchange
Commission or any stock exchange) or in connection with any bona fide legal process, including
disclosures of the type contemplated by the foregoing clauses (A) through (G) above (inclusive), then,
such disclosure to the extent reasonably necessary shall not be deemed a breach of this Agreement;
provided, however, that the Receiving Party, except where reasonably impracticable or legally
impermissible, will: (1) inform the Disclosing Party as soon as reasonably practicable following it
becoming aware of the required disclosure; (2) limit the disclosure to the required purpose; and (3) at the
Disclosing Party’s request and reasonable expense, assist in attempting to object to, limit or seek to secure
confidential treatment of the required disclosure.
(b)
Non-Solicitation. Each Party, on behalf of itself and on behalf of its Affiliates, agrees that
for a period of five (5) years commencing upon the Closing Date, such Party shall not (and shall cause its
Affiliates to not), directly or indirectly, solicit or encourage any employee or consultant of the other Party (or any
of its Affiliates) who was such at any time within the twelve (12)-month period immediately preceding the
Closing Date to terminate or diminish its relationship with such other Party (or any of its Affiliates) after the
Closing.
(c)
Acknowledgments. Seller agrees and acknowledges that the covenants in this Section 5.1
are reasonable and valid in all respects and are necessary to protect the corporate good will, Confidential
Information and Intellectual Property Rights, and other legitimate interests of the Parties, and such covenants
represent only a limited restraint. Further, Seller
35
acknowledges that, without the restrictions contained in this Section 5.1, the benefits of the Contemplated
Transactions could be devalued, lost or circumvented, particularly in light of the nature and ongoing development
of any RPGR Product, and that Buyer would not have entered into this Agreement without the restrictions
contained in this Section 5.1. The provisions of this Section 5.1 are in addition to, and not in limitation of, any
other similar provisions to which Seller or any of its Affiliates is bound.
(d)
Interpretation. Seller acknowledges and agrees that the provisions of this Section 5.1 are
necessary and reasonable to protect Buyer in the conduct of its business and are a material inducement to Buyer’s
execution and delivery of this Agreement and its willingness to enter into the Contemplated Transactions.
(e)
Validity. It is the desire and intent of the Parties that this Section 5.1 will be enforced to the
fullest extent permissible under the Laws applied in each jurisdiction in which enforcement is sought. If any
restriction set forth in this Section 5.1 is found by any court of competent jurisdiction to be invalid or
unenforceable for any reason (e.g., because it extends for too long a period of time, over too great a range of
activities or in too broad a geographic area), the Parties agree that the court making the determination of invalidity
or unenforceability shall reduce the scope, duration, or area of the term or provision, delete specific words or
phrases, or replace any invalid or unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision,
and this Agreement will be enforceable as so modified. The agreements contained in this Section 5.1 shall each
constitute a separate agreement independently supported by good and adequate consideration. For the avoidance
of doubt, the Parties acknowledge that Seller will benefit substantially from the consummation of the
Contemplated Transactions and that the consideration that Seller will receive upon such consummation is
adequate to support Seller’s agreement to be bound by the covenants set forth herein.
(f)
Injunctive Relief. Seller understands that a breach of this Section 5.1 by Seller may cause
Buyer or its Affiliates irreparable harm which may not be adequately compensated by money damages.
Accordingly, in the event of a breach or threatened breach by Seller of this Section 5.1, Buyer or, as applicable,
any of its Affiliates will be entitled to seek injunctive or other equitable relief to enforce the provisions hereof
(without need to post bond), in addition to such other remedies to which Buyer or its Affiliates may be entitled,
including the recovery of money damages and its reasonable attorneys’ fees and costs incurred thereby.
Section 5.2.
Certain Tax Matters.
(a)
Transfer Taxes. All recordation, transfer, documentary, excise, sales, value added, use,
stamp, conveyance or other similar Taxes, duties or governmental charges, and all recording or filing fees or
similar costs, imposed or levied by reason of, in connection with or attributable to this Agreement or the
Acquisition (collectively, “Transfer Taxes”) shall be borne equally between Seller, on the one hand, and Buyer, on
the other hand. Transfer Taxes shall be timely paid, and all applicable filings, reports and returns shall be filed, as
provided by applicable Law.
36
(b)
Tax Withholding. Buyer and any other applicable withholding agent shall be entitled to
deduct and withhold, or cause to be deducted and withheld, from any amounts payable pursuant to or as
contemplated by this Agreement or any Related Document any Taxes or other amounts required under the Code or
any applicable Law to be deducted and withheld; provided that, if Buyer becomes aware that any such
withholding is required, it shall, prior to withholding any Taxes from payments to Seller hereunder, inform Seller
of such requirement, and use commercially reasonable efforts to cooperate with Seller in executing any documents
and taking any other commercially reasonable actions necessary to reduce or eliminate the need for such
withholding. To the extent that any such amounts are so deducted or withheld, such amounts shall be treated for
all purposes of this Agreement and any Related Document as having been paid to the Person in respect of which
such deduction and withholding was made. Notwithstanding anything to the contrary in this Agreement, any
compensatory amounts payable pursuant to or as contemplated by this Agreement shall be remitted by the
applicable payer to the applicable employer for payment through such employer’s payroll procedure in accordance
with applicable Law.
(c)
Cooperation and Exchange of Information.
(i)
Each of Seller and Buyer shall cooperate fully, as and to the extent reasonably
requested by the other Party, in connection with the filing of Tax Returns in respect of the Purchased
Assets or the Business and any audit, litigation or other proceeding with respect to Taxes in respect
thereof. Such cooperation shall include the retention and (upon the other Party’s request) the provision of
records and information that are reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder.
(ii)
Buyer and Seller further agree, upon request, to use their best efforts to obtain any
certificate or other document from any governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to
the transactions contemplated hereby).
Section 5.3.
Public Announcements. Seller may issue a press release within thirty (30) days of
Closing, substantially in the form attached here as Exhibit H. Thereafter, Seller and its Affiliates shall not issue
any press release or otherwise make any public statement with respect to the provisions of this Agreement or the
Contemplated Transactions without the prior written consent of Buyer; provided, however, that Seller shall have
the right to issue a press release disclosing the receipt of any Development Milestone Payment hereunder.
Notwithstanding anything to the contrary in this Agreement or any Related Document, either Party may issue a
press release or make a public statement with respect to the Contemplated Transactions without the consent of the
other Party as may be required by Law or any listing agreement with any applicable securities exchange or market
(including public disclosure of the existence of this Agreement and the terms hereof in a current or periodic report
filed with the Securities and Exchange Commission); provided that such release or filing is provided to the other
Party for prior review and comment. The foregoing shall not limit any non-public equity
37
holder communication of either Party or any disclosure made in connection with a court pleading.
Section 5.4.
Expenses. Except as expressly set forth herein, each of Seller and Buyer shall bear
its own costs and expenses incurred in connection with this Agreement and the Contemplated Transactions.
Section 5.5.
Misallocated Assets.
(a)
If, after the Closing, Buyer or any of its Affiliates is transferred any asset which is
ultimately determined to be an Excluded Asset or possesses any Excluded Asset (other than any Licensed
Intellectual Property in connection with the exercise of the licenses granted to Buyer pursuant to Section 5.6(a)),
then (i) Buyer shall, or shall cause its Affiliates to, transfer and convey (without further consideration) such
Excluded Asset to Seller, and Seller will accept such Excluded Asset; (ii) Seller will assume and agree to pay,
perform, fulfill and discharge (without further consideration) any Excluded Liabilities associated with such
Excluded Asset as contemplated in Section 2.4; and (iii) Buyer and Seller will promptly execute such documents
or instruments of conveyance or assumption and take such further actions which are reasonably necessary or
desirable to effect the transfer of such Excluded Asset back to Seller and, until such time, to the extent necessary
and applicable, Buyer hereby grants to Seller an irrevocable, perpetual, global, non-exclusive, royalty-free license
(with the right to grant sublicenses under multiple tiers) to use such Excluded Asset for any and all purposes until
such transfer is effective.
(b)
If, after the Closing, Seller or any of its Affiliates is transferred any asset which is
ultimately determined to be a Purchased Asset or possesses any Purchased Asset (other than in connection with
the performance of Seller’s (or its Affiliates’) obligations under this Agreement (including pursuant to Section
5.7), the Supply Agreement, the Termination Agreement (including pursuant to any terms of the Collaboration
Agreement that survive pursuant to the Termination Agreement) or any other Related Documents, as applicable),
then, (i) Seller shall, or shall cause its Affiliates to, transfer and convey (without further consideration) such
Purchased Asset to Buyer, and Buyer will accept such Purchased Asset, (ii) Buyer will assume and agree to pay,
perform, fulfill and discharge (without further consideration) any Assumed Liabilities associated with such
Purchased Asset as contemplated in Section 2.3, and (iii) Seller and Buyer will promptly execute such documents
or instruments of conveyance or assumption and take such further actions which are reasonably necessary or
desirable to effect the transfer of such Purchased Asset to Buyer and, until such time, to the extent necessary and
applicable, Seller hereby grants to Buyer an irrevocable, perpetual, global, non-exclusive, royalty-free license
(with the right to grant sublicenses under multiple tiers) to use such Purchased Asset for any and all purposes until
such transfer is effective.
(c)
From and after the Closing, Seller shall refer all inquiries and other communications
(whether written or oral) in respect of any RPGR Product (or the Exploitation thereof) or Purchased Asset to
Buyer and shall promptly inform Buyer of such inquiries and communications. At Buyer’s request, Seller shall
reasonably cooperate with Buyer, at Buyer’s reasonable request, to facilitate Buyer’s communication with such
Person’s inquiry or other communication in respect of such RPGR Product or Purchased Asset, as applicable.
38
Section 5.6.
Unblocking Licenses; Grant-Back License.
(a)
Subject to the terms and conditions of this Agreement, Seller, on behalf of itself and its
Affiliates, hereby grants to Buyer and its Affiliates, effective as of the Closing and from and after the Closing
Date, a non-exclusive, perpetual, irrevocable, non-transferable (except as set forth in Section 7.6), royalty-free,
fully paid-up, worldwide license (with the right to grant sublicenses through multiple tiers, subject to the
remainder of this Section 5.6(a)) under all Licensed Intellectual Property solely to Research, Develop,
Manufacture, Commercialize and otherwise Exploit any RPGR Product in the Territory. Subject to the remainder
of this Section 5.6(a), Buyer shall have the right to grant any sublicenses, in whole or in part, under the licenses or
rights granted to Buyer under this Section 5.6(a) [***]. In the event that Buyer (or any of its Affiliates) grants any
sublicense under any of the licenses or rights granted to Buyer and its Affiliates under this Section 5.6(a) [***],
then: (i) Buyer shall remain responsible for the performance of its obligations under this Agreement and the
Related Documents, (ii) Buyer shall remain liable to Seller for any and all acts or omissions of any such
sublicensees, including compliance with the applicable terms and conditions of this Agreement or any relevant
Related Documents, as applicable, and (iii) any such sublicense granted [***] shall be in writing and shall be
subject to, and consistent with, the applicable terms and conditions of this Agreement or any relevant Related
Documents, as applicable.
(b)
Subject to the terms and conditions of this Agreement and the Supply Agreement (including
Section 3 of the Supply Agreement), Buyer, on behalf of itself and its Affiliates, hereby grants to Seller and its
Affiliates, effective as of the Closing and from and after the Closing Date, a non-exclusive, irrevocable, non-
transferable (except as set forth in Section 7.6), royalty-free, fully paid-up, worldwide license under:
(i)
the Purchased Intellectual Property and the Janssen Arising IP, in each case, solely
for the use by Seller and its Affiliates in connection with the performance of Seller’s (or its Affiliates’)
obligations under this Agreement (including pursuant to Section 5.7), the Supply Agreement, the
Termination Agreement (including pursuant to any terms of the Collaboration Agreement that survive
pursuant to the Termination Agreement) or any other Related Documents, as applicable;
(ii)
all Purchased Intellectual Property solely to Research, Develop, Manufacture,
Commercialize and otherwise Exploit any products or services existing within the Excluded Assets as of
the Closing Date in the Territory; provided that the licenses granted to Seller under this Section 5.6(b)(ii)
specifically excludes any license or grant of rights under the UCLB Intellectual Property; and
(iii)
solely with respect to any Janssen Arising IP that is necessary for the practice of any
Manufacturing Intellectual Property or Supplier Arising IP, solely to practice or use such Manufacturing
Intellectual Property or Supplier Arising IP (other than with respect to the practice or use of such
Manufacturing Intellectual Property or Supplier Arising IP for the Manufacture of any products or services
directed to the RPGR Target or the treatment of the RPGR Target Indication).
39
Subject to the remainder of this Section 5.6(b), Seller shall have the right to grant sublicenses (including through
multiple tiers), in whole or in part, under the licenses or rights granted to Seller under (A) Section 5.6(b)(i) [***];
or (B) Section 5.6(b)(ii) to any of its Affiliates or any Third Party. In the event that Seller (or any of its Affiliates)
grants any sublicense under any of the licenses or rights granted to Seller and its Affiliates under this Section
5.6(b) [***], then: (1) Seller shall remain responsible for the performance of its obligations under this Agreement
and the Related Documents, (2) Seller shall remain liable to Buyer for any and all acts or omissions of any such
sublicensees, including compliance with the applicable terms and conditions of this Agreement or any relevant
Related Documents, as applicable, and (3) any such sublicense granted to [***] shall be in writing and shall be
subject to, and consistent with, the applicable terms and conditions of this Agreement or any relevant Related
Documents, as applicable.
(c)
Each Party acknowledges that the licenses and rights granted under this Section 5.6 are
limited to the scope expressly granted therein and, except with respect to any rights or licenses expressly granted
under this Agreement or any Related Document (including with respect to the Purchased Assets pursuant to
Section 2.1 of this Agreement) or the rights or licenses granted pursuant to the Collaboration Agreement that
survive pursuant to the Termination Agreement, (i) all other rights to any Patents, Know-How or other Intellectual
Property Rights of a Party licensed hereunder are expressly reserved to the Party granting the license to such
Patents, Know-How or other Intellectual Property Rights, and (ii) nothing in this Agreement will be interpreted to
grant a Party any rights under any Patents, Know-How or other Intellectual Property Rights owned or Controlled
by the other Party that are not expressly granted herein, whether by implication, estoppel, or otherwise. Without
limiting the foregoing, notwithstanding anything to the contrary in this Agreement, (A) except with respect to the
Purchased Intellectual Property assigned to Buyer under this Agreement, Seller is not granting any licenses or
rights to Buyer (or any of its Affiliates) under any Patents, Know-How or other Intellectual Property Rights
owned or otherwise Controlled by Seller or any of its Affiliates to Research, Develop, Manufacture,
Commercialize or otherwise Exploit any compound, construct, product or service other than any RPGR Product;
and (B) except with respect to (1) the licenses granted to Seller and its Affiliates under Section 5.6(b)(i) or (2) any
other rights or licenses expressly granted to Seller or its Affiliates under this Agreement or any Related
Documents in connection with Seller’s (or its Affiliate’s) performance of its obligations under this Agreement or
any Related Documents, as applicable, Buyer is not granting any licenses or rights to Seller (or any of its
Affiliates) under any Patents, Know-How or other Intellectual Property Rights, including the UCLB Intellectual
Property, owned or otherwise Controlled by Buyer or any of its Affiliates to Research, Develop, Manufacture,
Commercialize or otherwise Exploit any RPGR Product.
(d)
The Parties agree that this Agreement constitutes an executory contract under Section 365
of the Bankruptcy Code for the license of “intellectual property” as defined under Section 101 of the Bankruptcy
Code and constitutes a license of “intellectual property” for purposes of any similar laws in any other country in
the Territory. The Parties further agree that Buyer, as licensee of such rights under this Agreement, will retain and
may fully exercise all of its protections, rights and elections under the Bankruptcy Code, including under Section
365(n) of the Bankruptcy Code, and any similar Laws in any other country in the Territory and that Buyer cannot
be compelled to accept a money satisfaction of its interests in the intellectual property licensed pursuant to this
Agreement, and that any such sale therefore may not be made
40
to a purchaser “free and clear” of Buyer’s rights under this Agreement and Section 365(n) without the express,
contemporaneous consent of Buyer. The Parties further agree that, in the event of an Insolvency Event by or
against Seller under the Bankruptcy Code and any similar laws in any other country in the Territory, Buyer may be
entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property (including Licensed Know-How and Know-How transferred to Buyer
pursuant to the Technology Transfer Plan), and the same, if not already in its possession, will be promptly
delivered to it: (i) upon any such commencement of an Insolvency Event upon its written request therefor, unless
Seller elects to continue to perform all of its obligations under this Agreement; or (ii) if not delivered under clause
(i) above, following the rejection of this Agreement by or on behalf of Seller upon written request therefor by
Buyer. Whenever Seller or any of its successors or assigns provides to Buyer any of the intellectual property
licensed hereunder (or any embodiment thereof including Licensed Know-How and Know-How transferred to
Buyer pursuant to the Technology Transfer Plan) pursuant to this Section 5.6(d), Buyer shall have the right to
perform Seller’s obligations hereunder with respect to such intellectual property, but neither such provision nor
such performance by Buyer shall release Seller from liability resulting from rejection of the license or the failure
to perform such obligations.
(e)
All rights, powers and remedies of Buyer provided herein are in addition to and not in
substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity
(including the Bankruptcy Code) in the event of the commencement of a case under the Bankruptcy Code with
respect to Seller. The Parties agree that they intend the following rights to extend to the maximum extent
permitted by Law, and to be enforceable under Bankruptcy Code Section 365(n):
(i)
the right of access to any intellectual property rights (including all embodiments
thereof) of Seller licensed to Buyer hereunder, or any Third Party with whom Seller contracts to perform
an obligation of Seller under this Agreement, and, in the case of the Third Party, which is necessary for the
Manufacture, use, sale, import or export of RPGR Products; and
(ii)
the right to contract directly with any Third Party to complete the contracted work.
Section 5.7.
Technology Transfer Plan. Subject to the terms and conditions of this Agreement
(including this Section 5.7), Buyer and Seller agree to conduct a technology transfer in accordance with the terms
set forth in the Technology Transfer Plan attached hereto as Exhibit E.
Section 5.8.
Additional Covenants of Seller. Notwithstanding anything to the contrary in this
Agreement, neither Seller nor any of its Affiliates will license, assign, transfer or otherwise convey any Licensed
Intellectual Property to any Third Party, in each case, in any manner that would conflict with any of the rights or
licenses granted to Buyer under this Agreement, including the licenses or rights granted to Buyer pursuant to
Section 5.6(a); provided, however, that, for clarity, Seller shall have no obligation to prosecute, maintain, enforce
or defend any of the Licensed Patents.
41
Section 5.9.
Further Assurances. Buyer and Seller hereby each agree on behalf of itself that it
shall execute, acknowledge and deliver such further instruments, and to do all such further acts, as is reasonably
necessary or appropriate in order to vest in Buyer or Seller, as applicable, and their respective successors, assigns
and sublicensees the Purchased Assets and the rights and licenses granted pursuant to Section 5.6.
Section 5.10.
Insurance. As of the Closing Date, the coverage under all insurance policies of
Seller and its Affiliates shall continue in force only for the benefit of the Seller and its Affiliates, and not for the
benefit of Buyer or any of its Affiliates. As of the Closing Date, Buyer agrees to arrange for its own insurance
policies with respect to the Purchased Assets covering all periods and agrees not to seek, through any means, to
benefit from any of Seller’s or its Affiliates’ insurance policies which may provide coverage for claims relating in
any way to the Purchased Assets.
Section 5.11. Access to Books and Records. After the Closing Date until the earlier to occur of
[***], Seller shall (i) give Buyer and its Representatives reasonable access, upon reasonable notice during normal
business hours, to the books and records (other than where access to such information is prohibited by applicable
Law), or other information and documents primarily related to the Purchased Assets or the Business, in each case,
that are (A) primarily related to the Purchased Assets or the Business (notwithstanding that such books, records or
files are necessary for, or actually used by or on behalf of Seller (or any of its Affiliates) as of the Closing in the
Exploitation of any Other Seller Product), but excluding any such books, records, information or other
documentation that constitute embodiments of Seller [***] Technology; and (B) in Seller’s or its Affiliates’
possession and control, and will permit Buyer and its Representatives to make copies of such books, records,
information and documents as Buyer may reasonably request (at Buyer’s sole cost and expense); (ii) deliver to
Buyer, at Seller’s sole cost and expense, each Clinical Development Record generated after the Closing [***], and
(iii) provide Buyer and its Representatives reasonable access, upon reasonable notice during normal business
hours, to the officers, other senior management and Representatives of Seller to cooperate reasonably, at such
times as Buyer and its Representatives may reasonably request, to verify and discuss the information furnished to
Buyer and its Representatives and otherwise discuss the Purchased Assets or the Business; provided that, in each
case, such access and cooperation shall not unreasonably disrupt the personnel and operations of Seller or the
Business.
ARTICLE VI
INDEMNIFICATION
Section 6.1.
Indemnification of Buyer.
(a)
Subject to the limitations set forth in this Article VI, without limiting the Termination
Agreement, from and after the Closing, Seller shall indemnify Buyer and its Affiliates and each of their respective
officers, directors, employees, agents and Representatives (each, a “Buyer Indemnified Party”) from and against,
and hold each Buyer Indemnified Party harmless from, any and all debts, obligations, losses, Liabilities, damages,
Liens, Taxes, penalties, costs of investigation, costs of defense and enforcement of this Agreement or other
42
costs and expenses, including reasonable attorneys’ and experts’ fees and expenses (collectively, “Losses”), to the
extent arising from, relating to or otherwise in connection with:
(i)
any breach of or inaccuracy in any representation or warranty of Seller in this
Agreement or any Related Document, [***];
(ii)
any breach by or behalf of Seller or any of its Affiliates of any of Seller’s covenants
or agreements contained in this Agreement or any Related Document;
(iii)
any Fraud by or on behalf of Seller;
(iv)
any Transfer Taxes allocated to Seller pursuant to Section 5.2(a); or
(v)
any Excluded Liabilities or Excluded Assets.
(b)
[***].
Section 6.2.
Indemnification of Seller Indemnified Parties. Subject to the limitations set forth in
this Article VI, without limiting the Termination Agreement, from and after the Closing, Buyer shall indemnify
Seller and its Affiliates and each of their respective officers, directors, employees, agents and Representatives
(each a “Seller Indemnified Party”) from and against, and hold each Seller Indemnified Party harmless from, any
and all Losses, to the extent arising from, relating to or otherwise in connection with:
(a)
or any Related Document, [***];
any breach of or inaccuracy in any representation or warranty of Buyer in this Agreement
(b)
any breach by or behalf of Buyer or any of its Affiliates of any of Buyer’s covenants or
agreements contained in this Agreement or any Related Document;
(c)
(d)
any Transfer Taxes allocated to Buyer pursuant to Section 5.2(a);
any practice of the Licensed Intellectual Property by or on behalf of Buyer (or any of its
Affiliates or its or their sublicensees under such Licensed Intellectual Property) pursuant to the license granted to
Buyer under Section 5.6(a);
(e)
(f)
any Fraud by or on behalf of Buyer; or
any Assumed Liabilities.
Section 6.3.
Indemnification Claims
(a)
In order for a Buyer Indemnified Party or a Seller Indemnified Party (an “Indemnified
Party”) to be entitled to any indemnification provided for under Section 6.1 or Section 6.2 in respect of, arising
out of or involving a claim of a Third Party (a “Third Party Claim”), such Indemnified Party must notify, with
respect to a claim for indemnification pursuant to Section 6.1, Seller, or, with respect to a claim for
indemnification pursuant to Section
43
6.2, Buyer (each, an “Indemnifying Party”) in writing of the Third Party Claim (including in such notice a brief
description of the applicable claim(s), including damages sought or estimated, to the extent actually known by
such Indemnified Party) [***] after receipt by such Indemnified Party of actual notice of the Third Party Claim;
provided, however, that failure to give such notification or any deficiency in such notification shall not affect the
indemnification provided under Section 6.1 or Section 6.2 except to the extent that the Indemnifying Party has
been actually prejudiced as a result of such failure or deficiency. The Indemnifying Party shall have the right to
undertake the defense or opposition to such Third Party Claim (at the Indemnifying Party’s expense) with counsel
selected by it and reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying Party gives
written notice to the Indemnified Party [***] after it has been notified of the Third Party Claim that it will defend
the Indemnified Party against such Third Party Claim; (ii) the Third Party Claim involves only money damages
and does not seek an injunction or other equitable relief against the Indemnified Party; (iii) the Third Party Claim
does not relate to or arise in connection with Taxes, any purported class action, or any criminal or regulatory
enforcement Action; (iv) the Indemnified Party has not been advised in writing by outside counsel that a legal
conflict exists between the Indemnified Party and the Indemnifying Party in connection with conducting the
defense of the Third Party Claim; (v) the Third Party Claim does not allege the infringement of the Intellectual
Property Rights of any Person by the Indemnified Party; and (vi) the Indemnifying Party diligently and vigorously
and in good faith conducts the defense of the Third Party Claim. The Indemnifying Party may not settle any Third
Party Claim without the prior written consent of the Indemnified Party (such consent not to be unreasonably
withheld or delayed) unless (1) the claimant in such Third Party Claim provides to the Buyer Indemnified Parties
or Seller Indemnified Parties, as applicable, a full, general and unqualified release from all liability in respect of
such Third Party Claim; (2) such settlement does not involve any injunctive relief; (3) such settlement does not
create a Lien on any of the assets of the applicable Indemnified Parties or impose any restriction or condition that
would apply to or materially affect the applicable Indemnified Parties or the conduct of the applicable Indemnified
Parties’ businesses; and (4) such settlement does not involve any finding or admission of liability or wrongdoing.
If the Indemnifying Party elects not to control or conduct the defense of a Third Party Claim, the Indemnifying
Party nevertheless shall have the right to participate in the defense of any Third Party Claim and, at its own
expense, to employ counsel of its own choosing for such purpose. The Parties shall cooperate in the defense of
any Third Party Claim, with such cooperation to include (i) the retention and the provision to the Indemnifying
Party of records and information that are reasonably relevant to such Third Party Claim and (ii) reasonable access
to employees on a mutually convenient basis for providing additional information and explanation of any material
provided hereunder.
(b)
In order for an Indemnified Party to be entitled to any indemnification provided for under
this Agreement other than in respect of, arising out of or involving a Third Party Claim, such Indemnified Party
shall deliver notice of such claim to the Indemnifying Party (including in such notice a brief description of the
applicable claim(s), including damages sought or estimated, to the extent actually known by such Indemnified
Party); provided, however, that failure to give such notification or any deficiency in such notification shall not
affect the indemnification provided under Section 6.1 or Section 6.2 except to the extent that the Indemnifying
Party has been actually prejudiced as a result of such failure or deficiency. If the Indemnifying Party does not
notify the Indemnified Party [***] following its receipt of such notice that the Indemnifying Party disputes the
indemnity claimed by the Indemnified Party
44
under Section 6.1 or Section 6.2, such indemnity claim specified by the Indemnified Party in such notice shall be
conclusively deemed a liability to be indemnified under Section 6.1 or Section 6.2 and the Indemnified Party shall
be indemnified for the amount of the Losses stated in such notice to the Indemnified Party on demand or, in the
case of any notice in which the Losses (or any portion thereof) are estimated, on such later date when the amount
of such Losses (or such portion thereof) becomes finally determined.
Section 6.4.
Termination of Indemnification.
(a)
The obligations to indemnify and hold harmless an Indemnified Party hereto (i) pursuant to
Section 6.1(a)(i) and Section 6.2(a) shall terminate when the applicable representation or warranty terminates
pursuant to Section 6.4(b); (ii) pursuant to Section 6.1(a)(ii) and Section 6.2(b), shall terminate pursuant to
Section 6.4(b); and (iii) pursuant to the other clauses of Section 6.1 and Section 6.2 shall not terminate; provided,
however, that as to clauses (i) and (ii) above such obligation to indemnify and hold harmless shall not terminate
with respect to any claims as to which the Indemnified Party shall have, before the expiration of the applicable
period, previously delivered a notice of such claim to the Indemnifying Party.
(b)
All representations, warranties, covenants and obligations contained in this Agreement shall
survive the Closing; provided, however, that, except in the case of Fraud, all representations and warranties (other
than the Fundamental Representations and representations and warranties in Section 3.4(h)) shall terminate [***]
and (i) all Fundamental Representations shall terminate [***] and (ii) Section 3.4(h) shall terminate [***]. All
covenants and obligations of the Parties shall survive until they are fully performed or fulfilled, except as
otherwise expressly set forth in the terms of such covenants and agreements.
Section 6.5.
Limitations.
(a)
Seller shall not be liable for any Loss or Losses under Section 6.1(a)(i) (other than a Loss or
Losses arising from a breach of any Fundamental Representation of Seller or Fraud by Seller) (i) unless and until
the amount of Losses arising from any matter or series of matters relating to the same underlying fact,
circumstance, action or event [***] (“Covered Losses”); and (ii) unless and until the aggregate amount of all
Covered Losses incurred by the Buyer Indemnified Party [***] of the Closing Purchase Price, [***]; provided,
however, that (A) the cumulative indemnification obligations of the Seller under Section 6.1(a)(i) (other than a
Loss or Losses arising from a breach of any Fundamental Representation of Seller, Section 3.3(c) (Sufficiency of
Assets), Section 3.4(h) or Fraud by Seller) shall in no event [***]; (B) the cumulative indemnification obligations
of the Seller under Section 6.1(a)(i) arising from a breach of Section 3.3(c) (Sufficiency of Assets) or Section
3.4(h) shall in no event [***]; and (C) the cumulative indemnification obligations of Seller under this Agreement
shall in no event [***]. Seller shall only be required to indemnify a Buyer Indemnified Party for any particular
Loss one time.
(b)
Each Indemnified Party shall use commercially reasonable efforts to mitigate its Losses.
The amount of Losses payable under this Article VI shall be reduced by any and all amounts recovered by the
Indemnified Party under applicable insurance policies or from any other Person alleged to be responsible therefor,
net of any expenses incurred by such
45
Indemnified Party in collecting such amount. If the Indemnified Party receives any amounts under applicable
insurance policies or from any other Person alleged to be responsible for any Losses subsequent to an
indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse the
Indemnifying Party for any payment made or expense incurred by such Indemnified Party in connection with
providing such indemnification up to the amount received by the Indemnified Party, net of any expenses incurred
by such Indemnified Party in collecting such amount.
Section 6.6.
[***]
Section 6.7.
Exclusive Remedies. Buyer and Seller acknowledge and agree that after the
Closing, the indemnification provisions of this Article VI shall be the sole and exclusive remedies of Buyer and
Seller for any breach of the representations or warranties or nonperformance of or default under any covenants or
agreements to be performed on or prior to Closing by Buyer or Seller contained in this Agreement or any Related
Document (other than (i) claims for equitable relief and (ii) claims of, or causes of action arising from, Fraud).
Section 6.8.
Purchase Price Adjustments. To the extent permitted by applicable Law, any
amounts payable under Article VI shall be treated by Buyer and Seller as an adjustment to the Purchase Price for
U.S. federal income tax purposes.
Section 6.9.
No Consequential Damages. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN, WITH THE EXCEPTION OF RELIEF MANDATED BY STATUTE, NO
PARTY TO THIS AGREEMENT SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO THE OTHER
PARTY OR ANY AFFILIATE OF THE OTHER PARTY FOR LOST REVENUES OR PROFITS DAMAGES
OR INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR MULTIPLIED
DAMAGES OR ATTORNEYS’ FEES, COSTS OR PREJUDGMENT INTEREST THAT ARISE OUT OF OR
RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH HEREOF OR ANY LIABILITY
RETAINED OR ASSUMED HEREUNDER; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT
BE CONSTRUED TO PRECLUDE RECOVERY IN RESPECT OF ANY LOSS DIRECTLY INCURRED OR
SUFFERED FROM THIRD PARTY CLAIMS OR IN RESPECT OF ANY BREACH OF SECTION 5.1(A).
ARTICLE VII
GENERAL PROVISIONS
Section 7.1.
Rules of Construction. The Parties agree that they have been represented by
counsel during the negotiation and execution of this Agreement and have together drafted this Agreement and,
therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities
in an agreement or other document will be construed against the Party drafting such agreement or document.
Section 7.2.
Notices. All notices, requests, claims, demands and other communications
hereunder shall be given (and shall be deemed to have been duly given upon
46
receipt) (i) by hand delivery; (ii) by prepaid overnight courier (providing written proof of delivery); (iii) by
electronic mail (with confirmation of transmission); or (iv) by certified or registered mail (return receipt requested
and first class postage prepaid), addressed as follows (or at such other address for a Party as shall be specified by
like notice):
if to Buyer, to:
[***]
and
[***]
if to Seller, to:
[***]
with a copy (which shall not constitute notice) to:
[***]
provided that any notice received at the addressee’s location (or, if sent by electronic mail, to the appropriate email
addresses set forth in this Section 7.2) on any Business Day after 5:00 p.m. (addressee’s local time) shall be
deemed to have been received at 9:00 a.m. (addressee’s local time) on the next Business Day.
Section 7.3.
Consents and Approvals. For any matter under this Agreement requiring the
consent or approval of either Party to be valid and binding on the Party, such consent or approval must be in
writing.
Section 7.4.
Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile .pdf or other electronically transmitted signatures), all of which shall be considered one
and the same agreement and shall become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other Party.
Section 7.5.
Entire Agreement; No Third-Party Beneficiaries. This Agreement, the
Confidentiality Agreement and the other Related Documents (i) constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter of
this Agreement, the Related Documents, and the Confidentiality Agreement; and (ii) other than in respect of any
Indemnified Party pursuant to the terms of Article VI, are not intended to and do not confer upon any Person other
than the Parties any legal or equitable rights or remedies.
Section 7.6.
Assignment. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by either of the Parties without the prior written consent of the
other Party, except that (a) subject in each case to Section 2.6(h), Buyer, upon prior written notice to Seller, may
assign, in its sole discretion, any of or all
47
its rights, interests and obligations under this Agreement to an Affiliate or to a Third Party in connection with the
sale or exclusive license of the Purchased Assets or any RPGR Product; and (b) Seller may (i) assign this
Agreement by operation of law (including pursuant to a transfer as a result of a merger, consolidation or
liquidation or dissolution of Seller) and (ii) upon prior written notice to Buyer, assign in its sole discretion its right
to receive, in whole or in part, Development Milestone Payments as part of a single transaction to a single
purchaser (including one or more of its affiliates) (provided that any such assignee of Seller’s right to receive
Development Milestone Payments shall agree to be bound by obligations of confidentiality and non-use consistent
with the terms of Section 5.1(a)); provided, however, that no such assignment by any Party shall relieve such Party
of any of its obligations hereunder. Subject to the preceding sentences, this Agreement will be binding upon,
inure to the benefit of, and be Enforceable by, the Parties and their respective successors and assigns. Any
purported assignment in violation of this Section 7.6 shall be null and void.
Section 7.7.
Governing Law; Judicial Resolution; Waiver of Jury Trial; Specific Performance.
(a)
This Agreement shall be governed by and construed in accordance with the Laws of the
State of New York, without regard to the conflicts of law, principles or rules of such state, to the extent such
principles or rules are not mandatorily applicable by statute and would permit or require the application of the
Laws of another jurisdiction.
(b) With the exception of any provisional relief sought pursuant to Section 7.7(d), before
initiating litigation, the parties must attempt to resolve a dispute by confidential mediation. The mediation shall
be held in New York, New York. Either Party may initiate mediation by written notice to the other Party of the
existence of a dispute.
(i)
The Parties shall use a professional mediator selected by agreement. The Parties
shall select a mediator within [***] of the notice and the mediation will begin promptly after the selection.
The mediation will continue until the mediator, or either Party, declares in writing, no sooner than after the
conclusion of [***] of a substantive mediation conference attended on behalf of each Party by a
representative with authority to resolve the dispute, that the dispute cannot be resolved by mediation. In
no event, however, shall mediation continue more than [***] from initial notice by a Party to initiate
meditation unless the Parties agree in writing to extend that period.
(ii)
Any period of limitations that would otherwise expire between the initiation of
mediation and its conclusion shall be extended until [***] after the conclusion of the mediation.
(iii)
The Parties may jointly opt out of the mediation procedure by written mutual
agreement.
(c)
Each Party acknowledges and agrees that in the event that such Party breaches its
obligations under this Agreement, the other Party may be damaged irreparably. Accordingly, each Party agrees
that, without posting bond or other undertaking, the other Party
48
shall be entitled to seek an injunction or injunctions to prevent breaches or violations of this Agreement and to
seek to enforce specifically the terms and provisions of this Agreement in any action instituted in any court
specified in Section 7.7(b) in addition to any other remedy to which the Parties may be entitled, at law or in
equity. Notwithstanding the foregoing, the Parties retain all rights and defenses available to any action brought in
law or equity.
(d)
Either Party has the right to seek provisional remedies such as attachment, preliminary
injunction, replevin, etc. to avoid irreparable harm, maintain the status quo, or preserve the subject matter of the
dispute.
(e)
EACH PARTY HERETO WAIVES ANY RIGHT TO TRIAL OF ANY ISSUE BY JURY.
Section 7.8.
Severability. If any term or other provision of this Agreement or any Related
Document is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions
and provisions of this Agreement or such Related Document shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the
Parties shall negotiate in good faith to modify this Agreement or such Related Document so as to effect the
original intent of the Parties as closely as possible to the fullest extent permitted by applicable Law in an
acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
Section 7.9.
Amendment. This Agreement may be amended by the Parties at any time by an
instrument in writing signed on behalf of each of the Parties.
Section 7.10. Appendices, Schedules and Exhibits. Except as otherwise provided in this
Agreement, all Appendices, Exhibits and Schedules referred to in this Agreement are intended to be and hereby
are made a part of this Agreement. The Disclosure Schedules have been arranged, for purposes of convenience
only, in sections corresponding to the Sections of this Agreement. The disclosure of any item in any section or
subsection of the Disclosure Schedules will be deemed disclosed with respect to each other section and subsection
of the Disclosure Schedules. Certain information set forth in the Disclosure Schedules is or may be included
solely for informational purposes, is not an admission of liability with respect to the matters covered by the
information, and may not be required to be disclosed pursuant to this Agreement. The specification of any dollar
amount in the representations and warranties contained in this Agreement or the inclusion of any specific item in
the Disclosure Schedules is not intended to imply that such amounts (or higher or lower amounts) or items (a) are
or are not material to the Business or the Purchased Assets; (b) amount to a Material Adverse Effect; or (c)
occurred outside of the ordinary course of business of Seller. No Party shall use the fact of the setting of such
amounts or the fact of the inclusion of any such item in the Disclosure Schedules in any dispute or controversy
between the Parties as to whether any obligation, item or matter not described in this Agreement or included in a
Disclosure Schedules is or is not material for purposes of this Agreement.
[Remainder of page intentionally left blank]
49
IN WITNESS WHEREOF, the Parties have caused this Asset Purchase Agreement to be signed by
their respective officers hereunto duly authorized, all as of the date first written above.
SELLER:
MEIRAGTX UK II LIMITED
By:
/s/ Stuart Naylor
Name: Stuart Naylor
Title: Chief Development Officer
MEIRAGTX HOLDINGS PLC
By:
/s/ Stuart Naylor
Name: Stuart Naylor
Title: Chief Development Officer
[Signature Page to Asset Purchase Agreement]
IN WITNESS WHEREOF, the Parties have caused this Asset Purchase Agreement to be signed by
their respective officers hereunto duly authorized, all as of the date first written above.
BUYER:
JANSSEN PHARMACEUTICALS, INC.
By:
/s/ Sarah Brennan
Name: Sarah Brennan
Title: President
[Signature Page to Asset Purchase Agreement]
Exhibit 10.48
Certain information marked as [***] has been excluded from this exhibit because it is both not material
and is the type that the registrant treats as private or confidential.
TERMINATION AGREEMENT
This Termination Agreement (this “Agreement”), dated as of December 20, 2023 (the “Effective Date”), is
by and among Janssen Pharmaceuticals, Inc., a Delaware corporation (“Janssen”) on one hand, and MeiraGTx UK
II Limited, a company organized and existing under the laws of England and Wales, and MeiraGTx Holdings plc,
an exempted company with limited liability incorporated under the laws of the Cayman Islands, on the other hand
(MeiraGTx UK II Limited and MeiraGTx Holdings plc, individually or collectively, “MeiraGTx”). MeiraGTx
and Janssen are sometimes individually referred to herein as a “Party” and are sometimes collectively referred to
herein as the “Parties”.
WHEREAS, the Parties are party to that certain Collaboration, Option and License Agreement, dated
January 30, 2019, by and between Janssen and MeiraGTx, as amended by that certain First Amendment to the
Collaboration, Option and License Agreement, dated December 16, 2021 (collectively, the “Collaboration
Agreement”), pursuant to which, among other things, the Parties Developed the RPGR Product;
WHEREAS, on the Effective Date, the Parties have entered into that certain Asset Purchase Agreement
(the “APA”), pursuant to which, among other things, MeiraGTx shall sell and transfer (or cause to be sold and
transferred) to Janssen, and Janssen shall purchase from MeiraGTx, all of MeiraGTx’s and its Affiliates’ right,
title and interest in, to and under the Purchased Assets (as defined in the APA), and Janssen shall obtain the
exclusive right to further Exploit the RPGR Product (as such terms are defined in the APA), in each case, upon the
terms and subject to the conditions set forth therein; and
WHEREAS, in furtherance of the APA and the transactions contemplated thereunder, the Parties desire to,
among other things, (i) terminate the Collaboration Agreement, and (ii) memorialize certain other agreements in
connection therewith, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
hereby agree as follows:
1.
Treatment of Collaboration Agreement.
(a)
Capitalized terms used but not defined herein have the respective meanings ascribed to them in the
Collaboration Agreement, unless the context otherwise requires.
(b)
Effective upon the Effective Date, and without requiring any further action by any Party, the Parties
hereby agree that, except as otherwise set forth in Section 1(c) below, the Collaboration Agreement is hereby
terminated by mutual agreement of the Parties and will be of no further force or effect whatsoever.
(c)
(i)
In respect of the Collaboration Agreement, Section 15.6 (Survival) of the Collaboration
Agreement, and the provisions of the Collaboration Agreement that expressly survive termination
in accordance with the terms of Section 15.6 (Survival) of the Collaboration Agreement (as
amended hereby), shall survive the termination of the Collaboration Agreement in accordance with
its terms; provided, however, that the Parties hereby agree that notwithstanding the foregoing,
Section 15.6 (Survival) of the Collaboration Agreement is hereby amended to delete references to
the following sections of the Collaboration Agreement: (A) Section 3.7(c) (Final Report); (B)
Section 4.1(c) (Internal Research License); (C) Section 10.12 (Disclaimer); (D) the last sentence of
Section 13.1 (Use of Names); (E) Section 13.4 (Publications); (F) Section 15.4(c) (Effects of
Termination; Wind-
Down Activities); (G) Section 15.4(d) (Effects of Expiration or Termination; Clinical Studies)
(provided, however, that, solely with respect to any Clinical IRD Product (other than the RPGR
Product), Section 15.4(d)(ii) and Section 15.4(d)(iv) shall survive as if the election set forth in
Section 15.4(d)(ii) had been made); (H) Section 15.4(e) (Effects of Expiration or Termination;
Further Actions); and (I) Section 15.5 (Post-Termination Royalties to Janssen) (the sections of the
Collaboration Agreement that survive pursuant Section 15.6 (Survival) of the Collaboration
Agreement, as amended pursuant to this Section 1(c)(i), collectively, the “Surviving Terms”).
Additionally, the Parties agree that any survival of Section 11.1 (Ownership under the Clinical IRD
Programs and Research IRD Programs), Section 11.2 (Ownership under the CMC Development
Collaboration), Section 11.3 (Duties to the Other Party) and Section 15.4(b) (Effects of Expiration
or Termination; Confidential Information) applies solely with respect to assets that are not
Purchased Assets under the APA.
(ii)
The Parties hereby acknowledge and agree that (A) notwithstanding the termination of the
Collaboration Agreement, the Surviving Terms remain in full force and effect and will remain in
full force and effect for the remainder of, and in accordance with, their respective terms pursuant to
the Collaboration Agreement (except as otherwise expressly modified herein); (B) other than as set
forth in the Surviving Terms, the Collaboration Agreement is hereby terminated in its entirety and
will be of no further force or effect whatsoever; and (C) in the event of a conflict between the APA
and the Surviving Terms, the APA will control to the extent of such conflict.
The Parties expressly acknowledge and agree that in connection with the termination of the
(iii)
Collaboration Agreement:
(A) no Upfront Payment, Development Milestone Payments, Commercial Milestone
Payments, Royalties, Clinical Development Costs, Clinical Development Manufacturing
Costs, Commercial Manufacturing Costs, Manufacturing Costs, Process Development
Costs, Research Costs or other payments are or will become due or payable to or by any
Party under the Collaboration Agreement; and
(B) each Party hereby forever unequivocally, irrevocably, knowingly and voluntarily
waives and disclaims any right or claim to any Upfront Payment, Development Milestone
Payments, Commercial Milestone Payments, Royalties, Clinical Development Costs,
Clinical Development Manufacturing Costs, Commercial Manufacturing Costs,
Manufacturing Costs, Process Development Costs, Research Costs or other payments or
any portion thereof.
(iv)
Notwithstanding the foregoing or anything to the contrary in this Agreement or in the
Collaboration Agreement, the Parties expressly acknowledge and agree that in connection with the
termination of the Collaboration Agreement, nothing shall relieve the Parties of: (1) any payment
becoming due and payable on or after the Effective Date of this Agreement under that certain
Transition Services Agreement, by and between the Parties, dated as of September 27, 2023 (as the
same is amended and restated as of the Effective Date, the “Transition Services Agreement”), (2)
any payment becoming due and payable on or after the Effective Date of this Agreement under that
certain Assignment and Assumption Agreement, by and between MeiraGTx and Janssen Research
& Development, LLC, dated September 29, 2023, (as the same is amended as of the Effective Date,
the “Assignment and Assumption Agreement”); (3) any payment becoming due and payable on or
after the Effective Date of this Agreement under the APA or any other Related Document (as such
term is defined in the APA); or (4) any work completed prior to the Effective Date of this
Agreement pursuant to the Collaboration Agreement, the Transition Services Agreement or the
Assignment and Assumption Agreement which, in the case of this clause (4), the Parties expressly
acknowledge and agree are (A) with respect to the Clinical Development Manufacturing Costs
or Process Development Costs incurred prior to the Effective Date of this Agreement, [***]
payable by Janssen to MeiraGTx pursuant to Section 10.4 or Section 10.5(b), as applicable, of the
Collaboration Agreement; and (B) with respect to Clinical Development Costs incurred prior to the
Effective Date of this Agreement, an amount payable by Janssen to MeiraGTx pursuant to Section
10.3 of the Collaboration Agreement, [***]. MeiraGTx represents as of the Effective Date of this
Agreement that the foregoing [***] reflects its good faith estimate of the Clinical Development
Costs incurred prior to the Effective Date of this Agreement.
(v)
For clarity and for the avoidance of any doubt, and notwithstanding anything herein to the
contrary, each of the Parties acknowledges and agrees that, except as expressly provided in Section
2 below, this Agreement does not terminate, amend, modify or otherwise change or alter that
certain Confidential Disclosure Agreement, dated [***] (the “Prior CDA”), which survives in
accordance with Section 19.12 of the Collaboration Agreement and the terms of the Prior CDA.
2.
Mutual Release; Disclaimer of Liability.
(a)
Effective as of the Effective Date hereof, MeiraGTx, for and on behalf of itself and its Affiliates,
will be deemed to have released and discharged, and hereby does, forever unconditionally, unequivocally,
irrevocably, knowingly and voluntarily release and discharge, Janssen and its Affiliates, and each of their
respective former and current equityholders, directors, officers, employees, agents, advisors, Affiliates, members,
managers, general or limited partners, spouses, heirs, trusts, trustees, successors, assignees, and any former and
current equityholders, directors, officers, employees, agents, advisors, Affiliates, members, managers, general or
limited partners, spouses, heirs, trusts, trustees, successors, or assignees of any of the foregoing (collectively, the
“Janssen Related Parties”), from any and all past, present or future liabilities, actions, causes of action, claims,
demands, obligations, defenses, affirmative defenses, counterclaims, setoffs, losses, Damages, rights (including
rights of contribution and other similar rights, from whatever source, whether under contract, Applicable Law or
otherwise), protests, suits, Disputes, orders, obligations, debts, proceedings, contracts, agreements, promises,
liabilities, controversies, costs, expenses, fees (including attorneys’ fees) or damages of any kind, arising by any
means, of any kind or nature, whether at law, in equity or otherwise (collectively, “Claims”), asserted or that could
have been asserted, that in any way arise from, under or out of, are based upon, or are in connection with the
Collaboration Agreement under any Applicable Law or otherwise, whether known or unknown, suspected or
unsuspected, foreseen or unforeseen, anticipated or unanticipated, disclosed or undisclosed, accrued or unaccrued,
apparent or not apparent (collectively, the “MeiraGTx Released Claims”), including any Claims that in any way
arise from, under or out of, are based upon, or are in connection with: (i) the performance, non-performance,
breach, action or failure to act under or in accordance with the Collaboration Agreement; (ii) any deliberations or
negotiations in connection with the Collaboration Agreement and (iii) the events leading to the negotiation and
execution of this Agreement and the transactions and agreements contemplated hereby; provided, however, that
the MeiraGTx Released Claims (including, for clarity, sub-clauses (i)-(iii)) exclude and this Section 2(a) will not
be construed as releasing any and all rights, remedies or Claims that in any way arise from, under or out of, are
based upon, or are in connection with this Agreement, any Surviving Terms, the APA, any Related Document (as
defined under the APA) or the Prior CDA (the “Retained Claims”).
(b)
Effective as of the Effective Date hereof, Janssen, for and on behalf of itself and its Affiliates, will
be deemed to have released and discharged, and hereby does, forever unconditionally, unequivocally, irrevocably,
knowingly and voluntarily release and discharge, MeiraGTx and its Affiliates, and each of their respective former
and current equityholders, directors, officers, employees, agents, advisors, Affiliates, members, managers, general
or limited partners, spouses, heirs, trusts, trustees, successors, assignees, and any former and current
equityholders, directors, officers, employees, agents, advisors, Affiliates, members, managers, general or limited
partners, spouses, heirs, trusts, trustees, successors, or assignees of any of the foregoing (collectively, the
“MeiraGTx Related Parties” and, together with the Janssen Related Parties, the “Related Parties”), from any and
all past, present or future Claims asserted or that could have been asserted, that in any way arise from, under or
out of, are based upon, or are in connection with the Collaboration
Agreement under any Applicable Law or otherwise, whether known or unknown, suspected or unsuspected,
foreseen or unforeseen, anticipated or unanticipated, disclosed or undisclosed, accrued or unaccrued, apparent or
not apparent (collectively, the “Janssen Released Claims” and, together with the MeiraGTx Released Claims, the
“Released Claims”), including any Claims that in any way arise from, under or out of, are based upon, or are in
connection with: (i) the performance, non-performance, breach, action or failure to act under or in accordance
with the Collaboration Agreement; (ii) any deliberations or negotiations in connection with the Collaboration
Agreement and (iii) the events leading to the negotiation and execution of this Agreement and the transactions and
agreements contemplated hereby; provided, however, that the Janssen Released Claims (including, for clarity,
sub-clauses (i)-(iii)) exclude and this Section 2(b) will not be construed as releasing any Retained Claims.
(c)
It is understood and agreed that, except as provided in Section 2(a) and Section 2(b), the preceding
paragraphs are a full and final release covering all known as well as unknown or unanticipated debts, claims,
liabilities, obligations or damages of each of the Parties and their respective Affiliates relating in any way to or
arising in any way out of the Collaboration Agreement (other than the Retained Claims). Therefore, each of the
Parties expressly waives any rights it may have under any statute, common law principle or in equity under which
a general release does not extend to claims which such Party does not know or suspect to exist in its favor at the
time of executing the release, which if known by such Party must have affected such Party’s settlement with the
other. In connection with such waiver and relinquishment, the Parties acknowledge that they or their attorneys or
agents may hereafter discover claims or facts in addition to or different from those which they now know or
believe to exist with respect to the Released Claims, but that it is their intention hereby to fully, finally and forever
settle and release all of the Released Claims. In furtherance of this intention, the releases herein given will be and
remain in effect as full and complete mutual releases with regard to the Released Claims notwithstanding the
discovery or existence of any such additional or different claim or fact, including without limitation Section 1542
of the California Civil Code, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR
RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED
PARTY.
(d)
Effective as of the Effective Date hereof, and, for the avoidance of doubt, except with respect to the
Retained Claims, each Party, on behalf of itself and its Affiliates hereby covenants not to, with respect to any
Released Claim, directly or indirectly encourage or solicit or voluntarily assist or participate in any way in
(including the investigation, filing, reporting or prosecution) by such Party or any of its Related Parties or any
Third Party of a suit, arbitration, mediation or Claim against any other Party or its Related Parties relating to any
Released Claim. The covenants contained in this Section 2 will survive this Agreement indefinitely regardless of
any statute of limitations.
3.
[***]
4.
Further Assurances. Each Party will, and will cause its Affiliates to, cooperate with each other in the
taking of all actions necessary, proper or advisable under this Agreement and Applicable Laws to effectuate the
transactions and agreements contemplated by this Agreement.
5.
Third Party Beneficiaries. Except for the provisions of Section 2 and Section 3, with respect to which a
Third Party is expressly intended to be a Third Party beneficiary thereof, this Agreement is not intended to (and
does not) confer on any Person other than the Parties any rights or remedies or impose on any Person other than
the Parties any obligations.
6.
Entire Agreement. This Agreement, together with the Surviving Terms, the APA, the other Related
Documents and the Prior CDA, constitute the entire agreement among the Parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the
Parties or any of them with respect to the subject matter hereof.
7.
Miscellaneous. The provisions of Article 18 (Dispute Resolution) of the Collaboration Agreement and
Article 19 (General Provisions) of the Collaboration Agreement (other than Section 19.9 (No Third Party
Beneficiary Rights) of the Collaboration Agreement and Section 19.12 (Entire Agreement) of the Collaboration
Agreement) are incorporated herein by reference and will apply to this Agreement, mutatis mutandis, as if fully
set forth herein.
(Remainder of Page Intentionally Left Blank; Signature pages follow)
IN WITNESS WHEREOF, the Parties have caused this Termination Agreement to be signed by their
respective officers hereunto duly authorized, all as of the Effective Date.
JANSSEN PHARMACEUTICALS, INC.
/s/ Sarah Brennan
By:
Name: Sarah Brennan
Title: President
MEIRAGTX UK II LIMITED
/s/ Stuart Naylor
By:
Name: Stuart Naylor
Title: Chief Development Officer
MEIRAGTX HOLDINGS PLC
/s/ Stuart Naylor
By:
Name: Stuart Naylor
Title: Chief Development Officer
Legal Name of Subsidiary
BRI-Alzan, Inc.
MeiraGTx B.V.
MeiraGTx Netherlands B.V.
MeiraGTx Limited
MeiraGTx, LLC
MeiraGTx UK Limited
MeiraGTx UK II Limited
MeiraGTx Ireland DAC
MeiraGTx Neurosciences, Inc.
MeiraGTx Bio Inc.
MeiraGTx Belgium
MeiraGTx Therapeutics, Inc.
SUBSIDIARIES OF MEIRAGTX HOLDINGS PLC
Jurisdiction of Organization
Exhibit 21
Delaware
Netherlands
Netherlands
England and Wales
Delaware
England and Wales
England and Wales
Ireland
Delaware
Delaware
Belgium
Delaware
Consent of Independent Registered Public Accounting Firm
EXHIBIT 23.1
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form S-3 No. 333-276183) of MeiraGTx Holdings plc,
(2) Registration Statement (Form S-3 No. 333-273675) of MeiraGTx Holdings plc,
(3) Registration Statement (Form S-3 No. 333-273672) of MeiraGTx Holdings plc,
(4) Registration Statement (Form S-3 No. 333-232527) of MeiraGTx Holdings plc,
(5) Registration Statement (Form S-3 No. 333-232677) of MeiraGTx Holdings plc,
(6) Registration Statement (Form S-8 No. 333-225535) pertaining to the 2016 Equity Incentive Plan, 2018 Incentive Award Plan and
2018 Employee Share Purchase Plan of MeiraGTx Holdings plc, and
(7) Registration Statement (Form S-8 No. 333-257164) pertaining to the 2018 Incentive Award Plan and 2018 Employee Share Purchase
Plan of MeiraGTx Holdings plc;
of our report dated March 15, 2024, with respect to the consolidated financial statements of MeiraGTx Holdings plc included in this
Annual Report (Form 10-K) of MeiraGTx Holdings plc for the year ended December 31, 2023.
/s/ Ernst & Young LLP
Jericho, New York
March 15, 2024
CERTIFICATION
Exhibit 31.1
I, Alexandria Forbes, certify that:
1.
I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of MeiraGTx Holdings plc;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: March 15, 2024
By:
/s/ Alexandria Forbes
Alexandria Forbes
President and Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
I, Richard Giroux, certify that:
CERTIFICATION
1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of MeiraGTx Holdings plc;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: March 15, 2024
By:
/s/ Richard Giroux
Richard Giroux
Chief Financial Officer and Chief Operating Officer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
In connection with the Annual Report on Form 10-K of MeiraGTx Holdings plc (the “Company”) for the year ended December 31,
2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as
adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The 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 the Company.
Date: March 15, 2024
By:
/s/ Alexandria Forbes
Alexandria Forbes
President and Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report on Form 10-K of MeiraGTx Holdings plc (the “Company”) for the year ended December 31,
2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as
adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The 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 the Company.
Date: March 15, 2024
By:
/s/ Richard Giroux
Richard Giroux
Chief Financial Officer and Chief Operating Officer
(Principal Financial Officer)
Exhibit 97.1
MEIRAGTX HOLDINGS PLC
POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
MeiraGTx Holdings plc (the “Company”) has adopted this Policy for Recovery of Erroneously Awarded
Compensation (the “Policy”), effective as of October 2, 2023 (the “Effective Date”). Capitalized terms used in
this Policy but not otherwise defined herein are defined in Section 11.
1.
Persons Subject to Policy
This Policy shall apply to current and former Officers of the Company. Each Officer shall be required to
sign an acknowledgment pursuant to which such Officer will agree to be bound by the terms of, and comply with,
this Policy; however, any Officer’s failure to sign any such acknowledgment shall not negate the application of
this Policy to the Officer.
2.
Compensation Subject to Policy
This Policy shall apply to Incentive-Based Compensation received on or after the Effective Date. For
purposes of this Policy, the date on which Incentive-Based Compensation is “received” shall be determined under
the Applicable Rules, which generally provide that Incentive-Based Compensation is “received” in the Company’s
fiscal period during which the relevant Financial Reporting Measure is attained or satisfied, without regard to
whether the grant, vesting or payment of the Incentive-Based Compensation occurs after the end of that period.
3.
Recovery of Compensation
In the event that the Company is required to prepare a Restatement, the Company shall recover, reasonably
promptly, the portion of any Incentive-Based Compensation that is Erroneously Awarded Compensation, unless
the Committee has determined that recovery would be Impracticable. Recovery shall be required in accordance
with the preceding sentence regardless of whether the applicable Officer engaged in misconduct or otherwise
caused or contributed to the requirement for the Restatement and regardless of whether or when restated financial
statements are filed by the Company. For clarity, the recovery of Erroneously Awarded Compensation under this
Policy will not give rise to any person’s right to voluntarily terminate employment for “good reason,” or due to a
“constructive termination” (or any similar term of like effect) under any plan, program or policy of or agreement
with the Company or any of its affiliates.
4.
Manner of Recovery; Limitation on Duplicative Recovery
The Committee shall, in its sole discretion, determine the manner of recovery of any Erroneously Awarded
Compensation, which may include, without limitation, reduction or cancellation by the Company or an affiliate of
the Company of Incentive-Based Compensation or Erroneously Awarded Compensation, reimbursement or
repayment by any person subject to this Policy of the Erroneously Awarded Compensation, and, to the extent
permitted by law, an offset of the Erroneously Awarded Compensation against other compensation payable by the
Company
or an affiliate of the Company to such person. Notwithstanding the foregoing, unless otherwise prohibited by the
Applicable Rules, to the extent this Policy provides for recovery of Erroneously Awarded Compensation already
recovered by the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 or Other Recovery
Arrangements, the amount of Erroneously Awarded Compensation already recovered by the Company from the
recipient of such Erroneously Awarded Compensation may be credited to the amount of Erroneously Awarded
Compensation required to be recovered pursuant to this Policy from such person.
5.
Administration
This Policy shall be administered, interpreted and construed by the Committee, which is authorized to
make all determinations necessary, appropriate or advisable for such purpose. The Board of Directors of the
Company (the “Board”) may re-vest in itself the authority to administer, interpret and construe this Policy in
accordance with applicable law, and in such event references herein to the “Committee” shall be deemed to be
references to the Board. Subject to any permitted review by the applicable national securities exchange or
association pursuant to the Applicable Rules, all determinations and decisions made by the Committee pursuant to
the provisions of this Policy shall be final, conclusive and binding on all persons, including the Company and its
affiliates, equityholders and employees. The Committee may delegate administrative duties with respect to this
Policy to one or more directors or employees of the Company, as permitted under applicable law, including any
Applicable Rules.
6.
Interpretation
This Policy will be interpreted and applied in a manner that is consistent with the requirements of the
Applicable Rules, and to the extent this Policy is inconsistent with such Applicable Rules, it shall be deemed
amended to the minimum extent necessary to ensure compliance therewith.
7.
No Indemnification; No Liability
The Company shall not indemnify or insure any person against the loss of any Erroneously Awarded
Compensation pursuant to this Policy, nor shall the Company directly or indirectly pay or reimburse any person
for any premiums for third-party insurance policies that such person may elect to purchase to fund such person’s
potential obligations under this Policy. None of the Company, an affiliate of the Company or any member of the
Committee or the Board shall have any liability to any person as a result of actions taken under this Policy.
8.
Application; Enforceability
Except as otherwise determined by the Committee or the Board, the adoption of this Policy does not limit,
and is intended to apply in addition to, any other clawback, recoupment, forfeiture or similar policies or provisions
of the Company or its affiliates, including any such policies or provisions of such effect contained in any
employment agreement, bonus plan, incentive plan, equity-based plan or award agreement thereunder or similar
plan, program or agreement of the Company or an affiliate or required under applicable law (the “Other Recovery
Arrangements”). The remedy specified in this Policy shall not be exclusive and shall be in addition to every other
right or remedy at law or in equity that may be available to the Company or an affiliate of the Company.
9.
Severability
The provisions in this Policy are intended to be applied to the fullest extent of the law; provided, however,
to the extent that any provision of this Policy is found to be unenforceable or invalid under any applicable law,
such provision will be applied to the maximum extent permitted, and shall automatically be deemed amended in a
manner consistent with its objectives to the extent necessary to conform to any limitations required under
applicable law.
10.
Amendment and Termination
The Board or the Committee may amend, modify or terminate this Policy in whole or in part at any time
and from time to time in its sole discretion. This Policy will terminate automatically when the Company does not
have a class of securities listed on a national securities exchange or association.
11.
Definitions
“Applicable Rules” means Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder, the
listing rules of the national securities exchange or association on which the Company’s securities are listed, and
any applicable rules, standards or other guidance adopted by the Securities and Exchange Commission or any
national securities exchange or association on which the Company’s securities are listed.
“Committee” means the committee of the Board responsible for executive compensation decisions
comprised solely of independent directors (as determined under the Applicable Rules), or in the absence of such a
committee, a majority of the independent directors serving on the Board.
“Erroneously Awarded Compensation” means the amount of Incentive-Based Compensation received by
a current or former Officer that exceeds the amount of Incentive-Based Compensation that would have been
received by such current or former Officer based on a restated Financial Reporting Measure, as determined on a
pre-tax basis in accordance with the Applicable Rules.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Financial Reporting Measure” means any measure determined and presented in accordance with the
accounting principles used in preparing the Company’s financial statements, and any measures derived wholly or
in part from such measures, including GAAP, IFRS and non-GAAP/IFRS financial measures, as well as stock or
share price and total equityholder return.
“GAAP” means United States generally accepted accounting principles.
“IFRS” means international financial reporting standards as adopted by the International Accounting
Standards Board.
“Impracticable” means (a) the direct costs paid to third parties to assist in enforcing recovery would
exceed the Erroneously Awarded Compensation; provided that the Company has (i) made reasonable attempts to
recover the Erroneously Awarded Compensation, (ii) documented such attempt(s), and (iii) provided such
documentation to the relevant listing exchange or association, (b) to the extent permitted by the Applicable Rules,
the recovery would violate the Company’s home country laws pursuant to an opinion of home country counsel;
provided that the Company has (i) obtained an opinion of home country counsel, acceptable to the relevant listing
exchange or association, that recovery would result in such violation, and (ii) provided such opinion to the
relevant listing exchange or association, or (c) recovery would likely cause an otherwise tax-qualified retirement
plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of
26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and the regulations thereunder.
“Incentive-Based Compensation” means, with respect to a Restatement, any compensation that is granted,
earned, or vested based wholly or in part upon the attainment of one or more Financial Reporting Measures and
received by a person: (a) after beginning service as an Officer; (b) who served as an Officer at any time during the
performance period for that compensation; (c) while the Company has a class of its securities listed on a national
securities exchange or association; and (d) during the applicable Three-Year Period.
“Officer” means each person who serves as an executive officer of the Company, as defined in Rule 10D-
1(d) under the Exchange Act.
“Restatement” means an accounting restatement to correct the Company’s material noncompliance with
any financial reporting requirement under securities laws, including restatements that correct an error in
previously issued financial statements (a) that is material to the previously issued financial statements or (b) that
would result in a material misstatement if the error were corrected in the current period or left uncorrected in the
current period.
“Three-Year Period” means, with respect to a Restatement, the three completed fiscal years immediately
preceding the date that the Board, a committee of the Board, or the officer or officers of the Company authorized
to take such action if Board action is not required, concludes, or reasonably should have concluded, that the
Company is required to prepare such Restatement, or, if earlier, the date on which a court, regulator or other
legally authorized body directs the Company to prepare such Restatement. The “Three-Year Period” also includes
any transition period (that results from a change in the Company’s fiscal year) within or immediately following
the three completed fiscal years identified in the preceding sentence. However, a transition period between the last
day of the Company’s previous fiscal year end and the first day of its new fiscal year that comprises a period of
nine to 12 months shall be deemed a completed fiscal year.
ACKNOWLEDGMENT AND CONSENT TO
POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
The undersigned has received a copy of the Policy for Recovery of Erroneously Awarded Compensation (the
“Policy”) adopted by MeiraGTx Holdings plc (the “Company”).
For good and valuable consideration, the receipt of which is acknowledged, the undersigned agrees to the terms of
the Policy and agrees that compensation received by the undersigned may be subject to reduction, cancellation,
forfeiture and/or recoupment to the extent necessary to comply with the Policy, notwithstanding any other
agreement to the contrary. The undersigned further acknowledges and agrees that the undersigned is not entitled to
indemnification in connection with any enforcement of the Policy and expressly waives any rights to such
indemnification under the Company’s organizational documents or otherwise.
Date
Signature
Name
Title