NuCana plc
Annual Report 2017

Plain-text annual report

As filed with the Securities and Exchange Commission on March 22, 2018UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20-F☐☐REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☒☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2017OR☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission File Number 001-38215NUCANA PLC(Exact name of Registrant as specified in its charter)England and Wales(Jurisdiction of incorporation or organization)NuCana plc3 Lochside WayEdinburgh EH12 9DTUnited KingdomTelephone: +44 (0)131 357 1111(Address of principal executive offices)Corporation Service Company251 Little Falls DriveWilmington, DE 19808Telephone: +1 302 636 5400(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)Hugh S. Griffith, Chief Executive OfficerNuCana plc3 Lochside WayEdinburgh EH12 9DTUnited KingdomTelephone: +44 (0)131 357 1111info@nucana.com(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registeredAmerican Depositary Shares, each representing one Ordinary Share, nominal value £0.04per share The Nasdaq Stock Market LLC Securities registered or to be registered pursuant to Section 12(g) of the Act: NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NoneIndicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 31,811,146ordinary shares, par value £0.04 per share.Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities ExchangeAct of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted andposted 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 andpost such files). ☒ Yes ☐ No (not required)Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of“accelerated filer,” large accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Emerging growth company ☒ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use theextended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codificationafter April 5, 2012.Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP ☐ International Financial Reporting Standards as issued by the International AccountingStandards Board ☒ Other ☐ If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item18If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No TABLE OF CONTENTS Page GENERAL INFORMATIONivPRESENTATION OF FINANCIAL AND OTHER DATAivINFORMATION REGARDING FORWARD-LOOKING STATEMENTSivPART I 1Item 1. Identity of Directors, Senior Management and Advisers1Item 2. Offer Statistics and Expected Timetable1Item 3. Key Information1 A. Selected Financial Data1 B. Capitalization and Indebtedness2 C. Reasons for the Offer and Use of Proceeds2 D. Risk Factors3Item 4. Information on the Company47 A. History and Development of the Company47 B. Business47 C. Organizational Structure84 D. Property, Plant and Equipment84Item 4A. Unresolved Staff Comments84Item 5. Operating and Financial Review and Prospects85 A. Operating Results85 B. Liquidity and Capital Resources93 C. Research and Development,Patents and Licenses, etc.95 D. Trend information95 E. Off Balance Sheet Arrangements95 F. Tabular Disclosure of Contractual Obligations95 G. Safe Harbor95Item 6. Directors, Senior Management and Employees96 A. Directors and Senior Management96 B. Compensation98 C. Board Practices104 D. Employees106 E. Share Ownership106Item 7. Major Shareholders and Related Party Transactions106 A. Major Shareholders106 B. Related Party Transactions108 C. Interests of Experts and Counsel108Item 8. Financial Information109 A. Consolidated Statements and Other Financial Information109 B. Significant Changes109Item 9. The Offer and Listing109 A. Offer and Listing Details109 B. Plan of Distribution109 C. Markets109 D. Selling Shareholders109 E. Dilution109 F. Expenses of the Issue109 iiTABLE OF CONTENTS(continued) Item 10. Additional Information110 A. Share Capital110 B. Memorandum and Articles of Association110 C. Material Contracts124 D. Exchange Controls124 E. Taxation124 F. Dividends and Paying Agents132 G. Statement by Experts132 H. Documents on Display132 I. Subsidiary Information132Item 11. Quantitative and Qualitative Disclosures About Market Risk132Item 12. Description of Securities Other than Equity Securities133 A. Debt Securities133 B. Warrants and Rights133 C. Other Securities133 D. American Depositary Shares133PART II 135Item 13. Defaults, Dividend Arrearages and Delinquencies135Item 14. Material Modifications To The Rights of Security Holders and Use of Proceeds135Item 15. Controls and Procedures135 A. Disclosure Controls and Procedures135 B. Management’s Annual Report on Internal Control over Financial Reporting135 C. Attestation Report of the Registered Public Accounting Firm135 D. Changes in Internal Control Over Financial Reporting135Item 16A. Audit Committee Financial Expert135Item 16B. Code of Ethics135Item 16C. Principal Accountant Fees and Services136Item 16D. Exemptions From the Listing Standards For Audit Committees136Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers136Item 16F. Change in the Registrant’s Certifying Accountant136Item 16G. Corporate Governance136Item 16H. Mine Safety Disclosure137PART III 138Item 17 Financial Statements138Item 18 Financial Statements138Item 19 Exhibits138 iiiGENERAL INFORMATIONIn this annual report on Form 20-F (“Annual Report”), “NuCana,” “NuCana plc,” the “Group,” the “Company,” “we,” “us” and “our” refer to NuCanaplc and its consolidated subsidiaries, except where the context otherwise requires.NuCana® and Acelarin® are our registered trademarks and ProTidesTM is our trademark.PRESENTATION OF FINANCIAL AND OTHER DATAThe consolidated financial statement data as at December 31, 2017, 2016 and 2015 for the years ended December 31, 2017, 2016, and 2015 havebeen derived from our consolidated financial statements, as presented elsewhere in this Annual Report, which have been prepared in accordance withInternational Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB and audited in accordance with thestandards of the Public Company Accounting Oversight Board (United States).All references in this prospectus to “$” are to U.S. dollars and all references to “£” are to pounds sterling.INFORMATION REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report contains estimates and forward-looking statements, principally in the sections titled “Risk Factors,” “Operating and FinancialReview and Prospects” and “Business.” Some of the matters discussed concerning our operations and financial performance include forward-lookingstatements and estimates within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. The words“believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify forward-looking statements andestimates. Forward-looking statements include, but are not limited to, statements about: •the development of Acelarin, NUC-3373 and NUC-7738, including statements regarding the expected initiation, timing, progress andavailability of data from our clinical trials; •the potential attributes and benefit of our ProTides and their competitive positions; •our ability to successfully commercialize our ProTides, if approved; •our estimates regarding expenses, capital requirements and our need for additional financing; •our ability to acquire or in-license new product candidates; •potential collaborations; and •the duration of our patent portfolio.These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actualresults of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets weserve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Factors that could cause actualresults, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results to differ materially include, but are not limitedto, those discussed under “Risk Factors” in this Annual Report. Additional risks that we may currently deem immaterial or that are not presently known to uscould also cause the forward-looking events discussed in this Annual Report not to occur. These forward-looking statements are based on assumptionsregarding our present and future business strategies and the environment in which we expect to operate in the future.Forward-looking statements and estimates speak only at the date they were made, and we undertake no obligation to update or to review any forward-looking statement or estimate because of new information, future events or other factors. Forward-looking statements and estimates involve risks anduncertainties and are not guarantees of future performance. Our future results may differ materially from those expressed in these forward-looking statementsand estimates.In light of the risks and uncertainties described above, the forward-looking statements and estimates discussed in this Annual Report might not occurand our future results and our performance may differ materially from those expressed in these forward-looking statements and estimates due to, inclusive of,but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these forward-looking statements and estimates.ivAdditional factors that could cause actual results, financial condition, liquidity, performance, prospects, opportunities, achievements or industryresults to differ materially include, but are not limited to, those discussed under “Risk Factors” in this Annual Report. Additional risks that we may currentlydeem immaterial or that are not presently known to us could also cause the forward-looking events discussed in this Annual Report not to occur. The words“believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify estimates and forward-lookingstatements. Estimates and forward-looking statements speak only at the date they were made, and we undertake no obligation to update or to review anyestimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risksand uncertainties and are not guarantees of future performance. Our future results may differ materially from those expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this Annual Reportmight not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, inclusiveof, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimatesand forward-looking statements. v PART IItem 1.Identity of Directors, Senior Management and AdvisersNot Applicable.Item 2.Offer Statistics and Expected TimetableNot Applicable.Item 3.Key InformationA.Selected Financial DataThe following tables summarize our consolidated financial data as of the dates and for the periods indicated. The consolidated financial data as of andfor the years ended December 31, 2015, 2016 and 2017 have been derived from our consolidated financial statements, which have been prepared inaccordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standard Board, or IASB, and audited inaccordance with the standards of the Public Company Accounting Oversight Board (United States) and included elsewhere in this Annual Report.Our historical results are not necessarily indicative of the results that may be expected in the future. The following summary consolidated financialdata should be read in conjunction with Item 5, “Operating and Financial Review and Prospects” and our consolidated financial statements includedelsewhere in this Annual Report. Year Ended December 31, 2015 2016 2017 (in thousands, except per share data) Consolidated statement of comprehensive loss data: Research and development expenses £(5,655) £(7,904) £(17,673)Administrative expenses (1,251) (1,143) (4,573)Initial public offering related expenses — — (1,794)Net foreign exchange (losses) gains (8) 599 (1,654)Operating loss (6,914) (8,448) (25,694)Finance income 406 283 208 Loss before tax (6,508) (8,165) (25,486)Income tax credit 1,176 2,116 2,401 Loss for the year (5,332) (6,049) (23,085)Other comprehensive expense: Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (1) (2) (8)Total comprehensive loss for the year £(5,333) £(6,051) £(23,093) Basic and diluted loss per share £(0.22) £(0.25) £(0.89) 1 As of December 31, 2015 2016 2017 (in thousands) Consolidated statement of financial position data: Cash and cash equivalents £14,112 £19,990 £86,703 Total assets 31,685 27,214 96,355 Share capital 659 663 1,272 Share premium 42,574 42,770 79,236 Accumulated deficit (16,224) (22,256) (45,159)Capital reserve (1) — — 42,466 Net assets/Total equity attributable to equity holders 29,960 25,241 93,420 Total liabilities (1,725) (1,973) (2,935)Number of shares 24,102 24,185 31,811 (1)The capital reserve balance arose from the impact of the reduction of our share premium account and corresponding increase to our capital reserveaccount reflected as of December 31, 2017 in connection with our re-registration as a public limited company, as further described in footnote 11 tothe consolidated financial statements.Exchange Rate InformationThe table below shows the period end, average, high and low exchange rates of U.S. dollars per pound sterling for the periods shown. Average ratesare computed by using the noon buying rate of the Federal Reserve Bank of New York for the U.S. dollar on the last business day of each month during therelevant year indicated or each business day during the relevant month indicated. The rates set forth below are provided solely for your convenience and maydiffer from the actual rates used in the preparation of our consolidated financial statements included in this prospectus and other financial data appearing inthis prospectus. Noon Buying Rate Period End Average (1) High Low ($ per £ 1.00)Period: 2013 1.6574 1.5668 1.6574 1.48372014 1.5578 1.6461 1.7165 1.55172015 1.4746 1.5250 1.5882 1.46482016 1.2337 1.3444 1.4800 1.21552017 1.3529 1.2957 1.3578 1.21182018 (through March 9, 2018) 1.3863 1.3881 1.4264 1.3513September 2017 1.3402 1.334 1.3578 1.2972October 2017 1.3281 1.3202 1.3304 1.3063November 2017 1.3506 1.3217 1.3506 1.3067December 2017 1.3529 1.3404 1.3529 1.3316January 2018 1.4190 1.3824 1.4262 1.3513February 2018 1.3794 1.3961 1.4247 1.3794March 2018 (through March 9, 2018) 1.3863 1.3834 1.3888 1.3755 (1)The average of the noon buying rate for pounds sterling on the last day of each full month during the relevant year or each business day during therelevant month indicated.B.Capitalization and IndebtednessNot Applicable.C.Reasons for the Offer and Use of ProceedsNot Applicable.2 D.Risk FactorsOur business has significant risks. You should carefully consider the following risk factors and all other information contained in this AnnualReport, including our consolidated financial statements and the related notes. The risks and uncertainties described below are those significant risk factors,currently known and specific to us, that we believe are relevant to our business, results of operations and financial condition. If any of these risksmaterialize, our business, results of operations or financial condition could suffer and the price of the ADSs could decline. Additional risks anduncertainties not currently known to us or that we now deem immaterial may also harm us and adversely affect our business, results of operations andfinancial condition.Risks Related to Our Business and IndustryWe have incurred significant operating losses since our inception. We expect to incur losses for the foreseeable future and may never achieve ormaintain profitability.We have incurred significant operating losses since our inception. We incurred net losses of £5.3 million for the year ended December 31, 2015,£6.0 million for the year ended December 31, 2016 and £23.1 million for the year ended December 31, 2017. As of December 31, 2017, we had anaccumulated deficit of £45.2 million. Our most advanced product candidate, Acelarin, is currently being evaluated in three clinical trials: one Phase 1b trial,one Phase 2 trial, and one Phase 3 trial. Our other clinical-stage product candidate, NUC-3373, is currently in a Phase 1 trial. It may be several years, if ever,before we have a product candidate ready for commercialization. To date, we have financed our operations primarily through public and private placementsof our equity securities. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incurmay fluctuate significantly from quarter to quarter. We anticipate that our expenses will increase substantially if and as we: •continue development of our ProTides, including initiating additional clinical trials of Acelarin and NUC-3373; •complete preclinical studies and potentially initiate clinical trials of our preclinical-stage product candidates, including our productcandidate NUC-7738; •identify and develop new product candidates; •establish a robust supply chain for the manufacture of our product candidates in accordance with current good manufacturing practice, orcGMP; •seek marketing approvals for our product candidates that successfully complete clinical trials; •establish a sales, marketing and distribution infrastructure to commercialize any products for which we obtain marketing approval; •pursue market acceptance of our product candidates in the medical community and with third-party payors; •maintain, expand and protect our intellectual property portfolio; •expand our headcount by recruiting personnel to drive our clinical development programs and effectively manage out-sourced developmentactivities; •enter into collaboration arrangements, if any, for the development of our product candidates or in-license other products and technologies; •achieve milestones which will trigger payments under our license agreements; •add operational, financial and management information systems and personnel, including personnel to support our product development andplanned future commercialization efforts; and •incur increased administrative and other costs as a result of operating as a public company.Because of the numerous risks and uncertainties associated with developing new pharmaceutical drugs, we are unable to predict the extent of anyfuture losses or when we will become profitable, if at all. In addition, our expenses could increase beyond expectations if we are required by the EuropeanMedicines Agency, or EMA, the Food and Drug Administration, or FDA, or other foreign regulatory agencies, to perform studies and clinical trials in additionto those that we currently anticipate, or if there are any delays in the completion of planned clinical trials or the development of any of our ProTides.3 To become and remain profitable, we must develop and eventually commercialize products with significant market potential. This will require us tobe successful in a range of challenging activities, including the following: •completing clinical trials of our product candidates that achieve their clinical endpoints; •obtaining marketing approval for our product candidates; •manufacturing, marketing and selling those products for which we may obtain marketing approval; and •achieving market acceptance of our product candidates in the medical community and with third-party payors.We may never succeed in these activities and, even if we do, may never generate revenues that are significant or large enough to achieve profitability.If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remainprofitable would decrease the value of the company and could impair our ability to raise capital, maintain our discovery and preclinical development efforts,expand our business or continue our operations and may require us to raise additional capital that may dilute your ownership interest. A decline in the valueof our company could also cause you to lose all or part of your investment.We depend heavily on the success of our product candidates, Acelarin, NUC-3373 and NUC-7738. We cannot give any assurance that these productcandidates will receive regulatory approval for any indication, which is necessary before any of them can be commercialized. If we, and anycollaborators with whom we may enter into agreements for the development and commercialization of any of these product candidates, are unable tocommercialize them, or experience significant delays in doing so, our ability to generate revenue and our financial condition will be adversely affected.We do not currently generate any revenues from sales of any products, and we may never be able to develop or commercialize a marketable product.We have invested substantially all of our efforts and financial resources to date in the development of Acelarin, NUC-3373 and NUC-7738. Our ability togenerate product revenues, which we do not expect will occur for at least the next several years, if ever, will depend heavily on the successful developmentand eventual commercialization of these product candidates, if approved, which may never occur. Each of Acelarin, NUC-3373 and NUC-7738 will requireadditional clinical development, management of clinical, preclinical and manufacturing activities, regulatory approval in multiple jurisdictions, procurementof manufacturing supply, commercialization, substantial additional investment and significant marketing efforts before we generate any revenues fromproduct sales, if at all. We are not permitted to market or promote any product candidates in the United States, Europe or other countries before we receiveregulatory approval from the FDA, the EMA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for Acelarin,NUC-3373 or NUC-7738 or any future product candidate. We have not submitted a New Drug Application, or NDA, to the FDA, a Marketing AuthorizationApplication, or MAA, to the EMA or comparable applications to other regulatory authorities for any of our product candidates and do not expect to be in aposition to do so in the foreseeable future. The success of our product candidates will depend on many factors, including the following with respect to each ofAcelarin, NUC-3373 and NUC-7738, specifically: •We may not be able to demonstrate that the product candidate is safe and effective as a treatment for our targeted indications to thesatisfaction of the applicable regulatory authorities •the applicable regulatory authorities may require additional preclinical or clinical trials of the product candidate, including additionaltoxicology trials, which would increase our costs and prolong our development; •the results of clinical trials of our product candidates may not meet the level of statistical or clinical significance required by the applicableregulatory authorities for marketing approval; •the applicable regulatory authorities may disagree with the number, design, size, conduct or implementation of our planned clinical trials; •the contract research organizations, or CROs, that we retain to conduct clinical trials may take actions outside of our control that adverselyimpact our clinical trials; •the applicable regulatory authorities may not find the data from preclinical studies and clinical trials sufficient to demonstrate that the clinicaland other benefits of the product candidate outweigh its safety risks; •the applicable regulatory authorities may disagree with our interpretation of data from preclinical studies and clinical trials or may require thatwe conduct additional studies; •the applicable regulatory authorities may not accept data generated at our clinical trial sites;4 •if we submit an NDA to the FDA or an MAA to the EMA, and it is reviewed by an advisory committee, the advisory committee mayrecommend against approval of our application or may recommend that the FDA or the EMA require, as a condition of approval, additionalpreclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; •the applicable regulatory authorities may require development of a risk evaluation and mitigation strategy, or REMS, as a condition ofapproval; •the applicable regulatory authorities may change its approval policies or adopt new regulations; •the applicable regulatory authorities may identify deficiencies in our formulation and manufacturing processes or facilities of our third-partymanufacturers; •we may face delays in our formulation and manufacturing process as a result of having not yet optimized formulations or due to lack ofavailability of starting materials; •we may be unable to scale up the manufacture process for some of our product candidates; •we may face challenges on the safe and appropriate administration of our drugs in the clinic, including with respect to the conversion of ourproduct candidates from a dry powder formulation to a liquid formulation prior to intravenous, or IV, administration, precipitation or otherblockages in IV infusion lines, and the handling and storage of the IV infusion bags containing our product candidates, any of which mayresult in the need to carry out additional studies on the administration and compatibility of our product candidates with infusion sets andpumps; •we may be faced with challenges from third parties on our right to use certain processes used in the formulation and process development ofour product candidates; •we may have to defend our patents against infringement by third parties; •we may unknowingly infringe third-party patents; •we may face a “freedom to operate” issue; •we will be dependent on the efforts of third parties in completing clinical trials of, receiving regulatory approval for and commercializing, anyproduct candidate we license to such third parties; •through our clinical trials, we may discover factors that limit the commercial viability of the product candidate or make theircommercialization unfeasible; •we may not be successful in completing preclinical studies and clinical trials of, receiving marketing approvals for, establishing commercialmanufacturing capabilities for and commercializing, any product candidate to which we retain rights under a collaboration agreement; and •we may not be successful in gaining acceptance of any product candidate by patients, the medical community and third-party payors,effectively competing with other therapies, maintaining a continued acceptable safety profile following approval and qualifying for,maintaining, enforcing and defending our intellectual property rights and claims.With respect to each of Acelarin, NUC-3373 and NUC-7738, if we or our suppliers, as applicable, do not overcome one or more of these factors in atimely manner or at all, we could experience significant delays or an inability to successfully commercialize that product candidate.We cannot be certain that Acelarin, NUC-3373 or NUC-7738 or any future product candidates will be successful in clinical trials or receive regulatoryapproval. Further, Acelarin, NUC-3373 or NUC-7738 or any future product candidates may not receive regulatory approval even if they are successful inclinical trials. If we do not receive regulatory approvals for Acelarin, NUC-3373 or NUC-7738 or any future product candidates, we may not be able tocontinue our operations. Even if we successfully obtain regulatory approvals to manufacture and market Acelarin, NUC-3373 or NUC-7738 or any futureproduct candidates, our revenues will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval and havecommercial rights. If the markets for patient groups that we are targeting are not as significant as we estimate, we may not generate significant revenues fromsales of such products, if approved.We plan to seek regulatory approval to commercialize Acelarin, NUC-3373 and NUC-7738 in the United States and the European Union, andpotentially in additional foreign countries. While the scope of regulatory approval is similar in5 many countries, to obtain separate regulatory approval in multiple countries requires us to comply with the numerous and varying regulatory requirements ofsuch countries regarding safety and efficacy and governing, among other things, clinical trials, commercial sales, pricing and distribution of Acelarin, NUC-3373 and NUC-7738, and we cannot predict success in these jurisdictions.Our lack of any approved products and our limited operating history may make it difficult for you to evaluate the success of our business to date and toassess our future viability.Biopharmaceutical drug development is a highly speculative undertaking and involves a substantial degree of risk. Our operations to date have beenlimited to organizing and staffing our company, business planning, raising capital, developing our technology, identifying potential product candidates,undertaking preclinical studies, and conducting early-stage, non-comparative clinical trials of Acelarin and NUC-3373. We have not yet demonstrated ourability to successfully complete large-scale, randomized, pivotal clinical trials compared to standards of care, obtain marketing approvals, manufacture acommercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful productcommercialization. Typically, it takes several years to develop one new drug from the time it is discovered to when it is available for treating patients. Inaddition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition from acompany with a research and development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.We will require substantial additional funding which may not be available to us on acceptable terms, or at all. If we fail to obtain additional financing,we may be unable to complete the development and commercialization of our product candidates or continue our development programs.The development of pharmaceutical drugs is capital-intensive. We expect our expenses to increase with our ongoing activities, particularly as weconduct larger-scale clinical trials of, and seek marketing approval for, our product candidates. In addition, if we obtain marketing approval for any of ourproduct candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. We mayalso need to raise additional funds sooner if we choose to pursue additional indications or geographies for our product candidates or otherwise expand morerapidly than we presently anticipate. Furthermore, we will continue to incur costs associated with operating as a public company. Accordingly, we will needto obtain substantial additional funding in connection with our continuing operations.As of December 31, 2017, we had £86.7 million in cash and cash equivalents. We believe, based upon our current operating plan, that, our cash andcash equivalents on hand will be sufficient to fund our anticipated operations at least through the first quarter of 2020. Our future capital requirements andthe period for which we expect our existing resources to support our operations may vary significantly from what we expect. Our monthly spending levelsvary based on new and ongoing research and development and other corporate activities. Because the length of time and activities associated with successfulresearch and development of our product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and anyapproved marketing and commercialization activities. In addition, our future capital requirements will depend on many factors, and could increasesignificantly as a result of many factors, including: •the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates; •the scope, prioritization and number of our research and development programs; •the costs, timing and outcome of regulatory review of our product candidates; •the extent to which we enter into non-exclusive, jointly funded clinical research collaboration arrangements, if any, for the development ofour product candidates in combination with other companies’ products; •our ability to establish collaboration arrangements for the development of our product candidates on favorable terms, if at all; •the achievement of milestones or occurrence of other developments that trigger payments under our license agreements and any collaborationagreements into which we may enter, if any; •the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under future collaboration agreements, ifany; •the extent to which we acquire or in-license product candidates and technologies, and the terms of such in-licenses;6 •the costs of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our productcandidates for which we receive marketing approval; •revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;and •the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defendingintellectual property-related claims.Conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that can take years to complete, and we maynever generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved,may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that may not be commercially available forseveral years, if ever. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop andcommercialize our product candidates. Volatility in the financial markets has generally made equity and debt financing more difficult to obtain and maycompromise our ability to meet our fundraising needs. We cannot guarantee that future financing will be available in sufficient amounts or on termsacceptable to us, if at all.If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research ordevelopment programs or the commercialization of any product candidate or be unable to expand our operations or otherwise capitalize on our businessopportunities.Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technologies orproduct candidates.Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity anddebt financings. The sale of additional equity or convertible debt securities would dilute all of our shareholders. The incurrence of indebtedness could resultin increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additionaldebt, limitations on our ability to acquire, sell or license intellectual property rights, limitations on declaring dividends and other operating restrictions thatcould adversely impact our ability to conduct our business. Moreover, the terms of any financing may adversely affect the holdings or the rights of ourshareholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of ourADSs to decline.We could decide to seek funds through collaborations, strategic alliances or licensing arrangements with third parties, and we could be required to doso at an earlier stage than otherwise would be desirable. In connection with any such collaborations, strategic alliances or licensing arrangements, we may berequired to relinquish valuable rights to our intellectual property, future revenue streams, research programs or product candidates, grant rights to developand market product candidates that we would otherwise prefer to develop and market ourselves, or otherwise agree to terms unfavorable to us.We may be unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments or benefit fromfavorable United Kingdom tax legislation.As a United Kingdom resident company, we are subject to U.K. corporate taxation. We have generated losses since inception. As of December 31,2017, we had cumulative carry forward tax losses of £12.4 million. Subject to any relevant restrictions (including changes introduced in the Finance (no. 2)Act 2017 that, broadly, restrict the amount of carried forward losses that can be utilized to 50% of group profits arising in a particular tax year above £5.0million), we expect these to be available to carry forward and offset against future operating profits. As a company that carries out extensive research anddevelopment activities, we benefit from the United Kingdom research and development tax credit regime for small and medium-sized companies, whereby weare able to surrender the trading losses that arise from our qualifying research and development activities for a payable tax credit of up to 33.35% of eligibleresearch and development expenditures. Qualifying expenditures largely comprise employment costs for research staff, consumables and subcontract costsincurred as part of research projects. Certain subcontracted qualifying research expenditures are eligible for a cash rebate of up to 21.68%. The majority of ourpipeline research, clinical trials management and manufacturing development activities are eligible for inclusion within these tax credit cash rebate claims.We may not be able to continue to claim7 payable research and development tax credits in the future as we become a public company because we may no longer qualify as a small or medium-sizedcompany.We may benefit in the future from the United Kingdom’s “patent box” regime, which allows certain profits attributable to revenues from patentedproducts to be taxed at an effective rate of 10%. As we have many different patents covering our products, future upfront fees, milestone fees, productrevenues and royalties could be taxed at this favorably low tax rate. When taken in combination with the enhanced relief available on our research anddevelopment expenditures, we expect a long-term lower rate of corporation tax to apply to us. If, however, there are unexpected adverse changes to theUnited Kingdom research and development tax credit regime or the “patent box” regime, or for any reason we are unable to qualify for such advantageous taxlegislation, or we are unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments then our business,results of operations and financial condition may be adversely affected.Our business may become subject to economic, political, regulatory and other risks associated with international operations.As a company based in the United Kingdom, our business is subject to risks associated with conducting business internationally. Many of oursuppliers and collaborative and clinical trial relationships are located outside the United States. Accordingly, our future results could be harmed by a varietyof factors, including: •economic weakness, including inflation, or political instability in particular non-U.S. economies and markets; •differing and changing regulatory requirements for drug approvals in non-U.S. countries; •differing jurisdictions could present different issues for securing, maintaining or obtaining freedom to operate in such jurisdictions; •potentially reduced protection for intellectual property rights; •difficulties in compliance with non-U.S. laws and regulations; •changes in non-U.S. regulations and customs, tariffs and trade barriers; •changes in non-U.S. currency exchange rates of the pound sterling, the euro and currency controls; •changes in a specific country’s or region’s political or economic environment, including the implications of the 2016 decision of the eligiblemembers of the U.K. electorate for the United Kingdom to withdraw from the European Union or any potential future referendum regarding theindependence of Scotland; •trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or non-U.S. governments; •differing reimbursement regimes and price controls in certain non-U.S. markets; •negative consequences from changes in tax laws; •compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; •workforce uncertainty in countries where labor unrest is more common than in the United States; •difficulties associated with staffing and managing international operations, including differing labor relations; •production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and •business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters including earthquakes, typhoons,floods and fires.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, particularly between the pound sterling and the U.S. dollar, mayadversely affect us. Since the vote of a majority of the eligible members of the electorate in the United Kingdom to withdraw from the European Union in anational referendum held on June 23, 2016, referred to as “BREXIT,” there has been a significant increase in the volatility of the exchange rate between thepound sterling and the U.S. dollar and an overall weakening of the pound sterling. Although we are based in the United Kingdom, we source our active8 pharmaceutical ingredient, or API, and other raw materials and our research and development, manufacturing, consulting and other services worldwide,including from the United States, the European Union and India. Any weakening of the pound sterling against the currencies of such other jurisdictionsmakes the purchase of such goods and services more expensive for us. Further, potential future revenue may be derived from abroad, particularly from theUnited States. As a result, our business and the price of our ADSs may be affected by fluctuations in foreign exchange rates not only between the poundsterling and the U.S. dollar, but also the currencies of other countries, which may have a significant impact on our results of operations and cash flows fromperiod to period. Currently, we do not have any exchange rate hedging arrangements in place.Risks Related to Development of Our Product CandidatesInitial success in the completed and ongoing early-stage clinical trials may not be indicative of results obtained when these trials are completed or inlater stage trials.Acelarin is currently being evaluated in three clinical trials across numerous solid tumor indications: one Phase 1b trial in combination with cisplatinin patients with biliary tract cancer, one Phase 2 trial in patients with recurrent ovarian cancer, and one Phase 3 trial in patients with pancreatic cancer. WhileAcelarin has shown high disease control rates and a favorable tolerability profile in early-stage trials, including in three dose-ranging Phase 1 trials, we maynot see such favorable data in future clinical trials involving Acelarin. Similarly, favorable results obtained from preclinical studies of NUC-3373 and in theongoing Phase 1 trial in patients with advanced solid tumors may not be replicated in any future clinical trials. In addition, data generated in these early stagePhase 1 trials are not the basis on which marketing approval by the FDA or a comparable foreign regulatory authority would be sought. Furthermore, theresults of our clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for marketingapproval. Statistical significance means that an effect is unlikely to have occurred by chance. Clinical trial results are considered statistically significantwhen the probability of the results occurring by chance, rather than from the efficacy of the product candidate, is sufficiently low. There can be no assurancethat any of our clinical trials will ultimately be successful or support further clinical development of any of our product candidates. There is a high failure ratefor drugs proceeding through clinical trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks inclinical development even after achieving promising results in earlier studies.Preliminary and interim data from our clinical trials may change as patient enrollment continues, patient data are further examined and more patientdata become available.Preliminary or interim data from our clinical trials, including those from the Phase 1b trial of Acelarin in combination with cisplatin in patients withbiliary tract cancer, the Phase 2 trial of Acelarin in patients with recurrent ovarian cancer, the Phase 3 trial of Acelarin in patients with pancreatic cancer, thePhase 1 trial of NUC-3373 in patients with advanced solid tumors, and any future clinical trials of any of product candidates, are not necessarily predictive offinal results and may change. In addition, while the Phase 1b trial of Acelarin in combination with cisplatin in patients with biliary cancer (the ABC-08clinical trial) was conducted by the same investigators that conducted the earlier ABC-02 clinical trial in a similar patient population comparing single agentgemcitabine to the combination of gemcitabine plus cisplatin, the ABC-08 trial has many fewer patients than did the ABC-02 trial, which enrolled 410patients. The results from the ABC-08 trial may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authoritiesto support a future marketing approval. Preliminary and interim data are subject to the risk that one or more of the clinical outcomes may materially change aspatient enrollment continues, patient data are further examined, more patient data become available, and we prepare and issue our final clinical study report.As a result, preliminary and interim data should be viewed with caution until the final data are available. Material adverse changes in the final data comparedto the preliminary or interim data could significantly harm our business prospects.We are very early in our development efforts. If we are unable to successfully develop and commercialize our product candidates or experiencesignificant delays in doing so, our business will be harmed.We currently do not have any products that have gained marketing approval. We have invested substantially all of our efforts and financial resourcesidentifying and developing our ProTides, such as Acelarin, NUC-3373 and NUC-7738. Our ability to generate product revenues, which may not occur forseveral years, if ever, will depend on the successful development and eventual commercialization of Acelarin, for which one Phase 1b trial, one Phase 2 trialand one Phase 3 trial are ongoing, NUC-3373, for which one Phase 1 trial is ongoing, and NUC-7738, which is currently in preclinical development. Wecurrently do not generate any revenues from sales of any products, and we may never be able to develop or commercialize a marketable drug. Each of ourproduct candidates will require development, management of development and manufacturing activities, marketing approval in multiple jurisdictions,obtaining manufacturing supply, building of a9 commercial organization, substantial investment and significant marketing efforts before we generate any revenues from drug sales.We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in newand rapidly evolving fields, particularly in the biopharmaceutical area. For example, to execute our business plan, we will need to successfully: •execute development activities for our product candidates, including successful enrollment in and completion of clinical trials; •manage our spending as costs and expenses increase due to preclinical development, clinical trials, marketing approvals andcommercialization; •obtain required marketing approvals for the development and commercialization of our product candidates; •obtain and maintain patent and trade secret protection and regulatory exclusivity for our product candidates and ensure that we do notinfringe the valid patent rights of third parties; •protect, leverage and expand our intellectual property portfolio; •establish and maintain clinical and commercial manufacturing capabilities or make arrangements with third-party manufacturers for clinicaland commercial manufacturing; •build and maintain robust sales, distribution and marketing capabilities, either on our own or in collaboration with strategic partners, if ourproduct candidates are approved; •gain acceptance for our product candidates, if approved, by patients, the medical community and third-party payors; •compete effectively with other therapies; •obtain and maintain healthcare coverage and adequate reimbursement; •maintain a continued acceptable safety profile for our product candidates following approval, if approved; and •develop and maintain any strategic relationships we elect to enter into, if any.If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfullycommercialize our product candidates, which would harm our business. If we do not receive marketing approvals for our product candidates, we may not beable to continue our operations.If we experience delays or difficulties in the enrollment of patients in clinical trials, development of our product candidates may be delayed orprevented.Identifying and qualifying patients to participate in clinical trials for our product candidates is critical to our success. We may not be able to initiateor continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials.Patient enrollment may be affected by many factors including: •the severity of the disease under investigation; •the size of the patient population for a product indication; •the eligibility criteria for the clinical trial in question; •the eligibility criteria for the clinical trial in question; •the perceived risks and benefits of the product candidate under study; •the efforts to facilitate timely enrollment in clinical trials; •the patient referral practices of physicians; •the availability of competing therapies and clinical trials; and •the proximity and availability of clinical trial sites for prospective patients.10 If we experience delays or difficulties in the enrollment of patients in clinical trials, our clinical trials may be delayed or terminated. Any delays incompleting our clinical trials will increase our costs, delay or prevent our product candidate development and approval process, and jeopardize our ability tocommence product sales and generate revenue.Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays incompleting, or ultimately be unable to complete, the development and may experience delays in obtaining, or ultimately be unable to obtain, theapproval of our product candidates.The risk of failure in drug development is high. Acelarin is currently being studied in one Phase 1b trial, one Phase 2 trial and one Phase 3 trial, NUC-3373 is currently being studied in one Phase 1 trial, and NUC-7738 is in preclinical development. Before obtaining marketing approval from regulatoryauthorities for the sale of any product candidate, we must complete preclinical development and conduct extensive clinical trials to demonstrate the safetyand efficacy of our product candidates in patients. Clinical trials are expensive, difficult to design and implement and can take several years to complete, andtheir outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Further, the results of preclinical studies and earlyclinical trials of our product candidates may not be predictive of the results of later-stage clinical trials, and interim results of a clinical trial do notnecessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companiesthat have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketingapproval of their products. It is impossible to predict when or if any of our product candidates will prove effective or safe in humans or will receive marketingapproval.We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketingapproval or commercialize our product candidates. Clinical trials may be delayed, suspended or prematurely terminated because costs are greater than weanticipate or for a variety of reasons, such as: •delay or failure in reaching agreement with the FDA, the EMA or a comparable foreign regulatory authority on a trial design that we are ableto execute; •delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authorityregarding the scope or design of a clinical trial; •delays in reaching, or failure to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, the terms of which canbe subject to extensive negotiation and may vary significantly among different CROs and trial sites; •inability, delay, or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in otherclinical programs; •delay or failure in recruiting and enrolling suitable subjects to participate in a trial; •delay or failure in having subjects complete a trial or return for post-treatment follow-up; •clinical sites and investigators deviating from the clinical protocol, failing to conduct the trial in accordance with regulatory requirements, ordropping out of a trial; •failure to initiate or delay of or failure to complete a clinical trial as a result of an Investigational New Drug Application, or IND, being placedon clinical hold by the FDA, or for other reasons; •lack of adequate funding to continue a clinical trial, including unforeseen costs due to enrollment delays, requirements to conduct additionalclinical trials and increased expenses associated with the services of our CROs and other third parties; •clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, toconduct additional clinical trials or abandon product development programs; •the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trialsmay 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, orat all; •regulators, or a Data Safety Monitoring Board, or DSMB, if one is used for our clinical trials, may require that we suspend or terminate ourclinical trials for various reasons, including noncompliance with regulatory11 requirements, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, or a finding that theparticipants are being exposed to unacceptable health risks; •the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may beinsufficient; •the FDA or other regulatory authorities may require us to submit additional data or impose other requirements before permitting us to initiate aclinical trial; or •there may be changes in governmental regulations or administrative actions.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 ofmarketing approval for our product candidates. The FDA may disagree with our clinical trial design and our interpretation of data from clinical trials, or maychange the requirements for approval even after it has reviewed and commented on the design for our clinical trials. Even though Acelarin and NUC-3373 aretransformations of chemotherapeutic agents that have been widely used for many years and there is a clear unmet medical need in each of the indications thatwe are currently pursuing in the clinic, there can be no assurance that the FDA will permit us to move more quickly to the initiation of pivotal clinical trialsin large patient populations. Furthermore, NUC-7738 is a transformation of cordycepin, a nucleoside analog that has never been successfully developed orapproved as a chemotherapy, which may result in the need for more preclinical studies or clinical trials than would be the case for transformations ofapproved chemotherapeutic agents.If we are required to conduct additional clinical trials or other studies of our product candidates beyond those that we currently contemplate, if we areunable to successfully complete clinical trials of our product candidates or other studies, if the results of these trials or tests are not positive or are onlymodestly positive or if there are safety concerns, we may: •be delayed in obtaining marketing approval for our product candidates; •not obtain marketing approval for our product candidates at all; •obtain approval for indications or patient populations that are not as broad as intended or desired; •obtain approval with labeling that includes significant use or distribution restrictions or safety warnings that would reduce the potentialmarket for our products or inhibit our ability to successfully commercialize our products; •be subject to additional post-marketing restrictions or requirements, including confirmatory trials; or •have the product removed from the market after obtaining marketing approval.Our product development costs will also increase if we experience delays in preclinical and clinical development or receiving the requisite marketingapprovals. We do not know whether any of our preclinical studies or clinical trials will need to be restructured or will be completed on schedule, or at all.Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our productcandidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidatesand may harm our business and results of operations.We face regulation and potential liability related to the privacy of health information we obtain from clinical trials sponsored by us or ourcollaborators. The regulatory environment surrounding information security and privacy is increasingly demanding. We are subject to numerous regulationsgoverning the protection of personal and confidential information of our clinical subjects, clinical investigators, and employees, including in relation tomedical records, credit card data and financial information. For example, on May 25, 2016, the European General Data Protection Regulation, or GDPR,entered into force following four years of negotiation. The GDPR repeals the Data Protection Directive (95/46/EC) and will be directly applicable in all E.U.member states starting on May 25, 2018. We will be subject to the GDPR when conducting clinical trials with E.U. based data subjects (whether the trials areconducted directly by us or through a clinical vendor or collaborator) or offering approved products to E.U. based data subjects (regardless of whetherinvolving our E.U. based subsidiary or operations). The GDPR sets out a number of requirements that must be complied with when handling the personal dataof such E.U. based data subjects including: the obligation to appoint data protection officers in certain circumstances; new rights for individuals to be“forgotten” and rights to data portability; the principal of accountability and the obligation to make public notification of significant data breaches. Theselaws and regulations are increasing in complexity and number, change frequently and12 sometimes conflict. In particular, as the E.U. states reframe their national legislation to prepare for and harmonize with the GDPR, we will need to monitorcompliance with all relevant E.U. member states' laws and regulations, including where permitted derogations from the GDPR are introduced.The introduction of the GDPR, and any resultant changes in E.U. member states’ national laws and regulations, may increase our complianceobligations and may necessitate the review and implementation of policies and processes relating to our collection and use of data. This increase incompliance obligations could also lead to an increase in compliance costs which may have an adverse impact on our business, financial condition or resultsof operations.If any person, including any of our employees, clinical vendors or collaborators or those with whom we share such information, negligently disregardsor intentionally breaches our established controls with respect to our clinical subject, clinical investigator, employee data or other personal data for which weare responsible, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions,fines and/or criminal prosecution in one or more jurisdictions. For example, under the GDPR there are significant new punishments for non-compliance whichcould result in a penalty of up to €20 million or 4% of the annual global turnover of the infringer, whichever is greater. In addition, a data breach could resultin negative publicity which could damage our reputation and have an adverse effect on our business, financial condition or results of operations.We strive to comply with all applicable laws, but they may conflict with each other, and by complying with the laws or regulations of onejurisdiction, we may find that we are violating the laws or regulations of another jurisdiction. Despite our efforts, we may not have fully complied in the pastand may not in the future. If we become liable under laws or regulations applicable to us, we could be required to pay significant fines and penalties, ourreputation may be harmed and we may be forced to change the way we operate. That could require us to incur significant expenses or to discontinue certainservices, which could negatively affect our business.Due to our limited resources and access to capital, we must, and have in the past decided to, prioritize development of certain ProTide candidates overother potential candidates. These decisions may prove to have been wrong and may adversely affect our performance.Because we have limited resources and access to capital to fund our operations, we must decide which ProTides to pursue and the amount of resourcesto allocate to each. Our decisions concerning the allocation of research, collaboration, management and financial resources toward particular ProTides ortherapeutic areas may not lead to the development of viable commercial products and may divert resources away from better opportunities. Similarly, ourdecisions to delay, terminate or collaborate with third parties in respect of product development programs may also prove not to be optimal and could causeus to miss valuable opportunities. If we make incorrect determinations regarding the market potential of our ProTides or misread trends in thebiopharmaceutical industry, in particular for our lead ProTides, then our business may be adversely affected.We may not be successful in our efforts to use and expand our technology platform to build a pipeline of additional ProTide candidates.A key element of our strategy is to use and expand our proprietary ProTide technology to build a pipeline of additional ProTide candidates andprogress these ProTide candidates through clinical development for the treatment of cancer. Although our research and development efforts to date haveresulted in a pipeline of ProTide candidates directed at the treatment of many solid tumors and hematological malignancies, we may not be able to developProTide candidates that are safe and effective. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identifymay not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that theyare unlikely to be products that will receive marketing approval and achieve market acceptance.Risks Related to Marketing Approval of Our Product CandidatesIf we are not able to obtain, or if there are delays in obtaining, required marketing approvals, we will not be able to commercialize our productcandidates and our ability to generate revenue will be impaired.Our product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture,safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale,13 distribution, import and export are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparableauthorities in other countries.These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, currentgood manufacturing practice, or cGMP, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of recordsand documents, including periodic inspections by FDA and other regulatory authorities, requirements regarding the distribution of samples to physicians andrecordkeeping. Before we can commercialize any of our product candidates, each such product candidate must be approved by the FDA pursuant to an NDAin the United States, by the EMA pursuant to a MAA in the European Union, and by similar regulatory authorities outside the United States prior tocommercialization.The process of obtaining marketing approvals, both in the United States and abroad, is expensive and takes several years, if approval is obtained atall, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Failure toobtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We have not received approval to market anyof our product candidates from regulatory authorities in any jurisdiction. We have limited experience in planning and conducting the clinical trials requiredfor marketing approvals, and we expect to rely on third-party contract research organizations, or CROs, to assist us in this process. Obtaining marketingapproval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeuticindication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about theproduct manufacturing process, and in many cases the inspection of manufacturing facilities by the regulatory authorities. Our product candidates may not beeffective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may precludeour obtaining marketing approval or prevent or limit commercial use. Because a number of our clinical trials will be in combination with other approvedtherapies, there may also be undesirable or unintended side effects, toxicities or other characteristics resulting from the other therapy or from its combinationwith our product candidate. In addition, because our product candidates are transformations of nucleoside analogs, including those that are approvedchemotherapeutic agents and those that have never been approved as chemotherapeutic agents, our product candidates could be negatively impacted by theidentification of any new undesirable or unintended side effects, toxicities or other characteristics in such existing nuceloside analogs, in particular in thosethat have never been approved as chemotherapeutic agents. Although we use the proprietary name Acelarin for our product candidate NUC-1031, we havenot obtained any conditional approval of this proprietary name and any goodwill or recognition that we accrue during development of the product candidatemay be lost if we are required to select a different proprietary name in the course of obtaining regulatory approval, if such approval occurs at all.Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data areinsufficient for approval and require additional preclinical studies or clinical trials. Our product candidates could be delayed in receiving, or fail to receive,marketing approval for many reasons, including the following: •the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials or require that weperform additional clinical trials, including toxicology trials; •we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safeand effective for its proposed indication; •the results of our clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatoryauthorities for marketing approval; •we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; •the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; •the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA or other submissionto obtain marketing approval in the United States or elsewhere; •third-party manufacturers or our clinical or commercial product candidates may be unable to meet the FDA’s cGMP requirements or similarrequirements of foreign regulatory authorities; and •the approval requirements or policies of the FDA or comparable foreign regulatory authorities may significantly change in a manner renderingour clinical data insufficient for approval.14 In addition, even if we were to obtain approval, regulatory authorities may approve our product candidates for fewer or more limited indications thanwe request, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label thatdoes not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarioscould harm the commercial prospects for our product candidates.If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our productcandidates may be harmed and our ability to generate revenues will be impaired.Our product candidates may cause undesirable side effects that could delay or prevent their marketing approval, limit the commercial profile of anapproved label, or result in significant negative consequences following marketing approval, if any.Undesirable side effects caused by our product candidates could cause us or the FDA or other regulatory authorities to interrupt, delay or halt ourclinical trials and could result in more restrictive labels or the delay or denial of marketing approval by the FDA or other regulatory authorities of our productcandidates. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these or other side effects. In such an event, our trialscould be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approvalof our product candidates for any or all targeted indications. The drug-related side effects could also affect patient recruitment or the ability of enrolledpatients to complete the trial or result in potential product liability claims.Further, clinical trials by their nature utilize a sample of the potential patient population. With a limited number of patients, rare and severe sideeffects of our product candidates may only be uncovered with a significantly larger number of patients exposed to the product candidate. If our productcandidates receive marketing approval and we or others identify undesirable side effects caused by such product candidates or any other similar drugs aftersuch approval, a number of potentially significant negative consequences could result, including: •regulatory authorities may withdraw or limit their approval of such product candidates; •regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication; •we may be required to create a medication guide outlining the risks of such side effects for distribution to patients; •we may be required to change the way such product candidates are distributed or administered, conduct additional clinical trials or change thelabeling of the product candidates; •regulatory authorities may require a REMS plan to mitigate risks, which could include medication guides, physician communication plans, orelements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools; •we may be subject to regulatory investigations and government enforcement actions; •we may decide to remove such product candidates from the marketplace after they are approved; •we could be sued and held liable for injury caused to individuals exposed to or taking our product candidates; and •our reputation may suffer.In addition, the patient profile in the indications for which we are currently developing our product candidates, with many patients already seriouslyill at the time of initiation of treatment, may result in an increased risk of claims that undesirable side effects or poor prognoses or outcomes are related to ourproduct candidates. Regardless of whether or not such side effects or prognoses or outcomes are ultimately determined to be related to our productcandidates, the claims themselves could result in some or all of the foregoing negative consequences.We believe that any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidates and couldsubstantially increase the costs of commercializing our product candidates, if approved, and significantly impact our ability to successfully commercializeour product candidates and generate revenues.15 A Fast Track Designation by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review orapproval process and does not increase the likelihood that our product candidates will receive marketing approval.We do not currently have Fast Track Designation for any of our product candidates but may seek such designation. If a drug is intended for thetreatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drugsponsor may apply for FDA Fast Track Designation. The FDA has broad discretion whether to grant this designation. Even if we believe a particular productcandidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Even if we do receive Fast Track Designation, we maynot experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw Fast Track Designationif it believes that the designation is no longer supported by data from our clinical development program. Many drugs that have received Fast TrackDesignation have failed to obtain drug approval.We may be unable to obtain orphan drug designation from the FDA for any of our product candidates, and even if we do obtain such designations, wemay be unable to obtain or maintain the benefits associated with orphan drug designation, including the potential for orphan drug exclusivity.Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is intended to treat a rare disease or condition, defined as oneoccurring 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 isno reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the European Union, the EMA’sCommittee for Orphan Medicinal Products, or COMP, grants orphan drug designation to promote the development of products that are intended for thediagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the EuropeanUnion. Additionally, designation is granted for products intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating orserious and chronic condition when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessaryinvestment in developing the drug or biological product or where there is no satisfactory method of diagnosis, prevention or treatment, or, if such a methodexists, the medicine must 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 trialcosts, 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 indication forwhich it has orphan designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other application to marketthe same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority over the productwith orphan exclusivity or where the manufacturer is unable to assure the availability of sufficient quantities of the orphan drug to meet the needs of patientswith 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 FDAhas already approved another drug with the same active ingredient for the same indication, unless the drug is demonstrated to be clinically superior to thepreviously approved drug. In the European Union, orphan drug designation entitles a party to financial incentives such as reduction of fees or fee waivers andten years of market exclusivity following approval. This period may be reduced to six years if the orphan drug designation criteria are no longer met,including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.We do not currently have orphan drug designation for any of our product candidates but may seek such designation. Even if we are able to obtainorphan designation for one or more of our product candidates in the United States or the European Union, we may not be the first to obtain marketingapproval for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products, which could prevent us frommarketing such product candidate if another company is able to obtain orphan drug exclusivity before we do. In addition, exclusive marketing rights in theUnited States may be unavailable if we seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA laterdetermines that the request for designation was materially defective or if we are unable to assure sufficient quantities of the product to meet the needs ofpatients with the rare disease or condition following approval. Further, even if we obtain orphan drug exclusivity for one or more of our ProTides, thatexclusivity may not effectively protect them from competition because different drugs with different active moieties can be approved for the same condition.In addition, the FDA or the EMA can subsequently approve products with the same active moiety for the same condition if the FDA or the EMA concludesthat the later drug is safer, more effective, or makes a major contribution to patient care. Orphan drug designation neither shortens the development time orregulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. In addition, while we may seek orphan drugdesignation for one or more of our product candidates, we may never receive such designations.16 There have been legal challenges to aspects of the FDA’s regulations and policies concerning the exclusivity provisions of the Orphan Drug Act, andfuture challenges could lead to changes that affect the protections afforded our products in ways that are difficult to predict. In 2014, a U.S. district courtinvalidated the FDA’s denial of orphan exclusivity to an orphan designated drug, which the FDA had based on its determination that the drug was not provento be clinically superior to a previously approved “same drug.” In response to the decision, the FDA released a policy statement stating that the court’sdecision is limited just to the facts of that particular case and that the FDA will continue to deny orphan drug exclusivity to a designated drug upon approvalif the drug is the “same” as a previously approved drug, unless the drug is demonstrated to be clinically superior to that previously approved drug. In April2016, another similar legal challenge was initiated against the FDA for its denial of orphan drug exclusivity to another designated drug. In the future, there isthe potential for additional legal challenges to the FDA’s orphan drug regulations and policies, and it is uncertain how ongoing and future challenges mightaffect our business.Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could besubject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatoryrequirements or if we experience unanticipated problems with our products, when and if any of them are approved.If the FDA or a comparable foreign regulatory authority approves any of our product candidates, activities such as the manufacturing processes,labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive andongoing regulatory requirements. The FDA or a comparable foreign regulatory authority may also impose requirements for costly post-marketing preclinicalstudies or clinical trials and surveillance to monitor the safety or efficacy of the product. The FDA closely regulates the post-approval marketing andpromotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling. The FDAimposes stringent restrictions on manufacturers’ communications regarding use of their products, and if we promote our products beyond their approvedindications, we may be subject to enforcement actions or prosecution arising from that off-label promotion. Violations of the Federal Food, Drug, andCosmetic Act relating to the promotion of prescription drugs may lead to investigations alleging violations of federal and state healthcare fraud and abuseand other laws, as well as state consumer protection laws.In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, orfailure to comply with regulatory requirements, may yield various results, including: •restrictions on such products, manufacturers or manufacturing processes; •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 or untitled letters; •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 •injunctions or the imposition of civil or criminal penalties.Non-compliance with European Union requirements regarding safety monitoring or pharmacovigilance can also result in significant financialpenalties. Similarly, failure to comply with the European Union’s requirements regarding the protection of personal information can also lead to significantpenalties and sanctions.The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval of ourproduct candidates. If we are slow or unable to adapt to changes in existing requirements or17 the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may haveobtained.Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws andregulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and futureearnings.Although we do not currently have any drugs on the market, once we begin commercializing our product candidates, we will be subject to additionalhealthcare statutory and regulatory requirements and enforcement by the U.S. federal and state governments and the foreign governments in the jurisdictionsin which we conduct our business. Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription ofany product candidates for which we obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to broadlyapplicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships throughwhich we market, sell and distribute any products for which we obtain marketing approval. Restrictions under applicable U.S. federal and state healthcarelaws and regulations include the following: •the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving orpaying remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or thepurchase, order or recommendation of, any good or service for which payment may be made under a federal healthcare program such asMedicare and Medicaid; a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order tohave committed a violation; •the federal false claims laws, including, without limitation, the civil False Claims Act (which can be enforced by private citizens through quitam actions), impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to thefederal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation topay money to the federal government; in addition, the government may assert that a claim including items and services resulting from aviolation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; •the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for executing a schemeto defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making anymaterially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the 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 havecommitted a violation; •the federal physician payment transparency requirements under the Physician Payments Sunshine Act, created under the Patient Protectionand Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, requiremanufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s HealthInsurance Program to report to the Centers for Medicare & Medicaid Services, or CMS, information related to payments and other transfers ofvalue to physicians and teaching hospitals and the ownership and investment interests of physicians and their immediate family members insuch manufacturers; •HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, whichalso imposes obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their businessassociates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatorycontractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; •some state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and therelevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related topayments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and •state and foreign laws that govern the privacy and security of health information in certain circumstances, many of which differ from eachother in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.18 Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements andclaims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involvesubstantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes,regulations 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 ofthese laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages,fines, disgorgement, imprisonment, exclusion of our products from government funded healthcare programs, such as Medicare and Medicaid, additionalreporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliancewith these laws, reputational harm, and the curtailment or restructuring of our operations. In addition, if any of the physicians or other healthcare providers orentities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrativesanctions, including exclusions from government funded healthcare programs.Current and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidatesand affect the prices we may obtain.In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regardingthe healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect ourability to profitably sell any product candidates for which we obtain marketing approval.In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, changed the way Medicare coversand pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and certain disabled people byestablishing the Medicare Part D Program and introduced a reimbursement methodology based on average sales prices for physician-administered drugs. Inaddition, this law provided authority for Medicare Part D plans to limit the number of drugs covered in any therapeutic class. Cost reduction initiatives andother provisions of this law and future laws could decrease the coverage and price that we will receive for any approved products. While the MMA onlyapplies to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their ownpayment rates. Therefore, any limitations in reimbursement that results from the MMA may result in reductions in payments from private payors.We expect that there will continue to be a number of federal and state proposals to implement governmental pricing controls and limit the growth ofhealthcare costs, including the cost of prescription drugs. For example, the Patient Protection and Affordable Care Act, as amended by the Health Care andEducation Affordability Reconciliation Act of 2010 (collectively, ACA) enacted in March 2010, was expected to have a significant impact on the health careindustry and result in expanded coverage for the uninsured. With regard to pharmaceutical products, among other things, ACA was expected to expand andincrease industry rebates for drugs covered under Medicaid programs and make changes to the coverage requirements under the Medicare Part D program. Wecannot predict the impact of ACA on pharmaceutical companies as many of the ACA reforms require the promulgation of detailed regulations implementingthe statutory provisions which has not yet occurred. In addition, both Congress and the President have expressed their intention to repeal the ACA and as aresult certain sections of the ACA have not been fully implemented or were effectively repealed. These actions add to the uncertainty of the changes enactedas part of ACA, and we continue to evaluate how the ACA and recent efforts to repeal and replace or limit the implementation of the ACA will impact ourbusiness.In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These new laws may result in additionalreductions in Medicare and other healthcare funding. For example, as a result of the Budget Control Act of 2011, providers are subject to Medicare paymentreductions of 2% per fiscal year through 2025 unless additional Congressional action is taken. In addition, the American Taxpayer Relief Act of 2012reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments from providersfrom three to five years. Further, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketedproducts, which have resulted in several recent Congressional inquiries and proposed federal and state legislation designed to, among other things, bringmore transparency to product pricing, contain the cost of drugs, review the relationship between pricing and manufacturer patient programs, and reformgovernment program reimbursement methodologies for products.19 We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteriaand in additional downward pressure on the price that we will receive for any approved product. Any reduction in payments from Medicare or othergovernment programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or otherhealthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize any of our products for which we receivemarketing approval.Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities forpharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance orinterpretations will be changed or what the impact of such changes on the marketing approvals, if any, of our product candidates, may be. In addition,increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to morestringent product labeling and post-marketing conditions and other requirements.Our future growth may depend, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens andother risks and uncertainties.Our future profitability may depend, in part, on our ability to commercialize our product candidates in foreign markets. In order to market and sell ourproducts in the European Union and many other jurisdictions, we or our third-party collaborators must obtain separate marketing approvals and comply withnumerous and varying regulatory requirements. The approval procedure varies among countries and economic areas and can involve additional testing. Thetime required to obtain approval may differ substantially from that required to obtain FDA approval. The marketing approval process outside the UnitedStates generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required thatthe product be approved for reimbursement before the product can be approved for sale in that country. We or these third parties may not obtain approvalsfrom regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities inother countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities inother countries or jurisdictions or by the FDA. Additionally, a failure or delay in obtaining marketing approval in one jurisdiction may have a negative effecton the marketing approval process in others. Approval procedures vary among jurisdictions and can involve requirements and administrative review periodsdifferent from, and greater than, those in the United States, including additional preclinical studies or clinical trials. Obtaining foreign marketing approvalsand compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent theintroduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets or receive applicablemarketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market. If weobtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to additional risksand uncertainties, including: •our customers’ ability to obtain reimbursement for our product candidates in foreign markets; •our inability to directly control commercial activities because we are relying on third parties; •the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements; •different medical practices and customs in foreign countries affecting acceptance in the marketplace; •import or export licensing requirements; •longer accounts receivable collection times; •longer lead times for shipping; •language barriers for technical training; •reduced or no protection on pharmaceutical products or their use in some foreign countries; •the unwillingness of courts in some foreign jurisdictions to enforce patents even when valid and infringed in that country;20 •the possibility of pre-grant or post-grant review proceedings in certain foreign countries that allow a petitioner to hold up patent rights for anextended period or permanently by challenging the patent filing at the patent office of that country; •the possibility of a compulsory license issued by a foreign country that allows a third-party entity or a government to manufacture, use or sellour products with a government-set low royalty to us; •the existence of additional potentially relevant third-party intellectual property rights; •foreign currency exchange rate fluctuations; •an increase in restrictions on trade or other protectionist measures; and •the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.Foreign sales of our product candidates could also be adversely affected by the imposition of governmental controls, political and economicinstability, trade restrictions and changes in tariffs.Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any.In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. Inthese countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. Toobtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our productcandidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactorylevels, our financial results would suffer.If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that couldharm our business.We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and thehandling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials,including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposalof these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resultingfrom our use of hazardous materials, we could be held liable for any resulting damages, and the amount of the liability could exceed our resources. We alsocould incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resultingfrom the use of hazardous materials, this insurance may not provide adequate coverage against other potential liabilities. We do not maintain insurance forenvironmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactivematerials.In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Thesecurrent or future laws and regulations may impair our discovery, preclinical development or production efforts. Our failure to comply with these laws andregulations also may result in substantial fines, penalties or other sanctions.Risks Related to Our Dependence on Third PartiesWe rely on, and expect to continue to rely on, third parties to conduct our clinical trials for our product candidates. If these third parties do notsuccessfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtainmarketing approval for or commercialize our product candidates, and our business could be substantially harmed.We do not have the ability to independently conduct clinical trials. We rely on medical institutions, clinical investigators, contract laboratories andother third parties, such as CROs, to conduct or otherwise support clinical trials for our product candidates. We expect to rely heavily on these parties forperformance of clinical trials for our product21 candidates. Nevertheless, we will be responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol, legal andregulatory requirements and scientific standards.We, our investigators, and our CROs will be required to comply with regulations, including good clinical practice, or GCP, and other relatedrequirements for conducting, monitoring, recording and reporting the results of clinical trials to ensure that the data and results are scientifically credible andaccurate, and that the trial patients are adequately informed of the potential risks of participating in clinical trials and their rights are protected. Theseregulations are enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatoryauthorities for any drugs in clinical development. The FDA enforces GCPs through periodic inspections of clinical trial sponsors, principal investigators andtrial sites. If we, our investigators or our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be called intoquestion and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before considering our marketingapplications for approval. We cannot assure you that, upon inspection, the FDA will determine that any of our future clinical trials will comply with GCPs.In addition, our clinical trials must be conducted with product candidates produced under cGMPs. Our failure or the failure of our investigators orCROs to comply with these requirements may require us to repeat clinical trials, which would delay the marketing approval process and could also subject usto enforcement action. We also are required to register certain clinical trials and post the results of such completed clinical trials involving productcandidates for which we receive marketing approval on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so canresult in fines, adverse publicity and civil and criminal sanctions.Although we intend to design the clinical trials for our product candidates, CROs will administer the clinical trials. As a result, many importantaspects of our development programs, including their conduct and timing, will be outside of our direct control. Our reliance on third parties to conduct futureclinical trials will also result in less direct control over the management of data developed through clinical trials than would be the case if we were relyingentirely upon our own staff. Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties incoordinating activities. Outside parties may: •have staffing difficulties; •fail to comply with contractual obligations; •experience regulatory compliance issues; •undergo changes in priorities or become financially distressed; •make errors in the design, management or retention of our data or data systems; or •form relationships with other entities, some of which may be our competitors.These factors may adversely affect the willingness or ability of third parties to conduct our clinical trials and may subject us to unexpected costincreases that are beyond our control. If the CROs do not perform clinical trials in a satisfactory manner, breach their obligations to us or fail to comply withregulatory requirements, the development, marketing approval and commercialization of our product candidates may be delayed, we may not be able toobtain marketing approval and commercialize our product candidates, or our development program may be irreversibly harmed. If we are unable to rely onclinical data collected by our CROs, we could be required to repeat, extend the duration of, or increase the size of any clinical trials we conduct and thiscould significantly delay commercialization and require significantly greater expenditures.If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs. If CROs donot successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of theclinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, any clinical trialssuch CROs are associated with may be extended, delayed or terminated and we may not be able to obtain marketing approval for or successfullycommercialize our product candidates. As a result, we believe that our financial results and the commercial prospects for our product candidates in the subjectindication would be harmed, our costs could increase and our ability to generate revenue could be delayed.22 We contract with third parties for the manufacture and shipment of our product candidates for preclinical studies and clinical trials and expect tocontinue to do so for commercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our productcandidates or drugs or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.We do not currently own or operate, nor do we have any plans to establish in the future, any manufacturing facilities or personnel. We rely, and expectto continue to rely, on third parties for the manufacture and shipment of our product candidates for preclinical studies and clinical trials, as well as for thecommercial manufacture of our drugs if any of our product candidates receive marketing approval. This reliance on third parties increases the risk that we willnot have sufficient quantities of our product candidates or drugs or such quantities at an acceptable cost or quality, which could delay, prevent or impair ourdevelopment or commercialization efforts.The facilities used to manufacture our product candidates must be evaluated by the FDA pursuant to inspections that will be conducted after wesubmit our marketing applications to the FDA to ensure compliance with cGMP. We do not control the manufacturing and shipment process of, and will becompletely dependent on, our contract manufacturers for compliance with cGMPs in connection with the manufacture and shipment of our productcandidates. If our contract manufacturers cannot successfully manufacture and ship material that conforms to our specifications and the regulatoryrequirements of the FDA or others, we will not be able to use the products produced at their manufacturing facilities. In addition, we have no control over theability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreignregulatory authority finds that these facilities do not comply with cGMP, we may need to find alternative manufacturing facilities, which would significantlyimpact our ability to develop, obtain marketing approval for or market our product candidates, if approved. Further, our failure, or the failure of our third-party manufacturers, to comply with these or other applicable regulations could result in sanctions being imposed on us, including clinical holds, fines,injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or drugs, if approved,operating restrictions and criminal prosecutions.We may be unable to establish any agreements with third-party manufacturers or do so on acceptable terms. Even if we are able to establishagreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: •reliance on the third party for regulatory compliance and quality assurance; •the possible breach of the manufacturing agreement by the third party; •the possible misappropriation of our proprietary information, including our trade secrets and know-how; and •the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.Our product candidates and any other drugs that we may develop may compete with other product candidates and approved drugs for access tomanufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. If our currentcontract manufacturers cannot perform as agreed, we may be required to replace such manufacturers. Although we believe that there are several potentialalternative manufacturers who could manufacture our product candidates, we may incur added costs and delays in identifying and qualifying any suchreplacement.Our current and anticipated future dependence upon others for the manufacture and shipment of our product candidates or drugs may adversely affectour future profit margins and our ability to commercialize any drugs that receive marketing approval on a timely and competitive basis.We, or our third-party manufacturers, may be unable to successfully scale-up manufacturing of our product candidates in sufficient quality andquantity, which would delay or prevent us from developing our product candidates and commercializing approved products, if any.In order to conduct large-scale clinical trials of our product candidates, we will need to manufacture them in large quantities. We, or any of ourmanufacturing partners, may be unable to successfully increase the manufacturing capacity for any of our product candidates in a timely or cost-effectivemanner, or at all. In addition, quality issues may arise during scale-up activities. If we, or any manufacturing partners, are unable to successfully scale up themanufacture of our product23 candidates in sufficient quality and quantity, the development, testing, and clinical trials of that product candidate may be delayed or infeasible, andregulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.The third parties upon which we rely for the supply of the active pharmaceutical ingredients, formulations, and drug products are our sole sources ofsupply and have limited capacity, and the loss of any of these suppliers could harm our business.The API, formulations and drug products for our product candidates are supplied to us from single-source suppliers with limited capacity. Our abilityto successfully develop our product candidates, and to ultimately supply our commercial drugs in quantities sufficient to meet the market demand, dependsin part on our ability to obtain the API, formulations and drug products in accordance with cGMP requirements and in sufficient quantities forcommercialization and clinical trials. We do not currently have arrangements in place for a redundant or second-source supply of any such API, formulationor drug product in the event any of our current suppliers cease their operations for any reason.We do not know whether our suppliers will be able to meet our demand, either because of the nature of our agreements with those suppliers, ourlimited experience with those suppliers or our relative importance as a customer to those suppliers. It may be difficult for us to assess their ability to timelymeet our demand in the future based on past performance. While our suppliers have generally met our demand for their products on a timely basis in the past,they may subordinate our needs in the future to their other customers.For all of our product candidates, we intend to identify and qualify additional manufacturers to provide API, formulations and drug products prior tosubmission of an NDA to the FDA or an MAA to the EMA. Establishing additional or replacement suppliers for the API, formulations and drug products forour product candidates, if required, may not be accomplished quickly. If we are able to find a replacement supplier, such replacement supplier would need tobe qualified, or we may have to perform comparative studies comparing the drug product from a new manufacturer to the product used in any completedclinical trials. All of this may require additional marketing approval, which could result in further delay. While we seek to maintain adequate inventory of theAPI, formulations and drug products for our product candidates, any interruption or delay in the supply of components or materials, or our inability to obtainsuch API, formulation and drug product from alternate sources at acceptable prices in a timely manner could impede, delay, limit or prevent our developmentefforts.We have entered into, and may in the future enter into, collaborations with third parties to discover or develop product candidates. If thesecollaborations are not successful, our business could be adversely affected.We have entered into a research, collaboration and license agreement with Cardiff University and University College Cardiff Consultants Ltd., orCardiff Consultants, for the design, synthesis, characterization and evaluation of ProTides, with the results of such research assigned to us and otherintellectual property of Cardiff University and Cardiff Consultants exclusively licensed to us for use for all purposes related to selected ProTides and thenucleoside family of the selected ProTides. We are significantly reliant on this collaboration for the generation of additional potential product candidatesand on the scientists employed by Cardiff University and Cardiff Consultants to perform such research. We have limited control over the amount and timingof resources that our collaborators dedicate to the development of ProTides and our ability to generate potential additional ProTides from these arrangementswill depend on our and our collaborators’ abilities to successfully perform the functions assigned to each of us in these arrangements. In addition, ourcollaborators have the ability to abandon research or development projects and terminate applicable agreements. If we breach any of our obligations underthis agreement, Cardiff University and Cardiff Consultants may have the right to terminate the agreement, which would result in a significant reduction in ourability to develop additional ProTides, and in our being unable to develop, manufacture and sell products that are covered by the licensed intellectualproperty, or in a competitor’s gaining access to the licensed intellectual property. Our agreement will expire at the end of 2019. Any expiration of thisagreement could also result in a significant reduction in our ability to develop additional ProTides.We may potentially enter into additional collaborations with third parties in the future. Our collaboration with Cardiff University and CardiffConsultants, and any future collaborations we enter into in the future, may pose several risks, including the following: •collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; •collaborators may not perform their obligations as expected;24 •the clinical trials conducted as part of, or as a result of, these collaborations may not be successful; •collaborators may not pursue development or commercialization of any product candidates that achieve regulatory approval or may elect notto continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focusor available funding or external factors, such as an acquisition, that divert resources or create competing priorities; •collaborators may delay clinical trials, provide insufficient funding for clinical trials, stop a clinical trial or abandon a product candidate,repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; •we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed orcommercialized under a collaboration and, consequently, may have limited ability to inform our shareholders about the status of such productcandidates; •collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our productcandidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized underterms that are more economically attractive than ours; •product candidates developed in collaboration with us may be viewed by our collaborators as competitive with their own product candidatesor products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; •a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may notcommit sufficient resources to the marketing and distribution of any such product candidate; •disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course ofdevelopment of any product candidates, may cause delays or termination of the research, development or commercialization of such productcandidates, may lead to additional responsibilities for us with respect to such product candidates or may result in litigation or arbitration, anyof which would be time-consuming and expensive; •collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as toinvite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; •disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations; •collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and •collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital topursue further development or commercialization of the applicable product candidates.If our collaborations do not result in the successful development and commercialization of products, or if one of our collaborators terminates itsagreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration. If we do not receive the fundingwe expect under these agreements, our development of product candidates could be delayed and we may need additional resources to develop our productcandidates. In addition, if one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and theperception of us in the business and financial communities could be adversely affected. All of the risks relating to product development, regulatory approvaland commercialization described in this Annual Report also apply to the activities of our collaborators.We may in the future decide to collaborate with pharmaceutical and biotechnology companies and other organizations for the development andpotential commercialization of our product candidates. These relationships, or those like them, may require us to incur non-recurring and other charges,increase our near- and long-term expenditures, issue securities that dilute our existing shareholders or disrupt our management and business. In addition, wecould face significant competition in seeking appropriate collaborators and the negotiation process is time-consuming and complex. Our ability to reach adefinitive collaboration agreement will depend, among other things, upon our assessment of the collaborator’s resources and expertise and the terms andconditions of the proposed collaboration. If we license rights to product candidates, we may not25 be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and strategy.If we fail to comply with our obligations under our license and collaboration agreement with Cardiff ProTides Ltd., we could lose rights to licensedand assigned intellectual property that are necessary for developing and commercializing Acelarin and other potential product candidates.We entered into an exclusive, worldwide assignment, license and collaboration agreement with Cardiff ProTides Ltd., or Cardiff ProTides, for certainof the patents related to Acelarin and other potential ProTides. This agreement imposes various development, commercialization, royalty payment, diligenceand other obligations on us. Among other obligations, we are specifically required to: pay Cardiff ProTides potential milestone payments; pay CardiffProTides royalties equal to mid- to high-single digit percentages of sales of such products, including sales by sublicensees; use commercially reasonableefforts to bring products to market; provide development and financial reports to Cardiff ProTides; file, prosecute, defend and maintain patent rights;indemnify Cardiff ProTides against certain claims and maintain insurance coverage; and direct future medicinal chemistry work related to certain compoundsto Cardiff ProTides on a preferential basis.If we breach any of these obligations, Cardiff ProTides may have the right to terminate the license and require us to assign back to Cardiff ProTidesthe intellectual property which was assigned to us under this agreement, which would result in our being unable to develop, manufacture and sell productsthat are covered by the licensed intellectual property or the assigned intellectual property, including Acelarin, or in a competitor’s gaining access to thelicensed intellectual property or the assigned intellectual property.Risks Related to the Commercialization of Our Product CandidatesEven if any of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients,third-party payors and others in the medical community necessary for commercial success.If any of our product candidates receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients,third-party payors and others in the medical community. If our product candidates do not achieve an adequate level of acceptance, we may not generatesignificant product revenues and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale,will depend on a number of factors, including: •the timing of our receipt of any marketing approvals; •the terms of any approvals and the countries in which approvals are obtained; •the efficacy and safety and potential advantages and disadvantages compared to alternative treatments; •the prevalence and severity of any side effects associated with our products or with any product that is used in combination with our product; •the indications for which our products are approved; •adverse publicity about our products or favorable publicity about competing products; •the approval of other products for the same indications as our products; •our ability to offer our products for sale at competitive prices; •the convenience and ease of administration compared to alternative treatments; •the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; •the success of our physician education programs; •the strength of our marketing and distribution; •the availability of third-party coverage and adequate reimbursement, including patient cost-sharing programs such as copays and deductibles;and •any restrictions on the use of our products together with other medications.26 We face substantial competition, which may result in others discovering, developing or commercializing competing products before or moresuccessfully than we do.The development and commercialization of new drug products is highly competitive. We face competition with respect to our current productcandidates and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from majorpharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical andbiotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications forwhich we are developing our product candidates. Some of these competitive products and therapies are based on scientific approaches that are the same as, orsimilar to, our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agenciesand other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research,development, manufacturing and commercialization.Specifically, there are a large number of companies developing or marketing treatments for cancer, including many major pharmaceutical andbiotechnology companies. If Acelarin is approved, it would compete with (a) existing chemotherapies, including gemcitabine, (b) existing targeted therapiesor immunotherapies and, if approved, targeted therapies or immunotherapies in clinical trials for the treatment of patients with cancer and (c) multipleapproved drugs or drugs that may be approved in the future for indications for which we may develop Acelarin. If NUC-3373 is approved, it would competewith (a) existing chemotherapies, including 5-FU, (b) existing targeted therapies or immunotherapies and, if approved, targeted therapies or immunotherapiesin clinical trials for the treatment of patients with cancer and (c) multiple approved drugs or drugs that may be approved in the future for indications for whichwe may develop NUC-3373. If NUC-7738 is approved, it would compete with existing chemotherapies and multiple approved drugs or drugs that may beapproved in the future for indications for which we may develop NUC-7738. Existing chemotherapies with which we may compete, including gemcitabineand 5-FU, are no longer under patent and are produced by numerous generic pharmaceutical manufacturers. As a result, these chemotherapies are and willcontinue to be substantially less expensive to patients than many other potential therapies, including our ProTide candidates, if approved.Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective,more convenient or less expensive or have fewer or less severe side effects than any products that we may develop. Our competitors also may obtain FDA orother marketing approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strongmarket position before we are able to enter the market or slow our marketing approval. Some of the important competitive factors affecting the success of allof our product candidates, if approved, are likely to be their efficacy, safety, convenience, price and the availability of reimbursement from government andother third-party payors.Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resourcesand expertise in research and development, manufacturing, preclinical studies, conducting clinical trials, obtaining marketing approvals and marketingapproved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources beingconcentrated among a smaller number of our competitors. Smaller and early-stage companies may also prove to be significant competitors, particularlythrough collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientificand management personnel and in establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologiescomplementary to, or necessary for, our programs.Even if we are able to commercialize any product candidates, such drugs may become subject to unfavorable pricing regulations or third-partycoverage and reimbursement policies.The regulations that govern marketing approvals, pricing and reimbursement for new drugs vary widely from country to country. Some countriesrequire approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing approval is granted.In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As aresult, we might obtain marketing approval for a product candidate in a particular country but then be subject to price regulations that delay our commerciallaunch of the product candidate, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the productcandidate in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our productcandidates obtain marketing approval.Our ability to commercialize any product candidates, if approved, successfully will depend in part on the extent to which coverage and adequatereimbursement for these product candidates and related treatments will be available from27 government authorities, private health insurers and other organizations. In the United States, the principal decisions about coverage and reimbursement fornew medicines under Medicare are made by CMS, an agency within the U.S. Department of Health and Human Services. Private payors ultimately determinewhich drugs they will cover and the amount of reimbursement they will provide for a covered drug. While there is no uniform system among payors formaking coverage and reimbursement decisions, private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide withrespect to reimbursement. Reimbursement agencies in Europe may be more conservative than CMS. For example, a number of cancer drugs are generallycovered and paid for in the United States, but have not been approved for reimbursement in certain European countries. A primary trend in the U.S. healthcareindustry and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and theamount of payments for particular drugs. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts fromlist prices and are challenging the prices charged for drugs. We may also need to conduct expensive pharmacoeconomic studies, in addition to the costlystudies required to obtain FDA or other comparable regulatory approvals, in order to demonstrate the medical necessity and cost-effectiveness of the productin order to secure coverage and reimbursement. We cannot be sure that coverage will be available for any product candidate that we commercialize and, ifcoverage is available, the level of payments. Reimbursement may impact the demand for, or the price of, any product candidate for which we obtainmarketing approval. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any productcandidate for which we obtain marketing approval.In addition to CMS and private payors, professional organizations such as the National Comprehensive Cancer Network and the American Society ofClinical Oncology can influence decisions about reimbursement for new medicines by determining standards of care. In addition, many private payorscontract with commercial vendors who sell software that provide guidelines that attempt to limit utilization of, and therefore reimbursement for, certainproducts deemed to provide limited benefit to existing alternatives. Such organizations may set guidelines that limit reimbursement or utilization of ourproducts.There may be significant delays in obtaining reimbursement for newly approved drugs, and coverage may be more limited than the purposes forwhich the drug is approved by the FDA or similar regulatory authorities outside the United States. Moreover, eligibility for reimbursement does not implythat any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interimreimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates mayvary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs andmay be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required bygovernment healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they maybe sold at lower prices than in the United States. Our inability to promptly obtain coverage and profitable payment rates from both government-funded andprivate payors for any approved drugs that we develop could compromise our operating results, our ability to raise capital needed to commercialize drugs andour overall financial condition.We currently have no marketing capability or sales force. If we are unable to establish effective sales or marketing capabilities or enter intoagreements with third parties to sell or market our product candidates, we may not be able to effectively sell or market our product candidates, ifapproved, or generate product revenues.We currently have no marketing capability or sales force, but we plan to commercialize any product candidates for which we receive regulatorymarketing approval using a specialized sales force in the United States and Europe. To achieve commercial success for any approved product candidate forwhich we retain sales and marketing responsibilities, we must build our sales, marketing, managerial and other non-technical capabilities or makearrangements with third parties to perform these services. There are risks involved with both establishing our own sales and marketing capabilities andentering into arrangements with third parties to perform these services. For example, recruiting and training a sales force is expensive and time consumingand could delay any drug launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities isdelayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, andour investment would be lost if we cannot retain or reposition our sales and marketing personnel.Factors that may inhibit our efforts to commercialize our product candidates on our own include: •our inability to recruit and retain adequate numbers of effective sales and marketing personnel; •the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future drugs;28 •the lack of complementary drugs to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies withmore extensive product lines; and •unforeseen costs and expenses associated with creating an independent sales and marketing organization.If we enter into arrangements with third parties to perform sales, marketing and distribution services, our drug revenues or the profitability of thesedrug revenues to us are likely to be lower than if we were to market and sell any product candidates that we develop ourselves. In addition, we may not besuccessful in entering into arrangements with third parties to sell and market our product candidates or may be unable to do so when needed or on terms thatare favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to selland market our product candidates effectively. If we do not establish sales and marketing capabilities successfully, either on our own or in collaboration withthird parties, we will not be successful in commercializing our product candidates that receive marketing approval or any such commercialization mayexperience delays or limitations.Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.We face an inherent risk of product liability exposure related to the evaluation of our product candidates in human clinical trials and will face an evengreater risk if we commercially sell any products that we may develop. If we cannot successfully defend ourselves against claims that our product candidatesor products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in: •decreased demand for any product candidates or products that we may develop; •injury to our reputation and significant negative media attention; •withdrawal of clinical trial participants; •significant costs to defend the related litigation; •substantial monetary awards to trial participants or patients; •loss of revenue; •reduced resources of our management to pursue our business strategy; and •the inability to successfully commercialize any products that we may develop.Our product liability insurance may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as weexpand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be ableto maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.Risks Related to Our Intellectual PropertyIf we are unable to obtain and maintain intellectual property protection for our technology and products, or if the scope of the intellectual propertyprotection obtained is not sufficiently broad, our competitors could commercialize technology and products similar or identical to ours, and our abilityto successfully commercialize our technology and products may be impaired. In addition, if we infringe the valid patent rights of others, we may beprevented from making, using or selling our products or may be subject to damages or penalties.Our success depends in large part on our ability to obtain and maintain patents in the United States and other countries that adequately protect ourproprietary technology and products. We seek to protect our proprietary position by filing patent applications in the United States and in foreign countriesthat cover our novel product candidates and their uses, pharmaceutical formulations and dosages, and processes for the manufacture of them. Our patentportfolio currently includes both patents and patent applications.The patent prosecution process is expensive and time-consuming. We may not be able to file and prosecute all necessary or desirable patentapplications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations and may choose not to pursuepatent protection in certain jurisdictions. Under the laws of certain jurisdictions, patents or other intellectual property rights may be unavailable or limited inscope. It is also possible that we will fail to identify patentable aspects of our research and development before it is too late to obtain patent protection.29 We currently solely own or exclusively license our patents and patent applications and we have the right to control the prosecution of the in-licensedpatent applications. In the future, we may choose to in-license additional patents or patent applications from third parties that we conclude are useful ornecessary for our business goals. We may not have the right to control the preparation, filing, prosecution or maintenance of such patent applications.Therefore, if we do license additional patents or patent applications in the future, these patents and applications may not be prosecuted and enforced in amanner consistent with the best interests of our business.The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions andhas in recent years been the subject of much litigation. Publications of discoveries in the scientific literature often lag behind the actual discoveries, andpatent 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 owned or licensed patents or pending patent applications, orthat we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of ourpatent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology orproducts, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patentlaws 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 patentprotection.Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and theenforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law.The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications areprosecuted and may also affect patent litigation. The U.S. Patent and Trademark Office, or USPTO, recently developed new regulations and procedures togovern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, thefirst to file provisions, became effective on March 16, 2013. The Leahy-Smith Act also created certain new administrative adversarial proceedings, discussedbelow. It is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and itsimplementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of ourissued patents.The U.S. Supreme Court has issued opinions in patent cases in the last few years that many consider may weaken patent protection in the UnitedStates, either by narrowing the scope of patent protection available in certain circumstances, holding that certain kinds of innovations are not patentable orgenerally otherwise making it easier to invalidate patents in court. Additionally, there have been recent proposals for additional changes to the patent laws ofthe United States and other countries that, if adopted, could impact our ability to obtain patent protection for our proprietary technology or our ability toenforce our proprietary technology. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies inother countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or toenforce our existing patents and patents that we might obtain in the future.Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitorsfrom competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our owned or licensedpatents by developing similar or alternative technologies or products in a non-infringing manner.The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may bechallenged in the courts or patent offices in the United States and in other countries. Such challenges may result in loss of exclusivity or in patent claimsbeing narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar oridentical technology and products, or limit the duration of the patent protection of our technology and products. In particular, third parties, such as genericscompanies, may seek to develop or acquire intellectual property rights proximate to our patents, including with respect to formulation and process matters,and may be able to do so in a non-infringing manner. Additionally, given the amount of time required for the development, testing and regulatory review ofnew product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our ownedand licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Likewise,a court could uphold and enforce a third-party patent that it rules we have infringed, which would subject us to damages or prevent us from making, using orselling our products.30 During patent prosecution in the United States and in most foreign countries, a third party can submit prior art or arguments to the reviewing patentoffice to attempt to prevent the issuance of a competitor’s patent. For example, our pending patent applications may be subject to a third-party preissuancesubmission of prior art to the USPTO or Third Party Observations in Europe. Such submission may convince the receiving patent office not to issue thepatent. In addition, if the breadth or strength of protection provided by our patents and patent applications is reduced by such third-party submission, it couldaffect the value of our resulting patent or dissuade companies from collaborating with us to license, develop or commercialize current or future productcandidates. We may also seek to have issued patents re-issued for purposes of strengthening our patent position; however, such requests for reissuance maynot result in the issuance of the new patent and could result in loss of the originally issued patent.The risks described here pertaining to our patents and other intellectual property rights also apply to any intellectual property rights that we currentlylicense or may license in the future. In some cases, we may not have control over the prosecution, maintenance or enforcement of the patents that we license,and our licensors may fail to take the steps that we believe are necessary or desirable in order to obtain, maintain and enforce the licensed patents.We may become involved in administrative adversarial proceedings in the USPTO or in the patent offices of foreign countries brought by a third partyto attempt to cancel or invalidate our patent rights, which could be expensive, time consuming and cause a loss of patent rights.The Leahy-Smith Act created for the first time new procedures to challenge issued patents in the United States, including post-grant review and interpartes review proceedings, which some third parties have been using to cause the cancellation of selected or all claims of issued patents of competitors. For apatent with a priority date of March 16, 2013 or later, a petition for post-grant review can be filed by a third party in a nine-month window from issuance ofthe patent. A petition for inter partes review can be filed immediately following the issuance of a patent if the patent was filed prior to March 16, 2013. Apetition for inter partes review can be filed after the nine-month period for filing a post-grant review petition has expired for a patent with a priority date ofMarch 16, 2013 or later. Post-grant review proceedings can be brought on any ground of challenge, whereas inter partes review proceedings can only bebrought to raise a challenge based on published prior art. These administrative adversarial actions at the USPTO review patent claims without thepresumption of validity afforded to U.S. patents in lawsuits in U.S. federal courts, use a lower burden of proof than used by U.S. federal courts and interpretpatent claims using a “broadest reasonable construction” instead of “plain and ordinary meaning,” which is used in court litigation. Because of thesedifferences between U.S. administrative and judicial adversarial patent proceedings, it is generally considered easier for a competitor or third party to have aU.S. patent cancelled in a patent office post-grant review or inter partes review proceeding than invalidated in a litigation in a U.S. federal court. If any of ourpatents are challenged by a third party in such a U.S. patent office proceeding, there is no guarantee that we will be successful in defending the patent, whichwould result in a loss of the challenged patent right to us.Opposition or invalidation procedures are also available in most foreign countries. Many foreign authorities, such as the authorities at the EuropeanPatent Office, have only post-grant opposition proceedings. However, certain countries, such as India, have both pre-grant and post-grant oppositionproceedings. These procedures have been used frequently against pharmaceutical patents in foreign countries. For example, in some foreign countries, theseprocedures are used by generic companies to hold up an innovator’s patent rights as a means to allow the generic company to enter the market. This activityis particularly prevalent in India, China and South America and may become more prevalent in Africa and other parts of Asia as certain countries reach moreestablished economies. If any of our patents are challenged in a foreign opposition or invalidation proceeding, we could face significant costs to defend ourpatents and may not be successful. Further, in many foreign jurisdictions, the losing party must pay the attorneys’ fees of the winning party, which can besubstantial.We may have to file one or more lawsuits in court to prevent a third party from selling a product or using a product in a manner that infringes ourpatent, which could be expensive, time consuming and unsuccessful, and ultimately result in the loss of our proprietary market.Because competition in our industry is intense, competitors may infringe or otherwise violate our issued patents, patents of our licensors or otherintellectual property. To counter infringement or unauthorized use, we may be required to file infringement lawsuits, which can be expensive and timeconsuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe theirpatents. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe thepatent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology inquestion. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. We mayalso elect to enter into license agreements in order to settle31 patent infringement claims or to resolve disputes prior to litigation, and any such license agreements may require us to pay royalties and other fees that couldbe significant. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk thatsome of our confidential information could be compromised by disclosure.Because our ProTides are small molecules, after commercialization they will be subject to the patent litigation process of the Hatch-Waxman Act,which allows a generic company to submit an Abbreviated New Drug Application, or ANDA, to the FDA to obtain approval to sell our drug usingbioequivalence data only. Under the Hatch-Waxman Act, since our candidates will be considered new chemical entities, we will have the opportunity to listall of our patents that cover our drug product or its method of use in the FDA’s compendium of “Approved Drug Products with Therapeutic EquivalenceEvaluation,” sometimes referred to as the FDA’s Orange Book. A generic company can submit an ANDA to the FDA four years after our drug approval. Thesubmission of the ANDA by a generic company is considered a technical act of patent infringement. The generic company can certify that it will wait untilthe natural expiration date of our listed patents to sell a generic version of our product or can certify that one or more of our listed patents are invalid,unenforceable, or not infringed. If the latter, we will have 45 days to bring a patent infringement lawsuit against the generic company. This will initiate achallenge to one or more of our Orange Book-listed patents based on arguments from the generic company that either our patent is invalid, unenforceable ornot infringed. Under the Hatch-Waxman Act, if a lawsuit is brought, the FDA is prevented from issuing a final approval on the generic drug until the earlier ofseven-and-a-half years from our drug approval or a final decision of a court holding that our asserted patent claims are invalid, unenforceable or not infringed.If we do not properly list our relevant patents in the Orange Book, timely file a lawsuit in response to a certification from a generic company under an ANDAor prevail in the resulting patent litigation, we can lose our proprietary market, which can rapidly become generic. Further, even if we do correctly list ourrelevant patents in the Orange Book, bring a lawsuit in a timely manner and prevail in that lawsuit, it may be at a very significant cost to us of attorneys’ feesand employee time and distraction over a long period. Further, it is common for more than one generic company to try to sell an innovator drug at the sametime, so we may be faced with the cost and distraction of multiple lawsuits. We may also determine it is necessary to settle the lawsuit in a manner that allowsthe generic company to enter our market prior to the expiration of our patent or otherwise in a manner that adversely affects the strength, validity orenforceability of our patent.A number of pharmaceutical companies have been the subject of intense review by the U.S. Federal Trade Commission, or FTC, or a correspondingagency in another country based on how they have conducted or settled drug patent litigation, and certain reviews have led to an allegation of an antitrustviolation, sometimes resulting in a fine or loss of rights. We cannot be sure that we would not also be subject to such a review or that the result of the reviewwould be favorable to us, which could result in a fine or penalty.The FTC has brought a number of lawsuits in federal court in the past few years to challenge Hatch-Waxman ANDA litigation settlements betweeninnovator companies and generic companies as anti-competitive. The FTC has taken an aggressive position that anything of value is a payment, whethermoney is paid or not. Under their approach, if an innovator as part of a patent settlement agrees not to launch or delay launch of an authorized generic duringthe 180-day period granted to the first generic company to challenge an Orange Book-listed patent covering an innovator drug, or negotiates a delay in entrywithout payment, the FTC may consider it an unacceptable reverse payment. The biopharmaceutical industry argues that such agreements are rationalbusiness decisions to dismiss risk and are immune from antitrust attack if the terms of the settlement are within the scope of the exclusionary potential of thepatent. In 2013, the U.S. Supreme Court, in a five-to-three decision in FTC v. Actavis, Inc., rejected both the biopharmaceutical industry’s and FTC’sarguments with regard to so-called reverse payments, and held that whether a “reverse payment” settlement involving the exchange of consideration for adelay in entry is subject to an anticompetitive analysis depends on five considerations: (a) the potential for genuine adverse effects on competition; (b) thejustification of payment; (c) the patentee’s ability to bring about anticompetitive harm; (d) whether the size of the payment is a workable surrogate for thepatent’s weakness; and (e) that antitrust liability for large unjustified payments does not prevent litigating parties from settling their lawsuits, for example, byallowing the generic to enter the market before the patent expires without the patentee’s paying the generic. Furthermore, whether a reverse payment isjustified depends upon its size, its scale in relation to the patentee’s anticipated future litigation costs, its independence from other services for which it mightrepresent payment, as was the case in Actavis, and the lack of any other convincing justification. The Court held that reverse payment settlements canpotentially violate antitrust laws and are subject to the standard antitrust rule-of-reason analysis, with the burden of proving that an agreement is unlawful onthe FTC and leaving to lower courts the structuring of such rule of reason analysis. If we are faced with drug patent litigation, including Hatch-Waxmanlitigation with a generic company, we could be faced with such an FTC challenge based on that activity, including how or whether we settle the case, andeven if we strongly disagree with the FTC’s position, we could face a significant expense or penalty.32 Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertainand could hurt our business.Our commercial success depends upon our ability to develop, manufacture, market and sell Acelarin, NUC-3373 and our other product candidates anduse our proprietary technologies without infringing the proprietary rights of third parties. While our product candidates are in preclinical studies and clinicaltrials, we believe that the use of our product candidates in these preclinical studies and clinical trials falls within the scope of the exemptions provided by 35U.S.C. Section 271(e) in the United States, which exempts from patent infringement liability activities reasonably related to the development and submissionof information to the FDA. As Acelarin, NUC-3373 and our other product candidates progress toward commercialization, the possibility of a patentinfringement claims against us increases. There can be no assurance that our product candidates do not infringe other parties’ patents or other proprietaryrights, however, and competitors or other parties may assert that we infringe their proprietary rights in any event.We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights covering our productsand technology, including interference or derivation proceedings before the USPTO. Third parties may assert infringement claims against us based onexisting patents or patents that may be granted in the future, including against our product candidates themselves, our formulation and manufacturingprocesses or our drug administration methods. In particular, because Acelarin and NUC-3373 are transformations of widely used approved chemotherapeuticagents, there is significant intellectual property held by third parties with respect to the formulation and manufacturing of those existing agents, which mayincrease the risk that such third parties allege infringement by us in the formulation and manufacture processes of our product candidates. Furthermore, if anyof our future ProTides are transformations of an existing chemotherapeutic agent that remains on patent, we could be subject to claims of infringement by theholder of such patents.If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continuedeveloping and marketing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or atall. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.Alternatively, we may need to redesign infringing products, which may be impossible or require substantial time and monetary expenditure. Under certaincircumstances, we could be forced, including by court order, to cease commercializing the infringing technology or product. In addition, we could be foundliable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringementcould prevent us from commercializing our product candidates or force us to cease some of our business operations, which could harm our business. Claimsthat we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.We may not be able to effectively enforce our intellectual property rights throughout the world.We generally file our first patent application, or priority filing, at the United Kingdom Intellectual Property Office. International applications underthe Patent Cooperation Treaty, or PCT, are usually filed within 12 months after the priority filing. Based on the PCT filing, national and regional patentapplications may be filed in additional jurisdictions where we believe our product candidates may be marketed or manufactured. Filing, prosecuting anddefending patents on our product candidates in all countries throughout the world would be prohibitively expensive, and therefore we only file for patentprotection in selected countries. The requirements for patentability may differ in certain countries, particularly in developing countries. Moreover, our abilityto protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. For example, Europe, India, China andcertain other countries do not allow patents for methods of treating the human body. Many companies have encountered significant problems in protectingand defending intellectual property rights in certain foreign jurisdictions that do not favor patent protection on drugs. This could make it difficult for us tostop the infringement of our patents or the misappropriation of our other intellectual property rights. Competitors may use our technologies in jurisdictionswhere we have not obtained patent protection to develop their own drugs and, further, may export otherwise infringing drugs to territories where we havepatent protection, if our ability to enforce our patents to stop infringing activities is inadequate. These drugs may compete with our product candidates, andour patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts andresources from other aspects of our business. Furthermore, while we intend to protect our intellectual property rights in the major markets for our productcandidates, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our productcandidates. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.33 A number of foreign countries have stated that they are willing to issue compulsory licenses to patents held by innovator companies on approveddrugs to allow the government or one or more third-party companies to sell the approved drug without the permission of the innovator patentee where theforeign government concludes it is in the public interest. India, for example, has used such a procedure to allow domestic companies to make and sellpatented drugs without innovator approval. There is no guarantee that patents covering any of our drugs will not be subject to a compulsory license in aforeign country, or that we will have any influence over if or how such a compulsory license is granted. Further, Brazil allows its regulatory agency, ANVISA,to participate in deciding whether to grant a drug patent in Brazil, and patent grant decisions are made based on several factors, including whether the patentmeets the requirements for a patent and whether such a patent is deemed in the country’s interest. In addition, several other countries have created laws thatmake it more difficult to enforce drug patents than patents on other kinds of technologies. Further, under the treaty on the Trade-Related Aspects ofIntellectual Property, or TRIPS, as interpreted by the Doha Declaration, countries in which drugs are manufactured are required to allow exportation of thedrug to a developing country that lacks adequate manufacturing capability. Therefore, our drug markets in the United States or foreign countries may beaffected by the influence of current public policy on patent issuance, enforcement or involuntary licensing in the healthcare area.In November 2015, members of the World Trade Organization, or the WTO, which administers TRIPS, voted to extend the exemption againstenforcing pharmaceutical drug patents in least developed countries until 2033. We currently have no patent applications filed in least developed countries,and our current intent is not to file in these countries in the future, at least in part due to this WTO pharmaceutical patent exemption.In addition, some countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. Further,some countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may havelimited remedies, which could materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties withrespect to any patents relevant to our business, our competitive position may be impaired.Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and otherrequirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with theserequirements.Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents or applications will be due to be paid to theUSPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents or applications. We havesystems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees due to non-U.S. patentagencies. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of alate fee or by other means in accordance with the applicable rules. However, there are situations in which non-compliance can result in abandonment or lapseof the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might beable to enter the market, which could compromise our competitive position.Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.Litigation or other legal proceedings relating to intellectual property claims, with or without merit, is unpredictable, generally expensive and timeconsuming and is likely to divert significant resources from our core business, including distracting our technical and management personnel from theirnormal responsibilities. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is arisk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be publicannouncements of the results of hearings, motions or other interim proceedings or developments and, if securities analysts or investors perceive these resultsto be negative, it could have a substantial adverse effect on the price of our ADSs. Such litigation or proceedings could substantially increase our operatinglosses and reduce the resources available for development activities or any future sales, marketing or distribution activities.We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able tosustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developedintellectual property portfolios. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon, misappropriating orsuccessfully challenging our intellectual property rights.34 Our intellectual property licenses with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of ourrights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors.Our intellectual property licenses with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of ourrights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors. The agreements under which wecurrently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multipleinterpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to therelevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement.If any of our licenses or material relationships or any in-licenses upon which our licenses are based are terminated or breached, we may: •lose our rights to develop and market our product candidates; •lose patent protection for our product candidates; •experience significant delays in the development or commercialization of our product candidates; •not be able to obtain any other licenses on acceptable terms, if at all; or •incur liability for damages.These risks apply to any agreements that we may enter into in the future for our current or any future product candidates. If we experience any of theforegoing, it could have a negative impact on our business, financial condition, results or operations and prospects.If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwiseexperience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.We have entered into license agreements with third parties and may need to obtain additional licenses from one or more of these same third parties orfrom others to advance our research or allow commercialization of our product candidates. It is possible that we may be unable to obtain additional licensesat a reasonable cost or on reasonable terms, if at all. In that event, we may be required to expend significant time and resources to redesign our productcandidates or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical orcommercial basis. If we are unable to do so, we may be unable to develop or commercialize our product candidates, which would harm our business. Wecannot provide any assurances that third-party patents or other intellectual property rights do not exist which might be enforced against our currentmanufacturing methods, product candidates or future methods, resulting in either an injunction prohibiting our manufacture or sales, or, with respect to oursales, an obligation on our part to pay royalties or other forms of compensation to third parties.It is possible that in any future license agreements, patent prosecution of our licensed technology may be controlled solely by the licensor, and wemay be required to reimburse the licensor for their costs of patent prosecution. If our licensors fail to obtain and maintain patent or other protection for theproprietary intellectual property we license from them, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, andour competitors could market competing products using the intellectual property. Disputes may arise regarding intellectual property subject to a licensingagreement, including: •the scope of rights granted under the license agreement and other interpretation-related issues; •the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensingagreement; •the sublicensing of patent and other rights under our collaborative development relationships; •our diligence obligations under the license agreement and what activities satisfy those diligence obligations;35 •the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensorsand us and our partners; and •the priority of invention of patented technology.If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptableterms, we may be unable to successfully develop and commercialize our product candidates.We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claimingownership of what we regard as our own intellectual property.Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors orpotential competitors. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, wemay be subject to claims that these employees or we have used or disclosed intellectual property, including trade secrets or other proprietary information, ofany such employee’s former employer. Litigation may be necessary to defend against these claims.In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property toexecute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact developsintellectual property that we regard as our own. Our and their assignment agreements may not be self-executing or may be breached, and we may be forced tobring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights orpersonnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction tomanagement.If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.In addition to seeking patents for some of our technology and product candidates, we also rely on trade secrets, including unpatented know-how,technology and other proprietary information, to maintain our competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientificcollaborators, contract manufacturers, consultants, advisors and other third parties. We seek to protect our confidential proprietary information but enforcinga claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. Inaddition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfullyobtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using thattechnology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, ourcompetitive position would be harmed.Our proprietary information, or that of our suppliers and any future collaborators, may be lost or we may suffer security breaches.In the ordinary course of our business, our clinical research organizations and other third parties on which we rely, collect and store sensitive data,including intellectual property, clinical trial data, proprietary business information, personally identifiable information of our employees and, potentially inthe future, personally identifiable information of our clinical trial subjects, in our data centers and on our networks. The secure processing, maintenance andtransmission of this information is critical to our operations. Despite our security measures, our information technology and infrastructure may be vulnerableto attacks by hackers or breached due to employee error, malfeasance or other disruptions. Although to our knowledge we have not experienced any suchmaterial security breach to date, any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lostor stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy ofpersonal information, regulatory penalties, disrupt our operations, damage our reputation, and cause a loss of confidence in us and our36 ability to conduct clinical trials, which could adversely affect our reputation and delay the clinical development of our product candidates.Intellectual property rights do not necessarily address all potential threats to our competitive advantage.The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and maynot adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative: •Others may be able to make, use or sell compounds that are similar to our product candidates but that are not covered by the claims of thepatents that we own or have exclusively licensed. •We, our licensors or strategic partners might not have been the first to make the inventions covered by the issued patent or pending patentapplication that we own or have exclusively licensed. •We, our licensors or strategic partners, or future licensors or strategic partners might not have been the first to file patent applications coveringcertain of our inventions. •Others may independently develop similar or alternative technologies, or duplicate any of our technologies without infringing ourintellectual property rights. •It is possible that our pending patent applications will not lead to issued patents. •Issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid orunenforceable as a result of legal challenges by our competitors. •Our competitors might conduct research and development activities in countries where we do not have patent rights and then use theinformation learned from such activities to develop competitive products for sale in our major commercial markets. •We may not develop additional proprietary technologies that are patentable. •The patents of others may have an adverse effect on our business.Risks Related to Employee Matters, Managing Growth and Other Risks Related to Our BusinessWe currently have a limited number of employees, and our future success depends on our ability to retain key executives and to attract, retain andmotivate qualified personnel.We are a clinical-stage company, and, as of December 31, 2017, had 20 employees, including three executive officers. We are highly dependent onthe research and development, clinical and business development expertise of Hugh S. Griffith, our Chief Executive Officer, as well as the other principalmembers of our management team and our collaborators’ scientific and clinical team. Although we have entered into employment agreements with ourexecutive officers, each of them may at any time serve notice to terminate their employment with us. Other than for Mr. Griffith, we do not maintain “keyperson” insurance for any of our executives or other employees. In addition, we rely on consultants and advisors, including scientific and clinical advisors, toassist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers otherthan us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we or our collaboratorsare unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.Recruiting and retaining qualified scientific, clinical, manufacturing, finance, sales and marketing personnel will also be critical to our success. Theloss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercializationobjectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees maybe 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 experiencerequired to successfully develop, obtain marketing approval of and commercialize products. Competition to hire from this limited pool is intense and we maybe unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical andbiotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities andresearch institutions. Failure to succeed in clinical trials may make it more challenging to recruit and retain qualified scientific personnel. If we or ourcollaborators are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.37 We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as aresult, we may encounter difficulties in managing our growth, which could disrupt our operations.To manage our anticipated development and expansion, we must continue to implement and improve our managerial, operational and financialsystems, expand our facilities and continue to recruit and train additional qualified personnel. Also, our management may need to divert a disproportionateamount of its attention away from its day-to-day activities and devote a substantial amount of time to managing these development activities. Due to ourlimited resources, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. This mayresult in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity amongremaining employees. The physical expansion of our operations may lead to significant costs and may divert financial resources from other projects, such asthe development of our product candidates. If our management is unable to effectively manage our expected development and expansion, our expenses mayincrease more than expected, our ability to generate or increase our revenue could be reduced and we may not be able to implement our business strategy. Ourfuture financial performance and our ability to commercialize our product candidates, if approved, and compete effectively will depend, in part, on ourability to effectively manage the future development and expansion of our company.The United Kingdom’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and ourbusiness, which could reduce the price of our ADSs.Following the BREXIT referendum held on June 23, 2016, the United Kingdom government served notice under Article 50 of the Treaty of theEuropean Union on March 29, 2017 to formally initiate the process of withdrawing from the European Union. The United Kingdom and the European Unionhave a two-year period under Article 50 to negotiate the terms of withdrawal. Any extension of the negotiation period for withdrawal will require the consentof all of the remaining 27 member states.The referendum and withdrawal have created significant uncertainty about the future relationship between the United Kingdom and the EuropeanUnion. Lack of clarity about future U.K. laws and regulations as the United Kingdom determines which E.U.-derived laws and regulations to replace orreplicate as part of a withdrawal, including financial laws and regulations, tax and free trade agreements, intellectual property rights, supply chain logistics,environmental, health and safety laws and regulations, immigration laws and employment laws, could decrease foreign direct investment in the UnitedKingdom, increase costs, depress economic activity and restrict our access to capital. If the United Kingdom and the European Union are unable to negotiateacceptable terms for the United Kingdom’s withdrawal from the European Union, or if other E.U. member states pursue withdrawal from the European Union,barrier-free access between the United Kingdom and other E.U. member states or across the European Economic Area overall could be diminished oreliminated. In addition, the United Kingdom could lose the benefits of global trade agreements negotiated by the European Union on behalf of its members.These developments, or the perception that any of them could occur, have had and may continue to have a significant adverse effect on global economicconditions and the stability of global financial markets, and could significantly reduce global market liquidity and restrict the ability of key marketparticipants to operate in certain financial markets. Asset valuations, currency exchange rates and credit ratings may be especially subject to increased marketvolatility. These developments, or the perception that any of them could occur, may also have a significant effect on our ability to attract and retainemployees, including scientists and other employees who are important for our and our collaborators’ research and development efforts.If Scotland decides to secede from the United Kingdom, our business may be adversely affected.A referendum on Scottish independence from the United Kingdom took place on September 18, 2014, the result of which was that Scotland remainedpart of the United Kingdom. There may in the future be a second referendum on Scottish independence from the United Kingdom. Any such referendum, evenif it again ultimately resulted in Scotland remaining part of the United Kingdom, could lead to uncertainty and disrupt the markets in which we operate, andmight cause us to lose potential customers, suppliers, collaborators and employees, including scientists and other key employees employed by us or ourcollaborators.Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. The 2008global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn, such as resultedfrom the 2008 global financial crisis, could result in a variety of risks to our business, including our ability to raise additional capital when needed onacceptable terms, if at all. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption.38 Our business and operations could suffer in the event of information technology and other internal infrastructure system failures.Despite the implementation of security measures, our information technology and other internal infrastructure systems and those of our third-partyCROs and other contractors and consultants, including corporate firewalls, servers, leased lines and connections to the Internet, are vulnerable to damagefrom computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Furthermore, we have little or nocontrol over the security measures and computer systems of our third-party CROs and other contractors and consultants. While we have not experienced anysuch system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a materialdisruption of our programs. For example, the loss of clinical trial data for our product candidates could result in delays in our marketing approval efforts andsignificantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our dataor applications or other data or applications relating to our technology or product candidates, or inappropriate disclosure of confidential or proprietaryinformation, we could incur liabilities and the further development of our product candidates could be delayed.Our employees, principal investigators, CROs and consultants may engage in misconduct or other improper activities, including non-compliance withregulatory standards and requirements and insider trading.We are exposed to the risk that our employees, principal investigators, CROs and consultants may engage in fraudulent conduct or other illegalactivity. Misconduct by these parties could include intentional, reckless or negligent conduct or disclosure of unauthorized activities to us that violate theregulations of the FDA and other regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to suchauthorities; healthcare fraud and abuse laws and regulations in the United States and abroad; or laws that require the reporting of financial information or dataaccurately. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended toprevent 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 alsoinvolve the improper use of information obtained in the course of clinical trials or creating fraudulent data in our preclinical studies or clinical trials, whichcould result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees andother third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or lossesor in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. If any such actions are institutedagainst us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, includingthe imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare,Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reportingrequirements and oversight if we become subject to a corporate integrity agreement to resolve allegations of non-compliance with these laws, and curtailmentof our operations, any of which could adversely affect our ability to operate our business and our results of operations.We may expend our limited resources to pursue a particular product candidate and fail to capitalize on product candidates that may be moreprofitable or for which there is a greater likelihood of success.Because we have limited financial and managerial resources, we focus on specific product candidates. As a result, we may forgo or delay pursuit ofopportunities with other product candidates that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail tocapitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs andproduct candidates for specific indications may not yield any commercially viable product candidates. If we do not accurately evaluate the commercialpotential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing orother royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to suchproduct candidate.We may acquire businesses or drugs or form strategic alliances in the future and we may not realize the benefits of such acquisitions.We may acquire additional businesses or drugs, form strategic alliances or create joint ventures with third parties that we believe will complement oraugment our existing business. If we acquire businesses with promising markets or39 technologies, we may not be able to realize the benefit of acquiring such businesses if we are unable to successfully integrate them with our existingoperations and strategy. We may encounter numerous difficulties in developing, manufacturing and marketing any new drugs resulting from a strategicalliance or acquisition that delay or prevent us from realizing their expected benefits or enhancing our business. We cannot assure you that, following anysuch acquisition, we will achieve the expected synergies to justify the transaction.We or the third parties upon which we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plansmay not adequately protect us from a serious disaster.Natural disasters could severely disrupt our operations and hurt our financial condition. If a natural disaster, power outage or other event occurred thatprevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for asubstantial period of time. The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster orsimilar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans.We are subject to certain U.K., U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws andregulations, violations of which can have a negative impact on our business.We are subject to certain U.K., U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws andregulations. Among other matters, these laws and regulations prohibit companies and their employees, agents, clinical research organizations, legal counsel,accountants, consultants, contractors and other partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly,corrupt or improper payments or anything else of value to or from recipients in the public or private sector. Violations of these laws and regulations can resultin substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraudlitigation, reputational harm and other consequences. We have direct or indirect interactions with officials and employees of government agencies orgovernment-affiliated hospitals, universities and other organizations. We also expect our international activities to increase over time. We engage thirdparties to obtain necessary permits, licenses, patent registrations and other regulatory approvals. We can be held liable for the corrupt or other illegalactivities of our personnel, agents or other partners, even if we do not explicitly authorize or have prior knowledge of such activities.Risks Related to the ADSsThe price of our ADSs may be volatile and may fluctuate due to factors beyond our control.The trading price of the ADSs has fluctuated, and is likely to continue to fluctuate substantially. The trading price of those securities depends on anumber of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operatingperformance. In addition, although the ADSs are listed on the Nasdaq Global Select Market, we cannot assure you that a trading market for those securitieswill be maintained.Since the ADSs were sold in our initial public offering in October 2017 at a price of $15.00 per ADS, the price per ADS has ranged as low as $9.32 andas high as $29.75 through March 20, 2018. The market price of our ADSs may fluctuate significantly due to a variety of factors, many of which are beyondour control, including: •positive or negative results from, or delays in, testing and clinical trials by us, collaborators or competitors; •technological innovations or commercial product introductions by us or competitors; •changes in government regulations; •developments concerning proprietary rights, including patents and litigation matters; •public concern relating to the commercial value or safety of Acelarin, NUC-3373 or NUC-7738; •financing, collaborations or other corporate transactions; •publication of research reports or comments by securities or industry analysts; •general market conditions in the pharmaceutical industry or in the economy as a whole; •the loss of any of our key scientific or senior management personnel;40 •sales of our ADSs or ordinary shares by us, our senior management and board members, holders of our ADSs or our ordinary shares in thefuture; •price and volume fluctuations attributable to inconsistent trading volume levels of the ADSs; and •other events and factors, many of which are beyond our control.These and other market and industry factors may cause the market price and demand for our ADSs to fluctuate substantially, regardless of our actualoperating performance, which may limit or prevent investors from readily selling their ADSs and may otherwise negatively affect the liquidity of our ADSs. Inaddition, the stock market in general, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that haveoften been unrelated or disproportionate to the operating performance of these companies. In the past, when the market price of a stock has been volatile,holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of the holders of our ADSs were to bring such alawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our senior management would be diverted from the operation ofour business. Any adverse determination in litigation could also subject us to significant liabilities.We will continue to incur increased costs as a result of operating as a public company in the United States, and our management is required to devotesubstantial time to new compliance initiatives and corporate governance practices.As a public company whose ADSs commenced trading in the United States in September 2017, we incur, and particularly after we no longer qualify asan “emerging growth company”, or EGC, we will continue to incur, significant legal, accounting and other expenses that we did not incur previously. TheSarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Global Select Market,or Nasdaq, and other applicable securities rules and regulations impose various requirements on non-U.S. reporting public companies, including theestablishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our senior management and otherpersonnel need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will continue to increase ourlegal and financial compliance costs and will make some activities more time-consuming and costly. For example, these rules and regulations have made itmore difficult and more expensive for us to obtain director and officer liability insurance, which in turn makes it more difficult for us to attract and retainqualified senior management personnel or members for our board of directors.However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, theirapplication in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertaintyregarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our senior management on ourinternal control over financial reporting. However, while we remain an EGC we are not required to include an attestation report on internal control overfinancial reporting issued by our independent registered public accounting firm. To prepare for eventual compliance with Section 404, once we no longerqualify as an EGC, we are engaged 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 anddocument the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing thatcontrols 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 will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financialreporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial marketsdue to a loss of confidence in the reliability of our financial statements.Certain of our existing shareholders, members of our board of directors and senior management maintain the ability to exercise significant controlover us. Your interests may conflict with the interests of these existing shareholders.As of December 31, 2017, our senior management, board of directors and greater than 5% shareholders and their respective affiliates, in the aggregate,owned 69.2% of our ordinary shares (including ordinary shares in the form of ADSs). These shareholders, either alone or voting together as a group, may be ina position to determine or significantly influence the outcome of decisions taken at any general meeting. Any shareholder or group of shareholderscontrolling more than 50% of the share capital present and voting at our general meetings of shareholders may control any shareholder resolution requiring asimple majority, including the appointment of board members, certain decisions relating to our capital structure, the41 approval of certain significant corporate transactions and amendments to our Articles of Association. Among other consequences, this concentration ofownership may have the effect of delaying or preventing a change in control and might therefore negatively affect the market price of our ADSs.Future sales, or the possibility of future sales, of a substantial number of our ADSs or ordinary shares could adversely affect the price of our ADSs.Future sales of a substantial number of our ADSs or ordinary shares, or the perception that such sales will occur, could cause a decline in the marketprice of our ADSs. If any of our large shareholders or members of our management team sell substantial amounts of our securities in the public market, or themarket perceives that such sales may occur, the market price of our ADSs and our ability to raise capital through an issue of equity securities in the futurecould be adversely affected. We have also entered into a registration rights agreement pursuant to which we have agreed under specified circumstances to filea registration statement to register the resale of the ordinary shares (which may be converted to ADSs) held by some of our existing shareholders, as well as tocooperate in specified public offerings of such shares.Because we do not anticipate paying any cash dividends on our ADSs or ordinary shares in the foreseeable future, capital appreciation, if any, will bethe sole source of potential gains with respect to such securities.Under current English law, a company’s accumulated realized profits must exceed its accumulated realized losses on a non-consolidated basis beforedividends can be paid. Therefore, we must have distributable profits before issuing a dividend. We have not paid dividends in the past on our ordinary shares.We intend to retain earnings, if any, for use in our business and do not anticipate paying any cash dividends in the foreseeable future. As a result, capitalappreciation, if any, on our ADSs or ordinary shares will be the sole source of potential gains with respect to such securities for the foreseeable future. Holders of our ADSs may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be ableto exercise their right to vote.Except as described in this Annual Report, holders of our ADSs will not be able to exercise voting rights attaching to the ordinary shares evidencedby our ADSs on an individual basis. Holders of our ADSs appoint the depositary or its nominee as their representative to exercise the voting rights attachingto the ordinary shares in the form of ADSs in accordance with the deposit agreement. Holders of ADSs may not receive voting materials in time to instruct thedepositary to vote, and it is possible that they, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity toexercise a right to vote. In certain cases, the shares represented by ADSs may be voted contrary to the holder’s instructions and the holder may be deemed tohave instructed the depositary to give a discretionary proxy to a person we designate to vote shares represented by the ADSs in such person’s discretion.Furthermore, the depositary will not be liable for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect ofany such vote. As a result, holders of ADSs may not be able to exercise voting rights and may lack recourse if their ADSs are not voted as requested. Inaddition, in their capacity as ADS holders, purchasers of our ADSs will not be able to call a shareholders’ meeting.Holders of our ADSs may not receive distributions on our ordinary shares in the form of ADSs or any value for them if it is illegal or impractical tomake them available to holders of ADSs.The depositary for our ADSs has agreed to pay to holders of our ADSs the cash dividends or other distributions it or the custodian receives on ourordinary shares or other deposited securities after deducting its fees and expenses and certain taxes. Holders of our ADSs will receive these distributions inproportion to the number of our ordinary shares their ADSs represent. However, in accordance with the limitations set forth in the deposit agreement, it maybe unlawful or impractical to make a distribution available to holders of ADSs. We have no obligation to take any other action to permit the distribution ofour ADSs, ordinary shares, rights or anything else to holders of our ADSs. This means that holders of our ADSs may not receive the distributions we make onour ordinary shares or any value from them if it is unlawful or impractical to make them available to them. These restrictions may have a negative impact onthe market value of our ADSs.Holders of our ADSs may be subject to limitations on transfer of their ADSs.ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSsgenerally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of anyrequirement of law or of any42 government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the depositagreement.The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.We are incorporated under English law. The rights of holders of ordinary shares and, therefore, certain of the rights of holders of ADSs, are governedby English law, including the provisions of the Companies Act 2006, and by our Articles of Association. These rights differ in certain respects from the rightsof shareholders in typical U.S. corporations. See “Description of Share Capital—Differences in Corporate Law” in this Annual Report for a description of theprincipal differences between the provisions of the Companies Act 2006 applicable to us and, for example, the Delaware General Corporation Law relating toshareholders’ rights and protections.Shareholder protections found in provisions under the U.K. City Code on Takeovers and Mergers, or the Takeover Code, will not apply if our place ofmanagement and control is considered to change to outside the United Kingdom.We are a public limited company incorporated in England and Wales and have our place of central management and control in the United Kingdom.Accordingly, we are currently subject to the Takeover Code and, as a result, our shareholders are entitled to the benefit of certain takeover offer protectionsprovided under the Takeover Code. The Takeover Code provides a framework within which takeovers of companies are regulated and conducted. If, at thetime of a takeover offer, the Panel on Takeovers and Mergers determines that we do not have our place of central management and control in the UnitedKingdom, then the Takeover Code would not apply to us and our shareholders would not be entitled to the benefit of the various protections that theTakeover Code affords. In particular, we would not be subject to the rules regarding mandatory takeover bids. The following is a brief summary of some of themost important rules of the Takeover Code: •When a person or group acquires interests in shares carrying 30% or more of the voting rights of a company (which percentage is treated bythe Takeover Code as the level at which effective control is obtained), they must make a cash offer to all other shareholders at the highestprice paid by them in the 12 months before the offer was announced. •When interests in shares carrying 10% or more of the voting rights of a class have been acquired by an offeror (i.e. a bidder) in the offer periodand the previous 12 months, the offer must include a cash alternative for all shareholders of that class at the highest price paid by the offeror inthat period. Further, if an offeror acquires for cash any interest in shares during the offer period, a cash alternative must be made available at aprice at least equal to the price paid for such shares. •If the offeror acquires an interest in shares in an offeree company (i.e. a target) at a price higher than the value of the offer, the offer must beincreased accordingly. •The offeree company must appoint a competent independent adviser whose advice on the financial terms of the offer must be made known toall the shareholders, together with the opinion of the board of directors of the offeree company. •Favorable deals for selected shareholders are banned. •All shareholders must be given the same information. •Those issuing takeover circulars must include statements taking responsibility for the contents. •Profit forecasts, quantified financial benefits statements and asset valuations must be made to specified standards and must be reported on byprofessional advisers. •Misleading, inaccurate or unsubstantiated statements made in documents or to the media must be publicly corrected immediately. •Actions during the course of an offer by the offeree company, which might frustrate the offer are generally prohibited unless shareholdersapprove these plans. •Stringent requirements are laid down for the disclosure of dealings in relevant securities during an offer. •Employees of both the offeror and the offeree company and the trustees of the offeree company’s pension scheme must be informed about anoffer. In addition, the offeree company’s employee representatives and pension scheme trustees have the right to have a separate opinion onthe effects of the offer on employment appended to the offeree board of directors’ circular or published on a website.43 Claims of U.S. civil liabilities may not be enforceable against us.We are incorporated under English law. Substantially all of our assets are located outside the United States. The majority of our senior managementand board of directors reside outside the United States. As a result, it may not be possible for investors to effect service of process within the United Statesupon such persons or to enforce judgments obtained in U.S. courts against them or us, including judgments predicated upon the civil liability provisions ofthe U.S. federal securities laws.The United States and the United Kingdom do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments(other than arbitration awards) in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether ornot predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in England and Wales. In addition, uncertainty existsas to whether the English and Welsh courts would entertain original actions brought in England and Wales against us or our directors or senior managementpredicated upon the securities laws of the United States or any state in the United States. Any final and conclusive monetary judgment for a definite sumobtained against us in U.S. courts would be treated by the courts of England and Wales as a cause of action in itself and sued upon as a debt so that no retrialof the issues would be necessary, provided that certain requirements are met consistent with English law and public policy. Whether these requirements aremet in respect of a judgment based upon the civil liability provisions of the U.S. securities laws is an issue for the English court making such decision. If anEnglish court gives judgment for the sum payable under a U.S. judgment, the English judgment will be enforceable by methods generally available for thispurpose.As a result, U.S. investors may not be able to enforce against us or our senior management, board of directors or certain experts named herein who areresidents of the United Kingdom or countries other than the United States any judgments obtained in U.S. courts in civil and commercial matters, includingjudgments under the U.S. federal securities laws.We qualify as a foreign private issuer and, as a result, we are not subject to U.S. proxy rules and are subject to Exchange Act reporting obligationsthat, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.We report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status.Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S.domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of asecurity registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and tradingactivities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing withthe SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon theoccurrence of specified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after theend of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the endof each fiscal year. Foreign private issuers also are exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures ofmaterial information. As a result of the above, our shareholders may not have the same protections afforded to shareholders of companies that are not foreignprivate issuers.As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differsignificantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy ifwe complied fully with Nasdaq corporate governance listing standards.As a foreign private issuer listed on Nasdaq, we are subject to corporate governance listing standards. However, Nasdaq rules permit a foreign privateissuer like us to follow the corporate governance practices of its home country in lieu of certain Nasdaq corporate governance listing standards. Certaincorporate governance practices in the United Kingdom, which is our home country, may differ significantly from Nasdaq corporate governance listingstandards. For example, neither the corporate laws of the United Kingdom nor our Articles of Association require a majority of our directors to beindependent; we can and do include non-independent directors as members of our nominations and remuneration committees; and our independent directorsare not required to hold regularly scheduled meetings at which only independent directors are present. Therefore, our shareholders may be afforded lessprotection than they otherwise would have under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.44 We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause usto incur significant legal, accounting and other expenses.As a foreign private issuer, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Actapplicable to U.S. domestic issuers. We may no longer be a foreign private issuer as of June 30, 2018 (the end of our second fiscal quarter in the fiscal yearafter our initial public offering), which would require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Actapplicable to U.S. domestic issuers as of January 1, 2019. In order to maintain our current status as a foreign private issuer, either (a) a majority of our votingsecurities must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directorscannot be U.S. citizens or residents, (ii) more than 50% of our assets must be located outside the United States and (iii) our business must be administeredprincipally outside the United States. If we lose our status as a foreign private issuer, we would be required to comply with the Exchange Act reporting andother requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may alsobe required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs tous under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higherthan the cost we incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financialcompliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules andregulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and wemay be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it moredifficult for us to attract and retain qualified members of our board of directors.We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to “emerging growth companies”will make our ADSs less attractive to investors.We are an EGC as defined in the JOBS Act. For as long as we continue to be an EGC, we may take advantage of exemptions from various reportingrequirements that are applicable to other public companies that are not EGCs, including not being required to comply with the auditor attestationrequirements of Section 404, exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approvalof any golden parachute payments not previously approved. As an EGC, we are able to report only two years of financial results and selected financial datacompared to three and five years, respectively, for comparable data reported by other public companies. We may take advantage of these exemptions until weare no longer an EGC. We could be an EGC until the last day of 2022, although circumstances could cause us to lose that status earlier, including if theaggregate market value of our ADSs and ordinary shares held by non-affiliates exceeds $700 million as of the end of our second fiscal quarter before thattime, in which case we would no longer be an EGC as of the following December 31st (the last day of our fiscal year). We cannot predict if investors will findour ADSs less attractive because we may rely on these exemptions. If some investors find our ADSs less attractive as a result, there may be a less active tradingmarket for our ADSs and the price of our ADSs may be more volatile.If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results orprevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and thetrading price of our ADSs.Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosurecontrols and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in theirimplementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404, or anysubsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that aredeemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for furtherattention or improvement. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could havea negative effect on the trading price of our ADSs.Management is required to assess the effectiveness of our internal controls annually. However, for as long as we are an EGC under the JOBS Act, ourindependent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant toSection 404. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not.Undetected material weaknesses in our internal controls could lead to financial statement restatements requiring us to incur the expense of remediation andcould also result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.45 If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our ADSs andour trading volume could decline.The trading market for our ADSs depends in part on the research and reports that securities or industry analysts publish about us or our business.Securities and industry analysts do not currently, and may never, publish research on us. If no or too few securities or industry analysts commence coverageon us, the trading price for our ADSs would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of theanalysts who cover us downgrade our ADSs or publish inaccurate or unfavorable research about our business, the price of our ADSs would likely decline. Ifone or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our ADSs could decrease, which might cause the priceof our ADSs and trading volume to decline.We may be classified as a passive foreign investment company, or a PFIC, in any taxable year and U.S. holders of our ADSs could be subject to adverseU.S. federal income tax consequences.Generally, if for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the value of our assets is attributable to assetsthat produce passive income or are held for the production of passive income, including cash, we would be characterized as a passive foreign investmentcompany, or PFIC, for U.S. federal income tax purposes. The determination of whether we are a PFIC depends on the particular facts and circumstances (suchas the valuation of our assets, including goodwill and other intangible assets, and the characterization of our income, including whether certain research anddevelopment tax credits received from the government of the United Kingdom will constitute gross income, and if they do, whether they will constitutepassive income for purposes of the PFIC income test) and may also be affected by the application of the PFIC rules, which are subject to differinginterpretations. Based on our estimated gross income, the average value of our assets, including goodwill and the nature of our active business, we do notexpect to be treated as a PFIC for U.S. federal income tax purposes for the taxable year ending December 31, 2018. The PFIC tests must be applied each year,and it is possible that we may become a PFIC in a future year.If we are a PFIC, U.S. holders of our ADSs may be subject to adverse U.S. federal income tax consequences, such as the ineligibility for any preferredtax rates on capital gains or on actual or deemed dividends for individuals who are U.S. holders, having interest apply to distributions by us and the proceedsof sales of the ADSs, and additional reporting requirements under U.S. federal income tax laws and regulations. Investors should consult their own taxadvisors regarding all aspects of the application of the PFIC rules to our ADSs. For more information related to classification as a PFIC, see “Taxation—Material U.S. Federal Income Tax Consideration—Passive Foreign Investment Company Considerations.”46 Item 4.Information on the CompanyA.History and Development of the CompanyNuCana was incorporated under the laws of England and Wales in 1997 under the name Biomed (UK) Limited, and commenced operations in 2008.On April 28, 2008, we changed our name to NuCana BioMed Limited. On August 29, 2017, we re-registered as a public limited company and changed ourname to NuCana plc. On October 2, 2017, we completed our initial public offering of American Depositary Shares, or ADSs, on the Nasdaq Global SelectMarket. Our ADSs are traded under the symbol “NCNA”.Our registered office is located at 77/78 Cannon Street, London EC4N 6AF, United Kingdom. Our principal executive offices are located at 3Lochside Way, Edinburgh, EH12 9DT, United Kingdom, our general telephone number is +44 (0)131 357 1111 and our internet address ishttp://www.nucana.com. Our website and the information contained on or accessible through our website are not part of this Annual Report. Our agent forservice of process in the United States is Corporation Service Company, 251 Little Falls Drive, Wilmington, DE 19808.B.BusinessOverviewWe are a clinical-stage biopharmaceutical company focused on significantly improving treatment outcomes for cancer patients by applying ourProTide™ technology to transform some of the most widely prescribed chemotherapy agents, nucleoside analogs, into more effective and safer medicines.While these conventional agents remain part of the standard of care for the treatment of many solid tumors, their efficacy is limited by cancer cell resistancemechanisms and they are often poorly tolerated. Utilizing our proprietary technology, we are developing new medicines, ProTides, designed to overcome keycancer resistance mechanisms and generate much higher concentrations of anti-cancer metabolites in cancer cells. Our most advanced ProTide candidates,Acelarin® and NUC-3373, are new chemical entities derived from the nucleoside analogs gemcitabine and 5-fluorouracil, respectively, two widely usedchemotherapy agents. Acelarin is currently being evaluated in three clinical trials across several solid tumor indications, including ovarian cancer, biliarytract cancer and pancreatic cancer. NUC-3373 is currently in a Phase 1 trial for the potential treatment of a wide range of advanced solid tumor cancers. Wehave retained worldwide rights to these lead product candidates as well as our preclinical product candidates, all of which we refer to as ProTides.Acelarin, our most advanced product candidate, is a potential first-in-class ProTide that has been evaluated in over 180 patients. Acelarin is a ProTidetransformation of gemcitabine that we believe could replace gemcitabine in certain cancer indications and have utility across a range of other cancers. In aPhase 1 dose-ranging trial in 49 evaluable patients with advanced metastatic solid tumors, Acelarin was well tolerated, achieved a 78% disease control rateand was associated with intracellular levels of active anti-cancer metabolite over 200 times higher than those reported for gemcitabine. A subset of 14evaluable patients with relapsed/refractory gynecological cancers achieved a 93% disease control rate. In a Phase 1b dose-ranging trial in 23 evaluablepatients with recurrent ovarian cancer, Acelarin was combined with carboplatin and achieved a 96% disease control rate. Based on these disease control ratesand the tolerability profile, we have begun a Phase 2 trial of Acelarin in patients with platinum-resistant ovarian cancer, for which we expect to report interimdata in 2018. Acelarin is also being evaluated in another Phase 1b trial in patients with locally advanced or metastatic biliary tract cancers to determine itsoptimal dose in combination with cisplatin. In January 2018, we announced interim results on the first eight patients recruited. In addition to thecombination being well-tolerated, a response rate of 50% was achieved including one complete response and three partial responses. Furthermore, oneadditional patient achieved sufficient tumor shrinkage to be eligible for surgery to remove the tumor completely. Based on these results, we are planning tocommence a Phase 3 trial of Acelarin plus cisplatin in patients with biliary tract cancer in 2018. In addition, the National Cancer Research Institute in theUnited Kingdom is facilitating a Phase 3 trial of Acelarin for the treatment of patients with pancreatic cancer. In January 2018, we reported that 100 patientshad been enrolled in this trial. The disease control rates referred to above include complete responses, partial responses and stable disease, measured byradiographic assessment to determine changes in tumor size, and evaluated using the standard scoring system known as Response Evaluation Criteria inSolid Tumors, or RECIST. The disease control rates are based on investigator assessment of tumor response in a limited number of patients and may not bepredictive of or consistent with the results of later trials.NUC-3373, our second product candidate, is a ProTide transformation of the active anti-cancer metabolite of 5-fluorouracil, or 5-FU, which webelieve has the potential to replace 5-FU as the standard of care in the treatment of a wide range of cancers. In preclinical studies, we observed that NUC-3373overcame the key resistance mechanisms associated with 5-FU and generated intracellular levels of the active anti-cancer metabolite over 300 times higherthan that of 5-FU. NUC-3373 is currently being evaluated in a Phase 1 clinical trial of patients with advanced solid tumors for which we47 reported interim data in September 2017. In this trial, NUC-3373 generated high levels of the active anti-cancer metabolite inside the patients’ white bloodcells, resulting in complete inhibition of the target enzyme associated with cancer cell growth. The pharmacokinetic profile of NUC-3373 appeared favorable,which supports our belief that NUC-3373 may enhance efficacy, improve safety and provide a more convenient dosing regimen. We expect to report finaldata from this trial in 2018. Contingent on regulatory guidance and other factors, we plan to initiate a number of clinical trials in 2018: a Phase 1b trial ofNUC-3373 in patients with colorectal cancer together with other agents routinely used in 5-FU combination regimens; a Phase 3 trial in patients withadvanced colorectal cancer; and a Phase 2 trial in patients with advanced breast cancer.NUC-7738, our third product candidate, is a ProTide transformation of cordycepin, a novel nucleoside analog that has shown potent anti-canceractivity in preclinical studies. We are evaluating NUC-7738 in preclinical studies and we expect to initiate a Phase 1 clinical trial in 2018.Despite the widespread use of nucleoside analogs, their efficacy is severely limited by cancer cell resistance mechanisms and they are often poorlytolerated. Harnessing the power of phosphoramidate chemistry, we convert nucleoside analogs into activated nucleotide analogs with the addition of aphosphate group, which is protected by specific combinations of aryl, ester and amino acid groupings. By adding and protecting this phosphate group, wedesign our ProTides to avoid or overcome key cancer resistance mechanisms in the uptake, activation and breakdown of nucleoside analogs. As a result, webelieve our ProTides have the potential to generate hundreds of times higher concentrations of the active anti-cancer metabolites inside tumor cells,potentially making our ProTides more effective than the current standards of care. Because our ProTides resist breakdown, and are thus more stable, webelieve they are also able to reduce or eliminate the generation of toxic byproducts that can result from the breakdown of nucleoside analogs likegemcitabine and 5-FU.Our proprietary ProTide technology was invented in the Cardiff University laboratory of our late Chief Scientific Officer, Professor ChristopherMcGuigan, who conceived of, and filed the original composition of matter patents for our initial ProTides. The unique feature of his discovery was thespecific combination of aryl, ester and amino acid groupings that protect the activated, or phosphorylated, nucleoside analog. This phosphoramidatechemistry approach is the key to the ProTide technology. Every ProTide grouping is distinct, and Professor McGuigan and his team synthesized and testedthousands of compounds in order to identify the optimal ProTide grouping for each underlying nucleoside analog.We have licensed what we believe to be the foundational patent estate for the application of phosphoramidate chemistry in oncology. We havegranted patents in key markets, including the United States, Europe and Japan, protecting the composition of matter of Acelarin, NUC-3373 and other of ourproduct candidates. Professor McGuigan’s work preceded and helped lead to the development of several FDA-approved anti-viral drugs containingnucleotide analogs, including: sofosbuvir, or Sovaldi®, which is also a key component of Harvoni®; and tenofovir alafenamide fumarate, or TAF, which is akey component of Genvoya®, Descovy® and Odefsey®.We are led by Hugh S. Griffith, our founder and Chief Executive Officer, who brings over 25 years of experience in the biopharmaceutical industry,including at Abbott Laboratories (now AbbVie Inc.) and Parke-Davis Warner Lambert (now Pfizer Inc.). Before founding NuCana, he led the operations ofBioenvision, Inc. from start-up through its acquisition by Genzyme Corporation. While at Bioenvision, he was instrumental in developing andcommercializing clofarabine, a nucleoside analog for the treatment of pediatric leukemia.Our StrategyOur goal is to transform standards of care and improve survival for patients across a wide range of cancer indications. Our strategy includes thefollowing key components: •Rapidly develop Acelarin as a first-in-class nucleotide analog for the treatment of patients with cancer. We believe that Acelarin has thepotential to replace the core chemotherapy component of treatment regimens for patients with various cancers, including: •Platinum-resistant ovarian cancer. We expect to report interim data from a Phase 2 trial of Acelarin in 2018. We also intend to explorethe use of Acelarin in combination with Avastin, a widely used agent in the treatment of several cancers, and expect to report interimdata from this trial in 2018. •Platinum-sensitive ovarian cancer. Contingent on regulatory guidance and other factors, we expect to commence a Phase 3 trial ofAcelarin in combination with carboplatin for this indication in 2018.48 •Biliary tract cancer. We reported interim data from a Phase 1b trial of Acelarin in combination with cisplatin in January 2018 andexpect to report further data from this trial later in 2018. Contingent on regulatory guidance and other factors, we plan to initiate aPhase 3 trial of Acelarin in combination with cisplatin as a first-line treatment in 2018. •Pancreatic cancer. The National Cancer Research Institute in the United Kingdom is facilitating a Phase 3 trial of Acelarin as a first-line treatment compared to gemcitabine. In January 2018, we reported that 100 patients had been enrolled in this study. •Rapidly develop NUC-3373 to replace 5-FU as the standard of care for the treatment of patients with various cancers. •Advanced solid tumors. We expect to report further data from a Phase 1 trial of NUC-3373 in patients with advanced solid tumors in2018. •Colorectal cancer. We plan to establish the optimal dose of NUC-3373 in combination with other agents in a Phase 1b trial in 2018.Contingent on regulatory guidance and other factors, we also intend to initiate a Phase 3 trial of NUC-3373 monotherapy in 2018. •Breast cancer. We intend to initiate a Phase 2 trial of NUC-3373 in patients with recurrent breast cancer and anticipate reportinginterim data from this trial in 2018. •Rapidly advance NUC-7738 into clinical trials. NUC-7738, a ProTide based on a novel nucleoside analog, is currently undergoingpreclinical studies and we expect to initiate a Phase 1 trial in 2018 for solid tumors. In addition, we plan to develop NUC-7738 for thetreatment of hematological malignancies. •Leverage our proprietary ProTide technology platform to develop additional product candidates. We are pursuing both thetransformation of well-established and widely used nucleoside analogs as well as novel nucleoside analogs, which we believe have thepotential to address additional areas of unmet medical need in oncology. •Continue to strengthen our intellectual property position. We own or have exclusive rights to the core technologies underlying our ProTidetechnology platform. We have granted patents in key markets, including the United States, Europe and Japan, protecting the composition ofmatter of Acelarin, NUC-3373 and other of our product candidates. We intend to further expand and enhance our intellectual propertyposition. •Build a focused commercial organization. We have worldwide rights to all product candidates that we are developing. We believe that manyof the cancers we are initially targeting with our ProTides can be addressed by a focused sales and marketing team. We plan to commercializeany product candidates for which we receive regulatory marketing approval using a specialized sales force in the United States and Europe.49 Our PipelineWe take a scientifically driven approach to designing ProTides, which we believe have the potential to result in highly efficacious cancer therapieswith improved tolerability. Our pipeline of product candidates is summarized below. Cancer and the Need for Improved Treatment OptionsCancer is the second leading cause of death in the United States, with approximately 1.7 million new cases and 610,000 deaths expected in 2018according to the American Cancer Society.The medical treatment of cancer can be divided into three major categories: surgery, radiotherapy and therapeutics. Therapeutics includechemotherapy, immunotherapy, and targeted and hormonal agents.The backbone of treatment for patients with cancer consists of chemotherapeutics, which generated sales of $20.6 billion worldwide in 2016. Thesetherapies exert their effects by killing cancer cells or preventing them from replicating. Within the larger universe of chemotherapy, nucleoside analogs, suchas gemcitabine and 5-FU, play a significant role. Nucleoside analogs have been in clinical use for over 50 years and have become cornerstones of treatmentfor patients with cancer. The FDA has approved 16 nucleoside analogs for the treatment of cancer and many of these have become the standard of careglobally for patients. FDA-approved anti-cancer nucleoside analogs are: gemcitabine; 5-FU; capecitabine; floxuridine; clofarabine; fludarabine; cytarabine;azacytidine; decitabine; nelarabine; cladribine; pentostatin; 6-mercaptopurine; tipiracil; 6-thioguanine; and trifluorothymidine. The World HealthOrganization has classified seven of these nucleoside analogs, including gemcitabine and 5-FU, as Essential Medicines, which they define as medicines thatsatisfy the priority healthcare needs of the population and should be available at all times.Many on-patent chemotherapies have generated significant sales, including, for example, gemcitabine, marketed as Gemzar®, which had peak annualsales of $1.7 billion before losing patent protection in 2010. Gemcitabine is still used extensively and remains an important part of the standard of care formany cancers, including pancreatic, ovarian, biliary, non-small cell lung, bladder and breast cancers. In addition, approximately 500,000 patients per year inNorth America receive 5-FU, which is widely used for the treatment of many cancers, including colorectal, breast, stomach, head and neck, and pancreaticcancers. The oral version of a derivative of 5-FU, known as capecitabine and marketed as Xeloda ® for the treatment of colorectal, breast and stomach cancer,had worldwide sales of $1.5 billion in 2012, before the market launch of generic competitors. We believe the number of patients receiving capecitabinerepresents a small proportion of the overall number of patients treated with 5-FU and its derivatives.50 Shortcomings of Existing Nucleoside Analog DrugsDespite the widespread use of nucleoside analogs, their efficacy is severely limited by cancer cell resistance and they are often poorly tolerated.Nucleoside analogs are based on the principle of blocking the replication of cancer cells by providing faulty DNA and RNA building blocks duringthe cell replication process, thus leading to cancer cell death, known as apoptosis. Some nucleoside analogs exert their effect by blocking enzymes necessaryfor the production of these DNA and RNA building blocks. However, there are critical barriers and cellular defenses that limit the efficacy of existingnucleoside analogs. The three critical shortcomings of nucleoside analogs are: (1) the need for uptake into cells by way of membrane proteins known astransporters; (2) the need for activation by the addition of one or more phosphate groups; and (3) the potential for enzymatic breakdown.1. Uptake by transporters. Nucleoside analogs require specific active-transport proteins in the cell membrane to enter cancer cells. If these proteins aremissing or down-regulated, nucleoside analogs cannot enter the cancer cell to exert their anti-cancer effect. Transport proteins, such as the humanequilibrative nucleoside transporter 1, or hENT1, are often not expressed at sufficient levels in many solid tumor cancers. For example, based on thepublished results of multiple studies assessing the correlation of hENT1 expression to survival outcomes in pancreatic cancer patients treated withgemcitabine, approximately 40% to 50% of pancreatic patients express low levels of hENT1, and thus derive little or no benefit from gemcitabine therapy.2. Conversion to the active form. Nucleoside analogs are all dosed as inactive precursors, or prodrugs, because their active forms are unstable andtheir negative charge further prevents them from entering cells. Naturally occurring enzymes in cells must add at least one chemical entity known as aphosphate group to activate these prodrugs and enable them to be incorporated into nucleic-acid chains or to bind to their target enzymes and thereby exerttheir anti-cancer effect. This process of activation by adding a phosphate group is known as phosphorylation. However, the addition of phosphate groupsoften occurs at such an insufficient rate in cancer cells that it limits or prevents the generation of active anti-cancer metabolites, and in some casesphosphorylation does not occur at all.3. Breakdown. Multiple enzymatic processes can break down nucleoside analogs, resulting in their degradation prior to phosphorylation, as well asthe release of toxic byproducts that can lead to off-target toxicity. Breakdown can take place either inside or outside the cancer cell.Our ProTide Technology and its Key AdvantagesWe use our ProTide technology to design new chemical entities to overcome the three key challenges associated with existing nucleoside analogs:uptake, activation and breakdown as shown below: Harnessing the power of phosphoramidate chemistry, we transform nucleoside analogs into activated nucleotide analogs with the addition of aphosphate group, which is protected by specific combinations of aryl, ester and amino acid groupings. We refer to these compounds as ProTides. We areapplying our ProTide technology both to nucleoside analogs currently approved for use as a chemotherapy and to nucleoside analogs that have not, to date,been successfully developed.51 A graphical representation of the chemical structure of nucleoside analogs, nucleotide analogs and ProTides is set forth below: Our researchers have invested over a decade of work in designing, synthesizing and screening ProTides, which we believe are optimally designed toovercome cancer cell resistance mechanisms. We have gained considerable insight from our scientific founders and executives in understandingphosphoramidate chemistry and the biology of how nucleotide analogs are able to exert their anti-cancer effects. Based on these learnings, we are able toefficiently create hundreds of target candidates from the millions of potential candidates. We then perform biological testing on these target candidates toselect our lead ProTides.Acelarin: A Transformation of GemcitabineOur lead product candidate, Acelarin, was designed to overcome the key cancer resistance mechanisms associated with the nucleoside analog,gemcitabine. We are rapidly advancing Acelarin in the clinic and exploring its use as a therapy against platinum-resistant and platinum-sensitive ovariancancer, biliary tract cancer and pancreatic cancer.Gemcitabine and its LimitationsGemcitabine is a nucleoside analog that is used as a chemotherapeutic to treat a wide range of tumors and has been investigated in over 1,900 clinicaltrials. It is approved as a single agent for the treatment of pancreatic cancer and in combination with other chemotherapeutic drugs for the treatment ofadvanced ovarian, metastatic breast, and non-small cell lung cancers. Gemcitabine is also used to treat many other types of tumors, including biliary tractcancer, both as monotherapy and in combination with other therapeutics.Gemcitabine is a conventional nucleoside analog which, like all nucleoside analogs, is an inactive prodrug. There are three key cancer resistancemechanisms that have been associated with a poor survival prognosis for gemcitabine therapy: transport, activation and breakdown. While there have beenattempts to address the requirement for active transport of gemcitabine into cancer cells, we believe we are the first to address all three limitations at once. 52 1. Requires active transport. Gemcitabine requires the membrane transporter hENT1 to enter the cancer cell. Patients with a low level of hENT1 whoreceive gemcitabine have lower overall survival as compared to patients with a high level of hENT1. In a study published in 2004 in the journal ClinicalCancer Research, it was reported that pancreatic cancer patients with a high level of hENT1 expression had a median overall survival of 13 months comparedto four months for those patients with a low level of hENT1 expression.In a study published in 2009 in the Journal of Clinical Oncology, non-small cell lung cancer patients with low levels of hENT1 who were treatedwith therapies that included gemcitabine survived for less than half as long as those with high levels of hENT1, specifically, 316 days in the case of lowlevels of hENT1, and 714 days in the case of high levels of hENT1.Some previous product candidates that have been tested clinically by others were designed to address the challenge of membrane transport but theseefforts failed even when the transport of these candidates across the cell membrane appeared to succeed. We believe that this was due to the failure of thosecandidates to address the other cancer resistance mechanisms of activation and breakdown.2. Requires activation within the cancer cell. Once gemcitabine enters cells, it must be activated by the addition of phosphate groups before it canexert its cell-killing effect. The rate-limiting addition of the first phosphate group is rapidly followed by the addition of a second and third phosphate group.The end result of this phosphorylation is the creation of the active anti-cancer metabolite, which is known as dFdCTP. A specific enzyme, deoxycytidinekinase, or dCK, is responsible for the first rate-limiting phosphorylation step. Initially, about one-third of cancer cells have reduced levels of dCK, which hasnegative consequences for the efficacy of gemcitabine. A study published in the journal Gastroenterology in 2012 reported that decreased expression of dCKled to resistance to gemcitabine treatment in cellular assays. In another published study, low levels of dCK in the pancreatic cancer cells of patients who weretreated with gemcitabine were associated with a median overall survival that was seven months shorter than that observed in patients with medium to highlevels of dCK. dCK is also associated with acquired resistance and studies have shown that cancer cells can downregulate the production of dCK in thepresence of gemcitabine leading to reduced efficacy.Because gemcitabine has a short half-life, ranging from 42 to 94 minutes, even with dCK present in the cancer cell, much of the gemcitabine will havebroken down before it can be converted to its active anti-cancer metabolite, dFdCTP.3. Subject to breakdown. Gemcitabine, prior to being phosphorylated to its active form, is susceptible to being broken down chemically by metabolicenzymes, such as cytidine deaminase, or CDA, which irreversibly degrades up to 90% of gemcitabine to an inactive form in less than three hours. A studypublished in the British Journal of Cancer in 2005 showed that increased levels of CDA were associated with an approximate five-month reduction inmedian overall survival in gemcitabine-treated pancreatic cancer patients. CDA is also expressed by various microorganisms in the body, such asmycoplasma that have been found to be associated with 30% to 50% of solid tumors, which further exacerbates the breakdown of gemcitabine.Contribution of resistance mechanisms to survivalEach of these resistance mechanisms on its own negatively impacts the survival of cancer patients receiving gemcitabine therapy by at least fivemonths. While studies have not been done on the effect of the combination of all three of these resistance mechanisms, one study in pancreatic cancerpatients who had undergone resection found that two of these resistance mechanisms had a cumulative effect. Specifically, patients with low levels of hENT1and any level of dCK experienced a median overall survival of 16.2 months, while patients with high levels of hENT1 and low levels of dCK had a medianoverall survival of 33.6 months and patients with high levels of hENT1 and moderate to high levels of dCK had a median overall survival of 61.4 months.53 Our Solution: AcelarinOur lead product candidate, Acelarin, was designed to overcome the key cancer resistance mechanisms associated with gemcitabine. Acelarin isdesigned to generate and maintain higher concentrations of the anti-cancer metabolite inside the tumor compared to gemcitabine. This ProTide is comprisedof gemcitabine, a phosphate group and a specific combination of aryl, ester and amino acid, also referred to as the phosphoramidate moiety. Acelarin’sdistinctive feature is this proprietary moiety, which protects the phosphate group. The moeity also changes the chemical properties of the molecule, enablingAcelarin to enter the cancer cell independent of the presence of the hENT1 transporter. Once Acelarin has entered the cell, the moeity is optimally cleavedoff, resulting in “deprotection” and the release of an activated, phosphorylated form of gemcitabine in the cell. Accordingly, the activating enzyme, dCK,which drives the rate-limiting phosphorylation of gemcitabine, is no longer required and the cancer cells’ deficiency of dCK does not result in resistance toAcelarin, as it does with gemcitabine. This activated nucleotide analog, dFdCMP, is then rapidly converted to dFdCDP and then the key anti-cancermetabolite, dFdCTP. Moreover, Acelarin, like the phosphorylated forms of gemcitabine, is not subject to breakdown by CDA, thus bypassing another keyresistance mechanism. As a result, Acelarin achieves much higher levels of dFdCTP than does gemcitabine.The metabolism of Acelarin compared to gemcitabine as described above is illustrated in the following graphic. Clinical DataAcelarin has been evaluated in one Phase 1 dose-ranging clinical trial and one Phase 1b clinical trial for recurrent ovarian cancer and is beingevaluated in three clinical trials across numerous solid tumor cancer indications: Phase 2 for platinum-resistant ovarian cancer; Phase 1b for biliary tractcancer; and Phase 3 for pancreatic cancer. We announced interim results from the Phase 1b trial for biliary tract cancer in January 2018.The vast majority of patients in the completed Phase 1 and Phase 1b trials were resistant or refractory to all existing standards of care and yet a highproportion obtained significant tumor regression or stable disease when treated with Acelarin. All of these investigator-sponsored trials were or, in the case ofthe ongoing Phase 1b trial, are conducted in the United Kingdom under a clinical trial authorization, or CTA, by the Medicines and Healthcare productsRegulatory Agency, or MHRA. The completed Phase 1 and Phase 1b trials were designed to assess the safety, pharmacokinectics and clinical activity ofAcelarin as monotherapy or in combination with carboplatin. The ongoing Phase 1b trial is designed to assess the safety, pharmacokinectics and clinicalactivity of Acelarin in combination with cisplatin.54 Acelarin: Phase 1 clinical trial (PRO-001). In the completed Phase 1 trial, 68 patients with advanced solid tumors and metastatic disease that hadpreviously been treated with other systemic anti-cancer therapies received Acelarin as monotherapy at doses ranging from 375 mg/m 2 to 1,000 mg/m 2. Allof these patients had rapidly progressing recurrent disease, had received on average 2.7 prior lines of chemotherapy, and had exhausted all other standardtreatment options. Initial signs of efficacy were evaluated using the standard scoring system known as Response Evaluation Criteria In Solid Tumors, orRECIST. A subset of 49 patients received two or more cycles of Acelarin, equivalent to two or more months of therapy, and had at least one follow-upradiographic assessment to measure changes in tumor size. Of these patients, five achieved a partial response, with at least a 30% decrease in tumor size,although not all of these five patients received a final confirmatory scan as technically required by the RECIST criteria for classification as a partial response.Another 33 patients had tumors that either decreased by up to 30% or increased by less than 20% and were scored as having stable disease. This resulted in anoverall disease control rate, the combination of both partial response and stable disease, of 78% in the total 49-patient evaluable population.The following graph illustrates the best percentage change from baseline tumor size in the 49 evaluable patients. Asterisks in the graph belowindicate patients who had disease progression as a result of a new lesion rather than an increase in size of any existing measurable tumors. These patients areaccordingly not included in the partial response or stable disease classifications. The median progression-free survival in the 49 evaluable patients was 4.0months with a range of two to 25 months. Of the 33 patients who achieved stable disease, 32 maintained stable disease for at least 12 weeks. An analysis was performed on a subset of 18 patients from the same trial who had some form of gynecological cancer: ovarian, endometrial, cervicalor uterine cancers. This patient subset had received on average 3.5 prior lines of chemotherapy. Of these patients, 14 were evaluable. Two of these 14 heavilypre-treated patients with gynecological cancer achieved a partial response and an additional 11 achieved stable disease, resulting in a disease control rate of93% with a median progression-free survival duration of 8.0 months. In the seven evaluable patients with platinum-refractory or platinum-resistant ovariancancer, the median progression-free survival duration was also 8.0 months.55 The following graph illustrates the best percentage change from baseline tumor size in the 14 evaluable patients with gynecological cancer. Theasterisk in the graph below indicates the one patient who experienced progressive disease as a result of a new lesion rather than an increase in size of anyexisting measurable tumor. This patient is therefore not included in the partial response or stable disease classifications. While not directly comparable to Acelarin, Doxil, or pegylated liposomal doxorubicin, a standard of care for patients with recurrent ovarian cancer,was assessed in the AURELIA clinical trial in patients who had received no more than two prior lines of chemotherapy. Doxil was associated with an overallresponse rate of 8% and a median progression-free survival duration of 3.5 months.56 In the Phase 1 trial, Acelarin had a plasma half-life of 8.3 hours, as compared to the plasma half-life of gemcitabine, which ranges from 42 minutes to94 minutes. The median intracellular levels of the active anti-cancer metabolite, dFdCTP, achieved with Acelarin were over 200 times higher than thosereported in the literature for gemcitabine on an equimolar dose comparison, as shown in the graphic below. Equimolar means that all of the doses beingcompared contained the same number of molecules of Acelarin or gemcitabine. 57 We observed levels of dFdCTP that were still higher 24 hours after dosing with Acelarin than the maximum reported concentration generated withgemcitabine at its peak level two hours after dosing. Furthermore, the concentration of intracellular dFdCTP over a 24-hour period, as measured by the areaunder the curve, or AUC, a measure of drug exposure over time, was 139 times higher for Acelarin on an equimolar dose comparison compared to the levelsreported for gemcitabine in the literature referenced above. We have combined the data from those four studies in order to derive the curve shown in thegraphic below. We believe that the higher concentrations of dFdCTP results from Acelarin’s ability to bypass the key cancer resistance mechanisms and its favorablepharmacokinetics, or the process by which Acelarin is distributed and metabolized in the body.Acelarin was generally well-tolerated. The most common Grade 3 and Grade 4 treatment-related adverse events, which occurred in 10% to 20% ofpatients, were fatigue and decreased counts of blood cells, including neutrophils, lymphocytes and platelets. A total of eight dose-limiting toxicities wereobserved in four patients at doses of 725 mg/m 2 and above. These included Grade 3 increases in liver enzymes known as transaminases, and Grade 4decreases in platelets and neutrophils. All of these adverse events were transient and all patients recovered. To date, we have not observed any treatment-related adverse events that have not previously been associated with gemcitabine.Acelarin: Phase 1b clinical trial in combination with carboplatin (PRO-002). In the Phase 1b trial, 25 patients with recurrent ovarian cancer receivedAcelarin at doses from 500 mg/m 2 to 750 mg/m 2 in combination with carboplatin for a maximum of six treatment cycles lasting three weeks each. Patientshad received on average three prior lines of chemotherapy and had a median age of 64. Of the 25 patients enrolled, 23 were evaluable and these patients werecharacterized by their platinum status: seven were platinum-refractory, 10 were platinum-resistant, four were partially platinum-sensitive and two wereplatinum-sensitive. Efficacy was evaluated using the RECIST standard scoring system. The 23 evaluable patients had received one or more cycles of Acelarinin combination with carboplatin and had at least one follow-up radiographic assessment to measure changes in tumor size. Of these patients, one achieved acomplete response, with a complete disappearance of all target lesions, and eight achieved a partial response, with at least a 30% decrease in tumor size,although not all of these patients have received a confirmatory scan. This resulted in an overall response rate of 39%. Another 13 patients had tumors thateither decreased by up to 30% or increased by less than 20% and were scored as having stable disease. This resulted in a disease control rate of 96%. Themedian progression-free survival duration for all 25 patients recruited was 7.3 months and for the evaluable population was 7.4 months.58 The following graph illustrates the best percentage change from baseline tumor size in the 23 evaluable patients. Although gemcitabine has never been approved as a single agent for patients with ovarian cancer, it is approved in combination with carboplatin inpatients who have relapsed at least six months after completion of platinum-based therapy. These patients are platinum-sensitive or partially platinum-sensitive. In this population, as a second line treatment, the combination of gemcitabine and carboplatin achieved an overall response rate of 47% and adisease control rate of 85%. Due to the toxicity burden of gemcitabine, carboplatin is limited to a suboptimal dose. Even at the suboptimal dose ofcarboplatin, the incidence of Grade 3 and Grade 4 neutropenia, or low neutrophils, and thrombocytopaenia, or low platelets, was 71% and 35%, respectively,with this combination.The results of the Phase 1b Acelarin trial suggest that Acelarin can be combined with carboplatin at a higher, more optimal carboplatin dose. In theseven patients with platinum partially sensitive and sensitive disease, the incidence of Grade 3 and Grade 4 neutropenia and thrombocytopaenia was 43%and 0%, respectively. In all 25 patients, the incidence of Grade 3 and Grade 4 neutropenia and thrombocytopaenia was 52% and 32%, respectively.The data from the Phase 1b trials are interim because the Phase 1b trial is still ongoing. Interim data are not necessarily predictive of final results andmay change as the data are further examined, more patient data become available and the final clinical study report is prepared and issued. As a result, interimdata should be viewed with caution until the final data are available. Initial success with either interim or final data in early-stage clinical trials may not beindicative of results obtained in later-stage trials, and the results of our clinical trials may not meet the level of statistical significance required by the FDA orcomparable foreign regulatory authorities for marketing approval. Statistical significance means that an effect is unlikely to have occurred by chance.Clinical trial results are considered statistically significant when the probability of the results occurring by chance, rather than from the efficacy of theproduct candidate, is sufficiently low. We plan to design our later stage trials to establish the statistical significance of the efficacy of our ProTides.Acelarin: Phase 1b clinical trial in combination with cisplatin (ABC-08)In January 2018, we announced interim results from the ABC-08 trial. In this Phase 1b multi-center, open-label study, Acelarin, when combined withcisplatin, achieved a high response rate and was well-tolerated as front-line treatment for patients with locally advanced or metastatic biliary tract cancers.Eight patients received Acelarin at 625mg/m2 and cisplatin at 25mg/m2 on days one and eight of a three-week cycle. A complete response was achieved inone patient, a partial response in three patients, and stable disease in one patient, resulting in an objective response rate of 50% and a disease control rate of63% on an intent-to-treat basis. Additionally, the one patient with stable disease, whose cancer initially had been considered unsuitable for surgicalresection, went on to have surgery to remove the tumor completely. Two of the eight patients received59 only one complete cycle or less of therapy due to complications unrelated to either Acelarin or cisplatin, so the objective response rate in those patients whoreceived adequate treatment was 67%. Additionally, the combination of Acelarin and cisplatin was well-tolerated with no unexpected adverse events and nodose-limiting toxicities.Based on the response rates and favorable safety profile seen in cohort 1, the clinical investigators determined that Acelarin at 625mg/m2 withcisplatin at 25mg/m2 was the optimal dose combination as compared with cohort 2, in which patients received Acelarin at 725mg/m2 with cisplatin at25mg/m2. Previously the same investigators had conducted the ABC-02 clinical trial in a similar patient population comparing single agent gemcitabine(1000mg/m2) to the combination of gemcitabine (1000mg/m2) plus cisplatin (25mg/m2) and established that the combination achieved a higher responserate and improved overall survival duration. A comparison of the response rate data from the ABC-08 trial and ABC-02 trial is provided in the followingtable:Based on the interim results of this trial, we plan to initiate a Phase 3 trial of Acelarin and cisplatin as a front-line treatment of patients with locallyadvanced or metastatic biliary tract cancers in 2018.The data from this Phase 1b trial is interim because the Phase 1b trial is still ongoing. Interim data are not necessarily predictive of final results andmay change as the data are further examined, more patient data become available and the final clinical study report is prepared and issued. As a result, interimdata should be viewed with caution until the final data are available. Initial success with either interim or final data in early-stage clinical trials may not beindicative of results obtained in later-stage trials, and the results of our clinical trials may not meet the level of statistical significance required by the FDA orcomparable foreign regulatory authorities for marketing approval. Statistical significance means that an effect is unlikely to have occurred by chance.Clinical trial results are considered statistically significant when the probability of the results occurring by chance, rather than from the efficacy of theproduct candidate, is sufficiently low. We plan to design our later stage trials to establish the statistical significance of the efficacy of our ProTides. Inaddition, while the ABC-08 trial was conducted by the same investigators that conducted the earlier ABC-02 trial in a similar patient population, the ABC-08trial has many fewer patients than did the ABC-02 trial, which enrolled 410 patients.Acelarin development strategy and ongoing clinical trialsAcelarin has been administered to over 180 patients with a wide range of advanced cancers. We are developing Acelarin for multiple indications: inboth platinum-resistant and platinum-sensitive ovarian cancer; as first-line treatment in biliary tract cancer, an indication in which no drug has ever beenapproved; and as first-line treatment in pancreatic cancer.Our ongoing clinical trials are: •a Phase 2 trial, in up to 64 patients with platinum-resistant ovarian cancer, to assess the optimal dose and anti-cancer activity of Acelarin asmonotherapy, with the expectation of interim data in 2018; and •a Phase 1b trial, in 20 patients with biliary tract cancer, to establish the optimal dose of Acelarin in combination with cisplatin as a first-linetreatment, with the expectation of interim results in 2018;60 •a Phase 3 trial expected to enroll 328 patients with metastatic pancreatic cancer to compare Acelarin to gemcitabine as a first-line treatment,facilitated by the National Cancer Research Institute in the United Kingdom.The Phase 2 trial in platinum-resistant ovarian cancer is being conducted under an Investigational New Drug application, or IND, in the United Statesand a CTA in the United Kingdom. In November 2017, we announced the enrollment of the first patients in both the United States and the United Kingdomin this trial. Patients are receiving Acelarin on day one, eight and fifteen of a 28-day cycle and are being treated to progression. The primary endpoint of thetrial is objective response rate, and secondary endpoints include duration of response, progression-free survival, overall survival and safety parameters. Partone of the trial will enroll up to 20 patients in each of two dose cohorts: 500mg/m2 and 750mg/m2. In part two of the trial, we expect to select one of thesedoses and enroll at least an additional 24 patients at the selected dose.The Phase 1b trial in biliary tract cancer and the Phase 3 trial in pancreatic cancer are investigator-sponsored trials and being conducted under a CTAin the United Kingdom. In January 2018, we reported that 14 patients had been enrolled in the Phase 1b trial and 100 patients had been enrolled in the Phase3 trial.Ovarian cancerOverview. Ovarian cancer is the fifth-leading cause of cancer death in women in the United States. According to the U.S. National Cancer Institute,there are approximately 22,000 new cases and 14,000 cancer-related deaths each year from ovarian cancer in the United States. Worldwide, there areapproximately 225,000 new cases of ovarian cancer and 140,000 deaths yearly. Surgery and cytotoxic chemotherapies are widely used to treat ovariancancer; however, the outcomes have changed little over several decades. The five-year survival rate for ovarian cancer patients in the United States hasimproved only marginally from 42.2% in 1995 to 46.6% in 2009.Limitations of current treatment options in ovarian cancer. First-line therapy for patients with advanced ovarian cancer is typically a combination ofa platinum drug, such as carboplatin, and a taxane drug such as paclitaxel. Due to toxicities, most patients undergo a maximum of six cycles, equivalent tofour and a half months, of this therapy. Between 62% and 85% of patients will relapse depending on the stage of the disease, and these patients can bedivided into four groups depending on length of time between the end of treatment and the relapse. Those with disease progression while receiving platinum-based therapy or who relapse within four weeks of the last platinum dose are defined as platinum-refractory. Those relapsing after more than one month butless than six months are deemed platinum-resistant and have a worse prognosis than partial platinum-sensitive patients, who relapse between six and 12months, and platinum-sensitive patients, who relapse after more than 12 months.Relapsed platinum-sensitive patients typically receive a platinum-containing agent such as carboplatin or cisplatin in combination with othertherapies such as gemcitabine. The addition of gemcitabine to carboplatin in these patients increased the progression-free survival to 8.6 months from 5.8months with carboplatin alone but had no significant effect on overall survival. Gemcitabine as monotherapy, although not approved, is used in relapsed,platinum-resistant ovarian cancer patients resulting in progression-free survival of approximately four months.Recently, a new class of anti-cancer drugs, known as PARP inhibitors, has been approved for the third- or fourth-line treatment of a subset of ovariancancers, specifically those containing mutations in BRCA genes, or BRCAm, which constitute approximately 15% of ovarian cancer patients. PARPinhibitors have also been approved as maintenance therapy in patients with recurrent ovarian cancer with a complete or partial response to platinum-basedchemotherapy.61 The market can be simplified into platinum-resistant and platinum-sensitive (including partially platinum-sensitive) ovarian cancer patients. Thefollowing illustrations show how platinum-resistance increases with line of chemotherapy and highlights where some existing therapies are being utilizedand the ovarian cancer indications we are targeting with Acelarin. Biliary tract cancerOverview. Biliary tract cancers, including cholangiocarcinoma, gallbladder and ampullary carcinoma, are cancers originating in the bile duct, a vesselthat transports bile from the liver to the gall bladder and small intestine. Approximately 178,000 new cases of biliary tract cancer are diagnosed each yearworldwide, with approximately 9,000 of those diagnoses in the United States.Limitations of current treatment options in biliary tract cancer. There are currently no agents approved for the treatment of biliary tract cancer;however, the worldwide standard of care in biliary tract cancer patients with locally advanced or metastatic disease is the combination of gemcitabine andcisplatin. Patients receiving this regimen have a median overall survival of 11.7 months compared to 8.1 months for patients receiving gemcitabine asmonotherapy.62 Pancreatic cancerOverview. Pancreatic cancer is the third-leading cause of cancer deaths in the United States with approximately 53,000 new diagnoses and 41,800deaths in 2016. Worldwide, there were approximately 338,000 new pancreatic cancer diagnoses in 2012. Approximately 85% of patients diagnosed withpancreatic cancer have advanced disease at the time of diagnosis, are ineligible for surgery and are treated with chemotherapy. Patients with pancreatic cancerhave a poor prognosis, with a five-year survival rate of only 7.7%.Limitations of current treatment options in pancreatic cancer. First-line treatment in pancreatic cancer for patients with a good performance score,which is a standard measure of general well-being, is a combination of 5-FU, oxaliplatin, leucovorin and irinotecan, a treatment regimen known asFOLFIRINOX. Treatment with FOLFIRINOX is, however, associated with high levels of toxicity, so it is generally not recommended for patients withoutgood performance scores. For patients with a less robust performance score, a common first-line treatment is a combination of gemcitabine and nab-paclitaxel,or Abraxane®. For patients who are less fit or who have co-morbidities, the standard of care is single-agent gemcitabine. In separate clinical trials, patientstreated with FOLFIRINOX had a median overall survival of 11.1 months and patients treated with the combination of gemcitabine and nab-paclitaxel had amedian overall survival of 8.5 months. The addition of nab-paclitaxel to gemcitabine resulted in a seven-week improvement in median overall survivalcompared to gemcitabine alone.Acelarin preclinical dataPrior to progressing our product candidates into clinical trials, we wanted to evaluate in preclinical studies whether Acelarin would: (1) be able toenter cells independent of transporters, including hENT1; (2) generate the active anti-cancer metabolite, dFdCTP, inside cancer cells without the need for thephosphorylating enzyme dCK; and (3) not be susceptible to breakdown by enzymes like CDA. The results of these preclinical studies are summarized below:1. Acelarin is not dependent on transporters to enter cancer cells. Gemcitabine requires the hENT1 transporter to cross the cell membrane. Evidenceof this can be seen in cellular assays we completed in which hENT1 was specifically blocked by an inhibitor known as NBTI in human cancer cells. A groupincluding our researchers published a study in the Journal of Medicinal Chemistry in which we observed that Acelarin did not require hENT1 in order toenter cells and that NBTI had no effect on intracellular levels of dFdCTP. These results are illustrated below. (†)p-value is a conventional statistical method for measuring the statistical significance of preclinical study and clinical trial results. A p-value of 0.05 orless represents statistical significance, meaning that there is a 1-in-20 or less likelihood that the observed results occurred by chance. A p-value of0.0001 or less means that there is a 1-in-10,000 or less likelihood that the observed results occurred by chance. This finding was confirmed in a separate study where hENT1 was blocked by dipyridamole, a commonly used nucleoside transporter inhibitor, withthe result that gemcitabine’s ability to kill the cancer cells was significantly reduced while Acelarin retained its activity.63 2. Acelarin does not require rate-limiting activation step. Gemcitabine must be phosphorylated, or activated, inside the cell by the addition of aphosphate group to the molecule in order to exert a cytotoxic effect. This phosphorylation requires the enzyme dCK. In our preclinical studies, inhibition ofdCK by a specific inhibitor, known as 2T2D, significantly reduced the phosphorylation step to generate dFdCTP within human cancer cells while Acelarinwas unaffected by 2T2D and was still able to generate the same level of the key active anti-cancer metabolite, dFdCTP. These results are illustrated below. This observation is consistent with the fact that Acelarin already includes the first phosphate group and thus does not require the action of dCK foractivation. Furthermore, we confirmed these findings in a separate study in which we blocked the action of dCK with the inhibitor deoxycytidine, whichsignificantly reduced the ability of gemcitabine to kill the cancer cells while Acelarin retained its activity.3. Acelarin not susceptible to breakdown by CDA. Nucleoside analogs such as gemcitabine are susceptible to breakdown by enzymes such as CDA.The presence of the phosphate on Acelarin protects it from breakdown by CDA. In our preclinical studies, incubation of Acelarin with purified CDA resultedin no degradation of Acelarin over the full 30-minute assay while gemcitabine under these same conditions was almost completely degraded in two minutes.We believe that the ability of Acelarin to generate the active anti-cancer metabolites within the cancer cells in higher concentrations thangemcitabine gives Acelarin the potential to have greater efficacy and to overcome the key cancer cell resistance mechanisms, while avoiding breakdown andrelease of toxic byproducts.NUC-3373: A Transformation of 5-FUWe have designed our second ProTide, NUC-3373, to overcome the key cancer resistance mechanisms, improve upon the safety profile and reduce thedosing administration burdens associated with the nucleoside analog, 5-FU. We are advancing NUC-3373 in the clinic and developing this new chemicalentity as a therapy for colorectal cancer, breast cancer and other solid tumors.5-FU and its LimitationsFirst introduced in 1957, 5-FU is still widely used for the treatment of many cancers, including colorectal, breast, stomach, head and neck, andpancreatic cancers. Approximately 500,000 patients per year in North America receive 5-FU.5-FU requires conversion to the phosphorylated anti-cancer metabolite, fluorodeoxyuridine monophosphate, or FUDR-MP, before it can exert itsprimary cytotoxic activity through the inhibition of an intracellular enzyme, thymidylate synthase, or TS. TS is required to convert uridine, specificallydeoxy-uridine monophosphate, or dUMP, to thymidine, specifically deoxy-thymidine monophosphate, or dTMP, one of the four nucleotides that compriseDNA. The inhibition of TS therefore results in an imbalance in the ratio of the nucleotides dUMP and dTMP, disrupting DNA synthesis and repair, whichleads to cancer cell death.64 Two other drugs have been approved that aim to generate the same active anti-cancer metabolite as 5-FU: fluorodeoxyuridine, or Floxuridine,marketed as FUDR ® , and capecitabine, marketed as Xeloda ®. Like 5-FU, both of these drugs must be converted to FUDR-MP inside the cancer cell in orderto exert their primary cytotoxic activity. Capecitabine is a derivative of 5-FU containing a chemical modification of the nucleoside ring, which allows oraldosing of capecitabine.Similar to gemcitabine, the key cancer resistance mechanisms of breakdown, activation and transport have been associated with a poor prognosis to a5-FU therapeutic regimen. We believe our ProTide, NUC-3373, overcomes these specific key resistance mechanisms as well as dosing administrationchallenges associated with 5-FU.1. Subject to breakdown. More than 85% of an injected dose of 5-FU is degraded by dihydropyrimidine dehydrogenase, or DPD, an enzyme largelyexpressed in the liver. This breakdown destroys most of the drug before it has an opportunity to enter the cancer cell, become activated and exert anytherapeutic effect. Furthermore, this breakdown results in the generation of a toxic byproduct, F-BAL, which has been associated with off-target toxicity, suchas “hand-foot syndrome,” which is reported in various sources as affecting at least half of patients treated with 5-FU. Hand-foot syndrome is a reddening,swelling, numbness and skin sloughing or peeling on the palms of the hands and soles of the feet . In addition, levels of DPD have also been found to beelevated in tumors that are resistant to 5-FU.2. Requires activation within the cancer cell. Once 5-FU enters cells, it must be processed by a series of enzymes to generate the active anti-cancermetabolite, FUDR-MP. FUDR-MP binds to and inhibits TS, leading to decreased levels of thymidine and resulting in cancer cell death. There are several keyenzymes involved in the conversion of 5-FU to the active anti-cancer metabolite, FUDR-MP. One of these is orotate phosphoribosyl transferase, or OPRT.Lower levels of OPRT in tumor cells are associated with resistance to 5-FU. Another intracellular enzyme, thymidine phosphorylase, or TP, can reversiblyconvert 5-FU to fluorodeoxyuridine, or FUDR, an intermediate to the formation of FUDR-MP. Low expression of TP in human cancer cells is associated withresistance to 5-FU. In addition, thymidine kinase, or TK, is the enzyme that converts FUDR to the active anti-cancer metabolite, FUDR-MP. Low expressionof TK in human cancer cells is associated with resistance to 5-FU.3. Requires active transport. Similar to gemcitabine and all nucleoside analogs, 5-FU relies on specific transporters in order to cross the cellularmembrane. If these transporters are not present or are expressed in low levels, 5-FU’s ability to enter into the cancer cell will be limited. For example, lowexpression of the nucleoside transporter, hENT1, has been associated with cancer cell resistance to 5-FU.4. Dosing administration challenges. The pharmacokinetic and pharmacodynamic properties of 5-FU also lead to dosing administration challenges.Pharmacodynamic properties refer to the biochemical and physiological effects of a drug on the human body. 5-FU has a half-life between eight and14 minutes in plasma. In an effort to counter this short time period, healthcare providers often administer 5-FU as a continuous infusion over extendedperiods of time, often days. For example, patients being treated for colorectal or pancreatic cancer typically receive their first dose, or loading dose, of 5-FUover 46 hours using a portable infusion pump. This dosing regimen creates burdens for providers, inconveniences patients and contributes additional costs tothe healthcare system.Our Solution: NUC-3373We designed our second ProTide, NUC-3373, to overcome the key cancer resistance mechanisms, improve upon the safety profile and reduce thedosing administration burdens associated with the nucleoside analog, 5-FU. NUC-3373 is a nucleotide analog that delivers the same active anti-cancermetabolite, FUDR-MP, that 5-FU aims to generate within a cancer cell, but at far higher concentrations. NUC-3373 is in a Phase 1 clinical trial in patientswith advanced solid tumors.Unlike 5-FU, NUC-3373 consists of the active anti-cancer metabolite, FUDR-MP, and a protective phosphoramidate moiety. This moiety allows NUC-3373 to enter the cell without the need for any membrane transporters. Once inside the cancer cell, the phosphoramidate moiety is optimally cleaved off,resulting in deprotection and the release of FUDR-MP. This bypasses the need for any activating enzymes, resulting in significantly higher levels of theactive anti-cancer metabolite, which we believe may lead to improved efficacy as compared to 5-FU. In addition, because NUC-3373 avoids breakdown bythe enzyme DPD, certain toxic byproducts such as F-BAL are not released, which we believe may lead to an improved tolerability profile as compared to 5-FU. Lastly, we believe that the improved pharmacokinetic and pharmacodynamic profile, including the significantly longer half-life of NUC-3373, mayresult in a more favorable dosing regimen relative to 5-FU.65 The metabolism of NUC-3373 compared to 5-FU as described above is illustrated in the following graphic. Clinical DataNUC-3373 is currently being evaluated in a Phase 1 trial in patients with advanced solid tumors. We are planning further clinical trials across anumber of indications, including colorectal cancer and metastatic breast cancer.NUC-3373: Phase 1 clinical trial. We have initiated a Phase 1 clinical trial of NUC-3373 in which we are planning to enroll approximately 76patients. We have currently enrolled over 20 patients with ten different advanced solid tumor types. We have completed four dose cohorts and we arecontinuing with dose-escalation cohorts to establish the optimal dose and frequency of administration. Patients are being dosed with a short infusion of NUC-3373, initially once per week.In this trial, we are measuring various pharmacokinetic and pharmacodynamic parameters, including plasma concentration of NUC-3373, intracellularconcentrations of the active anti-cancer metabolite, FUDR-MP, the ability of NUC-3373 to bind to its target enzyme, TS, and the downstream effects on thelevels of dTMP.66 We have interim data from 21 of the patients currently enrolled in the trial. The following graphs on the left labeled “Plasma NUC-3373” illustrate themaximum plasma concentrations, or Cmax, of NUC-3373 among the four cohorts as measured after one administration and the plasma concentrations ofNUC-3373 over time, as measured by AUC. The following graphs on the right labeled “Intracellular FUDR-MP” illustrate the corresponding data forintracellular levels of the active anti-cancer metabolite, FUDR-MP. The interim data from these 21 patients also showed: •pharmacokinetics were consistent across patients and showed a linear dose response; •NUC-3373 had a plasma half-life of 9.7 hours compared with the half-life of 8 to 14 minutes for 5-FU reported in the literature; •intracellular FUDR-MP was detected within five minutes after infusion with a half-life of 14.9 hours while the literature reports that 5-FU doesnot generate detectable levels of intracellular FUDR-MP; •intracellular FUDR-MP was still detectable up to 48 hours after dosing; •within one hour after infusion, FUDR-MP had bound to the target enzyme, TS, leading to depletion of intracellular dTMP two to four hoursafter administration; and •the toxic byproducts, FBAL and dhFU, were undetectable both intracellularly and in the patient’s plasma.These interim pharmacokinetic and pharmacodynamic data support our belief that NUC-3373 may have greater anti-cancer activity, an improvedsafety profile and a lower dosing administration burden than 5-FU. We expect further data from this Phase 1 trial in 2018.NUC-3373 Development Strategy and Planned Clinical TrialsWe are rapidly developing NUC-3373 for multiple indications and initially targeting advanced colorectal cancer and metastatic breast cancer. Weintend to initiate the following clinical trials in 2018: •a Phase 1b trial in approximately 36 patients with recurrent metastatic colorectal cancer in combination with standard agents that are routinelyused in combination with 5-FU, including leucovorin, oxaliplatin and irinotecan. The FDA recently provided authorization, following reviewof our IND, for this study to proceed; •a Phase 3 trial in patients with metastatic colorectal cancer; and67 •a Phase 2 trial in patients with metastatic breast cancer who have been previously treated with anthracycline and taxane therapy.The ongoing Phase 1 trial in advanced solid tumors is investigator-sponsored and being conducted under a CTA.Colorectal Cancer OverviewIn the United States, approximately 140,000 new cases of colorectal cancer and 50,000 deaths due to the disease are expected in 2018. Worldwide,there were an estimated 1.4 million new colorectal cancer cases and 694,000 deaths in 2012, and the global burden is expected to increase to more than2.2 million new cases and 1.1 million deaths annually by 2030. Most systemic therapies for colorectal cancer include 5-FU, either as monotherapy or incombination with another chemotherapeutic, typically oxaliplatin or irinotecan. Both alone and in combination, 5-FU is the single most effective compoundagainst these tumors. Nevertheless, despite being the standard of care, the effectiveness of 5-FU is modest. Overall response rates are in the range of 10% to15%.Breast Cancer OverviewApproximately one in eight women will be diagnosed with breast cancer at some point in their lifetime. In the United States alone, approximately253,000 women are expected to be diagnosed with the disease and over 40,000 women are projected to die from it in 2018. On a worldwide basis,approximately 1.7 million women were diagnosed with breast cancer in 2012.An estimated 30% of all breast cancers become metastatic and require systemic treatment. There are many available agents to treat metastatic breastcancer and the choice of therapy depends on factors such as tumor burden, the patient’s overall health, prior history of cancer treatment, the importance to thepatient of minimizing toxicity, dosing convenience, and the physician’s preferences. Physicians often prefer to treat patients with limited metastatic diseasewith these agents used as monotherapy in a sequential fashion. Initially, taxanes, such as docetaxel, paclitaxel and nabpaclitaxel, and anthracyclines, such asdoxorubicin and epirubicin, are frequently prescribed. However, these categories of therapeutics must be administered intravenously and are commonlyassociated with neutropenia, or low neutrophils, and gastrointestinal toxicities. The nucleoside analog, capecitabine, which is a prodrug of 5-FU, hasadvantages over taxanes and anthracyclines and has become a standard of care for patients with metastatic breast cancer. Recently, the PARP inhibitorolaparib has been approved for metastatic breast cancer patients with a BRCA mutation, who represent approximately 5% of this population.NUC-3373 Preclinical DataNUC-3373 avoids breakdown. In our preclinical studies, NUC-3373, unlike 5-FU, was not susceptible to breakdown by the enzyme DPD, which is amajor factor in limiting the efficacy of 5-FU. Therefore, the ability of NUC-3373 to generate the active anti-cancer metabolite, FUDR-MP, should beunaffected by DPD activity and result in much higher intracellular concentrations of FUDR-MP. Furthermore, in patients receiving NUC-3373, the toxicbyproduct, FBAL, produced by DPD’s breakdown of 5-FU has not been observed.In addition, a study published in the World Journal of Gastroenterology in 2001 indicated that approximately half of patients with colorectal cancerhad tumors that were infected with a type of bacteria called mycoplasma. A 2008 study published in the International Journal of Cancer Research andTreatment highlighted that 5-FU’s activity was reduced by up to 100 times in cancer cell lines infected with mycoplasma. In our preclinical studies, the anti-cancer activity of NUC-3373 was unaffected by the presence of mycoplasma infection.68 NUC-3373 has greater anti-cancer activity than 5-FU. In preclinical studies, NUC-3373 was not reliant on activating enzymes, including OPRT, TPand TK, all of which are essential for activating the prodrug, 5-FU. For example, we measured the anti-cancer activity of NUC-3373 and 5-FU across a rangeof human tumor cell lines, including colorectal, ovarian and lung cancers. NUC-3373 had up to 330 times greater activity than 5-FU. The following figureshows the levels of NUC-3373 or 5-FU required, in various tumor cell lines, to kill half of the cancer cells, with the shorter bars representing more potentactivity. Studies in human colorectal cancer cells showed that NUC-3373 generated levels of the active anti-cancer metabolite, FUDR-MP, 366 times higherthan those achieved by administering equivalent amounts of 5-FU. We believe that these increased levels of FUDR-MP could translate into the ability ofNUC-3373 to kill various cancer cells at much lower doses than those of 5-FU. Moreover, in a preclinical colorectal cancer xenograft study, NUC-3373showed a greater ability to reduce tumor weight and volume than 5-FU.NUC-7738: A Transformation of CordycepinNUC-7738 is a ProTide transformation of cordycepin, a nucleoside analog that was isolated from the fungus cordyceps militaris in 1950. Since thattime, cordycepin has not been successfully developed or approved as a chemotherapy, but has shown potent anti-cancer activity in preclinical studiesconducted by other companies and research institutions. Similar to our other ProTide products, NUC-7738 is designed to generate the active anti-cancermetabolite of cordycepin directly inside cells, bypassing the resistance mechanisms of transportation, activation and breakdown. In a preclinical study, weexamined the in vitro cytotoxic activity of NUC-7738 across a range of different human cancer cell lines, including leukemia, non-Hodgkin lymphoma,Hodgkin lymphoma, T-cell leukemia, multiple myeloma, pancreas, colon, liver and breast cancers, as compared with cordycepin. NUC-7738 was found, in 16of the 20 cell lines examined in this study, to be more potent than cordycepin when comparing the concentrations of the respective compounds required tokill 50% of the cancer cells. In three leukemia cell lines, NUC-7738 was found to be more than 50-times more potent than cordycepin based on the method ofcomparison described above.Cordycepin and its limitationsCordycepin must be converted to its active form once inside the cancer cell. Similar to other nucleoside analogs such as gemcitabine, the rate-limitingstep of activation requires the addition of a phosphate group, in this case by an enzyme called adenosine kinase, or AK. This phosphorylated form ofcordycepin is subsequently converted into its active metabolite, 3’ deoxyadenosine triphosphate, or 3’ dATP. This metabolite interferes with multiplepathways in cancer cells, including purine biosynthesis, RNA synthesis and growth factor signalling pathways, such as mTOR, and therefore inhibits theproliferation of cancer cells.69 Until cordycepin is converted to its phosphorylated form, it is subject to breakdown by adenosine deaminase, or ADA. Because of this potential forbreakdown of cordycepin by ADA, cordycepin must be administered together with inhibitors of ADA. Given the critical role of ADA in multiple humanmetabolic pathways, we believe the need to inhibit ADA when administering cordycepin represents a significant obstacle to the clinical development ofcordycepin. Therefore, we designed NUC-7738 to generate 3’ dATP inside cancer cells while avoiding breakdown by ADA and the requirement for AK.Our Solution: NUC-7738As a ProTide of cordycepin, NUC-7738, once inside the cancer cell, is rapidly converted into 3’ dATP. There is no need for AK to act on it, a processthat has been shown to be rate-limiting. There is also no breakdown by ADA. This results in significantly higher levels of 3’ dATP in cells. We have observedin our preclinical studies that NUC-7738 enters into cancer cells independent of any nucleoside transporters and is converted to 3’ dATP regardless of ADAor AK levels.The metabolism of NUC-7738 compared to cordycepin as described above is illustrated in the following graphic. We are targeting NUC-7738 for development in both solid and hematological tumors based on the broad activity seen with cordycepin in preclinicalstudies. We are currently evaluating NUC-7738 in preclinical toxicology studies and we expect to initiate a Phase 1 clinical trial in 2018 in patients withsolid tumors, with a second Phase 1 clinical trial planned for 2019 in patients with hematological tumors.Molecular ProfilingHealthcare professionals often use molecular-profiling tools to help choose the optimal therapy for patients with cancer. Therapeutic responses varyamong patients because cancers are heterogeneous, even for tumors arising from the same site in the body. Molecular diagnostics assays that detect specificbiomarkers can provide a framework to classify tumors according to their molecular signature. In turn, the cancer profile can guide the choice of therapy for aparticular patient.70 As part of our clinical development strategy, we are building a molecular profiling tool with the aim of identifying patients who may receive thegreatest benefit from our ProTides compared with the current nucleoside analog standards of care. We are working to identify and quantify key biomarkersrelevant to Acelarin and NUC-3373, as well as to assess their predictive nature with regard to treatment. In addition, such assays may become relevant to oureventual commercial and reimbursement strategy by helping to pre-identify those patients for whom existing nucleoside analogs are unlikely to provide asignificant benefit due to the existence in these patients of one or more cancer-resistance mechanisms.ManufacturingWe currently rely, and expect to continue to rely, on third-party contract manufacturing organizations, or CMOs, for the supply of clinical trialmaterials of Acelarin, NUC-3373, NUC-7738 and any future product candidates under the current good manufacturing practices, or cGMP, specified by theFDA. cGMP is a regulatory standard for the production of pharmaceuticals to be used in humans. In the future, we intend to also rely on our CMOs to producesufficient commercial quantities of Acelarin, NUC-3373, NUC-7738 and any future product candidates, if approved. We source key materials from thirdparties, either directly from suppliers or indirectly through our CMOs. These raw materials are generally available from multiple vendors, which provides uswith a robust and cost-effective supply chain.Manufacturing of any product candidate is subject to extensive regulations that impose various procedural and documentation requirementsgoverning recordkeeping, manufacturing processes and controls, personnel, quality control and quality assurance, among others. We expect that all of ourCMOs will manufacture Acelarin, NUC-3373 and NUC-7738 under cGMP conditions and in compliance with any similar regulatory requirements outside theUnited States.CompetitionThe development and commercialization of new drug therapies is highly competitive. While we believe that our scientific knowledge, proprietaryProTide technology and development experience provide us with competitive advantages, we face potential competition from many different sources,including major pharmaceutical, biotechnology and specialty pharmaceutical companies, academic institutions, governmental agencies and public andprivate research institutions. Any ProTide candidates that we successfully develop and commercialize will compete with existing products and new productsthat may become available in the future. Key product features that would affect our ability to effectively compete with other therapeutics include efficacy,safety profile, price, convenience of administration and level of promotional activity.The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy,immunotherapy and targeted drug therapy. There are a variety of available drug therapies marketed for cancer, including many which are administered incombination to enhance efficacy. We believe that our product candidates, if approved, will principally face competition from other chemotherapies,immunotherapy and targeted drug therapies. In the field of chemotherapy, our competitors include companies that manufacture off-patent chemotherapies,including gemcitabine and 5-FU, as well as companies that have developed new or improved chemotherapies.In addition, our product candidates, if approved, may face competition from cancer therapies developed by other companies using phosphoramidatechemistry, as well as other approved drugs or drugs that may be approved in the future for indications for which we may develop our product candidates.The availability of reimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of ourproducts. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, whichcould result in our competitors establishing a strong market position before we are able to enter the market. Many of the companies against which we maycompete have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinicaltrials, obtaining regulatory approvals and marketing approved products than we do. Smaller or early-stage companies may also prove to be significantcompetitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting andretaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiringtechnologies complementary to, or necessary for, our programs.71 Intellectual PropertyWe actively seek to protect the intellectual property and proprietary technology that we believe is important to our business, including seeking,maintaining, enforcing and defending patent rights for our therapeutics and processes, whether developed internally or licensed from third parties. Oursuccess will depend on our ability to obtain and maintain patent and other protection including data/market exclusivity for our product candidates andplatform technology, preserve the confidentiality of our know-how and operate without infringing the valid and enforceable patents and proprietary rights ofthird parties. See “Risk Factors — Risks Related to Our Intellectual Property.”Our policy is to seek to protect our proprietary position, generally by filing an initial priority filing at the U.K. Intellectual Property Office. This isfollowed by the filing of a patent application under the Patent Co-operation Treaty claiming priority from the initial application(s) and then filingapplications for patent grant in territories including, for example, the United States, Europe and Japan. In each case, we determine the strategy and territoriesrequired after discussion with our patent attorneys so that we obtain relevant coverage in territories that are commercially important to us and our productcandidates. We additionally rely on data exclusivity, market exclusivity and patent term extensions when available. We also rely on trade secrets and know-how relating to our underlying platform technology and product candidates. Prior to making any decision on filing any patent application, we consider withour patent attorneys whether patent protection is the most sensible strategy for protecting the invention concerned or whether the invention should bemaintained as confidential.As of January 26, 2018, we owned 222 granted patents (of which six are U.S.-issued patents) and 159 pending patent applications (of which eight areU.S. pending patent applications). Commercially or strategically important non-U.S. jurisdictions in which we hold issued or pending patent applicationsinclude: Australia, Canada, China, Eurasia (in the form of a regional patent), Europe (in the form of a regional patent), Hong Kong, India, Israel, Japan, SouthKorea, Malaysia, Mexico, Philippines, Singapore and South Africa. Not included in the patent count is one U.S. patent that is currently in reissue proceedingswhich were initiated by us for purposes of narrowing the claims covered by such patent.AcelarinWe own 33 granted patents covering the composition of matter of our Acelarin product candidate which is a mixture of two diastereoisomers, both ofwhich are therapeutically active. The patent claims are directed to the Acelarin product candidate and to a genus around that candidate. The patent has beengranted in major territories, including Europe and Japan. These granted patents are expected to expire in 2024, excluding any patent term adjustments andany patent term extensions. As disclosed above, there is also one patent in the United States for Acelarin that is currently under reissue.We own 41 granted patents, as well as 40 pending patent applications, directed towards Acelarin in single diastereoisomer form. A patent claiming themore soluble single diastereoisomer of Acelarin has been granted in Europe and corresponding patent applications are pending in other major territories,including the United States and Japan. These granted patents and patents arising from the pending applications, if issued, are expected to expire in 2033 and2035, excluding any patent term adjustments and any patent term extensions.We own granted patents and patent applications covering formulations of Acelarin (including those used in the clinical trials), methods of makingAcelarin (including as a single diastereoisomer), and specific uses of Acelarin, including the use of Acelarin in combination with carboplatin. Patents arisingfrom these pending applications have been filed in all major territories, including the United States, Europe and Japan and are expected to expire in 2035,2036 and 2038 excluding any patent term adjustments and any patent term extensions.NUC-3373We own 54 granted patents and 9 pending applications covering the composition of matter of NUC-3373, a genus around NUC-3373 and specificuses of NUC-3373. Those patents were granted in major territories, including the United States, Europe and Japan. These granted patents and patents arisingfrom the pending applications, if issued, are expected to expire in 2032, excluding any patent term adjustments and any patent term extensions.We own patent applications covering formulations of NUC-3373 (including those used in the clinical trials), methods of making NUC-3373, andspecific uses of NUC-3373. These patents and patents arising from these pending applications are expected to expire in 2036, 2037 and 2038 excluding anypatent term adjustments and any patent term extensions.72 NUC-7738We own 20 pending applications covering the composition of matter of NUC-7738, a genus around NUC-7738 and specific uses of NUC-7738. Thepatent applications are pending in major territories, including the United States, Europe and Japan. Patents arising from these pending applications, if issued,are expected to expire in 2035 excluding any patent term adjustments and any patent term extensions.Laws and Regulations Regarding Patent TermsThe term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which wefile, the patent term is 20 years from the earliest date of filing a non-provisional patent application. In the United States, a patent term may be shortened if apatent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee. A patent’s term may be lengthened by apatent term adjustment, which compensates a patentee for administrative delays by the USPTO in granting a patent. The patent term of a European patent is20 years from its effective filing date, which, unlike in the United States, is not subject to patent term adjustments in the same way as U.S. patents.The term of a patent that covers an FDA-approved drug or biologic may also be eligible for patent term extension, which permits patent termrestoration as compensation for the patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent Term Restoration Actof 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent termextension is related to the length of time the drug or biologic is under regulatory review. Patent extension cannot extend the remaining term of a patentbeyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended. Similar provisions areavailable in Europe and other jurisdictions to extend the term of a patent that covers an approved drug, for example Supplementary Protection Certificates. Inthe future, if and when our products receive FDA approval, we expect to apply for patent term extensions on patents covering those products. We anticipatethat some of our issued patents may be eligible for patent term extensions but such extensions may not be available and therefore our commercial monopolymay be restricted.Collaboration and License AgreementsCardiff University LicenseIn August 2009, we entered into a research, collaboration and license agreement with Cardiff University and University College Cardiff ConsultantsLtd., or Cardiff Consultants, which we refer to as the Cardiff Agreement. The Cardiff Agreement was renewed with an effective date of January 1, 2018 for anadditional two years on substantially the same terms. Under the Cardiff Agreement, we collaborate with Cardiff University in the design, synthesis,characterization and evaluation of phosphoramidate prodrugs, which we refer to as ProTides, based on certain nucleosides. We are responsible for fundingcertain work performed by Cardiff University and making other payments, which we expect will total £292,607 in aggregate in each of 2018 and 2019.Cardiff University and Cardiff Consultants, which is a holder of intellectual property developed by Cardiff University, have assigned to us all rights in theresults of the research under the Cardiff Agreement, and agreed not to undertake any research for any competing third party on nucleoside families of interestto us where such research would make use of ProTide-related intellectual property owned or controlled by Cardiff University as of the date of the CardiffAgreement or which at any time thereafter becomes owned or controlled by Cardiff University, which we refer to as the Cardiff intellectual property, or togrant rights in the Cardiff intellectual property to any third party for use in connection with nucleosides of interest to us. The foregoing restrictions excludethe field of neurodegeneration for one specific nucleoside analog.Upon our completion of the evaluation of the ProTides, we have the right to select one or more of the evaluated ProTides as candidates for potentialdevelopment of a commercial product. Cardiff University and Cardiff Consultants have granted us an exclusive worldwide license to use for all purposes theCardiff intellectual property in respect of the nucleoside family of our selected ProTides. The exclusive dealing obligations of Cardiff University and CardiffConsultants will continue for these nucleoside families.On our filing, or that of a sublicensee, of patent applications resulting from research under the Cardiff Agreement, we will owe Cardiff Consultantscertain immaterial payments. If we or our sublicensees develop and commercialize a product resulting from such research, we will owe Cardiff Consultantsclinical development milestone payments of up to £1,875,000; provided that such milestone payments are due only with respect to the first product withineach nucleoside family to achieve the milestone. We will also owe Cardiff Consultants royalties equal to a low-single digit percentage on our sales of aproduct resulting from such research. Should we sublicense our right to commercialize a product resulting from the research, we will owe Cardiff Consultantsa high-single digit percentage of payments received in consideration of the sublicense.73 The Cardiff Agreement currently expires on December 31, 2019. Upon expiration, we have the right to extend the period in which we may evaluateproducts for three months, and for a further three months in exchange for an additional payment. The Cardiff Agreement may also be terminated for anuncured material breach. Licenses to use the Cardiff intellectual property in the development and commercialization of products we have selected forcommercialization, and related payment obligations, will survive expiration of the Cardiff Agreement, but not on termination for an uncured material breach.Cardiff ProTides AgreementIn October 2009, we entered into a license and collaboration agreement with Cardiff ProTides Ltd., or Cardiff ProTides, which agreement wassubsequently amended and restated as an assignment, license and collaboration agreement in March 2012 and was further amended in May 2012, which werefer to as the ProTides Agreement. Under the ProTides Agreement, we collaborated with Cardiff ProTides in the discovery, drug design and in vitro screeningof purine and pyrimidine based nucleosides as potential drug candidates. We funded certain work at Cardiff ProTides, and Cardiff ProTides has assigned to usall rights in the results of its research under the ProTides Agreement. Cardiff ProTides also assigned to us patents related to certain compounds of interest,including with respect to Acelarin, and granted us an exclusive, worldwide license, including the right to grant sublicenses, to rights in and technicalinformation related to certain unpatented compounds for all therapeutic, diagnostic, prognostic and prophylactic applications.If we or a sublicensee develop one or more products covered by a valid claim of an assigned patent or patent resulting from Cardiff ProTides’ research,such as Acelarin, we will owe Cardiff ProTides up to approximately $4.5 million in development and approval milestone payments in the aggregate for thefirst such product. Additional development and approval milestones would be payable for the first additional product in a new nucleoside series covered by avalid claim of an assigned patent or a patent resulting from Cardiff ProTides’ research, although the maximum potential value of such milestone payments isapproximately half the value of the milestone payments associated with the first product. We will also owe Cardiff ProTides royalties equal to a percentage inmid- to high-single digits on sales of such products, subject to reduction under certain circumstances. Royalties on sales by sublicensees are set by formula,which formula would be likely to result in a royalty in the mid-single digits.The ProTides Agreement expires, on a country by country basis, on the later of the expiration, invalidity, abandonment, lapsing or rejection of the lastvalid claim of an assigned patent or patent resulting from Cardiff ProTides’ research, or, if certain technical information licensed from Cardiff ProTidesremains confidential or the product is covered by a period of data exclusivity, ten years from the date of first commercial sale of a product in such country.The ProTides Agreement may be sooner terminated on an uncured material breach, bankruptcy of a party or, by Cardiff ProTides, if we challenge, or assist in achallenge, of the validity or ownership of an assigned patent or patent resulting from Cardiff ProTides’ research, or fail to pay amounts payable under theProTides Agreement. It may also be sooner terminated where sums payable by us remain unpaid for 45 days after we receive a notice from Cardiff ProTidesthat the relevant sums are overdue. Upon a termination of the ProTides Agreement, our license rights will terminate except where the breach results fromcertain breaches by Cardiff ProTides, in which case our license rights continue on a non-exclusive basis, subject to reduced payment obligations. Upontermination of the ProTides Agreement, including as a result of our breach, we will be under an obligation to assign back to Cardiff ProTides the patentswhich Cardiff ProTides originally assigned to us.Government Regulation and Product ApprovalFDA Approval ProcessIn the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, or the FDCAct, and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping,approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceuticalproducts. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusalto approve pending new drug applications, or NDAs, warning letters, voluntary product recalls, product seizures, total or partial suspension of production ordistribution, injunctions, fines, civil penalties and criminal prosecution.Pharmaceutical product development in the United States typically involves the performance of nonclinical laboratory and animal tests, thesubmission to the FDA of an IND which must become effective before clinical testing may commence, and adequate, well-controlled clinical trials toestablish the safety and effectiveness of the drug for each indication for which FDA approval is sought. Satisfaction of FDA pre-market approval requirementstypically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.74 Preclinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal studies to assess the characteristicsand potential safety and efficacy of the product. The conduct of the preclinical and other nonclinical tests must comply with certain federal regulations andrequirements, including good laboratory practices. The results of preclinical testing are submitted to the FDA as part of an IND along with other information,including information about product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long term nonclinical tests, such asanimal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted.A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neithercommented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin.Clinical trials involve the administration of the investigational new drug to healthy volunteers or patients under the supervision of a qualifiedinvestigator. Clinical trials must be conducted: (i) in compliance with federal regulations, (ii) in compliance with good clinical practice, or GCP, aninternational standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors, and(iii) under protocols detailing the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.Each protocol and subsequent protocol amendments must be submitted to the FDA as part of the IND.The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time or impose other sanctions if it believes that the clinicaltrial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. The clinical trialprotocol and informed consent information for patients in clinical trials must also be submitted to an institutional review board, or IRB, at each site where aclinical trial will be performed for approval. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure tocomply with the IRB’s requirements or it may impose other conditions.Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, theinitial introduction of the drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions,side effects associated with increasing doses, and, if possible, early evidence on effectiveness. Phase 2 usually involves clinical trials in a limited patientpopulation to determine the effectiveness of the drug for a particular indication, dosage tolerance, and optimum dosage, and to identify common adverseeffects and safety risks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 clinical trialsare undertaken to obtain the additional information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersedclinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of thedrug. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. A single Phase 3clinical trial with other confirmatory evidence may be sufficient in rare instances where the clinical trial is a large multicenter trial demonstrating internalconsistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity, or prevention of a disease withpotentially serious outcome, and confirmation of the result in a second clinical trial would be practically or ethically impossible.After completion of the required clinical testing, a new drug application, or NDA, is prepared and submitted to the FDA. FDA approval of the NDA isrequired before marketing of the product may begin in the United States. The NDA must include the results of all nonclinical, clinical, and other testing and acompilation of data relating to the product’s pharmacology, chemistry, manufacture, and controls. The cost of preparing and submitting an NDA issubstantial. Under federal law, the submission of most NDAs is additionally subject to a substantial application user fee and the manufacturer or sponsorunder an approved NDA is also subject to annual product and establishment user fees. These fees are typically increased annually.The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s thresholddetermination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. TheFDA has agreed to certain performance goals in the review of NDAs. Most such applications for standard review drug products are reviewed within ten totwelve months, while most applications for priority review drugs are reviewed in six to eight months. Priority review can be applied to drugs that the FDAdetermines offer major advances in treatment, or provide a treatment where no adequate therapy exists. For biologics, priority review is further limited onlyfor drugs intended to treat a serious or life-threatening disease relative to the currently approved products. The review process for both standard and priorityreview may be extended by FDA for three additional months to consider certain late-submitted information, or information intended to clarify informationalready provided in the submission.75 The FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to an advisorycommittee, which is typically a panel that includes clinicians and other experts, for review, evaluation, and a recommendation as to whether the applicationshould be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Beforeapproving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility orthe facilities at which the drug is manufactured. The FDA will not approve the product unless compliance with current good manufacturing practicerequirements, or cGMP, is satisfactory and the NDA contains data that provide substantial evidence that the drug is safe and effective in the indicationstudied.After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A completeresponse letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information, in order for the FDA toreconsider the application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue anapproval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included.An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of NDAapproval, the FDA may require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug outweigh the potential risks.REMS can include medication guides, communication plans for health care professionals, and elements to assure safe and effective use, or ETASU. ETASUcan include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, specialmonitoring, and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability of the drug. Moreover,product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. Once granted, product approvalsmay be withdrawn if compliance with regulatory requirements is not maintained or problems are identified following initial marketing or any time thereafter.Disclosure of Clinical Trial InformationSponsors of clinical trials of certain FDA-regulated products, including prescription drugs, are required to register and disclose certain clinical trialinformation on a public website maintained by the U.S. National Institutes of Health. Information related to the product, patient population, phase ofinvestigation, clinical trial sites and investigator, and other aspects of the clinical trial is made public as part of the registration. Sponsors are also obligatedto disclose the results of these clinical trials after completion if the product candidate is ultimately approved, and disclosure of the results of these clinicaltrials will be delayed until such approval. Competitors may use this publicly-available information to gain knowledge regarding the design and progress ofour development programs.The Hatch-Waxman ActOrange Book Listing. In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent whose claims cover theapplicant’s product. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved DrugProducts with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited bypotential generic competitors in support of approval of an abbreviated new drug application, or ANDA. An ANDA provides for marketing of a drug productthat has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to betherapeutically equivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or submitresults of, nonclinical or clinical tests to prove the safety or effectiveness of their drug product. Drugs approved in this way are commonly referred to as“generic equivalents” to the listed drug, and can often be substituted by pharmacists under prescriptions written for the original listed drug.The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book. Specifically,the applicant must certify that: (i) the required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has not expired,but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the newproduct. The ANDA applicant may also elect to submit a section viii statement, certifying that its proposed ANDA label does not contain or carve out anylanguage regarding the patented method-of-use, rather than certify to a listed method-of-use patent.76 If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referencedproduct have expired. A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, iscalled a Paragraph IV certification. If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of theParagraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may theninitiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days ofthe receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent,settlement of the lawsuit, or a decision in the infringement case that is favorable to the ANDA applicant.The ANDA application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the referenced product hasexpired.Exclusivity. Upon NDA approval of a new chemical entity, or NCE, which is a drug that contains no active moiety that has been approved by the FDAin any other NDA, that drug receives five years of marketing exclusivity during which time the FDA cannot receive any ANDA seeking approval of a genericversion of that drug. Certain changes to a drug, such as the addition of a new indication to the package insert, are associated with a three-year period ofexclusivity during which the FDA cannot approval an ANDA for a generic drug that includes the change.An ANDA may be submitted one year before NCE exclusivity expires if a Paragraph IV certification is filed. If there is no listed patent in the OrangeBook, there may not be a Paragraph IV certification, and, thus, no ANDA may be filed before the expiration of the exclusivity period.Patent Term Extension. After NDA approval, owners of relevant drug patents may apply for up to a five-year patent term extension. The allowablepatent term extension is calculated as half of the drug’s testing phase—the time between IND submission and NDA submission—and all of the review phase—the time between NDA submission and approval up to a maximum of five years. The time can be shortened if FDA determines that the applicant did notpursue approval with due diligence. The total patent term after the extension may not exceed 14 years.For patents that might expire during the application phase, the patent owner may request an interim patent extension. An interim patent extensionincreases the patent term by one year and may be renewed up to four times. For each interim patent extension granted, the post-approval patent extension isreduced by one year. The director of the PTO must determine that approval of the drug covered by the patent for which a patent extension is being sought islikely. Interim patent extensions are not available for a drug for which an NDA has not been submitted.Advertising and PromotionOnce an NDA is approved, a product will be subject to certain post-approval requirements. For instance, FDA closely regulates the post-approvalmarketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientificand educational activities and promotional activities involving the internet. Drugs may be marketed only for the approved indications and in accordancewith the provisions of the approved labeling. Changes to some of the conditions established in an approved application, including changes in indications,labeling, or certain manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can beimplemented. An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the sameprocedures and actions in reviewing NDA supplements as it does in reviewing NDAs.Adverse Event Reporting and cGMP ComplianceAdverse event reporting and submission of periodic reports is required following FDA approval of an NDA. The FDA also may require post-marketingtesting, sometimes called Phase 4 testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions on anapproval that could restrict the distribution or use of the product. In addition, quality-control, drug manufacture, packaging, and labeling procedures, amongother things, must continue to conform to cGMP after approval. Drug manufacturers and certain of their subcontractors are required to register theirestablishments with FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, duringwhich the agency inspects manufacturing facilities to assess compliance with cGMP. Accordingly, manufacturers must continue to expend time, money andeffort in the areas of production, quality control and record keeping to maintain compliance with cGMP. Regulatory authorities may impose a range ofenforcement actions, including bringing a seizure and injunction in court, withdraw product approvals or request a product recall if a company fails tocomply with cGMP requirements.77 Pediatric InformationUnder the Pediatric Research Equity Act, or PREA, NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drugfor the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which thedrug is safe and effective. The sponsor must submit an initial Pediatric Study Plan, or PSP, within 60 days of an end-of-Phase 2 meeting or as may be agreedbetween the sponsor and the FDA. The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including studyobjectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any requestfor a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.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 thepediatric plan need to be considered based on data collected from nonclinical studies, early phase clinical trials or other clinical development programs. TheFDA may grant full or partial waivers, or deferrals, for submission of data.The Best Pharmaceuticals for Children Act, or BPCA, provides NDA holders a six-month extension of any exclusivity—patent or non-patent—for adrug if certain conditions are met, including satisfaction of a pediatric trial as described above. Conditions for exclusivity include the FDA’s determinationthat information relating to the use of a new drug in the pediatric population may produce health benefits in that population, the FDA making a writtenrequest for pediatric clinical trials, and the applicant agreeing to perform, and reporting on, the requested clinical trials within the statutory timeframe.Applications under the BPCA are treated as priority applications, with all of the benefits that designation confers.Special Protocol AssessmentA company may reach an agreement with FDA under the Special Protocol Assessment, or SPA, process as to the required design and size of clinicaltrials intended to form the primary basis of an efficacy claim. Under the FDC Act and FDA guidance implementing the statutory requirement, an SPA isgenerally binding upon the FDA except in limited circumstances, such as if the FDA identifies a substantial scientific issue essential to determining safety orefficacy after the clinical trial begins, public health concerns emerge that were unrecognized at the time of the protocol assessment, the sponsor and FDAagree to the change in writing, or if the clinical trial sponsor fails to follow the protocol that was agreed upon with the FDA.Expedited Review and ApprovalThe FDA has various programs, including Fast Track, priority review, accelerated approval and breakthrough designation which are intended toexpedite or simplify the process for reviewing drugs or provide for approval on the basis of surrogate endpoints. Even if a drug qualifies for one or more ofthese programs, the FDA may later decide that the drug no longer meets the conditions for qualification or that the time period for FDA review or approvalwill not be shortened. Generally, drugs that may be eligible for these programs are those for serious or life-threatening conditions, those with the potential toaddress unmet medical needs, or those that offer meaningful benefits over existing treatments. For example, Fast Track is a process designed to facilitate thedevelopment, and expedite the review, of drugs to treat serious diseases and fill an unmet medical need. The request may be made at the time of INDsubmission and generally no later than the pre-NDA meeting. The FDA will respond within 60 calendar days of receipt of the request. Priority review, whichis requested at the time of NDA submission, is designed to give drugs that offer major advances in treatment or provide a treatment where no adequate therapyexists an initial review within six months as compared to a standard review time of ten months. Although Fast Track and priority review do not affect thestandards for approval, the FDA will attempt to facilitate early and frequent meetings with a sponsor of a Fast Track designated drug and expedite review ofthe application for a drug designated for priority review. Accelerated approval provides an earlier approval of drugs to treat serious diseases, and that fill anunmet medical need based on a surrogate endpoint, which is a laboratory measurement or physical sign used as an indirect or substitute measurementrepresenting a clinically meaningful outcome. Discussions with the FDA about the feasibility of an accelerated approval typically begin early in thedevelopment of the drug in order to identify, among other things, an appropriate endpoint. As a condition of approval, the FDA may require that a sponsor ofa drug receiving accelerated approval perform post-marketing clinical trials to confirm the appropriateness of the surrogate marker clinical trial.78 Another expedited program is that for Breakthrough Therapy. A Breakthrough Therapy designation is designed to expedite the development andreview of drugs that are intended to treat a serious condition where preliminary clinical evidence indicates that the drug may demonstrate substantialimprovement over available therapy on a clinically significant endpoint(s). A sponsor may request Breakthrough Therapy designation at the time that theIND is submitted, or no later than at the end-of-Phase 2 meeting. The FDA will respond to a Breakthrough Therapy designation request within 60 days ofreceipt of the request. A drug that receives Breakthrough Therapy designation is eligible for all fast track designation features, intensive guidance on anefficient drug development program, beginning as early as Phase 1 and commitment from the FDA involving senior managers.Regulation of Companion Diagnostic DevicesIf we decide that a diagnostic test would provide useful information for patient selection or if the FDA requires us to develop such a test, we may workwith a collaborator to develop an in vitro diagnostic, or companion test. The FDA regulates in vitro diagnostic tests as medical devices, and the type ofregulation to which such a test will be subjected will depend in part on a risk assessment by the FDA as well as a determination of whether the test is intendedto yield results that would be helpful to know versus one that the FDA or we believe is necessary to know for the safe and effective use of our drugs underdevelopment.The FDA issued Guidance on In-Vitro Companion Diagnostic Devices in August 2014, which is intended to assist companies developing in vitrocompanion diagnostic devices and companies developing therapeutic products that depend on the use of a specific in vitro companion diagnostic for thesafe and effective use of the product. The FDA defined an in vitro companion diagnostic device, or IVD companion diagnostic device, as a device thatprovides information that is essential for the safe and effective use of a corresponding therapeutic product. The use of an IVD companion diagnostic devicewith a therapeutic product will be stipulated in the instructions for use in the labeling of both the diagnostic device and the corresponding therapeuticproduct, including the labeling of any generic equivalents of the therapeutic product. The FDA expects that the therapeutic sponsor will address the need foran approved or cleared IVD companion diagnostic device in its therapeutic product development plan and that, in most cases, the therapeutic product and itscorresponding companion diagnostic will be developed contemporaneously.The FDA has recently introduced the concept of complementary diagnostics that are distinct from companion diagnostics because they provideadditional information about how a drug is used or identify patients who are likely to derive the greatest benefit from therapy without being required for thesafe and effective use of that drug. The FDA has not yet provided much guidance on the regulation and use of complementary diagnostics, but several havebeen approved.Europe/Rest of World Government RegulationIn addition to regulations in the United States, we are and will be subject, either directly or through our distribution partners, to a variety ofregulations in other jurisdictions governing, among other things, clinical trials and commercial sales and distribution of our products, if approved.Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in non-U.S. countries priorto the commencement of clinical trials or marketing of the product in those countries. Certain countries outside of the United States have a process thatrequires the submission of a clinical trial application much like an IND prior to the commencement of human clinical trials. In Europe, for example, a clinicaltrial authorization, or CTA, must be submitted to the competent national health authority and to independent ethics committees in each country in which acompany plans to conduct clinical trials. Once the CTA is approved in accordance with a country’s requirements, clinical trials may proceed in that country.The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country,even though there is already some degree of legal harmonization in the E.U. member states resulting from the national implementation of underlying E.U.legislation. In all cases, the clinical trials are conducted in accordance with GCP and other applicable regulatory requirements.To obtain regulatory approval of a new drug, or medicinal product, in the European Union a sponsor must obtain approval of a marketingauthorization application, or MAA. The way in which a medicinal product can be approved in the European Union depends on the nature of the medicinalproduct.79 The centralized procedure results in a single MAA granted by the European Commission that is valid across the European Union, as well as inIceland, Liechtenstein and Norway. The centralized procedure is compulsory for human drugs that are: (i) derived from biotechnology processes, such asgenetic engineering, (ii) contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerativediseases, autoimmune and other immune dysfunctions and viral diseases, (iii) officially designated “orphan drugs” (drugs used for rare human diseases) and(iv) advanced-therapy medicines, such as gene-therapy, somatic cell-therapy or tissue-engineered medicines. The centralized procedure may at the request ofthe applicant also be used for human drugs which do not fall within the above mentioned categories if the human drug (a) contains a new active substancewhich, on the date of entry into force of this Regulation, was not authorized in the Community; or (b) the applicant shows that the medicinal productconstitutes a significant therapeutic, scientific or technical innovation or that the granting of authorization in the centralized procedure is in the interests ofpatients or animal health at European Community level.Under the centralized procedure in the European Union, the maximum timeframe for the evaluation of a MAA by the EMA is 210 days (excludingclock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the Committee for MedicinalProducts for Human Use, or CHMP), with adoption of the actual marketing authorization by the European Commission thereafter. Accelerated evaluationmight be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest from the point of view oftherapeutic innovation, defined by three cumulative criteria: the seriousness of the disease to be treated; the absence of an appropriate alternative therapeuticapproach, and anticipation of exceptional high therapeutic benefit. In this circumstance, EMA ensures that the evaluation for the opinion of the CHMP iscompleted within 150 days and the opinion issued thereafter.The mutual recognition procedure, or MRP, for the approval of human drugs is an alternative approach to facilitate individual national marketingauthorizations within the European Union. Basically, the MRP may be applied for all human drugs for which the centralized procedure is not obligatory. TheMRP is applicable to the majority of conventional medicinal products, and is based on the principle of recognition of an already existing national marketingauthorization by one or more member states.The characteristic of the MRP is that the procedure builds on an already existing marketing authorization in a member state of the European Unionthat is used as reference in order to obtain marketing authorizations in other E.U. member states. In the MRP, a marketing authorization for a drug alreadyexists in one or more E.U. member states and subsequently marketing authorization applications are made in other E.U. member states by referring to theinitial marketing authorization. The member state in which the marketing authorization was first granted will then act as the reference member state. Themember states where the marketing authorization is subsequently applied for act as concerned member states.The MRP is based on the principle of the mutual recognition by E.U. member states of their respective national marketing authorizations. Based on amarketing authorization in the reference member state, the applicant may apply for marketing authorizations in other member states. In such case, thereference member state shall update its existing assessment report about the drug in 90 days. After the assessment is completed, copies of the report are sent toall member states, together with the approved summary of product characteristics, labeling and package leaflet. The concerned member states then have 90days to recognize the decision of the reference member state and the summary of product characteristics, labeling and package leaflet. National marketingauthorizations shall be granted within 30 days after acknowledgement of the agreement.Should any Member State refuse to recognize the marketing authorization by the reference member state, on the grounds of potential serious risk topublic health, the issue will be referred to a coordination group. Within a timeframe of 60 days, member states shall, within the coordination group, make allefforts to reach a consensus. If this fails, the procedure is submitted to an EMA scientific committee for arbitration. The opinion of this EMA Committee isthen forwarded to the Commission, for the start of the decision making process. As in the centralized procedure, this process entails consulting variousEuropean Commission Directorates General and the Standing Committee on Human Medicinal Products or Veterinary Medicinal Products, as appropriate.For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing theconduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, again, the clinical trials are conducted inaccordance with GCP and the other applicable regulatory requirements.80 If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials,suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.Healthcare ReformWe expect that there will continue to be a number of federal and state proposals to implement governmental pricing controls and limit the growth ofhealthcare costs, including the cost of prescription drugs. For example, the Patient Protection and Affordable Care Act, as amended by the Health Care andEducation Affordability Reconciliation Act of 2010 (collectively, ACA) enacted in March 2010, was expected to have a significant impact on the health careindustry and result in expanded coverage for the uninsured. With regard to pharmaceutical products, among other things, ACA was expected to expand andincrease industry rebates for drugs covered under Medicaid programs and make changes to the coverage requirements under the Medicare Part D program. Wecannot predict the impact of ACA on pharmaceutical companies as many of the ACA reforms require the promulgation of detailed regulations implementingthe statutory provisions which has not yet occurred. In addition, both Congress and the President have expressed their intention to repeal the ACA and as aresult certain sections of the ACA have not been fully implemented or were effectively repealed. These actions add to the uncertainty of the changes enactedas part of ACA, and we continue to evaluate how the ACA and recent efforts to repeal and replace or limit the implementation of the ACA will impact ourbusiness.In addition, other federal health reform measures have been proposed and adopted in the United States since the ACA was enacted. For example, as aresult of the Budget Control Act of 2011, providers are subject to Medicare payment reductions of 2% per fiscal year through 2025 unless additionalCongressional action is taken. Further, the American Taxpayer Relief Act of 2012 reduced Medicare payments to several providers and increased the statuteof limitations period for the government to recover overpayments from providers from three to five years. Further, there has been heightened governmentalscrutiny over the manner in which manufacturers set prices for their marketed products, which have resulted in several recent Congressional inquiries andproposed federal and state legislation designed to, among other things, bring more transparency to product pricing, contain the cost of drugs, review therelationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may developnew payment and delivery models, such as bundled payment models. The U.S. Department of Health and Human Services, or HHS, set a goal of moving 30%of Medicare payments to alternative payment models tied to the quality or value of services by 2016 and 50% of Medicare payments into these alternativepayment models by the end of 2018. In March 2017, HHS announced that it has achieved its goal for 2016. In addition, recently there has been heightenedgovernmental scrutiny over the manner in which manufacturers set prices for their marketed products. We expect that additional U.S. federal healthcarereform 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 andservices, which could result in reduced demand for our product candidates or additional pricing pressures.Individual states in the United States have also become increasingly aggressive in passing legislation and implementing regulations designed tocontrol pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product accessand marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.Legally mandated price controls on payment amounts by third-party payors or other restrictions could compromise our ability to profitably commercializeany of our product candidates, if approved. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures todetermine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce theultimate demand for our products or put pressure on our product pricing, which could negatively affect our business, results of operations, financial conditionand prospects.In the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize any of ourproduct candidates, if approved. In addition to continuing pressure on prices and cost containment measures, legislative developments at the EuropeanUnion or member state level may result in significant additional requirements or obstacles that may increase our operating costs. The delivery of healthcare inthe European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively amatter for national, rather than European Union, law and policy. National governments and health service providers have different priorities and approachesto the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in mostEU member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with increasingEuropean Union81 and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates,restrict or regulate post-approval activities and affect our ability to commercialize any products for which we obtain marketing approval. In internationalmarkets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific productsand therapies.Other Healthcare LawsPhysicians, other healthcare providers, and third-party payors will play a primary role in the recommendation and prescription of any productcandidates for which we obtain marketing approval. Although we currently do not have any products on the market, our current and future businessoperations are and will be subject to various U.S. federal and state and other foreign fraud and abuse laws and other healthcare laws and regulations. Theselaws and regulations may impact, among other things, our arrangements with third-party payors, healthcare professionals who participate in our clinicalresearch programs, healthcare professionals and others who purchase, recommend or prescribe our approved products, and our proposed sales, marketing,distribution, and education programs. The U.S. federal and state healthcare laws and regulations that may affect our ability to operate include: •the federal Anti-Kickback Statute, which prohibits persons from, among other things, knowingly and willfully soliciting, receiving, offering orpaying anything of value, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase,order or recommendation of, any good or service, for which payment may be made under federally funded healthcare programs, such asMedicare and Medicaid; •the federal civil and criminal false claims laws, including, without limitation, the federal civil monetary penalties law and the civil FalseClaims Act (which can be enforced by private citizens through qui tam actions), prohibit individuals or entities from, among other things,knowingly presenting, or causing to be presented, false or fraudulent claims for payment of federal funds, and knowingly making, or causingto be made, a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to thefederal government; •the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal liability for executing orattempting to execute a scheme to defraud any healthcare benefit program and creates federal criminal laws that prohibit knowingly andwillfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of orpayment for healthcare benefits, items or services; •HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and its implementingregulations, which imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security andtransmission of individually identifiable health information without the appropriate authorization by entities subject to the law, such ashealthcare providers, health plans, and healthcare clearinghouses and their respective business associates that perform certain functions oractivities that involve the use or disclosure of protected health information on their behalf; •the federal transparency requirements under the Physician Payments Sunshine Act, created under the ACA, which requires certainmanufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or CHIP to report to HHS informationrelated to payments and other transfers of value provided to physicians and teaching hospitals and physician ownership and investmentinterests; and •analogous state laws and regulations, such as state anti-kickback and false claims laws, that impose similar restrictions and may apply to itemsor services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companiesto implement compliance programs, comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant complianceguidance promulgated by the federal government, or to track and report gifts, compensation and other remuneration provided to physiciansand other health care providers; and state health information privacy and data breach notification laws, which govern the collection, use,disclosure, and protection of health-related and other personal information, many of which differ from each other in significant ways and oftenare not pre-empted by HIPAA, thus complicating compliance efforts.We will be required to spend substantial time and money to ensure that our business arrangements with third parties comply with applicablehealthcare laws and regulations. In the United States, healthcare reform legislation has strengthened these federal and state healthcare laws. For example, theACA amends the intent requirement of the federal Anti-Kickback Statute and criminal healthcare fraud statutes to clarify that liability under these statutesdoes not require a person or entity to have actual knowledge of the statutes or a specific intent to violate them. Moreover, the ACA provides that thegovernment82 may assert that a claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim forpurposes of the civil False Claims Act. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it ispossible that some of our business activities could be subject to challenge under one or more of such laws.Violations of these laws can subject us to criminal, civil and administrative sanctions including monetary penalties, damages, fines, disgorgement,individual imprisonment, and exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, additional reportingrequirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with theselaws, reputational harm, and we may be required to curtail or restructure our operations. Moreover, we expect that there will continue to be federal and statelaws and regulations, proposed and implemented, that could impact our future operations and business.Coverage and ReimbursementSignificant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval. Sales of anyof our product candidates, if approved, will depend, in part, on the extent to which the costs of the products will be covered by third-party payors, includinggovernment healthcare programs such as Medicare and Medicaid, and private payors, such as commercial health insurers and managed care organizations.Third-party payors determine which drugs they will cover and the amount of reimbursement they will provide for a covered drug. In the United States, there isno uniform system among payors for making coverage and reimbursement decisions. In addition, the process for determining whether a payor will providecoverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage isapproved. Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approvedproducts for a particular indication.In order to secure coverage and reimbursement for our products, if approved for sale, we may need to conduct expensive pharmacoeconomic studies inorder to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costly studies required to obtain FDA or other comparableregulatory approvals. Even if we conduct pharmacoeconomic studies, our product candidates may not be considered medically necessary or cost-effective bypayors. Further, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.The containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of drugs have been a focus in thiseffort. The U.S. government, state legislatures, and foreign governments have shown significant interest in implementing cost-containment programs to limitthe growth of government-paid healthcare costs, including price controls, restrictions on reimbursement, and requirements for substitution of genericproducts for branded prescription drugs. For example, in the United States, the ACA contains provisions that may reduce the profitability of products,including, for example, increased rebates for products sold to Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatorydiscounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. CMSmay develop new payment and delivery models, such as bundled payment models. For example, HHS set a goal of moving 30% of Medicare payments toalternative payment models tied to the quality or value of services by 2016 and 50% of Medicare payments into these alternative payment models by the endof 2018. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, couldlimit payments for our products.The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payorsfail to provide adequate coverage and reimbursement. The focus on cost containment measures in the United States has increased and we expect will continueto increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if we attainfavorable coverage and reimbursement status for one or more products for which we receive regulatory approval, less favorable coverage policies andreimbursement rates may be implemented in the future.Legal ProceedingsFrom time to time, we may be party to litigation that arises in the ordinary course of our business. We do not have any pending litigation that,separately or in the aggregate, would, in the opinion of management, have a material adverse effect on our results of operations, financial condition or cashflows.83 C.Organizational StructureThe following is a list of our significant subsidiaries: Name of undertaking Country ofregistration Activity Percentholding NuCana, Inc. United States Biotechnology Research and Development 100 NuCana BioMed Trustee Company Limited Scotland Employee Benefit Trust 100 D.Property, Plant and Equipment Type Location Size (sq ft) ExpiryExecutive office Edinburgh, United Kingdom 5,632 August 14, 2022Executive office Newton, MA, United States 312 December 31, 2018 All of our property is leased. We believe that our office facilities are sufficient to meet our current needs.Item 4A.Unresolved Staff CommentsThere are no written comments from the staff of the U.S. Securities and Exchange Commission which remain unresolved before the end of the fiscalyear to which the annual report relates. 84 Item 5.Operating and Financial Review and ProspectsYou should read the following discussion and analysis of financial condition and operating results together with the information in “SelectedConsolidated Financial Data” and our consolidated financial statements and the related notes to those statements included elsewhere in this Annual Report.We present our consolidated financial statements in pounds sterling and in accordance with International Financial Reporting Standards, or IFRS, as issuedby the International Accounting Standards Board, or IASB, which may differ in material respects from generally accepted accounting principles in otherjurisdictions, including generally accepted accounting principles in the United States, or U.S. GAAP.The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources andother non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, includingthe risks and uncertainties described in the section titled “Risk Factors.” Our actual results may differ materially from those contained in or implied by anyforward-looking statements.A.Operating ResultsFinancial Operations OverviewRevenuesWe do not have any approved products. Accordingly, we have not generated any revenue, and we do not expect to generate any revenue from the saleof any products unless and until we obtain regulatory approvals for, and commercialize any of, our product candidates. In the future, we will seek to generaterevenue primarily from product sales and, potentially, regional or global collaborations with strategic partners.Operating ExpensesWe classify our operating expenses into two categories: research and development expenses and administrative expenses. Personnel costs, includingsalaries, benefits, bonuses and share-based payment expense, comprise a significant component of each of these expense categories. We allocate expensesassociated with personnel costs based on the function performed by the respective employees.Research and Development Expenses. The largest component of our total operating expenses since inception has been costs related to our researchand development activities, including the preclinical and clinical development of our product candidates.Research and development costs are expensed as incurred. Our research and development expense primarily consists of: •costs incurred under agreements with contract research organizations, or CROs, and investigative sites that conduct preclinical studies andclinical trials; •costs related to manufacturing active pharmaceutical ingredients and drug products for preclinical studies and clinical trials; •salaries and personnel-related costs, including bonuses, benefits and any share-based payment expense, for our personnel performing researchand development activities or managing those activities that have been out-sourced; •fees paid to consultants and other third parties who support our product candidate development; •other costs incurred in seeking regulatory approval of our product candidates; •costs of related office space allocated to our research and development function, materials and equipment; and •payments under our license agreements.The successful development of our product candidates is highly uncertain. Product candidates in later stages of clinical development generally havehigher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.Accordingly, we expect research and development costs to increase significantly for the foreseeable future as programs progress. However, we do not believethat it is possible at this85 time to accurately project total program-specific expenses through commercialization. We are also unable to predict when, if ever, material net cash inflowswill commence from our product candidates to offset these expenses. Our expenditures on current and future preclinical and clinical development programsare subject to numerous uncertainties in timing and cost to completion.The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors including: •the scope, rate of progress, results and expenses of our ongoing and future clinical trials, preclinical studies and research and developmentactivities; •the potential need for additional clinical trials or preclinical studies requested by regulatory agencies; •potential uncertainties in clinical trial enrollment rates or drop-out or discontinuation rates of patients; •competition with other drug development companies in, and the related expense of, identifying and enrolling patients in our clinical trialsand contracting with third-party manufacturers for the production of the drug product needed for our clinical trials; •the achievement of milestones requiring payments under in-licensing agreements; •any significant changes in government regulation; •the terms and timing of any regulatory approvals; •the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights; and •the ability to market, commercialize and achieve market acceptance for any of our product candidates, if approved.We track research and development expenses on a program-by-program basis for both clinical-stage and preclinical product candidates.Manufacturing and nonclinical research and development expenses are assigned or allocated to individual product candidates.Administrative Expenses. Administrative expenses consist of personnel costs, allocated expenses and other expenses for outside professionalservices, including legal, audit and accounting services. Personnel costs consist of salaries, bonuses, benefits and share-based payment expense. Otheradministrative expenses include office space-related costs not otherwise allocated to research and development expense, professional fees and costs of ourinformation systems. We anticipate that our administrative expenses will continue to increase in the future as we increase our headcount to support ourcontinued research and development and potential commercialization of our product candidates. We also incur expenses as a public company, includingexpenses related to compliance with the rules and regulations of the SEC and Nasdaq, additional insurance expenses, and expenses related to investorrelations activities and other administrative and professional services.Initial Public Offering Related ExpensesInitial public offering, or IPO, related expenses primarily relates to legal, accounting and other advisors’ fees in relation to our completed IPO.Net Foreign Exchange (Losses) GainsNet foreign exchange (losses) gains primarily includes losses or gains on cash held in U.S. dollars and on advances paid to suppliers.Finance IncomeFinance income relates to interest earned on our cash, cash equivalents and short-term deposits.Income Tax CreditWe are subject to corporate taxation in the United Kingdom and our wholly owned U.S. subsidiary, NuCana, Inc., is subject to corporate taxation inthe United States. Due to the nature of our business, we have generated losses since inception in the United Kingdom. Our income tax credit recognizedrepresents the sum of the research and development tax credits86 recoverable in the United Kingdom and in the United States and income tax payable in the United States. We do not expect to be materially impacted by therecently enacted U.S. tax reforms.As a company that carries out extensive research and development activities, we benefit from the U.K. and U.S. research and development tax creditregimes. In the United Kingdom, we are able to surrender some of our losses for a cash rebate of up to 33.35% of expenditures related to eligible research anddevelopment projects. In the United States, we are able to offset the research and development credits against corporation tax payable. Qualifyingexpenditures largely comprise clinical trial and manufacturing costs, employment costs for relevant staff and consumables incurred as part of research anddevelopment projects. In the United Kingdom, where we receive the larger proportion of the research and development credit, certain subcontractedqualifying research and development expenditures are eligible for a cash rebate of up to 21.68%. A large portion of costs relating to our research anddevelopment, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims.We may not be able to continue to claim research and development tax credits in the United Kingdom in the future under the current research anddevelopment tax credit scheme because we may no longer qualify as a small or medium-sized company. However, we may be able to file under a largecompany scheme.Unsurrendered tax losses are carried forward to be offset against future taxable profits. After accounting for tax credits receivable, there wereaccumulated tax losses for carry forward in the United Kingdom of £12.4 million as of December 31, 2017. There were also temporary differences on share-based compensation arrangements of £28.3 million. No deferred tax asset is recognized in respect of accumulated tax losses or temporary differences onshare-based compensation arrangements because future profits are not sufficiently certain.In the event we generate revenues in the future, we may benefit from the new “patent box” initiative that allows profits attributable to revenues frompatents or patented products to be taxed at a lower rate than other revenue. The rate of tax for relevant streams of revenue for companies receiving this reliefwill be 10%.Value Added Tax, or VAT, is charged on all qualifying goods and services by VAT-registered businesses. An amount of 20% of goods and services isadded to all sales invoices and is payable to the U.K. tax authorities. Similarly, VAT paid on purchase invoices is reclaimable from the U.K. tax authorities.Results of OperationsComparison of Year Ended December 31, 2016 and 2017The following table summarizes the results of our operations for the years ended December 31, 2016 and 2017. Year ended December 31, 2016 2017 (in thousands) Research and development expenses £(7,904) £(17,673)Administrative expenses (1,143) (4,573)Initial public offering related expenses — (1,794)Net foreign exchange (losses) gains 599 (1,654)Operating loss (8,448) (25,694)Finance income 283 208 Loss before tax (8,165) (25,486)Income tax credit 2,116 2,401 Loss for the year (6,049) (23,085)Other comprehensive expense: Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (2) (8)Total comprehensive loss for the year £(6,051) £(23,093) 87 Research and Development ExpensesResearch and development expenses were £17.7 million for the year ended December 31, 2017 as compared to £7.9 million for the year endedDecember 31, 2016, an increase of £9.8 million. The increase resulted primarily from a higher share-based compensation expense of £8.8 million in 2017compared with £1.0 million in 2016 as new options were granted in 2017. In addition, we incurred higher clinical trial costs due to the number and size ofclinical trials being performed in 2017 as compared to 2016; as well as an increase in the number of research and development personnel. The following tablegives a breakdown of the research and development costs incurred by product for the years ended December 31, 2016 and 2017: Year ended December 31, 2016 2017 (unaudited)(in thousands) Acelarin £4,729 £8,284 NUC-3373 1,413 5,447 NUC-7738 587 1,948 Other 1,175 1,994 £7,904 £17,673 Administrative ExpensesAdministrative expenses were £4.6 million for the year ended December 31, 2017 as compared to £1.1 million for the year ended December 31, 2016,an increase of £3.5 million. The increase was largely attributable to a higher share-based compensation expense in 2017 of £2.9 million compared with £0.1million in 2016 as new options were granted in 2017, as well as an increase in the number of and allocation to administrative personnel.Initial Public Offering ExpensesIn the year ended December 31, 2017, costs of £1.8 million were recorded in the Results of Operations and a further £0.4 million which directlyrelated to the proceeds of the offering was recorded in Share Premium. These costs primarily related to legal, accounting and other advisors’ fees inconnection with our IPO. There were no such costs in the year ended December 31, 2016.Net Foreign Exchange Gains (Losses)For the year ended December 31, 2017, we reported a net foreign exchange loss of £1.7 million as compared to a net foreign exchange gain of £0.6million for the year ended December 31, 2016. In the year ended December 31, 2017, the loss primarily arose from higher average cash balances held in U.S.dollars for the last quarter of 2017. The U.S. dollars depreciated during 2017 relative to the U.K. pound sterling. In the year ended December 31, 2016, thegain arose primarily from higher average cash balances held in U.S. dollars, which appreciated during 2016 relative to the U.K. pound sterling.Finance IncomeFinance income represents bank interest and was £0.2 million for the year ended December 31, 2017 and £0.3 million for the year ended December31, 2016. The decrease in bank interest for the year ended December 31, 2017 was primarily due to lower average cash balances in the first nine months of2017 as compared to 2016 as well as lower rates of interest on bank balances.Income Tax CreditThe income tax credit, which is largely comprised of research and development credits, amounted to £2.4 million for the year ended December 31,2017 as compared to £2.1 million for the year ended December 31, 2016. In the United Kingdom, research and development credits are obtained at amaximum rate of 33.35% of our qualifying research and development expenses, and the increase in the net credit was primarily attributable to an increase inour eligible research and development expenses.88 Comparison of Year Ended December 31, 2015 and 2016The following table summarizes the results of our operations for the years ended December 31, 2015 and 2016. Year Ended December 31, 2015 2016 (in thousands) Research and development expenses £(5,655) £(7,904)Administrative expenses (1,251) (1,143)Net foreign exchange gains (losses) (8) 599 Operating loss (6,914) (8,448)Finance income 406 283 Loss before tax (6,508) (8,165)Income tax credit 1,176 2,116 Loss for the year (5,332) (6,049)Other comprehensive expense: Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (1) (2)Total comprehensive loss for the year £(5,333) £(6,051) Research and Development ExpensesResearch and development expenses for the year ended December 31, 2016 were £7.9 million as compared to £5.7 million for the year endedDecember 31, 2015, an increase of £2.2 million. The increase was attributable to the number and size of clinical trials being performed in 2016 as comparedto 2015 as well as an increase in the number of research and development personnel. The following table gives a breakdown of the research and developmentcosts incurred by product for the years ended December 31, 2015 and 2016: Year Ended December 31, 2015 2016 (unaudited) (in thousands) Acelarin £3,408 £4,729 NUC-3373 1,122 1,413 NUC-7738 252 587 Other 873 1,175 £5,655 £7,904 Administrative ExpensesAdministrative expenses were £1.1 million for the year ended December 31, 2016 as compared to £1.3 million for the year ended December 31, 2015.This decrease was largely attributable to lower recruitment expenses in 2016 as compared to 2015.Net Foreign Exchange Gains (Losses)For the year ended December 31, 2016, we reported a net foreign exchange gain of £0.6 million as compared to a net foreign exchange loss of £8,000for the year ended December 31, 2015. This was primarily from a higher average cash balance being held in U.S. dollars, which appreciated during 2016relative to the U.K. pound sterling.Finance IncomeFinance income represents bank interest and was £0.3 million for the year ended December 31, 2016 and £0.4 million for the year ended December31, 2015. The decrease in bank interest for 2016 was primarily due to lower average cash balances in 2016 as compared to 2015.89 Income Tax CreditThe income tax credit, which is largely comprised of research and development credits, amounted to £2.1 million for the year ended December 31,2016 as compared to £1.2 million for the year ended December 31, 2015, an increase in the net credit amount of £0.9 million. Research and developmentcredits are obtained at a maximum rate of 33.35% of our qualifying research and development expenses, and the increase in the net credit was primarilyattributable to an increase in our eligible research and development expenses.Critical Accounting Policies, Judgments and EstimatesIn the application of our accounting policies, we are required to make judgments, estimates, and assumptions about the value of assets and liabilitiesfor which there is no definitive third-party reference. The estimates and associated assumptions are based on historical experience and other factors that areconsidered to be relevant. Actual results may differ from these estimates. We review our estimates and assumptions on an ongoing basis. Revisions toaccounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revisions andfuture periods if the revision affects both current and future periods.The following are our critical judgments that we have made in the process of applying our accounting policies and that have the most significanteffect on the amounts recognized in our consolidated financial statements included elsewhere in this Annual Report.Recognition of Clinical Trial ExpensesAs part of the process of preparing our consolidated financial statements, we may be required to estimate accrued expenses related to our clinicaltrials. In order to obtain reasonable estimates, we review open contracts and purchase orders. In addition, we communicate with applicable personnel in orderto identify services that have been performed, but for which we have not yet been invoiced. In most cases, our vendors provide us with monthly invoices inarrears for services performed. We confirm our estimates with these vendors and make adjustments as needed. The following are examples of our accruedexpenses: •fees paid to CROs for services performed on preclinical studies and clinical trials; and •fees paid for professional services.Share-Based PaymentsWe award share options to certain of our employees, directors and consultants as part of their compensation. All of these compensation arrangementsare settled in equity at a predetermined price and generally vest over a period of three to four years. All share options have a term of 10 years beforeexpiration. We measure share-based awards at the grant date based on the fair value of the award and we recognize it as a compensation expense over thevesting period with a corresponding increase in reserves. We determine the fair value of our share options using the Black-Scholes option-pricing model.In future periods, we expect our share-based payment expense to increase due in part to our existing unrecognized share-based payment expenses andthe grant of additional share-based awards to continue to attract, incent and retain our employees, directors and consultants.Valuation of Share Options. The Black-Scholes option pricing model requires the input of subjective assumptions, including assumptions about theexpected life of share-based awards and share price volatility. In addition, as a privately held company prior to completing our IPO, one of the mostsubjective inputs into the Black-Scholes option pricing model was the estimated fair value of our ordinary shares.As a privately held company prior to completing our IPO, our share price did not have sufficient historical volatility for us to adequately assess thefair value of the share option grants. As a result, our management considered the historical volatility of other comparable publicly traded companies and,based on this analysis, concluded that a volatility range of 66.56% to 67.11% (2016: 60.92% to 69.05%) was appropriate for the valuation of our shareoptions. We intend to continue to consistently apply this methodology using the same comparable companies until a sufficient amount of historicalinformation regarding the volatility of our own share price as a public company becomes available.90 The expected life of the option, beginning with the option grant date, was used in valuing our share options. The expected life used in the calculationof share-based payment expense is the time from the grant date to the expected exercise date. The life of the options depends on the option expiration date,volatility of the underlying shares and vesting features.IFRS 2, Share-based Payment, requires the use of the risk-free interest rate of the country in which the entity’s shares are principally traded, with aremaining term equal to the expected life of the option. The third-party valuation firm applied the appropriate risk-free rate using the Bank of England’sestimates of gilt zero-coupon yield curve as at the respective share option grant dates.Valuation of Ordinary Shares. Prior to completing our IPO, there were significant judgments and estimates inherent in the determination of the fairvalue of our ordinary shares. These judgments and estimates included assumptions regarding our future operating performance, the likelihood and time tocomplete an IPO or other liquidity event, the related company valuations associated with such events, and the determinations of the appropriate valuationmethods. If we had made different assumptions, our share-based payment expense, loss for the year and total comprehensive loss, on both an absolute and per-share basis, could have been significantly different.In conducting our valuations, we considered all objective and subjective factors that we believed to be relevant for each valuation conducted,including our best estimate of our business condition, prospects, and operating performance at each valuation date. Within the valuations performed, a rangeof factors, assumptions, and methodologies were used. The significant factors considered included: •the lack of an active public market for our ordinary shares, as well as our series A and series B convertible participating preferred shares; •the prices of our series A and series B convertible participating preferred shares that we had sold to outside investors in arm’s lengthtransactions, and the rights, preferences and privileges of the series A and series B convertible participating preferred shares relative to ourordinary shares; •the data generated from our research and development programs and financial condition; •the material risks related to our business and industry; •our business strategy; •the market performance of publicly traded companies in the life sciences and biotechnology sectors; and •the likelihood of achieving a liquidity event for the holders of our ordinary shares, such as an IPO, given prevailing market conditions.During 2016, we issued share options on June 30, August 22, October 28 and December 12. These share options were awarded based on theunderlying share price of £4.00 per ordinary share. We made contemporaneous estimates of the valuation of the share price, which for share options issued in2016 was retrospectively revalued upon contemplation of the IPO. After considering the market approach, the income approach and the asset-based approach,we utilized the market approach to determine the estimated fair value of our ordinary shares based on its determination that this approach was mostappropriate for a clinical-stage biopharmaceutical company at this point in its development. Consideration was given to the American Institute of CertifiedPublic Accountants’ Practice Aid: “Valuation of Privately-Held Company Equity Securities Issued as Compensation,” or the Practice Aid, in addition toinput from management, the likelihood of completing an IPO and recent transactions with investors. Once a public trading market for our ordinary shares (inthe form of ADSs) has been established in connection with the completion of our IPO, it will no longer be necessary to estimate the fair value of our ordinaryshares in connection with our accounting for share-based payment expenses, as the fair value of our ordinary shares will be determinable by reference to thetrading price of our ADSs on Nasdaq. The retrospective valuation dates for June 30, 2016, August 22, 2016, October 28, 2016 and December 12, 2016resulted in valuations of our ordinary shares of £6.97, £8.61, £8.76 and £9.19 per share, respectively, as of those dates.Our ordinary share valuations were prepared using the guideline public company, or GPC, method under the market approach. In the application ofthe GPC method, we considered the pricing of IPOs completed by clinical-stage oncology companies between April 2015 and May 2016. We convertedprospective IPO value to present value by applying a discount rate of 25%. The discount rate was derived from studies of rates of return required by ventureinvestors in IPO-stage companies. In addition to the IPO GPCs, we considered the enterprise values indicated by a group of eight trading GPCs. The tradingprices of these clinical-stage GPCs provided contemporaneous indications of value as of each appraisal date. We applied a discount for lack of marketabilityto the ordinary shares to account for the lack of access to an active public market. We estimated the discount for lack of marketability using an Asian putmodel.91 During 2017, we issued share options on May 16, September 13, September 14, September 15 and September 27. We made contemporaneousestimates of the valuation of the share price using the same methodology described above for those options issued between May and September 15 andupdated for pricing of initial public offerings completed by clinical stage oncology companies between April 2015 and June 2017.The following table summarizes by grant date the number of ordinary shares subject to options granted between January 1, 2016 and December 31,2017, the per share purchase or exercise prices, the fair value of the ordinary shares on the dates of grant, the re-assessed fair value of the ordinary shares onthe dates of grant, if applicable, and the estimated fair value per option utilized to calculate share-based payment expense. Grant date Number ofoptions granted Exercise price pershare Fair value ofordinary share atgrant date Re-assessedfair value ofordinary shareat grant date Estimated fairvalue peroption June 30, 2016 270,690 £4.00 £4.00 £6.97 £4.02 Aug. 22, 2016 12,500 £2.80 £4.00 £8.61 £6.15 Aug. 22, 2016 37,500 £3.00 £4.00 £8.61 £6.01 Aug. 22, 2016 25,000 £3.40 £4.00 £8.61 £5.74 Aug. 22, 2016 11,250 £3.60 £4.00 £8.61 £5.62 Aug. 22, 2016 5,000 £3.60 £4.00 £8.61 £5.62 Aug. 22, 2016 37,500 £3.60 £4.00 £8.61 £5.62 Oct. 28, 2016 12,500 £3.40 £4.00 £8.76 £5.85 Oct. 28, 2016 50,000 £4.00 £4.00 £8.76 £5.46 Dec. 12, 2016 45,750 £4.00 £4.00 £9.19 £5.22 May 16, 2017 23,250 £4.00 £11.08 n/a £7.70 Sep 13, 2017 14,690 £5.40 £10.43 n/a £6.15 Sep 14, 2017 25,000 £5.40 £10.34 n/a £6.08 Sep 14, 2017 110,310 £5.40 £10.34 n/a £6.08 Sep 14, 2017 12,500 £5.40 £10.34 n/a £6.08 Sep 14, 2017 25,000 £10.80 £10.34 n/a £3.90 Sep 15, 2017 45,750 £4.00 £10.15 n/a £6.76 Sep 15, 2017 1,028,533 £0.04 £10.15 n/a £10.11 Sep 27, 2017 37,500 £11.19 £11.19 n/a £4.36 Sep 27, 2017 178,282 £11.19 £11.19 n/a £4.36Deferred Tax and Current Tax CreditsTax on the profit or loss for the year comprises current and deferred tax. Tax is recognized in the statement of operations, except to the extent that itrelates to items recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable on the taxable income or lossfor the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Taxcredits are accrued for the year based on calculations that conform to the U.K. research and development tax credit regime applicable to small and medium-sized companies. We may not be able to continue to claim research and development tax credits in the future under the current research and development taxcredit scheme now that we are a U.S. public company because we may no longer qualify as a small or medium-sized company. However, we may be able tofile under a large company scheme. Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities for financialreporting purposes and the amounts used for taxation purposes. The amount of deferred tax is based on the expected manner of realization or settlement of thecarrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognized only tothe extent that it is probable that future taxable profits will be available against which the asset can be utilized. No deferred tax assets are recognized on ourlosses carried forward because there is currently no indication that we will make sufficient profits to utilize these tax losses.92 Recent Accounting PronouncementsThe International Accounting Standards Board, or IASB, and International Financial Reporting Interpretations Committee, or IFRIC, have issued thefollowing standards and interpretations, which are considered relevant to us, with an effective date after December 31, 2017. Effective DateIFRS 9: Financial Instruments January 1, 2018IFRS 16: Leases January 1, 2019Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions January 1, 2018Annual Improvements to IFRSs 2014-2016 Cycle January 1, 2018IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration January 1, 2018We will adopt these standards and interpretations in accordance with their effective dates. The Company is currently assessing the potential impact ofIFRS 16 on its consolidated financial statements. The other amendments and interpretations are not expected to have a material impact on the Company.See Note 2 “Significant Accounting Policies” of the notes to our audited consolidated financial statements for the year ended December 31, 2017included elsewhere in this Annual Report for more information.Jumpstart Our Business Startups Act of 2012In April 2012, the U.S. Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107(b) of the JOBS Act provides that an“emerging growth company,” or EGC, can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, anEGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Given that we currently reportand expect to continue to report under IFRS as issued by the IASB, we have irrevocably elected not to avail ourselves of this extended transition period, and,as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other publiccompanies.We intend to rely on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an EGC, we may relyon certain of these exemptions, including exemptions from (1) providing an auditor’s attestation report on our system of internal controls over financialreporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (2) complying with any requirement that may be adopted by the Public CompanyAccounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about theaudit and the financial statements, known as the auditor discussion and analysis. We will remain an EGC until the earliest of (a) the last day of our fiscal yearduring which we have total annual gross revenue of at least $1.07 billion; (b) the last day of our fiscal year following the fifth anniversary of the completionof our IPO; (c) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (d) the date onwhich we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, which would occur if the market value of ourequity securities that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. Once wecease to be an EGC, we will not be entitled to the exemptions provided in the JOBS Act.We have taken advantage of reduced reporting requirements in this Annual Report. Accordingly, the information contained herein may be differentthan the information you receive from other public companies in which you hold equity securities.B. Liquidity and Capital ResourcesOverviewSince our inception, we have incurred significant operating losses and negative cash flows. We anticipate that we will continue to incur losses for atleast the next several years. We expect that our research and development and administrative expenses will increase in connection with conducting clinicaltrials and seeking marketing approval for our product candidates, as well as costs associated with operating as a public company. As a result, we will needadditional capital to fund our operations, which we may obtain from additional equity financings, debt financings, research funding, collaborations, contractand grant revenue or other sources.93 Cash FlowsThe following table summarizes the results of our cash flows for the years ended December 31, 2016 and 2017. Year ended December 31, 2016 2017 (in thousands) Net cash used in operating activities £(9,264) £(8,708)Net cash (used in) provided by investing activities 14,931 (933)Net cash from financing activities 200 77,747 Net increase in cash and cash equivalents £5,867 £68,106 Operating activities. The decrease in net cash used in operating activities to £8.7 million for the year ended December 31, 2017 from £9.3 million forthe year ended December 31, 2016 was primarily due to advance payments made in 2016. This was partially offset by higher spend on clinical trial activity,one-off IPO related expenses and increased staff costs. We also had lower research and development tax credit receivable due to the timing of receipt of theclaim. Investing activities. Net cash used in investing activities was £0.9 million for the year ended December 31, 2017. Net cash provided by investingactivities was £14.9 million for the year ended December 31, 2016. This change was primarily due to proceeds from maturing deposits of £15.1 million,received in the year ended December 31, 2016. The year ended December 31, 2017 also included higher acquisition payments in respect of tangible andintangible assets.Financing activities. The increase in net cash from financing activities to £77.7 million for the year ended December 31, 2017 from £0.2 million forthe year ended December 31, 2016 was due to proceeds received from the IPO.The following table summarizes the results of our cash flows for the years ended December 31, 2015 and 2016. Year Ended December 31, 2015 2016 (in thousands) Net cash used in operating activities £(4,467) £(9,264)Net cash provided by (used in) investing activities (181) 14,931 Net cash from financing activities — 200 Net increase (decrease) in cash and cash equivalents £(4,648) £5,867 Operating activities. The increase in net cash used in operating activities to £9.3 million for the year ended December 31, 2016 from £4.5 million forthe year ended December 31, 2015 was primarily due to advance payments made during 2016 to two vendors to manufacture drug substance and to manageour clinical trials and an increase in the research and development tax credit receivable.Investing activities. Net cash used in investing activities was £0.2 million for the year ended December 31, 2015. Net cash provided by investingactivities was £14.9 million for the year ended December 31, 2016. This change was primarily due to an increase in proceeds from maturing deposits.Financing activities. The increase in net cash from financing activities to £0.2 million for the year ended December 31, 2016 from zero for the yearended December 31, 2015 was due to proceeds received from the issuance of ordinary shares upon the exercise of share options.Operating and Capital Expenditure RequirementsWe have not achieved profitability on an annual basis since our inception, and we expect to incur net losses in the future. We expect that ouroperating expenses will increase as we continue to invest in our research and development programs, exploit our ProTide pipeline and build out ourorganization with additional employees.Additionally, as a public company, we incur significant audit, legal and other expenses that we did not incur as a private company. We believe thatour existing capital resources will be sufficient to fund our operations, including currently anticipated research and development activities and plannedcapital spending, at least through the first quarter of 2020.94 Our future funding requirements will depend on many factors, including but not limited to: •the scope, rate of progress and cost of our clinical trials, preclinical programs and other related activities; •the extent of success in our early preclinical and clinical stage research programs, which will determine the amount of funding required tofurther the development of our product candidates; •the progress that we make in developing new product candidates based on our proprietary ProTide technology; •the cost of manufacturing clinical supplies and establishing commercial supplies of our product candidates and any products that we maydevelop; •the costs involved in filing and prosecuting patent applications and enforcing and defending potential patent claims; •the outcome, timing and cost of regulatory approvals of our ProTide product candidates; •the cost and timing of establishing sales, marketing and distribution capabilities; and •the costs of hiring additional skilled employees to support our continued growth and the related costs of leasing additional office space.C. Research and Development, Patents and Licenses, etc.Full details of our research and development activities and expenditures are given in “Item 4. Information on the Company–B. Business” and “Item 5.Operating and Financial Review and Prospects” within this Annual Report.D. Trend InformationSee “Item 5. Operating and Financial Review and Prospects” within this Annual Report.E. Off-Balance Sheet ArrangementsWe do not have variable interests in variable interest entities or any off-balance sheet arrangements.F. Tabular Disclosure of Contractual ObligationsThe following table summarizes our contractual commitments and obligations as of December 31, 2017. Payments Due by Period Total Less than1 year 1 - 3years 3 - 5years More than5 years (in thousands) Operating lease obligations 323 158 165 — — Total 323 158 165 — — Operating lease obligations relate to rental of office space.We have agreed to make milestone payments and pay royalties and annual maintenance fees to third parties under various licensing and relatedagreements and we have agreed to make payments to CROs and manufacturers under various CRO and manufacturing agreements. We have not included anysuch contingent payment obligations in the table above as the amount, timing and likelihood of such payments are not fixed or determinable.G.Safe HarborSee the section titled “Information Regarding Forward-Looking Statements” at the beginning of this Annual Report.95 Item 6.Directors, Senior Management and EmployeesA.Directors and Senior ManagementThe following table sets forth the names, ages and positions of our executive officers and directors: Name Age PositionExecutive Officers Hugh Griffith 50 Chief Executive Officer and DirectorChristopher Wood 72 Chairman and Chief Medical OfficerDonald Munoz 49 Chief Financial OfficerNon-Executive Directors Isaac Cheng 42 Non-Executive DirectorJames Healy 53 Non-Executive DirectorMartin Mellish 60 Non-Executive DirectorRafaèle Tordjman 48 Non-Executive DirectorExecutive OfficersHugh Griffith is our co-founder and has served as our Chief Executive Officer and as a member of our board of directors since our operations began inMarch 2008. In addition, he currently serves as a non-executive director of EdixoMed Limited and MedAnnex Limited, biotech companies which he co-founded in 2009. He also serves as director of Alida Capital International, a biotech business angel syndicate that he formed in 2009. Prior to foundingNuCana, Mr. Griffith was Chief Operating Officer of Bioenvision, Inc., a biopharmaceutical company, from July 2004 until December 2007, when it wasacquired by Genzyme Corporation (now Sanofi). He previously served as Commercial Director of Bioenvision, Inc. from September 2002 to June 2004.Before that, Mr. Griffith held several senior commercial positions at Quantanova Limited, a biopharmaceutical company, from January 2002 to July 2002,Abbott Laboratories (now AbbVie Inc.) from October 1995 to December 2001 and Warner-Lambert Company (now Pfizer Inc.) from April 1992 to October1995. He currently serves on the advisory board of the Scottish Lifesciences Association. Mr. Griffith received an M.B.A. from Cardiff Business School and aB.Sc. Honours in Biology from the University of Stirling. We believe that Mr. Griffith possesses specific attributes that qualify him to serve as a member ofour board of directors, including the perspective and experience he brings as our Chief Executive Officer, which provides historic knowledge of ourcompany, operational expertise and continuity to our board of directors, and his significant experience in the biopharmaceutical industry in positionsincluding chief executive officer, chief operating officer and executive director.Christopher Wood is our co-founder and has served as a member of our board of directors since our founding, as our Chairman since 2008 and as ourChief Medical Officer since July 2017. Dr. Wood also currently serves as chairman of several biopharmaceutical or biotechnology companies including:Edixomed Limited, MedAnnex Limited and OncoBioPharm Limited. In addition, he is a director of MiNA Therapeutics Limited, a biotechnology company.Prior to joining our board of directors, Dr. Wood was a co-founder of Bioenvision, Inc., a biopharmaceutical company, and served as its Chairman and ChiefExecutive Officer from 2000 until 2007, when it was acquired by Genzyme Corporation (now Sanofi). From 1995 through 1999, Dr. Wood was chairman ofthe board and Chief Executive of Eurobiotech, Inc. From 1989 through 1990, Dr. Wood was co-founder and director of Genethics Ltd until it was acquired byProteus International plc. Dr. Wood co-founded and served as chairman from 1986 to 1992 of Medirace Ltd., a biotechnology company, which later becameMedeva PLC and was acquired by Celltech Group PLC (now UCB). From 1979 to 1991, Dr. Wood was a surgical oncologist at The Royal PostgraduateMedical School and a consultant surgeon at Hammersmith Hospital, both in London, England. Dr. Wood is an honorary Professor at Imperial CollegeLondon, a Fellow of the Royal College of Surgeons of Edinburgh and a Fellow of the Learned Society of Wales. Dr. Wood received an M.D. from theUniversity of Wales School of Medicine. We believe that Dr. Wood possesses specific attributes that qualify him to serve as a member of our board ofdirectors, including his extensive experience in the biotechnology sector and his having founded and managed four companies, including our company.Donald Munoz has served as our Chief Financial Officer since October 2015. Prior to joining NuCana, Mr. Munoz served as Group Chief FinancialOfficer of NOXXON Pharma AG (now NOXXON Pharma N.V.), a biopharmaceutical company, from September 2014 to September 2015. Before that, he wasHead of Investment Banking at Summer Street Research Partners, an investment banking and institutional securities firm focused exclusively on healthcare,from August 2012 to September 2014. Mr. Munoz previously served as a Managing Director leading the medical technology investment banking franchisesat Cowen and Company, LLC from 2009 to 2011 and Leerink Partners LLC from 2005 to 2009. Prior to that, he spent approximately ten years in thehealthcare investment banking group at Alex. Brown & Sons and its successor, Deutsche Bank Securities. Mr. Munoz received an M.B.A. in Finance andAccounting from Columbia Business School and a B.A. from Dartmouth College.96 Non-Executive DirectorsRafaèle Tordjman has served as a member of our board of directors since November 2011. From February 2017 to August 2017, Dr. Tordjman was aSpecial Advisor at Sofinnova Partners, an independent venture capital firm based in Paris, where she specialized in life sciences investments. She joinedSofinnova Partners in 2001 and served as a Managing Partner from January 2011 to February 2017. Dr. Tordjman currently serves as a director of ObsEva SA,a Nasdaq-listed biopharmaceutical company, and Lysogene, a Euronext-listed biotechnology company, and has previously served as a director of severalbiopharmaceutical or biotechnology companies, including: Ascendis Pharma A/S, DBV Technologies S.A., Medtronic CoreValve LLC and FlexionTherapeutics, Inc. Previously, Dr. Tordjman was a research scientist at the Institut National de la Santé et de la Recherche Médicale (INSERM) in CochinHospital, Paris, France. Before joining INSERM, Dr. Tordjman was a medical doctor specializing in clinical hematology and internal medicine. Dr. Tordjmanreceived a Ph.D. with high honors in hematopoiesis and angiogenesis, and a post-doctoral fellowship in immunology, from the University Paris VII.Dr. Tordjman received an M.D. and fellowship in hematology and internal medicine from the Paris University Hospitals. We believe that Dr. Tordjmanpossesses specific attributes that qualify her to serve as a member of our board of directors, including her medical background, clinical and researchexperience, and industry knowledge.James Healy has served as a member of our board of directors since March 2014. Dr. Healy has also been a General Partner of Sofinnova Venturessince 2000, and currently serves as a director of Ascendis Pharma A/S, Coherus BioSciences, Inc., Edge Therapeutics, Inc., Natera, Inc., ObsEva SA andseveral private companies. Dr. Healy has previously served as a board member of Amarin Corporation, Auris Medical Holding AG, Hyperion Therapeutics,Inc., InterMune, Inc., Anthera Pharmaceuticals, Inc., Durata Therapeutics, Inc., CoTherix, Inc., Movetis NV and several private companies. Dr. Healy holds anM.D. and a Ph.D. in Immunology from Stanford University School of Medicine and a B.A. in Molecular Biology and Scandinavian Studies from theUniversity of California, Berkeley. We believe that Dr. Healy possesses specific attributes that qualify him to serve as a member of our board of directors,including extensive experience in biomedical research, development and finance.Isaac Cheng has served as a member of our board of directors since May 2017. Dr. Cheng is currently an investment advisor at MorningsideTechnology Advisory LLC, a venture capital firm, which he joined in 2006, and is also a director of Cognoa, Inc., a digital health company, and severalbiopharmaceutical or biotechnology companies, including: Liquidia Technologies, Inc., Artugen Therapeutics Limited, Amylyx Pharmaceuticals, Inc. and K-Gen Limited. Previously, he was a board member of Advanced Cell Diagnostics, Inc., a biotechnology company, and a board observer of both Chimerix, Inc.,a biotechnology company, and Argos Therapeutics, Inc , a biotechnology company. From 2004 to 2005, Dr. Cheng was Director of Research andDevelopment at Serica Technologies, Inc., a Morningside portfolio company. Prior to that, Dr. Cheng was an Associate Director at Novartis PharmaceuticalsCorporation in Clinical Development and Medical Affairs. Dr. Cheng received his M.D. from Tufts University School of Medicine. We believe that Dr. Chengpossesses specific attributes that qualify him to serve as a member of our board of directors, including his medical background, clinical and researchexperience and industry knowledge.Martin Mellish has served as a member of our board of directors since December 2009. Since 1994, Mr. Mellish has served as the Executive Directorof Aspen Advisory Services Ltd., a London-based office responsible for the administration of investments in North America, Europe and Asia. Mr. Mellishserves as a non-executive director of Kensington Green (Management) Limited, a real estate management company, Levitronix Technologies LLC, atechnology company, Alturki Holding, an industrial investment and development holding company, Saudi Readymix Construction Company (SRMCC), abuilding materials company, MicroVax LLC, a biotechnology company, Livercyte Limited, a biotechnology company, and Omnicyte Limited, abiotechnology company. He serves as Chairman of the Audit Committees of Levitronix Technologies, Alturki Holding, SRMCC and of i2 Egypt, a consumercommunications company. From 1992 to 1994, Mr. Mellish pursued studies at the Massachusetts Institute of Technology. From 1984 to 1992, he wasController and subsequently Chief Financial Officer of Alturki Holding. Prior to that, Mr. Mellish trained at Price Waterhouse Coopers. He was awarded anSM (Management) from the Massachusetts Institute of Technology and an M.Sc. (Accounting) from Northeastern University. We believe that Mr. Mellishpossesses specific attributes that qualify him to serve as a member of our board of directors, including his significant experience in accounting and finance.97 B.CompensationThe following discussion provides the amount of compensation paid, and benefits in kind granted, by us and our subsidiaries to our directors andmembers of management for services in all capacities to us and our subsidiaries for the year ended December 31, 2017, as well as the amount contributed byus or our subsidiaries into money purchase plans for the year ended December 31, 2017 to provide pension, retirement or similar benefits to, our directors andmembers of the executive management board.Directors’ and Executive Officers’ CompensationDirectors CompensationFor the year ended December 31, 2017, the table below sets forth the compensation paid to our directors, and, in the case of Messrs. Griffith andWood, reflects the compensation paid for their services as our Chief Executive Officer and Chief Medical Officer, respectively. Year Ended December 31, 2017 Directors Compensation (1) Name Salary/Fees AnnualBonus BenefitExcludingPension (2) PensionBenefit (3) Total £ £ £ £ £ Hugh S. Griffith Executive Director Chief Executive Officer (4) 330,329 270,850 1,690 31,687 634,556 Christopher Wood Executive Director Chairman and Chief Medical Officer 103,418 41,367 3,272 — 148,057 Isaac Cheng Non-Executive Director 7,711 — — — 7,711 James Healy Non-Executive Director 7,711 — — — 7,711 Martin Mellish Non-Executive Director 7,711 — — — 7,711 Rafaèle Tordjman Non-Executive Director 7,711 — — — 7,711 Paolo Paoletti Non-Executive Director (5) 16,667 — — — 16,667 Gerald Chang Non-Executive Director (6) — — — — — (1)For the year ended December 31, 2017, the majority of compensation was set and paid in pounds sterling (£). (2)The amount for benefits represents our contribution to medical insurance. (3)The amount for pension benefit represents our contribution into a money purchase plan. (4)The compensation for our Chief Executive Officer is determined to be effective from January 1 in each year. From October 1, 2017, this annualcompensation was increased from £289,966 to £451,417 to bring it in-line with market related compensation. (5)Paolo Paoletti retired September 1, 2017. The amount paid represents compensation for services as a director prior to his retirement. (6)Gerald Chang retired May 16, 2017.Executive Officers CompensationThe compensation for each our executive directors and executive officers is comprised of the following elements: base salary, annual bonus, personalbenefits, pension or 401(k) plan and long-term equity-based incentives. The total amount of98 compensation paid and benefits in kind granted to our executive officers, whether or not a director, for the year ended December 31, 2017 was £1.2 million.Bonus PlansThe summary set forth below describes the bonus plan pursuant to which compensation was paid to our executive officers and directors for the yearended December 31, 2017.Our executive officers and directors are eligible for an annual bonus at the discretion of the Remuneration Committee. Bonus awards are reviewed atthe end of each calendar year and any such awards are determined by the performance of the individual and our company as a whole based upon theachievement of strategic objectives set at the beginning of the year.Outstanding Equity Awards, Grants and Option ExercisesDuring the year ended December 31, 2017, options to purchase 1,275,815 ordinary shares were awarded to our executive officers and non-executivedirectors. Type of Nominal Exercise First date of Name Plan(1) Granted value price exercise (2) Date of expiry Executive Officers Hugh S. Griffith 2016 Share OptionScheme 1,028,533 £0.04 £0.04 Immediately September 15, 2027 Chief Executive Officer Christopher Wood 2016 Share OptionScheme — — — — — Chairman and Chief MedicalOfficer ​Donald Munoz 2016 Share OptionScheme 122,782 £0.04 £11.19 September 27, 2018 September 27, 2027 Chief Financial Officer Non-Executive Directors Isaac Cheng 2016 Share OptionScheme 55,500 £0.04 £11.19 September 27, 2018 September 27, 2027 James Healy 2016 Share OptionScheme — — — — — Martin Mellish 2016 Share OptionScheme 23,250 £0.04 £4.00​ October 28, 2017 May 16, 2027 Rafaèle Tordjman 2016 Share OptionScheme 45,750 £0.04 £4.00 September 15, 2018 September 15, 2027 (1)Further details of the 2016 Share Option Scheme are given on pages 102-104. (2)Options granted will vest if the option holder remains under their respective employment contract/contract of services for the agreed vestingperiod. The share options granted under these plans will vest equally over a period of four years, with the exception of options granted to HughGriffith, under which the options granted vested immediately.As of December 31, 2017, our executive officers and directors held options to purchase 3,851,502 ordinary shares. Our executive officers and directorsexercised options to purchase 30,000 ordinary shares during the year ended December 31, 2017.We periodically grant share options to employees, directors and consultants to enable them to share in our successes and to reinforce a corporateculture that aligns their interests with that of our shareholders. During the year ended December 31, 2017, we granted options to purchase 1,275,815 ordinaryshares to our executive officers and directors. During the year ended December 31, 2017, we granted options to purchase 225,000 ordinary shares to6 employees and consultants who are not directors or executive officers.99 Pension, Retirement and Similar BenefitsFor the year ended December 31, 2017, we and our subsidiaries contributed a total of £36,214 into money purchase plans to provide pension,retirement or similar benefits to our executive officers and directors.Insurance and IndemnificationTo the extent permitted by the Companies Act 2006, we are permitted to indemnify our directors against any liability they incur by reason of theirdirectorship. We maintain directors’ and officers’ insurance to insure such persons against certain liabilities and expect to enter into a deed of indemnity witheach of our directors and executive officers.Insofar as indemnification of liabilities arising under the Securities Act may be permitted to our directors, executive officers or persons controlling uspursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed inthe Securities Act and is therefore unenforceable.Equity Compensation PlansWe have granted options to purchase our shares under three share option schemes, which are summarized in this section.2009 Share Option SchemeOn August 1, 2009, we adopted a share option scheme, or the 2009 Share Option Scheme, for the purpose of enabling the grant of share options toincentivize our employees, consultants and directors and those employees, consultants and directors of our subsidiary companies. The 2009 Share OptionScheme was subsequently amended and approved by our board of directors and by our shareholders on November 15, 2011, November 17, 2011, September14, 2017 and October 2, 2017, respectively.The 2009 Share Option Scheme permits grants of (i) enterprise management incentive options which are potentially tax-advantaged in the UnitedKingdom under the terms of Schedule 5 to the United Kingdom Income Tax (Earnings and Pensions) Act 2003 (subject to the relevant conditions being metby the company and the grantee) and (ii) “unapproved” options (which do not attract tax advantages as they have not been “approved” by the U.K. taxauthority, HMRC).As of December 31, 2017, we had granted options to purchase 1,032,500 ordinary shares to directors, employees and consultants under the 2009Share Option Scheme. 7,500 of these options lapsed in 2017. The remainder of these options have vested and are exercisable.Class of Share. An option granted under the 2009 Share Option Scheme entitles the option holder, subject to the satisfaction, waiver or accelerationof specific exercise conditions, to subscribe for ordinary shares.Exercise Conditions. Options granted under our 2009 Share Option Scheme may be granted subject to vesting schedules, performance targets or otherconditions which must be satisfied or waived before exercise. Exercise conditions may be removed or varied by our board of directors, provided that anyvariation shall be (in the reasonable opinion of our board of directors) no more difficult to satisfy than the original exercise condition.Each option grant is documented through an option agreement. Most of the option agreements entered into under the 2009 Share Option Schemeprovide that all unexercised options are exercisable upon one or more of the following events: (i) the admission of part of or the entirety of issued sharecapital (or of any holding company) to listing on the Official List of the U.K. Listing Authority and to trading on the market for listed securities of LondonStock Exchange plc, or to trading on AIM, a market of the London Stock Exchange, or to trading on any recognized investment exchange (as that term wasdefined in Section 841 of Income and Corporate Taxes Act 1988, or ICTA, and as now contained in Section 1137 of the Corporation Tax Act 2010, or CTA);(ii) a change of control; or (iii) a sale of our company.Takeovers and Corporate Events. If (a) any person or group of persons acting in concert obtains control (as defined in section 840 of ICTA and asnow contained in section 995 Income Tax Act, or ITA) of the company, as a result of making either (i) an offer to acquire shares amounting to more than 50%of the issued share capital of the company on a condition such that if it is satisfied the person or group of persons will have control of the company, or (ii) ageneral offer to acquire all of the issued share capital of the company (or all of the ordinary shares of the company in issue); or (b) any person becomes100 entitled or bound to acquire shares in the company under sections 428 to 430F of the Companies Act 1985 (since repealed and replaced by sections 974 to991 of the Companies Act 2006); or (c) under section 425 of the Companies Act 1985 (since repealed and replaced by sections 895 to 901 of the CompaniesAct 2006) the courts of England and Wales sanction a compromise or arrangement proposed for the purpose of or in connection with a scheme for thereconstruction of the company or its amalgamation with any other company or companies, and, in each case an option holder’s option agreement expressly soprovides, an option holder may at any time exercise his or her options or any part thereof which has not lapsed within a specified period. To the extent theyare not exercised, such options will lapse at the end of the specified period for exercise.Lapse of Options. If not otherwise lapsed in accordance with the provisions of the 2009 Share Option Scheme, an option granted under the 2009Share Option Scheme shall lapse at 5p.m. on the day before the 10th anniversary of the grant of the option.If an option holder dies, his or her personal representatives may exercise his or her options within a period ending on the earlier of (i) the expiry of 12months after the date of death, and (ii) 5 p.m. on the day before the 10th anniversary of the grant of the option, only to the extent that any exercise conditionshave been met at the time of death. Failing such exercise the deceased option holder’s options shall lapse.Adjustment of Awards. In the event that there is any variation in our share capital that affects the value of the options, our board of directors willmake such adjustments to the number and exercise price of shares subject to each option or the option price as our board of directors considers appropriate inaccordance with the rules of the 2009 Share Option Scheme.Transferability. No options under the 2009 Share Option Scheme may be transferred, assigned or have any charge created over them and will lapseimmediately upon an attempt to do so.Amendment. Our board of directors may amend the 2009 Share Option Scheme, provided that any amendment shall not, without the consent of anoption holder, materially increase his or her liabilities or materially decrease the value of his or her subsisting rights under an outstanding option.Any amendment to the scheme shall take effect without the requirement for the prior approval of our shareholders, except as otherwise required byapplicable laws or the rules of any securities exchange on which our securities are listed.2012 Share Option SchemeOn July 3, 2012, we adopted a share option scheme, or the 2012 Share Option Scheme, for the purpose of enabling the grant of share options toincentivize our employees and directors and those employees and directors of our subsidiary companies. The 2012 Share Option Scheme was subsequentlyamended and approved by our board of directors and by our shareholders on September 14, 2017 and October 2, 2017.The 2012 Share Option Scheme permits grants of (i) enterprise management incentive options, which are potentially tax advantaged in the UnitedKingdom, and (ii) “unapproved” options, which do not attract tax advantages as they have not been “approved” by HMRC.As of December 31, 2017, we had granted options to purchase 1,908,935 ordinary shares to directors and employees under the 2012 Share OptionScheme. Of these, options to purchase 105,188 shares have been cancelled and options to purchase 37,500 shares were exercised in 2016. The remainingoptions to purchase 1,766,247 shares have vested and are exercisable.Class of Share. An option granted under the 2012 Share Option Scheme entitles the option holder, subject to the satisfaction, waiver or accelerationof specific exercise conditions, to subscribe for ordinary shares.Exercise Conditions. Options granted under our 2012 Share Option Scheme may be granted subject to vesting schedules, performance targets or otherconditions which must be satisfied or waived before exercise. Exercise conditions may be removed or varied by our board of directors, provided that anyvariation shall be (in the reasonable opinion of our board of directors) no more difficult to satisfy than the original exercise condition. Each option grant isdocumented through an option agreement.101 Leaver Provisions. Absent summary dismissal with just cause, options will be retained by an option holder once they have ceased to be an employeeor director of us or a subsidiary. Where an option holder has been summarily dismissed for cause, such option holder’s unexercised options shall immediatelycease to be exercisable and shall lapse after 90 days unless our board of directors determines within such 90 day period that the option holder may exerciseall or part of his options within a specified period.Lapse of Options. If not otherwise lapsed in accordance with the provisions of the 2012 Share Option Scheme, an option granted under the 2012Share Option Scheme shall lapse at 5 p.m. on the day before the 10th anniversary of the grant of the option.If an option holder dies, his personal representatives may exercise his options within a period ending on the earlier of (i) the expiry of 12 months afterthe date of death, and (ii) 5 p.m. on the day before the 10th anniversary of the grant of the option, only to the extent that any exercise conditions have beenmet at the time of death. Failing such exercise the deceased option holder’s options shall lapse.Takeovers and Corporate Events. If (a) any person or group of persons acting in concert obtains control (as defined in section 840 of ICTA and asnow contained in section 995 of ITA) of the company, as a result of making either (i) an offer to acquire shares amounting to more than 50% of the issuedshare capital of the company on a condition such that if it is satisfied the person or group of persons will have control of the company, or (ii) a general offer toacquire all of the issued share capital of the company (or all of the ordinary shares of the company in issue); or (b) any person becomes entitled or bound toacquire shares in the company under sections 428 to 430F of the Companies Act 1985 (since repealed and replaced by sections 974 to 991 of the CompaniesAct 2006); or (c) under section 425 of the Companies Act 1985 (since repealed and replaced by sections 895 to 901 of the Companies Act 2006) the courts ofEngland and Wales sanction a compromise or arrangement proposed for the purpose of or in connection with a scheme for the reconstruction of the companyor its amalgamation with any other company or companies, and, in each case an option holder’s option agreement expressly so provides, an option holdermay at any time exercise his or her options or any part thereof which has not lapsed within a specified period. To the extent they are not exercised, suchoptions will lapse at the end of the specified period for exercise.Adjustment of Awards. In the event that there is any variation in our share capital that affects the value of the options, our board of directors willmake such adjustments to the number and exercise price of shares subject to each option or the option price as our board of directors considers appropriate inaccordance with the rules of the 2012 Share Option Scheme.Transferability. No options under the 2012 Share Option Scheme may be transferred, assigned or have any charge created over them and will lapseimmediately upon an attempt to do so.Amendment. Our board of directors may amend the 2012 Share Option Scheme, provided that any amendment shall not, without the consent of anoption holder, materially increase his or her liabilities or materially decrease the value of his or her subsisting rights under an outstanding option.Any amendment to the scheme shall take effect without the requirement for the prior approval of our shareholders, except as otherwise required byapplicable laws or the rules of any securities exchange on which our securities are listed.2016 Share Option SchemeOn January 14, 2016 we adopted a share option scheme, or the 2016 Share Option Scheme, for the purpose of enabling the grant of share options toincentivize our employees and directors and those employees and directors of our subsidiary companies. The 2016 Share Option Scheme incorporates a sub-plan for option holders subject to taxation in the United States, or the 2016 U.S. Sub-Plan. The 2016 Share Option Scheme was subsequently amended andapproved by our board of directors and by our shareholders on September 14, 2017 and October 2, 2017.The 2016 Share Option Scheme permits grants of (i) enterprise management incentive options, (ii) “unapproved” options, and (iii) incentive stockoptions and non-qualified stock options under the 2016 U.S. Sub-Plan.As of December 31, 2017, we had granted options to purchase 1,996,005 ordinary shares to directors and employees under the 2016 Share OptionScheme. Of these, options to purchase 45,750 shares were exercised in 2016 and options to purchase 30,000 shares were exercised in 2017.102 Class of Share. An option granted under the 2016 Share Option Scheme entitles the option holder, subject to the satisfaction, waiver or accelerationof specific exercise conditions, to subscribe for ordinary shares.Exercise Conditions. Options granted under our 2016 Share Option Scheme may be granted subject to vesting schedules, performance targets or otherconditions which must be satisfied or waived before exercise. Exercise conditions may be removed or varied by our board of directors, provided that anyvariation shall be (in the reasonable opinion of our board of directors) no more difficult to satisfy than the original exercise condition.Each option grant is documented through an option agreement. Most of the option agreements entered into under the 2016 Share Option Schemeprovide that all unvested options shall immediately vest if, following one of the Takeover and Corporate Events listed below, the option holder (i) remains aneligible employee for the purpose of the plan; and (ii) has experienced a material reduction in base compensation that was payable as at the date of grant orhas otherwise experienced a material change or reduction in authority, duties, reporting or responsibilities.Leaver Provisions. If an option holder ceases to be an employee or director of the company or a subsidiary for a variety of specified reasons(including ill health, retirement, sale of a subsidiary company or part of the business to a third party, or if his employment/directorship ceases for any reasonapart from summary dismissal from fraud or gross misconduct) then the option holder may exercise his options during the 12 months after the date of suchcessation of employment/directorship only to the extent that any exercise conditions have been met at the time of such cessation ofemployment/directorship. Any part of an option in respect of which the relevant exercise conditions have not been met at the point at which the optionholder ceases his employment/directorship shall lapse.Lapse of Options. If not otherwise lapsed in accordance with the provisions of the 2016 Share Option Scheme, an option granted under the 2016Share Option Scheme shall lapse at 5 p.m. on the day before the 10th anniversary of the grant of the option.If an option holder dies, his personal representatives may exercise his options within a period ending on the earlier of (i) the expiry of 12 months afterthe date of death, and (ii) 5 p.m. on the day before the 10th anniversary of the grant of the option, only to the extent that any exercise conditions have beenmet at the time of death. Failing such exercise the deceased option holder’s options shall lapse.Takeovers and Corporate Events. If (a) any person or group of persons acting in concert obtains control (as defined in section 840 of ICTA and asnow contained in section 995 of ITA) of the company, as a result of making either (i) an offer to acquire shares amounting to more than 50% of the issuedshare capital of the company on a condition such that if it is satisfied the person or group of persons will have control of the company, or (ii) a general offer toacquire all of the issued share capital of the company (or all of the ordinary shares of the company in issue); or (b) any person becomes entitled or bound toacquire shares in the company under sections 974 to 991 of the Companies Act 2006; or (c) under sections 895 to 901 of the Companies Act 2006 the courtsof England and Wales sanction a compromise or arrangement proposed for the purpose of or in connection with a scheme for the reconstruction of thecompany or its amalgamation with any other company or companies, and, in each case an option holder’s option agreement expressly so provides, an optionholder may at any time exercise his or her options or any part thereof which has not lapsed within a specified period. To the extent they are not exercised,such options will lapse at the end of the specified period for exercise.Adjustment of Awards. In the event that there is any variation in our share capital that affects the value of the options, our board of directors willmake such adjustments to the number and exercise price of shares subject to each option or the option price as our board of directors considers appropriate inaccordance with the rules of the 2016 Share Option Scheme.Transferability. No options under the 2016 Share Option Scheme may be transferred, assigned or have any charge created over them and will lapseimmediately upon an attempt to do so.Amendment. Our board of directors may amend the 2016 Share Option Scheme, provided that any amendment shall not, without the consent of anoption holder, materially increase his or her liabilities or materially decrease the value of his or her subsisting rights under an outstanding option.Any amendment to the scheme shall take effect without the requirement for the prior approval of our shareholders, except as otherwise required byapplicable laws or the rules of any securities exchange on which our securities are listed.103 2016 U.S. Sub-PlanThe 2016 U.S. Sub-Plan applies to grantees that are subject to U.S. federal income tax. The 2016 U.S. Sub-Plan provides that options granted to theU.S. grantees will either be incentive stock options pursuant to Section 422 of the Internal Revenue Code or nonqualified stock options. Options, other thancertain incentive stock options described below, must have an exercise price not less than 100% of the fair market value of an underlying share on the date ofgrant. Incentive stock options that are not exercised within 10 years from the grant date expire, provided that incentive stock options granted to a personholding more than 10% of our voting power will expire within five years from the date of the grant date and must have an exercise price at least equal to110% of the fair market value of an underlying share on the date of grant. The number of shares available under the 2016 Share Option Scheme for grants ofincentive stock options shall not exceed 5,008,284 ordinary shares, subject to any applicable adjustment pursuant to the 2016 Share Option Scheme due to avariation of capital. With respect to grantees that are subject to U.S. federal income tax, the 2016 Share Option Scheme, the 2016 U.S. Sub-Plan and alloptions issued thereunder are intended to comply with, or be exempt from, Section 409A of the Internal Revenue Code, and they are to be interpretedaccordingly. In the event that any option is subject to Section 409A of the Internal Revenue Code, our board of directors or our general counsel may, in theirsole discretion, amend the 2016 Share Option Scheme, the 2016 U.S. Sub-Plan and any option issued thereunder, adopt policies and procedures or take suchother actions as our board of directors or our general counsel deem appropriate, to exempt the 2016 Share Option Scheme, the 2016 U.S. Sub-Plan or anyoption from Section 409A of the Internal Revenue Code, preserve the intended tax treatment of such option or comply with the requirements of Section 409Aof the Internal Revenue Code.Employee Benefit TrustOn December 19, 2011, we established a discretionary employee benefit trust under the terms of a trust deed, or the Employee Benefit Trust, tooperate in conjunction with our share option schemes. The beneficiaries of the Employee Benefit Trust are our employees and former employees (includingexecutive directors) and their spouses, civil partners, surviving spouses and civil partners, children and step-children under the age of 18. The trustee of theEmployee Benefit Trust is NuCana BioMed Trustee Company Limited, or the Trustee, our wholly owned subsidiary. As of December 31, 2017, the Trusteeholds 500,000 of our ordinary shares in trust under the terms of the trust deed, which, pursuant to the terms of our three option schemes, and at the election ofthe Trustee, may be used to satisfy awards under our share option schemes. Under the terms of the trust deed, unless we direct otherwise, the Trustee mustabstain from voting at a general meeting any of our shares held in the trust fund for which the Trustee holds the whole of the beneficial interest.C.Board PracticesBoard Composition and Director IndependenceOur business affairs are managed under the direction of our board of directors, which is currently composed of six members. Under the rules andregulations of Nasdaq a director will qualify as “independent” if our board of directors affirmatively determines that he or she has no material relationshipwith us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us). Our board of directors has establishedguidelines to assist it in determining whether a director has such a material relationship. Ownership of a significant amount of our shares, by itself, does notconstitute a material relationship.Pursuant to Nasdaq rules, a director employed by us cannot be deemed to be an “independent director,” and consequently Hugh Griffith andChristopher Wood do not qualify as independent directors.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based on thisreview, our board of directors has determined that the following directors are “independent directors” as defined by the applicable rules and regulations ofNasdaq: Rafaèle Tordjman, James Healy, Isaac Cheng and Martin Mellish.Terms of Directors and Executive OfficersOur executive officers are selected by and serve at the discretion of our board of directors. Our board of directors is divided into three classes, with themembers of each class serving staggered three year terms. See “Memorandum and Articles of Association — Directors — Classified board of directors” in thisAnnual Report for a description of each director’s current term of office.104 Committees of the Board of Directors and Corporate GovernanceSubject to certain exceptions, the rules of the Nasdaq permit a foreign private issuer to follow its home country practice in lieu of the listingrequirements of Nasdaq.The committees of our board of directors consist of an audit committee, a remuneration committee and a nominations committee. As permitted byhome country practice, our remuneration and nominations committees may include non-independent directors. Each of these committees has theresponsibilities described below. Our board of directors may also establish other committees from time to time to assist in the discharge of its responsibilities.Audit CommitteeThe members of our audit committee are three of our non-executive directors, Martin Mellish, James Healy and Isaac Cheng, and each of thesemembers is an “independent director” as such term is defined in Rule 10A-3 under the Exchange Act. Martin Mellish serves as chair of the audit committee.Our board of directors has determined that Martin Mellish is a financial expert as contemplated by the rules of the SEC implementing Section 407 of theSarbanes Oxley Act of 2002. Our audit committee meets at least four times per year and oversees the monitoring of our internal controls, accounting policiesand financial reporting and provides a forum through which our external auditors and independent registered public accounting firm reports. Our auditcommittee meets at least once a year with the external auditors and our independent registered public accounting firm without executive board memberspresent. The audit committee is also responsible for overseeing the activities of the external auditors and our independent registered public accounting firm,including their appointment, reappointment, or removal as well as monitoring their objectivity and independence. The audit committee also reviews andapproves the fees paid to our external auditors and independent registered public accounting firm and determines whether the fee levels for non-auditservices, individually and in aggregate, relative to the audit fee are appropriate so as not to undermine their independence.Remuneration CommitteeThe members of the remuneration committee are Hugh Griffith and two of our non-executive directors, Rafaèle Tordjman and James Healy. Each ofthese non-executive director members is a non-employee director as defined in Rule 166-3 under the Exchange Act and an outside director as defined inSection 162(m) of the Internal Revenue Code of 1986, as amended. Rafaèle Tordjman serves as chair of the remuneration committee. Our remunerationcommittee reviews, among other things, the performance of the executive officers and sets the scale and structure of their remuneration and the basis of theirservice agreements with due regard to the interests of the shareholders. It is a policy of the remuneration committee that no individual participates indiscussions or decisions concerning his or her own remuneration.Nominations CommitteeThe members of the nominations committee are Hugh Griffith and Christopher Wood and one of our non-executive directors, Rafaèle Tordjman. HughGriffith serves as chair of the nominations committee and oversees the evaluation of the board of directors’ performance. The nominations committee meets atleast twice a year and reviews the structure, size and composition of the board of directors, supervises the selection and appointment process of directors,making recommendations to the board of directors with regard to any changes and using an external search consultancy if considered appropriate. For newappointments, the nominations committee makes a final recommendation to the board of directors, and the board of directors has the opportunity to meet thecandidate prior to approving the appointment. Once appointed, the nominations committee oversees the induction of new directors and provides theappropriate training to the board of directors during the course of the year in order to ensure that they have the knowledge and skills necessary to operateeffectively. The nominations committee is also responsible for annually evaluating the performance of the board of directors, both on an individual basis andfor the board of directors as a whole, taking into account such factors as attendance record, contribution during board of directors meetings and the amount oftime that has been dedicated to board matters during the course of the year.Code of Business Conduct and EthicsWe have adopted a Code of Business Conduct and Ethics that covers a broad range of matters including the handling of conflicts of interest,compliance issues and other corporate policies such as equal opportunity and non-discrimination standards.105 D.EmployeesThe number of employees by function and geographic location as of the end of the period for our fiscal years ended December 31, 2015, 2016 and2017 was as follows: 2015 2016 2017By Function: Research and development 11 15 18Management and administrative 1 1 2Total 12 16 20By Geography: United Kingdom 9 15 17North America 3 1 3Total 12 16 20 As of December 31, 2017, we had 20 full-time employees. We have never had a work stoppage and none of our employees are covered by collectivebargaining agreements or represented by a labor union. We believe our employee relations are good.E.Share OwnershipSee Item 7 below.Item 7.Major Shareholders and Related Party TransactionsA.Major ShareholdersThe following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares as of December 31,2017 by: •each of our executive officers and directors; •each person beneficially owning more than 5% of our share capital as of December 31, 2017; and •all executive officers and directors as a group.Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of ordinary shares owned by aperson and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days from December 31, 2017,including through the exercise of any option, warrant or other right or the conversion of any other security. These ordinary shares, however, are not includedin the computation of the percentage ownership of any other person except with respect to the percentage ownership of all board members and executiveofficers, as a group. Based on our share register and other information made available to us by certain of our shareholders, as of December 31, 2017, 4,790,480ordinary shares, representing 15.1% of our issued and outstanding ordinary shares, were held by four U.S. record holders.106 Unless otherwise indicated, the address for each of the shareholders in the table below is c/o NuCana plc, 3 Lochside Way, Edinburgh, EH12 9DT,United Kingdom. Ordinary SharesBeneficiallyOwned(1) Name of Beneficial Owner Number Percent Greater than 5% Shareholders Sofinnova Capital VI FCPR(2) 8,100,000 25.46 Sofinnova Venture Partners VIII, L.P.(3) 4,666,666 14.67 Morningside Venture Investments Limited(4) 2,911,111 9.15 Scottish Enterprise(5) 2,246,915 7.06 SMALLCAP World Fund, Inc.(6) 2,002,629 6.30 Named Executive Officers and Directors Hugh Griffith(7) 3,403,531 9.95 Christopher Wood(8) 1,949,374 5.95 Donald Munoz(9) 135,345 * Rafaèle Tordjman — — James Healy(10) 4,712,416 14.81 Isaac Cheng(11) — — Martin Mellish(12) 28,312 * All of our current executive officers and directors, as a group (7 persons) 10,228,978 29.08% *Indicates beneficial ownership of less than one percent of our ordinary shares.(1)Number of shares owned as shown both in this table and the accompanying footnotes and percentage ownership is based on 31,811,146 ordinaryshares outstanding on December 31, 2017.(2)All shares are held by Sofinnova Capital VI FCPR (“Sofinnova Capital”), of which 266,666 shares are held in the form of ADSs. Sofinnova PartnersSAS, a French corporation, is the management company of Sofinnova Capital, and may be deemed to have sole voting and investment power withrespect to the shares held by Sofinnova Capital. Denis Lucquin, Antoine Papiernik, Henrijette Richter, Monique Saulnier and Graziano Seghezzi arethe managing partners of Sofinnova Partners SAS, and, as such, may be deemed to have joint voting and investment power with respect to the sharesheld by Sofinnova Capital. Beneficial ownership information is based on information known to us and a Schedule 13D filed on February 21, 2018.The address of Sofinnova Capital is Sofinnova Partners, Immeuble le Centorial, 16-18 Rue du Quatre-Septembre, 75002 Paris, France.(3)All shares are held by Sofinnova Venture Partners VIII, L.P. (“Sofinnova Ventures”), of which 666,666 shares are held in the form of ADSs. Dr. JamesHealy, a member of our board of directors, together with Dr. Michael F. Powell and Dr. Anand Mehra, are the managing members of SofinnovaManagement VIII, L.L.C., the general partner of Sofinnova Ventures, and as such, may be deemed to have joint voting and dispositive power withrespect to the shares held by Sofinnova Ventures. Each of Dr. Powell, Dr. Mehra and Dr. Healy disclaims beneficial ownership of the shares held bySofinnova Ventures, except to the extent of his pecuniary interest therein, if any. Beneficial ownership information is based on information known tous and a Schedule 13D filed on October 11, 2017. The mailing address of Sofinnova Ventures is c/o Sofinnova Ventures, Inc., 3000 Sand Hill Road,Bldg. 4, Suite 250, Menlo Park, CA 94025.(4)All shares are held by Morningside Venture Investments Limited (“MVIL”). Raymond Tang, Louise Garbarino, Peter Stuart Allenby Edwards and JillFranklin are directors of MVIL, and may be deemed to have joint voting and dispositive power with respect to the shares held by MVIL. Each ofMr. Tang, Ms. Garbarino, Mr. Edwards and Ms. Franklin disclaim beneficial ownership of the shares held by MVIL, except to the extent of his or herpecuniary interest therein, if any. Beneficial ownership information is based on information known to us and a Schedule 13G filed on February 13,2018. The mailing address of MVIL is 2nd Floor, Le Prince de Galles, 3-5 Avenue des Citronniers, MC 98000, Monaco.(5)Consists of 2,246,915 ordinary shares owned of record by Scottish Enterprise. Scottish Enterprise is a non-departmental body of the Scottishgovernment and has sole voting and investment power with respect to the shares. Beneficial ownership information is based on information known tous and a Schedule 13G filed on February 15, 2018. The address of Scottish Enterprise is Atrium Court, 50 Waterloo Street, Glasgow G2 6HQ,Scotland.107 (6)SMALLCAP World Fund, Inc., an investment company registered under the Investment Company Act of 1940, which is advised by Capital Researchand Management Company ("CRMC"), is the beneficial owner of 2,002,628 ordinary shares, all of which are held in the form of ADSs. CRMCmanages equity assets for various investment companies through three divisions, Capital Research Global Investors, Capital World Investors, andCapital International Investors. These divisions generally function separately from each other with respect to investment research activities and theymake investment decisions and proxy voting decisions for the investment companies on a separate basis. Beneficial ownership information is basedon information known to us and a Schedule 13G filed on February 14, 2018. The address of SMALLCAP World Fund, Inc. is 6455 Irvine CenterDrive, Irvine, CA 92618.(7)Consists of (a) 1,000,000 ordinary shares and (b) options to purchase 2,403,531 ordinary shares that are or will be immediately exercisable within 60days of December 31, 2017.(8)Consists of (a) 1,011,875 ordinary shares and (b) options to purchase 937,499 ordinary shares that are or will be immediately exercisable within 60days of December 31, 2017.(9)Consists of (a) 30,000 ordinary shares and (b) options to purchase 105,345 ordinary shares that are or will be immediately exercisable within 60 daysof December 31, 2017.(10)Consists of (a) 45,750 ordinary shares held in the Healy Family Trust, for which James Healy’s spouse is the trustee, and (b) 4,666,666 ordinary sharesowned of record by Sofinnova Ventures. James Healy, a member of our board of directors, together with Michael F. Powell and Anand Mehra, are themanaging members of Sofinnova Management VIII, L.L.C., the general partner of Sofinnova Ventures, and as such, may be deemed to share votingand investment power with respect to such shares. Dr. Healy disclaims beneficial ownership with regard to the 4,666,666 shares owned by SofinnovaVentures, except to the extent of his proportionate pecuniary interest therein.(11)Isaac Cheng is a member of our board of directors who has been designated by MVIL. Dr. Cheng has no voting or investment power with respect tothe shares held by MVIL.(12)Consists of options to purchase 28,312 ordinary shares that are or will be immediately exercisable within 60 days of December 31, 2017.B.Related Party TransactionsThe following is a description of related party transactions we have entered into since January 1, 2017 with any members of our board of directors orexecutive officers or the holders of more than 5% of our share capital.Registration Rights AgreementWe have entered into a registration rights agreement pursuant to which we have agreed under specified circumstances to file a registration statementto register the resale of the ordinary shares (which may be converted into ADSs) held by some of our existing shareholders, as well as to cooperate in specifiedpublic offerings of such shares. See “Description of Share Capital – Registration Rights”.Agreements with Our Executive Officers and DirectorsWe have entered into service agreements with our three executive officers and amended the service agreements with each of Hugh Griffith and DonaldMunoz in 2017.Related Person Transaction PolicyWe have adopted a related person transaction policy requiring that all related person transactions required to be disclosed by a foreign private issuerpursuant to the Exchange Act be approved by the audit committee or another independent body of our board of directors.Indemnification AgreementsWe expect to enter into deeds of indemnity with each of our directors and executive officers. See “Management — Compensation — Insurance andIndemnification.”C.Interests of Experts and CounselNot Applicable.108 Item 8Financial InformationA.Consolidated Statements and Other Financial InformationSee “Item 18. Financial Statements.”B.Significant ChangesThere have been no significant changes since December 31, 2017.Item 9The Offer and ListingA.Offer and Listing DetailsPrice History of StockThe following table sets forth, for the periods indicated, the reported high and low closing sale prices of our ADSs on the Nasdaq Global SelectMarket in U.S. dollars. Price Per ADS ​ High Low Annual (Year Ended December 31): 2017 (September 28, 2017 through December 31, 2017) $18.72 $10.00 2018 (through March 19, 2018) $28.25 $10.04 Quarterly: Third Quarter 2017 (September 28, 2017 through September 30, 2017) $18.37 $16.15 Fourth Quarter 2017 $18.72 $10.00 First Quarter 2018 (through March 19, 2018) $28.25 $10.04 Most Recent Six Months: September 2017 (September 28, 2017 through September 30, 2017) $18.37 $16.15 October 2017 $18.72 $11.36 November 2017 $13.01 $10.25 December 2017 $12.40 $10.00 January 2018 $28.25 $10.04 February 2018 $24.25 $18.95 March 2018 (through March 19, 2018) $20.00 $17.91 On December 31, 2017, and March 19, 2018, the last reported sale prices of our ADSs on the Nasdaq Global Select Market were $10.11 per ADS and$18.20 per ADS, respectively.B.Plan of DistributionNot Applicable.C.MarketsThe ADS have been listed on The Nasdaq Global Select Market under the symbol “NCNA” since September 28, 2017.D.Selling ShareholdersNot Applicable.E.DilutionNot Applicable.F.Expenses of the IssueNot Applicable.109 Item 10.Additional InformationA.Share CapitalNot Applicable.B.Memorandum and Articles of AssociationGeneralWe were incorporated in England and Wales with the Registrar of Companies of England and Wales, United Kingdom on January 28, 1997 under thename Biomed (UK) Limited as a private company limited by shares with company number 03308778.On April 28, 2008, our name was changed to NuCana BioMed Limited. On August 29, 2017, we re-registered as a public limited company andchanged our name to NuCana plc. Such re-registration required the passing of special resolutions by our shareholders to approve the re-registration as apublic limited company, the name change to NuCana plc and to effect certain amendments to our articles of association.Our registered office is located at 77/78 Cannon Street, London, EC4N 6AF, United Kingdom. The principal legislation under which we operate andour shares are issued is the Companies Act 2006.Issued Share CapitalOur issued share capital as of December 31, 2017 is £1,272,446, divided into: 31,811,146 ordinary shares of £0.04 each. A summary of increases in,and changes to, our issued share capital since our incorporation is set out below.We issued one quarter of one ordinary share of £4.00 each to each of London Law Services Limited and London Law Secretarial Limited,respectively, upon incorporation.On March 20, 2008, we subdivided the outstanding issued fractions of ordinary shares of £4.00 each into 50 ordinary shares of £0.04 each and wesubdivided the remaining authorized yet unissued fractions of the ordinary shares of £4.00 each into 2,450 ordinary shares of £0.04 each. Further, ourauthorized share capital was increased from £100 to £500,000 by the creation of 12,497,500 new ordinary shares of £0.04 each. On March 20, 2008, weissued 4,499,950 ordinary shares of £0.04 each.On July 27, 2008, we issued a further 200,000 ordinary shares of £0.04 each. On August 20, 2009, we issued 350,000 ordinary shares of £0.04 each.On December 18, 2009, we issued 1,816,976 ordinary shares of £0.04 each (500,000 of which were available for such issue, having previously been issued to,but subsequently surrendered by, a shareholder). On December 14, 2010, we issued 1,566,359 ordinary shares of £0.04 each.On November 24, 2011, we issued 7,483,334 series A convertible participating shares of £0.04 each.On March 28, 2012, we issued 222,222 ordinary shares of £0.04 each.On March 31, 2014, we issued 8,462,500 series B convertible participating shares of £0.004 each.On November 30, 2016, we issued 37,500 ordinary shares of £0.04 each, pursuant to the exercise of share options granted under the 2012 ShareOption Scheme.On December 31, 2016, we issued 45,750 ordinary shares of £0.04 each, pursuant to the exercise of share options granted under the 2016 ShareOption Scheme.On August 17, 2017, we issued 30,000 ordinary shares of £0.04 each, pursuant to the exercise of share options granted under the 2016 Share OptionScheme.On September 14, 2017, we completed a one-for-four reverse share split and an associated, prior, bonus allotment of three ordinary shares and fiveseries A convertible participating shares to eliminate fractional entitlements. References to the one-for-four reverse share split in this Annual Report includethe associated bonus allotment. The share numbers and nominal110 values set out above have, for presentational purposes, been adjusted to reflect the aforementioned reverse share split (which has necessitated reference tonotional fractions of shares and resulted in certain numbers of shares having been rounded up). These share numbers and nominal values are therefore notrepresentative of, for example, the entries made at the relevant time in our statutory registers nor filings we have made at the UK Registrar of Companies.On October 2, 2017, immediately prior to closing our initial public offering, we converted all issued series A convertible participating shares, series Bconvertible participating shares, founder ordinary 1 shares and founder ordinary 2 shares into ordinary shares, on a one-for-one basis. For the purpose offacilitating the conversion of each series B convertible participating share (nominal value £0.004 per share), into an ordinary share (nominal value £0.04 pershare), immediately prior to this conversion, on October 2, 2017, we allotted to holders of series B convertible participating shares an additional nine series Bconvertible participating shares for each series B convertible participating share held.On October 2, 2017, we issued 7,596,505 ordinary shares pursuant to our initial public offering.Ordinary SharesAs of December 31, 2017, we had issued and outstanding 31,811,146 ordinary shares of £0.04 each, held by 25 shareholders of record. Each issuedordinary share is fully paid.Holders of ordinary shares are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders and do not havecumulative voting rights.Any distribution made as result of winding-up, dissolution or liquidation of our company and any dividend declared will be distributed in proportionto the number of fully paid ordinary shares held.Registration RightsWe have entered into a registration rights agreement pursuant to which we have agreed under specified circumstances to file a registration statementto register the resale of the ordinary shares held by some of our existing shareholders, as well as to cooperate in specified public offerings of such shares.These rights are described below.Demand Registration Rights. If at any time when we are eligible to use a Form F-3 registration statement, the holders of at least 25% of the registrablesecurities then outstanding have the right to demand that we file a Form F-3 registration statement with respect to such registrable securities. Theseregistration rights are subject to specified conditions and limitations, including the right of the underwriters, if any, to limit the number of shares included inany such registration under specified circumstances. Upon such a request, we are required to use commercially reasonable efforts to effect such registration.Company Registration. If we propose to register any of our equity securities under the Securities Act, other than in connection with certain specifiedregistrations, including a registration relating solely to our employee equity incentive plans or a registration relating solely to certain business combinationsor mergers involving us, the holders of these registrable securities are entitled to notice of such registration and are entitled to include their ordinary shares inthe registration. Under certain circumstances, the underwriters, if any, may limit the number of ordinary shares included in any such registration.Termination of Registration Rights. The registration rights granted under the registration rights agreement shall terminate upon the earlier to occur of(i) the fifth anniversary of the closing of our initial public offering and (ii) the date on which there are no registrable securities remaining pursuant to theregistration rights agreement.Articles of AssociationThe following is a summary of certain provisions of our articles of association. Please note that this is only a summary and is not intended to beexhaustive. For further information please refer to the full version of our articles of association, which is included as an exhibit to this Annual Report.111 Shares and Rights Attaching to ThemGeneral. All ordinary shares have the same rights and rank pari passu in all respects. Subject to the provisions of the Companies Act 2006 and anyother relevant legislation, our board of directors may, from time to time, allot and issue shares following an ordinary resolution of the shareholders grantingauthority to the directors to allot shares (and if applicable, and not already disapplied, a special resolution to disapply pre-emption rights).Our shares may be issued with or have attached to them any preferred, deferred, qualified or other special rights or restrictions, whether in relation todividends, returns of capital, voting or otherwise, as set out in our articles of association or as the shareholders may determine by ordinary resolution (or, ifthe shareholders have not so determined, as our board of directors may determine).Voting rights. Subject to any other provisions of our articles of association and without prejudice to any special rights, privileges or restrictions as tovoting attached to any shares forming part of our share capital, the voting rights of shareholders are as follows. Unless a poll vote is demanded, shareholdersshall vote on all resolutions on a show of hands. Our articles of association provide that a poll vote may be demanded before, or on the declaration of, theresult of a vote on a show of hands: (a) by the chairman of a general meeting, (b) by at least five shareholders present at a meeting and entitled to vote, or(c) by any shareholder or shareholders present representing not less than ten per cent of the total voting rights or more than ten per cent of the total sum paidup on all voting shares. For these purposes, a shareholder will be present at a meeting if attending in person, by proxy, or, in the case of a shareholder that is acorporation (as broadly defined under the Companies Act 2006), by duly authorized representative.On a show of hands, each shareholder present in person, and each duly authorized representative present in person of a shareholder that is acorporation, has one vote. On a show of hands, each proxy present in person who has been duly appointed by one or more shareholders has one vote, but aproxy has one vote for and one vote against a resolution if the proxy is instructed to vote on a resolution by more than one shareholder and is instructed tovote in different ways on such resolution.On a poll, each shareholder present in person or by proxy or, with respect to a corporation, by a duly authorized representative has one vote for eachshare held by the shareholder. We are prohibited from exercising any rights to attend or vote at meetings in respect of any shares held by us as treasury shares.Restrictions on voting where sums overdue on shares. None of our shareholders is entitled to vote at any general meeting or at any separate classmeeting in respect of any share held by him or her unless all calls or other sums payable by him or her in respect of that share have been paid.Calls on shares. The directors may from time to time make calls on shareholders in respect of any amounts unpaid on their shares, whether in respectof nominal value of the shares or by way of premium. Shareholders are required to pay the called amount on shares subject to receiving at least 14 clear days’notice specifying the time and place for payment. Under our articles of association, a period of “clear days” excludes the day on which a notice is given ordeemed to have been given and the day for which it is given or on which it is to take effect. If a shareholder fails to pay any part of a call, the board ofdirectors may serve further notice naming another day not being less than 14 clear days from the date of the further notice requiring payment and stating thatin the event of non-payment the shares in respect of which the call was made will be liable to be forfeited. Subsequent forfeiture requires a resolution by theboard of directors.Dividends. Subject to the Companies Act 2006 and the provisions of all other relevant legislation, we may by ordinary resolution declare dividendsout of profits available for distribution in accordance with the respective rights of shareholders, but no such dividend shall exceed the amount recommendedby the board of directors. If, in the opinion of the board of directors, our profits available for distribution justify such payments, the board of directors maypay fixed dividends payable on any of our shares with preferential rights, half-yearly or otherwise, on fixed dates and from time to time pay interim dividendsto the holders of any class of shares. Subject to any special rights attaching to, or terms of issue of, any shares, all dividends shall be declared and paidaccording to the amounts paid up on the shares on which the dividend is paid. No dividend shall be payable to us in respect of any shares held by us astreasury shares.We may, upon the recommendation of the board of directors, by ordinary resolution, direct payment of a dividend wholly or partly by the distributionof specific assets.112 All dividends unclaimed for one year after having been declared may be invested or otherwise used at the directors’ discretion for our benefit untilclaimed (subject as provided in the articles of association), and all dividends unclaimed after a period of 12 years from the date when such dividend becamedue for payment shall be forfeited and shall revert to us.The board of directors may, if so authorized by ordinary resolution passed at any general meeting, offer any holders of the ordinary shares the right toelect to receive in lieu of that dividend an allotment of ordinary shares credited as fully paid.We may cease to send any check or warrant by mail or may stop the transfer of any sum by any bank or other funds transfer system for any dividendpayable on any of our shares, which is normally paid in that manner on those shares if in respect of at least two consecutive dividends the check or warrantshave been returned undelivered or remain uncashed or the transfer has failed, or in respect of one dividend the check or warrant has been returned undeliveredor remains uncashed or the transfer has failed and reasonable inquiries made by us have failed to establish any new address of the holder.We or the directors may specify a “record date” on which persons registered as the holders of shares shall be entitled to receipt of any dividend.Distribution of assets on winding-up. Subject to any special rights attaching to, or the terms of issue of any shares, on any winding-up of the companyour surplus assets remaining after satisfaction of our liabilities will be distributed among our shareholders in proportion to their respective holdings of sharesand the amounts paid up on those shares.On any winding-up of the company (whether the liquidation is voluntary, under supervision or by the Court), the liquidator may with the authority ofa special resolution of the company and any other sanction required by any relevant legislation, divide among our shareholders (excluding the companyitself to the extent that it is a shareholder by virtue of its holding any shares or treasury shares) in specie or in kind the whole or any part of our assets (subjectto any special rights attached to any shares issued by us in the future) and may for that purpose set such value as he deems fair upon any one or more class orclasses of property and may determine how that division shall be carried out as between the shareholders or different classes of shareholders. The liquidatormay, with that sanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the shareholders as he with the relevant authoritydetermines, and the liquidation of the company may be closed and the company dissolved, but so that no shareholders shall be compelled to accept anyshares or other property in respect of which there is a liability.Variation of rights. The rights or privileges attached to any class of shares may (unless otherwise provided by the terms of the issue of the shares ofthat class) be varied or abrogated with the consent in writing of the holders of three-fourths in requisite nominal value of the issued shares of that class(excluding any shares of that class held as treasury shares) or with the approval of a special resolution passed at a separate general meeting of the shareholdersof that class, but not otherwise.Transfer of shares. All of our shares are in registered form and may be transferred by a transfer in any usual or common form or any form acceptable tothe board of directors and permitted by the Companies Act 2006 and any other relevant legislation.The board of directors may decline to register a transfer of a share that is: •not fully paid or on which we have a lien; •(except where uncertificated shares are transferred without a written instrument) not lodged duly stamped (if it is required to be stamped) at ourregistered office or at such other place as the board of directors may appoint; •(except where a certificate has not been issued) not accompanied by the certificate of the share to which it relates or such other evidencereasonably required by the directors to show the right of the transferor to make the transfer; •in respect of more than one class of share; or •in the case of a transfer to joint holders of a share, the number of joint holders to whom the share is to be transferred exceeds four.113 Capital variations. We may, by ordinary resolution, consolidate and divide all or any of our share capital into shares of a larger nominal amount thanour existing shares or sub-divide our shares, or any of them, into shares of a smaller nominal amount than our existing shares. Subject to the provisions of theCompanies Act 2006 and any other applicable legislation, we may by special resolution reduce our share capital, any capital redemption reserve fund or anyshare premium account and may redeem or purchase any of our own shares.Pre-emption rights. There are no rights of pre-emption under our articles of association in respect of transfers of issued ordinary shares. In certaincircumstances, our shareholders may have statutory pre-emption rights under the Companies Act 2006 in respect of the allotment of new shares in thecompany. These statutory pre-emption rights, when applicable, would require us to offer new shares for allotment to existing shareholders on a pro rata basisbefore allotting them to other persons. In such circumstances, the procedure for the exercise of such statutory pre-emption rights would be set out in thedocumentation by which such ordinary shares would be offered to our shareholders. These statutory pre-emption rights may be disapplied by a specialresolution passed by shareholders in a general meeting in accordance with the provisions of the Companies Act 2006.DirectorsNumber. Unless and until we in a general meeting of our shareholders otherwise determine, the number of directors comprising our board of directorsshall not be subject to any maximum but shall not be less than two.Classified board of directors. Our board of directors is divided into three classes, “Class I,” whose initial term expires at the annual general meeting ofthe shareholders to be held in 2020, “Class II,” whose initial term expires at the annual general meeting of the shareholders to be held in 2019, and“Class III”, whose initial term expires at the annual general meeting of the shareholders to be held in 2018, with the classes as nearly equal in number aspossible. The Class I directors are Hugh Griffith and Christopher Wood, the Class II directors are Rafaèle Tordjman and James Healy, and the Class IIIdirectors are Isaac Cheng and Martin Mellish.Borrowing powers. Our board of directors may exercise all the powers of the company to borrow money, mortgage or charge all or any part or parts ofits undertaking, property and uncalled capital, and issue debentures and other securities whether outright or as collateral security for any debt, liability orobligation of the company or of any third party.Directors’ interests and restrictions(a) The board of directors may, in accordance with our articles of association and the requirements of the Companies Act 2006, authorize a matterproposed to us which would, if not authorized, involve a breach by a director of his or her duty under section 175 of the Companies Act 2006 to avoid asituation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with our interests. A director is not required,by reason of being a director, to account to the company for any remuneration or other benefit that he or she derives from a relationship involving a conflictof interest or possible conflict of interest that has been authorized by the board of directors.(b) Subject to the provisions of any relevant legislation and provided that he or she has disclosed to the directors the nature and extent of any materialinterest of his or hers, a director may be a party to, or otherwise interested in, any transaction, contract or arrangement and that director shall not, by reason ofhis or her office, be accountable to the company for any benefit that he or she derives from any such transaction or arrangement; and no such transaction orarrangement shall be liable to be voided on the ground of any such interest or benefit.(c) Except as provided in our articles of association, a director shall not vote at a meeting of the directors in respect of any transaction or arrangementor any other proposal whatsoever in which he or she has an interest that is to his or her knowledge material (together with any person connected with him orher within the meaning of section 252 of the Companies Act 2006), other than (i) an interest in shares or debentures or other securities of the company,(ii) where permitted by the terms of any authorization of a conflict of interest or by an ordinary resolution, or (iii) in the circumstances set out in paragraph(d) below, and shall not be counted in the quorum at a meeting in relation to any resolution on which he or she is not entitled to vote.(d) A director shall (in the absence of some material interest other than those indicated below) be entitled to vote (and be counted in the quorum) inrespect of any resolution concerning any of the following matters:(i) the giving of any guarantee, security or indemnity to him or her in respect of money lent to or an obligation incurred by him or her at therequest of or for the benefit of us or any of our subsidiaries;114 (ii) the giving to a third party of any guarantee, security or indemnity in respect of a debt or obligation of ours or any of our subsidiaries forwhich he himself or she herself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security;(iii) any proposal or contract concerning an offer of shares or debentures or other securities of or by the company or any of its subsidiaries, ifhe or she takes part because he or she is or may be entitled to participate as a holder of shares, debentures or other securities, or if he or she takes partin the underwriting, sub-underwriting or guarantee of the offer;(iv) any proposal concerning any other company in which he or she is interested, directly or indirectly and whether as an officer or shareholderor otherwise, provided that he or she (together with persons connected with him or her) does not to his or her knowledge hold an interest in sharesrepresenting one percent or more of the issued shares of any class of such company or of the voting rights available to shareholders of the relevantcompany;(v) any proposal concerning arrangements pursuant to which benefits are made available to our employees and which does not award him orher any privilege or benefit not generally awarded to the employees to whom such arrangement relates;(vi) any proposal under which he or she may benefit concerning the giving of indemnities to our directors or other officers that the directorsare empowered to give under our articles of association;(vii) any proposal under which he or she may benefit concerning the purchase or maintenance of insurance for any of our directors or otherofficers; and(viii) any proposal under which he or she may benefit concerning the provision to directors of funds to meet expenditures in defendingproceedings.(e) Where proposals are under consideration to appoint two or more directors to offices or employments with us or with any company in which we areinterested or to fix or vary the terms of such appointments, such proposals may be divided and considered in relation to each director separately and in suchcase each of the directors concerned (if not debarred from voting under paragraph (d)(iv) above) shall be entitled to vote (and be counted in the quorum) inrespect of each resolution, except that concerning his or her own appointment.(f) If any question shall arise at any meeting as to the materiality of a director’s interest or as to the entitlement of any director to vote and suchquestion is not resolved by his or her agreeing voluntarily to abstain from voting, such question shall be referred to the chairman of the meeting (or where theinterest concerns the chairman himself to the deputy chairman of the meeting) and his or her ruling in relation to any director shall be final and conclusive,except in a case where the nature or extent of the interests of the director concerned have not been fairly disclosed.Remuneration(a) Each of the directors (other than alternate directors) may (in addition to any amounts payable under paragraph (b) and (c) below or under any otherprovision of our articles of association) be paid out of the funds of the company such sum by way of directors’ fees as the board of directors may from time totime determine.(b) Any director who is appointed to hold any employment or executive office with us or who, by our request, goes or resides abroad for any purposesof the company or who otherwise performs services that in the opinion of the board of directors are outside the scope of his or her ordinary duties may be paidsuch additional remuneration (whether by way of salary, commission, participation in profits or otherwise) as the board of directors (or any duly authorizedcommittee of the board of directors) may determine and either in addition to or in lieu of any remuneration provided for by or pursuant to any other article.(c) Each director may be paid his or her reasonable traveling expenses (including hotel and incidental expenses) of attending and returning frommeetings of the directors or committees of the board of directors or general meetings or any separate meeting of the holders of any class of our shares or anyother meeting that as a director he or she is entitled to attend and shall be paid all expenses properly and reasonably incurred by him or her in the conduct ofthe company’s business or in the discharge of his or her duties as a director.Pensions and other benefits. The board of directors may exercise all the powers of the company to provide benefits, either by the payment ofgratuities or pensions or by insurance or in any other manner whether similar to the foregoing or not, for any director or former director, or any person who isor was at any time employed by, or held an executive or other office or place of profit in, the company or any body corporate that is or has been a subsidiaryof the company or a predecessor of115 the business of the company or of any such subsidiary and for the families and persons who are or was a dependent of any such persons and for the purpose ofproviding any such benefits contribute to any scheme trust or fund or pay any premiums.Appointment and retirement of directors(a) The board of directors shall have power to appoint any person who is willing to act to be a director, either to fill a casual vacancy or as anadditional director but so that the total number of directors shall not exceed the maximum number fixed (if any) by or in accordance with our articles ofassociation. Any director so appointed shall retire from office at our annual general meeting following such appointment, and then shall be eligible for re-election for the remaining portion of the term of office of the Class to which he or she is eligible for election.(b) Subject as provided in our articles of association, the shareholders may by ordinary resolution elect any person who is willing to act as a directoreither to fill a casual vacancy or as an addition to the existing directors or to replace a director removed from office under our articles of association but sothat the total number of directors shall not at any one time exceed any maximum number fixed by or in accordance with our articles of association.(c) Subject to paragraph (a) above and the initial terms described in “Description of Share Capital—Articles of Association—Directors—Classifiedboard of directors”, each director within each class shall retire at the third annual general meeting following the annual general meeting at which he or shewas elected or last re-elected. Except where there is an increase in the number of directors (in which case the newly created directorships shall be apportionedby our board amongst our existing classes) or in accordance with paragraph (a) above, directors elected or re-elected at an annual general meeting shall beappointed to the class whose term expires at such meeting.(d) A director retiring at an annual general meeting shall be eligible for re-election. If a retiring director is not re-elected, he or she shall hold officeuntil the meeting elects someone in his or her place or, if it does not do so, until the end of the meeting.Company name. The board of directors may resolve to change our company name.Indemnity of officers. Subject to the provisions of any relevant legislation, each of our directors and other officers may be indemnified by us againstall costs, charges, losses, expenses and liabilities incurred by him in the execution and discharge of his duties or in relation to those duties. The CompaniesAct 2006 renders void an indemnity for a director against any liability attaching to him or her in connection with any negligence, default, breach of duty orbreach of trust in relation to the company of which he or she is a director as described in “— Differences in Corporate Law — Liability of Directors andOfficers.”Shareholders’ MeetingsAnnual general meetings. We shall in each year hold an annual general meeting of our shareholders in addition to any other meetings in that year,and shall specify the meeting as such in the notice convening it. The annual general meeting shall be held at such time and place as the board of directorsmay appoint.Calling of general meetings. The board of directors may call a general meeting of shareholders. The board of directors must call a general meeting ifthe shareholders and the Companies Act 2006 require them to do so. The arrangements for the calling of general meetings are described in “— Differences inCorporate Law — Notice of General Meetings” below.Quorum of meetings. No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business butthe absence of a quorum shall not preclude the appointment of a chairman, which shall not be treated as part of the business of a meeting. One or morequalifying persons present at a meeting and between them holding (or being the proxy or corporate representative of the holders of) at least one-third innumber of the issued shares (excluding any shares held as treasury shares) entitled to vote on the business to be transacted are a quorum. A qualifying personfor these purposes is an individual who is a shareholder, a person authorized to act as the representative of a shareholder (being a corporation) in relation tothe meeting or a person appointed as proxy of a shareholder in relation to the meeting.116 Other United Kingdom law considerationsMandatory purchases and acquisitions. Pursuant to Sections 979 to 991 of the Companies Act 2006, where a takeover offer has been made for us andthe offeror has acquired or unconditionally contracted to acquire not less than 90% in value of the shares to which the offer relates and not less than 90% ofthe voting rights carried by those shares, the offeror may give notice to the holder of any shares to which the offer relates which the offeror has not acquired orunconditionally contracted to acquire that he wishes to acquire, and is entitled to so acquire, those shares on the same terms as the general offer. The“squeeze-out” of the minority shareholders can be completed at the end of six weeks from the date the notice has been given, subject to the minorityshareholders failing to successfully lodge an application to the court to prevent such squeeze-out any time prior to the end of those six weeks, followingwhich the offeror can execute a transfer of the outstanding shares in its favor and pay the consideration to us, to be held on trust for the outstanding minorityshareholders. The consideration offered to the outstanding minority shareholders whose shares are compulsorily acquired under the Companies Act 2006must, in general, be the same as the consideration that was available under the takeover offer.Sell-out. The Companies Act 2006 also gives our minority shareholders a right to be bought out in certain circumstances by an offeror who has madea takeover offer for all of our shares. The holder of shares to which the offer relates, and who has not otherwise accepted the offer, may require the offeror toacquire his shares if, prior to the expiry of the acceptance period for such offer, (i) the offeror has acquired or agreed to acquire not less than 90% in value ofour voting shares, and (ii) not less than 90% of the voting rights carried by those shares. The offeror may impose a time limit on the rights of minorityshareholders to be bought out that is not less than three months after the end of the acceptance period. If a shareholder exercises his rights to be bought out,the offeror is required to acquire those shares on the terms of the takeover offer or on such other terms as may be agreed.Disclosure of interest in shares. Pursuant to Part 22 of the Companies Act 2006 and our articles of association, we are empowered to require, by noticein writing, any person whom we know to be, or have reasonable cause to believe to be, interested in our shares, or at any time during the three yearsimmediately preceding the date on which the notice is issued has been so interested, within a reasonable time to disclose to us particulars of that person’sown interest and (so far as is within that person’s knowledge) particulars of any other interest, agreement or arrangement relating to the exercise of any rightsconferred by the holding of the shares that subsists or subsisted in those shares.Under our articles of association, if a person defaults in supplying us with the required particulars in relation to the shares in question (referred toherein as “default shares”), the board of directors may by notice direct that: •in respect of the default shares, the relevant shareholder shall not be entitled to vote or exercise any other right conferred by his holding sharesin relation to general meetings; or •where the default shares represent at least 0.25% of their class, (a) any dividend or other money payable in respect of the default shares shall beretained by us without liability to pay interest and, if applicable, any election to receive ordinary shares instead of money in respect of thedefault shares shall be ineffective; (b) no transfers of shares by the relevant shareholder other than certain approved transfers may be registered(unless the shareholder himself is not in default and the transfer does not relate to default shares) or (c) any shares held by the relevantshareholder in uncertificated form shall be converted into certificated form.Purchase of own shares. Under English law, a limited company may only purchase its own shares out of its distributable profits or the proceeds of afresh issue of shares made for the purpose of financing the purchase, provided it is are not restricted from doing so by its articles. A limited company may notpurchase its own shares if, as a result of the purchase, there would no longer be any issued shares of the company other than redeemable shares or shares heldas treasury shares. Shares must be fully paid in order to be repurchased.We may purchase our own fully paid shares otherwise than on a recognized investment exchange pursuant to a purchase contract authorized byresolution of shareholders before the purchase takes place. Any authority will not be effective if any shareholder from whom we propose to purchase sharesvotes on the resolution and the resolution would not have been passed if he had not done so. The resolution authorizing the purchase must specify a date, notbeing later than five years after the passing of the resolution, on which the authority to purchase is to expire.Preemptive Rights. English law generally provides shareholders with preemptive rights when new shares are issued for cash; however, it is possiblefor a company’s articles of association, or shareholders in general meeting, to exclude preemptive rights. Such an exclusion of preemptive rights may be for amaximum period of up to five years from the date of adoption of the articles of association, if the exclusion is contained in the articles of association, or fromthe date of the117 shareholder resolution, if the exclusion is by shareholder resolution. In either case, this exclusion would need to be renewed by our shareholders upon itsexpiration (i.e., at least every five years). On September 14, 2017, our shareholders approved the exclusion of preemptive rights in connection with theallotment of shares with an aggregate nominal value of up to £791,497, for a period ending at the conclusion of our next annual general meeting. OnSeptember 14, 2017, our shareholders also approved the exclusion of preemptive rights for the allotment of ordinary shares in connection with our shareschemes, up to an aggregate nominal value of £200,331 for a period of five years from the date of approval, which exclusion will need to be renewed uponexpiration (i.e., at least every five years) to remain effective, but may be sought more frequently for additional five-year terms (or any shorter period).City code on takeovers and mergers, or the Takeover Code. As a public company incorporated in England and Wales with its place of centralmanagement and control in the United Kingdom, we are subject to the United Kingdom City Code on Takeovers and Mergers (referred to herein as theTakeover Code). The Takeover Code contains rules concerning the conduct of takeover offers for the company. For example, under Rule 9 of the TakeoverCode, if a person:(a) acquires an interest in our shares that, when taken together with shares in which he or persons acting in concert with him are interested, carries 30%or more of the voting rights of our shares; or(b) who, together with persons acting in concert with him, is interested in shares that in the aggregate carry not less than 30% and not more than 50%of the voting rights in the company, acquires additional interests in shares that increase the percentage of shares carrying voting rights in which that person isinterested;the acquirer and, depending on the circumstances, its concert parties, would be required (except with the consent of the Takeover Panel) to make acash offer for our outstanding shares at a price not less than the highest price paid for any interests in the shares by the acquirer or its concert parties duringthe previous 12 months. Some provisions in the Takeover Code might have anti-takeover effects that could discourage an acquisition of us by others even ifan acquisition would be beneficial to our shareholders.Distributions and dividends. Under the Companies Act 2006, before a company can lawfully make a distribution or dividend, it must ensure that ithas sufficient distributable reserves (on a non-consolidated basis). The basic rule is that a company’s profits available for the purpose of making a distributionare its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as notpreviously written off in a reduction or reorganization of capital duly made. The requirement to have sufficient distributable reserves before a distribution ordividend can be paid applies to us and to each of our subsidiaries that has been incorporated under English law.It is not sufficient that we, as a public company, have made a distributable profit for the purpose of making a distribution. An additional capitalmaintenance requirement is imposed on us to ensure that the net worth of the company is at least equal to the amount of its capital. A public company canonly make a distribution:(a) if, at the time that the distribution is made, the amount of its net assets (that is, the total excess of assets over liabilities) is not less than the total ofits called up share capital and undistributable reserves; and(b) if, and to the extent that, the distribution itself, at the time that it is made, does not reduce the amount of the net assets to less than that total.Exchange controls. There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import orexport of capital, including the availability of cash, cash equivalents and short-term deposits for use by us, or that may affect the remittance of dividends,interest, or other payments by us to non-resident holders of our ordinary shares or ADSs, other than withholding tax requirements. There is no limitationimposed by English law or in the articles of association on the right of non-residents to hold or vote shares.118 Differences in Corporate LawThe applicable provisions of the Companies Act 2006 differ from laws applicable to U.S. corporations and their shareholders. Set forth below is asummary of certain differences between the provisions of the Companies Act 2006 applicable to us and the Delaware General Corporation Law relatingto shareholders’ rights and protections. This summary is not intended to be a complete discussion of the respective rights and it is qualified in its entiretyby reference to Delaware law and English law. England and Wales DelawareNumber of Directors Under the Companies Act 2006, a public limited companymust have at least two directors and the number of directorsmay be fixed by or in the manner provided in a company’sarticles of association. Under Delaware law, a corporation must have at least onedirector and the number of directors shall be fixed by or inthe manner provided in the bylaws. Removal of Directors Under the Companies Act 2006, shareholders may remove adirector without cause by an ordinary resolution (which ispassed by a simple majority of those voting in person or byproxy at a general meeting) irrespective of any provisions ofany service contract the director has with the company,provided 28 clear days’ notice of the resolution has been givento the company and its shareholders. On receipt of notice of anintended resolution to remove a director, the company mustforthwith send a copy of the notice to the director concerned.Certain other procedural requirements under the CompaniesAct 2006 must also be followed such as allowing the directorto make representations against his or her removal either at themeeting or in writing. Under Delaware law, any director or the entire board ofdirectors may be removed, with or without cause, by theholders of a majority of the shares then entitled to vote atan election of directors, except (a) unless the certificate ofincorporation provides otherwise, in the case of acorporation whose board of directors is classified,shareholders may effect such removal only for cause, or(b) in the case of a corporation having cumulative voting, ifless than the entire board of directors is to be removed, nodirector may be removed without cause if the votes castagainst his removal would be sufficient to elect him if thencumulatively voted at an election of the entire board ofdirectors, or, if there are classes of directors, at an electionof the class of directors of which he is a part. Vacancies on the Board ofDirectors Under English law, the procedure by which directors (otherthan a company’s initial directors) are appointed is generallyset out in a company’s articles of association, provided thatwhere two or more persons are appointed as directors of apublic limited company by resolution of the shareholders at ageneral meeting, resolutions appointing each director must bevoted on individually unless the shareholders present vote todisapply this requirement without any vote in opposition. Under Delaware law, vacancies and newly createddirectorships may be filled by a majority of the directorsthen in office (even though less than a quorum) or by a soleremaining director unless (a) otherwise provided in thecertificate of incorporation or by-laws of the corporation or(b) the certificate of incorporation directs that a particularclass of stock is to elect such director, in which case amajority of the other directors elected by such class, or asole remaining director elected by such class, will fill suchvacancy. Annual General Meeting Under the Companies Act 2006, a public limited companymust hold an annual general meeting in each six-month periodfollowing the company’s annual accounting reference date. Under Delaware law, the annual meeting of stockholdersshall be held at such place, on such date and at such time asmay be designated from time to time by the board ofdirectors or as provided in the certificate of incorporation orby the bylaws. 119 General Meeting Under the Companies Act 2006, a general meeting of theshareholders of a public limited company may be called by thedirectors. Shareholders holding at least 5% of the paid-up capital of thecompany carrying voting rights at general meetings canrequire the directors to call a general meeting and, if thedirectors fail to do so within a prescribed period, maythemselves call a general meeting. Under Delaware law, special meetings of the stockholdersmay be called by the board of directors or by such person orpersons as may be authorized by the certificate ofincorporation or by the bylaws. Notice of General Meetings Under the Companies Act 2006, 21 clear days’ notice must begiven for an annual general meeting and any resolutions to beproposed at the meeting. Subject to a company’s articles ofassociation providing for a longer period, at least 14 cleardays’ notice is required for any other general meeting. Inaddition, certain matters, such as resolutions to removedirectors or auditors, require special notice, which is 28 cleardays’ notice. The shareholders of a company may in all casesconsent to a shorter notice period, the proportion ofshareholders’ consent required being 100% of those entitled toattend and vote in the case of an annual general meeting and,in the case of any other general meeting, a majority in numberof the shareholders having a right to attend and vote at themeeting, being a majority who together hold not less than 95%in nominal value of the shares giving a right to attend and voteat the meeting. Under Delaware law, unless otherwise provided in thecertificate of incorporation or bylaws, written notice of anymeeting of the stockholders must be given to eachstockholder entitled to vote at the meeting not less than 10nor more than 60 days before the date of the meeting andshall specify the place, date, hour, and purpose or purposesof the meeting. Proxy Under the Companies Act 2006, at any meeting ofshareholders, a shareholder may designate another person toattend, speak and vote at the meeting on their behalf by proxy. Under Delaware law, at any meeting of stockholders, astockholder may designate another person to act for suchstockholder by proxy, but no such proxy shall be voted oracted upon after three years from its date, unless the proxyprovides for a longer period. A director of a Delawarecorporation may not issue a proxy representing thedirector’s voting rights as a director. Pre-emptive Rights Under the Companies Act 2006, “equity securities”, being(i) shares in the company other than shares that, with respect todividends and capital, carry a right to participate only up to aspecified amount in a distribution (“ordinary shares”) or(ii) rights to subscribe for, or to convert securities into,ordinary shares, proposed to be allotted for cash must beoffered first to the existing equity shareholders in the companyin proportion to the respective nominal value of theirholdings, unless an exception applies or a special resolution tothe contrary has been passed by shareholders in a generalmeeting or the articles of association provide otherwise (ineach case in accordance with the provisions of the CompaniesAct 2006). Under Delaware law, shareholders have no preemptiverights to subscribe to additional issues of stock or to anysecurity convertible into such stock unless, and except tothe extent that, such rights are expressly provided for in thecertificate of incorporation. 120 Authority to Allot Under the Companies Act 2006, the directors of a companymust not allot shares or grant rights to subscribe for or toconvert any security into shares unless an exception applies oran ordinary resolution to the contrary has been passed byshareholders in a general meeting or the articles of associationprovide otherwise (in each case in accordance with theprovisions of the Companies Act 2006). Under Delaware law, if the corporation’s charter orcertificate of incorporation so provides, the board ofdirectors has the power to authorize the issuance of stock. Itmay authorize capital stock to be issued for considerationconsisting of cash, any tangible or intangible property orany benefit to the corporation or any combination thereof.It may determine the amount of such consideration byapproving a formula. In the absence of actual fraud in thetransaction, the judgment of the directors as to the value ofsuch consideration is conclusive. Liability of Directors andOfficers Under the Companies Act 2006, any provision (whethercontained in a company’s articles of association or anycontract or otherwise) that purports to exempt a director of acompany, to any extent, from any liability that wouldotherwise attach to him in connection with any negligence,default, breach of duty or breach of trust in relation to thecompany is void. Any provision by which a company directly or indirectlyprovides an indemnity, to any extent, for a director of thecompany or of an associated company against any liabilityattaching to him in connection with any negligence, default,breach of duty or breach of trust in relation to the company ofwhich he is a director is also void except as permitted by theCompanies Act 2006, which provides exceptions for thecompany to (a) purchase and maintain insurance against suchliability; (b) provide a “qualifying third party indemnity”(being an indemnity against liability incurred by the directorto a person other than the company or an associated companyas long as he is successful in defending the claim or criminalproceedings or in obtaining relief from the court); and(c) provide a “qualifying pension scheme indemnity” (beingan indemnity against liability incurred in connection with thecompany’s activities as trustee of an occupational pensionplan). Under Delaware law, a corporation’s certificate ofincorporation may include a provision eliminating orlimiting the personal liability of a director to thecorporation and its stockholders for damages arising from abreach of fiduciary duty as a director. However, noprovision can limit the liability of a director for: • any breach of the director’s duty of loyalty to thecorporation or its stockholders; • acts or omissions not in good faith or thatinvolve intentional misconduct or a knowingviolation of law; • intentional or negligent payment of unlawfuldividends or stock purchases or redemptions; or • any transaction from which the director derivesan improper personal benefit. 121 Voting Rights Under English law, unless a poll is demanded by theshareholders of a company or is required by the chairman ofthe meeting or by the company’s articles of association,shareholders shall vote on all resolutions on a show of hands.Under the Companies Act 2006, a poll may be demanded by(a) not fewer than five shareholders having the right to vote onthe resolution; (b) any shareholder(s) representing not less than10% of the total voting rights of all the shareholders havingthe right to vote on the resolution; or (c) any shareholder(s)holding shares in the company conferring a right to vote onthe resolution being shares on which an aggregate sum hasbeen paid up equal to not less than 10% of the total sum paidup on all the shares conferring that right. A company’s articlesof association may provide more extensive rights forshareholders to call a poll. Under English law, an ordinary resolution is passed on a showof hands if it is approved by a simple majority (more than50%) of the votes cast by shareholders present (in person or byproxy) and entitled to vote. If a poll is demanded, an ordinaryresolution is passed if it is approved by holders representing asimple majority of the total voting rights of shareholderspresent, in person or by proxy, who, being entitled to vote,vote on the resolution. Special resolutions require theaffirmative vote of not less than 75% of the votes cast byshareholders present, in person or by proxy, at the meeting. Delaware law provides that, unless otherwise provided inthe certificate of incorporation, each stockholder is entitledto one vote for each share of capital stock held by suchstockholder. Shareholder Vote on CertainTransactions The Companies Act 2006 provides for schemes ofarrangement, which are arrangements or compromises betweena company and any class of shareholders or creditors that areused in certain types of reconstructions, amalgamations,capital reorganizations or takeovers. These arrangementsrequire: • the approval at a shareholders’ or creditors’ meetingconvened by order of the court, of a majority innumber of shareholders or creditors representing75% in value of the capital held by, or debt owed to,the class of shareholders, or class thereof present andvoting, either in person or by proxy; and • the approval of the court. Generally, under Delaware law, unless the certificate ofincorporation provides for the vote of a larger portion of thestock, completion of a merger, consolidation, sale, lease orexchange of all or substantially all of a corporation’s assetsor dissolution requires: • the approval of the board of directors; and • approval by the vote of the holders of a majorityof the outstanding stock or, if the certificate ofincorporation provides for more or less than onevote per share, a majority of the votes of theoutstanding stock of a corporation entitled tovote on the matter. 122 Standard of Conduct forDirectors Under English law, a director owes various statutory andfiduciary duties to the company, including: • to act in the way he considers, in good faith, wouldbe most likely to promote the success of thecompany for the benefit of its shareholders as awhole, subject in certain specified circumstances toconsider or act in the interests of the creditors of thecompany; • to avoid a situation in which he has, or can have, adirect or indirect interest that conflicts, or possiblyconflicts, with the interests of the company; • to act in accordance with the company’sconstitution and only exercise his powers for thepurposes for which they are conferred; • to exercise independent judgement; • to exercise reasonable care, skill and diligence; • not to accept benefits from a third party conferred byreason of his being a director or doing, or not doing,anything as a director; and • a duty to declare any interest that he has, whetherdirectly or indirectly, in a proposed or existingtransaction or arrangement with the company. Delaware law does not contain specific provisions settingforth the standard of conduct of a director. The scope of thefiduciary duties of directors is generally determined by thecourts of the State of Delaware. In general, directors have aduty to act without self-interest, on a well-informed basisand in a manner they reasonably believe to be in the bestinterest of the stockholders. Directors of a Delaware corporation owe fiduciary duties ofcare and loyalty to the corporation and to its shareholders.The duty of care generally requires that a director act ingood faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under thisduty, a director must inform himself of all materialinformation reasonably available regarding a significanttransaction. The duty of loyalty requires that a director actin a manner he reasonably believes to be in the bestinterests of the corporation. He must not use his corporateposition for personal gain or advantage. In general, butsubject to certain exceptions, actions of a director arepresumed to have been made on an informed basis, in goodfaith and in the honest belief that the action taken was inthe best interests of the corporation. However, thispresumption may be rebutted by evidence of a breach ofone of the fiduciary duties. Delaware courts have alsoimposed a heightened standard of conduct upon directorsof a Delaware corporation who take any action designed todefeat a threatened change in control of the corporation. In addition, under Delaware law, when the board ofdirectors of a Delaware corporation approves the sale orbreak-up of a corporation, the board of directors may, incertain circumstances, have a duty to obtain the highestvalue reasonably available to the shareholders. 123 Shareholder Litigation Under English law, generally, the company, rather than itsshareholders, is the proper claimant in an action in respect of awrong done to the company or where there is an irregularity inthe company’s internal management. Notwithstanding thisgeneral position, the Companies Act 2006 provides that (i) acourt may allow a shareholder to bring a derivative claim (thatis, an action in respect of and on behalf of the company) inrespect of a cause of action arising from an act or omissioninvolving a director’s negligence, default, breach of duty orbreach of trust and (ii) a shareholder may bring a claim for acourt order where the company’s affairs have been or are beingconducted in a manner that is unfairly prejudicial to some orall of its shareholders. Under Delaware law, a stockholder may initiate a derivativeaction to enforce a right of a corporation if the corporationfails to enforce the right itself. The complaint must: • state that the plaintiff was a stockholder at thetime of the transaction of which the plaintiffcomplains or that the plaintiffs shares thereafterdevolved on the plaintiff by operation of law;and • allege with particularity the efforts made by theplaintiff to obtain the action the plaintiff desiresfrom the directors and the reasons for theplaintiff’s failure to obtain the action; or • State the reasons for not making the effort. Additionally, the plaintiff must remain a stockholderthrough the duration of the derivative suit. The action willnot be dismissed or compromised without the approval ofthe Delaware Court of Chancery. C.Material ContractsExcept as otherwise disclosed in this Annual Report (including the exhibits thereto), we are not currently, and have not been in the last two years,party to any material contract, other than contracts entered into in the ordinary course of our business.D.Exchange ControlsThere are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital,including the availability of cash and cash equivalents for use by us, or that may affect the remittance of dividends, interest, or other payments by us to non-resident holders of our ordinary shares or ADSs, other than withholding tax requirements. There is no limitation imposed by English law or our articles ofassociation on the right of non-residents to hold or vote shares.E.TaxationMaterial U.S. Federal Income Tax ConsiderationsThe following discussion describes the material U.S. federal income tax consequences to U.S. Holders (as defined below) under present law of thepurchase, ownership and disposition of the ADSs. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended or the Code for purposesof this discussion, in effect as of the date of this Annual Report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of thisAnnual Report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject tochange, which change could apply retroactively and could affect the tax consequences described below.This discussion applies only to U.S. Holders that hold the ADSs as capital assets for U.S. federal income tax purposes. It does not purport to be acomprehensive description of all tax considerations that may be relevant to a decision to purchase the ADSs by any particular investor. In particular, thisdiscussion does not address tax considerations applicable to a U.S. Holder that may be subject to special tax rules, including, without limitation, a dealer insecurities or currencies, a trader in securities that elects to use a mark-to-market method of accounting for securities holdings, banks, thrifts, or other financialinstitutions, an insurance company, a tax-exempt organization, a person that holds the ADSs as part of a hedge, straddle or124 conversion transaction for tax purposes, a person whose functional currency for tax purposes is not the U.S. dollar, certain former citizens or residents of theUnited States or a person that owns directly, indirectly or constructively 10% or more of the company’s voting shares or value. Moreover, this descriptiondoes not address the U.S. federal estate, gift, or alternative minimum tax consequences, or any state, local or non-U.S. tax consequences, of the acquisition,ownership and disposition of the ADSs. In addition, the discussion does not address tax consequences to an entity or arrangement treated as a partnership forU.S. federal income tax purposes that holds the ADSs, or a partner in such partnership. The U.S. federal income tax treatment of each partner of suchpartnership generally will depend upon the status of the partner and the activities of the partnership. Prospective purchasers that are partners in a partnershipholding the ADSs are urged to consult their own tax advisers.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to an investor that is a beneficial owner of ADSs andthat is, for U.S. federal income tax purposes, •an individual who is a citizen or resident of the United States; •a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, anystate therein or the District of Columbia; •an estate whose income is subject to U.S. federal income taxation regardless of its source; or •a trust that (i) is subject to the primary supervision of a court within the United States and subject to the control of one or more U.S. persons forall substantial decisions or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.For U.S. federal income tax purposes, a beneficial owner of ADSs generally will be treated as the owner of the underlying ordinary shares representedby such ADSs. Accordingly, deposits or withdrawals of the underlying ordinary shares for ADSs generally will not be subject to U.S. federal income tax.You are urged to consult your tax advisors about the application of the U.S. federal income tax rules to your particular circumstances as well asthe state, local, non-U.S. and other tax consequences of the purchase, ownership and disposition of the ADSs.Passive Foreign Investment Company ConsiderationsIn general, a corporation organized outside the United States will be classified as a passive foreign investment company, or PFIC, in a particulartaxable year if either (i) 75% or more of the corporation’s gross income for the taxable year is passive income or (ii) on average at least 50% of the value ofthe corporation’s assets produce passive income or are held for the production of passive income. Passive income for this purpose generally includes, amongother things, certain dividends, interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property thatgives rise to passive income.In making this determination, we will be treated as earning our proportionate share of any income and owning our proportionate share of any assets ofany corporation in which we hold a 25% or greater interest (by value). Because PFIC status must be determined annually based on tests which are factual innature, our PFIC status will depend on our income, assets and activities each year, including whether certain research and development tax credits receivedfrom the government of the United Kingdom will constitute gross income, and, if they do, whether they will constitute passive income for purposes of thePFIC income test. If we are classified as a PFIC for any taxable year, a U.S. Holder may be able to mitigate some of the resulting adverse U.S. federal incometax consequences described below with respect to owning the ADSs, provided that such U.S. Holder is eligible to make, and validly makes a “mark-to-market” election, described below. In certain circumstances a U.S. Holder can make a “qualified electing fund” election to mitigate some of the adverse taxconsequences described with respect to an ownership interest in a PFIC by including in income its share of the PFIC’s income on a current basis. However, wedo not currently intend to prepare or provide the information that would enable a U.S. Holder to make a qualified electing fund election.In the event that we are classified as a PFIC in any year in which a U.S. Holder holds the ADSs, and the “mark-to-market” election described below isnot made by a taxable U.S. Holder, a special tax regime will apply with respect to such U.S. Holder to both (a) any gain realized on the sale or otherdisposition of the ADSs and (b) any “excess distribution” by us to such U.S. Holder (generally, such U.S. Holder’s ratable portion of distributions received bysuch U.S. Holder in any year which are greater than 125% of the average annual distribution received by such U.S. Holder in the shorter of the three precedingyears or such U.S. Holder’s holding period for the ADSs). Any gain recognized by such U.S. Holder on a sale or125 other disposition (including a pledge) of the ADSs and any excess distribution would be allocated ratably over such U.S. Holder’s holding period for theADSs. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income.The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for thattaxable year, and the interest charge generally applicable to underpayments of tax would be imposed on taxes deemed to have been payable in for therelevant taxable PFIC years. Classification as a PFIC may also have other adverse tax consequences, including, in the case of U.S. Holders that areindividuals, the denial of a step-up in the basis of such U.S. Holder’s ADSs at death.Based on our estimated gross income, the average value of our assets, including goodwill and the nature of our active business, we do not expect to betreated as a PFIC for U.S. income tax purposes for the taxable year ending December 31, 2018. The PFIC tests must be applied each year, and it is possiblethat we may become a PFIC in a future year.Mark-to-Market ElectionIf we are a PFIC for any taxable year during which a U.S. Holder holds the ADSs, then in lieu of being subject to the special tax regime and interestcharge rules discussed above, a U.S. Holder may make an election to include gain on the ADSs as ordinary income under a mark-to-market method, providedthat the ADSs are treated as “regularly traded” on a “qualified exchange.” In general, the ADSs will be treated as “regularly traded” for a given calendar yearif more than a de minimis quantity of the ADSs are traded on a qualified exchange on at least 15 days during each calendar quarter of such calendar year.Although the U.S. Internal Revenue Service, or the IRS, has not published any authority identifying specific exchanges that may constitute “qualifiedexchanges,” Treasury Regulations provide that a qualified exchange is (a) a U.S. securities exchange that is registered with the Securities and ExchangeCommission, or the SEC, (b) the U.S. market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a non-U.S.securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such non-U.S.exchange has trading volume, listing, financial disclosure, surveillance and other requirements designed to prevent fraudulent and manipulative acts andpractices, to remove impediments to and perfect the mechanism of a free and open, fair and orderly, market, and to protect investors; and the laws of thecountry in which such non-U.S. exchange is located and the rules of such non-U.S. exchange ensure that such requirements are actually enforced and (ii) therules of such non-U.S. exchange effectively promote active trading of listed shares. We have received approval to list our ADSs on the Nasdaq Global SelectMarket, which is a U.S. securities exchange that is registered with the SEC. However, no assurance can be given that the ADSs will meet the requirements tobe treated as “regularly traded” for purposes of the mark-to-market election. In addition, because a mark-to-market election cannot be made for any lower-tierPFICs that we may own, a U.S. Holder may continue to be subject to the special tax regime with respect to such holder’s indirect interest in any investmentsheld by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes, including shares in any future subsidiary of ours that is treatedas a PFIC.If a U.S. Holder makes this mark-to-market election, such U.S. Holder will be required in any year in which we are a PFIC to include as ordinaryincome the excess of the fair market value of such U.S. Holder’s ADSs at year-end over its basis in those ADSs. In addition, the excess, if any, of such U.S.Holder’s basis in the ADSs over the fair market value of such U.S. Holder’s ADSs at year-end is deductible as an ordinary loss in an amount equal to the lesserof (i) the amount of the excess or (ii) the amount of the net mark-to-market gains that have been included in income in prior years by such U.S. Holder. Anygain recognized by such U.S. Holder upon the sale of such U.S. Holder’s ADSs will be taxed as ordinary income in the year of sale. Amounts treated asordinary income will not be eligible for the preferential tax rate applicable to qualified dividend income or long-term capital gains. A U.S. Holder’s adjustedtax basis in the ADSs will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-marketrules. If a U.S. Holder makes a mark-to market election, it will be effective for the taxable year for which the election is made and all subsequent taxable yearsunless the ADSs are no longer regularly traded on a qualified exchange or the IRS consents to the revocation of the election.Information Reporting RequirementsIf we are a PFIC for any taxable year during which a U.S Holder holds the ADSs, each such U.S. Holder generally will be required to file an annualinformation return on IRS Form 8621 containing such information as the U.S. Treasury Department may require. The failure to file IRS Form 8621 couldresult in the imposition of penalties and the extension of the statute of limitations with respect to U.S. federal income tax.The U.S. federal income tax rules relating to PFICs are complex. U.S. Holders are urged to consult their tax advisors with respect to the purchase,ownership and disposition of the ADSs, the availability of the mark-to-market election and126 whether making the election would be advisable in their particular circumstances, and the IRS information reporting obligations with respect to the purchase,ownership and disposition of the ADSs.Taxation of Dividends and Other Distributions on the ADSsSubject to the discussion above under the heading “—Passive Foreign Investment Company Considerations,” generally, the gross amount ofdistributions made by us, if any, to a U.S. Holder with respect to the ADSs, before reduction for any non-U.S. taxes withheld therefrom, will be includable ingross income as a dividend to the extent that such distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federalincome tax principles). To the extent, if any, that the amount of any cash distribution exceeds our current and accumulated earnings and profits, it will betreated first as a tax-free return of such U.S. Holder’s tax basis in its ADSs, and to the extent the amount of the distribution exceeds such U.S. Holder’s taxbasis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, aU.S. Holder should expect that a distribution will generally be treated as a dividend even if that distribution would otherwise be treated as a non-taxablereturn of capital or as capital gain under the rules described above. A dividend in respect of the ADSs will not be eligible for the dividends-receiveddeduction allowed to corporations in respect of dividends received from other U.S. corporations. Non-corporate U.S. Holders may qualify for the lower ratesof taxation with respect to dividends on ADSs applicable to long term capital gains (i.e., gains from the sale of capital assets held for more than one year),provided that certain conditions are met, including certain holding period requirements and the absence of certain risk reduction transactions. However, suchreduced rate shall not apply if we are a PFIC for the taxable year in which we pay a dividend, or were a PFIC in the preceding taxable year. As indicated in thesection titled “Dividends and Dividend Policy” herein, we intend to retain any earnings for use in our business and do not currently intend to pay dividendson our ordinary shares.Subject to the paragraph below, dividends generally will constitute income from sources outside the United States, which may be relevant incalculating a U.S. Holder’s foreign tax credit limitation. Subject to certain conditions and limitations, non-U.S. tax withheld on dividends may be deductedfrom such U.S. Holder’s taxable income or credited against such U.S. Holder’s U.S. federal income tax liability. The limitation on foreign taxes eligible forcredit is calculated separately with respect to specific classes of income. For this purpose, dividends that we distribute generally should constitute “passivecategory income,” or, in the case of certain U.S. Holders, “general category income.” A foreign tax credit for foreign taxes imposed on distributions may bedenied if a U.S. Holder does not satisfy certain minimum holding period requirements.Notwithstanding the paragraph above, if 50% or more of the ADSs are treated as held by U.S. persons, we will be treated as a “U.S.-owned foreigncorporation.” In that case, dividends may be treated for U.S. foreign tax credit purposes as income from sources outside the United States to the extent paidout of our non-U.S. source earnings and profits, and as income from sources within the United States to the extent paid out of our U.S. source earnings andprofits. There can be no assurance that we will not be treated as a U.S.-owned foreign corporation. If the dividends are taxed at the lower tax rates generallyapplicable to long-term capital gains (as discussed above), the amount of the dividend taken into account for purposes of calculating the U.S. foreign taxcredit limitation will generally be limited to the gross amount of the dividend, multiplied by the preferential rate divided by the highest rate of tax normallyapplicable to dividends. The rules relating to the determination of the foreign tax credit are complex, and U.S. Holders are urged to consult their tax advisorsto determine whether and to what extent such U.S. Holder will be entitled to a foreign tax credit.Taxation of Dispositions of ADSsSubject to the discussion above under “—Passive Foreign Investment Company Considerations,” a U.S. Holder will recognize taxable gain or loss onany sale, exchange or other taxable disposition of an ADS equal to the difference between the amount realized (the amount of cash (in U.S. dollars) plus thefair market value of any property received) for the ADS and such U.S. Holder’s tax basis (in U.S. dollars) in the ADS. The gain or loss will generally be capitalgain or loss. Such capital gain or loss generally will be long-term capital gain taxable at a reduced rate for non-corporate U.S. Holders or long-term capitalloss if, on the date of sale, exchange or other disposition, the ADSs were held by the U.S. Holder for more than one year. The deductibility of capital losses issubject to limitations. Any such gain or loss generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes.Disposition of Foreign CurrencyU.S. Holders are urged to consult their tax advisors regarding the tax consequences of receiving, converting or disposing of any non-U.S. currencyreceived as dividends on our ADSs or on the sale or retirement of an ADS.127 Tax on Net Investment IncomeAdditional 3.8% Medicare tax on some or all of such U.S. Holder’s “net investment income.” Net investment income generally includes income fromthe ADSs unless such income is derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certainpassive or trading activities). You should consult your tax advisors regarding the effect this Medicare tax may have, if any, on your acquisition, ownership ordisposition of the ADSs.Information Reporting and Backup WithholdingDistributions with respect to ADSs and proceeds from the sale, exchange or disposition of ADSs may be subject to information reporting to the IRS,and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification numberand makes any other required certification or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exemptstatus generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding theapplication of the U.S. information reporting and backup withholding rules.Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal incometax liability, and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim forrefund with the IRS and furnishing any required information.Foreign Financial Asset Information ReportingU.S. Holders who are either individuals or certain domestic entities may be required to submit certain information to the IRS with respect to suchholder’s beneficial ownership of the ADSs, if such ADSs are not held on such holder’s behalf by a financial institution, as our ordinary shares are considered“specified foreign financial assets.” This law also imposes penalties and potential other adverse tax consequences if a U.S. Holder is required to submit suchinformation to the IRS and fails to do so. U.S. Holders are urged to consult their tax advisors regarding the potential information reporting obligations thatmay be imposed with respect to the ownership and disposition of the ADSs.The above description is not intended to constitute a complete analysis of all tax consequences relating to acquisition, ownership and dispositionof the ADSs. Prospective purchasers are urged to consult their tax advisors concerning the tax consequences related to their particular circumstances.United Kingdom Tax ConsiderationsThe following is a general summary of certain United Kingdom tax considerations relating to the ownership and disposal of the ADSs and does notaddress all possible tax consequences relating to an investment in the ADSs. It is based on current U.K. tax law and published HM Revenue & Customs, orHMRC, practice as of the date of this Annual Report, both of which are subject to change, possibly with retrospective effect.This United Kingdom taxation section is written on the basis that the company is and remains resident for tax purposes in the United Kingdom onlyand will therefore be subject to the U.K. tax regime and not the U.S. tax regime (save as discussed in the section titled “Material U.S. Federal Income TaxConsiderations” above). On this basis, dividends paid by the company will be regarded as U.K. dividends, not U.S. dividends.Except as provided otherwise, this summary applies only to persons who are resident (and, in the case of individuals, domiciled) in the UnitedKingdom for tax purposes and who are not resident for tax purposes in any other jurisdiction, and do not have a permanent establishment or fixed base in anyother jurisdiction with which the holding of the ADSs is connected. Such persons are referred to herein as U.K. Holders. Persons (a) who are not resident (or, ifresident, are not domiciled) in the United Kingdom for tax purposes, including those individuals and companies who trade in the United Kingdom through abranch, agency or permanent establishment in the United Kingdom to which the ADSs are attributable, or (b) who are resident or otherwise subject to tax in ajurisdiction outside the United Kingdom, are recommended to seek the advice of professional advisers in relation to their taxation obligations.128 This summary is for general information only and is not intended to be, nor should it be considered to be, legal or tax advice to any particularinvestor. It does not address all of the tax considerations that may be relevant to specific investors in light of their particular circumstances or to investorssubject to special treatment under U.K. tax law. In particular: •this summary only applies to the absolute beneficial owners of the ADSs (and where the ADSs are not held through an Individual SavingsAccount or a Self-Invested Personal Pension) and any dividends paid in respect of the related ordinary shares or ADSs where the dividends areregarded for U.K. tax purposes as that person’s own income (and not the income of some other person); and •this summary: (a) only addresses the principal U.K. tax consequences for investors who hold the ADSs as capital assets, (b) does not addressthe tax consequences that may be relevant to certain special classes of investor such as dealers, brokers or traders in shares or securities andother persons who hold the ADSs otherwise than as an investment, (c) does not address the tax consequences for holders that are financialinstitutions, insurance companies, collective investment schemes, pension schemes, charities or tax-exempt organizations, (d) assumes that theholder is not an officer or employee of the company (or of any related company) and has not (and is not deemed to have) acquired the ADSs orrelated ordinary shares by virtue of an office or employment, and (e) assumes that the holder does not control or hold (and is not deemed tocontrol or hold), either alone or together with one or more associated or connected persons, directly or indirectly (including through theholding of the related ordinary shares or ADSs), an interest of 10% or more in the issued share capital (or in any class thereof or ADSs), votingpower, rights to profits or capital of the company, and is not otherwise connected with the company.This summary further assumes that a holder of ADSs is the beneficial owner of the underlying ordinary shares for U.K. tax purposes.Potential investors in ADSs should satisfy themselves prior to investing as to the overall tax consequences, including, specifically, theconsequences under U.K. tax law and HMRC practice of the acquisition, ownership and disposal of ADSs in their own particular circumstances byconsulting their own tax advisers. In particular, non-U.K. resident or domiciled persons are advised to consider the potential impact of any relevantdouble taxation agreements.Taxation of dividendsWithholding Tax. Dividend payments in respect of ADSs or ordinary shares may be made without withholding or deduction for or on account of U.K.tax.United Kingdom Income Tax. An individual U.K. Holder (being an individual who is resident for tax purposes in the United Kingdom) who receivesa dividend from the company will generally be subject to income tax on the dividend. For the tax year 2017/2018, an individual U.K. Holder will generallypay tax at a rate of zero per cent on the first £5,000 of dividends received by such U.K. Holder. For dividends received from April 6, 2018 onwards, this tax-free dividend allowance is reduced to £2,000.An individual U.K. Holder who is subject to income tax at the basic rate will be liable to tax on the dividend at the rate of 7.5%. An individual U.K.Holder who is subject to income tax at the higher rate (but not the additional rate) will be liable to income tax on the dividend at the rate of 32.5% to theextent that such sum, when treated as the top slice of that holder’s income, exceeds the threshold for higher rate income tax.An individual U.K. Holder liable to income tax at the additional rate will be subject to income tax on the dividend at the rate of 38.1% to the extentthat the holder’s income (including the dividend) exceeds the threshold for the additional rate.An individual who is not a U.K. Holder (other than one carrying on a trade, profession or vocation in the United Kingdom) who is resident for taxpurposes outside the United Kingdom will not have any U.K. tax to pay on dividends received from the company.United Kingdom Corporation Tax. A U.K. Holder within the charge to U.K. corporation tax may be entitled to exemption from U.K. corporation taxin respect of dividend payments. If the conditions for the exemption are not satisfied, or such United Kingdom Holder elects for an otherwise exemptdividend to be taxable, United Kingdom corporation tax will be chargeable on the amount of any dividends. The main rate of United Kingdom corporationtax for the 2017/2018 tax year is 19%. If potential investors are in any doubt as to their position, they should consult their own professional advisers.129 A corporate holder of ADSs that is not a U.K. Holder will not be subject to U.K. corporation tax on dividends received from the company, unless itcarries on a trade in the United Kingdom through a permanent establishment to which the ordinary shares or the ADSs are attributable. In these circumstances,such holder may, depending on its individual circumstances and if the exemption from U.K. corporation tax discussed above does not apply, be chargeable toU.K. corporation tax on dividends received from the company.Taxation of DisposalsU.K. Holders. A disposal or deemed disposal of ADSs by an individual U.K. Holder may, depending on his or her individual circumstances, give riseto a chargeable gain or to an allowable loss for the purpose of U.K. capital gains tax. The principal factors that will determine the capital gains tax position ona disposal of ADSs are the extent to which the holder realizes any other capital gains in the tax year in which the disposal is made, the extent to which theholder has incurred capital losses in that or any earlier tax year and the level of the annual allowance of tax-free gains in that tax year (the “annualexemption”). The annual exemption for the 2017/2018 tax year is £11,300 increasing to £11,700 for tax year 2018/2019. If, after all allowable deductions, anindividual U.K. Holder who is subject to U.K. income tax at either the higher or the additional rate becomes liable to U.K. capital gains tax on the disposal ofordinary shares or ADSs, the current applicable rate would be 20%. For an individual U.K. Holder who is subject to U.K. income tax at the basic rate and, afterall allowable deductions, liable to U.K. capital gains tax on such disposal, the current applicable rate would be 10%, save to the extent that any capital gainsexceed the unused basic rate tax band. In that case, the current rate applicable to the excess would be 20%.An individual U.K. Holder who ceases to be resident in the United Kingdom (or who fails to be regarded as resident in a territory outside the UnitedKingdom for the purposes of double taxation relief) for a period of less than five years and who disposes of his or her ADSs during that period of temporarynon-residence may be liable to U.K. capital gains tax on a chargeable gain accruing on such disposal on his or her return to the United Kingdom (or uponceasing to be regarded as resident outside the United Kingdom for the purposes of double taxation relief) (subject to available exemptions or reliefs).A disposal of ADSs by a corporate U.K. Holder may give rise to a chargeable gain or an allowable loss for the purpose of U.K. corporation tax.Indexation allowance (which historically would have applied to reduce the amount of chargeable gain that is subject to corporation tax) will, assuming thatthe Finance (No. 2) Bill 2017-19 published on December 1, 2017 comes into force as expected, be abolished with effect from January 1, 2018 and so will notoperate to reduce any gains on disposal of ADSs acquired after that date that arise to corporate U.K. Holders. Indexation allowance may be available inrelation to disposals of ADSs acquired prior to January 1, 2018, but will be calculated applying the Retail Price Index for December 2017 regardless of theactual date of disposal.Non-United Kingdom Holders. The paragraphs below relating to the liability of non U.K. Holder’s to U.K. tax on chargeable gains assume that:(a) U.K. Government proposals published on November 22, 2017 relating to the taxation of gains made by non-residents on U.K. immoveableproperty are enacted into U.K. law as envisaged in that document; and(b) the company does not (and will not) derive 75% or more of its gross asset value from U.K. immoveable property.An individual holder who is not a U.K. Holder will not be liable to U.K. capital gains tax on capital gains realized on the disposal of his or her ADSsunless such holder carries on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a permanent establishment inthe United Kingdom to which the ADSs are attributable. In these circumstances, such holder may, depending on his or her individual circumstances, bechargeable to U.K. capital gains tax on chargeable gains arising from a disposal of his or her ADSs.A corporate holder of ADSs that is not a U.K. Holder will not be liable for U.K. corporation tax on chargeable gains realized on the disposal of itsADSs unless it carries on a trade in the United Kingdom through a permanent establishment to which the ADSs are attributable. In these circumstances, adisposal of ADSs by such holder may give rise to a chargeable gain or an allowable loss for the purposes of U.K. corporation tax.Inheritance Tax – individuals domiciled in the United StatesIf, for the purposes of the Taxes on Estates of Deceased Persons and on Gifts Treaty 1978 between the United States and the United Kingdom (enactedin the United Kingdom as Statutory Instrument No 1454 of 1979), an individual holder is domiciled in the United States and is not a national of the UnitedKingdom, any ADSs beneficially owned by that holder will130 not generally be subject to U.K. inheritance tax on that holder’s death or on a gift made by that holder during his or her lifetime, provided that any applicableU.S. federal gift or estate tax liability is paid, except where (i) the ADSs are part of the business property of a U.K. permanent establishment or pertain to aU.K. fixed base used for the performance of independent personal services; or (ii) the ADSs are comprised in a settlement unless, at the time the settlement wasmade, the settlor was domiciled in the United States and not a national of the United Kingdom.Stamp Duty and Stamp Duty Reserve TaxThe statements below in relation to U.K. stamp duty and stamp duty reserve tax, or SDRT, apply irrespective of whether the relevant holder of ADSs isresident or domiciled in the United Kingdom.Issue and Transfer of Ordinary SharesIssue (including to a depositary or clearance service). No U.K. stamp duty is payable on the issue of the ordinary shares.Based on current published HMRC practice and recent case law, there should be no SDRT payable on the issue of ordinary shares to a depositaryreceipt system or a clearance service. We understand that HMRC recognizes DTC as a clearance service for United Kingdom stamp duty and SDRT purposes.Transfer to a depositary or clearance service. Transfers of ordinary shares to, or to a nominee or agent for, a person whose business is or includesissuing depositary receipts or the provision of clearance services, will generally be regarded by HMRC as subject to stamp duty or SDRT at a rate of 1.5% ofthe amount or value of the consideration or, in certain circumstances, the value of the ordinary shares transferred unless, in the case of a clearance service, ithas made an election under section 97A(1) Finance Act 1986, or such transfer can be regarded as an integral part of an issue of share capital. A recent Court ofJustice of the European Union judgment (Air Berlin plc v HMRC [2017]) has cast some doubt as to the legality of this position but, as yet, the UK domesticlaw and HMRC’s published practice remain unchanged. Accordingly, we anticipate that the charge will continue to be collected and anticipate that thisliability for stamp duty or SDRT would be borne by the person depositing the relevant shares in the depositary receipt system or clearance service. Transfersof ordinary shares between depositary receipt systems and clearance services will generally be exempt from stamp duty and SDRT unless, in the case of aclearance service, it has made an election under section 97A(1) Finance Act 1986. Our understanding is that DTC has not made such an election.Transfer on sale. The transfer on sale of ordinary shares by a written instrument of transfer will generally be liable to U.K. stamp duty at the rate of0.5% of the amount or value of the consideration for the transfer. The purchaser normally pays the stamp duty.The transfer of ordinary shares within a depositary receipt system or clearance service should not be subject to stamp duty or SDRT, except where aclearance service has made an election under section 97A(1) Finance Act 1986. Our understanding is that DTC has not made such an election.An agreement to transfer ordinary shares outside a depositary receipt system or a clearance service will generally give rise to a liability on thepurchaser to SDRT at the rate of 0.5% of the amount or value of the consideration. Such SDRT is payable on the seventh day of the month following themonth in which the charge arises, but where an instrument of transfer is executed and duly stamped before the expiry of a period of six years beginning withthe date of that agreement, (i) any SDRT that has not been paid ceases to be payable, and (ii) any SDRT that has been paid may be recovered from HMRC,generally with interest.Transfer of ADSsNo U.K. stamp duty will be payable on a written instrument transferring an ADS or on a written agreement to transfer an ADS provided that theinstrument of transfer or the agreement to transfer is executed and remains at all times outside the United Kingdom. Where these conditions are not met, thewritten instrument for the transfer of, or written agreement to transfer, an ADS could, depending on the circumstances, attract a charge to U.K. stamp duty atthe rate of 0.5% of the value of the consideration given in connection with the transfer.No SDRT will be payable in respect of an agreement to transfer an ADS.131 F.Dividends and Paying AgentsNot Applicable.G.Statement by ExpertsNot Applicable.H.Documents on DisplayWe are subject to the informational requirements of the Exchange Act. Accordingly, we are required to file reports and other information with theSEC, including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information filed with the SEC at thePublic Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained bycalling the SEC at 1-800-732-0330. In addition, the SEC maintains an Internet website that contains reports and other information about issuers, like us, thatfile electronically with the SEC. The address of that website is www.sec.gov.We also make available on our website, free of charge, our Annual Report and the text of our reports on Form 6-K, including any amendments to thesereports, as well as certain other SEC filings, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our websiteaddress is www.nucana.com. The information contained on our website is not incorporated by reference in this Annual Report.I.Subsidiary InformationNot Applicable.Item 11.Quantitative and Qualitative Disclosures About Market RiskMarket risk arises from our exposure to fluctuation in interest rates and currency exchange rates. These risks are managed by maintaining anappropriate mix of cash deposits in the two main currencies we operate in, placed with a variety of financial institutions for varying periods according toexpected liquidity requirements.Interest Rate RiskAs of December 31, 2017, we had cash and cash equivalents of £86.7 million. As of December 31, 2016, we had cash and cash equivalents of£20.0 million. Our exposure to interest rate sensitivity is impacted primarily by changes in the underlying U.K. bank interest rates. Our surplus cash and cashequivalents are invested in interest-bearing accounts and certificates of deposit from time to time which earn interest at fixed or variable rates, based on theterms agreed for each account. We have not entered into investments for trading or speculative purposes. An increase in the U.K bank interest rates by 0.5percentage points would increase the net annual interest income applicable to the cash and cash equivalents by £327,261 (2016: £97,165).Currency RiskOur functional currency is U.K. pounds sterling, and our transactions are commonly denominated in that currency. However, we incur a portion ofexpenses in other currencies, primarily U.S. dollars, and are exposed to the effects of this exchange rate. Since mid-2016, there has been significantlyincreased volatility in the exchange rate between the pound sterling and the U.S. dollar and an overall weakening of the pound sterling related to Britain’sexit from the European Union. Although we are based in the United Kingdom, we source our active pharmaceutical ingredient, or API, and other raw materialsand our research and development, manufacturing, consulting and other services worldwide, including from the United States, the European Union and India.Any weakening of the pound sterling against the currencies of such other jurisdictions makes the purchase of such goods and services more expensivefor us. We seek to minimize this exposure by maintaining currency cash balances at levels appropriate to meet foreseeable short to mid-term expenses in theseother currencies. We do not use forward exchange contracts to manage exchange rate exposure. A 1% increase in the value of the pound sterling relative tothe U.S. dollar would reduce the carrying value of our net financial assets and liabilities in foreign currencies at December 31, 2017 by £747,004 (2016:£30,807).132 For additional information about our quantitative and qualitative risks, see Note 16 to the consolidated financial statements included elsewhere inthis Annual Report.Item 12.Description of Securities Other than Equity SecuritiesA.Debt SecuritiesNot Applicable.B.Warrants and RightsNot Applicable.C.Other SecuritiesNot Applicable.D.American Depositary SharesCitibank, N.A., or Citibank, has agreed to act as the depositary for the ADSs. Citibank’s depositary offices are located at 388 Greenwich Street, NewYork, New York 10013. ADSs represent ownership interests in securities that are on deposit with the depositary. ADSs may be represented by certificates thatare commonly known as American Depositary Receipts, or ADRs. The depositary typically appoints a custodian to safekeep the securities on deposit. In thiscase, the custodian is Citibank, N.A., London Branch.We have appointed Citibank as depositary pursuant to a deposit agreement. A copy of the deposit agreement is on file with the SEC under cover of aregistration statement on Form F-6. You may obtain a copy of the deposit agreement from the SEC’s Public Reference Room at 100 F Street, N.E.,Washington, D.C. 20549 and from the SEC’s website (www.sec.gov). Please refer to registration number 333-220392 when retrieving such copy.Fees and ChargesAs an ADS holder, you will be required to pay the following fees under the terms of the deposit agreement: Service FeeIssuance of ADSs (e.g., an issuance of ADS upon a deposit of ordinary shares or upon a change in the ADS(s)-to-ordinary shares ratio), excluding ADS issuances as a result of distributions of ordinary shares Up to $0.05 per ADS issued Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited property or upon a change in theADS(s)-to-ordinary shares ratio) Up to $0.05 per ADS cancelled Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements) Up to $0.05 per ADS held Distribution of ADSs pursuant to (i) share dividends or other distributions, or (ii) exercise of rights topurchase additional ADSs Up to $0.05 per ADS held Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off) Up to $0.05 per ADS held ADS services Up to $0.05 per ADS held on the applicablerecord date(s) established by the depositary As an ADS holder you will also be responsible to pay certain charges such as: •taxes (including applicable interest and penalties) and other governmental charges; •the registration fees as may from time to time be in effect for the registration of ordinary shares on the share register and applicable to transfersof ordinary shares to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals,respectively;133 •certain cable, telex and facsimile transmission and delivery expenses; •the expenses and charges incurred by the depositary in the conversion of foreign currency; •the fees and expenses incurred by the depositary in connection with compliance with exchange control regulations and other regulatoryrequirements applicable to ordinary shares, ADSs and ADRs; and •the fees and expenses incurred by the depositary, the custodian, or any nominee in connection with the servicing or delivery of depositedproperty.ADS fees and charges payable upon (i) the issuance of ADSs, and (ii) the cancellation of ADSs are charged to the person to whom the ADSs are issued(in the case of ADS issuances) and to the person whose ADSs are cancelled (in the case of ADS cancellations). In the case of ADSs issued by the depositaryinto DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions made through DTC, and may be charged to the DTCparticipant(s) receiving the ADSs being issued or the DTC participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the beneficialowner(s) and will be charged by the DTC participant(s) to the account of the applicable beneficial owner(s) in accordance with the procedures and practicesof the DTC participants as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of theapplicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds beingdistributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced for the amount of theADS fees and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADSfees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC and may be charged to theDTC participants in accordance with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS feesand charges to the beneficial owners for whom they hold ADSs.In the event of refusal to pay the depositary fees or charges, the depositary may, under the terms of the deposit agreement, refuse the requested serviceuntil payment is received or may set off the amount of the depositary fees and charges from any distribution to be made to the ADS holder.Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary. You willreceive prior notice of such changes. The depositary may reimburse us for certain expenses incurred by us in respect of the ADR program, by makingavailable a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary agreefrom time to time.134 PART IIItem 13.Defaults, Dividend Arrearages and DelinquenciesNoneItem 14.Material Modifications to the Rights of Security Holders and Use of ProceedsNot Applicable.Item 15.Controls and ProceduresA.Disclosure Controls and ProceduresOur management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report. Based onsuch evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective to ensurethat information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported,within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief ExecutiveOfficer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.B.Management’s Annual Report on Internal Control over Financial ReportingThis Annual Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation reportof the company’s registered public accounting firm due to a transition period established by the SEC’s rules for newly public companies.C.Attestation Report of the Registered Public Accounting FirmThis report does not include an attestation report of our registered public accounting firm as we are an emerging growth company.D.Changes in Internal Control Over Financial ReportingThere has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred duringthe period covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.Item 16A.Audit Committee Financial ExpertOur Audit Committee is comprised of three of our non-executive directors, Martin Mellish, James Healy and Isaac Cheng, and each of these membersis an “independent director” as such term is defined in Rule 10A-3 under the Exchange Act and under the listing standards of the Nasdaq Stock Market.Martin Mellish serves as chair of this committee. Our Board has determined that Mr. Mellish is an “audit committee financial expert” as defined in Item 16Aof Form 20-F.Item 16B.Code of EthicsOur Code of Business Conduct and Ethics is applicable to all of our employees, officers and directors and is available on our website athttp://www.nucana.com. We expect that any amendment to this code, or any waivers of its requirements, will be disclosed on our website. Informationcontained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report, and you should not consider informationon our website to be part of this Annual Report.135 Item 16C.Principal Accountant Fees and ServicesOur financial statements have been prepared in accordance with IFRS and are audited by Ernst & Young LLP, our independent registered publicaccounting firm registered with the Public Company Accounting Oversight Board in the United States.Ernst & Young LLP has served as our independent registered public accountant for each of the years ended December 31, 2015, December 31, 2016and December 31, 2017 for which audited statements appear in this Annual Report.The following table shows the aggregate fees billed to us, including some of our subsidiaries, for services rendered by Ernst & Young LLP. Year ended December 31, 2016 2017 (in thousands) Audit Fees £60 £247 Audit-Related Fees (1) — 475 All Other Fees (2) 8 — Total £68 £722 (1)For the year ended December 31, 2017, audit-related fees include fees for the performance of half-year reviews and assuring reporting on historicalfinancial information included in the Company’s SEC registration statements in connection with the Company’s initial public offerings on theNasdaq Global Select Market.(2)No fees incurred in this category in 2017.Our Audit Committee reviews and pre-approves the scope and the cost of audit services related to us and permissible non-audit services performed bythe independent auditors, other than those for de minimis services which are approved by the Audit Committee prior to the completion of the audit. All of theservices related to our company provided by Ernst & Young LLP during the last two fiscal years have been approved by the Audit Committee.Item 16D.Exemptions From the Listing Standards For Audit CommitteesNot Applicable.Item 16E.Purchases of Equity Securities by the Issuer and Affiliated PurchasersNot Applicable.Item 16F.Change in the Registrant’s Certifying AccountantNot Applicable.Item 16G.Corporate GovernanceAs a “foreign private issuer,” as defined by the SEC, although we are permitted to follow certain corporate governance practices of England andWales, instead of those otherwise required under The Nasdaq Stock Market, or Nasdaq, for domestic issuers, we intend to follow the Nasdaq corporategovernance rules applicable to foreign private issuers. While we voluntarily follow most Nasdaq corporate governance rules, we intend to take advantage ofthe following limited exemptions: •Exemption from filing quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four days oftheir occurrence. •Exemption from Section 16 rules regarding sales of ordinary shares by insiders, which will provide less data in this regard than shareholders ofU.S. companies that are subject to the Exchange Act. •Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four business days of any determination to grant awaiver of the code of business conduct and ethics to directors and officers. Although we will require board approval of any such waiver, wemay choose not to disclose the waiver in the manner set forth in the Nasdaq rules, as permitted by the foreign private issuer exemption.136 •Exemption from the requirements that director nominees are selected, or recommended for selection by our board of directors, either by(1) independent directors constituting a majority of our board of directors’ independent directors in a vote in which only independentdirectors participate, or (2) a committee comprised solely of independent directors, and that a formal written charter or board resolution, asapplicable, addressing the nominations process is adopted.Furthermore, Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, such as us, may rely on home country corporate governance practices inlieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq’s Notification ofNoncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3),consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). Although we are permitted to follow certain corporategovernance rules that conform to U.K. requirements in lieu of many of the Nasdaq corporate governance rules, we intend to comply with the Nasdaq corporategovernance rules applicable to foreign private issuers as set forth in the prior sentence. Accordingly, our shareholders will not have the same protectionsafforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. We may utilize these exemptions for aslong as we continue to qualify as a foreign private issuer.Item 16H.Mine Safety DisclosureNot Applicable.137 PART IIIItem 17.Financial StatementsWe have elected to provide financial statements pursuant to Item 18.Item 18.Financial StatementsThe financial statements are filed as part of this Annual Report beginning on page F-1.Item 19.Exhibits Exhibit Description Schedule/Form FileNumber Exhibit FileDate 1.1 Articles of Association of the registrant Form S-8 333-223476 3.1 03/07/2018 2.1* Deposit Agreement by and among the registrantand Citibank, N.A. and all Holders and BeneficialOwners of ADSs issued hereunder, dated as ofOctober 2, 2017 2.2* Form of American Depositary Receipt (included in Exhibit 2.1) 4.1* Registration Rights Agreement by and among the registrant and theinvestors named therein, dated as of September 20, 2017 4.2# 2009 Share Option Scheme (as amended) and form of option agreementsthereunder Form F-1/A 333-220321 10.1 09/18/2017 4.3# 2012 Share Option Scheme (as amended) and form of option agreementsthereunder Form F-1/A 333-220321 10.2 09/18/2017 4.4# 2016 Share Option Scheme (as amended) and form of option agreementsthereunder Form F-1/A 333-220321 10.3 09/18/2017 4.7† Variation Agreement, dated March 15, 2012, by and between the registrantand Cardiff ProTides Limited and the related Side Letter, dated May 15,2012 Form F-1/A 333-220321 10.5 09/18/2017 4.8† Assignment, License and Collaboration Agreement, dated October 13,2009, by and between the registrant and Cardiff ProTides Limited Form F-1/A 333-220321 10.6 09/18/2017 4.9† Patent Assignment Agreement, dated March 15, 2012, by and between theregistrant and Cardiff ProTides Limited Form F-1/A 333-220321 10.7 09/18/2017 4.10*† Research, Collaboration and License Agreement, dated December 21,2017, by and between the registrant, Cardiff University and UniversityCollege Cardiff Consultants Ltd, as amended by Amendment No. 1, datedFebruary 1, 2018 4.11* Lease between the registrant and Drum Income Plus Limited, datedSeptember 21, 2017 4.12# Form of Deed of Indemnity for directors and officers Form F-1/A 333-2220321 10.10 09/18/2017 8.1 List of subsidiaries of the registrant Form F-1/A 333-220321 21.1 09/01/2017 12.1* Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer 138 12.2* Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer 13.1* Section 1350 Certification of Chief Executive Officer 13.2* Section 1350 Certification of Chief Financial Officer 15.1* Consent of Ernst & Young LLP 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document *Filed herewith.#Indicates management contract or compensatory plan.†Confidential treatment previously requested and granted as to portions of the exhibit. Confidential materials omitted and filed separately with theSecurities and Exchange Commission.139 SignatureThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersignedto sign this Annual Report on its behalf. NUCANA PLC By:/s/ Hugh S. Griffith Name:Hugh S. Griffith Title:Chief Executive OfficerDate: March 22, 2018 140 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F-1 Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015 F-2 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017, 2016 and 2015 F-3 Consolidated Statements of Financial Position as of December 31, 2017 and 2016 F-4 Consolidated Statements of Changes in Equity for the years ended December 31, 2017, 2016 and 2015 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015 F-6 Notes to the Consolidated Financial Statements F-7  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholders and the Board of Directors of NuCana plcOpinion on the Financial StatementsWe have audited the accompanying consolidated statements of financial position of NuCana plc (formerly known as NuCana Biomed Limited) (the“Company“) and subsidiaries as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive loss, changes in equityand cash flows, for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the “financialstatements“). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity withInternational Financial Reporting Standards as issued by the International Accounting Standards Board.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (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 andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required tohave, 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 anunderstanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internalcontrol over financial reporting. Accordingly, we express no opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in thefinancial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company’s auditor since 2014.Edinburgh, United KingdomMarch 21, 2018 F-1 NUCANA PLCCONSOLIDATED STATEMENTS OF OPERATIONSYEAR ENDED DECEMBER 31, Notes 2017 2016 2015 (in thousands, except per share data) £ £ £ Research and development expenses (17,673) (7,904) (5,655) Administrative expenses (4,573) (1,143) (1,251) Initial public offering related expenses 5 (1,794) — — Net foreign exchange (losses) gains (1,654) 599 (8) Operating loss (25,694) (8,448) (6,914) Finance income 208 283 406 Loss before tax (25,486) (8,165) (6,508) Income tax credit 7 2,401 2,116 1,176 Loss for the year (23,085) (6,049) (5,332) Basic and diluted loss per share 4 (0.89) (0.25) (0.22) The accompanying notes form an integral part of these consolidated financial statements.F-2 NUCANA PLCCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSYEAR ENDED DECEMBER 31, Notes 2017 2016 2015 (in thousands) £ £ £ Loss for the year (23,085) (6,049) (5,332)Other comprehensive expense: Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (8) (2) (1)Other comprehensive expense for the year (8) (2) (1)Total comprehensive loss for the year (23,093) (6,051) (5,333)Attributable to: Equity holders of the Company (23,093) (6,051) (5,333) The accompanying notes form an integral part of these consolidated financial statements.F-3 NUCANA PLCCONSOLIDATED STATEMENTS OF FINANCIAL POSITIONAT DECEMBER 31, Notes 2017 2016 (in thousands) £ £ ASSETS Non-current assets Intangible assets 8 1,938 1,377 Property, plant and equipment 9 358 18 Deferred tax asset 81 — 2,377 1,395 Current assets Prepayments, accrued income and other receivables 10 3,050 3,634 Current income tax receivable 7 4,225 2,195 Cash and cash equivalents 15 86,703 19,990 93,978 25,819 Total assets 96,355 27,214 EQUITY AND LIABILITIES Capital and reserves Share capital and share premium 11 80,508 43,433 Other reserves 12 58,071 4,064 Accumulated deficit (45,159) (22,256)Total equity attributable to equity holders 93,420 25,241 Non-current liabilities Provisions 18 — Current liabilities Trade payables 1,120 728 Payroll taxes and social security 157 61 Accrued expenditure 1,640 1,184 2,917 1,973 Total liabilities 2,935 1,973 Total equity and liabilities 96,355 27,214 The accompanying notes form an integral part of these consolidated financial statements.F-4 NUCANA PLCCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED DECEMBER 31, Sharecapital Sharepremium Ownsharereserve Shareoptionreserve Foreigncurrencytranslationreserve CapitalReserve Accumulateddeficit Total equityattributableto equityholders (in thousands) £ £ £ £ £ £ £ £ Balance at January 1, 2015 659 42,574 (339) 2,506 — — (10,892) 34,508 Loss for the year — — — — — — (5,332) (5,332)Other comprehensive expense for the year — — — — (1) — — (1)Total comprehensive loss for the year — — — — (1) — (5,332) (5,333)Share-based payments — — — 785 — — — 785 Balance at December 31, 2015 659 42,574 (339) 3,291 (1) — (16,224) 29,960 Loss for the year — — — — — — (6,049) (6,049)Other comprehensive expense for the year — — — — (2) — — (2)Total comprehensive loss for the year — — — — (2) — (6,049) (6,051)Share-based payments — — — 1,132 — — — 1,132 Exercise of share options 4 196 — (17) — — 17 200 Balance at December 31, 2016 663 42,770 (339) 4,406 (3) — (22,256) 25,241 Loss for the year — — — — — — (23,085) (23,085)Other comprehensive expense for the year — — — — (8) — — (8)Total comprehensive loss for the year — — — — (8) — (23,085) (23,093)Share-based payments — — — 11,731 — — — 11,731 Reduction in share premium — (42,466) — — — 42,466 — — Exercise of share options 1 119 — (180) — — 180 120 Lapse of share options — — — (2) — — 2 — Bonus issue to series B shareholders 304 (304) — — — — — — Issue of share capital 304 79,530 — — — — — 79,834 Initial public offering related expenses — (413) — — — — — (413)Balance at December 31, 2017 1,272 79,236 (339) 15,955 (11) 42,466 (45,159) 93,420 The accompanying notes form an integral part of these consolidated financial statements. F-5 NUCANA PLCCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED DECEMBER 31, 2017 2016 2015 (in thousands) £ £ £ Cash flows from operating activities Loss for the year (23,085) (6,049) (5,332)Adjustments for: Income tax credit (2,401) (2,116) (1,176)Amortization and depreciation 194 101 44 Finance income (208) (283) (406)Share-based payments 11,731 1,132 785 Initial public offering (IPO) related expenses 1,794 — — Net foreign exchange losses 1,584 — — (10,391) (7,215) (6,085)Movements in working capital: Decrease (increase) in prepayments, accrued income and other receivables 458 (3,404) 36 Increase in trade payables 392 220 133 Increase in payroll taxes, social security and accrued expenditure 551 33 418 Movements in working capital 1,401 (3,151) 587 Cash used in operations (8,990) (10,366) (5,498)Corporation tax 282 1,102 1,031 Net cash used in operating activities (8,708) (9,264) (4,467)Cash flows from investing activities Interest received 162 410 290 Payments for office and computer equipment (370) (15) (6)Payments for intangible assets (725) (539) (390)Proceeds from (investment in) short-term deposits — 15,075 (75)Net cash (used in) provided by investing activities (933) 14,931 (181)Cash flows from financing activities Proceeds from issue of share capital 79,834 — — IPO related expenses from issue of share capital - included in share premium (413) — — IPO related expenses included in statement of operations (1,794) — — Proceeds from issue of share capital - exercise of share options 120 200 — Net cash from financing activities 77,747 200 — Net increase (decrease) in cash and cash equivalents 68,106 5,867 (4,648)Cash and cash equivalents at beginning of year 19,990 14,112 18,761 Foreign currency translation differences (1,393) 11 (1)Cash and cash equivalents at end of year 86,703 19,990 14,112 The accompanying notes form an integral part of these consolidated financial statements. F-6NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. General informationNuCana plc (“NuCana” or the “Company”) is a clinical-stage biopharmaceutical company developing a portfolio of new medicines to treat cancer.We are harnessing the power of phosphoramidate chemistry to generate new medicines called ProTides. These compounds have the potential to improvecancer treatment by enhancing the efficacy and safety of several current standards of care.On August 29, 2017 the Company re-registered as a public limited company and changed its name from NuCana BioMed Limited to NuCana plc.The Company has had American Depository Receipts (“ADRs”) registered with the US Securities and Exchange Commission (“SEC”) and is listed onNasdaq since October 2, 2017. The Company is incorporated in England and Wales and domiciled in the United Kingdom.The Company has two wholly owned subsidiaries, NuCana, Inc. and NuCana BioMed Trustee Company Limited. The financial statements for theCompany were authorized for issue by the board of directors on March 21, 2018.2. Significant accounting policiesBasis of preparationThe financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the InternationalAccounting Standards Board (“IASB”).The Company’s financial statements comprise the financial statements of the Company and its subsidiaries at December 31, 2017. The financialstatements are presented in pounds sterling, which is also the Company’s functional currency. All values are rounded to the nearest thousand, except whereotherwise indicated.Going concernIn common with many companies in the biopharmaceutical sector, the Company incurs significant expenditure in its early years as it researches anddevelops its potential products for market.The board of directors, having reviewed the operating budgets and development plans, considers that the Company has adequate resources tocontinue in operation for the foreseeable future. The board of directors is therefore satisfied that it is appropriate to adopt the going concern basis ofaccounting in preparing the financial statements. The Company believes that its cash and cash equivalents of £86.7 million at December 31, 2017, will besufficient to fund its current operating plan for at least the next 12 months. As the Company continues to incur losses, the transition to profitability isdependent upon the successful development, approval and commercialization of its product candidates and achieving a level of revenues adequate tosupport its cost structure. The Company may never achieve profitability, and unless and until it does, it will continue to need to raise additional capital.There can be no assurances, however, that additional funding will be available on acceptable terms. F-7NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. Significant accounting policies (continued)Judgements and estimatesThe preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported forassets and liabilities at the balance sheet dates and the amounts reported for revenue and expenses during the year. The nature of estimations means thatactual outcomes could differ from those estimates.The following judgements have had the most significant effect on the amounts recognized in the financial statements:Research and development expensesThe Company recognizes research and development expenses in the statement of operations in the period in which they are incurred. Whendevelopment activities reach the advanced stage, as set out in the specific criteria of International Accounting Standard (“IAS”) 38, Intangible Assets, therewill be a requirement to capitalize such costs as intangible assets. Management will continue to exercise judgement in the appropriate treatment ofdevelopment costs. TaxationManagement judgement is required to determine the amount of deferred tax assets that should be recognized, based upon the likely timing and levelof future taxable profits. Further details are contained in Note 7.The following estimates have had the most significant effect on the amounts recognized in the financial statements:Recognition of Clinical Trial ExpensesAs part of the process of preparing our consolidated financial statements, we may be required to estimate accrued expenses related to our clinicaltrials. In order to obtain reasonable estimates, we review open contracts and purchase orders. In addition, we communicate with applicable personnel in orderto identify services that have been performed, but for which we have not yet been invoiced. In most cases, our vendors provide us with monthly invoices inarrears for services performed. We confirm our estimates with these vendors and make adjustments as needed, however, our estimates are dependent on thecompleteness of information from our vendors. The following are examples of our accrued expenses: •fees paid to Clinical Research Organizations (CROs) for services performed on preclinical studies and clinical trials; and •fees paid for professional services. Share-based paymentsEstimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on theterms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model, including the expected lifeof the share option or appreciation right, volatility, dividend yield and assumptions about them and, in the case of the Company, the value of an ordinaryshare. For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Company uses the Black-Scholes model. Theassumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 13.Basis of consolidationThe consolidated financial statements comprise the financial statements of the Company and its subsidiaries.Subsidiaries are consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidateduntil the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, usingconsistent accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends areeliminated in full.F-8NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. Significant accounting policies (continued)Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statementsfrom the date the Company gains control until the date the Company ceases to control the subsidiary.Segment reportingThe Company operates in one operating segment. The Company’s chief operating decision maker (the “CODM”), its Chief Executive Officer,manages the Company’s operations on an integrated basis for the purposes of allocating resources. The Company’s principal operations and decision-makingfunctions are located in the United Kingdom. The CODM makes decisions on a global basis from there. Accordingly, the Company has determined that itoperates in a single reporting segment.Initial public offering (IPO) related expenses Incremental costs incurred and directly attributable to the offering of securities were deducted from the related proceeds of the offering. The netamount is recorded as contributed shareholders’ equity in the period when such shares were issued. Costs that relate to the stock market listing or areotherwise not incremental and directly attributable to issuing new shares, are recorded as an expense in the statement of comprehensive income. Costs thatrelate to both share issuance and listing are allocated between those functions on a rational and consistent basis. In the absence of a more specific basis forapportionment, an allocation of common costs based on the proportion of new shares issued to the total number of (new and existing) shares listed has beenused.Property, plant and equipmentProperty, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. There are no restrictionson title or equipment pledged as security for liabilities.Depreciation is provided on property, plant and equipment over their expected useful economic life as follows: Asset class Depreciation method and periodOffice and computer equipmentFixtures and fittings Straight-line over 3 yearsStraight-line over 5 years Intangible assetsIntangible assets are stated at cost, net of accumulated amortization and accumulated impairment losses, if any. Cost in relation to patents includesregistration, documentation and other legal fees associated with obtaining the patent. Software costs represent the initial purchase price of the asset.The amortization method and amortization period for the principal categories of intangible assets are follows: Asset class Amortization method and periodPatents Straight-line over 20 yearsComputer software Straight-line between 3 and 5 years The Company’s primary patents each have a life of 20 years. Further patents are granted in various jurisdictions to extend the territorial coverage ofthe primary patent. These patents are granted up to the period of the related primary patent. Costs are thus amortized over the remaining life of the relevantprimary patent. The amortization method and the amortization period for an intangible asset with a finite useful life are reviewed at least at each financialyear-end. Changes in the expected useful economic life or the expected pattern of consumption of future economic benefits embodied in the asset areaccounted for by changing the amortization period or method, as appropriate. The Company changed the amortization method of patents from reverse sum ofdigits to straight-line from July 1, 2017. These changes are made on a prospective basis and treated as changes in accounting estimates. The effect of thischange on the current year is immaterial.Intangible assets are tested for impairment when there is an indicator of impairment.F-9NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. Significant accounting policies (continued)Cash, cash equivalents and short-term depositsCash and cash equivalents in the statement of financial position include cash at banks with a maturity of less than three months, which is subject to aninsignificant risk of changes in value.Short-term deposits represent certificates of deposits with banks with maturities of greater than three months but less than one year.Research and developmentResearch and development expenses are currently recognized in the statement of operations in the year in which they are incurred. Developmentexpenditures on an individual project will be recognized as an intangible asset when the Company can demonstrate: •the technical feasibility of completing the intangible asset so that the asset will be available for use or sale; •its intention to complete and its ability and intention to use or sell the asset; •how the asset will generate future economic benefits; •the availability of resources to complete the asset; and •the ability to measure reliably the expenditure during development.Income TaxesCurrent income taxCurrent income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax ratesand tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Companyoperates and generates taxable income.Deferred income taxDeferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities andtheir carrying amounts in the Company’s financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of anasset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected toapply when the related deferred income tax asset is realized or the deferred tax liability is settled. Deferred tax assets are recognized to the extent that it isprobable that future taxable profit will be available against which the temporary differences can be utilized.Income tax creditThe Company benefits from the U.K. research and development tax credit regime whereby a portion of the Company’s losses can be surrendered for acash rebate of up to 33.35% of eligible expenditures. Such credits are accounted for within the tax provision, in the year in which the expenditures wereincurred.F-10NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. Significant accounting policies (continued)Operating leasesLeases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases and rentals payableare charged in the consolidated statement of operations on a straight-line basis over the lease term.Impairment of non-financial assetsThe Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, the Companyestimates the asset’s recoverable amount.An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairmentlosses are recognized in the consolidated statements of operations.A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows fromother assets or groups of assets.Calculation of recoverable amountThe recoverable amount of assets and cash-generating units is the higher of their fair value less costs to sell and value in use. In assessing value in use,the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value ofmoney and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for thecash-generating unit to which the asset belongs.Reversal of impairmentAn assessment is made at each reporting date as to whether there is an indication that a previously recognized impairment loss may no longer exist ormay have decreased. If such an indication exists, the recoverable amount is estimated.A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount sincethe last impairment loss was recognized. If that is the case, the carrying value is increased to its recoverable amount. An impairment loss is reversed only tothe extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if noimpairment loss had been recognized.Share-based paymentsEmployees, directors and consultants of the Company receive remuneration in the form of share-based payments, whereby individuals render servicesas consideration for equity instruments (share options).Under IFRS 2 Share-based Payment, equity share-based payments are measured at the fair value of the equity instruments at the grant date. Detailsregarding the determination of fair value of equity settled share-based transactions are set out in Note 13.The fair value determined at the grant date of equity settled share-based payments is expensed on a straight line basis over the vesting period, with acorresponding increase in equity to the share option reserve.F-11NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. Significant accounting policies (continued)Fair value measurementFair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transactionbetween market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, IFRS 13 establishes afair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly.Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.Accounting StandardsIn preparing these financial statements, the Company has applied all relevant IAS, IFRS and International Financial Reporting InterpretationsCommittee (“IFRIC”) Interpretations as of the date of approval of these financial statements and which are mandatory for the financial year endedDecember 31, 2017.The following accounting standards and interpretations have been adopted as of January 1, 2017 in these financial statements and have not had amaterial impact on the Company’s accounts in the period of initial application:Amendments to IAS 7 Statement of Cash Flows: Disclosure InitiativeThe amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arisingfrom cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has no liabilities arising from financing activities thereforeno additional disclosure is required.Amendments to IAS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised LossesThe amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may take deductionson the reversal of deductible temporary differences related to unrealised losses. Furthermore, the amendments provide guidance on how an entity shoulddetermine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carryingamount. The Company applied amendments retrospectively. However, their application has no effect on the Company’s financial position and performanceas the Company has no deductible temporary differences or assets that are in the scope of the amendments.Annual Improvements 2014-2016 CycleThese improvements include:IFRS 12 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in IFRS 12The amendments clarify that the disclosure requirements in IFRS 12, other than those in paragraphs B10–B16, apply to an entity’s interest in asubsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that isclassified) as held for sale. This amendment is not expected to have a material impact on the Company.F-12NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. Significant accounting policies (continued)The IASB and IFRIC have issued the following standards and interpretations, which are considered relevant to the Company, with an effective dateafter the date of these financial statements.IFRS 9: Financial InstrumentsIn July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition andMeasurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classificationand measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early applicationpermitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedgeaccounting, the requirements are generally applied prospectively, with some limited exceptions. The Company expects no material impact on its balancesheet and equity.IFRS 16: LeasesIFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4 Determining Whether an Arrangement Contains a Lease, SIC-15Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles forthe recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet modelsimilar to the accounting for finance leases under IAS 17. The standard includes two recognition exemptions for lessees—leases of ’low-value’ assets (e.g.,personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognize aliability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset.Lessees will also be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future leasepayments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognize the amount of theremeasurement of the lease liability as an adjustment to the right-of-use asset.Lessor accounting under IFRS 16 is substantially unchanged from today’s accounting under IAS 17. Lessors will continue to classify all leases usingthe same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also requires lessees andlessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after January 1, 2019. Early applicationis permitted, but not before an entity applies IFRS 15 Revenue from Contracts with Customers. A lessee can choose to apply the standard using either a fullretrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. The Company is currently assessing thepotential impact of IFRS 16 on its consolidated financial statements.Amendments to IFRS 2: Classification and Measurement of Share-based Payment TransactionsThe IASB issued amendments to IFRS 2 Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of acash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding taxobligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash-settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permittedif elected for all three amendments and other criteria are met. The amendments are effective for annual periods beginning on or after January 1, 2018, withearly application permitted. This amendment is not expected to have a material impact on the Company.IFRIC Interpretation 22 Foreign Currency Transactions and Advance ConsiderationThe interpretation clarifies that in determining the spot exchange rate to use on initial recognition of a related asset, expense or income (or part of it)on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which anentity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receiptsin advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. This interpretation is not expectedto have a material impact on the Company. F-13NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3. Staff costsIncluded in research and development expenses: 2017 2016 2015 (in thousands) £ £ £ Wages and salaries 2,391 2,241 1,366 Social security costs 272 205 151 Pension costs and other benefits 119 102 92 Share-based payments 8,868 1,027 709 11,650 3,575 2,318 Included in administrative expenses: 2017 2016 2015 (in thousands) £ £ £ Wages and salaries 408 84 108 Social security costs 37 13 52 Pension costs and other benefits 21 7 15 Share-based payments 2,863 105 76 3,329 209 251 Total employee benefit expense 14,979 3,784 2,569 The average number of staff employed under contracts of service were: 2017 2016 2015 (number) Research and development activities 18 15 11 Administrative activities 2 1 1 20 16 12 Directors’ remuneration & other benefits 2017 2016 2015 (in thousands) £ £ £ Directors’ remuneration 793 549 526 Pension and other benefits 37 34 77 830 583 603 The number of directors who exercised share options in 2017 is nil (2016: 1; 2015: nil).The above amounts for remuneration include the following in respect of the highest paid director: 2017 2016 2015 (in thousands) £ £ £ Directors’ remuneration 601 378 318 Pension and other benefits 33 29 61 634 407 379 F-14NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4. Basic and diluted loss per share 2017 2016 2015 (in thousands, except per share data) £ £ £ Loss for the year (23,085) (6,049) (5,332) Basic and diluted weighted average number of shares 26,069 24,107 24,101 £ £ £ Basic and diluted loss per share (0.89) (0.25) (0.22) Basic loss per share is calculated by dividing the loss for the year attributable to the equity holders of the Company by the weighted average numberof shares outstanding during the year.The dilutive effect of potential shares through equity settled transactions were considered to be anti-dilutive as they would have decreased the lossper share and were therefore excluded from the calculation of diluted loss per share.5. IPO related expenses 2017 2016 2015 (in thousands) £ £ £ IPO related expenses 1,794 — — IPO related costs primarily relate to legal, accounting and other advisors’ fees in relation to the Company’s listing on Nasdaq which was completed onOctober 2, 2017.6. Capital commitments and contingencies 2017 2016 (in thousands) £ £ Future capital expenditure contracted but not provided for 147 —Other commitmentsCollaboration and License AgreementsCardiff University LicenseIn August 2009, we entered into a research, collaboration and license agreement with Cardiff University and University College Cardiff ConsultantsLtd., or Cardiff Consultants, which we refer to as the Cardiff Agreement. The Cardiff Agreement was renewed with an effective date of January 1, 2018 for anadditional two years on substantially the same terms. Under the Cardiff Agreement, we collaborate with Cardiff University in the design, synthesis,characterization and evaluation of phosphoramidate prodrugs, which we refer to as ProTides, based on certain nucleosides. We are responsible for fundingcertain work performed by Cardiff University and making other payments, which we expect will total £292,607 in aggregate in each of 2018 and 2019.Cardiff University and Cardiff Consultants, which is a holder of intellectual property developed by Cardiff University, have assigned to us all rights in theresults of the research under the Cardiff Agreement, and agreed not to undertake any research for any competing third party on nucleoside families of interestto us where such research would make use of ProTide-related intellectual property owned or controlled by Cardiff University as of the date of the CardiffAgreement or which at any time thereafter becomes owned or controlled by Cardiff University, which we refer to as the Cardiff intellectual property, or togrant rights in the Cardiff intellectual property to any third party for use in connection with nucleosides of interest to us. The foregoing restrictions excludethe field of neurodegeneration for one specific nucleoside analog.F-15NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 6. Capital commitments and contingencies (continued)Upon our completion of the evaluation of the ProTides, we have the right to select one or more of the evaluated ProTides as candidates for potentialdevelopment of a commercial product. Cardiff University and Cardiff Consultants have granted us an exclusive worldwide license to use for all purposes theCardiff intellectual property in respect of the nucleoside family of our selected ProTides. The exclusive dealing obligations of Cardiff University and CardiffConsultants will continue for these nucleoside families.On our filing, or that of a sublicensee, of patent applications resulting from research under the Cardiff Agreement, we will owe Cardiff Consultantscertain immaterial payments. If we or our sublicensees develop and commercialize a product resulting from such research, we will owe Cardiff Consultantsclinical development milestone payments of up to £1,875,000; provided that such milestone payments are due only with respect to the first product withineach nucleoside family to achieve the milestone. We will also owe Cardiff Consultants royalties equal to a low-single digit percentage on our sales of aproduct resulting from such research. Should we sublicense our right to commercialize a product resulting from the research, we will owe Cardiff Consultantsa high-single digit percentage of payments received in consideration of the sublicense.The Cardiff Agreement currently expires on December 31, 2019. Upon expiration, we have the right to extend the period in which we may evaluateproducts for three months, and for a further three months in exchange for an additional payment. The Cardiff Agreement may also be terminated for anuncured material breach. Licenses to use the Cardiff intellectual property in the development and commercialization of products we have selected forcommercialization, and related payment obligations, will survive expiration of the Cardiff Agreement, but not on termination for an uncured material breach.Cardiff ProTides AgreementIn October 2009, we entered into a license and collaboration agreement with Cardiff ProTides Ltd., or Cardiff ProTides, which agreement wassubsequently amended and restated as an assignment, license and collaboration agreement in March 2012 and was further amended in May 2012, which werefer to as the ProTides Agreement. Under the ProTides Agreement, we collaborated with Cardiff ProTides in the discovery, drug design and in vitro screeningof purine and pyrimidine based nucleosides as potential drug candidates. We funded certain work at Cardiff ProTides, and Cardiff ProTides has assigned to usall rights in the results of its research under the ProTides Agreement. Cardiff ProTides also assigned to us patents related to certain compounds of interest,including with respect to Acelarin, and granted us an exclusive, worldwide license, including the right to grant sublicenses, to rights in and technicalinformation related to certain unpatented compounds for all therapeutic, diagnostic, prognostic and prophylactic applications.If we or a sublicensee develop one or more products covered by a valid claim of an assigned patent or patent resulting from Cardiff ProTides’ research,such as Acelarin, we will owe Cardiff ProTides up to approximately $4.5 million in development and approval milestone payments in the aggregate for thefirst such product. Additional development and approval milestones would be payable for the first additional product in a new nucleoside series covered by avalid claim of an assigned patent or a patent resulting from Cardiff ProTides’ research, although the maximum potential value of such milestone payments isapproximately half the value of the milestone payments associated with the first product. We will also owe Cardiff ProTides royalties equal to a percentage inmid- to high-single digits on sales of such products, subject to reduction under certain circumstances. Royalties on sales by sublicensees are set by formula,which formula would be likely to result in a royalty in the mid-single digits.The ProTides Agreement expires, on a country by country basis, on the later of the expiration, invalidity, abandonment, lapsing or rejection of the lastvalid claim of an assigned patent or patent resulting from Cardiff ProTides’ research, or, if certain technical information licensed from Cardiff ProTidesremains confidential or the product is covered by a period of data exclusivity, ten years from the date of first commercial sale of a product in such country.The ProTides Agreement may be sooner terminated on an uncured material breach, bankruptcy of a party or, by Cardiff ProTides, if we challenge, or assist in achallenge, of the validity or ownership of an assigned patent or patent resulting from Cardiff ProTides’ research, or fail to pay amounts payable under theProTides Agreement. It may also be sooner terminated where sums payable by us remain unpaid for 45 days after we receive a notice from Cardiff ProTidesthat the relevant sums are overdue. Upon a termination of the ProTides Agreement, our license rights will terminate except where the breach results fromcertain breaches by Cardiff ProTides, in which case our license rights continue on a non-exclusive basis, subject to reduced payment obligations. Upontermination of the ProTides Agreement, including as a result of our breach, we will be under an obligation to assign back to Cardiff ProTides the patentswhich Cardiff ProTides originally assigned to us.F-16NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 6. Capital commitments and contingencies (continued) CROs and Manufacturing commitmentsWe have agreed to make payments to CROs and manufacturers under various CRO and manufacturing agreements. We have not included furtherdetails on such contingent payment obligations as the amount, timing and likelihood of such payments are not fixed or determinable.Commitments under non-cancellable operating leasesOperating leases relate to rental of office space. The Company entered into new lease obligations for office space. The lease obligations are for aperiod of five years with a break clause after three years. All operating lease contracts contain clauses for market rental reviews on renewal. The Company’ssubsidiary renewed its lease agreement for a period of one year. The Company and its subsidiary do not have an option to purchase the leased office at theexpiry of the lease periods. Operating lease expense for the years ended December 31, 2017, 2016 and 2015 was £0.2 million, £0.2 million and £0.1 million,respectively.Future minimum rentals payable under non-cancellable operating leases are as follows: 2017 2016 2015 (in thousands) £ £ £ Not later than 1 year 158 192 166 Later than 1 year and not later than 5 years 165 62 — Later than 5 years — — — 323 254 166 F-17NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 7. Income tax creditThe major components of income tax for the years ended December 31, 2017, 2016 and 2015 are as follows: 2017 2016 2015 (in thousands) £ £ £ Current tax: In respect of current year U.K. 2,298 1,906 1,182 In respect of current year U.S. (10) (28) (6)In respect of prior years U.K. 3 235 — In respect of prior years U.S. — 3 — Total current tax 2,291 2,116 1,176 Deferred tax: In respect of current year U.S. 61 — — In respect of prior years U.S. 49 — — Total deferred tax 110 — — Income tax credit 2,401 2,116 1,176 Current income tax receivable: U.K. tax 4,207 2,141 1,182 U.S. tax 18 54 — Current income tax receivable 4,225 2,195 1,182 Deferred tax: U.S. tax 81 — — Current income tax payable: U.S. tax — — 6 The credit for the year can be reconciled to the loss per the statement of operations as follows: 2017 2016 2015 (in thousands) £ £ £ Loss before tax (25,486) (8,165) (6,508)Tax on loss at standard U.K. tax rate of 19.25% (2016: 20.00%; 2015: 20.25%) (4,906) (1,633) (1,318)Effects of: Expenses not deductible 3,899 1,301 888 Deduction for R&D (3,051) (2,629) (1,650)Losses surrendered for R&D tax credit 3,051 2,629 1,650 Deferred tax - PY adjustment (49) 24 6 Overseas tax payable 10 — — R&D tax credit— U.S. (61) — — R&D tax credit—current year (2,298) (1,906) (1,182)R&D tax credit—prior years (3) (235) — Deferred tax asset not recognized 1,007 333 430 Income tax credit (2,401) (2,116) (1,176) F-18NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 7. Income tax credit (continued)In the United Kingdom, the Company has not recognized a deferred tax asset in respect of tax losses carried forward as at December 31, 2017 on thebasis that the timing during which tax losses could be regarded as recoverable against future taxable profits cannot be determined with reasonable certainty.In the United States, a deferred tax asset has been recognized as management consider that adequate future taxable profits will be available to realize thedeferred tax asset.Temporary differences and cumulative carry forward tax losses for which deferred tax has not been recognized amount to £40.7 million (2016:£32.5 million; 2015: £10.1 million).U.K. tax legislation, which was substantively enacted on October 26, 2015, includes legislation that will reduce the main rate of U.K. corporation taxfrom 20% to 18%. This decrease is to be phased in with a reduction to 19%, effective from April 1, 2017, and a reduction to 18%, effective from April 1,2020. Further, as announced on March 16, 2016, that the full rate of U.K. corporation tax will reduce by a further 1% to 17% from April 1, 2020. This furtherreduction was included within the U.K. tax legislation, which was substantively enacted on September 6, 2016.8. Intangible assets Patents ComputerSoftware Total (in thousands) £ £ £ Cost: At December 31, 2015 1,004 — 1,004 Additions 529 10 539 At December 31, 2016 1,533 10 1,543 Accumulated amortization: At December 31, 2015 77 — 77 Charge for the year 86 3 89 At December 31, 2016 163 3 166 Cost: At December 31, 2016 1,533 10 1,543 Additions 582 143 725 At December 31, 2017 2,115 153 2,268 Accumulated amortization: At December 31, 2016 163 3 166 Charge for the year 139 25 164 At December 31, 2017 302 28 330 Net book value: At December 31, 2017 1,813 125 1,938 At December 31, 2016 1,370 7 1,377 F-19NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 9. Property, plant and equipment Office andcomputerequipment Fixtures andFittings Total (in thousands) £ £ £ Cost: At December 31, 2015 37 — 37 Additions 15 — 15 Disposals (1) — (1)Effect of foreign currency exchange differences 1 — 1 At December 31, 2016 52 — 52 Depreciation: At December 31, 2015 23 — 23 Charge for the year 12 — 12 Disposals (1) — (1)Effect of foreign currency exchange differences — — — At December 31, 2016 34 — 34 Cost: At December 31, 2016 52 — 52 Additions 90 280 370 Disposals — — — Effect of foreign currency exchange differences — — — At December 31, 2017 142 280 422 Depreciation: At December 31, 2016 34 — 34 Charge for the year 17 13 30 Disposals — — — Effect of foreign currency exchange differences — — — At December 31, 2017 51 13 64 Net book value: At December 31, 2017 91 267 358 At December 31, 2016 18 — 18 10. Prepayments, accrued income and other receivables 2017 2016 (in thousands) £ £ Prepayments—manufacturing and clinical 1,979 3,050 Prepayments—other 522 173 Accrued income 67 21 VAT 473 198 Other receivables 9 192 3,050 3,634 F-20NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 11. Share capital and share premium 2017 2016 2015 (in thousands) £ £ £ Share capital 1,272 663 659 Share premium 79,236 42,770 42,574 80,508 43,433 43,233 Number Number Number (in thousands) Issued share capital comprises: Ordinary shares of £0.04 each (2016 and 2015: £0.01 each) 31,811 6,239 6,156 Founder ordinary 1 shares of £0.01 each — 1,000 1,000 Founder ordinary 2 shares of £0.01 each — 1,000 1,000 Series A shares of £0.01 each — 7,483 7,483 Series B shares of £0.001 each — 8,463 8,463 31,811 24,185 24,102 The table above does not total due to rounding.In order to facilitate the Company being re-registered as a public company, the directors of the Company signed a solvency statement on June 29,2017 with the agreement of the shareholders and undertook a capital reduction reducing its share premium by £42.5 million, which was credited to theCompany’s capital reserve.On September 14, 2017, the Company completed a one-for-four reverse share split and an associated bonus allotment of shares to take into accountfractional entitlements. This had the effect of consolidating every four ordinary shares of £0.01 to one ordinary share of £0.04, every four founder ordinary 1shares of £0.01 to one founder ordinary 1 share of £0.04, every four founder ordinary 2 shares of £0.01 to one founder ordinary 2 share of £0.04, every fourseries A shares of £0.01 to one series A share of £0.04 and every four series B shares of £0.001 to one series B share of £0.004.Following the one-for-four reverse share split, for the purpose of facilitating a conversion of each Series B share (nominal value £0.004 per share), intoan ordinary share (nominal value £0.04 per share), the company allotted to holders of Series B shares an additional nine Series B shares for each Series Bshare held. Subjected to and conditional upon this allotment, every 10 Series B shares of £0.004 were consolidated into a single Series B share of £0.04. EachSeries B share of £0.04 was then automatically converted into one ordinary share of £0.04. The company funded the allotment of these additional shares withreserves that were standing to the credit of the share premium account. The impact of this bonus issue was £304,650.Immediately prior to the initial public offering, all issued series A convertible participating shares, series B convertible participating shares, founderordinary 1 shares and founder ordinary 2 shares were converted into ordinary shares on a one-for-one basis. The Company had 24,214,641 shares outstanding.This included an issue of 30,000 shares in August 2017, upon the exercise of options. On October 2, 2017, the Company completed an IPO of 7,596,505American Depository Shares (ADSs) at a price to the public of $15.00 per ADS. Each ADS represents one ordinary share of the Company.F-21NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 11. Share capital and share premium (continued) Numberof shares Sharecapital Sharepremium (in thousands) £ £ Fully paid shares: Balance at January 1, 2015 and December 31, 2015 24,102 659 42,574 Issue of shares on exercise of options 83 4 196 Balance at December 31, 2016 24,185 663 42,770 Reduction in share premium account — — (42,466)Exercise of share options 30 1 119 Bonus issue to series B — 304 (304)Issue of share capital 7,596 304 79,530 IPO costs — — (413)Balance at December 31, 2017 31,811 1,272 79,236 Ordinary sharesPrior to the re-organization of capital described above, the ordinary shares ranked equally with all other shares in issue in that on a poll every memberhad one vote for each ordinary share held (save for the enhanced voting rights referred to in the founder ordinary shares). The ordinary shares ranked equallywith all other shares in issue in respect of any rights to any dividend distribution. The ordinary shares ranked equally with all other shares in issue in respectof any rights to any capital distribution. The ordinary shares were not redeemable.After the re-organization of capital described above, holders of ordinary shares are entitled to one vote for each share held of record on all matterssubmitted to a vote of shareholders and do not have cumulative voting rights.Founder ordinary sharesUpon shareholder vote, the founder ordinary 1 shares and the founder ordinary 2 shares as separate classes of shares each conferred upon the holdersof such classes of shares such number of votes, which equaled at least 5% of all votes exercisable by all holders of shares.Series A sharesThe series A shares ranked equally with all other shares in issue in that on a vote every member had one vote for each series A share held (save for theenhanced voting rights conferred upon the founder ordinary shares). The series A shares ranked equally with all others shares in respect of any rights to anydividend distribution. The series A shares ranked equally with all other shares in issue in respect of any rights to any capital distribution. The series A shareswere not redeemable.Series B sharesThe series B shares ranked equally with all other shares in issue (save for the enhanced voting rights conferred upon the founder ordinary shares). Theseries B shares ranked equally with all other shares in issue in respect of any rights to any dividend distribution. The series B shares ranked equally with allother shares in respect of any rights to any capital distribution. The series B shares were not redeemable.Capital managementFor the purpose of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to theequity holders of the Company. The purpose of the Company’s capital management is to maximize shareholder value and ensure adequate capital isavailable to meet the medium-term operating plan. Review of operations and commitments is key to identifying future capital management and a full reviewis undertaken on a quarterly basis.No changes were made in the objectives, policies or processes for managing capital during the year ended December 31, 2017, 2016 or 2015. F-22NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12. Other reserves 2017 2016 2015 (in thousands) £ £ £ Own share reserve (339) (339) (339)Foreign currency translation reserve (11) (3) (1)Capital reserve 42,466 — — Share option reserve Balance at beginning of year 4,406 3,291 2,506 Share-based payments 11,731 1,132 785 Exercise of share options (180) (17) — Lapse of share options (2) — — Balance at end of year 15,955 4,406 3,291 Total other reserves 58,071 4,064 2,951 Foreign currency translation reserveThe foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreignoperations.Own share reserveThe own share reserve represents the cost of 500,000 shares of NuCana plc purchased by NuCana Employee Benefit Trust and that may, at thediscretion of the trustee, be used to satisfy future exercise of options under the Company’s share options plan.Capital reserveThe capital reserve balance arose from the reduction of our share premium account and corresponding increase to our capital reserve account reflectedas of June 30, 2017 in connection with our re-registration as a public limited company, as further described in Note 1.Share option reserveThe share option reserve is used to recognize the value of equity-settled share-based payments provided to employees, directors and consultants aspart of their remuneration. Refer to Note 13 for further details of these plans.13. Share-based paymentsThe Company has three share-based payment plans for employees, directors and consultants. The share options granted will be settled in equity.2016 optionsIn 2016, share options were granted under the following share-based payment plans:U.K. share-based payment plansOptions granted under these plans will vest if the option holder remains under their respective employment/consultancy contract for the agreedvesting period. The majority of the share options granted under these plans will vest equally over a period of four years, with the exception of the following:1) options granted to a director, under which a third of the options granted vested immediately with the remaining two-thirds vesting each subsequentyear; andF-23NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 13. Share-based payments (continued)2) options granted to three employees, under which two thirds of the options vested immediately with the remaining third vesting in 2017.Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determined at grant date. Stock option plan (U.S. Sub-Plan)On June 30, 2016, share options were granted under this sub-plan, which will vest equally over a period of four years if the option holder remainsunder the respective employment contract. Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determinedat grant date.On December 12, 2016, 45,750 share options were granted to a non-executive director with an exercise price of £4.00 each, which could be exercisedwithin six months after the grant date. The share options were exercised on December 29, 2016. In terms of the stock option agreement, should that non-executive director cease holding office within the four years from the grant date then a reducing number, dependent upon when such cessation occurs, ofthese shares options so acquired may, at the Board’s discretion, be subject to a mandatory transfer notice. These share options will only be fully unencumbered by such restriction after a period of four years from the expiration of the grant date andconsequently the share-based payment expense is recognized on a straight-line basis. Cancelled share option arrangement During the year ended December 31, 2016, the share-based payment arrangements for three employees were cancelled. The cancellation of theoriginal plan resulted in an acceleration of the remaining vesting period, with the remaining charge recognized in 2016 deemed immaterial.2017 optionsIn 2017, share options were granted under the following share-based payment plans:U.K. share-based payment plansOptions granted under these plans will vest if the option holder remains under their respective contract of employment or contract of service for theagreed vesting period. The share options granted under these plans will vest equally over a period of four years, with the exception of options granted to adirector, under which the options granted vested immediately.Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determined at grant date.Stock option plan (U.S. Sub-Plan)Options granted under these plans will vest if the option holder remains under their respective employment contract for the agreed vesting period. Theshare options granted under these plans will vest equally over a period of four years.F-24NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 13. Share-based payments (continued)Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determined at grant date.Share options and weighted average exercise prices are as follows for the reporting periods presented: Number ofshares Weightedaverageexercise priceper share £ Outstanding at January 1, 2015 2,873,747 0.26 Granted — — Forfeited — — Exercised — — Outstanding at December 31, 2015 2,873,747 0.26 Granted 507,690 3.81 Forfeited — — Cancelled (50,000) 2.95 Exercised1 (83,250) 2.40 Outstanding at December 31, 2016 3,248,187 0.72 Granted 1,500,815 2.58 Forfeited (7,500) 0.16 Cancelled — — Exercised2 (30,000) 4.00 Outstanding at December 31, 2017 4,711,502 1.29 Vested and exercisable at December 31, 20173 4,030,833 0.36 Vested and exercisable at December 31, 2016 2,841,419 0.36 Vested and exercisable at December 31, 2015 2,262,500 0.23 1. The weighted average share price at the date of exercise of these options was £9.00 2. The weighted average share price at the date of exercise of these options was £10.43 3. Share options granted to a non-executive director in 2016 are not included in these calculations. Theseshare options were exercised and will only be fully unencumbered after a period of four years from the grantdate. The weighted average remaining contractual life of the share options outstanding as at December 31, 2017 is 4.49 years (2016: 6.66; 2015: 6.18).F-25NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 13. Share-based payments (continued)The following principal assumptions were used in the valuation for the 2016 share options. Options granted on Jun 30, 2016 Aug 22, 2016 Aug 22, 2016 Aug 22, 2016 Aug 22, 2016 Vesting dates Oct 12, 2016 Aug 22, 2016 Aug 22, 2016 Dec 07, 2016 Mar 01, 2017 Oct 12, 2017 Aug 22, 2017 Aug 22, 2017 Dec 07, 2017 Mar 01, 2018 Oct 12, 2018 Dec 07, 2018 Mar 01, 2019 Oct 12, 2019 Dec 07, 2019 Mar 01, 2020 Volatility 69.05% 67.92% 67.92% 67.92% 67.92%Dividend yield 0% 0% 0% 0% 0%Risk-free investment rate 0.11% 0.07% 0.07% 0.07% 0.07%Fair value of option at grant date £ 4.02 £ 6.15 £ 6.01 £ 5.74 £ 5.62 Fair value of share at grant date £ 6.97 £ 8.61 £ 8.61 £ 8.61 £ 8.61 Exercise price at date of grant £ 4.00 £ 2.80 £ 3.00 £ 3.40 £ 3.60 Lapse date June 30, 2026 Aug 22, 2026 Aug 22, 2026 Aug 22, 2026 Aug 22, 2026 Expected option life (years) 2.50 2.36 2.36 2.36 2.36 Number of options granted 270,690 12,500 37,500 25,000 11,250 Options granted on Aug 22, 2016 Aug 22, 2016 Oct 28, 2016 Oct 28, 2016 Dec 12, 2016 Vesting dates May 01, 2017 May 16, 2017 Oct 28, 2017 Oct 28, 2016 Dec 12, 2017 May 01, 2018 May 16, 2018 Oct 28, 2018 Oct 28, 2017 Dec 12, 2018 May 01, 2019 May 16, 2019 Oct 28, 2019 Oct 28, 2018 Dec 12, 2019 May 01, 2020 May 16, 2020 Oct 28, 2020 Dec 12, 2020 Volatility 67.92% 67.92% 68.38% 68.38% 60.92%Dividend yield 0% 0% 0% 0% 0%Risk-free investment rate 0.07% 0.07% 0.28% 0.28% 0.06% Fair value of option at grant date £ 5.62 £ 5.62 £ 5.85 £ 5.46 £ 5.22 Fair value of share at grant date £ 8.61 £ 8.61 £ 8.76 £ 8.76 £ 9.19 Exercise price at date of grant £ 3.60 £ 3.60 £ 3.40 £ 4.00 £ 4.00 Lapse date Aug 22, 2026 Aug 22, 2026 Oct 28, 2026 Oct 28, 2026 Dec 12, 2026 Expected option life (years) 2.36 2.36 2.17 2.17 0.50 Number of options granted 5,000 37,500 12,500 50,000 45,750 The fair values of options granted were determined using the Black-Scholes model that takes into account factors specific to the share incentive plansuch as the assumption that the options will be exercised at a single point in time, in December 2018. This has been incorporated into the measurement bymeans of actuarial modelling. As NuCana plc was unlisted at the grant date of the options, it is not possible to derive historical volatility from the Company’sown share price. The underlying expected volatility was therefore determined by using the historical volatility of similar listed entities as a proxy. Thevolatility percentage applied to each tranche is the average of the historical volatility of companies comparable to NuCana plc. In prior years, managementmade contemporaneous valuation of the share price, based on recent capital transactions, as an input to the Black-Scholes model. For the 2016 awards, theCompany’s ordinary share valuations were prepared using the guideline public company, or GPC, method under the market approach. In the application ofthe GPC method, we considered the pricing of IPOs completed by clinical-stage oncology companies between April 2015 and May 2016. We convertedprospective IPO value to present value by applying a discount rate of 25%. The discount rate was derived from studies of rates of return required by ventureinvestors in IPO-stage companies. In addition to the IPO GPCs, we considered the enterprise values indicated by a group of eight trading GPCs. The tradingprices of these clinical-stage GPCs provided contemporaneous indications of value as of each appraisal date. We applied a discount for lack of marketabilityto the ordinary shares to account for the lack of access to an active public market. We estimated the discount for lack of marketability using an Asian putmodel. In the year ended December 31, 2016, an employee remuneration expense, all of which related to equity-settled share-based payments, of £1.1 million(2015: £0.8 million) has been included in the statement of operations and credited to equity.F-26NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 13. Share-based payments (continued)The following principal assumptions were used in the valuation for share 2017 options. May 16, 2017 Sep 13, 2017 Sep 14, 2017 Sep 14, 2017 Sep 14, 2017 Vesting dates Oct 28, 2017 Sep 13, 2018 Mar 06, 2018 Sep 14, 2018 Sep 14, 2018 Oct 28, 2018 Sep 13, 2019 Mar 06, 2019 Sep 14, 2019 Sep 14, 2019 Oct 28, 2019 Sep 13, 2020 Mar 06, 2020 Sep 14, 2020 Sep 14, 2020 Oct 28, 2020 Sep 13, 2021 Mar 06, 2012 Sep 14, 2021 Sep 14, 2021 Volatility 66.56% 66.94% 66.97% 66.97% 66.97%Dividend yield 0% 0% 0% 0% 0%Risk-free investment rate 0.12% 0.27% 0.36% 0.36% 0.36%Fair value of option at grant date £ 7.70 £ 6.15 £ 6.08 £ 6.08 £ 6.08 Fair value of share at grant date £ 11.08 £ 10.43 £ 10.34 £ 10.34 £ 10.34 Exercise price at date of grant £ 4.00 £ 5.40 £ 5.40 £ 5.40 £ 5.40 Lapse date May 16, 2027 Sep 13, 2027 Sep 14, 2027 Sep 14, 2027 Sep 14, 2027 Expected option life (years) 2.63 2.30 2.30 2.30 2.30 Number of options granted 23,250 14,690 25,000 110,310 12,500 Sep 14, 2017 Sep 15, 2017 Sep 15, 2017 Sep 27, 2017 Sep 27, 2017 Vesting dates Sep 14, 2018 Sep 15, 2018 Sep 15, 2017 Mar 20, 2018 Sep 27, 2018 Sep 14, 2019 Sep 15, 2019 Mar 20, 2019 Sep 27, 2019 Sep 14, 2020 Sep 15, 2020 Mar 20, 2020 Sep 27, 2020 Sep 14, 2021 Sep 15, 2021 Mar 20, 2021 Sep 27, 2021 Volatility 66.97% 67.02% 67.02% 67.11% 67.11%Dividend yield 0% 0% 0% 0% 0%Risk-free investment rate 0.36% 0.44% 0.44% 0.47% 0.47%Fair value of option at grant date £ 3.90 £ 6.76 £ 10.11 £ 4.36 £ 4.36 Fair value of share at grant date £ 10.34 £ 10.15 £ 10.15 £ 11.19 £ 11.19 Exercise price at date of grant £ 10.80 £ 4.00 £ 0.04 £ 11.19 £ 11.19 Lapse date Sep 14, 2027 Sep 15, 2027 Sep 15, 2027 Sep 27, 2027 Sep 27, 2027 Expected option life (years) 2.30 2.29 2.29 2.26 2.26 Number of options granted 25,000 45,750 1,028,533 37,500 178,282 The fair values of options granted were determined using the Black-Scholes model that takes into account factors specific to the share incentive plansuch as the assumption that the options will be exercised at a single point in time, in December 2019. This has been incorporated into the measurement bymeans of actuarial modelling. As NuCana plc was unlisted at the grant date of the options, it is not possible to derive historical volatility from the Company’sown share price. The underlying expected volatility was therefore determined by using the historical volatility of similar listed entities as a proxy. Thevolatility percentage applied to each tranche is the average of the historical volatility of companies comparable to NuCana plc. With the exception of theawards granted on September 27, 2017, the Company’s ordinary share valuations were prepared using the guideline public company, or GPC, method underthe market approach. In the application of the GPC method, we considered the pricing of IPOs completed by clinical-stage oncology companies between July2015 and June 2017. We converted prospective IPO value to present value by applying a discount rate of 25%. The discount rate was derived from studies ofrates of return required by venture investors in IPO-stage companies. In addition to the IPO GPCs, we considered the enterprise values indicated by a group ofeight trading GPCs. The trading prices of these clinical-stage GPCs provided contemporaneous indications of value as of each appraisal date. We applied adiscount for lack of marketability to the ordinary shares to account for the lack of access to an active public market. We estimated the discount for lack ofmarketability using an Asian put model. In the year ended December 31, 2017, an employee remuneration expense, all of which related to equity-settledshare-based payments, of £11.7 million (2016: £1.1 million; 2015: £0.8 million) has been included in the statement of operations and credited to equity.F-27NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 14. Related party disclosuresCompensation of key management personnel of the Company 2017 2016 2015 (in thousands) £ £ £ Short-term employee benefits 1,184 1,053 647 Severance payments — 150 — Pension and other benefits 56 47 77 Share-based payments 11,230 731 726 12,470 1,981 1,450 The amounts disclosed in the table above are the amounts recognized as an expense during the reporting year related to key management personnel.15. Cash, cash equivalents and short-term deposits 2017 2016 (in thousands) £ £ Cash and cash equivalents 86,703 19,990 Cash and cash equivalents comprise cash at banks with maturity of three months or less, which is subject to insignificant risk of changes in value.Cash at banks earn interest at fixed or variable rates based on the terms agreed for each account.Liquidity risk is minimal and is managed using deposits with immediate and varied fixed term dates.Cash, cash equivalents and short term deposits are measured at fair value and classified as Level 1 under the fair value level hierarchy.16. Financial instrumentsFair value of financial assets and liabilitiesThe fair value of the financial assets and liabilities is included at the amount at which an instrument could be exchanged in a current transactionbetween willing parties, other than in a forced liquidation or sale.The following methods and assumptions were used to estimate the fair values:Cash, cash equivalents, short-term deposits, other receivables, trade payables and other payables approximate their carrying amounts largely due tothe short-term maturities of these instruments.Market RiskMarket risk arises from our exposure to fluctuation in interest rates and currency exchange rates. These risks are managed by maintaining anappropriate mix of cash deposits in the two main currencies we operate in, placed with a variety of financial institutions for varying periods according toexpected liquidity requirements.F-28NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 16. Financial instruments (continued)Interest Rate RiskAs of December 31, 2017, we had cash and cash equivalents of £86.7 million. As of December 31, 2016, we had cash and cash equivalents of£20.0 million. Our exposure to interest rate sensitivity is impacted primarily by changes in the underlying U.K. bank interest rates. Our surplus cash and cashequivalents are invested in interest-bearing accounts and certificates of deposit from time to time which earn interest at fixed or variable rates based on theterms agreed for each account. We have not entered into investments for trading or speculative purposes.Financial assets subject to fixed or variable interest rates are as follows: 2017 2016 (in thousands) Carrying amount Carrying amount £ £ Financial assets at fixed rates Cash and cash equivalents 51,745 5,000 Financial assets at variable rates Cash and cash equivalents 13,708 14,433An increase in the U.K. bank interest rates by 0.5 percentage points would increase the net annual interest income applicable to the cash and cashequivalents by £327,261 (2016: £97,165).Currency RiskOur functional currency is the U.K. pound sterling, and our transactions are commonly denominated in that currency. However, we incur a portion ofexpenses in other currencies, primarily U.S. dollars, and are exposed to the effects of this exchange rate. Since mid-2016, there has been significantlyincreased volatility in the exchange rate between the pound sterling and the U.S. dollar and an overall weakening of the pound sterling related to Britain’sexit from the European Union. Although we are based in the United Kingdom, we source our active pharmaceutical ingredient, or API, and other raw materialsand our research and development, manufacturing, consulting and other services worldwide, including from the United States, the European Union and India.Any weakening of the pound sterling against the currencies of such other jurisdictions makes the purchase of such goods and services more expensivefor us. We seek to minimize this exposure by maintaining currency cash balances at levels appropriate to meet foreseeable short to mid-term expenses in theseother currencies. We do not use forward exchange contracts to manage exchange rate exposure.Financial assets and liabilities in foreign currencies are as follows: 2017 2016 (in thousands) Carrying amount Carrying amount £ £ Financial assets Prepayments, accrued income and other receivables 2,656 3,068 Current income tax receivable 18 54 Cash and cash equivalents 72,645 251 Financial liabilities Trade payables 148 126 Payroll taxes and social security 3 — Accrued expenditure 468 167F-29NUCANA PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 16. Financial instruments (continued)A 1% increase in exchange rates would reduce the carrying value of net financial assets and liabilities in foreign currencies by £747,004 (2016:£30,807).Credit riskWe actively manage our cash and cash equivalents across a number of banks and have deposits with different maturity dates. The Company monitorsthe credit rating of those banks. 17. Events after the reporting periodThere have been no significant changes to the Company’s circumstances since the year-end.F-30 Exhibit 2.1 EXECUTION DEPOSIT AGREEMENT by and amongNUCANA PLCandCITIBANK, N.A.,as Depositary,andALL HOLDERS AND BENEFICIAL OWNERS OFAMERICAN DEPOSITARY SHARESISSUED HEREUNDER Dated as of October 2, 2017 9964064v.4 TABLE OF CONTENTS ARTICLE I DEFINITIONS1Section 1.1“ADS Record Date”1Section 1.2“Affiliate”1Section 1.3“American Depositary Receipt(s)”, “ADR(s)” and “Receipt(s)”1Section 1.4“American Depositary Share(s)” and “ADS(s)”2Section 1.5“Applicant”2Section 1.6“Articles of Association”2Section 1.7“Beneficial Owner”2Section 1.8“Certificated ADS(s)”3Section 1.9“Citibank”3Section 1.10“Commission”3Section 1.11“Company”3Section 1.12“CREST”3Section 1.13“Custodian”3Section 1.14“Deliver” and “Delivery”3Section 1.15“Deposit Agreement”4Section 1.16“Depositary”4Section 1.17“Deposited Property”4Section 1.18“Deposited Securities”4Section 1.19“Dollars” and “$”4Section 1.20“DTC”4Section 1.21“DTC Participant”4Section 1.22“Exchange Act”4Section 1.23“Foreign Currency”4Section 1.24“Full Entitlement ADR(s)”, “Full Entitlement ADS(s)” and “Full Entitlement Share(s)”5Section 1.25“Holder(s)”5Section 1.26“Partial Entitlement ADR(s)”, “Partial Entitlement ADS(s)” and “Partial Entitlement Share(s)”5Section 1.27“Pounds”, “Pence” and “£”5Section 1.28“Pre-Release Transaction”5Section 1.29“Principal Office”5Section 1.30“Registrar”5Section 1.31“Restricted Securities”5Section 1.32“Restricted ADR(s)”, “Restricted ADS(s)” and “Restricted Shares”6Section 1.33“Securities Act”6Section 1.34“Share Registrar”6Section 1.35“Shares”6Section 1.36“Uncertificated ADS(s)”6Section 1.37“United States” and “U.S.”6i9964064v.4 ARTICLE II APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS; DEPOSIT OF SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS7Section 2.1Appointment of Depositary.7Section 2.2Form and Transferability of ADSs.7Section 2.3Deposit of Shares.9Section 2.4Registration and Safekeeping of Deposited Securities.10Section 2.5Issuance of ADSs.11Section 2.6Transfer, Combination and Split-up of ADRs.11Section 2.7Surrender of ADSs and Withdrawal of Deposited Securities.12Section 2.8Limitations on Execution and Delivery, Transfer, etc. of ADSs; Suspension of Delivery, Transfer, etc.13Section 2.9Lost ADRs, etc.14Section 2.10Cancellation and Destruction of Surrendered ADRs; Maintenance of Records.14Section 2.11Escheatment.14Section 2.12Partial Entitlement ADSs.15Section 2.13Certificated/Uncertificated ADSs.15Section 2.14Restricted ADSs.17 ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL OWNERS OF ADSs18Section 3.1Proofs, Certificates and Other Information.18Section 3.2Liability for Taxes and Other Charges.19Section 3.3Representations and Warranties on Deposit of Shares.19Section 3.4Compliance with Information Requests.20Section 3.5Ownership Restrictions.20Section 3.6Reporting Obligations and Regulatory Approvals.20 ARTICLE IV THE DEPOSITED SECURITIES20Section 4.1Cash Distributions.20Section 4.2Distribution in Shares.22Section 4.3Elective Distributions in Cash or Shares.22Section 4.4Distribution of Rights to Purchase Additional ADSs.23Section 4.5Distributions Other Than Cash, Shares or Rights to Purchase Shares.25Section 4.6Distributions with Respect to Deposited Securities in Bearer Form.26Section 4.7Redemption.26Section 4.8Conversion of Foreign Currency.27Section 4.9Fixing of ADS Record Date.27Section 4.10Voting of Deposited Securities.28ii9964064v.4 Section 4.11Changes Affecting Deposited Securities.30Section 4.12Available Information.31Section 4.13Reports.31Section 4.14List of Holders.31Section 4.15Taxation.31 ARTICLE V THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY32Section 5.1Maintenance of Office and Transfer Books by the Registrar.32Section 5.2Exoneration.33Section 5.3Standard of Care.34Section 5.4Resignation and Removal of the Depositary; Appointment of Successor Depositary.35Section 5.5The Custodian.35Section 5.6Notices and Reports.36Section 5.7Issuance of Additional Shares, ADSs etc.37Section 5.8Indemnification.38Section 5.9ADS Fees and Charges.38Section 5.10Pre-Release Transactions.40Section 5.11Restricted Securities Owners.40 ARTICLE VI AMENDMENT AND TERMINATION40Section 6.1Amendment/Supplement.40Section 6.2Termination.41 ARTICLE VII MISCELLANEOUS42Section 7.1Counterparts.42Section 7.2No Third‑Party Beneficiaries.43Section 7.3Severability.43Section 7.4Holders and Beneficial Owners as Parties; Binding Effect.43Section 7.5Notices.43Section 7.6Governing Law and Jurisdiction.44Section 7.7Assignment.46Section 7.8Compliance with U.S. Securities Laws.46Section 7.9England and Wales Law References.46Section 7.10Titles and References.46 EXHIBITS Form of ADR.A-1 Fee Schedule.B-1 iii9964064v.4 DEPOSIT AGREEMENTDEPOSIT AGREEMENT, dated as of October 2, 2017, by and among (i) NuCana plc, a public limited companyincorporated under the laws of England and Wales and its successors (the “Company”), (ii) CITIBANK, N.A., a national bankingassociation organized under the laws of the United States of America (“Citibank”) acting in its capacity as depositary, and anysuccessor depositary hereunder (Citibank in such capacity, the “Depositary”), and (iii) all Holders and Beneficial Owners of AmericanDepositary Shares issued hereunder (all such capitalized terms as hereinafter defined).W I T N E S S E T H T H A T:WHEREAS, the Company desires to establish with the Depositary an ADR facility to provide for the deposit of the Shares(as hereinafter defined) and the creation of American Depositary Shares representing the Shares so deposited and for the execution anddelivery of American Depositary Receipts (as hereinafter defined) evidencing such American Depositary Shares; andWHEREAS, the Depositary is willing to act as the Depositary for such ADR facility upon the terms set forth in the DepositAgreement (as hereinafter defined); andWHEREAS, any American Depositary Receipts issued pursuant to the terms of the Deposit Agreement are to besubstantially in the form of Exhibit A attached hereto, with appropriate insertions, modifications and omissions, as hereinafter providedin the Deposit Agreement.NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto agree as follows:ARTICLE IDEFINITIONSAll capitalized terms used, but not otherwise defined, herein shall have the meanings set forth below, unless otherwiseclearly indicated:Section 1.1“ADS Record Date” shall have the meaning given to such term in Section 4.9.Section 1.2“Affiliate” shall have the meaning assigned to such term by the Commission (as hereinafter defined)under Regulation C promulgated under the Securities Act (as hereinafter defined), or under any successor regulation thereto.Section 1.3“American Depositary Receipt(s)”, “ADR(s)” and “Receipt(s)” shall mean the certificate(s) issued bythe Depositary to evidence the American Depositary Shares issued under the terms of the Deposit Agreement in the form ofCertificated ADS(s) (as hereinafter defined), as such ADRs may be amended from time to time in accordance with the provisions ofthe Deposit Agreement. An ADR may evidence any number of ADSs and may, in 9964064v.4 the case of ADSs held through a central depository such as DTC, be in the form of a “Balance Certificate.”Section 1.4“American Depositary Share(s)” and “ADS(s)” shall mean the rights and interests in the DepositedProperty (as hereinafter defined) granted to the Holders and Beneficial Owners pursuant to the terms and conditions of the DepositAgreement and, if issued as Certificated ADS(s) (as hereinafter defined), the ADR(s) issued to evidence such ADSs. ADS(s) may beissued under the terms of the Deposit Agreement in the form of (a) Certificated ADS(s) (as hereinafter defined), in which case theADS(s) are evidenced by ADR(s), or (b) Uncertificated ADS(s) (as hereinafter defined), in which case the ADS(s) are not evidencedby ADR(s) but are reflected on the direct registration system maintained by the Depositary for such purposes under the terms ofSection 2.13. Unless otherwise specified in the Deposit Agreement or in any ADR, or unless the context otherwise requires, anyreference to ADS(s) shall include Certificated ADS(s) and Uncertificated ADS(s), individually or collectively, as the context mayrequire. Each ADS shall represent the right to receive, and to exercise the beneficial ownership interests in, the number of Sharesspecified in the form of ADR attached hereto as Exhibit A (as amended from time to time) that are on deposit with the Depositaryand/or the Custodian, subject, in each case, to the terms and conditions of the Deposit Agreement and the applicable ADR (if issued asa Certificated ADS), until there shall occur a distribution upon Deposited Securities referred to in Section 4.2 or a change in DepositedSecurities referred to in Section 4.11 with respect to which additional ADSs are not issued, and thereafter each ADS shall represent theright to receive, and to exercise the beneficial ownership interests in, the applicable Deposited Property on deposit with the Depositaryand the Custodian determined in accordance with the terms of such Sections, subject, in each case, to the terms and conditions of theDeposit Agreement and the applicable ADR (if issued as a Certificated ADS). In addition, the ADS(s)-to-Share(s) ratio is subject toamendment as provided in Articles IV and VI of the Deposit Agreement (which may give rise to Depositary fees).Section 1.5“Applicant” shall have the meaning given to such term in Section 5.10.Section 1.6“Articles of Association” shall mean the Articles of Association of the Company, as amended andrestated from time to time.Section 1.7“Beneficial Owner” shall mean, as to any ADS, any person or entity having a beneficial interestderiving from the ownership of such ADS. Notwithstanding anything else contained in the Deposit Agreement, any ADR(s) or anyother instruments or agreements relating to the ADSs and the corresponding Deposited Property, the Depositary, the Custodian andtheir respective nominees are intended to be, and shall at all times during the term of the Deposit Agreement be, the record holders onlyof the Deposited Property represented by the ADSs for the benefit of the Holders and Beneficial Owners of the correspondingADSs. The Depositary, on its own behalf and on behalf of the Custodian and their respective nominees, disclaims any beneficialownership interest in the Deposited Property held on behalf of the Holders and Beneficial Owners of ADSs. The beneficial ownershipinterests in the Deposited Property are intended to be, and shall at all times during the term of the Deposit Agreement continue to be,vested in the Beneficial Owners of the ADSs representing the Deposited Property. The beneficial ownership interests in the DepositedProperty shall, unless otherwise agreed by the Depositary, be exercisable by the Beneficial Owners of the ADSs only through the29964064v.4 Holders of such ADSs, by the Holders of the ADSs (on behalf of the applicable Beneficial Owners) only through the Depositary, andby the Depositary (on behalf of the Holders and Beneficial Owners of the corresponding ADSs) directly, or indirectly through theCustodian or their respective nominees, in each case upon the terms of the Deposit Agreement and, if applicable, the terms of theADR(s) evidencing the ADSs. A Beneficial Owner of ADSs may or may not be the Holder of such ADSs. A Beneficial Owner shallbe able to exercise any right or receive any benefit hereunder solely through the person who is the Holder of the ADSs owned by suchBeneficial Owner. Unless otherwise identified to the Depositary, a Holder shall be deemed to be the Beneficial Owner of all theADSs registered in his/her/its name. The manner in which a Beneficial Owner holds ADSs (e.g., in a brokerage account vs. asregistered holder) may affect the rights and obligations of, the manner in which, and the extent to which, services are made available to,Beneficial Owners pursuant to the terms of the Deposit Agreement. With respect to the foregoing sentence, neither the Depositary northe Company shall bear any responsibility for any Beneficial Owner’s loss, liability, tax, charge or expense.Section 1.8“Certificated ADS(s)” shall have the meaning set forth in Section 2.13.Section 1.9“Citibank” shall mean Citibank, N.A., a national banking association organized under the laws of theUnited States of America, and its successors.Section 1.10“Commission” shall mean the Securities and Exchange Commission of the United States or anysuccessor governmental agency thereto in the United States.Section 1.11“Company” shall mean NuCana plc, a public limited company incorporated under the laws of Englandand Wales, and its successors.Section 1.12“CREST” shall mean the system for the paperless settlement of trades in securities and the holding ofuncertificated securities operated by Euroclear UK & Ireland Limited in accordance with the Uncertificated Securities Regulations2001 (SI 2001 No. 3755), as amended from time to time, or any successor thereto.Section 1.13“Custodian” shall mean (i) as of the date hereof, Citibank N.A., London Branch, having its principaloffice at 25 Canada Square, Canary Wharf, London, E14 5LB, United Kingdom, as the custodian of Deposited Property for thepurposes of the Deposit Agreement, (ii) Citibank, N.A., acting as custodian of Deposited Property pursuant to the Deposit Agreement,and (iii) any other entity that may be appointed by the Depositary pursuant to the terms of Section 5.5 as successor, substitute oradditional custodian hereunder. The term “Custodian” shall mean any Custodian individually or all Custodians collectively, as thecontext requires.Section 1.14“Deliver” and “Delivery” shall mean (x) when used in respect of Shares and other DepositedSecurities, either (i) the physical delivery of the certificate(s) representing such securities, or (ii) the book-entry transfer and recordationof such securities on the books of the Share Registrar (as hereinafter defined) or in the book-entry settlement of CREST, and (y) whenused in respect of ADSs, either (i) the physical delivery of ADR(s) evidencing the ADSs, or (ii) the book-entry transfer and recordationof ADSs on the books of the Depositary or any book-entry settlement system in which the ADSs are settlement-eligible.39964064v.4 Section 1.15“Deposit Agreement” shall mean this Deposit Agreement and all exhibits hereto, as the same mayfrom time to time be amended and supplemented from time to time in accordance with the terms of the Deposit Agreement.Section 1.16“Depositary” shall mean Citibank, N.A., a national banking association organized under the laws ofthe United States, in its capacity as depositary under the terms of the Deposit Agreement, and any successor depositary hereunder.Section 1.17“Deposited Property” shall mean the Deposited Securities and any cash and other property held ondeposit by the Depositary and the Custodian in respect of the ADSs under the terms of the Deposit Agreement, subject, in the case ofcash, to the provisions of Section 4.8. All Deposited Property shall be held by the Custodian, the Depositary and their respectivenominees for the benefit of the Holders and Beneficial Owners of the ADSs representing the Deposited Property. The DepositedProperty is not intended to, and shall not, constitute proprietary assets of the Depositary, the Custodian or their nominees. Beneficialownership in the Deposited Property is intended to be, and shall at all times during the term of the Deposit Agreement continue to be,vested in the Beneficial Owners of the ADSs representing the Deposited Property. Notwithstanding the foregoing, the collateraldelivered in connection with Pre-Release Transactions described in Section 5.10 shall not constitute Deposited Property.Section 1.18“Deposited Securities” shall mean the Shares and any other securities held on deposit by the Custodianfrom time to time in respect of the ADSs under the Deposit Agreement and constituting Deposited Property.Section 1.19“Dollars” and “$” shall refer to the lawful currency of the United States.Section 1.20“DTC” shall mean The Depository Trust Company, a national clearinghouse and the central book-entry settlement system for securities traded in the United States and, as such, the custodian for the securities of DTC Participants (ashereinafter defined) maintained in DTC, and any successor thereto.Section 1.21“DTC Participant” shall mean any financial institution (or any nominee of such institution) having oneor more participant accounts with DTC for receiving, holding and delivering the securities and cash held in DTC. A DTC Participantmay or may not be a Beneficial Owner. If a DTC Participant is not the Beneficial Owner of the ADSs credited to its account at DTC,or of the ADSs in respect of which the DTC Participant is otherwise acting, such DTC Participant shall be deemed, for all purposeshereunder, to have all requisite authority to act on behalf of the Beneficial Owner(s) of the ADSs credited to its account at DTC or inrespect of which the DTC Participant is so acting. A DTC Participant, upon acceptance in any one of its DTC accounts of any ADSs(or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall be deemed for all purposesto be a party to, and bound by, the terms of the Deposit Agreement and the applicable ADR(s) to the same extent as, and as if the DTCParticipant were, the Holder of such ADSs.Section 1.22“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended from timeto time.Section 1.23“Foreign Currency” shall mean any currency other than Dollars.49964064v.4 Section 1.24“Full Entitlement ADR(s)”, “Full Entitlement ADS(s)” and “Full Entitlement Share(s)” shall havethe respective meanings set forth in Section 2.12.Section 1.25“Holder(s)” shall mean the person(s) in whose name the ADSs are registered on the books of theDepositary (or the Registrar, if any) maintained for such purpose. A Holder may or may not be a Beneficial Owner. If a Holder is notthe Beneficial Owner of the ADS(s) registered in its name, such person shall be deemed, for all purposes hereunder, to have allrequisite authority to act on behalf of the Beneficial Owners of the ADSs registered in its name. The manner in which a Holder holdsADSs (e.g., in certificated vs. uncertificated form) may affect the rights and obligations of, and the manner in which the services aremade available to, Holders pursuant to the terms of the Deposit Agreement. With respect to the foregoing sentence, neither theDepositary nor the Company shall bear any responsibility for any Holder’s loss, liability, tax, charge or expense.Section 1.26“Partial Entitlement ADR(s)”, “Partial Entitlement ADS(s)” and “Partial Entitlement Share(s)”shall have the respective meanings set forth in Section 2.12.Section 1.27“Pounds”, “Pence” and “£” shall refer to the lawful currency of England.Section 1.28“Pre-Release Transaction” shall have the meaning set forth in Section 5.10.Section 1.29“Principal Office” shall mean, when used with respect to the Depositary, the principal office of theDepositary at which at any particular time its depositary receipts business shall be administered, which, at the date of the DepositAgreement, is located at 388 Greenwich Street, New York, New York 10013, U.S.A.Section 1.30“Registrar” shall mean the Depositary or any bank or trust company having an office in the Boroughof Manhattan, The City of New York, which shall be appointed by the Depositary to register issuances, transfers and cancellations ofADSs as herein provided, and shall include any co-registrar appointed by the Depositary for such purposes. Registrars (other than theDepositary) may be removed and substitutes appointed by the Depositary. Each Registrar (other than the Depositary) appointedpursuant to the Deposit Agreement shall be required to give notice in writing to the Depositary accepting such appointment andagreeing to be bound by the applicable terms of the Deposit Agreement.Section 1.31“Restricted Securities” shall mean Shares, Deposited Securities or ADSs which (i) have been acquireddirectly or indirectly from the Company or any of its Affiliates in a transaction or chain of transactions not involving any publicoffering and are subject to resale limitations under the Securities Act or the rules issued thereunder, or (ii) are held by an executiveofficer or director (or persons performing similar functions) or other Affiliate of the Company, or (iii) are subject to other restrictions onsale or deposit under the laws of the United States, England and Wales, or under a shareholder agreement or the Articles ofAssociation of the Company or under the regulations of an applicable securities exchange unless, in each case, such Shares, DepositedSecurities or ADSs are being transferred or sold to persons other than an Affiliate of the Company in a transaction (a) covered by aneffective resale registration59964064v.4 statement, or (b) exempt from the registration requirements of the Securities Act (as hereinafter defined), and the Shares, DepositedSecurities or ADSs are not, when held by such person(s), Restricted Securities.Section 1.32“Restricted ADR(s)”, “Restricted ADS(s)” and “Restricted Shares” shall have the respectivemeanings set forth in Section 2.14.Section 1.33“Securities Act” shall mean the United States Securities Act of 1933, as amended from time to time.Section 1.34“Share Registrar” shall mean Computershare Investor Services plc, a company registered in Englandand Wales under company number 3498808 and whose registered office is at The Pavilions, Bridgewater Road, Bristol BS13 8AE orany other institution organized under the laws of England and Wales appointed by the Company to carry out the duties of registrar forthe Shares, and any successor thereto.Section 1.35“Shares” shall mean the Company’s ordinary shares, nominal value £0.04 per share, validly issued andoutstanding and fully paid and may, if the Depositary so agrees after consultation with the Company, include evidence of the right toreceive Shares; provided that in no event shall Shares include evidence of the right to receive Shares with respect to which the fullpurchase price has not been paid or Shares as to which preemptive rights have theretofore not been validly waived, disapplied orexercised; provided further, however, that, if there shall occur any change in nominal value, split‑up, consolidation, reclassification,exchange, conversion or any other event described in Section 4.11 in respect of the Shares of the Company, the term “Shares” shallthereafter, to the maximum extent permitted by law, represent the successor securities resulting from such event.Section 1.36“Uncertificated ADS(s)” shall have the meaning set forth in Section 2.13.Section 1.37“United States” and “U.S.” shall have the meaning assigned to it in Regulation S as promulgated bythe Commission under the Securities Act. 69964064v.4 ARTICLE IIAPPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;DEPOSIT OF SHARES; EXECUTION ANDDELIVERY, TRANSFER AND SURRENDER OF RECEIPTSSection 2.1Appointment of Depositary. The Company hereby appoints the Depositary as depositary for theDeposited Property and hereby authorizes and directs the Depositary to act in accordance with the terms and conditions set forth in theDeposit Agreement and the applicable ADRs. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or anyinterest therein) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) bea party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and theapplicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositaryin its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicableADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.Section 2.2Form and Transferability of ADSs.(a)Form. Certificated ADSs shall be evidenced by definitive ADRs which shall be engraved, printed, lithographedor produced in such other manner as may be agreed upon by the Company and the Depositary. ADRs may be issued under theDeposit Agreement in denominations of any whole number of ADSs. The ADRs shall be substantially in the form set forth inExhibit A to the Deposit Agreement, with any appropriate insertions, modifications and omissions, in each case as otherwisecontemplated in the Deposit Agreement or required by law. ADRs shall be (i) dated, (ii) signed by the manual or facsimile signature ofa duly authorized signatory of the Depositary, (iii) countersigned by the manual or facsimile signature of a duly authorized signatory ofthe Registrar, and (iv) registered in the books maintained by the Registrar for the registration of issuances and transfers of ADSs. NoADR and no Certificated ADS evidenced thereby shall be entitled to any benefits under the Deposit Agreement or be valid orenforceable for any purpose against the Depositary or the Company, unless such ADR shall have been so dated, signed, countersignedand registered. ADRs bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the timeof signature was a duly-authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary,notwithstanding the fact that such signatory has ceased to be so authorized prior to the delivery of such ADR by the Depositary. TheADRs shall bear a CUSIP number that is different from any CUSIP number that was, is or may be assigned to any depositary receiptspreviously or subsequently issued pursuant to any other arrangement between the Depositary (or any other depositary) and theCompany and which are not ADRs outstanding hereunder.(b)Legends. The ADRs may be endorsed with, or have incorporated in the text thereof, such legends or recitals notinconsistent with the provisions of the Deposit Agreement as may be (i) necessary to enable the Depositary and the Company toperform their respective obligations hereunder, (ii) required to comply with any applicable laws or regulations, or with79964064v.4 the rules and regulations of any securities exchange or market upon which ADSs may be traded, listed or quoted, or to conform withany usage with respect thereto, (iii) necessary to indicate any special limitations or restrictions to which any particular ADRs or ADSsare subject by reason of the date of issuance of the Deposited Securities or otherwise, or (iv) required by any book-entry system inwhich the ADSs are held. Holders and Beneficial Owners shall be deemed, for all purposes, to have notice of, and to be bound by, theterms and conditions of the legends set forth, in the case of Holders, on the ADR registered in the name of the applicable Holders or, inthe case of Beneficial Owners, on the ADR representing the ADSs owned by such Beneficial Owners.(c)Title. Subject to the limitations contained herein and in the ADR, title to an ADR (and to each Certificated ADSevidenced thereby) shall be transferable upon the same terms as a certificated security under the laws of the State of New York,provided that, in the case of Certificated ADSs, such ADR has been properly endorsed or is accompanied by proper instruments oftransfer. Notwithstanding any notice to the contrary, the Depositary and the Company may deem and treat the Holder of an ADS (thatis, the person in whose name an ADS is registered on the books of the Depositary) as the absolute owner thereof for allpurposes. Neither the Depositary nor the Company shall have any obligation nor be subject to any liability under the DepositAgreement or any ADR to any holder or any Beneficial Owner unless, in the case of a holder of ADSs, such holder is the Holderregistered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner, or the Beneficial Owner’srepresentative, is the Holder registered on the books of the Depositary.(d)Book‑Entry Systems. The Depositary shall make arrangements for the acceptance of the ADSs into DTC. AllADSs held through DTC will be registered in the name of the nominee for DTC (currently “Cede & Co.”). As such, the nominee forDTC will be the only “Holder” of all ADSs held through DTC. Unless issued by the Depositary as Uncertificated ADSs, the ADSsregistered in the name of Cede & Co. will be evidenced by one or more ADR(s) in the form of a “Balance Certificate,” which willprovide that it represents the aggregate number of ADSs from time to time indicated in the records of the Depositary as being issuedhereunder and that the aggregate number of ADSs represented thereby may from time to time be increased or decreased by makingadjustments on such records of the Depositary and of DTC or its nominee as hereinafter provided. Citibank, N.A. (or such other entityas is appointed by DTC or its nominee) may hold the “Balance Certificate” as custodian for DTC. Each Beneficial Owner of ADSsheld through DTC must rely upon the procedures of DTC and the DTC Participants to exercise or be entitled to any rights attributableto such ADSs. The DTC Participants shall for all purposes be deemed to have all requisite power and authority to act on behalf of theBeneficial Owners of the ADSs held in the DTC Participants’ respective accounts in DTC and the Depositary shall for all purposes beauthorized to rely upon any instructions and information given to it by DTC Participants. So long as ADSs are held through DTC orunless otherwise required by law, ownership of beneficial interests in the ADSs registered in the name of the nominee for DTC will beshown on, and transfers of such ownership will be effected only through, records maintained by (i) DTC or its nominee (with respectto the interests of DTC Participants), or (ii) DTC Participants or their nominees (with respect to the interests of clients of DTCParticipants). Any distributions made, and any notices given, by the Depositary to DTC under the terms of the Deposit Agreementshall (unless otherwise specified by the Depositary) satisfy the Depositary’s obligations under the Deposit Agreement to make suchdistributions, and89964064v.4 give such notices, in respect of the ADSs held in DTC (including, for avoidance of doubt, to the DTC Participants holding the ADSsin their DTC accounts and to the Beneficial Owners of such ADSs).Section 2.3Deposit of Shares. Subject to the terms and conditions of the Deposit Agreement and applicable law,Shares or evidence of rights to receive Shares (other than Restricted Securities) may be deposited by any person (including theDepositary in its individual capacity but subject, however, in the case of the Company or any Affiliate of the Company, to Section 5.7)at any time, whether or not the transfer books of the Company or the Share Registrar, if any, are closed, by Delivery of the Shares tothe Custodian. Every deposit of Shares shall be accompanied by the following: (A) (i) in the case of Shares represented bycertificates issued in registered form, appropriate instruments of transfer or endorsement, in a form satisfactory to the Custodian, (ii) inthe case of Shares represented by certificates in bearer form, the requisite coupons and talons pertaining thereto, and (iii) in the case ofShares delivered by book-entry transfer and recordation, confirmation of such book-entry transfer and recordation in the books of theShare Registrar or of CREST, as applicable, to the Custodian or that irrevocable instructions have been given to cause such Shares tobe so transferred and recorded, (B) such certifications and payments (including, without limitation, the Depositary’s fees and relatedcharges) and evidence of such payments (including, without limitation, stamping or otherwise marking such Shares by way of receipt)as may be required by the Depositary or the Custodian in accordance with the provisions of the Deposit Agreement and applicablelaw, (C) if the Depositary so requires, a written order directing the Depositary to issue and deliver to, or upon the written order of, theperson(s) stated in such order the number of ADSs representing the Shares so deposited, (D) evidence satisfactory to the Depositary(which may be an opinion of counsel) that all necessary approvals have been granted by, or there has been compliance with the rulesand regulations of, any applicable governmental agency in England and Wales, and (E) if the Depositary so requires, (i) an agreement,assignment or instrument satisfactory to the Depositary or the Custodian which provides for the prompt transfer by any person inwhose name the Shares are or have been recorded to the Custodian of any distribution, or right to subscribe for additional Shares or toreceive other property in respect of any such deposited Shares or, in lieu thereof, such indemnity or other agreement as shall besatisfactory to the Depositary or the Custodian and (ii) if the Shares are registered in the name of the person on whose behalf they arepresented for deposit, a proxy or proxies entitling the Custodian to exercise voting rights in respect of the Shares for any and allpurposes until the Shares so deposited are registered in the name of the Depositary, the Custodian or any nominee.Without limiting any other provision of the Deposit Agreement, the Depositary shall instruct the Custodian not to, and theDepositary shall not knowingly, accept for deposit (a) any Restricted Securities, except as contemplated by Section 2.14 nor (b) anyfractional Shares or fractional Deposited Securities nor (c) a number of Shares or Deposited Securities which upon application of theADS to Shares ratio would give rise to fractional ADSs. No Shares shall be accepted for deposit unless accompanied by evidence, ifany is required by the Depositary, that is reasonably satisfactory to the Depositary or the Custodian that all conditions to such deposithave been satisfied by the person depositing such Shares under the laws and regulations of England and Wales and any necessaryapproval has been granted by any applicable governmental body in England and Wales, if any. The Depositary may issue ADSsagainst evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer99964064v.4 agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares. Such evidence of rightsshall consist of written blanket or specific guarantees of ownership of Shares furnished by the Company or any such custodian,registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares.Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement(A) any Shares or other securities required to be registered under the provisions of the Securities Act, unless (i) a registration statementis in effect as to such Shares or other securities or (ii) the deposit is made upon terms contemplated in Section 2.14, or (B) any Sharesor other securities the deposit of which would violate any provisions of the Articles of Association of the Company. For purposes ofthe foregoing sentence, the Depositary shall be entitled to rely upon representations and warranties made or deemed made pursuant tothe Deposit Agreement and shall not be required to make any further investigation. The Depositary will comply with writteninstructions of the Company (received by the Depositary reasonably in advance) not to accept for deposit hereunder any Sharesidentified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in orderto facilitate the Company’s compliance with the securities laws of the United States.Section 2.4Registration and Safekeeping of Deposited Securities. The Depositary shall instruct the Custodianupon each Delivery of registered Shares being deposited hereunder with the Custodian (or other Deposited Securities pursuant toArticle IV hereof), together with the other documents above specified, to present such Shares, together with the appropriateinstrument(s) of transfer or endorsement, duly stamped, to the Share Registrar for transfer and registration of the Shares (as soon astransfer and registration can be accomplished and at the expense of the person for whom the deposit is made) in the name of theDepositary, the Custodian or a nominee of either. Deposited Securities shall be held by the Depositary, or by a Custodian for theaccount and to the order of the Depositary or a nominee of the Depositary, in each case, on behalf of the Holders and BeneficialOwners, at such place(s) as the Depositary or the Custodian shall determine. Notwithstanding anything else contained in the DepositAgreement, any ADR(s), or any other instruments or agreements relating to the ADSs and the corresponding Deposited Property, theregistration of the Deposited Securities in the name of the Depositary, the Custodian or any of their respective nominees, shall, to themaximum extent permitted by applicable law, vest in the Depositary, the Custodian or the applicable nominee the record ownership inthe applicable Deposited Securities with the beneficial ownership rights and interests in such Deposited Securities being at all timesvested with the Beneficial Owners of the ADSs representing the Deposited Securities. Notwithstanding the foregoing, the Depositary,the Custodian and the applicable nominee shall at all times be entitled to exercise the beneficial ownership rights in all DepositedProperty, in each case only on behalf of the Holders and Beneficial Owners of the ADSs representing the Deposited Property, uponthe terms set forth in the Deposit Agreement and, if applicable, the ADR(s) representing the ADSs. The Depositary, the Custodianand their respective nominees shall for all purposes be deemed to have all requisite power and authority to act in respect of DepositedProperty on behalf of the Holders and Beneficial Owners of ADSs representing the Deposited Property, and upon making paymentsto, or acting upon instructions from, or information provided by, the Depositary, the Custodian or their respective nominees all personsshall be authorized to rely upon such power and authority. 109964064v.4 Section 2.5Issuance of ADSs. The Depositary has made arrangements with the Custodian for the Custodian toconfirm to the Depositary upon receipt of a deposit of Shares (i) that a deposit of Shares has been made pursuant to Section 2.3, (ii) thatsuch Deposited Securities have been recorded in the name of the Depositary, the Custodian or a nominee of either on the shareholders’register maintained by or on behalf of the Company by the Share Registrar on the books of CREST, (iii) that all required documentshave been received, and (iv) the person(s) to whom or upon whose order ADSs are deliverable in respect thereof and the number ofADSs to be so delivered. Such notification may be made by letter, cable, telex, SWIFT message or, at the risk and expense of theperson making the deposit, by facsimile or other means of electronic transmission. Upon receiving such notice from the Custodian, theDepositary, subject to the terms and conditions of the Deposit Agreement and applicable law, shall issue the ADSs representing theShares so deposited to or upon the order of the person(s) named in the notice delivered to the Depositary and, if applicable, shallexecute and deliver at its Principal Office Receipt(s) registered in the name(s) requested by such person(s) and evidencing theaggregate number of ADSs to which such person(s) are entitled, but, in each case, only upon payment to the Depositary of the chargesof the Depositary for accepting a deposit of Shares and issuing ADSs (as set forth in Section 5.9 and Exhibit B hereto) and all taxesand governmental charges and fees payable in connection with such deposit and the transfer of the Shares and the issuance of theADS(s). The Depositary shall only issue ADSs in whole numbers and deliver, if applicable, ADR(s) evidencing whole numbers ofADSs. Nothing herein shall prohibit any Pre-Release Transaction upon the terms set forth in the Deposit Agreement.Section 2.6Transfer, Combination and Split-up of ADRs.(a)Transfer. The Registrar shall register the transfer of ADRs (and of the ADSs represented thereby) on the booksmaintained for such purpose and the Depositary shall (x) cancel such ADRs and execute new ADRs evidencing the same aggregatenumber of ADSs as those evidenced by the ADRs canceled by the Depositary, (y) cause the Registrar to countersign such new ADRsand (z) Deliver such new ADRs to or upon the order of the person entitled thereto, if each of the following conditions has beensatisfied: (i) the ADRs have been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at itsPrincipal Office for the purpose of effecting a transfer thereof, (ii) the surrendered ADRs have been properly endorsed or areaccompanied by proper instruments of transfer (including signature guarantees in accordance with standard securities industrypractice), (iii) the surrendered ADRs have been duly stamped (if required by the laws of the State of New York or of the UnitedStates), and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmentalcharges (as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject, however, in each case, to the terms andconditions of the applicable ADRs, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.(b)Combination & Split-Up. The Registrar shall register the split-up or combination of ADRs (and of the ADSsrepresented thereby) on the books maintained for such purpose and the Depositary shall (x) cancel such ADRs and execute new ADRsfor the number of ADSs requested, but in the aggregate not exceeding the number of ADSs evidenced by the ADRs canceled by theDepositary, (y) cause the Registrar to countersign such new ADRs and (z) Deliver such new ADRs to or upon the order of the Holderthereof, if each of the following119964064v.4 conditions has been satisfied: (i) the ADRs have been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) tothe Depositary at its Principal Office for the purpose of effecting a split-up or combination thereof, and (ii) all applicable fees andcharges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9and Exhibit B hereto) have been paid, subject, however, in each case, to the terms and conditions of the applicable ADRs, of theDeposit Agreement and of applicable law, in each case as in effect at the time thereof.Section 2.7Surrender of ADSs and Withdrawal of Deposited Securities.The Holder of ADSs shall be entitled to Delivery (at the Custodian’s designated office) of the Deposited Securities at thetime represented by the ADSs upon satisfaction of each of the following conditions: (i) the Holder (or a duly-authorized attorney of theHolder) has duly Delivered ADSs to the Depositary at its Principal Office (and if applicable, the ADRs evidencing such ADSs) for thepurpose of withdrawal of the Deposited Securities represented thereby, (ii) if applicable and so required by the Depositary, the ADRsDelivered to the Depositary for such purpose have been properly endorsed in blank or are accompanied by proper instruments oftransfer in blank (including signature guarantees in accordance with standard securities industry practice), (iii) if so required by theDepositary, the Holder of the ADSs has executed and delivered to the Depositary a written order directing the Depositary to cause theDeposited Securities being withdrawn to be Delivered to or upon the written order of the person(s) designated in such order, and (iv)all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as areset forth in Section 5.9 and Exhibit B) have been paid, subject, however, in each case, to the terms and conditions of the ADRsevidencing the surrendered ADSs, of the Deposit Agreement, of the Company’s Articles of Association and of any applicable lawsand the rules of CREST, and to any provisions of or governing the Deposited Securities, in each case as in effect at the time thereof.Upon satisfaction of each of the conditions specified above, the Depositary (i) shall cancel the ADSs Delivered to it (and, ifapplicable, the ADR(s) evidencing the ADSs so Delivered), (ii) shall direct the Registrar to record the cancellation of the ADSs soDelivered on the books maintained for such purpose, and (iii) shall direct the Custodian to Deliver, or cause the Delivery of, in eachcase, without unreasonable delay, the Deposited Securities represented by the ADSs so canceled together with any certificate or otherdocument of title for the Deposited Securities, or evidence of the electronic transfer thereof (if available), as the case may be, to or uponthe written order of the person(s) designated in the order delivered to the Depositary for such purpose, subject however, in each case,to the terms and conditions of the Deposit Agreement, of the ADRs evidencing the ADSs so canceled, of the Articles of Association ofthe Company, of any applicable laws and of the rules of CREST, and to the terms and conditions of or governing the DepositedSecurities, in each case as in effect at the time thereof.The Depositary shall not accept for surrender ADSs representing less than one (1) Share. In the case of Delivery to it ofADSs representing a number other than a whole number of Shares, the Depositary shall cause ownership of the appropriate wholenumber of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) return tothe person surrendering such ADSs the number of ADSs representing any129964064v.4 remaining fractional Share, or (ii) sell or cause to be sold the fractional Share represented by the ADSs so surrendered and remit theproceeds of such sale (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxeswithheld) to the person surrendering the ADSs.Notwithstanding anything else contained in any ADR or the Deposit Agreement, the Depositary may make delivery at thePrincipal Office of the Depositary of Deposited Property consisting of (i) any cash dividends or cash distributions, or (ii) any proceedsfrom the sale of any non-cash distributions, which are at the time held by the Depositary in respect of the Deposited Securitiesrepresented by the ADSs surrendered for cancellation and withdrawal. At the request, risk and expense of any Holder so surrenderingADSs, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) anyDeposited Property (other than Deposited Securities) held by the Custodian in respect of such ADSs to the Depositary for delivery atthe Principal Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Holder, bycable, telex or facsimile transmission.Section 2.8Limitations on Execution and Delivery, Transfer, etc. of ADSs; Suspension of Delivery, Transfer,etc.(a)Additional Requirements. As a condition precedent to the execution and delivery, the registration of issuance,transfer, split-up, combination or surrender, of any ADS, the delivery of any distribution thereon, or the withdrawal of any DepositedProperty, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of ADSs or of an ADR ofa sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto(including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable feesand charges of the Depositary as provided in Section 5.9 and Exhibit B, (ii) the production of proof satisfactory to it as to the identityand genuineness of any signature or any other matter contemplated by Section 3.1, and (iii) compliance with (A) any laws orgovernmental regulations relating to the execution and delivery of ADRs or ADSs or to the withdrawal of Deposited Securities and(B) such reasonable regulations as the Depositary and the Company may establish consistent with the provisions of the representativeADR, if applicable, the Deposit Agreement and applicable law. If satisfaction of any condition precedent referred to above wouldinvolve an unlawful payment by the Company under the applicable laws of England and Wales, the Company and the Depositary shallreasonably cooperate to determine if there is a mutually agreeable lawful alternative, provided, that in no event shall the Company berequired to make any unlawful payment, provided further, that in no event shall the Depositary be required to effect any transactionuntil it receives applicable payments with respect thereto, as provided herein.(b)Additional Limitations. The issuance of ADSs against deposits of Shares generally or against deposits ofparticular Shares may be suspended, or the deposit of particular Shares may be refused, or the registration of transfer of ADSs inparticular instances may be refused, or the registration of transfers of ADSs generally may be suspended, during any period when thetransfer books of the Company, the Depositary, a Registrar or the Share Registrar are closed or if any such action is deemed necessaryor advisable by the Depositary or the Company,139964064v.4 in good faith, at any time or from time to time because of any requirement of law or regulation, any government or governmental bodyor commission or any securities exchange on which the ADSs or Shares are listed, or under any provision of the Deposit Agreement orthe representative ADR(s), if applicable, or under any provision of, or governing, the Deposited Securities, or because of a meeting ofshareholders of the Company or for any other reason, subject, in all cases, to Section 7.8.(c)Regulatory Restrictions. Notwithstanding any provision of the Deposit Agreement or any ADR(s) to thecontrary, Holders are entitled to surrender outstanding ADSs to withdraw the Deposited Securities associated herewith at any timesubject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Shares inconnection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges,(iii) compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of the DepositedSecurities, and (iv) other circumstances specifically contemplated by Instruction I.A.(l) of the General Instructions to Form F-6 (as suchGeneral Instructions may be amended from time to time).Section 2.9Lost ADRs, etc. In case any ADR shall be mutilated, destroyed, lost, or stolen, the Depositary shallexecute and deliver a new ADR of like tenor at the expense of the Holder (a) in the case of a mutilated ADR, in exchange of andsubstitution for such mutilated ADR upon cancellation thereof, or (b) in the case of a destroyed, lost or stolen ADR, in lieu of and insubstitution for such destroyed, lost, or stolen ADR, after the Holder thereof (i) has submitted to the Depositary a written request forsuch exchange and substitution before the Depositary has notice that the ADR has been acquired by a bona fide purchaser, (ii) hasprovided such security or indemnity (including an indemnity bond) as may be required by the Depositary to hold it and any of itsagents harmless, and (iii) has satisfied any other reasonable requirements imposed by the Depositary, including, without limitation,evidence satisfactory to the Depositary of such destruction, loss or theft of such ADR, the authenticity thereof and the Holder’sownership thereof.Section 2.10Cancellation and Destruction of Surrendered ADRs; Maintenance of Records. All ADRssurrendered to the Depositary shall be canceled by the Depositary. Canceled ADRs shall not be entitled to any benefits under theDeposit Agreement or be valid or enforceable against the Depositary for any purpose. The Depositary is authorized to destroy ADRsso canceled, provided the Depositary maintains a record of all destroyed ADRs. Any ADSs held in book-entry form (e.g., throughaccounts at DTC) shall be deemed canceled when the Depositary causes the number of ADSs evidenced by the Balance Certificate tobe reduced by the number of ADSs surrendered (without the need to physically destroy the Balance Certificate).Section 2.11Escheatment. In the event any unclaimed property relating to the ADSs, for any reason, is in thepossession of Depositary and has not been claimed by the Holder thereof or cannot be delivered to the Holder thereof through usualchannels, the Depositary shall, upon expiration of any applicable statutory period relating to abandoned property laws, escheat suchunclaimed property to the relevant authorities in accordance with the laws of each of the relevant States of the United States. 149964064v.4 Section 2.12Partial Entitlement ADSs. In the event any Shares are deposited which (i) entitle the holders thereof toreceive a per-share distribution or other entitlement in an amount different from the Shares then on deposit or (ii) are not fully fungible(including, without limitation, as to settlement or trading) with the Shares then on deposit (the Shares then on deposit collectively, “FullEntitlement Shares” and the Shares with different entitlement, “Partial Entitlement Shares”), the Depositary shall (i) cause theCustodian to hold Partial Entitlement Shares separate and distinct from Full Entitlement Shares, and (ii) subject to the terms of theDeposit Agreement, issue ADSs representing Partial Entitlement Shares which are separate and distinct from the ADSs representingFull Entitlement Shares, by means of separate CUSIP numbering and legending (if necessary) and, if applicable, by issuing ADRsevidencing such ADSs with applicable notations thereon (“Partial Entitlement ADSs/ADRs” and “Full Entitlement ADSs/ADRs”,respectively). If and when Partial Entitlement Shares become Full Entitlement Shares, the Depositary shall (a) give notice thereof toHolders of Partial Entitlement ADSs and give Holders of Partial Entitlement ADRs the opportunity to exchange such PartialEntitlement ADRs for Full Entitlement ADRs, (b) cause the Custodian to transfer the Partial Entitlement Shares into the account of theFull Entitlement Shares, and (c) take such actions as are necessary to remove the distinctions between (i) the Partial Entitlement ADRsand ADSs, on the one hand, and (ii) the Full Entitlement ADRs and ADSs on the other. Holders and Beneficial Owners of PartialEntitlement ADSs shall only be entitled to the entitlements of Partial Entitlement Shares. Holders and Beneficial Owners of FullEntitlement ADSs shall be entitled only to the entitlements of Full Entitlement Shares. All provisions and conditions of the DepositAgreement shall apply to Partial Entitlement ADRs and ADSs to the same extent as Full Entitlement ADRs and ADSs, except ascontemplated by this Section 2.12. The Depositary is authorized to take any and all other actions as may be necessary (including,without limitation, making the necessary notations on ADRs) to give effect to the terms of this Section 2.12. The Company agrees togive timely written notice to the Depositary if any Shares issued or to be issued are Partial Entitlement Shares and shall assist theDepositary with the establishment of procedures enabling the identification of Partial Entitlement Shares upon Delivery to theCustodian. Section 2.13Certificated/Uncertificated ADSs. Notwithstanding any other provision of the Deposit Agreement, theDepositary may, at any time and from time to time, issue ADSs that are not evidenced by ADRs (such ADSs, the “UncertificatedADS(s)” and the ADS(s) evidenced by ADR(s), the “Certificated ADS(s)”). When issuing and maintaining Uncertificated ADS(s)under the Deposit Agreement, the Depositary shall at all times be subject to (i) the standards applicable to registrars and transfer agentsmaintaining direct registration systems for equity securities in New York and issuing uncertificated securities under New York law,and (ii) the terms of New York law applicable to uncertificated equity securities. Uncertificated ADSs shall not be represented by anyinstruments but shall be evidenced by registration in the books of the Depositary maintained for such purpose. Holders ofUncertificated ADSs, that are not subject to any registered pledges, liens, restrictions or adverse claims of which the Depositary hasnotice at such time, shall at all times have the right to exchange the Uncertificated ADS(s) for Certificated ADS(s) of the same type andclass, subject in each case to (x) applicable laws and any rules and regulations the Depositary may have established in respect of theUncertificated ADSs, and (y) the continued availability of Certificated ADSs in the U.S. Holders of Certificated ADSs shall, if theDepositary maintains a direct registration system for the ADSs, have the right to exchange the Certificated ADSs for UncertificatedADSs upon (i) the159964064v.4 due surrender of the Certificated ADS(s) to the Depositary for such purpose and (ii) the presentation of a written request to that effectto the Depositary, subject in each case to (a) all liens and restrictions noted on the ADR evidencing the Certificated ADS(s) and alladverse claims of which the Depositary then has notice, (b) the terms of the Deposit Agreement and the rules and regulations that theDepositary may establish for such purposes hereunder, (c) applicable law, and (d) payment of the Depositary fees and expensesapplicable to such exchange of Certificated ADS(s) for Uncertificated ADS(s). Uncertificated ADSs shall in all material respects beidentical to Certificated ADS(s) of the same type and class, except that (i) no ADR(s) shall be, or shall need to be, issued to evidenceUncertificated ADS(s), (ii) Uncertificated ADS(s) shall, subject to the terms of the Deposit Agreement, be transferable upon the sameterms and conditions as uncertificated securities under New York law, (iii) the ownership of Uncertificated ADS(s) shall be recordedon the books of the Depositary maintained for such purpose and evidence of such ownership shall be reflected in periodic statementsprovided by the Depositary to the Holder(s) in accordance with applicable New York law, (iv) the Depositary may from time to time,upon notice to the Holders of Uncertificated ADSs affected thereby, establish rules and regulations, and amend or supplement existingrules and regulations, as may be deemed reasonably necessary to maintain Uncertificated ADS(s) on behalf of Holders, provided that(a) such rules and regulations do not conflict with the terms of the Deposit Agreement and applicable law, and (b) the terms of suchrules and regulations are readily available to Holders upon request, (v) the Uncertificated ADS(s) shall not be entitled to any benefitsunder the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company unless suchUncertificated ADS(s) is/are registered on the books of the Depositary maintained for such purpose, (vi) the Depositary may, inconnection with any deposit of Shares resulting in the issuance of Uncertificated ADSs and with any transfer, pledge, release andcancellation of Uncertificated ADSs, require the prior receipt of such documentation as the Depositary may deem reasonablyappropriate, and (vii) upon termination of the Deposit Agreement, the Depositary shall not require Holders of Uncertificated ADSs toaffirmatively instruct the Depositary before remitting proceeds from the sale of the Deposited Property represented by such Holders’Uncertificated ADSs under the terms of Section 6.2 of the Deposit Agreement. When issuing ADSs under the terms of the DepositAgreement, including, without limitation, issuances pursuant to Sections 2.5, 4.2, 4.3, 4.4, 4.5 and 4.11, the Depositary may in itsdiscretion determine to issue Uncertificated ADSs rather than Certificated ADSs, unless otherwise specifically instructed by theapplicable Holder to issue Certificated ADSs. All provisions and conditions of the Deposit Agreement shall apply to UncertificatedADSs to the same extent as to Certificated ADSs, except as contemplated by this Section 2.13. The Depositary is authorized anddirected to take any and all actions and establish any and all procedures deemed reasonably necessary to give effect to the terms of thisSection 2.13. Any references in the Deposit Agreement or any ADR(s) to the terms “American Depositary Share(s)” or “ADS(s)”shall, unless the context otherwise requires, include Certificated ADS(s) and Uncertificated ADS(s). Except as set forth in this Section2.13 and except as required by applicable law, the Uncertificated ADSs shall be treated as ADSs issued and outstanding under theterms of the Deposit Agreement. In the event that, in determining the rights and obligations of parties hereto with respect to anyUncertificated ADSs, any conflict arises between (a) the terms of the Deposit Agreement (other than this Section 2.13) and (b) theterms of this Section 2.13, the terms and conditions set forth in this Section 2.13 shall be controlling and shall govern169964064v.4 the rights and obligations of the parties to the Deposit Agreement pertaining to the Uncertificated ADSs.Section 2.14Restricted ADSs. The Depositary shall, at the request and expense of the Company, establishprocedures enabling the deposit hereunder of Shares that are Restricted Securities in order to enable the holder of such Shares to holdits ownership interests in such Restricted Securities in the form of ADSs issued under the terms hereof (such Shares, “RestrictedShares”). Upon receipt of a written request from the Company to accept Restricted Shares for deposit hereunder, the Depositaryagrees to establish procedures permitting the deposit of such Restricted Shares and the issuance of ADSs representing the right toreceive, subject to the terms of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS), such depositedRestricted Shares (such ADSs, the “Restricted ADSs,” and the ADRs evidencing such Restricted ADSs, the “RestrictedADRs”). Notwithstanding anything contained in this Section 2.14, the Depositary and the Company may, to the extent not prohibitedby law, agree to issue the Restricted ADSs in uncertificated form (“Uncertificated Restricted ADSs”) upon such terms and conditionsas the Company and the Depositary may deem necessary and appropriate. The Company shall assist the Depositary in theestablishment of such procedures and agrees that it shall take all steps necessary and satisfactory to the Depositary to ensure that theestablishment of such procedures does not violate the provisions of the Securities Act or any other applicable laws. The depositors ofsuch Restricted Shares and the Holders of the Restricted ADSs may be required prior to the deposit of such Restricted Shares, thetransfer of the Restricted ADRs and Restricted ADSs or the withdrawal of the Restricted Shares represented by Restricted ADSs toprovide such written certifications or agreements as the Depositary or the Company may require. The Company shall provide to theDepositary in writing the legend(s) to be affixed to the Restricted ADRs (if the Restricted ADSs are to be issued as CertificatedADSs), or to be included in the statements issued from time to time to Holders of Uncertificated ADSs (if issued as UncertificatedRestricted ADSs), which legends shall (i) be in a form reasonably satisfactory to the Depositary and (ii) contain the specificcircumstances under which the Restricted ADSs, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, may betransferred or the Restricted Shares withdrawn. The Restricted ADSs issued upon the deposit of Restricted Shares shall be separatelyidentified on the books of the Depositary and the Restricted Shares so deposited shall, to the extent required by law, be held separateand distinct from the other Deposited Securities held hereunder. The Restricted Shares and the Restricted ADSs shall not be eligiblefor Pre-Release Transactions. The Restricted ADSs shall not be eligible for inclusion in any book-entry settlement system, including,without limitation, DTC, and shall not in any way be fungible with the ADSs issued under the terms hereof that are not RestrictedADSs. The Restricted ADSs, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, shall be transferable only bythe Holder thereof upon delivery to the Depositary of (i) all documentation otherwise contemplated by the Deposit Agreement and (ii)an opinion of counsel satisfactory to the Depositary setting forth, inter alia, the conditions upon which the Restricted ADSs presented,and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, are transferable by the Holder thereof under applicablesecurities laws and the transfer restrictions contained in the legend applicable to the Restricted ADSs presented for transfer. Except asset forth in this Section 2.14 and except as required by applicable law, the Restricted ADSs and the Restricted ADRs evidencingRestricted ADSs shall be treated as ADSs and ADRs issued and outstanding under the terms of the Deposit Agreement. In the eventthat, in determining the rights and obligations of parties hereto with respect to any Restricted ADSs,179964064v.4 any conflict arises between (a) the terms of the Deposit Agreement (other than this Section 2.14) and (b) the terms of (i) this Section2.14 or (ii) the applicable Restricted ADR, the terms and conditions set forth in this Section 2.14 and of the Restricted ADR shall becontrolling and shall govern the rights and obligations of the parties to the Deposit Agreement pertaining to the deposited RestrictedShares, the Restricted ADSs and Restricted ADRs.If the Restricted ADRs, the Restricted ADSs and the Restricted Shares cease to be Restricted Securities, the Depositary,upon receipt of (x) an opinion of counsel satisfactory to the Depositary setting forth, inter alia, that the Restricted ADRs, the RestrictedADSs and the Restricted Shares are not as of such time Restricted Securities, and (y) instructions from the Company to remove therestrictions applicable to the Restricted ADRs, the Restricted ADSs and the Restricted Shares, shall (i) eliminate the distinctions andseparations that may have been established between the applicable Restricted Shares held on deposit under this Section 2.14 and theother Shares held on deposit under the terms of the Deposit Agreement that are not Restricted Shares, (ii) treat the newly unrestrictedADRs and ADSs on the same terms as, and fully fungible with, the other ADRs and ADSs issued and outstanding under the terms ofthe Deposit Agreement that are not Restricted ADRs or Restricted ADSs, and (iii) take all actions necessary to remove anydistinctions, limitations and restrictions previously existing under this Section 2.14 between the applicable Restricted ADRs andRestricted ADSs, respectively, on the one hand, and the other ADRs and ADSs that are not Restricted ADRs or Restricted ADSs,respectively, on the other hand, including, without limitation, by making the newly-unrestricted ADSs eligible for Pre-ReleaseTransactions and for inclusion in the applicable book-entry settlement systems. ARTICLE IIICERTAIN OBLIGATIONS OF HOLDERSAND BENEFICIAL OWNERS OF ADSsSection 3.1Proofs, Certificates and Other Information. Any person presenting Shares for deposit, any Holder andany Beneficial Owner may be required, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositaryand the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmentalcharges relating to that person, exchange control approval, legal or beneficial ownership of ADSs and Deposited Property, compliancewith applicable laws, the terms of the Deposit Agreement or the ADR(s) evidencing the ADSs and the provisions of, or governing, theDeposited Property, to execute such certifications and to make such representations and warranties, and to provide such otherinformation and documentation (or, in the case of Shares in registered form presented for deposit, such information relating to theregistration on the books of the Company or of the Share Registrar) as the Depositary or the Custodian may deem necessary or properor as the Company may reasonably require by written request to the Depositary consistent with its obligations under the DepositAgreement and the applicable ADR(s). The Depositary and the Registrar, as applicable, may withhold the execution or delivery orregistration of transfer of any ADR or ADS or the distribution or sale of any dividend or distribution of rights or of the proceedsthereof or, to the extent not limited by the terms of Section 7.8, the delivery of any Deposited Property until such proof or otherinformation is filed or such certifications are executed, or such representations and warranties are made, or such189964064v.4 other documentation or information is provided, in each case to the Depositary’s, the Registrar’s and the Company’s satisfaction. TheDepositary shall provide the Company, in a timely manner, with copies or originals if necessary and appropriate of (i) any such proofsof citizenship or residence, taxpayer status, or exchange control approval or copies of written representations and warranties which itreceives from Holders and Beneficial Owners, and (ii) any other information or documents which the Company may reasonablyrequest and which the Depositary shall request and receive from any Holder or Beneficial Owner or any person presenting Shares fordeposit or ADSs for cancellation, transfer or withdrawal. Nothing herein shall obligate the Depositary to (i) obtain any information forthe Company if not provided by the Holders or Beneficial Owners, or (ii) verify or vouch for the accuracy of the information soprovided by the Holders or Beneficial Owners.Section 3.2Liability for Taxes and Other Charges. Any tax or other governmental charge payable by theCustodian or by the Depositary with respect to any Deposited Property, ADSs or ADRs shall be payable by the Holders andBeneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from anydistributions made in respect of Deposited Property, and may sell for the account of a Holder and/or Beneficial Owner any or all of theDeposited Property and apply such distributions and sale proceeds in payment of, any taxes (including applicable interest andpenalties) or charges that are or may be payable by Holders or Beneficial Owners in respect of the ADSs, Deposited Property andADRs, the Holder and the Beneficial Owner remaining liable for any deficiency. The Custodian may refuse the deposit of Shares andthe Depositary may refuse to issue ADSs, to deliver ADRs, to register the transfer of ADSs, to register the split‑up or combination ofADRs and (subject to Section 7.8) the withdrawal of Deposited Property until payment in full of such tax, charge, penalty or interest isreceived. Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, and any of theiragents, officers, employees and Affiliates for, and to hold each of them harmless from, any claims with respect to taxes (includingapplicable interest and penalties thereon) arising from any tax benefit obtained for such Holder and/or Beneficial Owner. Theobligations of Holders and Beneficial Owners under this Section 3.2 shall survive any transfer of ADSs, any cancellation of ADSs andwithdrawal of Deposited Securities, and the termination of the Deposit Agreement.Section 3.3Representations and Warranties on Deposit of Shares. Each person depositing Shares under theDeposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are dulyauthorized, validly allotted and issued, fully paid, not subject to any call for the payment of further capital and legally obtained by suchperson, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived, disapplied or exercised,(iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien,encumbrance, security interest, charge, mortgage or adverse claim, (v) the Shares presented for deposit are not, and the ADSs issuableupon such deposit will not be, Restricted Securities (except as contemplated in Section 2.14), and (vi) the Shares presented for deposithave not been stripped of any rights or entitlements. Such representations and warranties shall survive the deposit and withdrawal ofShares, the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs. If any such representations orwarranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositingShares, to take any and all actions necessary to correct the consequences thereof.199964064v.4 Section 3.4Compliance with Information Requests. Notwithstanding any other provision of the DepositAgreement or any ADR(s), each Holder and Beneficial Owner agrees to comply with requests from the Company pursuant toapplicable law, the rules and requirements of The NASDAQ Global Market and any other stock exchange on which the Shares orADSs are, or will be, registered, traded or listed or the Articles of Association of the Company, which are made to provideinformation, inter alia, as to the capacity in which such Holder or Beneficial Owner owns ADSs (and Shares as the case may be) andregarding the identity of any other person(s) interested in such ADSs and the nature of such interest and various other matters, whetheror not they are Holders and/or Beneficial Owners at the time of such request. The Depositary agrees to use its reasonable efforts toforward, upon the request of the Company and at the Company’s expense, any such request from the Company to the Holders and toforward to the Company any such responses to such requests received by the Depositary.Section 3.5Ownership Restrictions. Notwithstanding any other provision in the Deposit Agreement or any ADR,the Company may restrict transfers of the Shares where such transfer might result in ownership of Shares exceeding limits imposed byapplicable law or the Articles of Association of the Company. The Company may also restrict, in such manner as it deems appropriate,transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single Holderor Beneficial Owner to exceed any such limits. The Company may, in its sole discretion but subject to applicable law, instruct theDepositary to take action with respect to the ownership interest of any Holder or Beneficial Owner in excess of the limits set forth inthe preceding sentence, including, but not limited to, the imposition of restrictions on the transfer of ADSs, the removal or limitation ofvoting rights or mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADSs heldby such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable lawand the Articles of Association of the Company. Nothing herein shall be interpreted as obligating the Depositary or the Company toensure compliance with the ownership restrictions described in this Section 3.5.Section 3.6Reporting Obligations and Regulatory Approvals. Applicable laws and regulations may requireholders and beneficial owners of Shares, including the Holders and Beneficial Owners of ADSs, to satisfy reporting requirements andobtain regulatory approvals in certain circumstances. Holders and Beneficial Owners of ADSs are solely responsible for determiningand complying with such reporting requirements and obtaining such approvals. Each Holder and each Beneficial Owner herebyagrees to make such determination, file such reports, and obtain such approvals to the extent and in the form required by applicablelaws and regulations as in effect from time to time. Neither the Depositary, the Custodian, the Company or any of their respectiveagents or affiliates shall be required to take any actions whatsoever on behalf of Holders or Beneficial Owners to determine or satisfysuch reporting requirements or obtain such regulatory approvals under applicable laws and regulations.209964064v.4 ARTICLE IVTHE DEPOSITED SECURITIESSection 4.1Cash Distributions. Whenever the Company intends to make a distribution of a cash dividend or othercash distribution in respect of any Deposited Securities, the Company shall give notice thereof to the Depositary at least twenty (20)days (or such other number of days as mutually agreed to in writing by the Depositary and the Company) prior to the proposeddistribution specifying, inter alia, the record date applicable for determining the holders of Deposited Securities entitled to receive suchdistribution. Upon the timely receipt of such notice, the Depositary shall establish the ADS Record Date upon the terms described inSection 4.9. Upon receipt of confirmation of the receipt of (x) any cash dividend or other cash distribution on any DepositedSecurities, or (y) proceeds from the sale of any Deposited Property held in respect of the ADSs under the terms hereof, the Depositarywill (i) if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (pursuant toSection 4.8), be converted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to beconverted such cash dividend, distribution or proceeds into Dollars (on the terms described in Section 4.8), (ii) if applicable and unlesspreviously established, establish the ADS Record Date upon the terms described in Section 4.9, and (iii) distribute promptly theamount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxeswithheld) to the Holders entitled thereto as of the ADS Record Date in proportion to the number of ADSs held as of the ADS RecordDate. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction ofone cent, and any balance not so distributed shall be held by the Depositary (without liability for interest thereon) and shall be added toand become part of the next sum received by the Depositary for distribution to Holders of ADSs outstanding at the time of the nextdistribution. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend orother cash distribution in respect of any Deposited Securities, or from any cash proceeds from the sales of Deposited Property, anamount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs shall be reducedaccordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevantgovernmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary uponrequest. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of theapplicable Holders and Beneficial Owners of ADSs until the distribution can be effected or the funds that the Depositary holds must beescheated as unclaimed property in accordance with the laws of the relevant states of the United States. Notwithstanding anythingcontained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of theproposed distribution provided for in this Section 4.1, the Depositary agrees to use commercially reasonable efforts to perform theactions contemplated in this Section 4.1, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositaryshall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.1 where such notice has notbeen so timely given, other than its failure to use commercially reasonable efforts, as provided herein.219964064v.4 Section 4.2Distribution in Shares. Whenever the Company intends to make a distribution that consists of adividend in, or free distribution of, Shares, the Company shall give notice thereof to the Depositary at least twenty (20) days (or suchother number of days as mutually agreed to in writing by the Depositary and the Company) prior to the proposed distribution,specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such distribution. Upon thetimely receipt of such notice from the Company, the Depositary shall establish the ADS Record Date upon the terms described inSection 4.9. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, theDepositary shall either (i) subject to Section 5.9, distribute to the Holders as of the ADS Record Date in proportion to the number ofADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as suchdividend, or free distribution, subject to the other terms of the Deposit Agreement (including, without limitation, (a) the applicable feesand charges of, and expenses incurred by, the Depositary and (b) applicable taxes), or (ii) if additional ADSs are not so distributed,take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law,thenceforth also represent rights and interests in the additional integral number of Shares distributed upon the Deposited Securitiesrepresented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicabletaxes). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares or ADSs, as the case may be, representedby the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1. In the event that theDepositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges whichthe Depositary is obligated to withhold, or, if the Company in the fulfillment of its obligations under Section 5.7, has furnished anopinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed toHolders (and no such registration statement has been declared effective), the Depositary may dispose of all or a portion of suchproperty (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, asthe Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deductionof (a) applicable taxes and (b) fees and charges of, and expenses incurred by, the Depositary) to Holders entitled thereto upon the termsdescribed in Section 4.1. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with theprovisions of the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event theCompany fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.2, the Depositary agreesto use commercially reasonable efforts to perform the actions contemplated in this Section 4.2, and the Company, the Holders and theBeneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actionscontemplated in this Section 4.2 where such notice has not been so timely given, other than its failure to use commercially reasonableefforts, as provided herein.Section 4.3Elective Distributions in Cash or Shares. Whenever the Company intends to make a distributionpayable at the election of the holders of Deposited Securities in cash or in additional Shares, the Company shall give notice thereof tothe Depositary at least sixty (60) days (or such other number of days as mutually agreed to in writing by the Depositary and theCompany) prior to the proposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitledto receive such elective distribution and229964064v.4 whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon the timely receipt of a noticeindicating that the Company wishes such elective distribution to be made available to Holders of ADSs, the Depositary shall consultwith the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonablypracticable to make such elective distribution available to the Holders of ADSs. The Depositary shall make such elective distributionavailable to Holders only if (i) the Company shall have timely requested that the elective distribution be made available to Holders,(ii) the Depositary shall have determined that such distribution is reasonably practicable and (iii) the Depositary shall have receivedsatisfactory documentation within the terms of Section 5.7. If the above conditions are not satisfied or if the Company requests suchelective distribution not to be made available to Holders of ADSs, the Depositary shall establish the ADS Record Date on the termsdescribed in Section 4.9 and, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is madein England and Wales in respect of the Shares for which no election is made, either (X) cash upon the terms described in Section 4.1 or(Y) additional ADSs representing such additional Shares upon the terms described in Section 4.2. If the above conditions are satisfied,the Depositary shall establish an ADS Record Date on the terms described in Section 4.9 and establish procedures to enable Holders toelect the receipt of the proposed distribution in cash or in additional ADSs. The Company shall assist the Depositary in establishingsuch procedures to the extent necessary. If a Holder elects to receive the proposed distribution (X) in cash, the distribution shall bemade upon the terms described in Section 4.1, or (Y) in ADSs, the distribution shall be made upon the terms described in Section4.2. Nothing herein shall obligate the Depositary to make available to Holders a method to receive the elective distribution in Shares(rather than ADSs). There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity toreceive elective distributions on the same terms and conditions as the holders of Shares. Notwithstanding anything contained in theDeposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distributionprovided for in this Section 4.3, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated inthis Section 4.3, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability forthe Depositary’s failure to perform the actions contemplated in this Section 4.3 where such notice has not been so timely given, otherthan its failure to use commercially reasonable efforts, as provided herein.Section 4.4Distribution of Rights to Purchase Additional ADSs.(a)Distribution to ADS Holders. Whenever the Company intends to distribute to the holders of the DepositedSecurities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least sixty (60) days (orsuch other number of days as mutually agreed to in writing by the Depositary and the Company) prior to the proposed distributionspecifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such distribution and whether ornot it wishes such rights to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Companywishes such rights to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and theCompany shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such rights availableto the Holders. The Depositary shall make such rights available to Holders only if (i) the Company shall have timely requested thatsuch rights be made available to Holders, (ii) the Depositary shall have received239964064v.4 satisfactory documentation within the terms of Section 5.7, and (iii) the Depositary shall have determined that such distribution of rightsis reasonably practicable. In the event any of the conditions set forth above are not satisfied or if the Company requests that the rightsnot be made available to Holders of ADSs, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b)below. In the event all conditions set forth above are satisfied, the Depositary shall establish the ADS Record Date (upon the termsdescribed in Section 4.9) and establish procedures to (x) distribute rights to purchase additional ADSs (by means of warrants orotherwise), (y) enable the Holders to exercise such rights (upon payment of the subscription price and of the applicable (a) fees andcharges of, and expenses incurred by, the Depositary and (b) taxes), and (z) deliver ADSs upon the valid exercise of such rights. TheCompany shall assist the Depositary to the extent necessary in establishing such procedures. Nothing herein shall obligate theDepositary to make available to the Holders a method to exercise rights to subscribe for Shares (rather than ADSs).(b)Sale of Rights. If (i) the Company does not timely request the Depositary to make the rights available to Holdersor requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within theterms of Section 5.7, or determines it is not reasonably practicable to make the rights available to Holders, or (iii) any rights madeavailable are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonablypracticable to sell such rights, in a riskless principal capacity, at such place and upon such terms (including public or private sale) as itmay deem practicable. The Company shall assist the Depositary to the extent necessary to determine such legality andpracticability. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable (a) fees and chargesof, and expenses incurred by, the Depositary and (b) taxes) upon the terms set forth in Section 4.1.(c)Lapse of Rights. If the Depositary is unable to make any rights available to Holders upon the terms described inSection 4.4(a) or to arrange for the sale of the rights upon the terms described in Section 4.4(b), the Depositary shall allow such rightsto lapse.The Depositary shall not be liable for (i) any failure to accurately determine whether it may be lawful or practicable to makesuch rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred inconnection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company inconnection with the rights distribution.Notwithstanding anything to the contrary in this Section 4.4, if registration (under the Securities Act or any other applicablelaw) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or suchsecurities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders(i) unless and until a registration statement under the Securities Act (or other applicable law) covering such offering is in effect or(ii) unless the Company furnishes the Depositary opinion(s) of counsel for the Company in the United States and counsel to theCompany in any other applicable country in which rights would be distributed, in each case satisfactory to the Depositary, to the effectthat the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, theprovisions of the Securities Act or any other applicable laws.249964064v.4 In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from anydistribution of Deposited Property (including rights) an amount on account of taxes or other governmental charges, the amountdistributed to the Holders of ADSs shall be reduced accordingly. In the event that the Depositary determines that any distribution ofDeposited Property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which theDepositary is obligated to withhold, the Depositary may dispose of all or a portion of such Deposited Property (including Shares andrights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deemsnecessary and practicable to pay any such taxes or charges.There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive orexercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights. Nothing herein shallobligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon theexercise of such rights.Section 4.5Distributions Other Than Cash, Shares or Rights to Purchase Shares.(a)Whenever the Company intends to distribute to the holders of Deposited Securities property other than cash,Shares or rights to purchase additional Shares, the Company shall give timely notice thereof to the Depositary and shall indicatewhether or not it wishes such distribution to be made to Holders of ADSs. Upon receipt of a notice indicating that the Companywishes such distribution to be made to Holders of ADSs, the Depositary shall consult with the Company, and the Company shall assistthe Depositary, to determine whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not makesuch distribution unless (i) the Company shall have requested the Depositary to make such distribution to Holders, (ii) the Depositaryshall have received satisfactory documentation within the terms of Section 5.7, and (iii) the Depositary shall have determined that suchdistribution is reasonably practicable.(b)Upon receipt of satisfactory documentation and the request of the Company to distribute property to Holders ofADSs and after making the requisite determinations set forth in (a) above, the Depositary shall distribute the property so received to theHolders of record, as of the ADS Record Date, in proportion to the number of ADSs held by them respectively and in such manner asthe Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees andcharges of, and expenses incurred by, the Depositary, and (ii) net of any applicable taxes withheld. The Depositary may dispose of allor a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as theDepositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmentalcharges applicable to the distribution.(c)If (i) the Company does not request the Depositary to make such distribution to Holders or requests the Depositarynot to make such distribution to Holders, (ii) the Depositary does not receive satisfactory documentation within the terms of Section5.7, or (iii) the Depositary determines that all or a portion of such distribution is not reasonably practicable, the Depositary shall sell orcause such property to be sold in a public or private sale, at such place or259964064v.4 places and upon such terms as it may deem practicable and shall (i) cause the proceeds of such sale, if any, to be converted into Dollarsand (ii) distribute the proceeds of such conversion received by the Depositary (net of applicable (a) fees and charges of, and expensesincurred by, the Depositary and (b) taxes) to the Holders as of the ADS Record Date upon the terms of Section 4.1. If the Depositaryis unable to sell such property, the Depositary may dispose of such property for the account of the Holders in any way it deemsreasonably practicable under the circumstances.(d)Neither the Depositary nor the Company shall be liable for (i) any failure to accurately determine whether it islawful or practicable to make the property described in this Section 4.5 available to Holders in general or any Holders in particular, nor(ii) any loss incurred in connection with the sale or disposal of such property.Section 4.6Distributions with Respect to Deposited Securities in Bearer Form. Subject to the terms of thisArticle IV, distributions in respect of Deposited Securities that are held by the Depositary or the Custodian in bearer form shall bemade to the Depositary for the account of the respective Holders of ADS(s) with respect to which any such distribution is made upondue presentation by the Depositary or the Custodian to the Company of any relevant coupons, talons, or certificates. The Companyshall promptly notify the Depositary of such distributions. The Depositary or the Custodian shall promptly present such coupons,talons or certificates, as the case may be, in connection with any such distribution.Section 4.7Redemption. If the Company intends to exercise any right of redemption in respect of any of theDeposited Securities, the Company shall give notice thereof to the Depositary at least sixty (60) days (or such other number of days asmutually agreed to in writing by the Depositary and the Company) prior to the intended date of redemption which notice shall set forththe particulars of the proposed redemption. Upon timely receipt of (i) such notice and (ii) satisfactory documentation given by theCompany to the Depositary within the terms of Section 5.7, and only if the Depositary shall have determined that such proposedredemption is practicable, the Depositary shall provide to each Holder a notice setting forth the intended exercise by the Company ofthe redemption rights and any other particulars set forth in the Company’s notice to the Depositary. The Depositary shall instruct theCustodian to present to the Company the Deposited Securities in respect of which redemption rights are being exercised againstpayment of the applicable redemption price. Upon receipt of confirmation from the Custodian that the redemption has taken place andthat funds representing the redemption price have been received, the Depositary shall convert, transfer, and distribute the proceeds (netof applicable (a) fees and charges of, and the expenses incurred by, the Depositary, and (b) taxes), retire ADSs and cancel ADRs, ifapplicable, upon delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1 and 6.2. If less than all outstandingDeposited Securities are redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as may be determined by theDepositary. The redemption price per ADS shall be the dollar equivalent of the per share amount received by the Depositary (adjustedto reflect the ADS(s)-to-Share(s) ratio) upon the redemption of the Deposited Securities represented by ADSs (subject to the terms ofSection 4.8 and the applicable fees and charges of, and expenses incurred by, the Depositary, and applicable taxes) multiplied by thenumber of Deposited Securities represented by each ADS redeemed.269964064v.4 Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give theDepositary timely notice of the proposed redemption provided for in this Section 4.7, the Depositary agrees to use commerciallyreasonable efforts to perform the actions contemplated in this Section 4.7, and the Company, the Holders and the Beneficial Ownersacknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section4.7 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.Section 4.8Conversion of Foreign Currency. Whenever the Depositary or the Custodian shall receive ForeignCurrency, by way of dividends or other distributions or the net proceeds from the sale of Deposited Property, which in the judgment ofthe Depositary can at such time be converted on a practicable basis, by sale or in any other manner that it may determine in accordancewith applicable law, into Dollars transferable to the United States and distributable to the Holders entitled thereto, the Depositary shallconvert or cause to be converted, by sale or in any other manner that it may determine, such Foreign Currency into Dollars, and shalldistribute such Dollars (net of any applicable fees, any reasonable and customary expenses incurred in such conversion and anyexpenses incurred on behalf of the Holders in complying with currency exchange control or other governmental requirements) inaccordance with the terms of the applicable sections of the Deposit Agreement. If the Depositary shall have distributed warrants orother instruments that entitle the holders thereof to such Dollars, the Depositary shall distribute such Dollars to the holders of suchwarrants and/or instruments upon surrender thereof for cancellation, in either case without liability for interest thereon. Suchdistribution may be made upon an averaged or other practicable basis without regard to any distinctions among Holders on account ofany application of exchange restrictions or otherwise.If such conversion or distribution generally or with regard to a particular Holder can be effected only with the approval orlicense of any government or agency thereof, the Depositary shall have authority to file such application for approval or license, if any,as it may deem desirable. In no event, however, shall the Depositary be obligated to make such a filing.If at any time the Depositary shall determine that in its judgment the conversion of any Foreign Currency and the transferand distribution of proceeds of such conversion received by the Depositary is not practicable or lawful, or if any approval or license ofany governmental authority or agency thereof that is required for such conversion, transfer and distribution is denied or, in the opinionof the Depositary, not obtainable at a reasonable cost or within a reasonable period, the Depositary may, in its discretion, (i) make suchconversion and distribution in Dollars to the Holders for whom such conversion, transfer and distribution is lawful and practicable,(ii) distribute the Foreign Currency (or an appropriate document evidencing the right to receive such Foreign Currency) to Holders forwhom this is lawful and practicable, or (iii) hold (or cause the Custodian to hold) such Foreign Currency (without liability for interestthereon) for the respective accounts of the Holders entitled to receive the same.Section 4.9Fixing of ADS Record Date. Whenever the Depositary shall receive notice of the fixing of a record dateby the Company for the determination of holders of Deposited Securities entitled to receive any distribution (whether in cash, Shares,rights, or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares279964064v.4 that are represented by each ADS, or whenever the Depositary shall receive notice of any meeting of, or solicitation of consents orproxies of, holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient inconnection with the giving of any notice, solicitation of any consent or any other matter, the Depositary shall fix the record date (the“ADS Record Date”) for the determination of the Holders of ADS(s) who shall be entitled to receive such distribution, to giveinstructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitationor to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Shares represented by eachADS. The Depositary shall make reasonable efforts to establish the ADS Record Date as closely as practicable to the applicablerecord date for the Deposited Securities (if any) set by the Company in England and Wales and shall not announce the establishment ofany ADS Record Date prior to the relevant corporate action having been made public by the Company (if such corporate action affectsthe Deposited Securities). Subject to applicable law and the provisions of Section 4.1 through 4.8 and to the other terms andconditions of the Deposit Agreement, only the Holders of ADSs at the close of business in New York on such ADS Record Date shallbe entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.Section 4.10Voting of Deposited Securities. As soon as practicable after receipt of notice of any meeting at whichthe holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities,the Depositary shall fix the ADS Record Date in respect of such meeting or solicitation of consent or proxy in accordance with Section4.9. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take anyfurther action if the request shall not have been received by the Depositary at least thirty (30) days prior to the date of such vote ormeeting), at the Company’s expense and provided no U.S. legal prohibitions exist, distribute to Holders as of the ADS Record Date:(a) such notice of meeting or solicitation of consent or proxy, (b) a statement that the Holders at the close of business on the ADSRecord Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Articles of Association of theCompany and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent partby the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securitiesrepresented by such Holder’s ADSs, and (c) a brief statement as to the manner in which such voting instructions may be given to theDepositary or in which voting instructions may be deemed to have been given in accordance with this Section 4.10 if no instructionsare received prior to the deadline set for such purposes to the Depositary to give a discretionary proxy to a person designated by theCompany. Notwithstanding anything contained in the Deposit Agreement or any ADR, with the Company’s prior consent, theDepositary may, to the extent not prohibited by law or regulations, or by the requirements of the stock exchange on which the ADSsare listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation ofconsents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwisepublicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (e.g., by reference to awebsite containing the materials for retrieval or a contact for requesting copies of the materials).289964064v.4 The Depositary has been advised by the Company that under the Articles of Association of the Company as in effect on thedate of the Deposit Agreement, voting at any meeting of shareholders of the Company is by show of hands unless (before or upon thedeclaration of the result of the show of hands) a poll is demanded. The Depositary will not join in demanding a poll, whether or notrequested to do so by Holders of ADSs. Under the Articles of Association of the Company as in effect on the date of the DepositAgreement, a poll may be demanded by (a) the chairman of the Company’s board of directors, (b) not fewer than five shareholderspresent in person or by proxy and having the right to vote at the meeting, (c) any shareholder(s) present in person or by proxy andrepresenting not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding anyshares held in treasury), or (d) any shareholder(s) present in person or by proxy and holding shares in the Company conferring a rightto vote on the resolution being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid upon all the shares conferring that right (excluding any shares held in treasury).Voting instructions may be given only in respect of a number of ADSs representing an integral number of DepositedSecurities. Upon the timely receipt from a Holder of ADSs as of the ADS Record Date of voting instructions in the manner specifiedby the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of theDeposit Agreement, Articles of Association of the Company and the provisions of the Deposited Securities, to vote, or cause theCustodian to vote, the Deposited Securities (in person or by proxy) represented by such Holder’s ADSs as follows: (a) in the eventvoting takes place at a shareholders’ meeting by a show of hands, the Depositary will instruct the Custodian to vote all DepositedSecurities in accordance with the voting instructions received from a majority of Holders of ADSs who provided voting instructions,and (b) in the event voting takes place at a shareholders’ meeting by poll, the Depositary will instruct the Custodian to vote theDeposited Securities in accordance with the voting instructions received from the Holders of ADSs. If voting is by poll and theDepositary does not receive voting instructions from a Holder as of the ADS Record Date on or before the date established by theDepositary for such purpose, such Holder shall be deemed, and the Depositary shall deem such Holder, to have instructed theDepositary to give a discretionary proxy to a person designated by the Company to vote the Deposited Securities; provided, however,that no such discretionary proxy shall be given by the Depositary with respect to any matter to be voted upon as to which the Companyinforms the Depositary that (a) the Company does not wish such proxy to be given, (b) substantial opposition exists, or (c) the rights ofholders of Deposited Securities may be adversely affected.Neither the Depositary nor the Custodian shall under any circumstances exercise any discretion as to voting and neither theDepositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of, for purposes of establishing aquorum or otherwise, the Deposited Securities represented by ADSs, except pursuant to and in accordance with the voting instructionstimely received from Holders or as otherwise contemplated herein. If the Depositary timely receives voting instructions from a Holderwhich fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, theDepositary will deem such Holder (unless otherwise specified in the notice distributed to Holders) to have instructed the Depositary tovote in favor of the items set forth in such voting instructions. Deposited Securities represented by ADSs for which no timely votinginstructions are received by the Depositary from the Holder shall not be voted (except (a) in the case voting is299964064v.4 by show of hands, in which case the Depositary will instruct the Custodian to vote all Deposited Securities in accordance with thevoting instructions received from a majority of Holders of ADSs who provided voting instructions, and (b) as contemplated in thisSection 4.10). Notwithstanding anything else contained herein, the Depositary shall, if so requested in writing by the Company,represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities fromHolders as of the ADS Record Date) for the sole purpose of establishing quorum at a meeting of shareholders. Notwithstanding anything else contained in the Deposit Agreement or any ADR, the Depositary shall not have anyobligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Deposited Securities if thetaking of such action would violate U.S. laws. The Company agrees to take any and all actions reasonably necessary and as permittedby the laws of England and Wales to enable Holders and Beneficial Owners to exercise the voting rights accruing to the DepositedSecurities and to deliver to the Depositary an opinion of U.S. counsel addressing any actions requested to be taken if so requested bythe Depositary.There can be no assurance that Holders generally or any Holder in particular will receive the notice described above withsufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.Section 4.11Changes Affecting Deposited Securities. Upon any change in nominal or par value, split‑up,cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger,consolidation or sale of assets affecting the Company or to which it is a party, any property which shall be received by the Depositaryor the Custodian in exchange for, or in conversion of, or replacement of, or otherwise in respect of, such Deposited Securities shall, tothe extent permitted by law, be treated as new Deposited Property under the Deposit Agreement, and the ADSs shall, subject to theprovisions of the Deposit Agreement, any ADR(s) evidencing such ADSs and applicable law, represent the right to receive suchadditional or replacement Deposited Property. In giving effect to such change, split-up, cancellation, consolidation or otherreclassification of Deposited Securities, recapitalization, reorganization, merger, consolidation or sale of assets, the Depositary may,with the Company’s approval, and shall, if the Company shall so request, subject to the terms of the Deposit Agreement (including,without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) applicable taxes) andreceipt of an opinion of counsel to the Company satisfactory to the Depositary that such actions are not in violation of any applicablelaws or regulations, (i) issue and deliver additional ADSs as in the case of a stock dividend on the Shares, (ii) amend the DepositAgreement and the applicable ADRs, (iii) amend the applicable Registration Statement(s) on Form F-6 as filed with the Commission inrespect of the ADSs, (iv) call for the surrender of outstanding ADRs to be exchanged for new ADRs, and (v) take such other actionsas are appropriate to reflect the transaction with respect to the ADSs. The Company agrees to, jointly with the Depositary, amend theRegistration Statement on Form F-6 as filed with the Commission to permit the issuance of such new form of ADRs. Notwithstandingthe foregoing, in the event that any Deposited Property so received may not be lawfully distributed to some or all Holders, theDepositary may, with the Company’s approval, and shall, if the Company requests, subject to receipt of an opinion of Company’scounsel satisfactory to the Depositary that such action is not in violation of any applicable laws or309964064v.4 regulations, sell such Deposited Property at public or private sale, at such place or places and upon such terms as it may deem properand may allocate the net proceeds of such sales (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and(b) taxes) for the account of the Holders otherwise entitled to such Deposited Property upon an averaged or other practicable basiswithout regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in thecase of a distribution received in cash pursuant to Section 4.1. The Depositary shall not be responsible for (i) any failure to determinethat it may be lawful or practicable to make such Deposited Property available to Holders in general or to any Holder in particular, (ii)any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such DepositedProperty.Section 4.12Available Information.The Company is subject to the periodic reporting requirements of the Exchange Act and, accordingly, is required to file orfurnish certain reports with the Commission. These reports can be retrieved from the Commission’s website (www.sec.gov) and canbe inspected and copied at the public reference facilities maintained by the Commission located (as of the date of the DepositAgreement) at 100 F Street, N.E., Washington D.C. 20549.Section 4.13Reports. The Depositary shall make available for inspection by Holders at its Principal Office anyreports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by theDepositary, the Custodian, or the nominee of either of them as the holder of the Deposited Property and (b) made generally available tothe holders of such Deposited Property by the Company. The Depositary shall also provide or make available to Holders copies ofsuch reports when furnished by the Company pursuant to Section 5.6.Section 4.14List of Holders. Promptly upon written request by the Company, the Depositary shall furnish to it a list,as of a recent date, of the names, addresses and holdings of ADSs of all Holders.Section 4.15Taxation. The Depositary will, and will instruct the Custodian to, forward to the Company or its agentssuch information from its records as the Company may reasonably request to enable the Company or its agents to file the necessary taxreports with governmental authorities or agencies. The Depositary, the Custodian or the Company and its agents may file such reportsas are necessary to reduce or eliminate applicable taxes on dividends and on other distributions in respect of Deposited Property underapplicable tax treaties or laws for the Holders and Beneficial Owners. In accordance with instructions from the Company and to theextent practicable, the Depositary or the Custodian will take reasonable administrative actions to obtain tax refunds, reducedwithholding of tax at source on dividends and other benefits under applicable tax treaties or laws with respect to dividends and otherdistributions on the Deposited Property. As a condition to receiving such benefits, Holders and Beneficial Owners of ADSs may berequired from time to time, and in a timely manner, to file such proof of taxpayer status, residence and beneficial ownership (asapplicable), to execute such certificates and to make such representations and warranties, or to provide any other information ordocuments, as the Depositary or the Custodian may deem necessary or proper to fulfill the Depositary’s or the Custodian’s obligationsunder applicable law. The Depositary and the319964064v.4 Company shall have no obligation or liability to any person if any Holder or Beneficial Owner fails to provide such information or ifsuch information does not reach the relevant tax authorities in time for any Holder or Beneficial Owner to obtain the benefits of any taxtreatment. The Holders and Beneficial Owners shall indemnify the Depositary, the Company, the Custodian and any of theirrespective directors, employees, agents and Affiliates against, and hold each of them harmless from, any claims by any governmentalauthority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding atsource or other tax benefit obtained.If the Company (or any of its agents) withholds from any distribution any amount on account of taxes or governmentalcharges, or pays any other tax in respect of such distribution (e.g., stamp duty tax, capital gains or other similar tax), the Company shall(and shall cause such agent to) remit promptly to the Depositary information about such taxes or governmental charges withheld orpaid, and, if so requested, the tax receipt (or other proof of payment to the applicable governmental authority) therefor, in each case, ina form satisfactory to the Depositary. The Depositary shall, to the extent required by U.S. law, report to Holders any taxes withheld byit or the Custodian, and, if such information is provided to it by the Company, any taxes withheld by the Company. The Depositaryand the Custodian shall not be required to provide the Holders with any evidence of the remittance by the Company (or its agents) ofany taxes withheld, or of the payment of taxes by the Company, except to the extent the evidence is provided by the Company to theDepositary or the Custodian, as applicable. Neither the Depositary nor the Custodian shall be liable for the failure by any Holder orBeneficial Owner to obtain the benefits of credits on the basis of non‑U.S. tax paid against such Holder’s or Beneficial Owner’sincome tax liability.The Depositary is under no obligation to provide the Holders and Beneficial Owners with any information about the taxstatus of the Company. The Depositary shall not incur any liability for any tax consequences that may be incurred by Holders andBeneficial Owners on account of their ownership of the ADSs, including without limitation, tax consequences resulting from theCompany (or any of its subsidiaries) being treated as a “Passive Foreign Investment Company” (in each case as defined in the U.S.Internal Revenue Code and the regulations issued thereunder) or otherwise.ARTICLE VTHE DEPOSITARY, THE CUSTODIAN AND THE COMPANYSection 5.1Maintenance of Office and Transfer Books by the Registrar. Until termination of the DepositAgreement in accordance with its terms, the Registrar shall maintain in the Borough of Manhattan, the City of New York, an officeand facilities for the issuance and delivery of ADSs, the acceptance for surrender of ADS(s) for the purpose of withdrawal ofDeposited Securities, the registration of issuances, cancellations, transfers, combinations and split‑ups of ADS(s) and, if applicable, tocountersign ADRs evidencing the ADSs so issued, transferred, combined or split-up, in each case in accordance with the provisions ofthe Deposit Agreement.329964064v.4 The Registrar shall keep books for the registration of ADSs which at all reasonable times shall be open for inspection by theCompany and by the Holders of such ADSs, provided that such inspection shall not be, to the Registrar’s knowledge, for the purposeof communicating with Holders of such ADSs in the interest of a business or object other than the business of the Company or otherthan a matter related to the Deposit Agreement or the ADSs.The Registrar may close the transfer books with respect to the ADSs, at any time or from time to time, when deemednecessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable writtenrequest of the Company subject, in all cases, to Section 7.8.If any ADSs are listed on one or more stock exchanges or automated quotation systems in the United States, the Depositaryshall act as Registrar or appoint a Registrar or one or more co‑registrars for registration of issuances, cancellations, transfers,combinations and split-ups of ADSs and, if applicable, to countersign ADRs evidencing the ADSs so issued, transferred, combined orsplit-up, in accordance with any requirements of such exchanges or systems. Such Registrar or co-registrars may be removed and asubstitute or substitutes appointed by the Depositary.Section 5.2Exoneration. Notwithstanding anything contained in the Deposit Agreement or any ADR, neither theDepositary nor the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the DepositAgreement or incur any liability (i) if the Depositary or the Company shall be prevented or forbidden from, or delayed in, doing orperforming any act or thing required by the terms of the Deposit Agreement, by reason of any provision of any present or future law orregulation of the United States, England and Wales or any other country, or of any other governmental authority or regulatory authorityor stock exchange, or on account of potential criminal or civil penalties or restraint, or by reason of any provision, present or future, ofthe Articles of Association of the Company or any provision of or governing any Deposited Securities, or by reason of any act of Godor war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions,work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure), (ii) by reason of anyexercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles of Association of theCompany or provisions of or governing Deposited Securities, (iii) for any action or inaction in reliance upon the advice of orinformation from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner orauthorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information,(iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is madeavailable to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADSs,or (v) for any consequential or punitive damages (including lost profits) for any breach of the terms of the Deposit Agreement.The Depositary, its controlling persons, its agents, any Custodian and the Company, its controlling persons and its agentsmay rely and shall be protected in acting upon any written notice, request or other document believed by it to be genuine and to havebeen signed or presented by the proper party or parties.339964064v.4 No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement.Section 5.3Standard of Care. The Company and the Depositary assume no obligation and shall not be subject toany liability under the Deposit Agreement or any ADRs to any Holder(s) or Beneficial Owner(s), except that the Company and theDepositary agree to perform their respective obligations specifically set forth in the Deposit Agreement or the applicable ADRs withoutnegligence or bad faith.Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective controlling persons,or agents, shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of anyDeposited Property or in respect of the ADSs, which in its opinion may involve it in expense or liability, unless indemnity satisfactoryto it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required (and noCustodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solelyto the Depositary).The Depositary and its agents shall not be liable for any failure to carry out any instructions to vote any of the DepositedSecurities, or for the manner in which any vote is cast or the effect of any vote, provided that any such action or omission is in goodfaith and without negligence and in accordance with the terms of the Deposit Agreement. The Depositary shall not incur any liabilityfor any failure to accurately determine that any distribution or action may be lawful or reasonably practicable, for the content of anyinformation submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for anyinvestment risk associated with acquiring an interest in the Deposited Property, for the validity or worth of the Deposited Property orfor any tax consequences that may result from the ownership of ADSs, Shares or other Deposited Property, for the credit‑worthiness ofany third party, for allowing any rights to lapse upon the terms of the Deposit Agreement, for the failure or timeliness of any noticefrom the Company, or for any action of or failure to act by, or any information provided or not provided by, DTC or any DTCParticipant.The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with aprevious act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of theDepositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed itsobligations without negligence or bad faith while it acted as Depositary.The Depositary shall not be liable for any acts or omissions made by a predecessor depositary whether in connection with anact or omission of the Depositary or in connection with any matter arising wholly prior to the appointment of the Depositary or afterthe removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises theDepositary performed its obligations without negligence or bad faith while it acted as Depositary.349964064v.4 Section 5.4Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositarymay at any time resign as Depositary hereunder by written notice of resignation delivered to the Company, such resignation to beeffective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall be entitled to take theactions contemplated in Section 6.2), or (ii) the appointment by the Company of a successor depositary and its acceptance of suchappointment as hereinafter provided.The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall beeffective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take theactions contemplated in Section 6.2), or (ii) upon the appointment by the Company of a successor depositary and its acceptance of suchappointment as hereinafter provided.In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts toappoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of NewYork. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company aninstrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed(except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor(other than as contemplated in Sections 5.8 and 5.9). The predecessor depositary, upon payment of all sums due it and on the writtenrequest of the Company, shall, (i) execute and deliver an instrument transferring to such successor all rights and powers of suchpredecessor hereunder (other than as contemplated in Sections 5.8 and 5.9), (ii) duly assign, transfer and deliver all of the Depositary’sright, title and interest to the Deposited Property to such successor, and (iii) deliver to such successor a list of the Holders of alloutstanding ADSs and such other information relating to ADSs and Holders thereof as the successor may reasonably request. Anysuch successor depositary shall promptly provide notice of its appointment to such Holders.Any entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositarywithout the execution or filing of any document or any further act.Section 5.5The Custodian. The Depositary has initially appointed Citibank N.A., London Branch, as Custodian forthe purpose of the Deposit Agreement. The Custodian or its successors in acting hereunder shall be subject at all times and in allrespects to the direction of the Depositary for the Deposited Property for which the Custodian acts as custodian and shall beresponsible solely to it. If any Custodian resigns or is discharged from its duties hereunder with respect to any Deposited Property andno other Custodian has previously been appointed hereunder, the Depositary shall promptly appoint a substitute custodian. TheDepositary shall require such resigning or discharged Custodian to Deliver, or cause the Delivery of, the Deposited Property held by it,together with all such records maintained by it as Custodian with respect to such Deposited Property as the Depositary may request, tothe Custodian designated by the Depositary. Whenever the Depositary determines, in its discretion, that it is appropriate to do so, itmay appoint an additional custodian with respect to any Deposited Property, or discharge the Custodian with respect to any DepositedProperty and appoint a substitute custodian, which shall thereafter be Custodian hereunder with respect to the Deposited Property. 359964064v.4 Immediately upon any such change, the Depositary shall give notice thereof in writing to all Holders of ADSs, each other Custodianand the Company.Citibank, N.A. may at any time act as Custodian of the Deposited Property pursuant to the Deposit Agreement, in whichcase any reference to Custodian shall mean Citibank, N.A. solely in its capacity as Custodian pursuant to the DepositAgreement. Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary shall not be obligated to givenotice to the Company, any Holders of ADSs or any other Custodian of its acting as Custodian pursuant to the Deposit Agreement.Upon the appointment of any successor depositary, any Custodian then acting hereunder shall, unless otherwise instructedby the Depositary, continue to be the Custodian of the Deposited Property without any further act or writing, and shall be subject to thedirection of the successor depositary. The successor depositary so appointed shall, nevertheless, on the written request of anyCustodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and completepower and authority to act on the direction of such successor depositary.Section 5.6Notices and Reports. On or before the first date on which the Company gives notice, by publication orotherwise, of any meeting of holders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of thetaking of any action by such holders other than at a meeting, or of the taking of any action in respect of any cash or other distributionsor the offering of any rights in respect of Deposited Securities, the Company shall transmit to the Depositary and the Custodian a copyof the notice thereof in the English language but otherwise in the form given or to be given to holders of Shares or other DepositedSecurities. The Company shall also furnish to the Custodian and the Depositary a summary, in English, of any applicable provisions orproposed provisions of the Articles of Association of the Company that may be relevant or pertain to such notice of meeting or be thesubject of a vote thereat.The Company will also transmit to the Depositary (a) an English language version of the other notices, reports andcommunications which are made generally available by the Company to holders of its Shares or other Deposited Securities and (b) theEnglish‑language versions of the Company’s annual and semi‑annual reports prepared in accordance with the applicable requirementsof the Commission. The Depositary shall arrange, at the request of the Company and at the Company’s expense, to provide copiesthereof to all Holders or make such notices, reports and other communications available to all Holders on a basis similar to that forholders of Shares or other Deposited Securities or on such other basis as the Company may advise the Depositary or as may berequired by any applicable law, regulation or stock exchange requirement. The Company has delivered to the Depositary and theCustodian a copy of the Company’s Articles of Association along with the provisions of or governing the Shares and any otherDeposited Securities issued by the Company in connection with such Shares, and promptly upon any amendment thereto or changetherein, the Company shall deliver to the Depositary and the Custodian a copy of such amendment thereto or change therein. TheDepositary may rely upon such copy for all purposes of the Deposit Agreement.The Depositary will, at the expense of the Company, make available a copy of any such notices, reports or communicationsissued by the Company and delivered to the Depositary for369964064v.4 inspection by the Holders of the ADSs at the Depositary’s Principal Office, at the office of the Custodian and at any other designatedtransfer office.Section 5.7Issuance of Additional Shares, ADSs etc. The Company agrees that in the event it or any of itsAffiliates proposes (i) an issuance, sale or distribution of additional Shares, (ii) an offering of rights to subscribe for Shares or otherDeposited Securities, (iii) an issuance or assumption of securities convertible into or exchangeable for Shares, (iv) an issuance of rightsto subscribe for securities convertible into or exchangeable for Shares, (v) an elective dividend of cash or Shares, (vi) a redemption ofDeposited Securities, (vii) a meeting of holders of Deposited Securities, or solicitation of consents or proxies, relating to anyreclassification of securities, merger or consolidation or transfer of assets, (viii) any assumption, reclassification, recapitalization,reorganization, merger, consolidation or sale of assets which affects the Deposited Securities, or (ix) a distribution of securities otherthan Shares, it will obtain U.S. legal advice and take all steps necessary to ensure that the application of the proposed transaction toHolders and Beneficial Owners does not violate the registration provisions of the Securities Act, or any other applicable laws(including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act and the securities laws of thestates of the U.S.). In support of the foregoing, the Company will furnish to the Depositary (a) a written opinion of U.S. counsel(reasonably satisfactory to the Depositary) stating whether such transaction (1) requires a registration statement under the Securities Actto be in effect or (2) is exempt from the registration requirements of the Securities Act and (b) an opinion of English counsel stating that(1) making the transaction available to Holders and Beneficial Owners does not violate the laws or regulations of England and Walesand (2) all requisite regulatory consents and approvals have been obtained in England and Wales. If the filing of a registrationstatement is required, the Depositary shall not have any obligation to proceed with the transaction unless it shall have received evidencereasonably satisfactory to it that such registration statement has been declared effective. If, being advised by counsel, the Companydetermines that a transaction is required to be registered under the Securities Act, the Company will either (i) register such transactionto the extent necessary, (ii) alter the terms of the transaction to avoid the registration requirements of the Securities Act or (iii) direct theDepositary to take specific measures, in each case as contemplated in the Deposit Agreement, to prevent such transaction fromviolating the registration requirements of the Securities Act. The Company agrees with the Depositary that neither the Company norany of its Affiliates will at any time (i) deposit any Shares or other Deposited Securities, either upon original issuance or upon a sale ofShares or other Deposited Securities previously issued and reacquired by the Company or by any such Affiliate, or (ii) issue additionalShares, rights to subscribe for such Shares, securities convertible into or exchangeable for Shares or rights to subscribe for suchsecurities or distribute securities other than Shares, unless such transaction and the securities issuable in such transaction do not violatethe registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment CompanyAct of 1940, as amended, the Exchange Act and the securities laws of the states of the U.S.).Notwithstanding anything else contained in the Deposit Agreement, nothing in the Deposit Agreement shall be deemed toobligate the Company to file any registration statement in respect of any proposed transaction.379964064v.4 Section 5.8Indemnification. The Depositary agrees to indemnify the Company and its directors, officers,employees, agents and Affiliates against, and hold each of them harmless from, any direct loss, liability, tax, charge or expense of anykind whatsoever (including, but not limited to, the reasonable fees and expenses of counsel) which may arise out of acts performed oromitted by the Depositary under the terms hereof due to the negligence or bad faith of the Depositary.The Company agrees to indemnify the Depositary, the Custodian and any of their respective directors, officers, employees,agents and Affiliates against, and hold each of them harmless from, any direct loss, liability, tax, charge or expense of any kindwhatsoever (including, but not limited to, the reasonable fees and expenses of counsel) that may arise (a) out of, or in connection with,any offer, issuance, sale, resale, transfer, deposit or withdrawal of ADRs, ADSs, the Shares, or other Deposited Securities, as the casemay be and to the extent it is not unlawful for the Company to indemnify such person at such time under the applicable laws ofEngland and Wales, (b) out of, or as a result of, any offering documents in respect thereof or (c) out of acts performed or omitted,including, but not limited to, any delivery by the Depositary on behalf of the Company of information regarding the Company, inconnection with the Deposit Agreement, the ADRs, the ADSs, the Shares, or any Deposited Property, in any such case (i) by theDepositary, the Custodian or any of their respective directors, officers, employees, agents and Affiliates, except to the extent such loss,liability, tax, charge or expense is due to the negligence or bad faith of any of them, or (ii) by the Company or any of its directors,officers, employees, agents and Affiliates. The Company shall not indemnify the Depositary or the Custodian (for so long as theCustodian is a branch of Citibank, N.A.) against any liability or expense arising out of information relating to the Depositary or suchCustodian, as the case may be, furnished in a signed writing to the Company, executed by the Depositary expressly for use in anyregistration statement, prospectus or preliminary prospectus relating to any Deposited Securities represented by the ADSs.The obligations set forth in this Section shall survive the termination of the Deposit Agreement and the succession orsubstitution of any party hereto.Any person seeking indemnification hereunder (an “indemnified person”) shall notify the person from whom it is seekingindemnification (the “indemnifying person”) of the commencement of any indemnifiable action or claim promptly after suchindemnified person becomes aware of such commencement (provided that the failure to make such notification shall not affect suchindemnified person’s rights to seek indemnification except to the extent the indemnifying person is materially prejudiced by suchfailure) and shall consult in good faith with the indemnifying person as to the conduct of the defense of such action or claim that maygive rise to an indemnity hereunder, which defense shall be reasonable in the circumstances. No indemnified person shall compromiseor settle any action or claim that may give rise to an indemnity hereunder without the consent of the indemnifying person, whichconsent shall not be unreasonably withheld.Section 5.9ADS Fees and Charges. The Company, the Holders, the Beneficial Owners, and persons receivingADSs upon issuance or whose ADSs are being cancelled shall be required to pay the ADS fees and charges identified as payable bythem respectively in the ADS fee schedule attached hereto as Exhibit B. All ADS fees and charges so payable may be389964064v.4 deducted from distributions or must be remitted to the Depositary, or its designee, may be waived by the Depositary in full or in partwith respect to some or all ADSs upon such terms, and subject to such conditions, as the Depositary may determine and may, at anytime and from time to time, be changed by agreement between the Depositary and the Company, but, in the case of ADS fees andcharges payable by Holders and Beneficial Owners, only in the manner contemplated in Section 6.1. The Depositary shall provide,without charge, a copy of its latest ADS fee schedule to anyone upon request. ADS fees and charges payable upon (i) the issuance of ADSs and (ii) the cancellation of ADSs will be payable by theperson to whom the ADSs are so issued by the Depositary (in the case of ADS issuances) and by the person whose ADSs are beingcancelled (in the case of ADS cancellations). In the case of ADSs issued by the Depositary into DTC or presented to the Depositaryvia DTC, the ADS issuance and cancellation fees and charges will be payable by the DTC Participant(s) receiving the ADSs from theDepositary or the DTC Participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the Beneficial Owner(s) andwill be charged by the DTC Participant(s) to the account(s) of the applicable Beneficial Owner(s) in accordance with the proceduresand practices of the DTC participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS servicefee are payable by Holders as of the applicable ADS Record Date established by the Depositary. In the case of distributions of cash,the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions otherthan cash and (ii) the ADS service fee, the applicable Holders as of the ADS Record Date established by the Depositary will beinvoiced for the amount of the ADS fees and charges and such ADS fees may be deducted from distributions made to Holders. ForADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted fromdistributions made through DTC, and may be charged to the DTC Participants in accordance with the procedures and practicesprescribed by DTC from time to time and the DTC Participants in turn charge the amount of such ADS fees and charges to theBeneficial Owners for whom they hold ADSs. The Depositary may reimburse the Company for certain expenses incurred by the Company in respect of the ADR programestablished pursuant to the Deposit Agreement, by making available a portion of the ADS fees charged in respect of the ADR programor otherwise, upon such terms and conditions as the Company and the Depositary agree from time to time. The Company shall pay tothe Depositary such fees and charges, and reimburse the Depositary for such out-of-pocket expenses, as the Depositary and theCompany may agree from time to time. Responsibility for payment of such fees, charges and reimbursements may from time to timebe changed by agreement between the Company and the Depositary. Unless otherwise agreed, the Depositary shall present itsstatement for such fees, charges and reimbursements to the Company once every three months. The charges and expenses of theCustodian are for the sole account of the Depositary.The obligations of Holders and Beneficial Owners to pay ADS fees and charges shall survive the termination of the DepositAgreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4, the right to collectADS fees and charges shall extend for those ADS fees and charges incurred prior to the effectiveness of such resignation or removal.399964064v.4 Section 5.10Pre-Release Transactions. Subject to the further terms and provisions of this Section 5.10, theDepositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and itsAffiliates and in ADSs. In its capacity as Depositary, the Depositary shall not lend Shares or ADSs; provided, however, that theDepositary may (i) issue ADSs prior to the receipt of Shares pursuant to Section 2.3 and (ii) deliver Shares prior to the receipt of ADSsfor withdrawal of Deposited Securities pursuant to Section 2.7, including ADSs which were issued under (i) above but for whichShares may not have been received (each such transaction a “Pre-Release Transaction”). The Depositary may receive ADSs in lieu ofShares under (i) above and receive Shares in lieu of ADSs under (ii) above. Each such Pre-Release Transaction will be (a) subject to awritten agreement whereby the person or entity (the “Applicant”) to whom ADSs or Shares are to be delivered (w) represents that atthe time of the Pre-Release Transaction the Applicant or its customer owns the Shares or ADSs that are to be delivered by theApplicant under such Pre-Release Transaction, (x) agrees to indicate the Depositary as owner of such Shares or ADSs in its recordsand to hold such Shares or ADSs in trust for the Depositary until such Shares or ADSs are delivered to the Depositary or theCustodian, (y) unconditionally guarantees to deliver to the Depositary or the Custodian, as applicable, such Shares or ADSs, and (z)agrees to any additional restrictions or requirements that the Depositary deems appropriate, (b) at all times fully collateralized with cash,U.S. government securities or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not morethan five (5) business days’ notice and (d) subject to such further indemnities and credit regulations as the Depositary deemsappropriate. The Depositary will normally limit the number of ADSs and Shares involved in such Pre-Release Transactions at any onetime to thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstanding under (i) above), provided, however,that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate.The Depositary may also set limits with respect to the number of ADSs and Shares involved in Pre-Release Transactionswith any one person on a case-by-case basis as it deems appropriate. The Depositary may retain for its own account any compensationreceived by it in conjunction with the foregoing. Collateral provided pursuant to (b) above, but not the earnings thereon, shall be heldfor the benefit of the Holders (other than the Applicant).Section 5.11Restricted Securities Owners. The Company agrees to advise in writing each of the persons or entitieswho, to the knowledge of the Company, holds Restricted Securities that such Restricted Securities are ineligible for deposit hereunder(except under the circumstances contemplated in Section 2.14) and, to the extent practicable, shall require each of such persons torepresent in writing that such person will not deposit Restricted Securities hereunder (except under the circumstances contemplated inSection 2.14).ARTICLE VIAMENDMENT AND TERMINATIONSection 6.1Amendment/Supplement. Subject to the terms and conditions of this Section 6.1 and applicable law, theADRs outstanding at any time, the provisions of the Deposit Agreement and the form of ADR attached hereto and to be issued underthe terms hereof may at any time and from time to time be amended or supplemented by written agreement between the409964064v.4 Company and the Depositary in any respect which they may deem necessary or desirable without the prior written consent of theHolders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than chargesin connection with foreign exchange control regulations, and taxes and other governmental charges, delivery and other such expenses),or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however,become effective as to outstanding ADSs until the expiration of thirty (30) days after notice of such amendment or supplement shallhave been given to the Holders of outstanding ADSs. Notice of any amendment to the Deposit Agreement or any ADR shall not needto describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such noticeshall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means forHolders and Beneficial Owners to retrieve or receive the text of such amendment (e.g., upon retrieval from the Commission’s, theDepositary’s or the Company’s website or upon request from the Depositary). The parties hereto agree that any amendments orsupplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to beregistered on Form F-6 under the Securities Act or (b) the ADSs to be settled solely in electronic book‑entry form and (ii) do not ineither such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice anysubstantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement sobecomes effective shall be deemed, by continuing to hold such ADSs, to consent and agree to such amendment or supplement and tobe bound by the Deposit Agreement and the ADR, if applicable, as amended or supplemented thereby. In no event shall anyamendment or supplement impair the right of the Holder to surrender such ADS and receive therefor the Deposited Securitiesrepresented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if anygovernmental body should adopt new laws, rules or regulations which would require an amendment of, or supplement to, the DepositAgreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement andany ADRs at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the DepositAgreement and any ADRs in such circumstances may become effective before a notice of such amendment or supplement is given toHolders or within any other period of time as required for compliance with such laws, rules or regulations.Section 6.2Termination. The Depositary shall, at any time at the written direction of the Company, terminate theDeposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days priorto the date fixed in such notice for such termination. If ninety (90) days shall have expired after (i) the Depositary shall have deliveredto the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice ofthe removal of the Depositary, and, in either case, a successor depositary shall not have been appointed and accepted its appointment asprovided in Section 5.4 of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by distributing notice of suchtermination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for suchtermination. The date so fixed for termination of the Deposit Agreement in any termination notice so distributed by the Depositary tothe Holders of ADSs is referred to as the “Termination Date”. Until the Termination Date, the Depositary shall continue to perform allof its obligations under419964064v.4 the Deposit Agreement, and the Holders and Beneficial Owners will be entitled to all of their rights under the Deposit Agreement. If any ADSs shall remain outstanding after the Termination Date, the Registrar and the Depositary shall not, after theTermination Date, have any obligation to perform any further acts under the Deposit Agreement, except that the Depositary shall,subject, in each case, to the terms and conditions of the Deposit Agreement, continue to (i) collect dividends and other distributionspertaining to Deposited Securities, (ii) sell Deposited Property received in respect of Deposited Securities, (iii) deliver DepositedSecurities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any otherDeposited Property, in exchange for ADSs surrendered to the Depositary (after deducting, or charging, as the case may be, in eachcase, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for theaccount of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (iv)take such actions as may be required under applicable law in connection with its role as Depositary under the Deposit Agreement.At any time after the Termination Date, the Depositary may sell the Deposited Property then held under the DepositAgreement and shall after such sale hold un-invested the net proceeds of such sale, together with any other cash then held by it underthe Deposit Agreement, in an un-segregated account and without liability for interest, for the pro rata benefit of the Holders whoseADSs have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations underthe Deposit Agreement except (i) to account for such net proceeds and other cash (after deducting, or charging, as the case may be, ineach case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for theaccount of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (ii)as may be required at law in connection with the termination of the Deposit Agreement. After the Termination Date, the Companyshall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Depositary under Sections 5.8,5.9 and 7.6 of the Deposit Agreement. The obligations under the terms of the Deposit Agreement of Holders and Beneficial Ownersof ADSs outstanding as of the Termination Date shall survive the Termination Date and shall be discharged only when the applicableADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement (except asspecifically provided in the Deposit Agreement).ARTICLE VIIMISCELLANEOUSSection 7.1Counterparts. The Deposit Agreement may be executed in any number of counterparts, each of whichshall be deemed an original and all of such counterparts together shall constitute one and the same agreement. Copies of the DepositAgreement shall be maintained with the Depositary and shall be open to inspection by any Holder during business hours.429964064v.4 Section 7.2No Third‑Party Beneficiaries. The Deposit Agreement is for the exclusive benefit of the parties hereto(and their successors) and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person,except to the extent specifically set forth in the Deposit Agreement. Nothing in the Deposit Agreement shall be deemed to give rise toa partnership or joint venture among the parties nor establish a fiduciary or similar relationship among the parties. The parties heretoacknowledge and agree that (i) Citibank and its Affiliates may at any time have multiple banking relationships with the Company, theHolders, the Beneficial Owners, and their respective Affiliates, (ii) Citibank and its Affiliates may be engaged at any time intransactions in which parties adverse to the Company, the Holders, the Beneficial Owners or their respective Affiliates may haveinterests, (iii) the Depositary and its Affiliates may from time to time have in their possession non-public information about theCompany, the Holders, the Beneficial Owners, and their respective Affiliates, (iv) nothing contained in the Deposit Agreement shall(a) preclude Citibank or any of its Affiliates from engaging in such transactions or establishing or maintaining such relationships, (b)obligate Citibank or any of its Affiliates to disclose such information, transactions or relationships, or to account for any profit made orpayment received in such transactions or relationships, and (v) the Depositary shall not be deemed to have knowledge of anyinformation any other division of Citibank or any of its Affiliates may have about the Company, the Holders, the Beneficial Owners, orany of their respective Affiliates.Section 7.3Severability. In case any one or more of the provisions contained in the Deposit Agreement or in theADRs should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remainingprovisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.Section 7.4Holders and Beneficial Owners as Parties; Binding Effect. The Holders and Beneficial Owners fromtime to time of ADSs issued hereunder shall be parties to the Deposit Agreement and shall be bound by all of the terms and conditionshereof and of any ADR evidencing their ADSs by acceptance thereof or any beneficial interest therein.Section 7.5Notices. Any and all notices to be given to the Company shall be deemed to have been duly given ifpersonally delivered or sent by mail, air courier or cable, telex or facsimile transmission, confirmed by letter personally delivered orsent by mail or air courier, addressed to NuCana plc, 10 Lochside Place, Edinburgh, EH12 9RG, United Kingdom, Attention: HughS. Griffith, Chief Executive Officer, or to any other address which the Company may specify in writing to the Depositary.Any and all notices to be given to the Depositary shall be deemed to have been duly given if personally delivered or sent bymail, air courier or cable, telex or facsimile transmission, confirmed by letter personally delivered or sent by mail or air courier,addressed to Citibank, N.A., 388 Greenwich Street, New York, New York 10013, U.S.A., Attention: Depositary ReceiptsDepartment, or to any other address which the Depositary may specify in writing to the Company.Any and all notices to be given to any Holder shall be deemed to have been duly given (a) if personally delivered or sent bymail or cable, telex or facsimile transmission, confirmed by letter, addressed to such Holder at the address of such Holder as it appearson the books of the439964064v.4 Depositary or, if such Holder shall have filed with the Depositary a request that notices intended for such Holder be mailed to someother address, at the address specified in such request, or (b) if a Holder shall have designated such means of notification as anacceptable means of notification under the terms of the Deposit Agreement, by means of electronic messaging addressed for delivery tothe e-mail address designated by the Holder for such purpose. Notice to Holders shall be deemed to be notice to Beneficial Owners forall purposes of the Deposit Agreement. Failure to notify a Holder or any defect in the notification to a Holder shall not affect thesufficiency of notification to other Holders or to the Beneficial Owners of ADSs held by such other Holders. Any notices given toDTC under the terms of the Deposit Agreement shall (unless otherwise specified by the Depositary) constitute notice to the DTCParticipants who hold as the ADSs in their DTC accounts and to the Beneficial Owners of such ADSs.Delivery of a notice sent by mail, air courier or cable, telex or facsimile transmission shall be deemed to be effective at thetime when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission)is deposited, postage prepaid, in a post-office letter box or delivered to an air courier service, without regard for the actual receipt ortime of actual receipt thereof by a Holder. The Depositary or the Company may, however, act upon any cable, telex or facsimiletransmission received by it from any Holder, the Custodian, the Depositary, or the Company, notwithstanding that such cable, telex orfacsimile transmission shall not be subsequently confirmed by letter.Delivery of a notice by means of electronic messaging shall be deemed to be effective at the time of the initiation of thetransmission by the sender (as shown on the sender’s records), notwithstanding that the intended recipient retrieves the message at alater date, fails to retrieve such message, or fails to receive such notice on account of its failure to maintain the designated e-mailaddress, its failure to designate a substitute e-mail address or for any other reason.Section 7.6Governing Law and Jurisdiction. The Deposit Agreement and the ADRs shall be interpreted inaccordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the Stateof New York applicable to contracts made and to be wholly performed in that State. Notwithstanding anything contained in theDeposit Agreement, any ADR or any present or future provisions of the laws of the State of New York, the rights of holders of Sharesand of any other Deposited Securities and the obligations and duties of the Company in respect of the holders of Shares and otherDeposited Securities, as such, shall be governed by the laws of England and Wales (or, if applicable, such other laws as may governthe Deposited Securities).Except as set forth in the following paragraph of this Section 7.6, the Company and the Depositary agree that the federal orstate courts in the City of New York shall have jurisdiction to hear and determine any suit, action or proceeding and to settle anydispute between them that may arise out of or in connection with the Deposit Agreement and, for such purposes, each irrevocablysubmits to the non-exclusive jurisdiction of such courts. The Company hereby irrevocably designates, appoints and empowersCorporation Service Company (the “Agent”) now at 251 Little Falls Drive Wilmington, DE 19808 as its authorized agent to receiveand accept for and on its behalf, and on behalf of its properties, assets and revenues, service by mail of any and all legal process,summons, notices and documents that may be served in any suit, action or proceeding brought against the Company in any federal orstate court as described in449964064v.4 the preceding sentence or in the next paragraph of this Section 7.6. If for any reason the Agent shall cease to be available to act assuch, the Company agrees to designate a new agent in New York on the terms and for the purposes of this Section 7.6 reasonablysatisfactory to the Depositary. The Company further hereby irrevocably consents and agrees to the service of any and all legal process,summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon theAgent (whether or not the appointment of such Agent shall for any reason prove to be ineffective or such Agent shall fail to accept oracknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its addressprovided in Section 7.5. The Company agrees that the failure of the Agent to give any notice of such service to it shall not impair oraffect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon.Notwithstanding the foregoing, the Depositary and the Company unconditionally agree that in the event that a Holder orBeneficial Owner brings a suit, action or proceeding against (a) the Company, (b) the Depositary in its capacity as Depositary underthe Deposit Agreement or (c) against both the Company and the Depositary, in any such case, in any state or federal court of theUnited States, and the Depositary or the Company have any claim, for indemnification or otherwise, against each other arising out ofthe subject matter of such suit, action or proceeding, then the Company and the Depositary may pursue such claim against each otherin the state or federal court in the United States in which such suit, action, or proceeding is pending and, for such purposes, theCompany and the Depositary irrevocably submit to the non-exclusive jurisdiction of such courts. The Company agrees that service ofprocess upon the Agent in the manner set forth in the preceding paragraph shall be effective service upon it for any suit, action orproceeding brought against it as described in this paragraph.The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may nowor hereafter have to the laying of venue of any actions, suits or proceedings brought in any court as provided in this Section 7.6, andhereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit orproceeding brought in any such court has been brought in an inconvenient forum.The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, and agrees not to plead orclaim, any right of immunity from legal action, suit or proceeding, from setoff or counterclaim, from the jurisdiction of any court, fromservice of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, from execution ofjudgment, or from any other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, andconsents to such relief and enforcement against it, its assets and its revenues in any jurisdiction, in each case with respect to any matterarising out of, or in connection with, the Deposit Agreement, any ADR or the Deposited Property.EACH OF THE PARTIES TO THE DEPOSIT AGREEMENT (INCLUDING, WITHOUT LIMITATION,EACH HOLDER AND BENEFICIAL OWNER) IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL459964064v.4 PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY ARISING OUT OF, OR RELATING TO,THE DEPOSIT AGREEMENT, ANY ADR AND ANY TRANSACTIONS CONTEMPLATED THEREIN (WHETHERBASED ON CONTRACT, TORT, COMMON LAW OR OTHERWISE). No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement. The provisions ofthis Section 7.6 shall survive any termination of the Deposit Agreement, in whole or in part.Section 7.7Assignment. Subject to the provisions of Section 5.4, the Deposit Agreement may not be assigned byeither the Company or the Depositary.Section 7.8Compliance with U.S. Securities Laws. Notwithstanding anything in the Deposit Agreement to thecontrary, the withdrawal or delivery of Deposited Securities will not be suspended by the Company or the Depositary except as wouldbe permitted by Instruction I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time,under the Securities Act.Section 7.9England and Wales Law References. Any summary of laws and regulations of England and Walesand of the terms of the Company’s Articles of Association set forth in the Deposit Agreement have been provided by the Companysolely for the convenience of Holders, Beneficial Owners and the Depositary. While such summaries are believed by the Company tobe accurate as of the date of the Deposit Agreement, (i) they are summaries and as such may not include all aspects of the materialssummarized applicable to a Holder or Beneficial Owner, and (ii) these laws and regulations and the Company’s Articles of Associationmay change after the date of the Deposit Agreement. Neither the Depositary nor the Company has any obligation under the terms ofthe Deposit Agreement to update any such summaries.Section 7.10Titles and References.(a)Deposit Agreement. All references in the Deposit Agreement to exhibits, articles, sections, subsections, andother subdivisions refer to the exhibits, articles, sections, subsections and other subdivisions of the Deposit Agreement unless expresslyprovided otherwise. The words “the Deposit Agreement”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar importrefer to the Deposit Agreement as a whole as in effect at the relevant time between the Company, the Depositary and the Holders andBeneficial Owners of ADSs and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine andneuter gender shall be construed to include any other gender, and words in the singular form shall be construed to include the pluraland vice versa unless the context otherwise requires. Titles to sections of the Deposit Agreement are included for convenience onlyand shall be disregarded in construing the language contained in the Deposit Agreement. References to “applicable laws andregulations” shall refer to laws and regulations applicable to ADRs, ADSs or Deposited Property as in effect at the relevant time ofdetermination, unless otherwise required by law or regulation.(b)ADRs. All references in any ADR(s) to paragraphs, exhibits, articles, sections, subsections, and othersubdivisions refer to the paragraphs, exhibits, articles, sections,469964064v.4 subsections and other subdivisions of the ADR(s) in question unless expressly provided otherwise. The words “the Receipt”, “theADR”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import used in any ADR refer to the ADR as a whole and asin effect at the relevant time, and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine andneuter gender in any ADR shall be construed to include any other gender, and words in the singular form shall be construed to includethe plural and vice versa unless the context otherwise requires. Titles to paragraphs of any ADR are included for convenience onlyand shall be disregarded in construing the language contained in the ADR. References to “applicable laws and regulations” shall referto laws and regulations applicable to ADRs, ADSs or Deposited Property as in effect at the relevant time of determination, unlessotherwise required by law or regulation.479964064v.4 IN WITNESS WHEREOF, NUCANA PLC and CITIBANK, N.A. have duly executed the Deposit Agreement as of the day andyear first above set forth and all Holders and Beneficial Owners shall become parties hereto upon acceptance by them of ADSs issuedin accordance with the terms hereof, or upon acquisition of any beneficial interest therein. NUCANA PLC By: /s/ Hugh S. Griffith Name: Hugh S. Griffith Title: Chief Executive Officer CITIBANK, N.A. By: /s/ Leslie A. DeLuca Name: Leslie A. DeLuca Title: Attorney-in-Fact 489964064v.4 EXHIBIT A[FORM OF ADR]Number CUSIP NUMBER: American Depositary Shares (each AmericanDepositary Share representing the right to receiveone (1) fully paid ordinary share, nominal value£0.04 per share) AMERICAN DEPOSITARY RECEIPTforAMERICAN DEPOSITARY SHARESrepresentingDEPOSITED ORDINARY SHARES, NOMINAL VALUE £0.04 PER SHAREofNUCANA PLC(Incorporated under the laws of England and Wales)CITIBANK, N.A., a national banking association organized and existing under the laws of the United States of America, asdepositary (the “Depositary”), hereby certifies that _____________is the owner of ______________ American Depositary Shares(hereinafter “ADS”) representing deposited ordinary shares, nominal value £0.04 per share, including evidence of rights to receivesuch ordinary shares (the “Shares”), of NuCana plc, a public limited company incorporated under the laws of England and Wales (the“Company”). As of the date of issuance of this ADR, each ADS represents the right to receive one (1) Share deposited under theDeposit Agreement (as hereinafter defined) with the Custodian, which at the date of execution of the Deposit Agreement is Citibank,N.A., London Branch (the “Custodian”). The ADS(s)-to-Share(s) ratio is subject to amendment as provided in Articles IV and VI ofthe Deposit Agreement. The Depositary’s Principal Office is located at 388 Greenwich Street, New York, New York 10013, U.S.A.(1)The Deposit Agreement. This American Depositary Receipt is one of an issue of American Depositary Receipts(“ADRs”), all issued and to be issued upon the terms and conditions set forth in the Deposit Agreement, dated as of October 2, 2017(as amended and supplemented from time to time, the “Deposit Agreement”), by and among the Company, the Depositary, and allHolders and Beneficial Owners from time to time of ADSs issued thereunder. The Deposit Agreement sets forth the rights andobligations of Holders and Beneficial Owners of ADSs and the rights and duties of the Depositary in respect of the Shares depositedthereunder and any and all other Deposited Property (as defined in the Deposit Agreement) from time to time received and held ondeposit in respect of the ADSs. Copies of the Deposit Agreement are on file at the Principal Office of the Depositary and with theCustodian. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance A-19964064v.4 with the terms and conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms ofthe Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney‑in‑fact, with full power to delegate, toact on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any andall procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deemnecessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions tobe the conclusive determinant of the necessity and appropriateness thereof. The manner in which a Beneficial Owner or Holder holdsADSs (e.g., in a brokerage account vs. as registered holder) may affect the rights and obligations of, the manner in which, and theextent to which services are made available to them pursuant to the terms of the Deposit Agreement. With respect to the foregoingsentence, neither the Depositary nor the Company shall bear any responsibility for any Beneficial Owner or Holder’s loss, liability, tax,charge or expense.The statements made on the face and reverse of this ADR are summaries of certain provisions of the Deposit Agreement andthe Articles of Association of the Company (as in effect on the date of the signing of the Deposit Agreement) and are qualified by andsubject to the detailed provisions of the Deposit Agreement and the Articles of Association, to which reference is hereby made.All capitalized terms not defined herein shall have the meanings ascribed thereto in the Deposit Agreement.The Depositary makes no representation or warranty as to the validity or worth of the Deposited Property. The Depositaryhas made arrangements for the acceptance of the ADSs into DTC. Each Beneficial Owner of ADSs held through DTC must rely onthe procedures of DTC and the DTC Participants to exercise and be entitled to any rights attributable to such ADSs. The Depositarymay issue Uncertificated ADSs subject, however, to the terms and conditions of Section 2.13 of the Deposit Agreement.(2)Surrender of ADSs and Withdrawal of Deposited Securities. The Holder of this ADR (and of the ADSsevidenced hereby) shall be entitled to Delivery (at the Custodian’s designated office) of the Deposited Securities at the time representedby the ADSs evidenced hereby upon satisfaction of each of the following conditions: (i) the Holder (or a duly-authorized attorney ofthe Holder) has duly Delivered to the Depositary at its Principal Office the ADSs evidenced hereby (and if applicable, this ADR) forthe purpose of withdrawal of the Deposited Securities represented thereby, (ii) if applicable and so required by the Depositary, thisADR Delivered to the Depositary for such purpose has been properly endorsed in blank or is accompanied by proper instruments oftransfer in blank (including signature guarantees in accordance with standard securities industry practice), (iii) if so required by theDepositary, the Holder of the ADSs has executed and delivered to the Depositary a written order directing the Depositary to cause theDeposited Securities being withdrawn to be Delivered to or upon the written order of the person(s) designated in such order, and (iv)all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as areset forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms andconditions of this ADR evidencing the surrendered ADSs, of the Deposit Agreement, of the Company’s Articles of Association and of A-29964064v.4 any applicable laws and the rules of CREST, and to any provisions of or governing the Deposited Securities, in each case as in effectat the time thereof.Upon satisfaction of each of the conditions specified above, the Depositary (i) shall cancel the ADSs Delivered to it (and, ifapplicable, this ADR(s) evidencing the ADSs so Delivered), (ii) shall direct the Registrar to record the cancellation of the ADSs soDelivered on the books maintained for such purpose, and (iii) shall direct the Custodian to Deliver, or cause the Delivery of, in eachcase, without unreasonable delay, the Deposited Securities represented by the ADSs so canceled together with any certificate or otherdocument of title for the Deposited Securities, or evidence of the electronic transfer thereof (if available), as the case may be, to or uponthe written order of the person(s) designated in the order delivered to the Depositary for such purpose, subject however, in each case,to the terms and conditions of the Deposit Agreement, of this ADR evidencing the ADSs so canceled, of the Articles of Association ofthe Company, of any applicable laws and of the rules of CREST, and to the terms and conditions of or governing the DepositedSecurities, in each case as in effect at the time thereof.The Depositary shall not accept for surrender ADSs representing less than one (1) Share. In the case of Delivery to it ofADSs representing a number other than a whole number of Shares, the Depositary shall cause ownership of the appropriate wholenumber of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) return tothe person surrendering such ADSs the number of ADSs representing any remaining fractional Share, or (ii) sell or cause to be sold thefractional Share represented by the ADSs so surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of,and expenses incurred by, the Depositary and (b) applicable taxes withheld) to the person surrendering the ADSs.Notwithstanding anything else contained in this ADR or the Deposit Agreement, the Depositary may make delivery at thePrincipal Office of the Depositary of Deposited Property consisting of (i) any cash dividends or cash distributions, or (ii) any proceedsfrom the sale of any non-cash distributions, which are at the time held by the Depositary in respect of the Deposited Securitiesrepresented by the ADSs surrendered for cancellation and withdrawal. At the request, risk and expense of any Holder so surrenderingADSs represented by this ADR, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extentpermitted by law) any Deposited Property (other than Deposited Securities) held by the Custodian in respect of such ADSs to theDepositary for delivery at the Principal Office of the Depositary. Such direction shall be given by letter or, at the request, risk andexpense of such Holder, by cable, telex or facsimile transmission.(3)Transfer, Combination and Split-up of ADRs. The Registrar shall register the transfer of this ADR (and of theADSs represented hereby) on the books maintained for such purpose and the Depositary shall (x) cancel this ADR and execute newADRs evidencing the same aggregate number of ADSs as those evidenced by this ADR when canceled by the Depositary, (y) causethe Registrar to countersign such new ADRs and (z) Deliver such new ADRs to or upon the order of the person entitled thereto, ifeach of the following conditions has been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly authorizedattorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a A-39964064v.4 transfer thereof, (ii) this surrendered ADR has been properly endorsed or is accompanied by proper instruments of transfer (includingsignature guarantees in accordance with standard securities industry practice), (iii) this surrendered ADR has been duly stamped (ifrequired by the laws of the State of New York or of the United States), and (iv) all applicable fees and charges of, and expensesincurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, theDeposit Agreement) have been paid, subject, however, in each case, to the terms and conditions of this ADR, of the DepositAgreement and of applicable law, in each case as in effect at the time thereof.The Registrar shall register the split-up or combination of this ADR (and of the ADSs represented hereby) on the booksmaintained for such purpose and the Depositary shall (x) cancel this ADR and execute new ADRs for the number of ADSs requested,but in the aggregate not exceeding the number of ADSs evidenced by this ADR when canceled by the Depositary, (y) cause theRegistrar to countersign such new ADRs and (z) Deliver such new ADRs to or upon the order of the Holder thereof, if each of thefollowing conditions has been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly authorized attorney of theHolder) to the Depositary at its Principal Office for the purpose of effecting a split-up or combination hereof, and (ii) all applicable feesand charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth inSection 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms and conditionsof this ADR, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.(4)Pre-Conditions to Registration, Transfer, Etc. As a condition precedent to the execution and delivery, theregistration of issuance, transfer, split-up, combination or surrender, of any ADS, the delivery of any distribution thereon, or thewithdrawal of any Deposited Property, the Depositary or the Custodian may require (i) payment from the depositor of Shares orpresenter of ADSs or of this ADR of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer orregistration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) andpayment of any applicable fees and charges of the Depositary as provided in Section 5.9 and Exhibit B to the Deposit Agreement andin this ADR, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other mattercontemplated by Section 3.1 of the Deposit Agreement, and (iii) compliance with (A) any laws or governmental regulations relating tothe execution and delivery of this ADR or ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations asthe Depositary and the Company may establish consistent with the provisions of this ADR, if applicable, the Deposit Agreement andapplicable law. If satisfaction of any condition precedent referred to above would involve an unlawful payment by the Companyunder the applicable laws of England and Wales, the Company and the Depositary shall reasonably cooperate to determine if there is amutually agreeable lawful alternative, provided, that in no event shall the Company be required to make any unlawful payment,provided further, that in no event shall the Depositary be required to effect any transaction until it receives applicable payments withrespect thereto, as provided herein and in the Deposit Agreement.The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or thedeposit of particular Shares may be refused, or the A-49964064v.4 registration of transfer of ADSs in particular instances may be refused, or the registration of transfers of ADSs generally may besuspended, during any period when the transfer books of the Company, the Depositary, a Registrar or the Share Registrar are closed orif any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to timebecause of any requirement of law or regulation, any government or governmental body or commission or any securities exchange onwhich the ADSs or Shares are listed, or under any provision of the Deposit Agreement or this ADR, if applicable, or under anyprovision of, or governing, the Deposited Securities, or because of a meeting of shareholders of the Company or for any other reason,subject, in all cases, to paragraph (25) of this ADR and Section 7.8 of the Deposit Agreement. Notwithstanding any provision of theDeposit Agreement or this ADR to the contrary, Holders are entitled to surrender outstanding ADSs to withdraw the DepositedSecurities associated herewith at any time subject only to (i) temporary delays caused by closing the transfer books of the Depositary orthe Company or the deposit of Shares in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) thepayment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to theADSs or to the withdrawal of the Deposited Securities, and (iv) other circumstances specifically contemplated by Instruction I.A.(l) ofthe General Instructions to Form F-6 (as such General Instructions may be amended from time to time).(5)Compliance with Information Requests. Notwithstanding any other provision of the Deposit Agreement or thisADR, each Holder and Beneficial Owner of the ADSs represented hereby agrees to comply with requests from the Company pursuantto applicable law, the rules and requirements of The NASDAQ Global Market and any other stock exchange on which the Shares orADSs are, or will be, registered, traded or listed or the Articles of Association of the Company, which are made to provideinformation, inter alia, as to the capacity in which such Holder or Beneficial Owner owns ADSs (and the Shares represented by suchADSs, as the case may be) and regarding the identity of any other person(s) interested in such ADSs (and the Shares represented bysuch ADSs, as the case may be) and the nature of such interest and various other matters, whether or not they are Holders and/orBeneficial Owners at the time of such request. The Depositary agrees to use its reasonable efforts to forward, upon the request of theCompany and at the Company’s expense, any such request from the Company to the Holders and to forward to the Company any suchresponses to such requests received by the Depositary.(6)Ownership Restrictions. Notwithstanding any other provision of this ADR or of the Deposit Agreement, theCompany may restrict transfers of the Shares where such transfer might result in ownership of Shares exceeding limits imposed byapplicable law or the Articles of Association of the Company. The Company may also restrict, in such manner as it deems appropriate,transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single Holderor Beneficial Owner to exceed any such limits. The Company may, in its sole discretion but subject to applicable law, instruct theDepositary to take action with respect to the ownership interest of any Holder or Beneficial Owner in excess of the limits set forth inthe preceding sentence, including, but not limited to, the imposition of restrictions on the transfer of ADSs, the removal or limitation ofvoting rights or the mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADSsheld by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicablelaw and the Articles of A-59964064v.4 Association of the Company. Nothing herein or in the Deposit Agreement shall be interpreted as obligating the Depositary or theCompany to ensure compliance with the ownership restrictions described herein or in Section 3.5 of the Deposit Agreement.(7)Reporting Obligations and Regulatory Approvals. Applicable laws and regulations may require holders andbeneficial owners of Shares, including the Holders and Beneficial Owners of ADSs, to satisfy reporting requirements and obtainregulatory approvals in certain circumstances. Holders and Beneficial Owners of ADSs are solely responsible for determining andcomplying with such reporting requirements and obtaining such approvals. Each Holder and each Beneficial Owner hereby agrees tomake such determination, file such reports, and obtain such approvals to the extent and in the form required by applicable laws andregulations as in effect from time to time. Neither the Depositary, the Custodian, the Company or any of their respective agents oraffiliates shall be required to take any actions whatsoever on behalf of Holders or Beneficial Owners to determine or satisfy suchreporting requirements or obtain such regulatory approvals under applicable laws and regulations.(8)Liability for Taxes and Other Charges. Any tax or other governmental charge payable by the Custodian or bythe Depositary with respect to any Deposited Property, ADSs or this ADR shall be payable by the Holders and Beneficial Owners tothe Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect ofDeposited Property, and may sell for the account of a Holder and/or Beneficial Owner any or all of the Deposited Property and applysuch distributions and sale proceeds in payment of, any taxes (including applicable interest and penalties) or charges that are or may bepayable by Holders or Beneficial Owners in respect of the ADSs, Deposited Property and this ADR, the Holder and the BeneficialOwner hereof remaining liable for any deficiency. The Custodian may refuse the deposit of Shares and the Depositary may refuse toissue ADSs, to deliver ADRs, to register the transfer of ADSs, to register the split‑up or combination of ADRs and (subject toparagraph (25) of this ADR and Section 7.8 of the Deposit Agreement) the withdrawal of Deposited Property until payment in full ofsuch tax, charge, penalty or interest is received. Every Holder and Beneficial Owner agrees to indemnify the Depositary, theCompany, the Custodian, and any of their agents, officers, employees and Affiliates for, and to hold each of them harmless from, anyclaims with respect to taxes (including applicable interest and penalties thereon) arising from any tax benefit obtained for such Holderand/or Beneficial Owner. The obligations of Holders and Beneficial Owners under Section 3.2 of the Deposit Agreement shallsurvive any transfer of ADSs, any cancellation of ADSs and withdrawal of Deposited Securities, and the termination of the DepositAgreement.(9)Representations and Warranties on Deposit of Shares. Each person depositing Shares under the DepositAgreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized,validly allotted and issued, fully paid, not subject to any call for the payment of further capital and legally obtained by such person, (ii)all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived, disapplied or exercised, (iii) the personmaking such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance,security interest, charge, mortgage or adverse claim, (v) the Shares presented for deposit are not, and the ADSs issuable upon suchdeposit will not be, Restricted Securities (except as contemplated in Section 2.14 of the Deposit Agreement), and (vi) the Sharespresented for A-69964064v.4 deposit have not been stripped of any rights or entitlements. Such representations and warranties shall survive the deposit andwithdrawal of Shares, the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs. If any suchrepresentations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of theperson depositing Shares, to take any and all actions necessary to correct the consequences thereof.(10)Proofs, Certificates and Other Information. Any person presenting Shares for deposit, any Holder and anyBeneficial Owner may be required, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary andthe Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental chargesrelating to that person, exchange control approval, legal or beneficial ownership of ADSs and Deposited Property, compliance withapplicable laws, the terms of the Deposit Agreement or this ADR evidencing the ADSs and the provisions of, or governing, theDeposited Property, to execute such certifications and to make such representations and warranties, and to provide such otherinformation and documentation (or, in the case of Shares in registered form presented for deposit, such information relating to theregistration on the books of the Company or of the Share Registrar) as the Depositary or the Custodian may deem necessary or properor as the Company may reasonably require by written request to the Depositary consistent with its obligations under the DepositAgreement and this ADR. The Depositary and the Registrar, as applicable, may withhold the execution or delivery or registration oftransfer of any ADR or ADS or the distribution or sale of any dividend or distribution of rights or of the proceeds thereof or, to theextent not limited by paragraph (25) and the terms of Section 7.8 of the Deposit Agreement, the delivery of any Deposited Propertyuntil such proof or other information is filed or such certifications are executed, or such representations and warranties are made, orsuch other documentation or information is provided, in each case to the Depositary’s, the Registrar’s and the Company’ssatisfaction. The Depositary shall provide the Company, in a timely manner, with copies or originals if necessary and appropriate of (i)any such proofs of citizenship or residence, taxpayer status, or exchange control approval or copies of written representations andwarranties which it receives from Holders and Beneficial Owners, and (ii) any other information or documents which the Companymay reasonably request and which the Depositary shall request and receive from any Holder or Beneficial Owner or any personpresenting Shares for deposit or ADSs for cancellation, transfer or withdrawal. Nothing herein shall obligate the Depositary to (i)obtain any information for the Company if not provided by the Holders or Beneficial Owners, or (ii) verify or vouch for the accuracyof the information so provided by the Holders or Beneficial Owners.(11)ADS Fees and Charges. The following ADS fees are payable under the terms of the Deposit Agreement: (i)ADS Issuance Fee: by any person to whom the ADSs are issued (e.g., an issuance of ADSs upon adeposit of Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason), excludingADS issuances described in paragraph (iv) below, a fee not in excess of U.S. $5.00 per 100 ADSs (orfraction thereof) issued under the terms of the Deposit Agreement; A-79964064v.4 (ii)ADS Cancellation Fee: by any person whose ADSs are being cancelled (e.g., a cancellation of ADSsfor delivery of Deposited Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any otherreason), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) cancelled; (iii)Cash Distribution Fee: by any Holder of ADSs, a fee not in excess of U.S. $5.00 per 100 ADSs (orfraction thereof) held for the distribution of cash dividends or other cash distributions (e.g., upon sale ofrights and other entitlements); (iv)Stock Distribution /Rights Exercise Fee: by any Holder of ADS(s), a fee not in excess of U.S. $5.00per 100 ADSs (or fraction thereof) held for the distribution of ADSs pursuant to (a) stock dividends orother free stock distributions or (b) the exercise of rights to purchase additional ADSs; (v)Other Distribution Fee: by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (orfraction thereof) held for the distribution of securities other than ADSs or rights to purchase additionalADSs (e.g., spin-off shares); and (vi)Depositary Services Fee: by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs(or fraction thereof) held on the applicable record date(s) established by the Depositary.The Company, Holders, Beneficial Owners, persons receiving ADSs upon issuance, and persons whose ADSs are beingcancelled shall be responsible for the following ADS charges under the terms of the Deposit Agreement: (a)taxes (including applicable interest and penalties) and other governmental charges; (b)such registration fees as may from time to time be in effect for the registration of Shares or otherDeposited Securities on the share register and applicable to transfers of Shares or other DepositedSecurities to or from the name of the Custodian, the Depositary or any nominees upon the making ofdeposits and withdrawals, respectively; (c)such cable, telex and facsimile transmission and delivery expenses as are expressly provided in theDeposit Agreement to be at the expense of the person depositing Shares or withdrawing DepositedSecurities or of the Holders and Beneficial Owners of ADSs; (d)the expenses and charges incurred by the Depositary in the conversion of foreign currency; A-89964064v.4 (e)such fees and expenses as are incurred by the Depositary in connection with compliance with exchangecontrol regulations and other regulatory requirements applicable to Shares, Deposited Securities, ADSsand ADRs; and (f)the fees and expenses incurred by the Depositary, the Custodian, or any nominee in connection with thedelivery or servicing of Deposited Property.All ADS fees and charges so payable may be deducted from distributions or must be remitted to the Depositary, or itsdesignee, may be waived by the Depositary in full or in part with respect to some or all ADSs upon such terms, and subject to suchconditions, as the Depositary may determine and may, at any time and from time to time, be changed by agreement between theDepositary and the Company, but, in the case of ADS fees and charges payable by Holders and Beneficial Owners, only in themanner contemplated by paragraph (23) of this ADR and as contemplated in Section 6.1 of the Deposit Agreement. The Depositaryshall provide, without charge, a copy of its latest ADS fee schedule to anyone upon request.ADS fees and charges payable upon (i) the issuance of ADSs and (ii) the cancellation of ADSs will be payable by theperson to whom the ADSs are so issued by the Depositary (in the case of ADS issuances) and by the person whose ADSs are beingcancelled (in the case of ADS cancellations). In the case of ADSs issued by the Depositary into DTC or presented to the Depositaryvia DTC, the ADS issuance and cancellation fees and charges will be payable by the DTC Participant(s) receiving the ADSs from theDepositary or the DTC Participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the Beneficial Owner(s) andwill be charged by the DTC Participant(s) to the account(s) of the applicable Beneficial Owner(s) in accordance with the proceduresand practices of the DTC Participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS servicefee are payable by Holders as of the applicable ADS Record Date established by the Depositary. In the case of distributions of cash,the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions otherthan cash and (ii) the ADS service fee, the applicable Holders as of the ADS Record Date established by the Depositary will beinvoiced for the amount of the ADS fees and charges and such ADS fees may be deducted from distributions made to Holders. ForADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted fromdistributions made through DTC, and may be charged to the DTC Participants in accordance with the procedures and practicesprescribed by DTC from time to time and the DTC Participants in turn charge the amount of such ADS fees and charges to theBeneficial Owners for whom they hold ADSs.The Depositary may reimburse the Company for certain expenses incurred by the Company in respect of the ADR programestablished pursuant to the Deposit Agreement, by making available a portion of the ADS fees charged in respect of the ADR programor otherwise, upon such terms and conditions as the Company and the Depositary agree from time to time. The Company shall pay tothe Depositary such fees and charges, and reimburse the Depositary for such out-of-pocket expenses, as the Depositary and theCompany may agree from time to time. Responsibility for payment of such fees, charges and reimbursements may from time to A-99964064v.4 time be changed by agreement between the Company and the Depositary. Unless otherwise agreed, the Depositary shall present itsstatement for such fees, charges and reimbursements to the Company once every three months. The charges and expenses of theCustodian are for the sole account of the Depositary.The obligations of Holders and Beneficial Owners to pay ADS fees and charges shall survive the termination of the DepositAgreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4 of the DepositAgreement, the right to collect ADS fees and charges shall extend for those ADS fees and charges incurred prior to the effectiveness ofsuch resignation or removal.(12)Title to ADRs. Subject to the limitations contained in the Deposit Agreement and in this ADR, it is a conditionof this ADR, and every successive Holder of this ADR by accepting or holding the same consents and agrees, that title to this ADR(and to each Certificated ADS evidenced hereby) shall be transferable upon the same terms as a certificated security under the laws ofthe State of New York, provided that, in the case of Certificated ADSs, this ADR has been properly endorsed or is accompanied byproper instruments of transfer. Notwithstanding any notice to the contrary, the Depositary and the Company may deem and treat theHolder of this ADR (that is, the person in whose name this ADR is registered on the books of the Depositary) as the absolute ownerthereof for all purposes. Neither the Depositary nor the Company shall have any obligation nor be subject to any liability under theDeposit Agreement or this ADR to any holder of this ADR or any Beneficial Owner unless, in the case of a holder of ADSs, suchholder is the Holder of this ADR registered on the books of the Depositary or, in the case of a Beneficial Owner, such BeneficialOwner, or the Beneficial Owner’s representative, is the Holder registered on the books of the Depositary.(13)Validity of ADR. The Holder(s) of this ADR (and the ADSs represented hereby) shall not be entitled to anybenefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company unless thisADR has been (i) dated, (ii) signed by the manual or facsimile signature of a duly-authorized signatory of the Depositary, (iii)countersigned by the manual or facsimile signature of a duly-authorized signatory of the Registrar, and (iv) registered in the booksmaintained by the Registrar for the registration of issuances and transfers of ADRs. An ADR bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly authorized signatory of the Depositaryor the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be soauthorized prior to the delivery of such ADR by the Depositary.(14)Available Information; Reports; Inspection of Transfer Books. The Company is subject to the periodicreporting requirements of the Exchange Act and, accordingly, is required to file or furnish certain reports with the Commission. Thesereports can be retrieved from the Commission’s website (www.sec.gov) and can be inspected and copied at the public referencefacilities maintained by the Commission located (as of the date of the Deposit Agreement) at 100 F Street, N.E., WashingtonD.C. 20549.The Depositary shall make available for inspection by Holders at its Principal Office any reports and communications,including any proxy soliciting materials, received from the A-109964064v.4 Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of theDeposited Property and (b) made generally available to the holders of such Deposited Property by the Company. The Depositary shallalso provide or make available to Holders copies of such reports when furnished by the Company pursuant to Section 5.6 of theDeposit Agreement.Until termination of the Deposit Agreement in accordance with its terms, the Registrar shall maintain in the Borough ofManhattan, the City of New York, an office and facilities for the issuance and delivery of ADSs, the acceptance for surrender ofADS(s) for the purpose of withdrawal of Deposited Securities, the registration of issuances, cancellations, transfers, combinations andsplit‑ups of ADS(s) and, if applicable, to countersign ADRs evidencing the ADSs so issued, transferred, combined or split-up, in eachcase in accordance with the provisions of the Deposit Agreement.The Registrar shall keep books for the registration of ADSs which at all reasonable times shall be open for inspection by theCompany and by the Holders of such ADSs, provided that such inspection shall not be, to the Registrar’s knowledge, for the purposeof communicating with Holders of such ADSs in the interest of a business or object other than the business of the Company or otherthan a matter related to the Deposit Agreement or the ADSs.The Registrar may close the transfer books with respect to the ADSs, at any time or from time to time, when deemednecessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable writtenrequest of the Company subject, in all cases, to paragraph (25) and Section 7.8 of the Deposit Agreement.Dated:CITIBANK, N.A.Transfer Agent and Registrar CITIBANK, N.A.as Depositary By: By: Authorized Signatory Authorized Signatory The address of the Principal Office of the Depositary is 388 Greenwich Street, New York, New York 10013, U.S.A. A-119964064v.4 [FORM OF REVERSE OF ADR]SUMMARY OF CERTAIN ADDITIONAL PROVISIONSOF THE DEPOSIT AGREEMENT(15)Dividends and Distributions in Cash, Shares, etc. (a) Cash Distributions: Whenever the Company intends tomake a distribution of a cash dividend or other cash distribution in respect of any Deposited Securities, the Company shall give noticethereof to the Depositary at least twenty (20) days (or such other number of days as mutually agreed to in writing by the Depositaryand the Company) prior to the proposed distribution specifying, inter alia, the record date applicable for determining the holders ofDeposited Securities entitled to receive such distribution. Upon the timely receipt of such notice, the Depositary shall establish theADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement. Upon receipt of confirmation of the receipt of(x) any cash dividend or other cash distribution on any Deposited Securities, or (y) proceeds from the sale of any Deposited Propertyheld in respect of the ADSs under the terms of the Deposit Agreement, the Depositary will (i) if at the time of receipt thereof anyamounts received in a Foreign Currency can, in the judgment of the Depositary (pursuant to Section 4.8 of the Deposit Agreement), beconverted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to be converted such cashdividend, distribution or proceeds into Dollars (on the terms described in Section 4.8 of the Deposit Agreement), (ii) if applicable andunless previously established, establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement, and(iii) distribute promptly the amount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, theDepositary and (b) applicable taxes withheld) to the Holders entitled thereto as of the ADS Record Date in proportion to the number ofADSs held as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed withoutattributing to any Holder a fraction of one cent, and any balance not so distributed shall be held by the Depositary (without liability forinterest thereon) and shall be added to and become part of the next sum received by the Depositary for distribution to Holders of ADSsoutstanding at the time of the next distribution. If the Company, the Custodian or the Depositary is required to withhold and doeswithhold from any cash dividend or other cash distribution in respect of any Deposited Securities, or from any cash proceeds from thesales of Deposited Property, an amount on account of taxes, duties or other governmental charges, the amount distributed to Holderson the ADSs shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or theDepositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Companyto the Depositary upon request. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing accountfor the benefit of the applicable Holders and Beneficial Owners of ADSs until the distribution can be effected or the funds that theDepositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the UnitedStates. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give theDepositary timely notice of the proposed distribution provided for in Section 4.1 of the Deposit Agreement, the Depositary agrees touse commercially reasonable efforts to perform the actions contemplated in Section 4.1 of the Deposit Agreement, and the Company,the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform A-129964064v.4 the actions contemplated in Section 4.1 of the Deposit Agreement where such notice has not been so timely given, other than its failureto use commercially reasonable efforts, as provided herein.(b)Share Distributions: Whenever the Company intends to make a distribution that consists of a dividend in, or freedistribution of, Shares, the Company shall give notice thereof to the Depositary at least twenty (20) days (or such other number of daysas mutually agreed to in writing by the Depositary and the Company) prior to the proposed distribution, specifying, inter alia, therecord date applicable to holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such noticefrom the Company, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9 of the DepositAgreement. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, theDepositary shall either (i) subject to Section 5.9 of the Deposit Agreement, distribute to the Holders as of the ADS Record Date inproportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number ofShares received as such dividend, or free distribution, subject to the other terms of the Deposit Agreement (including, withoutlimitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxes), or (ii) if additionalADSs are not so distributed, take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, tothe extent permissible by law, thenceforth also represent rights and interests in the additional integral number of Shares distributed uponthe Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositaryand (b) applicable taxes). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares or ADSs, as the casemay be, represented by the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1 of theDeposit Agreement. In the event that the Depositary determines that any distribution in property (including Shares) is subject to anytax or other governmental charges which the Depositary is obligated to withhold, or, if the Company in the fulfillment of its obligationsunder Section 5.7 of the Deposit Agreement, has furnished an opinion of U.S. counsel determining that Shares must be registeredunder the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declaredeffective), the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in suchamounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and theDepositary shall distribute the net proceeds of any such sale (after deduction of (a) applicable taxes and (b) fees and charges of, andexpenses incurred by, the Depositary) to Holders entitled thereto upon the terms described in Section 4.1 of the DepositAgreement. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of theDeposit Agreement. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails togive the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commerciallyreasonable efforts to perform the actions contemplated in Section 4.2 of the Deposit Agreement, and the Company, the Holders and theBeneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actionscontemplated in Section 4.2 of the Deposit Agreement where such notice has not been so timely given, other than its failure to usecommercially reasonable efforts, as provided herein. A-139964064v.4 (c)Elective Distributions in Cash or Shares: Whenever the Company intends to make a distribution payable at theelection of the holders of Deposited Securities in cash or in additional Shares, the Company shall give notice thereof to the Depositaryat least sixty (60) days (or such other number of days as mutually agreed to in writing by the Depositary and the Company) prior to theproposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive suchelective distribution and whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon the timelyreceipt of a notice indicating that the Company wishes such elective distribution to be made available to Holders of ADSs, theDepositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it islawful and reasonably practicable to make such elective distribution available to the Holders of ADSs. The Depositary shall makesuch elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution be madeavailable to Holders, (ii) the Depositary shall have determined that such distribution is reasonably practicable and (iii) the Depositaryshall have received satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement. If the above conditions arenot satisfied or if the Company requests such elective distribution not to be made available to Holders of ADSs, the Depositary shallestablish the ADS Record Date on the terms described in Section 4.9 of the Deposit Agreement and, to the extent permitted by law,distribute to the Holders, on the basis of the same determination as is made in England and Wales in respect of the Shares for which noelection is made, either (X) cash upon the terms described in Section 4.1 of the Deposit Agreement or (Y) additional ADSsrepresenting such additional Shares upon the terms described in Section 4.2 of the Deposit Agreement. If the above conditions aresatisfied, the Depositary shall establish an ADS Record Date on the terms described in Section 4.9 of the Deposit Agreement andestablish procedures to enable Holders to elect the receipt of the proposed distribution in cash or in additional ADSs. The Companyshall assist the Depositary in establishing such procedures to the extent necessary. If a Holder elects to receive the proposeddistribution (X) in cash, the distribution shall be made upon the terms described in Section 4.1 of the Deposit Agreement, or (Y) inADSs, the distribution shall be made upon the terms described in Section 4.2 of the Deposit Agreement. Nothing herein or in theDeposit Agreement shall obligate the Depositary to make available to Holders a method to receive the elective distribution in Shares(rather than ADSs). There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity toreceive elective distributions on the same terms and conditions as the holders of Shares. Notwithstanding anything contained in theDeposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distributionprovided for in Section 4.3 of the Deposit Agreement, the Depositary agrees to use commercially reasonable efforts to perform theactions contemplated in Section 4.3 of the Deposit Agreement, and the Company, the Holders and the Beneficial Ownersacknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.3of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts,as provided herein.(d)Distribution of Rights to Purchase Additional ADSs: Whenever the Company intends to distribute to theholders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary atleast sixty (60) days (or such other number of days as mutually agreed to in writing by the Depositary and the Company) prior A-149964064v.4 to the proposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive suchdistribution and whether or not it wishes such rights to be made available to Holders of ADSs. Upon the timely receipt of a noticeindicating that the Company wishes such rights to be made available to Holders of ADSs, the Depositary shall consult with theCompany to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonablypracticable to make such rights available to the Holders. The Depositary shall make such rights available to Holders only if (i) theCompany shall have timely requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactorydocumentation within the terms of Section 5.7 of the Deposit Agreement, and (iii) the Depositary shall have determined that suchdistribution of rights is reasonably practicable. In the event any of the conditions set forth above are not satisfied or if the Companyrequests that the rights not be made available to Holders of ADSs, the Depositary shall proceed with the sale of the rights ascontemplated in Section 4.4(b) of the Deposit Agreement. In the event all conditions set forth above are satisfied, the Depositary shallestablish the ADS Record Date (upon the terms described in Section 4.9 of the Deposit Agreement) and establish procedures to(x) distribute rights to purchase additional ADSs (by means of warrants or otherwise), (y) enable the Holders to exercise such rights(upon payment of the subscription price and of the applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b)taxes), and (z) deliver ADSs upon the valid exercise of such rights. The Company shall assist the Depositary to the extent necessary inestablishing such procedures. Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to theHolders a method to exercise rights to subscribe for Shares (rather than ADSs).If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rightsnot be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7 of theDeposit Agreement, or determines it is not reasonably practicable to make the rights available to Holders, or (iii) any rights madeavailable are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonablypracticable to sell such rights, in a riskless principal capacity, at such place and upon such terms (including public or private sale) as itmay deem practicable. The Company shall assist the Depositary to the extent necessary to determine such legality andpracticability. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable (a) fees and chargesof, and expenses incurred by, the Depositary and (b) taxes) upon the terms hereof and of Section 4.1 of the Deposit Agreement.If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) of the DepositAgreement or to arrange for the sale of the rights upon the terms described in Section 4.4(b) of the Deposit Agreement, the Depositaryshall allow such rights to lapse.The Depositary shall not be liable for (i) any failure to accurately determine whether it may be lawful or practicable to makesuch rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred inconnection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company inconnection with the rights distribution. A-159964064v.4 Notwithstanding anything herein or in Section 4.4 of the Deposit Agreement to the contrary, if registration (under theSecurities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for theCompany to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will notdistribute such rights to the Holders (i) unless and until a registration statement under the Securities Act (or other applicable law)covering such offering is in effect or (ii) unless the Company furnishes the Depositary opinion(s) of counsel for the Company in theUnited States and counsel to the Company in any other applicable country in which rights would be distributed, in each casesatisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exemptfrom, or do not require registration under, the provisions of the Securities Act or any other applicable laws.In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from anydistribution of Deposited Property (including rights) an amount on account of taxes or other governmental charges, the amountdistributed to the Holders of ADSs shall be reduced accordingly. In the event that the Depositary determines that any distribution ofDeposited Property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which theDepositary is obligated to withhold, the Depositary may dispose of all or a portion of such Deposited Property (including Shares andrights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deemsnecessary and practicable to pay any such taxes or charges.There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive orexercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights. Nothing herein or in theDeposit Agreement shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities tobe acquired upon the exercise of such rights.(e)Distributions Other Than Cash, Shares or Rights to Purchase Shares: Whenever the Company intends todistribute to the holders of Deposited Securities property other than cash, Shares or rights to purchase additional Shares, the Companyshall give timely notice thereof to the Depositary and shall indicate whether or not it wishes such distribution to be made to Holders ofADSs. Upon receipt of a notice indicating that the Company wishes such distribution to be made to Holders of ADSs, the Depositaryshall consult with the Company, and the Company shall assist the Depositary, to determine whether such distribution to Holders islawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have requested theDepositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms ofSection 5.7 of the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution is reasonablypracticable. Upon satisfaction of such conditions, the Depositary shall distribute the property so received to the Holders of record, asof the ADS Record Date, in proportion to the number of ADSs held by them respectively and in such manner as the Depositary maydeem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, andexpenses incurred by, the Depositary, and (ii) net of any applicable taxes withheld. The Depositary may dispose of all or a portion ofthe property so distributed and deposited, in such amounts and in such manner (including public or private sale) A-169964064v.4 as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or othergovernmental charges applicable to the distribution.If the conditions above are not satisfied, the Depositary shall sell or cause such property to be sold in a public or private sale,at such place or places and upon such terms as it may deem practicable and shall (i) cause the proceeds of such sale, if any, to beconverted into Dollars and (ii) distribute the proceeds of such conversion received by the Depositary (net of applicable (a) fees andcharges of, and expenses incurred by, the Depositary and (b) taxes) to the Holders as of the ADS Record Date upon the terms hereofand of the Deposit Agreement. If the Depositary is unable to sell such property, the Depositary may dispose of such property for theaccount of the Holders in any way it deems reasonably practicable under the circumstances.Neither the Depositary nor the Company shall be liable for (i) any failure to accurately determine whether it is lawful orpracticable to make the property described in Section 4.5 of the Deposit Agreement available to Holders in general or any Holders inparticular, nor (ii) any loss incurred in connection with the sale or disposal of such property.(16)Redemption. If the Company intends to exercise any right of redemption in respect of any of the DepositedSecurities, the Company shall give notice thereof to the Depositary at least sixty (60) days (or such other number of days as mutuallyagreed to in writing by the Depositary and the Company) prior to the intended date of redemption which notice shall set forth theparticulars of the proposed redemption. Upon timely receipt of (i) such notice and (ii) satisfactory documentation given by theCompany to the Depositary within the terms of Section 5.7 of the Deposit Agreement, and only if the Depositary shall havedetermined that such proposed redemption is practicable, the Depositary shall provide to each Holder a notice setting forth the intendedexercise by the Company of the redemption rights and any other particulars set forth in the Company’s notice to the Depositary. TheDepositary shall instruct the Custodian to present to the Company the Deposited Securities in respect of which redemption rights arebeing exercised against payment of the applicable redemption price. Upon receipt of confirmation from the Custodian that theredemption has taken place and that funds representing the redemption price have been received, the Depositary shall convert, transfer,and distribute the proceeds (net of applicable (a) fees and charges of, and the expenses incurred by, the Depositary, and (b) taxes),retire ADSs and cancel ADRs, if applicable, upon delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1and 6.2 of the Deposit Agreement. If less than all outstanding Deposited Securities are redeemed, the ADSs to be retired will beselected by lot or on a pro rata basis, as may be determined by the Depositary. The redemption price per ADS shall be the dollarequivalent of the per share amount received by the Depositary (adjusted to reflect the ADS(s)-to-Share(s) ratio) upon the redemption ofthe Deposited Securities represented by ADSs (subject to the terms of Section 4.8 of the Deposit Agreement and the applicable feesand charges of, and expenses incurred by, the Depositary, and applicable taxes) multiplied by the number of Deposited Securitiesrepresented by each ADS redeemed.Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give theDepositary timely notice of the proposed redemption provided for in Section 4.7 of the Deposit Agreement, the Depositary agrees touse commercially reasonable efforts to perform the actions contemplated in Section 4.7 of the Deposit Agreement, and the Company,the Holders and the Beneficial Owners acknowledge that the Depositary shall A-179964064v.4 have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.7 of the Deposit Agreement where suchnotice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.(17)Fixing of ADS Record Date. Whenever the Depositary shall receive notice of the fixing of a record date by theCompany for the determination of holders of Deposited Securities entitled to receive any distribution (whether in cash, Shares, rights,or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by eachADS, or whenever the Depositary shall receive notice of any meeting of, or solicitation of consents or proxies of, holders of Shares orother Deposited Securities, or whenever the Depositary shall find it necessary or convenient in connection with the giving of anynotice, solicitation of any consent or any other matter, the Depositary shall fix the record date (the “ADS Record Date”) for thedetermination of the Holders of ADS(s) who shall be entitled to receive such distribution, to give instructions for the exercise of votingrights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action, or toexercise the rights of Holders with respect to such changed number of Shares represented by each ADS. The Depositary shall makereasonable efforts to establish the ADS Record Date as closely as practicable to the applicable record date for the Deposited Securities(if any) set by the Company in England and Wales and shall not announce the establishment of any ADS Record Date prior to therelevant corporate action having been made public by the Company (if such corporate action affects the Deposited Securities). Subjectto applicable law, the provisions of Section 4.1 through 4.8 of the Deposit Agreement and to the other terms and conditions of theDeposit Agreement, only the Holders of ADSs at the close of business in New York on such ADS Record Date shall be entitled toreceive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.(18)Voting of Deposited Securities. As soon as practicable after receipt of notice of any meeting at which theholders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, theDepositary shall fix the ADS Record Date in respect of such meeting or solicitation of consent or proxy in accordance with Section 4.9of the Deposit Agreement. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having noobligation to take any further action if the request shall not have been received by the Depositary at least thirty (30) days prior to thedate of such vote or meeting), at the Company’s expense and provided no U.S. legal prohibitions exist, distribute to Holders as of theADS Record Date: (a) such notice of meeting or solicitation of consent or proxy, (b) a statement that the Holders at the close ofbusiness on the ADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Articlesof Association of the Company and the provisions of or governing the Deposited Securities (which provisions, if any, shall besummarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to theDeposited Securities represented by such Holder’s ADSs, and (c) a brief statement as to the manner in which such voting instructionsmay be given to the Depositary or in which voting instructions may be deemed to have been given in accordance with Section 4.10 ofthe Deposit Agreement if no instructions are received prior to the deadline set for such purposes to the Depositary to give adiscretionary proxy to a person designated by the Company. A-189964064v.4 Notwithstanding anything contained in the Deposit Agreement or any ADR, with the Company’s prior written consent, theDepositary may, to the extent not prohibited by law or regulations, or by the requirements of the stock exchange on which the ADSsare listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation ofconsents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwisepublicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (e.g., by reference to awebsite containing the materials for retrieval or a contact for requesting copies of the materials).The Depositary has been advised by the Company that under the Articles of Association of the Company as in effect on thedate of the Deposit Agreement, voting at any meeting of shareholders of the Company is by show of hands unless (before or upon thedeclaration of the result of the show of hands) a poll is demanded. The Depositary will not join in demanding a poll, whether or notrequested to do so by Holders of ADSs. Under the Articles of Association of the Company as in effect on the date of the DepositAgreement, a poll may be demanded by (a) the chairman of the Company’s board of directors, (b) not fewer than five shareholderspresent in person or by proxy and having the right to vote at the meeting, (c) any shareholder(s) present in person or by proxy andrepresenting not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding anyshares held in treasury), or (d) any shareholder(s) present in person or by proxy and holding shares in the Company conferring a rightto vote on the resolution being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid upon all the shares conferring that right (excluding any shares held in treasury).Voting instructions may be given only in respect of a number of ADSs representing an integral number of DepositedSecurities. Upon the timely receipt from a Holder of ADSs as of the ADS Record Date of voting instructions in the manner specifiedby the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of theDeposit Agreement, Articles of Association of the Company and the provisions of the Deposited Securities, to vote, or cause theCustodian to vote, the Deposited Securities (in person or by proxy) represented by such Holder’s ADSs as follows: (a) in the eventvoting takes place at a shareholders’ meeting by a show of hands, the Depositary will instruct the Custodian to vote all DepositedSecurities in accordance with the voting instructions received from a majority of Holders of ADSs who provided voting instructions,and (b) in the event voting takes place at a shareholders’ meeting by poll, the Depositary will instruct the Custodian to vote theDeposited Securities in accordance with the voting instructions received from the Holders of ADSs. If voting is by poll and theDepositary does not receive voting instructions from a Holder as of the ADS Record Date on or before the date established by theDepositary for such purpose, such Holder shall be deemed, and the Depositary shall deem such Holder, to have instructed theDepositary to give a discretionary proxy to a person designated by the Company to vote the Deposited Securities; provided, however,that no such discretionary proxy shall be given by the Depositary with respect to any matter to be voted upon as to which the Companyinforms the Depositary that (a) the Company does not wish such proxy to be given, (b) substantial opposition exists, or (c) the rights ofholders of Deposited Securities may be adversely affected.Neither the Depositary nor the Custodian shall under any circumstances exercise any discretion as to voting and neither theDepositary nor the Custodian shall vote, attempt to A-199964064v.4 exercise the right to vote, or in any way make use of, for purposes of establishing a quorum or otherwise, the Deposited Securitiesrepresented by ADSs, except pursuant to and in accordance with the voting instructions timely received from Holders or as otherwisecontemplated in the Deposit Agreement or herein. If the Depositary timely receives voting instructions from a Holder which fail tospecify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, the Depositary willdeem such Holder (unless otherwise specified in the notice distributed to Holders) to have instructed the Depositary to vote in favor ofthe items set forth in such voting instructions. Deposited Securities represented by ADSs for which no timely voting instructions arereceived by the Depositary from the Holder shall not be voted (except (a) in the case voting is by show of hands, in which case theDepositary will instruct the Custodian to vote all Deposited Securities in accordance with the voting instructions received from amajority of Holders of ADSs who provided voting instructions, and (b) as contemplated in Section 4.10 of the DepositAgreement). Notwithstanding anything else contained herein, the Depositary shall, if so requested in writing by the Company,represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities fromHolders as of the ADS Record Date) for the sole purpose of establishing quorum at a meeting of shareholders. Notwithstanding anything else contained in the Deposit Agreement or any ADR, the Depositary shall not have anyobligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Deposited Securities if thetaking of such action would violate U.S. laws. The Company agrees to take any and all actions reasonably necessary and as permittedby the laws of England and Wales to enable Holders and Beneficial Owners to exercise the voting rights accruing to the DepositedSecurities and to deliver to the Depositary an opinion of U.S. counsel addressing any actions requested to be taken if so requested bythe Depositary.There can be no assurance that Holders generally or any Holder in particular will receive the notice described above withsufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.(19)Changes Affecting Deposited Securities. Upon any change in nominal or par value, split‑up, cancellation,consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, consolidationor sale of assets affecting the Company or to which it is a party, any property which shall be received by the Depositary or theCustodian in exchange for, or in conversion of, or replacement of, or otherwise in respect of, such Deposited Securities shall, to theextent permitted by law, be treated as new Deposited Property under the Deposit Agreement, and the ADSs shall, subject to theprovisions of the Deposit Agreement, any ADR(s) evidencing such ADSs and applicable law, represent the right to receive suchadditional or replacement Deposited Property. In giving effect to such change, split-up, cancellation, consolidation or otherreclassification of Deposited Securities, recapitalization, reorganization, merger, consolidation or sale of assets, the Depositary may,with the Company’s approval, and shall, if the Company shall so request, subject to the terms of the Deposit Agreement (including,without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) applicable taxes) andreceipt of an opinion of counsel to the Company satisfactory to the Depositary that such actions are not in violation of any applicablelaws or regulations, (i) issue and deliver additional ADSs as in the case of a stock A-209964064v.4 dividend on the Shares, (ii) amend the Deposit Agreement and the applicable ADRs, (iii) amend the applicable RegistrationStatement(s) on Form F-6 as filed with the Commission in respect of the ADSs, (iv) call for the surrender of outstanding ADRs to beexchanged for new ADRs, and (v) take such other actions as are appropriate to reflect the transaction with respect to the ADSs. TheCompany agrees to, jointly with the Depositary, amend the Registration Statement on Form F-6 as filed with the Commission to permitthe issuance of such new form of ADRs. Notwithstanding the foregoing, in the event that any Deposited Property so received may notbe lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall, if the Company requests,subject to receipt of an opinion of Company’s counsel satisfactory to the Depositary that such action is not in violation of anyapplicable laws or regulations, sell such Deposited Property at public or private sale, at such place or places and upon such terms as itmay deem proper and may allocate the net proceeds of such sales (net of applicable (a) fees and charges of, and expenses incurred by,the Depositary and (b) taxes) for the account of the Holders otherwise entitled to such Deposited Property upon an averaged or otherpracticable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extentpracticable as in the case of a distribution received in cash pursuant to Section 4.1 of the Deposit Agreement. The Depositary shall notbe responsible for (i) any failure to determine that it may be lawful or practicable to make such Deposited Property available to Holdersin general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) anyliability to the purchaser of such Deposited Property.(20)Exoneration. Notwithstanding anything contained in the Deposit Agreement or any ADR, neither theDepositary nor the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the DepositAgreement or incur any liability (i) if the Depositary or the Company shall be prevented or forbidden from, or delayed in, doing orperforming any act or thing required by the terms of the Deposit Agreement or this ADR, by reason of any provision of any present orfuture law or regulation of the United States, England and Wales or any other country, or of any other governmental authority orregulatory authority or stock exchange, or on account of potential criminal or civil penalties or restraint, or by reason of any provision,present or future, of the Articles of Association of the Company or any provision of or governing any Deposited Securities, or byreason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation,currency restrictions, work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure), (ii)by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles ofAssociation of the Company or provisions of or governing Deposited Securities, (iii) for any action or inaction in reliance upon theadvice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owneror authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice orinformation, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefitwhich is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available toHolders of ADSs, or (v) for any consequential or punitive damages (including lost profits) for any breach of the terms of the DepositAgreement. A-219964064v.4 The Depositary, its controlling persons, its agents, any Custodian and the Company, its controlling persons and its agentsmay rely and shall be protected in acting upon any written notice, request or other document believed by it to be genuine and to havebeen signed or presented by the proper party or parties.No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement or this ADR.(21)Standard of Care. The Company and the Depositary assume no obligation and shall not be subject to anyliability under the Deposit Agreement or any ADRs to any Holder(s) or Beneficial Owner(s), except that the Company and theDepositary agree to perform their respective obligations specifically set forth in the Deposit Agreement or the applicable ADRs withoutnegligence or bad faith.Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective controlling persons,or agents, shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of anyDeposited Property or in respect of the ADSs, which in its opinion may involve it in expense or liability, unless indemnity satisfactoryto it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required (and noCustodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solelyto the Depositary).The Depositary and its agents shall not be liable for any failure to carry out any instructions to vote any of the DepositedSecurities, or for the manner in which any vote is cast or the effect of any vote, provided that any such action or omission is in goodfaith and without negligence and in accordance with the terms of the Deposit Agreement. The Depositary shall not incur any liabilityfor any failure to accurately determine that any distribution or action may be lawful or reasonably practicable, for the content of anyinformation submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for anyinvestment risk associated with acquiring an interest in the Deposited Property, for the validity or worth of the Deposited Property orfor any tax consequences that may result from the ownership of ADSs, Shares or other Deposited Property, for the credit‑worthiness ofany third party, for allowing any rights to lapse upon the terms of the Deposit Agreement, for the failure or timeliness of any noticefrom the Company, or for any action of or failure to act by, or any information provided or not provided by, DTC or any DTCParticipant.The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with aprevious act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of theDepositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed itsobligations without negligence or bad faith while it acted as Depositary.The Depositary shall not be liable for any acts or omissions made by a predecessor depositary whether in connection with anact or omission of the Depositary or in connection with any matter arising wholly prior to the appointment of the Depositary or after theremoval or A-229964064v.4 resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositaryperformed its obligations without negligence or bad faith while it acted as Depositary.(22)Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary mayat any time resign as Depositary under the Deposit Agreement by written notice of resignation delivered to the Company, suchresignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall beentitled to take the actions contemplated in Section 6.2 of the Deposit Agreement), or (ii) upon the appointment of a successordepositary and its acceptance of such appointment as provided in the Deposit Agreement.The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall beeffective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take theactions contemplated in Section 6.2 of the Deposit Agreement), or (ii) upon the appointment by the Company of a successor depositaryand its acceptance of such appointment as provided in the Deposit Agreement.In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts toappoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of NewYork. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company aninstrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed(except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor(other than as contemplated in Sections 5.8 and 5.9 of the Deposit Agreement). The predecessor depositary, upon payment of all sumsdue it and on the written request of the Company, shall, (i) execute and deliver an instrument transferring to such successor all rightsand powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9 of the Deposit Agreement), (ii) dulyassign, transfer and deliver all of the Depositary’s right, title and interest to the Deposited Property to such successor, and (iii) deliver tosuch successor a list of the Holders of all outstanding ADSs and such other information relating to ADSs and Holders thereof as thesuccessor may reasonably request. Any such successor depositary shall promptly provide notice of its appointment to such Holders.Any entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositarywithout the execution or filing of any document or any further act.(23)Amendment/Supplement. Subject to the terms and conditions of this paragraph (23), the Deposit Agreementand applicable law, this ADR and any provisions of the Deposit Agreement may at any time and from time to time be amended orsupplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary ordesirable without the prior written consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose orincrease any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and othergovernmental charges, delivery and other such expenses), or which shall otherwise materially A-239964064v.4 prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding ADSsuntil the expiration of thirty (30) days after notice of such amendment or supplement shall have been given to the Holders ofoutstanding ADSs. Notice of any amendment to the Deposit Agreement or any ADR shall not need to describe in detail the specificamendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such noticeinvalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and BeneficialOwners to retrieve or receive the text of such amendment (e.g., upon retrieval from the Commission’s, the Depositary’s or theCompany’s website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) arereasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under theSecurities Act or (b) the ADSs to be settled solely in electronic book‑entry form and (ii) do not in either such case impose or increaseany fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or BeneficialOwners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, bycontinuing to hold such ADSs, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement andthis ADR as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder tosurrender such ADS and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatoryprovisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulationswhich would require an amendment of, or supplement to, the Deposit Agreement to ensure compliance therewith, the Company andthe Depositary may amend or supplement the Deposit Agreement and this ADR at any time in accordance with such changed laws,rules or regulations. Such amendment or supplement to the Deposit Agreement and this ADR in such circumstances may becomeeffective before a notice of such amendment or supplement is given to Holders or within any other period of time as required forcompliance with such laws, rules or regulations.(24)Termination. The Depositary shall, at any time at the written direction of the Company, terminate the DepositAgreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to thedate fixed in such notice for such termination. If ninety (90) days shall have expired after (i) the Depositary shall have delivered to theCompany a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of theremoval of the Depositary, and, in either case, a successor depositary shall not have been appointed and accepted its appointment asprovided in Section 5.4 of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by distributing notice of suchtermination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for suchtermination. The date so fixed for termination of the Deposit Agreement in any termination notice so distributed by the Depositary tothe Holders of ADSs is referred to as the “Termination Date”. Until the Termination Date, the Depositary shall continue to perform allof its obligations under the Deposit Agreement, and the Holders and Beneficial Owners will be entitled to all of their rights under theDeposit Agreement.If any ADSs shall remain outstanding after the Termination Date, the Registrar and the Depositary shall not, after theTermination Date, have any obligation to perform any further acts A-249964064v.4 under the Deposit Agreement, except that the Depositary shall, subject, in each case, to the terms and conditions of the DepositAgreement, continue to (i) collect dividends and other distributions pertaining to Deposited Securities, (ii) sell Deposited Propertyreceived in respect of Deposited Securities, (iii) deliver Deposited Securities, together with any dividends or other distributionsreceived with respect thereto and the net proceeds of the sale of any other Deposited Property, in exchange for ADSs surrendered tothe Depositary (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, theDepositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case uponthe terms set forth in Section 5.9 of the Deposit Agreement), and (iv) take such actions as may be required under applicable law inconnection with its role as Depositary under the Deposit Agreement.At any time after the Termination Date, the Depositary may sell the Deposited Property then held under the DepositAgreement and shall after such sale hold un-invested the net proceeds of such sale, together with any other cash then held by it underthe Deposit Agreement, in an un-segregated account and without liability for interest, for the pro rata benefit of the Holders whoseADSs have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations underthe Deposit Agreement except (i) to account for such net proceeds and other cash (after deducting, or charging, as the case may be, ineach case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for theaccount of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (ii)as may be required at law in connection with the termination of the Deposit Agreement. After the Termination Date, the Companyshall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Depositary under Sections 5.8,5.9 and 7.6 of the Deposit Agreement. The obligations under the terms of the Deposit Agreement of Holders and Beneficial Ownersof ADSs outstanding as of the Termination Date shall survive the Termination Date and shall be discharged only when the applicableADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement (except asspecifically provided in the Deposit Agreement).(25)Compliance with U.S. Securities Laws. Notwithstanding any provisions in this ADR or the DepositAgreement to the contrary, the withdrawal or delivery of Deposited Securities will not be suspended by the Company or theDepositary except as would be permitted by Instruction I.A.(1) of the General Instructions to the Form F-6 Registration Statement, asamended from time to time, under the Securities Act.(26)Certain Rights of the Depositary; Limitations. Subject to the further terms and provisions of Section 5.10 ofthe Deposit Agreement, the Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securitiesof the Company and its Affiliates and in ADSs. The Depositary may issue ADSs against evidence of rights to receive Shares from theCompany, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownershipor transaction records in respect of the Shares. Such evidence of rights shall consist of written blanket or specific guarantees ofownership of Shares. In its capacity as Depositary, the Depositary shall not lend Shares or ADSs; provided, however, that theDepositary may (i) issue ADSs prior to the receipt of Shares pursuant to Section 2.3 of the Deposit Agreement and (ii) deliver Sharesprior to the receipt of A-259964064v.4 ADSs for withdrawal of Deposited Securities pursuant to Section 2.7 of the Deposit Agreement, including ADSs which were issuedunder (i) above but for which Shares may not have been received (each such transaction a “Pre-Release Transaction”). TheDepositary may receive ADSs in lieu of Shares under (i) above and receive Shares in lieu of ADSs under (ii) above. Each such Pre-Release Transaction will be (a) subject to a written agreement whereby the person or entity (the “Applicant”) to whom ADSs or Sharesare to be delivered (w) represents that at the time of the Pre-Release Transaction the Applicant or its customer owns the Shares orADSs that are to be delivered by the Applicant under such Pre-Release Transaction, (x) agrees to indicate the Depositary as owner ofsuch Shares or ADSs in its records and to hold such Shares or ADSs in trust for the Depositary until such Shares or ADSs aredelivered to the Depositary or the Custodian, (y) unconditionally guarantees to deliver to the Depositary or the Custodian, asapplicable, such Shares or ADSs, and (z) agrees to any additional restrictions or requirements that the Depositary deems appropriate,(b) at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary deems appropriate,(c) terminable by the Depositary on not more than five (5) business days’ notice and (d) subject to such further indemnities and creditregulations as the Depositary deems appropriate. The Depositary will normally limit the number of ADSs and Shares involved in suchPre-Release Transactions at any one time to thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstandingunder (i) above), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as itdeems appropriate.The Depositary may also set limits with respect to the number of ADSs and Shares involved in Pre-Release Transactionswith any one person on a case-by-case basis as it deems appropriate. The Depositary may retain for its own account any compensationreceived by it in conjunction with the foregoing. Collateral provided pursuant to (b) above, but not the earnings thereon, shall be heldfor the benefit of the Holders (other than the Applicant).(27)Governing Law; Waiver of Jury Trial and Jurisdiction. The Deposit Agreement and the ADRs shall beinterpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, thelaws of the State of New York applicable to contracts made and to be wholly performed in that State. Notwithstanding anythingcontained in the Deposit Agreement, any ADR or any present or future provisions of the laws of the State of New York, the rights ofholders of Shares and of any other Deposited Securities and the obligations and duties of the Company in respect of the holders ofShares and other Deposited Securities, as such, shall be governed by the laws of England and Wales (or, if applicable, such other lawsas may govern the Deposited Securities).EACH OF THE PARTIES TO THE DEPOSIT AGREEMENT (INCLUDING, WITHOUT LIMITATION,EACH HOLDER AND BENEFICIAL OWNER) IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGALPROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY ARISING OUT OF, OR RELATING TO,THE DEPOSIT AGREEMENT, ANY ADR AND ANY TRANSACTIONS CONTEMPLATED THEREIN (WHETHERBASED ON CONTRACT, TORT, COMMON LAW OR OTHERWISE). A-269964064v.4 (ASSIGNMENT AND TRANSFER SIGNATURE LINES)FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto______________________________ whose taxpayer identification number is _______________________ and whose addressincluding postal zip code is ________________, the within ADR and all rights thereunder, hereby irrevocably constituting andappointing ________________________ attorney‑in‑fact to transfer said ADR on the books of the Depositary with full power ofsubstitution in the premises.Dated:Name: By: Title: NOTICE: The signature of the Holder to this assignment mustcorrespond with the name as written upon the face of the withininstrument in every particular, without alteration or enlargement or anychange whatsoever.If the endorsement be executed by an attorney, executor, administrator,trustee or guardian, the person executing the endorsement must givehis/her full title in such capacity and proper evidence of authority to actin such capacity, if not on file with the Depositary, must be forwardedwith this ADR.__________________________SIGNATURE GUARANTEEDAll endorsements or assignments of ADRs must be guaranteed by amember of a Medallion Signature Program approved by the SecuritiesTransfer Association, Inc. Legends[The ADRs issued in respect of Partial Entitlement American Depositary Shares shall bear the following legend on the face of theADR: “This ADR evidences ADSs representing ‘partial entitlement’ Shares of NuCana plc and as such do not entitle the holdersthereof to the same per-share entitlement as other Shares (which are ‘full entitlement’ Shares) issued and outstanding at such time. TheADSs represented by this ADR shall entitle holders to distributions and entitlements identical to other ADSs when the Sharesrepresented by such ADSs become ‘full entitlement’ Shares.”] A-279964064v.4 EXHIBIT BFEE SCHEDULEADS FEES AND RELATED CHARGESAll capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Deposit Agreement.I.ADS Fees The following ADS fees are payable under the terms of the Deposit Agreement: ServiceRateBy Whom Paid(1)Issuance of ADSs (e.g., an issuanceupon a deposit of Shares, upon a change inthe ADS(s)-to-Share(s) ratio, or for anyother reason), excluding issuances as aresult of distributions described inparagraph (4) below.Up to U.S. $5.00 per 100 ADSs (orfraction thereof) issued.Person receiving ADSs.(2)Cancellation of ADSs (e.g., acancellation of ADSs for delivery ofdeposited Shares, upon a change in theADS(s)-to-Share(s) ratio, or for any otherreason).Up to U.S. $5.00 per 100 ADSs (orfraction thereof) cancelled.Person whose ADSs are being cancelled.(3)Distribution of cash dividends or othercash distributions (e.g., upon a sale ofrights and other entitlements).Up to U.S. $5.00 per 100 ADSs (orfraction thereof) held.Person to whom the distribution is made.(4)Distribution of ADSs pursuant to (i)stock dividends or other free stockdistributions, or (ii) an exercise of rights topurchase additional ADSs.Up to U.S. $5.00 per 100 ADSs (orfraction thereof) held.Person to whom the distribution is made.(5)Distribution of securities other thanADSs or rights to purchase additionalADSs (e.g., spin-off shares).Up to U.S. $5.00 per 100 ADSs (orfraction thereof) held.Person to whom the distribution is made.B-19964064v.4 6)ADS Services.Up to U.S. $5.00 per 100 ADSs (orfraction thereof) held on the applicablerecord date(s) established by theDepositary.Person holding ADSs on the applicablerecord date(s) established by theDepositary. II.ChargesThe Company, Holders, Beneficial Owners, persons receiving ADSs upon issuance and persons whose ADSs are being cancelledshall be responsible for the following ADS charges under the terms of the Deposit Agreement: (i)taxes (including applicable interest and penalties) and other governmental charges;(ii)such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities on theshare register and applicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, theDepositary or any nominees upon the making of deposits and withdrawals, respectively;(iii)such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the Deposit Agreement to beat the expense of the person depositing Shares or withdrawing Deposited Securities or of the Holders and Beneficial Ownersof ADSs;(iv)the expenses and charges incurred by the Depositary in the conversion of foreign currency;(v)such fees and expenses as are incurred by the Depositary in connection with compliance with exchange control regulationsand other regulatory requirements applicable to Shares, Deposited Securities, ADSs and ADRs; and(vi)the fees and expenses incurred by the Depositary, the Custodian, or any nominee in connection with the servicing ordelivery of Deposited Property.B-29964064v.4Exhibit 4.1REGISTRATION RIGHTS AGREEMENTdated as ofSeptember 20, 2017among NUCANA PLC and THE INVESTORS PARTY HERETO  TABLE OF CONTENTS Page1.Definitions1 2.Registration Rights3 2.1Demand Registration3 2.2Company Registration4 2.3Underwriting Requirements5 2.4Obligations of the Company6 2.5Furnish Information8 2.6Expenses of Registration8 2.7Delay of Registration8 2.8Indemnification8 2.9Reports Under Exchange Act10 2.10[Reserved]11 2.11Restrictions on Transfer11 2.12Effectiveness; Termination of Registration Rights12 2.13Conversions of Ordinary Shares into ADSs12 2.14Obligation to Register ADSs13 3.Miscellaneous13 3.1Successors and Assigns13 3.2Governing Law13 3.3Counterparts13 3.4Titles and Subtitles13 3.5Notices14 3.6Amendments and Waivers14 3.7Severability14 3.8Aggregation14 3.9Entire Agreement15 3.10Dispute Resolution15 3.11Delays or Omissions15 3.12Acknowledgment15 Schedule A-Schedule of Major Investors Schedule B-Schedule of Original Investors i  REGISTRATION RIGHTS AGREEMENTTHIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made as of the 20th day of September, 2017, byand among NuCana plc, a company incorporated under the laws of England and Wales (the “Company”), each of the shareholderslisted on Schedule A hereto (the “Major Investors”) and each of the shareholders listed on Schedule B hereto (the “OriginalInvestors”) who become party hereto prior to the Effectiveness Date (as defined below). The Major Investors and the OriginalInvestors are collectively referred to herein as the “Investors” and each is referred to herein as an “Investor”.RECITALSWHEREAS, the Company and the Investors are parties to that certain shareholders’ agreement dated March 31, 2014, asamended on or around the date hereof, (the “Shareholders Agreement”), which agreement contains certain registration rights but willterminate and cease to have effect upon the IPO; andWHEREAS, in order to provide for such rights following the IPO, the Investors and the Company hereby agree that thisAgreement shall be effective upon the date and time of the closing of the IPO (the “Effectiveness Date”) and shall govern the rights ofthe Investors to cause the Company to register ADSs representing Ordinary Shares held by the Investors as set forth in this Agreement;NOW, THEREFORE, the parties hereby agree as follows: 1.Definitions. For purposes of this Agreement:1.1“ADSs” means American depositary shares, representing Ordinary Shares pursuant to a sponsoredADR facility.1.2“Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly,controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managingmember, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or moregeneral partners or managing members of, or shares the same management company with, such Person.1.3“Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto maybecome subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability(or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material factcontained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein orany amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be statedtherein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party(or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulationpromulgated under the Securities Act, the Exchange Act, or any state securities law.  1.4“Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeablefor (in each case, directly or indirectly), Ordinary Shares, including options and warrants.1.5“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules andregulations promulgated thereunder.1.6“Excluded Registration” means (i) a registration relating to the sale of securities to employees,directors, officers or consultants of the Company or a subsidiary pursuant to a share option, share purchase, or similar plan; (ii) aregistration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the sameinformation as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) aregistration in which the only Ordinary Shares being registered is Ordinary Shares issuable upon conversion of debt securities that arealso being registered.1.7“Form F‑1” means such form under the Securities Act as in effect on the date hereof or any successorregistration form under the Securities Act subsequently adopted by the SEC.1.8“Form F-3” means such form under the Securities Act as in effect on the date hereof or any registrationform under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference toother documents filed by the Company with the SEC.1.9“Holder” means any holder of Registrable Securities who is a party to this Agreement.1.10“Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent,spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptiverelationships, of a natural person referred to herein.1.11“Initiating Holders” means, collectively, Holders who properly initiate a registration request underthis Agreement.1.12“IPO” means the Company’s first underwritten public offering of its Ordinary Shares under theSecurities Act.1.13“Ordinary Shares” means shares of the Company’s ordinary shares, nominal value £0.04 per share(or such other nominal value as may, from time to time, result from a consolidation of subdivision of the ordinary share capital).1.14“Person” means any individual, corporation, partnership, trust, limited liability company, associationor other entity.1.15“Registrable Securities” means (i) the Ordinary Shares issuable or issued upon conversion of theCompany’s Founder Ordinary 1 Shares, Founder Ordinary 2 Shares,2 Series A Shares and Series B Shares outstanding immediately prior to the closing of the IPO; (ii) any Ordinary Shares issued as (orissuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution withrespect to, or in exchange for or in replacement of, the shares referenced in clause (i) above; (iii) the Ordinary Shares outstandingimmediately prior to the closing of the IPO; and (iv) any ADSs issued in respect of any Ordinary Shares described in clause (i), (ii) or(iii); excluding in all cases, however, any Registrable Securities not held by an Investor as of the Effectivness Date or sold by a Personin a transaction in which the applicable rights under this Agreement are not assigned pursuant to Subsection 3.1, and excluding anyshares for which registration rights have terminated pursuant to Subsection 2.12 of this Agreement.1.16“Registrable Securities then outstanding” means the number of shares determined by adding thenumber of shares of outstanding Ordinary Shares that are Registrable Securities and the number of shares of Ordinary Shares issuable(directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.1.17“Restricted Securities” means the securities of the Company required to be notated with the legendset forth in Subsection 2.11(b) hereof.1.18“SEC” means the Securities and Exchange Commission.1.19“SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.1.20“SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act. 1.21“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulationspromulgated thereunder.1.22“Selling Expenses” means all underwriting discounts, selling commissions, and share transfer taxes orstamp duties applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder. 2.Registration Rights. The Company covenants and agrees as follows:2.1Demand Registration.(a)Form F-3 Demand. If at any time when it is eligible to use a Form F-3 registration statement,the Company receives a request from Holders of at least twenty-five percent (25%) of the Registrable Securities then outstanding thatthe Company file a Form F-3 registration statement with respect to outstanding Registrable Securities of such Holders having ananticipated aggregate offering price, net of Selling Expenses, of at least $3 million, then the Company shall (i) within ten (10) daysafter the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (ii)as soon as practicable, and in any event within forty-five (45) days after the date such request is given by the Initiating Holders, file aForm F-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registrationby any other Holders, as3 specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and ineach case, subject to the limitations of Subsections 2.1(b) and 2.3.(b)Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting aregistration pursuant to this Subsection 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faithjudgment of the Company’s Board of Directors it would be materially detrimental to the Company and its shareholders for suchregistration statement to either become effective or remain effective for as long as such registration statement otherwise would berequired to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization,or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has abona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under theSecurities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any timeperiods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than sixty (60) days afterthe request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than twice in anytwelve (12) month period; and provided further that the Company shall not register any securities for its own account or that of anyother shareholder during such sixty (60) day period other than an Excluded Registration.(c)The Company shall not be obligated to effect, or to take any action to effect, any registrationpursuant to Subsection 2.1(a) (i) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filingof, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided that the Companyis actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) ifthe Company has effected two registrations pursuant to Subsection 2.1(a) within the twelve (12) month period immediately precedingthe date of such request. A registration shall not be counted as “effected” for purposes of this Subsection 2.1(c) until such time as theapplicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for suchregistration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant toSubsection 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Subsection2.1(c).2.2Company Registration. If the Company proposes to register (including, for this purpose, a registrationeffected by the Company for shareholders other than the Holders) any of its Ordinary Shares or ADSs under the Securities Act inconnection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, atsuch time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days aftersuch notice is given by the Company, the Company shall, subject to the provisions of Subsection 2.3, cause to be registered all of theRegistrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right toterminate or withdraw any registration initiated by it under this Subsection 2.2 before the effective date of such registration, whether ornot any Holder has elected to include Registrable4 Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by theCompany in accordance with Subsection 2.6. 2.3Underwriting Requirements.(a)If, pursuant to Subsection 2.1, the Initiating Holders intend to distribute the RegistrableSecurities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request madepursuant to Subsection 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will beselected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the rightof any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participationin such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. AllHolders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Subsection2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for suchunderwriting. Notwithstanding any other provision of this Subsection 2.3, if the managing underwriter(s) advise(s) the InitiatingHolders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holdersshall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number ofRegistrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities,including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holderor in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number ofRegistrable Securities held by (x) the Major Investors to be included in such underwriting shall not be reduced unless and until allRegistrable Securities held by the Original Investors are entirely excluded from the underwriting and (y) the Original Investors to beincluded in such underwriting shall not be reduced unless and until all other securities are entirely excluded from the underwriting. Tofacilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number ofshares allocated to any Holder to the nearest one hundred (100) shares.(b)In connection with any offering involving an underwriting of shares of the Company’scapital stock pursuant to Subsection 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities insuch underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters,and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering bythe Company. If the total number of securities, including Registrable Securities, requested by shareholders to be included in suchoffering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretiondetermine is compatible with the success of the offering, then the Company shall be required to include in the offering only thatnumber of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determinewill not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested tobe registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocatedamong the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities5 owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate theallocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of sharesallocated to any Holder to the nearest one hundred (100) shares. Notwithstanding the foregoing, in no event shall (i) the number ofRegistrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company)are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced belowtwenty-five percent (25%) of the total number of securities included in such offering. For purposes of the provision in this Subsection2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners,members, retired partners, retired members, shareholders, and Affiliates of such Holder, or the estates and Immediate Family Membersof any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons,shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based uponthe aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.(c)For purposes of Subsection 2.1, a registration shall not be counted as “effected” if, as a resultof an exercise of the underwriter’s cutback provisions in Subsection 2.3(a), fewer than fifty percent (50%) of the total number ofRegistrable Securities that Holders have requested to be included in such registration statement are actually included.2.4Obligations of the Company. Whenever required under this Section 2 to effect the registration of anyRegistrable Securities, the Company shall, as expeditiously as reasonably possible:(a)prepare and file with the SEC a registration statement with respect to such RegistrableSecurities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request ofthe Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period ofup to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed;provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period theHolder refrains, at the request of an underwriter of Ordinary Shares (or other securities) of the Company, from selling any securitiesincluded in such registration;(b)prepare and file with the SEC such amendments and supplements to such registrationstatement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the SecuritiesAct in order to enable the disposition of all securities covered by such registration statement;(c)furnish to the selling Holders such numbers of copies of a prospectus, including a preliminaryprospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitatetheir disposition of their Registrable Securities;6 (d)use its commercially reasonable efforts to register and qualify the securities covered by suchregistration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the sellingHolders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process inany such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required bythe Securities Act;(e)in the event of any underwritten public offering, enter into and perform its obligations underan underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;(f)use its commercially reasonable efforts to cause all such Registrable Securities covered bysuch registration statement to be listed on a national securities exchange or trading system and each securities exchange and tradingsystem (if any) on which similar securities issued by the Company are then listed;(g)provide a transfer agent and registrar for all Registrable Securities registered pursuant to thisAgreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of suchregistration;(h)promptly make available for inspection by the selling Holders, any managing underwriter(s)participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by anysuch underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of theCompany, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonablyrequested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracyof the information in such registration statement and to conduct appropriate due diligence in connection therewith;(i)notify each selling Holder, promptly after the Company receives notice thereof, of the timewhen such registration statement has been declared effective or a supplement to any prospectus forming a part of such registrationstatement has been filed;(j)Notify each Holder of Registrable Securities covered by such registration statement at anytime when a prospectus or free writing prospectus (to the extent prepared by or on behalf of the Company) relating thereto is requiredto be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registrationstatement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated thereinor necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will usereasonable efforts to amend or supplement such prospectus or free writing prospectus (to the extent prepared by or on behalf of theCompany) in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material factrequired to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;and7 (k)after such registration statement becomes effective, notify each selling Holder of any requestby the SEC that the Company amend or supplement such registration statement or prospectus.In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securitiesof the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’sdirectors may implement a trading program under Rule 10b5-1 of the Exchange Act.2.5Furnish Information. It shall be a condition precedent to the obligations of the Company to take anyaction pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to theCompany such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of suchsecurities as is reasonably required to effect the registration of such Holder’s Registrable Securities.2.6Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection withregistrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ andaccounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed$75,000, of one counsel for the selling Holders, shall, to the extent permitted by applicable law, be borne and paid by the Company;provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant toSubsection 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the RegistrableSecurities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of RegistrableSecurities that were to be included in the withdrawn registration) unless the Holders of a majority of the Registrable Securities agree toforfeit their right to one registration pursuant to Subsection 2.1; provided further that if, at the time of such withdrawal, the Holdersshall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to theHolders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information thenthe Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Subsection2.1. All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holderspro rata on the basis of the number of Registrable Securities registered on their behalf.2.7Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining orotherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to theinterpretation or implementation of this Section 2.2.8Indemnification. If any Registrable Securities are included in a registration statement under this Section2:(a)To the extent permitted by law, the Company will indemnify and hold harmless each sellingHolder, and the partners, members, officers, directors, and shareholders of each8 such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each suchHolder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the ExchangeAct, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementionedPerson any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceedingfrom which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected withoutthe consent of the Company, which consent shall not be unreasonably withheld or conditioned, nor shall the Company be liable forany Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity withwritten information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Personexpressly for use in connection with such registration.(b)To the extent permitted by law, each selling Holder, severally and not jointly, will indemnifyand hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (ifany), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, anyunderwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controllingPerson of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out ofor are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf ofsuch selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company andeach other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating ordefending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that theindemnity agreement contained in this Subsection 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceedingif such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld or conditioned; andprovided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution underSubsections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid bysuch Holder), except in the case of fraud or willful misconduct by such Holder.(c)Promptly after receipt by an indemnified party under this Subsection 2.8 of notice of thecommencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder,such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 2.8, givethe indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such actionand, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has beengiven, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party(together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain oneseparate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by thecounsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between suchindemnified party and any other party represented by such counsel in such action.9 (d)To provide for just and equitable contribution to joint liability under the Securities Act in anycase in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to thisSubsection 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and theexpiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case,notwithstanding the fact that this Subsection 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Actmay be required on the part of any party hereto for which indemnification is provided under this Subsection 2.8, then, and in each suchcase, such parties will, to the extent permitted by applicable law, contribute to the aggregate losses, claims, damages, liabilities, orexpenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault ofeach of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted insuch loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of theindemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue orallegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied bythe indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity tocorrect or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contributeany amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to suchregistration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the SecuritiesAct) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further thatin no event shall a Holder’s liability pursuant to this Subsection 2.8(d), when combined with the amounts paid or payable by suchHolder pursuant to Subsection 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expensespaid by such Holder), except in the case of willful misconduct or fraud by such Holder.(e)Notwithstanding the foregoing, to the extent that the provisions on indemnification andcontribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflictwith the foregoing provisions, the provisions in the underwriting agreement shall control.(f)Unless otherwise superseded by an underwriting agreement entered into in connection withthe underwritten public offering, the obligations of the Company and Holders under this Subsection 2.8 shall survive the completion ofany offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of thisAgreement.2.9Reports Under Exchange Act. With a view to making available to the Holders the benefits of SECRule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to thepublic without registration or pursuant to a registration on Form F-3, the Company shall:(a)make and keep available adequate current public information, as those terms are understoodand defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;10 (b)use commercially reasonable efforts to file with the SEC in a timely manner all reports andother documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has becomesubject to such reporting requirements); and(c)furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith uponrequest (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), theSecurities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that itqualifies as a registrant whose securities may be resold pursuant to Form F-3 (at any time after the Company so qualifies) and (ii) suchother information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling ofany such securities without registration (at any time after the Company has become subject to the reporting requirements under theExchange Act) or pursuant to Form F-3 (at any time after the Company so qualifies to use such form). 2.10[Reserved] 2.11Restrictions on Transfer.(a)The Registrable Securities shall not be sold, pledged, or otherwise transferred, and theCompany shall not recognize and shall issue stop-transfer instructions to its transfer agent (if applicable) with respect to any such sale,pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance withthe provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the RegistrableSecurities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified inthis Agreement.(b)Each certificate, instrument, or book entry representing (i) the Registrable Securities and (ii)any other securities issued in respect of the securities referenced in clause (i), upon any share split, share dividend, recapitalization,merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Subsection 2.12(c)) be notated with alegend substantially in the following form:THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT ANDHAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCHSHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCHREGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUSDELIVERY REQUIREMENTS OF SAID ACT.THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCEWITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, ACOPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.11 The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of theRestricted Securities in order to implement the restrictions on transfer set forth in this Subsection 2.111.(c)The holder of such Restricted Securities, by acceptance of ownership thereof, agrees tocomply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities,unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall givenotice to the Company of such Holder’s intention to effect such sale, pledge, or transfer. Each such notice shall describe the mannerand circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall beaccompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, bereasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected withoutregistration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer ofsuch Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken withrespect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale,pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder ofsuch Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of thenotice given by the Holder to the Company. The Company will not require such a legal opinion or “no action” letter (x) in anytransaction in compliance with SEC Rule 144; or (y) in any transaction in which such Holder distributes Restricted Securities to anAffiliate of such Holder for no consideration; provided that each transferee agrees in writing to be subject to the terms of thisSubsection 2.111. Each certificate, instrument, or book entry representing the Restricted Securities transferred as above provided shallbe notated with, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Subsection2.11(b), except that such certificate instrument, or book entry shall not be notated with such restrictive legend if, in the opinion ofcounsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of theSecurities Act.2.12Effectiveness; Termination of Registration Rights. This Agreement shall become automaticallyeffective as of the Effectiveness Date and shall be of no force or effect prior to such date and time. The right of any Holder to requestregistration or inclusion of Registrable Securities in any registration pursuant to Subsections 2.1 or 2.2 shall terminate upon the earliestto occur of:(a)such time as Rule 144 or another similar exemption under the Securities Act is available forthe sale of all of such Holder’s shares without limitation during a three-month period without registration; and(b)the fifth anniversary of the IPO.2.13Conversions of Ordinary Shares into ADSs. To the extent that the Company causes ADSs to beissued in the IPO and to the extent permitted by applicable law, following the IPO and as requested by the Investors, the Company willprovide reasonable12 cooperation to the Investors in order to assist the Investors in depositing the Ordinary Shares held by the Investors from time to timewith the ADS depositary and will use commercially reasonable efforts to cause the ADS depositary to issue ADSs to the Investorsupon deposit of such Ordinary Shares, provided that the Investor shall not deposit such Ordinary Shares in exchange for ADSs (a) onor prior to the date that is six (6) months from the date of the final prospectus for the IPO except in compliance with the Securities Act,(b) at any time at which to do so would violate obligations under any underwriter’s lock-up agreement entered into in connection withthe IPO. To the extent permitted by applicable law, the Company will pay the ADS depositary fees payable by the Investors to theADS depositary in connection with the issuance of ADSs upon exchange of Ordinary Shares for ADSs.2.14Obligation to Register ADSs. Notwithstanding anything to the contrary herein, unless the Companyhas previously caused the Ordinary Shares to be listed on a national securities exchange or trading system in the United States (it beingacknowledged that the Company shall have no obligation to so list the Ordinary Shares) and a market in the United States for OrdinaryShares not held in the form of ADSs exists, in any registration pursuant to this Agreement any Registrable Securities registered andsold pursuant thereto shall be in the form of ADSs. 3.Miscellaneous.3.1Successors and Assigns. The rights under this Agreement may be assigned (but only with all relatedobligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder or (ii) is a Holder’s ImmediateFamily Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; provided,however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address ofsuch transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in awritten instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement. The terms andconditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of theparties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or theirrespective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement,except as expressly provided herein.3.2Governing Law. This Agreement shall be governed by the internal law of the State of Delaware.3.3Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shallbe deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered viafacsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g.,www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validlydelivered and be valid and effective for all purposes.3.4Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and arenot to be considered in construing or interpreting this Agreement.13 3.5Notices. All notices and other communications given or made pursuant to this Agreement shall be inwriting and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii)when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal businesshours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receiptrequested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier,freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respectiveparties at their addresses as set forth on Schedule A hereto, or to the principal office of the Company and to the attention of the ChiefExecutive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified bywritten notice given in accordance with this Subsection 3.5. If notice is given to the Company, a copy shall also be sent to Mintz,Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center, Boston, MA 02111, facsimile number 617 542 2241, Attention:William C. Hicks, Esq.3.6Amendments and Waivers. Any term of this Agreement may be amended and the observance of anyterm of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only withthe written consent of the Company and the holders of a majority of the Registrable Securities then outstanding; provided that theCompany may in its sole discretion waive compliance with Subsection 2.11(c) (and the Company’s failure to object promptly inwriting after notification of a proposed assignment allegedly in violation of Subsection 2.11(c) shall be deemed to be a waiver); andprovided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent ofany other party. Notwithstanding the foregoing, this Agreement may not be amended or terminated and the observance of any termhereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment,termination, or waiver applies to all Investors in the same fashion. The Company shall give prompt notice of any amendment ortermination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, orwaiver. Any amendment, termination, or waiver effected in accordance with this Subsection 3.6 shall be binding on all parties hereto,regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of thisAgreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term,condition, or provision.3.7Severability. In case any one or more of the provisions contained in this Agreement is for any reasonheld to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any otherprovision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will bevalid, legal, and enforceable to the maximum extent permitted by law.3.8Aggregation. All shares of Registrable Securities held or acquired by Affiliates shall be aggregatedtogether for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportionsuch rights as among themselves in any manner they deem appropriate.3.9Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the fulland entire understanding and agreement among the parties with14 respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between theparties is expressly canceled. Immediately upon the consummation of the IPO, and upon the effectiveness of this Agreement, theShareholders Agreement shall terminate and be of no further force and effect.3.10Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdictionof the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose ofany suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or otherproceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court forthe District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit,action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exemptor immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of thesuit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM ORCAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTIONDOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THISWAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANYCOURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUTLIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, ANDALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACHOF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACHPARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THISWAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITSJURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.3.11Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to anyparty under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, orremedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach ordefault, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed awaiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law orotherwise afforded to any party, shall be cumulative and not alternative.3.12Acknowledgment. The Company acknowledges that the Investors are in the business of venturecapital investing and therefore review the business plans and related proprietary information of many enterprises, including enterpriseswhich may have products or services which compete directly or indirectly with those of the Company. Nothing in this Agreementshall preclude or in any way restrict the Investors from investing or participating in any particular enterprise whether or not suchenterprise has products or services which compete with those of the Company.[Remainder of Page Intentionally Left Blank] 15 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.NUCANA PLC By:/s/ Hugh S. Griffith Name:Hugh S. Griffith Title:C.E.O SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT INVESTORS: SOFINNOVA CAPITAL VI FCPR By:/s/ Monique Saulnier Name:Monique Saulnier Title:Managing Partner SOFINNOVA VENTURE PARTNERS VIII, L.P By: Sofinnova Management VIII, L.L.C. Its: General Partner By:/s/ James Healy Name:James Healy Title: MORNINGSIDE VENTURE INVESTMENTS LIMITED By:/s/ Louise Mary Garbarino and /s/ Jill Marie Franklin Name:Louise Mary Garbarino/Jill Marie Frankin Title:Authorized Signatures SCOTTISH ENTERPRISE By:/s/ Caitlin Douglas Name:Caitlin Douglas Title:Solicitor & Authorized Signatory Seal: SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.By:/s/ Christopher Wood Name:Christopher Wood SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.FOR AND ON BEHALF OF CODALE LIMITED By:/s/ Michael Hayworth Name:Michael Hayworth, Director SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.By:/s/ Ben White Name:Ben White SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.By:/s/ Frank V. Sica Name:Frank V. Sica SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.By:/s/ Thomas Scott Nelson Name:Thomas Scott Nelson SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.By:/s/ Stuart Smith Name:Dr. Stuart WG Smith SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.By:/s/ Moira Adamson Name:Moira Adamson SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.By:/s/ Ian Abercrombie Name:Ian Abercrombie SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.By:/s/ Hugh S. Griffith Name:Hugh S. Griffith SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.CASTLEVIEW INTERNATIONAL HOLDINGS LTD. By:/s/ Martin Bell Name:Martin Bell Title:Group M.D. SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT SCHEDULE A Major Investors Soffinova Capital VI FCPRLe Centorial, 6-18 rue du 4 Septembre75002, Paris, FrancePhone Number:Fax Number:Email Soffinova Venture Partners VIII, L.P.3000 Sand Hill Road, Bldg. 4, Suite 250,Menlo Park, California, USAPhone Number: 650-681-8430Fax Number: 650-322-2037Email: shahlavi@sofinnova.com Morningside Venture Investments LimitedAttn: Louise Garbarino2nd Floor, Le Prince de Galles3-5 Avenue des CitronniersMC 98000T: 011-377-97-97-47-37F: 011-377-97-97-47-30lgarbarino@thc-mgt.mc with copies to: 1)McCarthy Legal ServicesAttn: Stephanie O’Brien, Esq.1188 Centre StreetNewton Centre, MA 02459T: (617) 244-2800F: (617) 244-2889obrien@morningsidenewton.com 2)Springfield Financial Advisory LimitedAttn: Alice Li/Makim Ma22nd Floor Hang Lung Centre2-20 Paterson StreetCauseway Bay, Hong KongT: 011-856-2576-6800F: 011-852-2881-5741alice.li@springfld.comMakimMa@springfld.com  Scottish EmpireEstablished by the Enterprise and New Towns(Scotland) Act 1990, Atrium Court, 50 Waterloo Street,Glasgow, G2 6HQPhone Number:Fax Number:Email:  SCHEDULE B Original Investors Christopher Wood Hugh Griffith Frank Sica IRA Castle View International Holdings Limited Codale Limited Benjamin White Ian Abercrombie Stuart Smith Moira Adamson Thomas Scott Nelson Christopher McGuigan Martin Mellish Exhibit 4.10Research, Collaboration and Licence Agreement THIS AGREEMENT is made this 21 day of December 2017 BETWEEN: (1)CARDIFF UNIVERSITY, whose administrative offices are at 30-36 Newport Road, Cardiff, CF24 0DE, U.K.(the “University”); (2)UNIVERSITY COLLEGE CARDIFF CONSULTANTS LTD a company incorporated under the laws of Englandand Wales (company number 1477909) whose registered office is at 30-36 Newport Road, Cardiff, UnitedKingdom, CF24 0DE (“UC3”); and (3)NUCANA PLC a company incorporated under the laws of England and Wales (company number 3308778)whose registered office is at 77 / 78 Cannon Street, London, England, EC4N 6AF (hereinafter referred to as“NuCana”), together the “Parties” and each a “Party”. RECITALSiThe University has expertise in the purification and characterisation of phosphoramidate prodrugs.iiThe University undertook a programme of research in relation to the purification and characterisation ofphosphoramidate prodrugs for NuCana under a Research, Collaboration and Licence Agreement entered intoby the Parties on 21 August 2009 (as subsequently amended and extended).iii.The 2009 Agreement is about to expire. The Parties wish to build on the results of the previous research andthe University has agreed to carry out the Project for NuCana upon the terms and conditions set out in thisAgreement.iiiNuCana has agreed to arrange for external biological evaluation of phosphoramidate protides prepared by theUniversity in support of the Project.ivUC3 is a wholly owned company of the University which is used to hold and exploit intellectual property rightson behalf of the University.Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. vThe University and UC3 have agreed that the ownership of the results of the Project shall vest solely inNuCana and the University has agreed to grant NuCana an exclusive licence to use the Protides IP in respectof each Nucleoside Family worked on during the Project and under the 2009 Agreement upon the terms andconditions set out in this Agreement. WHEREAS the Parties hereby agree: 1The Project 1.1The University shall carry out the Project and provide the deliverables set out in Schedule 1 during theProject Period. 1.2NuCana will arrange at its own cost for external biological evaluation of phosphoramidate protidesprepared by the University and will share the results generated with the University as soon as isreasonably practicable. The University will be entitled to use such results for the sole purpose of carryingout the Project. The University will treat such results as Information provided to it by NuCana and keepsuch results confidential in accordance with Clause 6. 1.3The Project shall be undertaken by 1.3.1[***] 1.3.2[***] 1.3.3[***] each engaged full-time for two years from the Effective Date; and 1.3.4a technician engaged full-time for one year during the Initial Project Period,together the “Research Team”. If at any time during the Project Period all of the Principal Investigators areunable or unwilling to continue supervising the Project the University in consultation with NuCana shallendeavour to appoint a successor or successors as soon as reasonably practicable thereafter. If anappropriate successor or successors acceptable to both the University and NuCana cannot be foundwithin [***], NuCana may terminate this Agreement upon giving the other Parties [***] written notice. 1.4The Project may be extended beyond the Initial Project Period for a further period or periods by the writtenagreement of the Parties as to the scope of any additional work and/or research funding. Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 2Funding by NuCana 2.1The University shall carry out the Project in consideration of payment by NuCana of the Project Feesbeing: 2.1.1£[***] on the Effective Date; 2.1.2£[***] on 1 July 2018; 2.1.3£[***] on 1 January 2019; and2.1.4£[***] on 1 July 2019.The University will charge VAT in addition where appropriate. The foregoing payments include the costsof all consumables used in the Project. 2.2If NuCana fails to make any payment due pursuant to Clauses 2, 8.5, or 9, by the date for payment of thesame, without prejudice to any other right or remedy available to the University or UC3, the University orUC3 may charge interest (both before and after any judgment) on the amount outstanding, at the interestrate in force pursuant to the Late Payment of Commercial Debts (Interest) Act 1998. That interest will becalculated from the date or last date for payment to the actual date of payment, both dates inclusive, andwill be compounded quarterly. NuCana will pay that interest to the University or UC3 on demand. 3University Responsibilities 3.1The University will carry out the Project in accordance with NuCana's reasonable instructions and shalluse all reasonable skill and care in the performance of the Project. 3.2The University will provide NuCana with regular written reports summarising the progress of work underthe Project and the Results, and shall provide NuCana with a final report containing all of the Resultsreasonably promptly following completion of the Project. The University shall use all reasonableendeavours to answer reasonably promptly all reasonable queries received from NuCana regarding theperformance of the Project and the Results. 4Warranties and Limitations and Exclusions of Liability 4.1The University does not undertake that work carried out under or pursuant to this Agreement will lead toany particular result and NuCana acknowledges and understands that the success of the Project is notguaranteed. 4.2The University does not accept any responsibility for any use which may be made of any work carried outunder or pursuant to this Agreement, or of theResearch, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Results, nor for any reliance which may be placed on such work or the Results, nor for advice orinformation given in connection with them 4.3NuCana acknowledges that, in entering into this Agreement, it does not do so in reliance on anyrepresentation or warranty given by the University, UC3, their employees or officers and any conditions,warranties or other terms implied by statue or common law are excluded from this Agreement to the fullestextent permitted by law. Accordingly, NuCana acknowledges and accepts that, other than as set out inClause 4.4, neither the University or UC3 make any warranties or representations whether express orimplied regarding the Results and/or the Intellectual Property in the Results and no warranty norrepresentation is given that: 4.3.1the Results and/or the Intellectual Property in the Results and/or use of the same will notinfringe the rights of any person; 4.3.2the Project will be successful or that any particular result or objective shall be achieved, beachievable or be attained at all or by expiry of the Project Period or by any other date. 4.4The University and UC3 each hereby warrants to NuCana that: 4.4.1no third parties have been granted any rights to use the Protides IP in connection with anycompounds comprised within the Nucleoside Families (with the exception of [***] under theResearch Agreement); 4.4.2all necessary steps have been taken to ensure that UC3 will own all rights in the Results andthe Foreground Intellectual Property, including but not limited to any Results and ForegroundIntellectual Property generated by any persons engaged by the University to perform the Project,so as to enable UC3 to assign ownership of the Results and the Foreground IntellectualProperty to NuCana pursuant to Clause 8.3;4.4.3 UC3 has the right to grant the exclusive licence to NuCana to use the Protides IP as set out inClauses 8.4 to 8.7 (inclusive); and 4.4.4.the University will enter into a written agreement with [***] under which [***] will agree to assign(on the University’s request and without any additional consideration) to the University all oftheir property, rights, title and interest (if any) in and to the Results and the ForegroundIntellectual property, prior to the relevant [***] being engaged on the Project. 4.5NuCana undertakes to make no claim against the Principal Investigators or any other employee, student,agent or appointee of the University, being a claim which seeks to enforce against any of them anyliability whatsoever in connection with this Agreement or its subject matter. 4.6In no event shall any Party be liable to the other Parties under or in connection with this Agreement for:Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  4.6.1 loss of contracts, loss of goodwill, loss of opportunity, loss of profits, loss of turnover or loss ofanticipated savings but only to the extent such losses are not direct losses; or 4.6.2 any indirect or consequential loss or special loss or damage of any nature whatsoever. 4.7Save in respect of [***], the maximum liability of the University or UC3 to NuCana under or otherwise inconnection with this Agreement or its subject matter shall be [***]. 4.8If any provision of this Clause 4 is held to be invalid or unenforceable under any applicable statute or ruleof law then it shall be deemed to be omitted, and if as a result any Party becomes liable for loss ordamage which would otherwise have been excluded then such liability shall be subject to the remainingprovisions of this Clause 4. 5Exclusivity 5.1The University and UC3 each agrees that it will not:5.1.1 during the Project Period: (a)undertake any [***] research on compounds comprised within the Nucleoside Families with orfor [***] where such research would require utilisation of the Protides IP; and/or (b)grant to any third party any licence or right to use, or any option to obtain a licence or right to use,the Protides IP in connection with any of the Nucleoside Families or compounds comprisedwithin the Nucleoside Families for any purpose whatsoeverin the case of [***], the parties agree the restrictions in clause (a) and (b) above will relate to all fields otherthan the field of [***]. 5.1.2 during the Extended Licence Period or Further Licence Period: (a)undertake with or for any third party any industrially sponsored research on those Compounds inrespect of which a licence is granted during such Extended Licence Period or (as the case may be)Further Extended Licence Period ( the “Exclusive Compounds”) or on any compounds within suchExclusive Compounds’ Nucleoside Families (“Related Compounds”) where such research wouldrequire utilisation of the Protides IP; and/or (b)grant to any third party any licence or right to use, or any option to obtain a licence or right to use, theProtides IP in connection with any of the Exclusive Compounds or Related Compounds for anypurpose whatsoever. Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  5.3NuCana acknowledges and accepts that the University cannot guarantee that the Nucleoside Familieswill not be covered by the claims contained in any patents granted pursuant to the patent applicationsassigned to [***] under the Assignment Deed. For the avoidance of doubt, NuCana further acknowledgesthe University shall not be deemed to be in breach of clause 5.1 in respect of the Cancer Research UKfunded ECMC project entitled ‘Experimental Cancer Medicine Centre and/or under the ResearchAgreement. 6Confidentiality 6.1The University undertakes not to use or disclose to any third party any Information which is disclosed byNuCana to the University for use in the Project or any Results generated during the Project (“ConfidentialInformation”) save that the University may disclose all and any Confidential Information to employees,students, officers and consultants of the University who need to know the same in connection with theperformance of this Agreement or to advisers of the University who are providing advice in connectionwith this Agreement provided that all such personnel are bound by appropriate written terms ofconfidentiality equivalent to those contained in this Clause 6. 6.2The obligation of non-disclosure set out in Clause 6.1 shall not apply with respect to information whichthe Receiving Party can show: (a)is known to the Receiving Party before the Effective Date, and not impressed already with anyobligation by the Disclosing Party; or (b)is or becomes publicly known without fault on the part of the Receiving Party; or (c)is obtained by the Receiving Party from a third party in circumstances where they have no reason tobelieve that there has been a breach of an obligation of confidentiality owed to the Disclosing Party;or (d)the Receiving Party develops independently; or (e)is approved for release in writing by an authorised representative of the Disclosing Party; or (f)the Receiving Party is specifically required to disclose pursuant to an order of any Court ofcompetent jurisdiction in order to fulfil the Court Order or in order to comply with any otherlegislation. Before making such a disclosure the Receiving Party shall inform the Disclosing Party ofthe requirement to make such disclosure. 7PublicationsResearch, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  7.1NuCana recognises that under University policy, the Results must be publishable and agrees that,subject to Clause 7.2, the University shall be permitted to present at symposia, national or regionalprofessional meetings, and to publish in journals or otherwise of their own choosing, methods and resultsof the Project and accordingly NuCana hereby grants or agrees to grant to the University a licence to usethe Intellectual Property in the Results and where appropriate the foreground intellectual property andresults assigned to NuCana under the 2009 Agreement for such purposes. 7.2Subject to the provisions of Clause 7.3, the University agrees to provide NuCana with a copy of anyproposed publication at least [***] prior to submission for publication. NuCana may object to publicationby providing notice to the University on the basis that: 7.2.1the publication contains Confidential Information; or7.2.2 the publication contains Intellectual Property belonging to NuCanaPROVIDED THAT if the University has not received notice from NuCana objecting to the publicationwithin [***] of NuCana receiving a copy of the proposed publication NuCana shall be deemed to haveagreed to the publication and the University may proceed with the publication.If NuCana objects to the proposed publication: (a)on the basis the publication contains Confidential Information and/ or Intellectual Property belongingto NuCana other than the Foreground Intellectual Property, NuCana shall identify such ConfidentialInformation and/ or Intellectual Property and the University shall remove such ConfidentialInformation and/ or Intellectual Property from the publication; (b)on the basis that the publication contains Foreground Intellectual Property, the University shalldelay publication for a period of [***] from the date of receipt of the proposed publication by NuCanain order that NuCana may file patent applications to protect such Foreground Intellectual Property; (c)if NuCana considers that there are exceptional circumstances requiring a longer delay in respect ofany proposed publication to permit NuCana to file patent applications to protect the ForegroundIntellectual Property and that view is supported by NuCana’s patent agents, NuCana may requestthat the University delays such publication for up to [***] from the date of receipt of the proposedpublication by NuCana and the University shall be bound to agree to such request provided thatNuCana provides the University with details of the exceptional circumstances necessitating such adelay and the supporting advice from the patent agents.It is further agreed by the University that, at NuCana’s request, an acknowledgement to NuCana beincluded in any written publicationResearch, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. produced by the University in recognition of NuCana’s involvement in the Project. 7.3Notwithstanding the provisions of Clauses 7.1 and 7.2, nothing contained in this Agreement shall preventor hinder any student employed by the University in connection with the Project from submitting a thesisincorporating or using the Foreground Intellectual Property or the Results, the examination of such athesis by examiners appointed by the University or the deposit of such a thesis in a University library inaccordance with the University’s procedures provided always that: 7.3.1the University shall obtain the prior written consent of NuCana, such consent not to beunreasonably withheld or delayed; 7.3.2the University shall ensure that the examiners appointed by the University shall be bound bywritten obligations of confidentiality no less onerous than those at Clause 6; 7.3.3the University shall ensure that the student theses are stored in a University library with restrictedaccess for [***] from submission or such longer period (but subject to a maximum of [***]) asNuCana may reasonably request provided that the University is able to allow such extendedperiod of restricted access taking into account University policy and the relevant student thesis ona case by case basis. 8Intellectual Property and use of the Results 8.1Each Party shall retain ownership in and to its Background IP. Except as otherwise stated, thisAgreement shall not grant or be construed as granting any rights by license or otherwise to the otherParties in or to another Party's Background IP. 8.2Each Party hereby grants the other Parties a non-exclusive, royalty-free licence to use its Background IPthat it introduces into the Project for the purposes of completion of the Project only and, except as set outelsewhere in this Agreement, no other rights or licences are granted in respect of such Background IP. 8.3The University and/or UC3 each hereby undertakes that all Intellectual Property in and to the Resultsshall belong to and vest in NuCana, and the University and UC3 each hereby: 8.3.1assigns to NuCana all of their right, title and interest in and to any copyrights, database rightsand UK unregistered design rights in and to the Results to the intent and with the effect that allsuch rights shall vest in NuCana on the date such rights are developed by the University; 8.3.2assigns to NuCana all their right, title and interest in and to all other Intellectual Property inand to the Results; andResearch, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  8.3.3undertakes to execute or procure the execution of any additional documents or do or procureany other acts or things which may be necessary from to time to vest in NuCana legal andbeneficial ownership of the Results and the Foreground Intellectual Property. 8.4The University and UC3 hereby grant to NuCana, and NuCana hereby accepts, an exclusive royalty-freeworldwide licence (with the right to grant sub-licences to third parties) during the Project Period to use theProtides IP in respect of the Compounds and all compounds comprised within their respectiveNucleoside Families (e.g. if the University has carried out work on [***] as part of the Project or under the2009 Agreement then the foregoing licence will cover all [***]) for all purposes, including but not limited toresearching and developing pharmaceutical products for all and any therapeutic, diagnostic, prognosticand prophylactic indications and thereafter the manufacture, marketing, distribution and sale of suchpharmaceutical products. 8.5Upon request by NuCana to the University and UC3 prior to expiry of the Project Period, the licencegranted pursuant to Clause 8.4 shall be deemed to have been extended for a further period of [***] fromexpiry of the Project Period (the “Extended Licence Period”) in respect of those Compounds upon whichEvaluation Testing either has been undertaken during the Project Period or under the 2009 Agreement, iscontinuing at expiry of the Project Period or is to be undertaken following expiry of the Project Period andall compounds within their respective Nucleoside Families, subject to NuCana notifying the Universityand UC3 at the time of such request of the Compounds in respect of which Evaluation Testing iscontinuing or is to be undertaken. 8.6Upon request by NuCana to the University and UC3 prior to expiry of the Extended Licence Period, thelicence referred to in Clause 8.5 above shall be deemed to have been extended for one further [***] period(the “Further Extended Licence Period”) if NuCana so requests in respect of those Compounds uponwhich Evaluation Testing is ongoing at such date for the purposes of finalising Evaluation Testing on suchCompounds, subject to;8.6.1 the sum of £[***] ([***] pounds) becoming due and payable by NuCana to the UC3 on the first day of theFurther Extended Licence Period; and8.6.2 NuCana notifying the University and UC3 at the time of such request of the Compounds upon whichEvaluation Testing is ongoing at such date. UC3 will charge VAT in addition where appropriate. 8.7Once NuCana has completed its Evaluation Testing on the Compounds, it shall notify the University andUC3 of such completion and of those Compounds which, following such Evaluation Testing, arereasonablyResearch, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  deemed by NuCana to be suitable for commercialisation (the “Selected Compounds”). The University andUC3 hereby grants to NuCana, and NuCana hereby accepts, an exclusive royalty-free worldwide licence(with the right to grant sub-licences to third parties) (terminable only in the circumstances set out inClause 8.9) to use the Protides IP in respect of the Selected Compounds and all compounds comprisedwithin their respective Nucleoside Families (i.e. if a [***] is one of the Selected Compounds, then theforegoing licence will cover all [***]) for all purposes, including but not limited to researching anddeveloping pharmaceutical products for all and any therapeutic, diagnostic, prognostic and prophylacticindications and thereafter the manufacture, marketing, distribution and sale of such pharmaceuticalproducts. 8.8The University and UC3 each hereby agrees not (except as expressly permitted under other provisions ofthis Agreement) at any time whilst the licences granted pursuant to: 8.8.1Clauses 8.4 or 8.5 remain in force, to use, or to grant to any person or entity a licence or otherright to use the Protides IP with any of the Compounds/ or and any of the compounds comprisedwithin their respective Nucleoside Families covered by such licences or to conduct research onsuch Compounds and/ or any compounds comprised within their respective Nucleoside Familieson behalf of or in collaboration with any third party, for any purpose whatsoever; 8.8.2Clauses 8.6 or 8.7 remain in force, to use, or to grant to any person or entity a licence or otherright to use the Protides IP with any of the Compounds covered by such licences and/ or anycompounds comprised within their respective Nucleoside Families or to conduct research onsuch Compounds and/ or any compounds comprised within their respective Nucleoside Familieson behalf of or in collaboration with any third party, for any purpose. 8.9All the licences granted to NuCana pursuant to Clauses 8.4, 8.5 and 8.6 and 8.7: 8.9.1may be terminated by UC3: (a)[***] by serving written notice upon NuCana in the event of NuCana’s Insolvency; (b)by giving [***] written notice to NuCana in the event of a material breach of any such licenceincluding, but not limited to, failure to make the payments due under Clause 8.6, which if capable ofremedy by NuCana is not remedied within the [***] notice period; (c)if NuCana fails to pay any of the payments payable pursuant to Clause 9 within [***] of the due datefor payment thereof; 8.9.2shall [***] terminate upon termination of this Agreement pursuant to the provisions of Clause 11.2. Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  8.10NuCana shall promptly notify the University at the end of the Extended Licence Period or FurtherExtended Licence Periods as applicable of the Compounds (if any) which it no longer requires a licencefor and the restrictions upon the University and UC3 at Clause 8.8 shall cease to apply in respect of thoseCompounds (if any). For the avoidance of doubt the restrictions at Clause 8.8 shall cease to apply if thelicences granted pursuant to Clauses 8.4, 8.5, 8.6 and/or 8.7 are terminated pursuant to Clause 8.9. 8.11NuCana hereby grants or agrees to grant to the University a royalty-free licence to use any IntellectualProperty in and to the Results for the University’s own internal non-commercially funded research andacademic and teaching purposes, provided that such purposes do not cause the University to be inbreach of any other term of this Agreement including its obligation of confidentiality set out in Clause 6. 8.12NuCana shall indemnify and hold harmless the University, UC3, their employees and agents, from andagainst any claim, loss, damage or expense relating to NuCana’s use and/or uses of any and all Results,the Intellectual Property in the Results and/or any other advice or information supplied to NuCanapursuant to this Agreement but excluding any such claim, loss, damage or expense to the extent that itarises as a result of any breach by the University or UC3 or their employees and agents of the terms ofthis Agreement or any negligence on the part of the University or UC3 or their employees and agents. TheUniversity and/ or UC3 (as the case shall be) shall provide NuCana with written notice of any such claimor liability as soon as possible and in any event within [***] of receiving notice of any such claim orliability. NuCana shall be solely responsible for the investigation, defence, settlement and discharge ofsuch claim or liability and the University and/or UC3 shall provide NuCana with all assistance reasonablyrequested by NuCana in connection with the investigation, defence, settlement and discharge of suchclaim or liability.9Milestone and Royalty Payments 9.1NuCana agrees to make milestone payments to UC3 as set forth in Schedule 2. Each milestone paymentis owed whether the milestone is achieved by NuCana, an Affiliate, Licensee or Assignee. NuCana shallinform UC3 within [***] of the event and the payment shall be made within [***] of the notice of each eventbeing served to UC3. If the milestone is achieved by a Licensee or Assignee, NuCana shall inform UC3within [***] of NuCana’s knowledge of the event and payment shall be made within [***] of notice of eachevent being served to UC3. 9.2NuCana will pay to UC3 a royalty of [***] percent ([***]%) of Net Sales of NuCana or any of its Affiliates. 9.3NuCana will pay to UC3 a royalty of [***] percent ([***]%) of all Other Income received by NuCana or anyof its Affiliates from the exploitation of the Results and/or Foreground Intellectual Property.Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  9.4[***]. No milestone payments (as set out in Schedule 2) or royalties, as payable in accordance withClauses 9.1, 9.2 and 9.3, shall be payable by NuCana to the UC3 if the relevant milestones have alreadybeen paid under the 2009 Agreement including but not limited to where the relevant milestone is onlypayable on the first product incorporating a compound within a Nucleoside Family and the relevantmilestone has already been paid for a product incorporating another compound within the sameNucleoside Family under the 2009 Agreement 9.5Within [***] of the end of the period commencing on the Effective Date and ending on [***] and eachsubsequent period of [***] commencing on [***] (each a “Royalty Period”), NuCana shall submit to UC3 awritten statement detailing: (a)the total Net Sales (if any) of NuCana and all its Affiliates during such Royalty Period; (b)the total royalties payable pursuant to the provisions of clause 9.2 above in respect of such NetSales; (c)the total Other Income (if any) received by NuCana and all its Affiliates during such Royalty Periodfrom the exploitation of the Results and/or Foreground Intellectual Property; and (d) the total royalties payable pursuant to the provisions of Clause 9.3 above in respect of such OtherIncometogether with payment of the total amount of royalties (if any) shown on such statement. 9.6All sums payable under this Agreement are exclusive of value added tax which shall, if applicable, bepayable in addition at the rate in force from time to time. 9.7NuCana shall and shall procure that each of its Affiliates shall keep true and accurate records and booksof account of:(a) all sales by NuCana or (as the case may be) the relevant Affiliate of Products; and(b) all proceeds received by NuCana or (as the case may be) the relevant Affiliate from;(i) Licensees in connection with a licence or sub-licence of the Results or Foreground IntellectualProperty, including but not limited to signing or upfront fees, annual licence maintenance fees,royalties on sales and annual minimum royalty payments; and/or(ii) Assignees in connection with assignation of the Results and/or Foreground Intellectual Property(the “Records”), and NuCana shall and shall procure that each of its Affiliates shall, upon request by UC3and during normal business hours, permit a chartered accountant appointed by UC3 to inspect suchRecords for the purpose of enabling UC3 to verify the accuracy of the statementsResearch, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. provided pursuant to Clause 9.5. UC3 shall procure that such accountant enters into a confidentialityagreement with NuCana in terms of which he/ she agrees to keep confidential all information obtainedfrom such inspection and to disclose such information solely to UC3. All fees, expenses and otherpayments payable to such chartered accountant in connection with any such inspection shall be borne byUC3 unless such inspection reveals an underpayment of royalties in respect of any Royalty Period of atleast [***] percent ([***]%) in which case such costs shall be borne by NuCana and, if such costs havealready been incurred by UC3, NuCana shall (subject to UC3 providing receipts or other proof thatsuch costs have been incurred) reimburse such costs to UC3 immediately upon demand. 10Force majeureIf the performance by any Party of any of its obligations under this Agreement (other than an obligation to makepayment) shall be prevented by circumstances beyond its reasonable control, then the that Party shall (provided ithas notified the other Parties of the relevant circumstances) be excused from performance of that obligation for theduration of the relevant event. 11Term and Termination 11.1This Agreement shall be deemed to have commenced on the Effective Date and shall continue in fullforce and effect until expiry of the Project Period unless terminated earlier pursuant to the provisions ofClause 11.2. 11.2This Agreement may be terminated by any Party for any material breach of the obligations set out in thisAgreement by any of the other Parties, by giving [***] written notice to the other Parties of its intention toterminate. The notice shall include a detailed statement describing the nature of the breach. If the breachis capable of being remedied and is remedied within the [***] notice period, then the termination shall nottake effect. If the breach is not remedied within the [***] notice period, then the termination shall take effect at the end of the[***] notice period. Failure to make the payments set out in Clauses 2.1, 8.6 or 9 within [***] following thedue date for such payment shall constitute a material breach for the purposes of this Clause 11.2. 11.3Upon expiry or termination of this Agreement all rights and obligations of the Parties shall, subject to theprovisions of Clause 11.4, immediately cease without prejudice to any rights of action then accruedhereunder or at law. 11.4Unless stated otherwise in this Agreement:Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  11.4.1 the following provisions shall survive expiry (but not termination of this Agreement pursuant toClause 11.2): Clauses 2.1, 2.2, 3.2, 4, 5, 6, 7, 8, 9, 10, 11.3, 12, 13, 14, 15, 16, 17 and thisClause 11.4; 11.4.2the following provisions shall survive termination of this Agreement pursuant to Clause 11.2:Clauses 2.1 and 2.2 (but only in relation to any outstanding payments due as at the date oftermination),2.4, 3.2, 4, 6, 7, 8.3, 9, 10, 12, 13, 14, 15, 16, 17 and this Clause 11.4. 12PublicityNo Party shall use the name of either of the others in any press release or product advertising, or for any othercommercial purpose, without that other Party’s prior written consent; provided, however, that publication of the sumsreceived from NuCana in the University’s annual report and similar publications shall not be regarded as a breach of thisClause 12. 13AssignmentNo Party shall assign any of its rights and obligations under this Agreement without the prior written consent of each ofthe other Parties. 14Notices 14.3The University’s representative for the purpose of receiving payments shall until further notice be:[***] 14.4The University’s representative for the purpose of receiving reports shall until further notice be:[***] 14.5The University’s representative for the purpose of receiving all other notices shall until further notice be:[***] 14.6UC3’s representative for the purpose of receiving all notices shall until further notice be:[***] 14.7NuCana’s representative for the purpose of receiving invoices, reports and other notices shall until furthernotice be:Hugh S Griffith, Chief Executive Officer, NuCana plc, 3 Lochside Way, Edinburgh, EH129DT.15GeneralResearch, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  15.1Nothing in this Agreement shall create, imply or evidence any partnership or joint venture between theParties or the relationship between any of them of either principal and agent or employer and employee. 15.2This Agreement, and its Schedules (which are incorporated into and made a part of this Agreement),together constitute the entire agreement between the Parties for the Project. Any variation shall be inwriting and signed by all Parties or by their authorised signatories. 15.3This Agreement shall be governed by English and Welsh law. The English and Welsh courts shall haveexclusive jurisdiction to deal with any dispute which has arisen or may arise out of or in connection withthis Agreement. 15.4Headings are for convenience only and shall not affect the construction or interpretation of thisAgreement; and references to Clauses are to clauses of this Agreement. 16Third partiesThe Parties do not intend that the terms of this Agreement create any right enforceable by any person who is not a partyto it ('Third Party') under the Contracts (Rights of Third Parties) Act 1999 (the “Act”).Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 17DefinitionsIn this Agreement the following words shall have the following meanings unless the context otherwise requires:“Affiliate”means any corporation or non-corporate entity thatcontrols, is controlled by, or is under common controlwith a party to this agreement. A corporation or non-corporate entity is to be regarded as in control of acorporation if it owns, or directly or indirectly controls, atleast fifty percent (50%) of the voting stock of the othercorporation, or (i) in the absence of the ownership of atleast fifty percent (50%) of the voting stock of acorporation or (ii) in the case of a non-corporatebusiness entity, or non-profit corporation, if it possesses,directly or indirectly, the power to direct or cause thedirection of the management and policies of suchcorporation or non-corporate entity, as applicable;“Assignee”means any person or entity obtaining an assignment ofthe Foreground Intellectual Property or part thereof fromNuCana or from any Affiliate of NuCana other than anAffiliate of NuCana;“Assignment Deed”means the Deed between UC3 and [***] (thereafteracquired by [***]) dated [***];“Background IP”means any Intellectual Property owned or controlled byany Party at the date of this Agreement together with anyand all rights therein or which shall at any time thereafterbecome so owned or controlled and in the case of theUniversity includes the Protides IP;Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. “Confidential Information”shall have the meaning set out in Clause 6.1;“Compounds”means the compounds comprised within eachNucleoside Family which the University has beenrequested to conduct work on by NuCana as part of theProject or under the 2009 Agreement;“Disclosing Party”means a Party to this Agreement that disclosesConfidential Information to one or both of the otherParties;“Effective Date”means 1 January 2017;“Evaluation Testing”means testing such as [***]; “Extended Licence Period”means the period referred to in Clause 8.5 above;“Foreground Intellectual Property”means any Intellectual Property arising from the Project;“Further Extended Licence Period”means the period referred to in Clause 8.6 above;“Information”means specifications, drawings, circuit diagrams, tapes,discs and other computer-readable media, documents,information, techniques and know-how;“Initial Project Period”means the period of [***] commencing on the EffectiveDate;“Intellectual Property”means all and any rights in or to [***]; and all similar orequivalent rights arising or subsisting in any part of theworld; Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. “Insolvency”(i)a petition is presented, a resolution is passed or anorder is made for the winding up or dissolution ofa party; (ii)an application, petition or order is made for any of thefollowing to be appointed over a party or any of itsassets, or such anappointment is made: receiver, administrativereceiver, receiver and manager, administrator orsequestrator; (iii)a party enters into, or there is proposed, acompromise or arrangement or voluntaryarrangement, or a scheme or composition insatisfaction or composition of its debts with all orany of the creditors or members of a party or stepsare taken to obtain a moratorium; (iv)any creditor takes possession of, or levies distress,enforcement or some other process upon, all orany of a party’s assets or undertaking; (v)a party is deemed unable to pay its debts, or isunable, or admits its inability, to pay its debts asthey fall due; or (vi)a party ceases to carry on the whole or a substantialpart of its business; and the term “Insolvent” shall be construed accordingly; “Licensee”means any person or entity (other than an Affiliate ofNuCana) entering into a license with NuCana or asublicense with an Affiliate of NuCana of the Results orForeground Intellectual Property or part thereof;“"Net Sales"means the gross proceeds received by NuCana or itsAffiliates from the sale of Products by NuCana or itsAffiliates after deduction of costs relating to [***]; Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. “Nucleoside Families” means those nucleoside families as set out in Schedule1 and Nucleoside Family shall be construed accordingly; "Other Income"means the gross proceeds received by NuCana or itsAffiliates:(i) from Licensees in connection with a licenceor sub-licence of the Results or Foreground IntellectualProperty, including but not limited to, [***]; and/or (ii) from Assignees in connection with assignation of theResults or Foreground Intellectual Property, other thanany assignation of the Results or Foreground IntellectualProperty as part of the sale of all or substantially all ofthe business and assets of NuCana to a third party andas part of which sale NuCana's rights and obligationsunder this Agreement are also being transferred to therelevant third party;“[***]”means a [***] engaged by the University on the Project; "Product"means any pharmaceutical products developed,manufactured, marketed, distributed and/or sold byNuCana or its Affiliates which incorporate a compoundwhich is comprised within the Results;“Project”shall have the meaning set out in Schedule 1;“Project Period”the Initial Project Period and any extension orextensions thereto agreed by the Parties pursuant toClause 1.4;“Project Fee”means the fees set out at Clause 2.1 above;Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. "ProTides Agreement"means the licence and collaboration agreement to beentered into between NuCana and [***];“Protides IP”means the Intellectual Property owned or controlled bythe University at the date of the 2009 Agreement relatingto [***] nucleoside phosphoramidate prodrugs and anyand all rights therein or which shall any time thereafterbecome so owned or controlled;“Principal Investigators”means [***] or such successor as may be appointed;“Receiving Party”means a Party to this Agreement that receivesConfidential Information from one or both of the otherParties;“Results”means the results generated by the PrincipalInvestigators, [***],[***] and/or any other persons engagedon the Project arising from the research conducted bythe Principal Investigators, [***] and/or any other personsin performing the Project; "Research Agreement"means the terms of agreement between the Universityand [***] for the conduct of research by the Universityrelating to the discovery and development of new anticancer nucleosides and nucleotides; and “2009 Agreement”means the Research, Collaboration and LicenceAgreement entered into by the Parties on 21 August2009 (as subsequently amended and extended pursuantto amendments signed by the Parties dated 30 Sept2010, 25 July 2011, 26 October 2011, 3 July 2012, 9December 2013, 8 October 2014, 17 March 2015, 5October 2015 and 22 November 2016. Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. AGREED by the Parties through their authorised signatories: For and on behalf ofCARDIFF UNIVERSITY For and on behalf ofNUCANA PLC [***] /s/ Hugh S Griffithsigned Signed[***] Hugh S Griffithprint name Deputy Director and Head ofResearch Governance andContractsResearch Innovation Services Chief Executive Officertitle 21/12/17 21/12/17date For and on behalf ofUNIVERSITY COLLEGECARDIFF CONSULTANTS LTD signed [***] print name [***] title Deputy Director and Headof CommercialDevelopmentResearch Innovation Services date 21/12/17 Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. SCHEDULE ONE[***] SCHEDULE TWO [***] The University or UC3 as applicable will charge VAT in addition where appropriate. Research, Collaboration and Licence Agreement December 2017 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Amendment No.1This Amendment, effective as of 21 December 2017, is made:BETWEEN: (1)CARDIFF UNIVERSITY, whose administrative offices are at 30-36 Newport Road, Cardiff, CF24ODE, U.K. (the “University”); (2)UNIVERSITY COLLEGE CARDIFF CONSULTANTS LTD, a company incorporated under the lawsof England and Wales (company number 1477909) whose registered office is at 30-36 NewportRoad, Cardiff, United Kingdom, CF24 0DE (“UC3”); and (3)NUCANA PLC, a company incorporated under the laws of England and Wales (company number3308778) whose registered office is at 77 / 78 Cannon Street, London, England, EC4N 6AF(“NuCana”),together the “Parties” and each a “Party”.RECITAL:The Parties entered into a Research, Collaboration and License Agreement dated 21 December 2017 for a researchproject (the “Agreement”). The Parties wish to amend the Agreement as set forth in this Amendment.IT IS AGREED AS FOLLOWS:1.Status and Purpose of this AmendmentThis Amendment is supplemental to the Agreement. Except as expressly set forth in this Amendment, theAgreement shall remain in full force and effect.2.Amendments to the AgreementThe Parties agree that, with effect from 21 December 2017, the terms of the Agreement shall be amended asfollows:The reference to “1 January 2017” in the definition of “Effective Date” in Clause 17 shall be amended to “1January 2018”.The reference to “[***]” in Clause 9.5 shall be amended to “[***]”.Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed by their authorized officers orrepresentatives on the date indicated below.Signed on behalf ofCardiff University /s/ [***]Date01.02.2018Signed on behalf ofUniversity College CardiffConsultants Ltd /s/ [***]Date01.02.2018Signed on behalf ofNucana PLC /s/ H. GriffithDate01.02.2018 Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commissionpursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  Exhibit 4.11 LEASEbetweenDRUM INCOME PLUS LIMITEDandNUCANA BIOMED PLC Subjects: Suite 2 (East), Second Floor, Lochside House, 3 Lochside Way, Edinburgh Park, Brodies LLP15 Atholl CrescentEdinburgh EH3 8HAT: 0131 228 3777F: 0131 228 3878DX.ED10Ref: EKW/DRU114.36FAS 04682017  LEASEbetweenDRUM INCOME PLUS LIMITED incorporated and registered in England and Wales with company number 09515513 whose registered office is atLevel 13, Broadgate Tower, 20 Primrose Street, London EC2A 2EW (hereinafter called the "Landlord")andNUCANA BIOMED LIMITED incorporated under the Companies Acts with company number 03308778 and having its registered office at 77-78Cannon Street, London, England, EC4N 6AF (hereinafter called the "Tenant")The parties hereto have agreed and do hereby agree as follows:-1Definitions and Interpretation1.1definitionsIn this Lease the following expressions shall have, where the context so admits, the following meanings respectively: 1.1.1"Building" means the subjects more particularly described in Part 1B of the Schedule; 1.1.2"Car Parks" means those parts of the Development used from time to time for car parking; 1.1.3"Common Parts" means the common parts of the Building from time to time being those described in Part 2 of theSchedule as varied, altered, extended or restricted by the Landlord acting reasonably and in accordance with theprinciples of good estate management and exercising the rights reserved to the Landlord in terms of paragraph 12 ofPart 4 of the Schedule including any extension thereof made by the Landlord in terms of paragraph 13 of Part 4 theSchedule; 1.1.4"Conduits" means the pipes, sewers, channels, ventilation ducting, drains, rhones, conduits, gutters, lightningconductors, watercourses, wires, cables, aerials, subways, flues and all other conducting media, pumps, valves,manholes, meters and connections for the time being and from time to time in and passing through or serving theBuilding or Development some part thereof; 1.1.5"Development" means the subjects more particularly described in Part 1C of the Schedule; 1.1.6"Duration of this Lease" means the period referred to in Clause 2 and any continuation thereof whether by tacitrelocation, by statute or for any other reason;  2 1.1.7“Entry Conditions” means: 1.1.7.1taking entry only after giving Requisite Notice, 1.1.7.2taking entry where, having regard to the purpose of taking entry, there is no other reasonablypracticable alternative, 1.1.7.3making good all damage caused to the Premises and, provided the Tenant has taken reasonablesteps to protect the same, to the Tenant’s fittings and fixtures in the Premises and that as soon asreasonably practicable and to the Tenant’s reasonable satisfaction, 1.1.7.4ensuring that those taking access shall cause the minimum practicable disturbance to the Tenant’suse of the Premises as permitted under this Lease, 1.1.7.5ensuring that the Tenant’s use of the Premises as permitted under this Lease is not materiallyadversely affected, and 1.1.7.6ensuring that sufficient access to and egress the Premises is maintained at all times. 1.1.8"Full Cost of Reinstatement" means an amount equal to the costs which would be likely to be incurred, including thecosts of shoring up, demolition and site clearance, architects, surveyors and other professional fees and VAT in thecase of the insurances to be effected under Clause 4 in reinstating the Development (including the Building) or any partthereof, at the time when such reinstatement is likely to take place having regard to any expected increases in buildingcosts pending and during the period of reinstatement; 1.1.9"Insured Risks" means risks in respect of loss or damage by fire, lightning, explosion, impact and (in peacetime)aircraft and other aerial devices and/or articles dropped therefrom, burst water pipes, riot and civil commotion andmalicious damage, storm or tempest, flood and terrorism (but only for so long as and to the extent that the Landlord isable to obtain cover for the foregoing risks at normal and reasonable commercial rates and on normal and reasonablecommercial conditions in the UK insurance market) and such other normal commercial risks against which theLandlord may from time to time (acting reasonably) deem it necessary to insure subject to such normal andreasonable commercial exclusions, limitations, excesses or conditions, as may be applied by the Insurers; 1.1.10"Insurers" means a reputable UK insurance office or underwriters with whom the Landlord effects the insurancesunder Clause 4;  3 1.1.11"Interest" means interest at the rate of four per centum per annum above the base lending rate for the time being ofThe Royal Bank of Scotland plc or in the absence of such a rate, such rate as is reasonably equivalent thereto; 1.1.12"Landlord" means the Landlord and its successors in title; 1.1.13"Lettable Units" means the Premises or any other unit of accommodation forming part of the Building let or designedfor letting or capable of being let for exclusive use (whether or not the same are, at any particular time, actually let),and Lettable Unit shall be construed accordingly; 1.1.14"Loss of Rent and Service Charge" means such a sum of money as the Landlord may estimate represents the lossof the rent and service charge payable hereunder in respect of the Premises for such period (being not less than threeyears and not more than five years) as may reasonably be required by the Landlord from time to time having regard tothe likely period required for reinstatement of the Development (including the Building); 1.1.15"Management Premises" means any administrative accommodation within the Building as shall be utilised for themanagement of the Development (including the Building); 1.1.16"Planning Acts" means the Local Government and Planning (Scotland) Act 1982, the Planning and Compensation Act1991, the Town and Country Planning (Scotland) Act 1997, the Planning (Listed Buildings and Conservation Areas)(Scotland) Act 1997, the Planning (Hazardous Substances)(Scotland) Act 1997 and the Planning (ConsequentialProvisions)(Scotland) Act 1997 and the Planning etc (Scotland) Act 2006; 1.1.17"Plant and Equipment" means all electrical, mechanical and other plant, machinery and equipment for the time beingand from time to time in use for common benefit of the Building (and which do not exclusively serve the Lettable Units)including, without prejudice to that generality, generators, service and/or passenger lifts, heating equipment, lightingequipment (including emergency lighting and automatic controls and equipment), ventilation equipment, wastecompactors, air conditioning, cooling plant and equipment (serving the Common Parts), cleaning equipment, internaland public telephone systems, radio paging equipment, public address systems, fire precaution equipment, fire fightingequipment, fire alarm and/or security systems and equipment (including remote control and/or closed circuit televisionequipment), common television aerial and all connecting media and circuitry pertaining thereto and all other suchequipment (including stand-by and emergency systems and equipment); 1.1.18"Premises" means the second floor suite of office accommodation forming part of the Building known as Suite 2(East) more particularly described in Part 1A of the  4 Schedule and includes where the context so admits, all additions, alterations and improvements thereto fixtures,fittings, plant, machinery and pertinents thereof and shall also include all landlord’s fittings and fixtures from time totime in and about the same; 1.1.19“Quarter Days” means 28 February, 28 May, 28 August and 28 November in each year and the expression “QuarterDay” shall be construed accordingly; 1.1.20“Related Company" means in respect of a company any holding company or subsidiary company of the company orany subsidiary company of such holding company as the term “subsidiary company” and “holding company” aredefined in Section 1159 of the Companies Act 2006; 1.1.21"Regulations" means the regulations which may be imposed by the Landlord acting reasonably in the interests of andin accordance with the principles of good estate management in terms of paragraph 15 of Part 4 of the Schedule andnotified in writing to the Tenant as the same may be varied from time to time and notified in writing to the Tenant inaccordance with paragraph 16 of Part 4 of the Schedule; 1.1.22"Rent Commencement Date" means 15 November 2017 being the day falling 3 months after the Date of Entry; 1.1.23"Requisite Notice" means notice in writing to the Tenant given two Working Days before the Landlord requires entry tothe Premises, save in an emergency when no notice is required; 1.1.24"Schedule" means the schedule in nine parts annexed and executed as relative hereto; 1.1.25"Service Charge" means the service charge as provided for in paragraph 3 of Part 5 of the Schedule; 1.1.26"Service Charge Percentage" means the percentage equivalent to the proportion which the gross internal area of thePremises bears to the total gross internal area of all Lettable Units in the Building (including the Premises and anyfuture extensions and additions to the Building) or, in the case of services provided for the benefit of a particular tenantor group of tenants or in the event of a material change of circumstances relevant to the allocation of ServiceExpenditure, such other percentage calculated on a demonstrably equitable basis as is fair and equitable in thecircumstances, having regard to the nature of the service in question and the relative extent of the benefit derived fromit or the change of circumstances, as indicated by written notice from the Landlord to the Tenant given at any time, theLandlord being required to act reasonably and in accordance with the principles of good estate management, so thatany such substituted percentage will apply for the accounting  5 year following said notice and for all later accounting years (unless subsequently varied in accordance with the termshereof); 1.1.27"Service Expenditure" means the expenditure defined in paragraph 2.5 of Part 5 of the Schedule; 1.1.28"Tenant" means the Tenant and in substitution therefor its successors and permitted assignees; 1.1.29"Title Deeds" means the title deeds and other documents referred to in Part 7 of the Schedule; 1.1.30"Uninsured Risk" means subject as mentioned in the proviso hereto any one or more of the Insured Risks where lossor damage caused in whole or in part by the same is not the subject of insurance cover by the Landlord (becauseinsurance against such Insured Risk or Insured Risks or against particular events giving rise to a claim thereunder isnot then ordinarily available from a reputable insurer for the Development on normal and reasonable commercial terms)provided always that “Uninsured Risk” shall not include (unless in fact insured by the Landlord) loss or damagecaused by reason of the act, default or omission of the Tenant their sub-tenants and/or their respective licensees andcontractors or others for whom the Tenant is responsible in law; 1.1.31"VAT" means Value Added Tax chargeable under the Value Added Tax Act 1994 as amended from time to time orunder any rule, regulation, order or instrument authorised to be made by that Act as aforesaid or any similar taxamending or replacing such Value Added Tax; and 1.1.32"Working Day" means from Monday to Friday inclusive throughout the year apart from: 1.1.32.1any days which are official bank holidays throughout the whole of Scotland and/or England, and 1.1.32.2any days which are official public holidays within the City of Edinburgh and / or London.1.2interpretation 1.2.1This Lease shall be construed and interpreted in accordance with Clauses 1.1 and 1.2 hereof unless there besomething in the subject or context inconsistent therewith. 1.2.2Reference to this Lease shall be construed as reference to this Lease and the Schedule.  6 1.2.3Words importing one gender include all other genders and words importing the singular include the plural and viceversa. 1.2.4Where there are, at any given time, two or more persons included in the expression "the Tenant" obligations containedin this Lease which are expressed to be made by the Tenant shall be binding jointly and severally on them (but withoutimplying continuing liability of an assignor following a permitted assignation of the tenant’s interest under the Lease);where the Tenant is a firm or partnership (or persons trading as such) the obligations of the Tenant hereunder shall bebinding jointly and severally on all persons who are or become partners of the firm at any time during the Duration ofthis Lease and their respective executors and representatives whomsoever as well as on the firm and its whole assetswithout the necessity of discussing them in their order and such obligations will subsist notwithstanding any change orchanges which may take place in the firm or partnership or its name or by the assumption of a new partner or partnersor by the retiral, bankruptcy or death of any partner or partners provided that the Landlord will not unreasonablywithhold consent to the release of a retiring partner or the trustee in bankruptcy or the estate of a deceased partnerfrom liability under this Lease if the Landlord is satisfied, acting reasonably, that the covenant of the remainingpartners remains at a level not substantially less than it was prior to such retiral or bankruptcy or death. 1.2.5Where any act by the Tenant or the Landlord is prohibited or not permitted the Tenant and the Landlord shall bedeemed to be obliged not to knowingly permit or suffer such act to be done and to use reasonable endeavours toprevent such act being done by a person for whom they are responsible in law. 1.2.6Reference to any consent or approval of the Landlord required hereunder shall be construed as also requiring theconsent or approval of any heritable creditor or chargeholder of the Premises and/or the Development (including theBuilding) when the same shall be required except that nothing in this Lease shall be construed as implying that anyobligation is imposed upon any heritable creditor or chargeholder not unreasonably to refuse any such consent orapproval. 1.2.7Reference to any consent or approval of the Landlord required hereunder shall be construed as one given in writing andnot otherwise. 1.2.8Reference to any right of the Landlord to have access to the Premises shall be construed as extending to all personsauthorised by the Landlord (including agents, professional advisers, contractors, workmen and others) actingreasonably. 1.2.9Reference to any statute includes reference to any statute amending or re-enacting the same and to any regulations ororders made thereunder.  7 1.2.10Paragraph headings, the front cover, the index and the use of bold type shall be ignored. 1.2.11To pay VAT on any sums due by the Tenant under this Lease in return for a valid VAT invoice addressed to theTenant at the Premises or such other address as the Tenant notifies to the Landlord in writing.2Grant of the Lease and Rent PayableThe Landlord in consideration of the rents and other prestations hereinafter specified and subject to the provisions, conditions anddeclarations hereinafter contained HEREBY LETS to the Tenant (but excluding always assignees and sub-tenants legal or voluntaryand creditors and managers for creditors in any form except where permitted in accordance with the terms of this Lease) ALL andWHOLE the Premises TOGETHER with (A) the exclusive use of the 15 car parking spaces, as more particularly described in Part 1 ofthe Schedule, and (B) the Common Rights set out in Part 3 of the Schedule, but in both cases excepting therefrom the Exceptions andReservations referred to in Part 4 of the Schedule, and which Premises and the Common Parts the Tenant accepts as being in good,tenantable and substantial repair and condition and in all respects fit for the purpose for which they are let and that for the period from15 August 2017 (hereinafter called "the Date of Entry") notwithstanding the date or dates hereof until 14 August 2022;DECLARING THAT for as long as the tenant under this Lease is Nucana Biomed Limited (company number 03308778) or a RelatedCompany of the said Nucana Biomed Limited (“Nucana”), Nucana shall be entitled: (A)to terminate this Lease as at and on 15 August 2020 (hereinafter called the “Break Date”) on giving to the Landlord not less than9 months' prior written notice to that effect (time being of the essence in this regard). In the event that Nucana exercises theforegoing right to break and terminate this Lease then within 20 Working Days of the Break Date the Landlord shall refund toNucana all of the Rents paid by Nucana which relate to the period commencing on the Break Date on the basis that Nucana willreceive a 1/365th part of the annual rent for each day during such period; and (B)to extend this Lease on the same terms and conditions (but without this right of extension) for the period of five yearscommencing on 15 August 2022 and expiring on 14 August 2027 (inclusive) on giving to the Landlord not less than 9 months'prior written notice to that effect (time being of the essence in this regard). In the event that Nucana validly exercises theforegoing right to extend this Lease, the rent payable under this Lease shall be subject to review on 15 August 2022 inaccordance with Part 8 of the Schedule and, for the period commencing on 15 August 2022 the rent payable by Nucana to theLandlord shall be the said reviewed rent.For which causes and on the other part the Tenant binds itself and in substitution therefor its successors and assignees to pay to theLandlord:  8 2.1without any written demand therefor the rent of SEVENTY THOUSAND AND TWO HUNDRED POUNDS (£70,200) STERLING perannum (exclusive of all, if any, VAT chargeable thereon) and that by equal quarterly payments in advance on the Quarter Days in everyyear, clear of all deductions whatsoever, the first of such payments shall be a proportionate payment for the period from the RentCommencement Date until the day immediately preceding the immediate next Payment Day (notwithstanding the date or dates hereof)and shall be made on or before the Rent Commencement Date and the next payment shall be made on that Quarter Day for the quartersucceeding and so forth quarterly, termly and proportionally thereafter. Each payment of the said rent payable hereunder shall bemade by banker’s standing order in favour of such bank account as the Landlord may direct in writing from time to time and the Tenantshall forthwith complete and deliver to the Landlord all forms provided by the Landlord for that purpose and the Tenant shall not withoutthe prior written consent of the Landlord vary, amend or cancel any banker’s order form completed by it in pursuance of theseprovisions;2.2a yearly sum equal to: 2.2.1a fair and equitable proportion of the premium or premiums incurred by the Landlord in complying with its insuranceobligations under Clauses 4.3.1, 4.3.3, 4.3.4 and 4.3.7; and 2.2.2the whole of the premium incurred by the Landlord in complying with its insurance obligations under Clause 4.3.2;all payable within 10 Working Days of written demand, with the first payment being a proportionate payment in respect of the periodfrom the Date of Entry to the date preceding the date of renewal of the policies concerned;2.3the Service Charge as defined in, at the times specified in and ascertained in accordance with Part 5 of the Schedule; and2.4within 10 Working Days of written demand all other monies payable to the Landlord under the provisions of this Lease,the sums payable in accordance with clauses 2.1 to 2.4 (inclusive) are hereinafter together called the “Rents".3Tenant's ObligationsThe Tenant HEREBY UNDERTAKES:3.1rentsTo pay the Rents at the times and in the manner at and in which the same are respectively hereinbefore due and payable without anydeduction and in the event that any of the Rents shall remain unpaid for more than 10 Working Days after the date upon which thesame becomes due  9 (whether formally demanded or not) to pay Interest from the date upon which the relevant Rents became payable until the date ofpayment.3.2outgoings 3.2.1To pay, bear and discharge and perform all existing and future rates, taxes, duties, charges, assessments, impositionsand outgoings and obligations whatsoever (whether parliamentary, parochial, local, national or of any other description)which now are or may at any time hereafter during the Duration of this Lease be charged, rated, levied, assessed orimposed upon the Premises or upon the owner or occupier in respect thereof except any tax payable in respect of anydealing or deemed dealing by the Landlord with its interest in the Premises or the Development or any taxes payableby the Landlord by reason of receipt of the annual rent in terms of this Lease (other than Value Added Tax on the rent). 3.2.2To pay for all gas, water and electricity consumed and all telephone, facsimile and similar services used by the Tenanton the Premises during the Duration of this Lease (including all charges for hire of meters, telephones and otherequipment in respect thereof) and to observe and perform at the Tenant’s expense all present and future regulationsand requirements of the gas and electricity, telephone and water suppliers concerning the installation and use ofservices in and exclusively serving the Premises.3.3repairs and maintenance 3.3.1At all times throughout the Duration of this Lease at the expense of the Tenant well and substantially to repair,maintain, decorate and clean the Premises and every part thereof and all Conduits including sprinkler and fire alarmsystems in so far as the same serve the Premises exclusively in good and substantial repair and condition and(whenever necessary for the purpose of ensuring that they are kept at all times in such condition) to renew, rebuild andreinstate the Premises and every part thereof; such obligations herein contained shall subsist regardless of the age orstate of dilapidation of the Premises and irrespective of the cause of the damage, deterioration or destruction whetherby a defect, latent or patent which may exist in the Premises at the Date of Entry or which may subsequently developor from any other cause or source whatever; excepting from this obligation and any other provisions of this Lease (i)damage which is caused by one of the Insured Risks except to the extent that the insurance monies are renderedirrecoverable in whole or in part in consequence of any act, neglect or default of the Tenant or those for whom theTenant is responsible at law (including any sub-tenant or other occupier) and such irrecoverable monies have not havebeen paid in full, cleared funds by the Tenant to the Landlords pursuant to Clause 3.16.4; (ii) damage which is causedby any Uninsured Risks; and (iii) damage which is caused by the act, neglect of default of the Landlord or those forwhom the Landlord is responsible at law.  10 3.3.2To keep the Premises in a clean and tidy condition and properly cleansed and in particular to clean the windows andthe doors and all other glass in the Premises at least once per month or as otherwise reasonably required by theLandlord. 3.4internal decorationWithout prejudice to the generality of the foregoing obligations, at least once in every five years of the Duration of this Lease calculatedfrom the Date of Entry and (unless carried out in the immediately preceding 12 months period) in the last six months thereof howsoeverdetermined in a good and proper and workmanlike manner all to the reasonable satisfaction of the Landlord to prepare and paint, polishor otherwise treat as the case may be all internal surfaces of the Premises usually or requiring to be so treated having first preparedsuch surfaces by stripping off, stopping and priming as may be necessary and to wash down all washable surfaces and to grain,marble or varnish any parts so treated all decorations being carried out with high quality materials and where painting is involved twocoats being applied in addition to the priming coat such decoration in final redecoration cycle shall be executed in such colours,patterns and materials as approved by the Landlord (such approval not to be unreasonably withheld or a decision thereon unreasonablydelayed).3.5upkeep 3.5.1To cleanse and maintain and to keep cleansed and maintained and free from obstruction all Conduits serving thePremises exclusively excepting from this obligation and any other provisions of this Lease (i) damage which is causedby any Insured Risks except to the extent that the insurance monies are rendered irrecoverable in whole or in part inconsequence of any act, neglect or default of the Tenant or those for whom the Tenant is responsible at law and suchirrecoverable monies have not have been paid in full, cleared funds by the Tenant to the Landlords pursuant to Clause3.16.4; (ii) damage which is caused by any Uninsured Risks; and (iii) damage which is caused by the act, neglect ofdefault of the Landlord or those for whom the Landlord is responsible at law. 3.5.2To replace by new articles of similar kind and quality, any fixtures, fittings or plant or equipment (other than tenant’s ortrade fixtures and fittings) upon or in the Premises which shall become beyond economic repair, all to the reasonablesatisfaction of the Landlord.3.6notice of breachTo permit the Landlord with or without workmen and others and appliances at all reasonable hours in the daytime during the Duration ofthis Lease after giving Requisite Notice to enter the Premises or any part thereof to view the state and condition of the same and of alldefects, wants of reparation and breaches of obligations then and there found for which the Tenant is liable hereunder to give or leaveon the Premises notice in writing to the Tenant and within 10 Working  11 Days after every such notice or such longer or shorter period of time as shall be appropriate and reasonable in the circumstances tocommence and then diligently to proceed to repair and to make good the same according to such notice and the obligations hereincontained to a standard compliant with the Tenant’s obligations under this Lease AND if the Tenant shall fail to complete such workswithin two calendar months of the service of such notice or such other period as shall be reasonable and appropriate in thecircumstances it shall be lawful (but without prejudice to the right of irritancy hereinafter contained) for the Landlord upon RequisiteNotice to enter the Premises and to carry out or cause to be carried out all or any of the works referred to in such notice for which theTenant is liable under this Lease and the properly and reasonably incurred cost of so doing and all expenses properly and reasonablyincurred thereby shall be paid by the Tenant to the Landlord within 10 Working Days of written demand PROVIDED ALWAYS that whenexercising its right under this Clause 3.6, the Landlord complies with Clauses 1.1.7.3, 1.1.7.4 and 1.1.7.5 of the Entry Conditions.3.7entryTo permit the Landlord at all reasonable times during the Duration of this Lease upon Requisite Notice to enter upon the Premises: 3.7.1to take schedules or inventories of the fixtures and fittings, plant and machinery belonging to the Landlord or to beyielded up at the expiration or sooner determination of this Lease; and 3.7.2with or without other persons for any other reasonably necessary purpose connected with the rights and obligations ofthe Landlord under this Lease and/or the interest of the Landlord in the Premises,PROVIDED ALWAYS that when exercising its right under this Clause 3.7, the Landlord complies with the Entry Conditions.3.8no other buildingNot to erect any new building or new structure of any kind at any time upon the Premises or any part thereof.3.9title conditionsTo perform and observe all the real liens, burdens, conditions, restrictions, servitudes, agreements or others howsoever constituted,whether in the Title Deeds or otherwise which affect the Development, the Premises and/or the Common Parts or any part thereof fromtime to time so far as the same remain subsisting and capable of taking effect and to indemnify the Landlord from and against allactions, costs, expenses, claims and demands which may arise or be occasioned in respect of a breach by the Tenant or those forwhom it is legally responsible of its obligations in this Clause 3.9.  12 3.10alterations 3.10.1Not at any time during the Duration of this Lease to cut, divide, alter, maim or permit or suffer to be cut, divided,altered, maimed or removed any of the walls, beams, columns or other structural parts of the Premises or make orpermit or suffer to be made any change in or to the existing design or appearance of the Premises or to merge thePremises with any adjoining Lettable Unit nor except in accordance with plans and specifications previously submittedto and approved by the Landlord. 3.10.2Not at any time during the Duration of this Lease to make any alterations to the interior of the Premises (not beingalterations prohibited by the preceding sub-clause) without the previous written consent of the Landlord, such consentshall not be unreasonably withheld or a decision thereon unreasonably delayed for non-structural internal alterationswhich do not affect the external appearance of the Common Parts, subject always to the Tenant complying with allnecessary consents of any competent authority and exhibiting detailed plans and specifications to the Landlord. 3.10.3Not to interfere with or make any alteration, connection, disconnection or addition to the electrical installation orsprinkler and fire alarm systems and the sealed service duct (if any) located within the Premises and apparatus forheating, cooling, extracting or exchanging air of the Premises save in a manner previously approved by the Landlord(acting reasonably and such approval not be unreasonably withheld or a decision thereon unreasonably delayed) inwriting and in accordance with the terms and conditions laid down by the Institution of Electrical Engineers and theregulations of the electricity and water supply authorities. 3.10.4At all times following completion of any permitted alterations/additions to provide the Landlord with detailed plans,specifications and information reasonably required with regard to the value of such permitted alterations/additions.3.11userNot to use the Premises or permit the Premises to be used, other than as high quality offices without the Landlord’s prior writtenconsent provided always that the Landlord may only withhold consent where: 3.11.1it is in the Landlord’s opinion prudent to do so in accordance with the principles of good estate management; or 3.11.2the refusal of consent is in the Landlord’s opinion (acting reasonably) consistent with the use of the Building as a highquality office development.  13 3.12general user 3.12.1Not to do or permit or suffer to be done or remain upon the Premises or any part thereof anything which may be orbecome a legal nuisance, injury or damage to the Landlord or its tenants or the owners or occupiers of theDevelopment (including the Building) or any property in the neighbourhood or which may emit noxious odours or smellsor which may produce noise audible outside the Premises. 3.12.2Not to use or permit or suffer the Premises or any part thereof to be used for any noxious or offensive trade orbusiness nor for any illegal or immoral act or purpose and no sale by auction shall take place thereon. 3.12.3Not to allow rubbish of any description to accumulate upon the Premises nor to discharge or permit or suffer to bedischarged into any pipe or drain serving the Premises and/or the Development (including the Building) or any otherproperty, any oil, grease or other deleterious matter or any substance which might be or become a source of danger orinjury to the drainage system of the Premises and/or the Development (including the Building) or any such otherproperty or any parts thereof. 3.12.4Not to suspend or to permit or suffer to be suspended any excessive weight from the main structure of the Premisesand/or the Building. 3.12.5Not to overload or permit or suffer to be overloaded the floors, roofs or structures of the Premises and/or the Buildingor permit or suffer the same to be used in any manner which will cause undue strain or interfere therewith and not toinstall or permit or suffer to be installed any machinery on the Premises which shall be unduly noisy or causedangerous vibrations nor to use or permit or suffer to be used the Premises or any part thereof in such manner as tosubject the same to any strains beyond those which it is designed to bear. 3.12.6Not to reside or sleep on the Premises or use any part thereof as a dwellinghouse.3.13display of notices 3.13.1To ensure that no figure, letter, pole, flag, signboard, advertisement, inscription, bill, placard or sign whatsoever shallbe attached to or exhibited in, on or to the Premises or the windows thereof so as to be seen from the exterior of thePremises without the previous consent of the Landlord (such consent not be unreasonably withheld or a decisionthereon unreasonably delayed). The Tenant shall be entitled to have its signage, of a size determined by the Landlord,acting reasonably, included in the Landlord’s standard signage located within the ground floor reception of the CommonParts and provided for the use of all tenants within the Building. 3.13.2PROVIDED THAT the Landlord’s consent shall not be required in respect of signs, notices and posters stating theTenant’s name and business or profession (such sign,  14 if the Landlord so requires, to be removed and any damage caused thereby made good by the Tenant at the end orsooner determination of this Lease) PROVIDED THAT if the Tenant at any time displays a sign or signs or any otherdisplay materials in accordance with this Clause 3.13.2 which the Landlord considers (acting reasonably) aredetrimental to the visual aspects of the Premises and/or the Building or any adjoining property, the Landlord shall beentitled to require the Tenant to take down the sign or signs or display materials and if the Tenant fails to do so withina reasonable time period, the Landlord can enter the Premises and take down the sign or signs or display materialsafter giving Requisite Notice to the Tenant of its intention to do so and shall not be liable to make good any loss ormake any compensation for such action but the Landlords shall use reasonable endeavours to minimise any damagecaused to the Premises in the exercise its rights under this Clause 3.13.2.3.14masts and wiresNot to erect poles, masts or wires on the exterior of the Premises (whether in connection with a satellite dish or television apparatus orotherwise) without the previous consent of the Landlord (such consent not be unreasonably withheld or a decision thereon unreasonablydelayed).3.15obstruction of common parts 3.15.1That no road, forecourt, car park or other area or entrance hall, staircase, passageway, lift or other relevant part orparts of the Common Parts and/or the Development and/or other areas leading to or giving access to the Premisesshall be damaged or obstructed or used in such manner as to cause in the opinion of the Landlord (acting reasonably)any legal nuisance or damage. 3.15.2Not to display or hang or place or exhibit or sell or permit or suffer to be displayed or hung or placed or exhibited orsold any goods outside the Premises and not to obstruct or permit or suffer to be obstructed the Common Parts.3.16vitiation of insurance 3.16.1Not to do or omit anything whereby any policy or policies of insurance for the time being in force in respect of orincluding or covering the Premises, and/or the Development (including the Building) against any of the Insured Risksmay become void or voidable or whereby the rate of premium thereon may be increased and that the Tenant will at alltimes comply with the requirements of the Insurers of the Premises and/or the Development (including the Building)and will indemnify the Landlord against all expense and loss arising from a breach of this obligation. 3.16.2Not to effect any insurance against any of the Insured Risks in respect of or relating to the Premises.  15 3.16.3Upon becoming aware of the happening of any event or thing against which insurance has been effected by theLandlord or under the provisions hereinafter contained to give notice thereof to the Landlord. 3.16.4That in the event of the Premises and/or the Development (including the Building) or any part thereof being destroyedor damaged by any of the Insured Risks and the insurance money under any insurance against the same effectedthereon by the Landlord being wholly or partially irrecoverable by reason solely or in part of any act, neglect or defaultof the Tenant or those for whom the Tenant is responsible at law, and in every such case the Tenant will pay to theLandlord the whole of such irrecoverable insurance money in full, cleared funds (or a fair proportion thereof if onlypartially attributable to any act, neglect of default of the Tenant or those for whom the Tenant is responsible at law).3.17statutory requirementsSubject always to the proviso aftermentioned: 3.17.1At all times during the Duration of this Lease at the Tenant’s own expense to observe and comply in all respects withthe provisions and requirements of any and every statute or prescribed or required by any public, local or otherauthority so far as they relate to or affect the Premises or the use of the tenant thereof or any additions orimprovements thereto installed by the Tenant or the user thereof for any purposes or the employment therein by theTenant of any person or persons or any fixtures, fittings, machinery or plant for the time being affixed thereto or beingthereupon or used for the purposes thereof. 3.17.2To execute all works and provide and maintain all arrangements which by or under any statute or by any governmentdepartment, local authority or other public authority or duly authorised officer or court of competent jurisdiction actingunder or in pursuance of any enactment are or may be directed or required to be executed provided or maintained atany time during the Duration of this Lease upon or in respect of the Premises or any addition or improvements theretocarried out by the Tenant or in respect of any user thereof or employment therein of any person or persons by theTenant or fittings, fixtures, machinery or plant by the Tenant. 3.17.3To indemnify the Landlord at all times against all costs, charges and expenses of or incidental to the execution of anyworks relating to the Premises or the provision or maintenance of any arrangements so directed or required asaforesaid and not at any time during the Duration of this Lease to do or omit in or about the Premises any act or thingby reason of which the Landlord may under any enactment incur or have imposed upon it or become liable to pay anypenalty, damages, compensation, costs, charges or expenses.  16 3.17.4Without prejudice to the foregoing generality to comply with at all times the provisions of the Planning Acts, FactoriesAct 1961, the Offices Shops and Railway Premises Act 1963, the Fire (Scotland) Act 2005 and the Health and Safetyat Work Etc. Act 1974, the Construction (Design and Management) Regulations 2015 and the Equality Act 2010, all asamended from time to time insofar as the same applies to the Premises. 3.17.5To provide the Landlord on request and at the Tenant’s expense with copies of the fire certificate, the Health & SafetyFile and any certificates, consents, warrants, notices and other documentation relating to the Premises as the Landlordmay require from time to time as evidence of the Tenant’s compliance with this Clause 3.17.3.18notice of claimsWithin 5 Working Days of the receipt of notice of the same to give full particulars to the Landlord of any permission, notice, order orproposal for a notice or order relevant to the Premises or to the use or condition thereof made, given or issued to the Tenant or theoccupier of the Premises by any government department, local or public authority and if so required by the Landlord to produce suchpermission, notice, order or proposal to the Landlord and also without delay to take all reasonable or necessary steps to complytherewith and also at the reasonable request and at the expense of the Landlord to make or join with the Landlord in making suchobjections and representations against or in respect of any such notice, order or proposal as aforesaid as the Landlord shall actingreasonably deem expedient.3.19alienation 3.19.1Not to assign, charge or sub-let or part with or share the possession or occupation of any part or parts (as distinct fromthe whole) of the Premises to or with any other person or corporation. 3.19.2Not to part with or share possession of the whole of the Premises to or with any other person or corporation or permitany company or person to occupy the same save as provided below. 3.19.3Not to sub-let the whole of the Premises at a fine or a premium (whether given or taken) nor at a rent less than the rentpayable hereunder or the open market rent of the Premises at the time of such sub-lease (whichever shall be thehigher). 3.19.4Notwithstanding the foregoing provisions of this sub-clause, not to assign, charge or sub-let the whole of the Premiseswithout the previous consent of the Landlord which consent will not be unreasonably withheld or a decision thereonunreasonably delayed in the case of a proposed assignee or sub-tenant of sound financial standing and demonstrablycapable of fulfilling the obligations of the Tenant under this Lease or the intended sub-lease.  17 3.19.5Upon the Landlord consenting to a sub-let of the Premises to ensure that the sub-lease shall contain: 3.19.5.1an unqualified obligation on the part of the sub-tenant that the sub-tenant will not assign or charge orhold on trust for any other person or corporation any part or parts of the Premises (as distinct fromthe whole) and will not sub-let or (save by way of an assignation of the whole) part with or sharepossession of or hold on trust for any other person or corporation or permit any person or companyto occupy the whole or any part of the Premises thereby sub-let, 3.19.5.2an obligation on the part of the sub-tenant that the sub-tenant will not assign or sublet the whole ofthe Premises without the previous consent of the Landlord which consent shall not be unreasonablywithheld or a decision thereon unreasonably delayed in the case of a respectable and responsibleproposed assignee or sub-tenant of sound financial standing and demonstrably capable of fulfillingthe obligations of the subtenant under the sub-lease, 3.19.5.3such further obligations by the sub-tenant (which the Tenant hereby undertakes to enforce) as toprohibit the sub-tenant from doing or suffering any act or thing upon or in relation to the Premises bythe sub-tenant which will contravene any of the Tenant’s obligations in this Lease, 3.19.5.4an irritancy provision on breach of any obligation on the part of the sub-tenant, and 3.19.5.5provisions reserving the same rights of entry for the Landlord against the sub-tenant as the Landlordhas against the Tenant in this Lease. 3.19.6To undertake to the Landlord to enforce all obligations upon the sub-tenant under the sub-lease. 3.19.7Not to grant any sub-lease except in a form to be first approved by the Landlord (acting reasonably and such approvalnot be unreasonably withheld or a decision thereon unreasonably delayed). 3.19.8Not to waive or vary any provisions of any such sub-lease after it has been granted without the prior consent of theLandlord which shall not be unreasonably withheld or a decision thereon unreasonably delayed.  18 3.20payment of feesTo pay to the Landlord within 10 Working Days of written demand the properly and reasonably incurred costs, charges and expenses(including solicitors’, counsel’s and surveyors’ and other reasonably required professionals’ costs and fees) including any Value AddedTax thereon (but only in exchange for a valid VAT invoice addressed to the Tenant in accordance with Clause 1.2.11) properly andreasonably incurred by the Landlord: 3.20.1in the preparation and service of a schedule of want of repair or dilapidations at any time during this Lease or within 2months after the termination thereof (but relating in all cases only to dilapidations which accrued before the expiry orearlier termination of the Duration and for which the Tenant is responsible in terms of this Lease); 3.20.2in connection with the recovery of arrears of Rents properly due from the Tenant hereunder; 3.20.3in connection with and relating to the enforcement of or procuring the remedy of any breach of any obligation of theTenant hereunder notwithstanding that steps taken hereunder may be rendered unnecessary by the Tenant’ssubsequent compliance with the terms of this Lease; and 3.20.4in respect of any application for consent required by this Lease including the approval of drawings and specifications,the inspection and supervision of works and the issue of any certificate and that whether or not such consent begranted or the application be withdrawn or not proceeded with (save where the same is not granted in circumstanceswhere the Landlord is found to have acted unreasonably in withholding or delaying its consent when it is not entitled todo so under this Lease).3.21the planning actsIn relation to the Planning Acts: 3.21.1At all times to comply in all respects with the provisions and requirements of the Planning Acts and all licences,consents, permissions, agreements and conditions (if any) already or hereafter to be granted, imposed or entered intothereunder or under any enactment repealed thereby so far as the same respectively relate to or affect the carrying outby the Tenant of any operations on the Premises or any part thereof or the Tenant’s use of the Premises as permittedunder this Lease. 3.21.2During the Duration of this Lease so often as occasion shall require at the expense in all respects of the Tenant toobtain from the local authority, and/or the local planning authority, and/or the Scottish Government and/or theSecretary of State for Scotland (or other appropriate Minister) all such licences, consents and permissions (if any) asmay be required for the carrying out by the Tenant of any operations on the Premises or the institution or continuanceby the Tenant thereon of any use thereof as permitted  19 under this Lease which may constitute development or a material change of use within the meaning of the PlanningActs but so that the Tenant shall not make any application for planning permission without the prior consent of theLandlord which consent shall not be unreasonably withheld or a decision thereon unreasonably delayed but shall not bedeemed to be unreasonably withheld if giving such consent would impose any financial liability on the Landlord. 3.21.3To pay and satisfy any charge that may hereafter be imposed under the Planning Acts in respect of the carrying out ormaintenance by the Tenant of any such operation or the institution or continuance by the Tenant of any such use asaforesaid. 3.21.4Notwithstanding any consent which may be granted by the Landlord under this Lease not to carry out or make anyalteration or addition to the Premises or any change of use thereof (being an alteration or addition or change of usewhich is prohibited by or for which the consent of the Landlord is required to be obtained under this Lease and for whicha planning permission needs to be obtained) before a planning permission and building warrant (if necessary) thereforhas or have been produced to the Landlord and acknowledged by it as satisfactory to it but so that the Landlord mayrefuse so to express satisfaction with any such planning permission or building warrant on the grounds that the periodthereof or anything contained therein or omitted therefrom in the reasonable opinion of the Landlord would be or belikely to be materially prejudicial to the Landlord’s interest in the Premises or the Development during the Duration ofthis Lease or following the expiration or determination thereof. 3.21.5Unless the Landlord shall otherwise in writing direct to carry out before the expiration or sooner determination of thisLease any works stipulated to be carried out to the Premises as a condition of any planning permission or buildingwarrant granted during the duration of this Lease as a result of a planning application submitted by the Tenant whetheror not the date by which the planning permission or building warrant required such works to be carried out falls withinthe Duration of this Lease, except where the relevant planning permission is temporary or personal to the Tenant orotherwise will expire or cease to apply on determination of this Lease. 3.21.6If and when called upon so to do to produce to the Landlord and as it may direct all such plans, documents and otherevidence as the Landlord may reasonably require to satisfy itself that the provisions of this sub-clause have beencomplied with in all respects. 3.21.7As soon as practicable on receiving the same to give to the Landlord notice of any order, direction, proposal or noticeunder the Planning Acts or relating to any of the matters referred to in this sub-clause hereof which is served upon orreceived by the Tenant in connection with or relating to the Premises and will produce to the Landlord if so required anysuch order, direction, proposal or notice as aforesaid as is in the possession of the Tenant and will not regarding suchorder, direction, proposal or  20 notice as aforesaid take any action not approved by the Landlord (such approval not to be unreasonably withheld or adecision thereon unreasonably delayed). 3.21.8Not without the consent of the Landlord to serve any notice under Part 5 of the Town and Country Planning (Scotland)Act 1997. 3.21.9Not without the consent of the Landlord to enter into any agreement under Section 75 of the Town and CountryPlanning (Scotland) Act 1997. 3.21.10The Lease and the Rents payable to the Landlord hereunder shall not determine by reason only of any change,modification or restriction of use of the Premises or obligations or requirements hereafter to be made or imposed underor by virtue of the Planning Acts.3.22fire fighting equipmentTo keep the Premises sufficiently supplied and equipped with such fire fighting and extinguishing appliances as shall from time to timebe required by law or by the local or other competent authority or as shall be reasonably required by the Landlord and such appliancesshall be open to inspection and shall be maintained to the reasonable satisfaction of the Landlord and also not to obstruct the accessto or means of working such appliances or the means of escape from the Premises in the case of fire or other emergency.3.23to leave in good repair 3.23.1At the expiry or sooner termination of this Lease quietly to surrender the Premises to the Landlord free of the Tenant’soccupation and free of occupation of any other occupier and that in good, tenantable and substantial repair and inaccordance with the obligations on the part of the Tenant contained in this Lease having made good all damagecaused by the removal of trade or tenant’s fixtures or fittings and tenant’s signage and having complied with the termsof any schedule of dilapidations served by the Landlord, all such matters being carried out in a proper workmanlikemanner to the reasonable satisfaction of the Landlord. 3.23.2At the entire cost of the Tenant to remove any alterations, additions, signs, fittings or fixtures which may have beenmade or installed by or on behalf of the Tenant or any sub-tenants subsequent to the Date of Entry and to restore thePremises to their condition prior to such alterations, additions, signs, fittings or fixtures having been carried out orinstalled, in a proper and workmanlike manner having regard to then best practices and to the Landlord’s reasonablesatisfaction. 3.23.3If at the Date of Expiry the Premises shall not be in such good and substantial repair and condition as referred to inClause 3.23.1, the Tenant shall carry out at its entire cost the works necessary to put the Premises into such repairand condition (the “Removal Works”) and in default of the Tenant so doing within a reasonable time  21 period after the Date of Expiry having regard to the nature of the works, the Landlord shall be entitled to carry out theremoval works at the entire cost of the Tenant (the proper and reasonable expenses incurred thereby being payable bythe Tenant to the Landlord on demand with Interest from the date of written demand by the Landlord). 3.23.4Whether the Removal Works are carried out by the Tenant or, in default by the Tenant as aforesaid, by the Landlord,there shall in addition be paid to the Landlord by the Tenant a sum equivalent to the loss of rent and Service Charge (atlevels not less than those respectively payable in the period immediately preceding the Date of Expiry) suffered by theLandlord in respect of the period from the Date of Expiry until all such necessary Removal Works have beencompleted to the satisfaction of the Landlord such sum to be paid on a date being 10 Working Days from the date thatall such works have been so completed.3.24re-lettingDuring the six months immediately preceding the determination of this Lease to permit the Landlord or its agents to affix upon any partof the Premises a notice as to the proposed re-letting or disposal of the Landlord’s interest therein and to permit intending tenants orpurchasers at reasonable times of the business day on Requisite Notice to view the Premises subject to (i) sub-clauses 1.1.7.3,1.1.7.4 and 1.1.7.5 of the Entry Conditions; (ii) such notices not materially obscuring the windows or signs of the Premises; and (iii)such notices being removed forthwith upon conclusion of a legally binding contract for a sale or letting of the Premises.3.25not to accumulate rubbishNot to allow trade empties or rubbish of any description to accumulate on or outside the Premises but to place all refuse or rubbish inproper receptacles therefor and not hang or place or to allow to be hung or placed any articles or other goods of any description outsidethe Premises or the entrance door thereof whether on any forecourt or otherwise or from the windows of the Premises nor exposeoutside or from the windows of the Premises any clothes, articles or other goods of any description.3.26not to obstruct windowsNot to stop up or obstruct any windows or light belonging to the Landlord nor permit any new window, light opening, doorway, path,drain or other encroachment or servitude to be made into, against or upon the Premises and to give notice to the Landlord of any suchwhich shall be made or attempted and come to the Tenant’s notice and at the reasonable request of the Landlord and at the joint costof the Landlord and the Tenant to adopt such means and take such steps as may be reasonably required by the Landlord to preventthe same.  22 3.27to give noticeWithin one month after the execution of any assignation, charge, transfer or sub-lease or any transmission by reason of a death orotherwise affecting the Premises or any part thereof to produce to and leave with the Landlord or the agents for the time being of theLandlord a copy of the deed, instrument or other document evidencing or effecting such dealing or transmission.3.28emergency warning systemsTo keep any emergency warning systems within the Premises free from obstruction and to ensure that all employees of the Tenanthave detailed knowledge of the emergency procedure to operate in the event that the emergency warning system is used whichprocedure will be contained in the regulations therefor issued in writing from time to time by the Landlord (acting reasonably).3.29notices of damageAs soon as reasonably practicable after becoming aware of the same to give notice in writing to the Landlord of any defect in the stateof the Premises and/or the Development (including the Building) which would or might give rise to any third party claim or to anyobligation on the Landlord to do or refrain from doing any act or thing and indemnify and keep indemnified the Landlord from or againstany loss, claims, actions, costs or demands arising from a failure to give such notice and at all times to display and maintain all propernotices (including the wording thereof) which the Landlord (acting reasonably) may from time to time display or require to be displayedat the Premises in relation to such liability.3.30empty propertyIn the event of the Premises or any separately rateable portion thereof having been unoccupied for a period immediately prior to theexpiration or sooner determination of this Lease and the Tenant being allowed relief from rates in respect thereof, the Tenant shallmake good any loss suffered by the Landlord by reason of the Landlord being refused such relief by the local authority in respect of theperiod subsequent to the Duration of this Lease.3.31to pay costs of repair of conduits in emergenciesIn the event of emergencies only and the Tenant having breached its obligations under this Lease and, in particular, Clauses 3.33 and3.35, to pay to the Landlord within 10 Working Days of written demand all proper and reasonable costs and expenses incurred by theLandlord in keeping in good, tenantable repair and condition such parts of the Conduits as are situated outside the Premises but aredesigned to serve exclusively the Premises.  23 3.32emergency stairways etcNot to allow or permit any emergency stairways or passages to be used by the Tenant, its servants, sub-tenants or licensees forpurposes other than in an emergency or cause the same or access thereto to be obstructed or impeded in any way.3.33not to harm drainsNot to allow or suffer to pass into the Conduits any effluent or other substance which could cause any obstruction in or damage to theConduits and in the event of any such obstruction or damage resulting from the Tenant’s breach hereof to make good the same to thereasonable satisfaction of the Landlord.3.34loading and unloading of goods 3.34.1Not to load or unload any goods or materials from any vehicles except when they are occupying the portion of theservice road, car park, or common service areas provided for that purpose and for such period as shall be reasonablynecessary for such loading or unloading and not to cause congestion of the said service road, car park, or within thesaid common service areas nor inconvenience to any other user thereof. 3.34.2Not to permit any vehicles belonging to the Tenant or to any persons calling on the Premises expressly or byimplication with the authority of the Tenant to stand on the service road, internal or circulation roads within the CarParks or any pavement thereof. 3.34.3To comply with such reasonable directions as may from time to time be given by the Landlord in writing for theregulation and direction of traffic in the service road, car park and common service areas. 3.34.4Not to allow or permit any goods or articles to be conveyed to or from the Premises except through the entrances andservice areas provided for the purpose.3.35heating, cooling & ventilation 3.35.1Not to knowingly do or permit anything which interferes with the heating, cooling or ventilation of the Common Parts orany part of the Building or which imposes an additional load on the heating, cooling or ventilation plant and equipment. 3.35.2To operate the ventilation equipment in the Premises which comprises part of the system for the air-conditioning orventilation of the Common Parts or any part of the Building in accordance with any reasonable regulations for suchpurpose made by the Landlord (acting reasonably) and notified in writing to the Tenant from time to time.  24 3.36securityTo ensure that all entrances and exits from and to the Premises are held lockfast and secure outwith such times as an employee ofthe Tenant is not actually present in the Premises.3.37not to prejudice servitudes 3.37.1Not by building or otherwise to interrupt or obstruct any right of the nature of a servitude, wayleave, privilege orencroachment enjoyed by any subjects nor to permit or obstruct any windows, lights, ventilators or any othersbelonging to the Premises nor to permit any new window, light, ventilator, passage, drainage or other encroachment orservitude to be made into or acquired against or over the Premises or any part thereof and if any such encroachmentor servitude whatsoever be made or acquired or threatened to be made or acquired to give notice to the Landlord and atthe cost of the Landlord do all such things as may be reasonably required or deemed proper for the purpose ofpreventing any new encroachment or servitude being made or acquired PROVIDED ALWAYS that if the Tenant omitsor neglects to do all such things as aforesaid it shall be lawful for the Landlord or its agents, officers, servants andworkmen to enter the Premises and to do the same subject to the Entry Conditions. 3.37.2Not to give any third party any acknowledgement that the Tenant enjoys any such right over, under or into thePremises by the consent of such third party nor to pay any such third party any sum of money or to enter into anyagreements with such third party for the purpose of inducing or obliging such third party to abstain from interrupting orobstructing such right and if any of the owners or occupiers of adjacent land or buildings does or threatens to doanything which interrupts or obstructs such right to give notice thereof to the Landlord.3.38notices & defectsTo give notice as soon as practicable on becoming aware of the same to the Landlord of: 3.38.1any defect in the Premises which might give rise to an obligation on the Landlord to do or refrain from doing any act orthing in order to comply with the provisions of this Lease or any duty of care that may be imposed upon the Landlordby statute or at common law and at all times to display and maintain all notices which the Landlord may from time totime reasonably require to be displayed at the Premises; 3.38.2all notices, permissions, orders or proposals for a notice or order made, given or issued to the Tenant by anygovernment department or local or public or other competent authority under or by virtue of any powers and to give tothe Landlord a certified copy of each such notice, permission, order or proposal and if so required by the Landlord andat the joint cost of the Landlord and the Tenant to make or join in making such objections or representations in respectof any such notice, order or proposal as the Landlord may reasonably require; and  25 3.38.3damage to or destruction of the Building or any part thereof whether the same shall have been caused by theoccurrence of any of the Insured Risks or otherwise.3.39temperatureTo keep the temperature in the Premises at a level sufficient to prevent the freezing of water and other pipes situated within thePremises.3.40application for consentUpon making any application for any consent or approval which is required under this Lease the Tenant shall disclose to the Landlordsuch information as the Landlord may reasonably require.3.41remedy breaches by sub-tenantsIn the event of a breach, non-performance or non-observance of any of the obligations, conditions, agreements and provisionscontained or referred to in this Lease by any sub-tenants of the Tenant, upon discovering the same, to take and institute at its ownexpense all reasonably necessary steps and proceedings to remedy or procure remedy of such breach, non-performance or non-observance (without prejudice, however, to the Landlord’s right to irritate this Lease on account of such breach, non-performance ornon-observance).3.42indemnity 3.42.1To free, relieve and indemnify the Landlord from and against liability in respect of any injury to or the death of anyperson, damage to any property, heritable or moveable, any interdict or court action, the infringement, disturbance ordestruction (or alleged infringement, disturbance or destruction) of any right, servitude or privilege or otherwise byreason of or arising out of the repair, state of repair, condition of the Premises and all damage caused by any burst,overflow or stoppage of any Conduits exclusively serving the Premises (but only to the extent that the Tenant isresponsible for such repair, state of repair or condition under this Lease) or any alteration or addition or improvement tothe Premises by the Tenant or the use of the Premises or the Common Parts by the Tenant and from any act,omission or default of the Tenant, or those for whom they are respectively responsible at law in the implementation andobservance of the obligations contained in this Lease and from all proceedings, costs, claims and demands ofwhatsoever nature in respect of any such liability or alleged liability. 3.42.2Provided always that: 3.42.2.1the Landlord shall use reasonable endeavours to mitigate any such liability, proceedings, costs,claims and demands resulting from such a breach by the Tenant;  26 3.42.2.2where the Tenant is obliged to indemnify the Landlord in respect of any matter under this Lease theLandlord (i) shall, at the reasonable request of the Tenant, keep the Tenant fully informed of allmaterial steps or proceedings which may give rise to any liability on the part of the Tenant undersuch indemnity; and (ii) shall have due and proper regard (without being required to implement thesame) to any proper and reasonable representations made by the Tenant relating thereto; and 3.42.2.3the foregoing indemnity shall not apply to the extent that (i) the liability is due to any act, default ornegligence on the part of the Landlord or others for whom it is responsible in law; or (ii) theLandlord is indemnified by the insurances which it has effected or should have effected had itcomplied with its obligations under this Lease, except to the extent that the insurance monies arewithheld due to the actions or omissions of the Tenant or anyone for whom the Tenant isresponsible at law.3.43requirements of insurersTo comply in all respects with the terms and conditions and any other requirements affecting the Premises and the permitted usethereof contained in any insurance policy maintained in respect of the Premises and notified to the Tenant.3.44regulationsTo observe, perform and comply with the Regulations.4Landlord's ObligationsThe Landlord hereby undertakes:4.1Landlord's warrantyThe Tenant shall and may peaceably and quietly hold and enjoy the Premises during the Duration of this Lease without any lawfulinterruption by the Landlord or any person rightfully claiming through, under or in trust for it.4.2servicesThe Landlord undertakes to the Tenant that, at all times during the Duration of this Lease and in accordance with the principlesof good estate management, it shall use all reasonable endeavours to carry out or procure the carrying out of such of the serviceslisted at Part 6 of the Schedule as the Landlord (acting reasonably and in accordance with the principle of good estate management)considers appropriate for the benefit of the Tenant and other tenants of the Development as a whole.  27 4.3insurance 4.3.1To pay to the Insurers the premiums for keeping the Development (including the Building and the Premises and allfixtures, permitted additions and alterations therein except tenant’s trade fixtures) insured subject to such normal andreasonable commercial limitations or exclusions as the Insurers may impose and through such agency as the Landlordshall from time to time decide for the Full Cost of Reinstatement against loss or damage by the Insured Risks and thatfor the Duration of this Lease. 4.3.2To insure against Loss of Rent and Service Charge. 4.3.3To keep adequate insurances in respect of property owner’s liability, third party liability and employer’s liability inrespect of the Development (including the Building). 4.3.4To keep insured such of the Plant and Equipment as the Landlord from time to time reasonably deems appropriate (butonly to the extent that such cover is not effected under Clause 4.2.1 hereof) against mechanical and electricalbreakdown, explosion and third party risks and to effect staff insurance, staff vehicle insurance, Common Parts andcontents insurance. 4.3.5Notwithstanding the terms of Clauses 4.2.1 to 4.2.4 immediately above, the Landlord shall insure against the risksdefined as the Insured Risks only so long as and to the extent to which the Landlord is able to obtain such cover atnormal and reasonable commercial rates and on normal and reasonable commercial conditions. 4.3.6To cause all monies received by virtue of any such insurance to be laid out in making good the items covered by suchinsurance and (except to the extent that such insurance is vitiated in whole or in part by any act, neglect, default oromission of the Tenant or those for whom the Tenant is responsible at law) to make up any shortfall between suchinsurance monies and the cost of such rebuilding and reinstating and making good. 4.3.7Notwithstanding the terms of this Clause 4.2, to effect such other necessary insurances in respect of the Development(including the Building and the Common Parts), and the Plant and Equipment and the Landlord’s interest therein as theLandlord shall from time to time deem appropriate (acting reasonably). 4.3.8Upon reasonable request by the Tenant but not more often than once per calendar year, to produce or procure theproduction to the Tenant of evidence of such insurance and of payment of the last premium therefor. 4.3.9The Landlord shall use reasonable endeavours to:  28 4.3.9.1procure that the Insurers note the interest of the Tenant on the relevant policy (either specifically orgenerically); and 4.3.9.2include in such policy a waiver of subrogation rights in favour of the Tenants (either specifically orgenerically),provided always that "reasonable endeavours" shall not, in this context, include any obligation upon the Landlord toplace or threaten to place its insurance cover with a different insurance company if the existing policy or proposedpolicy will be a block policy which covers the Development (including the Building) and at least one other property.4.4reinstatementIf either (i) the Premises, or (ii) the Development (including the Building and the Common Parts) or any part thereof on which thePremises depend for support, access or servicing (the “Relevant Parts”), are destroyed or damaged by any of the Insured Risks so asto render the Premises unfit for use and occupation as permitted by this Lease or inaccessible then unless and to the extent thatpayment of the insurance monies or any part thereof shall be refused in whole or in part by reason of any act or default of the Tenant orthose for whom the Tenant is responsible at law, and the Tenant has not paid to the Landlord in full cleared funds such irrecoverableproportion attributable to such act or default, and subject to the Landlord being able to obtain any necessary planning consents and allother necessary licences, approvals and consents, the Landlord shall as soon as reasonably practicable lay out the net proceeds ofsuch insurance (other than sums receivable in respect of Loss of Rent and Service Charge) towards rebuilding, repairing and reinstatingthe Development (including the Building, the Common Parts and the Premises) as soon as reasonably practicable and, as necessary,in accordance with the original plans, elevations and details thereof with such variations as may be necessary or in the Landlord’s or itsmanaging agent’s opinion desirable having regard both to statutory provisions, bye-laws and regulations then in force and any planningapproval necessary and also to building standards then prevailing to the intent that the Development (including the Building, theCommon Parts and the Premises) shall be reconstructed so as to conform to the then current practice and to be substantiallycomparable to the Building (including the Common Parts and the Premises) as at the date of such damage or destruction and shallafford to the Tenant a substantially comparable area to that contained in the Premises and/or the Common Parts (as applicable) as atthe date of damage or destruction.4.5abatement of rentIn case the Premises or any Relevant Parts or any part thereof shall at any time during the Duration of this Lease be destroyed ordamaged by any of the Insured Risks so as to render the Premises unfit for occupation and use as permitted under this Lease orinaccessible and except to the extent that the policy or policies of insurance shall not have been vitiated or payment of the policymonies refused in consequence of some act or default of the Tenant or those for whom the  29 Tenant is responsible at law the Rents payable under Clauses 2.1 and 2.3 of this Lease, or a fair proportion thereof according to thenature and extent of the damage sustained, shall be suspended from the date of the damage or destruction until the earlier of (i) thedate on which the Premises and the Relevant Parts shall be again rendered fit for occupation and use as permitted under this Leaseand are again accessible or (ii) until the expiration of the period of Loss of Rent and Service Charge insured by the Landlord; and anydispute regarding the said abatement of rent shall be referred to the award of a single arbitrator to be appointed in default of agreementupon the application of either party by the President for the time being of the Scottish Branch of the Royal Institution of CharteredSurveyors in accordance with the provisions of the Arbitration (Scotland) Act 2010.4.6terminationIf the Premises or the Relevant Parts or any part thereof are destroyed or damaged by any of the Insured Risks so as to render thePremises unfit for occupation and use as permitted under this Lease or inaccessible and are not repaired or reinstated in the mannerprovided for in Clause 4.3 within a period of 3 years from the date of such damage or destruction either party may terminate this Leaseat any time after the expiry of the said period by giving not less than one month’s written notice to that effect to the other party. Inconnection with the notice: 4.6.1the date of termination of this Lease will be the date of service of the notice; and 4.6.2all insurance monies will be paid to the Landlord and the Tenant will have no claim on the insurance moniesimmediately on the giving of the notice.4.7Uninsured Risk damage 4.7.1If the Premises or any Relevant Parts are destroyed or damaged (whether in whole or in part) by any Uninsured Riskso as to render the Premises unfit for occupation and use as permitted under this Lease or inaccessible: 4.7.1.1the rent and the Service Charge or a fair proportion of the rent and the Service Charge according tothe nature and extent of the damage, shall cease to be payable until the Premises shall again be fitfor occupation and use as permitted under this Lease and are again accessible; and 4.7.1.2the Landlord may by notice in writing to the Tenant given at any time within twelve months aftersuch destruction or damage elect whether or not to reinstate the Premises. 4.7.2If the Landlord elects within such twelve month period to reinstate the Premises then: 4.7.2.1the Landlord shall at their own cost (subject to the availability of all consents necessary tocommence reinstatement in a form acceptable to the Landlord (acting reasonably)) reinstate thePremises (but not any  30 tenant’s fixtures and fittings) to the extent that is necessary to render the same fit for occupationand use as permitted under this Lease, and such destruction or damage shall be deemed for thepurposes of the Landlord’s obligation to reinstate to have been caused by an Insured Risk; 4.7.2.2the Landlord shall from time to time on request supply to the Tenant their best estimate of thetimetable for reinstatement; and 4.7.2.3if the Premises are not repaired or reinstated in the manner provided for in Clause 4.7.2.1 within aperiod of 3 years from the date of such damage or destruction either party may terminate this Leaseany time after the expiry of the said period by giving not less than one month’s written notice to thateffect to the other party and the date of termination of this Lease will be the date of service of thesaid notice. 4.7.3If (pursuant to Clause 4.7.1.2 the Landlord elects not to reinstate the Premises (or if the Landlord fails within thespecified twelve month period to make any election) then this Lease shall automatically terminate with effect from thedate of such election or, as the case may be, the last date upon which such election could have been made. 4.7.4If the Premises or the Relevant Parts are destroyed or major damage caused to them so as to render the Premisesunfit for occupation or use as permitted under this Lease by an Uninsured Risk and: 4.7.4.1such destruction or damage occurs during the last three years of this Lease then the Landlord shallbe entitled to determine this Lease on giving not less than six months’ prior written notice to theTenant; or 4.7.4.2the Landlord has not notified the Tenant in writing that it has obtained all consents necessary tocommence reinstatement in a form acceptable to the Landlord (acting reasonably) within two yearsof such damage or destruction then either party shall be entitled to determine this Lease on givingnot less than one month’s prior written notice to the other,this Lease will then determine on the date specified in the relevant notice, but without prejudice to the rights of anyparty against any other for any antecedent breach of its obligations under this Lease. 4.7.5Upon determination of this Lease, the Tenant shall ensure that the whole of the Premises are given to the Landlord freeof the Tenant’s occupation and free of occupation of any other occupier. 4.7.6If this Lease is determined then the Landlord shall be entitled to retain the whole of the insurance monies for theirabsolute use and benefit.  31 4.8lease to continue in forceUnless otherwise specifically provided herein this Lease shall not be terminated by reason of any damage to or destruction of thePremises or the Common Parts, or any part thereof, however the same be caused, but shall nevertheless remain in full force and effectfor the Duration of this Lease, notwithstanding any rule of law to the contrary.5ProvisosProvided always and it is hereby agreed and declared as follows:5.1irritancy 5.1.1Notwithstanding and without prejudice to any other remedies and powers herein contained or otherwise available to theLandlord if the Rents payable hereunder or any part thereof shall be unpaid for 14 days after becoming payable(whether formally demanded or not) or if there be any other breach, non-observance or non-performance by the Tenantof any of its other obligations under this Lease or if the Tenant for the time being hereunder being a company shallenter into liquidation whether compulsory or voluntary (other than a voluntary liquidation of a solvent company for thepurpose of amalgamation or reconstruction) or pass a resolution for winding up or suffer a receiver to be appointed orhave an administration order made against it or being an individual or being more than one individual any one of themshall become bankrupt or notour bankrupt or apparently insolvent or sign a trust deed for creditors or suffer anydiligence to be levied on its, their or his goods then and in any such case the Tenant shall at the sole option of theLandlord forfeit all right and title under these presents and if such option of irritancy be exercised this Lease shallbecome ipso facto null and void and that without the necessity of any declarator process of removal or other processat law and the Premises shall thereupon revert to the Landlord who shall be entitled to enter the Premises andrepossess and enjoy the same as if this Lease had never been granted but without prejudice to the Landlord’s right ofaction in respect of any antecedent breach of the Tenant’s obligations herein contained; 5.1.2Provided always that in the case of a breach, non-observance or non-performance by the Tenant of any of itsundertakings contained in this Lease which is capable of being remedied (albeit late), the Landlord shall not exerciseany such option of irritancy unless and until it shall first have given written notice to the Tenant and to any insolvencyrepresentative in respect of the Tenant's interest in this Lease specifying such breach, non-observance or non-performance and requiring the same to be remedied and intimating its intention to exercise its option of irritancy in theevent of said breach, non-observance or non-performance not being remedied within such period as shall be stated inthe notice (being such reasonable period of time as the Landlord shall stipulate in the notice as being practicable in allthe circumstances, which in the case of a breach being the non-payment of rent or any other monetary  32 sum (other than any monetary sum demanded further to a schedule of dilapidations issued in accordance with theterms of this Lease), however, shall be specified by the Landlord shall be a period of not less than 14 days) and theTenant or any insolvency representative shall have failed to remedy the same within said period; and 5.1.3in the case of the Tenant being a limited company going into liquidation (other than for the purposes of reconstructionor amalgamation as aforesaid) or having a receiver, administrator or administrative receiver appointed or, in the case ofthe Tenant being an individual or individuals, having a trustee or curator or judicial factor appointed under a trust deedor by order of a Court (each of the said parties being herein called the “Insolvency Representative”) then, and in anysuch event, the Landlord shall allow the Insolvency Representative a period of six months from the date of theappointment of such Insolvency Representative in which to dispose of the Tenant’s interest in this Lease and shallonly be entitled to exercise its option of irritancy on the grounds of the appointment of the Insolvency Representative ifthe Insolvency Representative shall have failed to dispose of the Tenant's interest by the end of the said period,provided always that the Insolvency Representative shall within 28 days of appointment accept personal liability interms satisfactory to the Landlord (acting reasonably) for payment of the Rents (whether due in respect of a periodoccurring before or after the date of appointment of such Insolvency Representative) and for the performance of all ofthe other obligations of the tenant in terms of this Lease and that from the date of the appointment of such InsolvencyRepresentative to the date of disposal or irritancy including settlement of any arrears of rent and the performance ofany outstanding obligations which may subsist at the date of the appointment of such Insolvency Representative andduring the said period of six months the Insolvency Representative shall be entitled to the same rights as the Tenanthereunder, save for the provisions of Clause 5.1.1.5.2service of notices 5.2.1All notices must be in writing. 5.2.2Any demand or notice requiring to be made given to or served on the Tenant shall be duly and validly made, given orserved if sent by the Landlord or its agents by recorded delivery post by pre-paid letter addressed to the Tenant (and ifthere shall be more than one of them then any of them) at the Premises and at its registered office. PROVIDED THAT for so long as the Tenant is Nucana, all notices served on the Tenant shall be served at (a) thePremises and (b) at its registered office, in both cases marked for the attention of Hugh Griffith. 5.2.3Any notices required to be given to the Landlord shall be well and sufficiently given if sent through the recordeddelivery post by pre-paid letter addressed to the Landlord at  33 its registered office or (if the Landlord is an individual) the Landlord’s last known address. 5.2.4Any demand or notice sent by post as aforesaid shall be conclusively treated as having been made, given or servedforty-eight hours after the date of posting.5.3tenant’s acknowledgementNothing in this Lease shall imply or warrant that the Premises may in accordance with the Planning Acts be used for the purposeherein authorised and the Tenant hereby acknowledges and admits that the Landlord has not given or made at any time anyrepresentation or warranty that any such use is or will be or will remain a permitted use under the Planning Acts.5.4exclusion of compensationNotwithstanding anything herein contained or consequent hereto and in derogation thereof the Landlord and all persons authorised by itshall have power, without obtaining any consent from or making any compensation to the Tenant, to deal as it or they may think fit withthe Development and any part thereof, any of the lands, buildings or parts of buildings adjacent, adjoining or near to the Premises orany part thereof and to erect or suffer to be erected thereon or on any part thereof any building whatsoever and to make any alterationsor additions and carry out any demolition or rebuilding whatsoever which it or they may think fit or desire to do to such lands orbuildings or any part or parts thereof; PROVIDED THAT (i) nothing in this Clause 5.4 or otherwise in terms of this Lease shall permitthe Landlord to diminish or adversely affect the rights granted to the Tenant under this Lease; and (ii) without prejudice to the foregoinggenerality, the Landlord shall ensure that such buildings, alterations or additions shall not affect or diminish the light or air which maynow or at any time during this Lease be enjoyed by the Tenant or the tenants or occupiers of the Premises to a material extent.5.5waiverThe demand for and/or the acceptance of Rents by the Landlord or its agents shall not constitute and shall not be construed to mean awaiver of any of the obligations on the part of the Tenant herein contained or of the penalty attached to the non-performance thereof.5.6no liability in damagesThe Landlord shall not in any circumstances incur any liability to the Tenant: 5.6.1for any damage loss or expense to the Premises or to any of the goods, persons or property of the Tenant except tothe extent that: 5.6.1.1the Landlords are indemnified in terms of the insurances effected in terms of this Lease and theTenants or those for whom they are  34 responsible at law have not caused the said insurance monies to be vitiated or withheld in whole orin part, 5.6.1.2the liability is due to negligence on the part of the Landlord, its servants, employees, agent,independent contractors or others for whom it is responsible in law; or 5.6.1.3the liability is due to breach by the Landlord of any of its obligations under this Lease; and 5.6.2for any loss, damage or expense sustained by the Tenant by or through any defect, decay, inadequacy, want of repairor decoration or otherwise in the Premises or the Common Parts or in or arising from the choking, bursting, overflow,leakage, stoppage or failure of any gas, water or soil pipes, ducts and cisterns or of the drains, sewers, gutters, rhonesor conductors or the failure, fusing or breakdown of any electric wires or appliances or other service media or for anyloss, damage or expense caused to the Tenant through any act or omission of the Landlord, the proprietors, tenants oroccupiers of any Lettable Units or any adjoining or neighbouring properties or from any other cause or source whatever,except to the extent that (i) the Landlords are indemnified in terms of the insurances effected in terms of this Lease; (ii)the liability is due to negligence on the part of the Landlord, its servants, employees, agent, independent contractors orothers for whom it is responsible in law; or (iii) the liability is due to breach by the Landlord of any of its obligationsunder this Lease.5.7failure to perform obligationsThe Landlord shall not in any event be liable to the Tenant in respect of any failure of the Landlord to perform any of its obligations tothe Tenant hereunder whether expressed or implied if it shall be prevented, hampered or restricted in any way from so doing by anymatter not within the reasonable control of the Landlord (excluding the Landlord’s financial circumstances), provided that the Landlordshall use all reasonable endeavours to resume performance of its obligations as soon as reasonably practicable.5.8statutory compensationThe Tenant shall not be entitled to claim any compensation from the Landlord on quitting the Premises or any part thereof.5.9exclusion of rights not grantedNothing herein contained shall operate expressly or impliedly to confer upon or grant to the Tenant any servitude, right or privilege otherthan any expressly hereby granted.  35 5.10value added taxWhere by virtue of any of the provisions of this Lease the Tenant is required to pay or repay to the Landlord or to any other person orpersons any cost, fee, charge, expense or other sum in respect of the supply of any goods or services by the Landlord or any otherperson or persons, the Tenant shall also be required to pay and shall keep the Landlord indemnified against the amount of any VATwhich may be chargeable in respect of such supply but only in return for a valid VAT invoice properly addressed to the Tenant.5.11arbitrationAny arbitrator appointed under this Lease will be appointed jointly by the Landlord and the Tenant or, if the parties fail to agree on theappointment, then either the Landlord or the Tenant may apply to the Chairman or other senior office holder for the time being of theScottish Branch of the Royal Institution of Chartered Surveyors to appoint an arbitrator.6JurisdictionThis Lease shall be interpreted in accordance with the Law of Scotland and any dispute, difference or question of any kind which mayarise between the parties shall be determined in accordance with the Law of Scotland.7RegistrationThe parties consent to registration hereof for preservation and execution: IN WITNESS WHEREOF these presents consisting of thisand the 34 preceding pages together with the schedule are executed as undernoted:FOR AND ON BEHALF OF THE SAID DRUM INCOME PLUS LIMITED BY BRYAN SHERRIFF, ATTORNEY, PURSUANT TO POWER OFATTORNEY BY DRUM INCOME PLUS LIMITED DATE 15TH JULY 2016 /s/ Elizabeth Ward /s/ Bryan Sheriffsignature of director/witness signature of Bryan SherriffElizabeth Ward Edinburghfull name of above (print) place of signing 21-9-2017 date of signing address of witness  36 FOR NUCANA BIOMED LIMITED /s/ Moira Adamson /s/ Hugh Stephen Griffithsignature of director/authorised signatory/witness signature of director/authorised signatoryMoira Adomson Hugh Stephen Grffithfull name of above (print) full name of above (print) 7 September 2017 date of signing 10 Lochside Place, Edinburghaddress of witnessplace of signing  THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING LEASE BETWEEN DRUM INCOME PLUS LIMITED AND NUCANA BIOMEDLIMITEDSCHEDULEPART 1AThe PremisesALL and WHOLE that second floor office suite known as Suite 2 (East) forming part of the Building, shown coloured brown and outlined red on thePremises Plan forming Part 9A of this Schedule and which includes:1the paint, paper, plaster and other decorative finishes applied to the interior of any wall of the structure of the Building which forms aboundary of the suite but (subject to the terms of paragraph 5 below) not any part of such walls of the suite;2the floor finishes , including screeds, so that the lower limit of the suite shall include such finishes and screed but shall not extend toanything below them;3the ceiling finishes so that the upper limit of the suite shall include such finishes but shall not extend to anything above them otherthan the underside of the structure to which a ceiling finish of plaster and/or the like or supports for a suspended ceiling finish is/areapplied or fixed thereto;4the entirety of any non-loadbearing internal walls or partitions within the suite;5the inner half severed medially of any of the walls (so far as they are internal, non-loadbearing and so far as they are not walls of thestructure of the Building) dividing the suite from other parts of the Building but excluding any structural pillars or columns located in oradjoining such walls and also excluding structural pillars or columns within the suite;6the windows, the window frames, the doors, the door frames and all plate glass therein;7all additions and improvements to the suite carried out throughout the Duration of the foregoing Lease including any false ceiling;8all Landlord’s fixtures, fittings, plant, machinery, apparatus (including fire detection and alarm systems) serving the Premisesexclusively and appurtenances and all additions thereto (other than the Tenant’s trade fixtures and fittings); and9all pipes, wires, cables, conduits, trunking, drains, meters and any other service media exclusively serving the Premises.TOGETHER WITH the right to the exclusive use of 15 car parking spaces within the Car Parks together with access to and from the Car Parks toand from the Premises, as such spaces may be determined by the Landlord and intimated in writing to the Tenant from time to time, which 15 carparking spaces at the  38 Date of Entry are shown outlined red on the Car Park Plan forming Part 9C of this Schedule. Declaring that the Landlord shall be entitled to alterthe location of the spaces to be used by the Tenant in terms of the foregoing Lease at any time on giving to the Tenant no less than 1 week’swritten notice to that effect,PROVIDED THAT (a) the Tenant will always have the exclusive use of 15 car parking spaces within the Car Parks; and (b) the Landlord shall notpermanently relocate the Tenant from spaces numbered 1-4 (inclusive) on the Car Park Plan unless required to do so to comply with statutory,local authority regulations, any planning or building control permissions or consents affecting the Development or for another such reason out withthe Landlord’s reasonable control (but excluding the Landlord’s financial circumstances).  39 PART 1BALL and WHOLE the building known as Lochside House, 3 Lochside Way, Edinburgh, EH12 9DT and forming part of the Development.  40 PART 1CALL and WHOLE the whole subjects and others known as and forming Site G2, 3 Lochside Way, Edinburgh, EH12 9DT being the whole subjectsregistered in the Land Register of Scotland under Title Number MID70754 and shown outlined red on the Development Plan forming Part 9B of thisSchedule.  41 PART 2Common PartsThe parts and pertinents of the Development (including the Building) as first constructed, or thereafter extended, erected or altered by the Landlordfrom time to time (acting reasonably), under exception of the Premises and any other Lettable Units, declaring that without prejudice to theforegoing generality, the Common Parts shall include:1the structure, foundations, floors, floor slabs, external and internal walls (so far as not part of any Lettable Units), ceilings and glazingand all floor, wall and ceiling and other finishes of the escape, service and fire corridors, common lift shafts, the structure surroundingcommon stairs and stairs themselves of the Building including without prejudice to the said generality the roofs of all or any of theforegoing and all entrance and exit doors thereto and therefrom;2the toilets, offices and stores and all other utilities provided from time to time for public or common service of and within the Building;3the whole Car Parks, access and service roads, yards and loading areas within the Development;4all pedestrian walkways, cycle lanes, entrance malls, passageways and stairways and other pedestrian and other common areasforming part of the Development (including the Building) as the same may be varied, altered or extended pursuant to the provisions ofPart 4 of the Schedule;5all walls, fences and other erections or boundary demarcations whatsoever which form the boundary from time to time of theDevelopment;6the Conduits;7the Plant and Equipment;8the Management Premises within the Building; and9all hard and soft landscaped areas forming part of the Development and not forming part of any Lettable Units as the same may bevaried, altered or extended pursuant to the provisions of Part 4 of the Schedule.  42 PART 3Common RightsThe Landlord grants to the Tenant (in common with the Landlord and other occupiers and tenants of the Development (including the Building) ortheir agents and all other persons from time to time duly authorised by the Landlord (acting reasonably) for that purpose, but only to the extent soentitled or authorised), the following rights:1Passage of utilitiesThe free passage of ventilation, heating, water, soil, gas, electricity and drainage, air and telephone and other services in and throughthose parts of the Conduits serving inter alia the Premises, provided that the Tenant shall not knowingly use or attempt to use or permitthe use of any part of the Conduits to an extent which is in excess of the capacity it is designed to bear.2Access to other parts of the BuildingTo enter upon any part of the Common Parts immediately adjoining the Premises (without obstructing such part) upon first obtainingthe prior written consent of the Landlord (which consent shall not be unreasonably withheld or a decision thereon unreasonablydelayed) for the purpose of cleansing, inspecting, repairing, maintaining, or renewing the whole or any part of the Premises (to theextent that such maintenance, repair et cetera cannot practicably be carried out from within the Premises), subject to the Tenant:2.1being bound to exercise such right in a manner as will cause the least practicable inconvenience and disturbance to the Landlord andneighbouring proprietors or occupiers of the Development (including the Building); and2.2making good all damage thereby occasioned as soon as reasonably practicable,in both cases to the reasonable satisfaction of the Landlord.3Right of supportRight of support, shelter and protection from the adjoining and adjacent parts of the Building.4Common PartsA right in common with the other tenants and occupiers of the Building and the Development to use the Common Parts insofar as isreasonably required for the Tenant to enjoy beneficial use and occupation of the Premises (including access to and from the Premisesand to and from the Car Parks) as permitted in terms of this Lease, subject to the Tenant complying with the Regulations.  43 PART 4Exceptions and ReservationsThe following rights and reservations are excepted and reserved in favour of the Landlord and its tenants and the proprietors/tenants of anyadjoining or neighbouring land and/or Lettable Unit and all other persons authorised by the Landlord or having the like rights:1Passage of utilitiesThe free and uninterrupted passage of and running of ventilation, heating, water, soil, drainage, gas, electricity and telephone and otherservices in and through the Conduits with the right to construct and maintain new services for the benefit of any adjoining orneighbouring land and/or premises (provided that where such new Conduits constructed through the Premises they may only beconstructed along such line and in such location as the Tenant may agree in writing, such agreement not to be unreasonably withheldor delayed) and the right to repair, maintain and renew such existing and new services and the right at any time but (except in anemergency) upon Requisite Notice to enter (or in an emergency or after the giving of Requisite Notice in the Tenant’s absence to breakand enter) the Premises PROVIDED THAT the Landlord shall make good any damage caused to the Premises as soon as reasonablypracticable but the Landlord being under no liability to pay compensation and shall otherwise comply with the Entry Conditions.2No restriction on adjoining propertyThe right to build, rebuild or execute any other works upon any adjoining or neighbouring land and/or premises in such manner as theLandlord or the person exercising such right may think fit PROVIDED THAT (i) such works shall not materially diminish or adverselyaffect the rights granted to the Tenant under this Lease; (ii) without prejudice to the foregoing generality, the Landlord shall ensure thatsuch buildings, alterations or additions shall not affect or diminish the light or air which may now or at any time during this Lease beenjoyed by the Tenant or the tenants or occupiers of the Premises to a material extent; but the Landlord being under no liability to paycompensation; (iii) no part of the costs of any such building or works shall be borne by the Tenant; and (iv) if entering the Premises forthe exercise of the rights under this paragraph 2, the Landlord shall comply with the Entry Conditions.3Right to use Conduits and Plant and EquipmentThe right to use all Conduits and Plant and Equipment within the Premises and to connect with or otherwise use the same providedthat:3.1the Landlord shall not use or attempt to use any part of the Conduits and Plant and Equipment within the Premises to an extent whichis in excess of the capacity they are designed to bear; and3.2as from the date of taking into use and only if the Landlord has taken the said Conduits and Plant and Equipment into use for its sole,exclusive benefit and not for either:  44 3.2.1carrying out of its obligations under this Schedule or the foregoing Lease, or 3.2.2granting the said use to a third party,the Landlord shall contribute a fair and equitable proportion of the expense of maintaining, repairing or renewing the same.4Entry for repairSubject to the Entry Conditions, the right at any time but (except in an emergency) after giving Requisite Notice to enter (or in anemergency or after the giving of Requisite Notice during the Tenant’s absence to break and enter at the Landlord’s expense andsubject to the Landlord making good any damage caused to the Premises as soon as reasonably practicable) the Premises:4.1for the purposes of inspecting and of cleaning, maintaining, repairing, altering, improving, renewing or replacing any part of theDevelopment (including the Building) including without limitation any part of the Common Parts and of building, constructing, rebuildingand/or altering the Premises or any buildings on any other land adjoining or neighbouring the Premises or carrying out any work uponany adjoining or neighbouring property or any Lettable Unit and of installing (whether by way of replacement or extension) new oradditional parts of any of the Conduits and the Plant and Equipment in, upon, under or near to the Premises or any part or parts thereofor for any necessary or reasonable purpose pertaining to the Premises and/or the Development (including the Building) or any part orparts thereof but PROVIDED THAT (i) the Tenant’s use and occupation of the Premises as permitted under this Lease is notpermanently or materially adversely affected and (ii) such works shall not affect or diminish the light or air which may now or at anytime during this Lease be enjoyed by the Tenant or the tenants or occupiers of the Premises to a material extent; or4.2to inspect or view the condition of the Premises; or4.3for the purposes of carrying out work or doing anything whatsoever comprised within the Landlord's obligations in terms of the foregoingLease whether or not the Tenant is liable to make a contribution; or4.4to take schedules or inventories of fixtures and other items to be given up on the expiry or earlier termination of the foregoing Lease; or4.5to exercise any of the rights granted or reserved to the Landlord by the foregoing Lease.5ServitudesAll existing servitudes, rights of way and others, if any, affecting the Premises or any part thereof, whether contained in the Title Deedsor otherwise.  45 6Right of supportThe right of light, air, support, shelter and protection and all other servitudes and rights now or hereafter belonging to or enjoyed byother Lettable Units or any other adjoining or neighbouring land.7Right to attach fixtures to outside wallsThe right to create, place or fix and maintain, renew and operate at any time during the Duration of the foregoing Lease to the CommonParts or blank elevations of any other part of the Building including without prejudice to that generality all roofs, canopies and externalwalls and any such items which may be considered by the Landlord acting reasonably to be requisite or desirable and including but notlimited to fire escapes, tenant information panels, television aerials and connections for the use of the tenants and other occupierswithin the Development (including the Building), public lighting, brackets (with lamps attached), seats, street names, vending machinesor waste paper receptacles.8ScaffoldingTo erect scaffolding for any purpose connected with or related to the Building.9Temporary deprivation of Common RightsTo suspend temporarily any rights granted to the Tenant in respect of the Common Parts in connection with the repair and maintenancethereof or any other necessary purpose.10Variation of Lettable UnitTo build or rebuild, narrow, widen or heighten any Lettable Unit in such manner as the Landlord may desire or permit.11Common rights/alienation11.1To use in common with everybody entitled to use the same the Common Rights.11.2To sell, dispose of or otherwise alienate in any way and at any time any part or parts of the Building.12Control of Common Parts12.1To vary, alter, restrict or extend the Common Parts, including: 12.1.1variation, alteration, restriction or extension of the Car Parks, access roads, pedestrian footpaths and ways, serviceroads, service yards and landscaped areas; and 12.1.2to build or rebuild upon any part of the Common Parts to such height and in such manner and otherwise as theLandlord may desire, provided that such variation,  46 alteration or extension does not permanently materially adversely affect the Tenant’s occupation and use of thePremises.12.2To regulate and control the use of the Common Parts in each case in accordance with the principles of good estate management andin particular (but without prejudice to the generality of the foregoing): 12.2.1close the public entrances to the Development (including the Building) outside normal business hours (as determinedby the Landlord, acting reasonably) subject to reasonable arrangements being made to allow access and egress by thecleaning staff of the Tenant; 12.2.2to make reasonable regulations for the control, regulation and limitation of pedestrian or vehicular traffic in theDevelopment or on any part thereof and to erect such signs as may be appropriate; and 12.2.3to vary, alter, change the use of, close or control access to the whole or any part of the Development (including theBuilding) (provided that the Landlord shall provide reasonable alternative access).13Extensions and additions to Building13.1The right from time to time to extend the Building (whether by developing or utilising any other ground owned by the Landlord oracquiring any area or areas of ground as a subsequent phase of the Landlord’s general development or by creating a new Lettable Unitor extending an existing Lettable Unit) and/or to erect new buildings or extend or alter existing buildings on or over any part of theBuilding or the Development (as existing at the date of execution of the foregoing Lease or after extension as aforesaid) includingwithout prejudice to the foregoing generality the right to build upon the roof and airspace above those parts of the Building and toresume without any compensation to the Tenant parts of the Common Parts for such purposes and/or to consent to a third party doingany of the foregoing; PROVIDED that on each occasion on which the Landlord exercises the rights hereinbefore reserved in thisparagraph 13: 13.1.1no part of the capital costs of any such extension, erection or alteration of buildings shall be borne by the Tenant; 13.1.2any additional Lettable Unit created in consequence of such extension, erection or alteration shall from the date whensuch additional Lettable Unit is completed or let, whichever is the earlier, be taken into account in calculating theService Charge Percentage applicable to the Premises which from such last mentioned date shall be amendedaccordingly; 13.1.3the Common Parts and the Building as defined and mentioned in the foregoing Lease shall as and from each occasionon which such extension, erection or alteration is  47 completed be deemed to refer to the Common Parts or the Building (as appropriate) as so extended, erected or altered; 13.1.4the Tenant’s occupation and use of the Premises as permitted by this Lease shall not be permanently materiallyadversely affected by such extension, erection or alteration; and 13.1.5the tenants of any such extended or altered part of the Building shall be entitled to use the Common Parts and toexercise the Common Rights.13.2To resume and remove from the Building any Lettable Unit and/or any additional areas not comprising Common Parts provided thatwritten intimation of such resumption is given to the Tenant as soon as practicable after any such resumption has taken place.14Right to alter Common Parts if so required by a competent authorityFull right and liberty to carry out all or any works which may be required by any public, local or other competent authority or which arerequired by any local acts or bye-laws or any statute already or hereafter to be passed and where the responsibility for such works isnot imposed upon the Tenant by such authority and in particular the Landlord reserves the right, if required by any such authority, toalter, amend or extend the service roads or areas, and walkways within, and other Common Parts of, the Development (including theBuilding) in accordance with the directions of such authority.15To make RegulationsIn each case in accordance with the principles of good estate management to make reasonable regulations for the use of the CommonParts and the Building, the control and regulation and limitation of pedestrian or vehicular traffic in the Development (including theBuilding), safety, traffic flow, amenity, visual amenity, to preserve the quality of the Building or other purposes and to erect such signsas may be appropriate and to make any reasonable regulations in relation to the Development (including the Building) which aredesigned for the general benefit of the Development (including the Building).16Variation of RegulationsTo make reasonable variations or alterations to the regulations provided for in paragraph 15 of Part 4 of this Schedule.DECLARING THAT in the exercise of the rights reserved to the Landlord or any other person in terms of Part 4 of this Schedule, the followingconditions shall apply: a)the Landlord or the person exercising the rights under Part 4 of this Schedule do so acting reasonably and in accordance with theprinciples of good estate management;  48 b)all damage to the Premises and (provided that the Tenant, having been given Requisite Notice, has taken reasonable steps to protectsame against damage) to the Tenant’s fittings and fixtures, caused by the exercise of such rights shall be made good as soon asreasonably practicable by the Landlord to the reasonable satisfaction of the Tenant; c)if any of the entitled parties require to enter upon the Premises for any of the said purposes, they shall be obliged to do so only (exceptin an emergency) on giving Requisite Notice, or in an emergency or after the giving of Requisite Notice during the Tenant’s absencethey shall be entitle to break and enter and in all cases shall comply with the Entry Conditions; d)all of such rights shall be exercised in such a manner as will cause, so far as is reasonably practicable, the minimum practicabledisruption and inconvenience to the Tenant and any other permitted occupier of the use of the Premises as permitted by this Lease; e)the Tenant’s use and enjoyment of the Premises as permitted under this Lease is not materially permanently adversely affected andadequate access to and egress the Premises is maintained at all times; and f)any scaffolding shall be erected for as short a period as shall be reasonably practicable in the circumstances and shall be removed assoon as reasonably practicable and shall not otherwise materially and permanently interfere with the access to or use and enjoyment ofthe Premises as permitted by this Lease.  49 PART 5Service Charge1Payments of Service ChargeIn order to ensure that the Landlord is fully and effectually indemnified in respect of all Service Expenditure, the Tenant shall pay to theLandlord, without deduction, a Service Charge, calculated in accordance with the provisions of this Part 5 of the Schedule.2Definitions2.1"the Accountant" means the accountant, surveyor or managing agent appointed by the Landlord from time to time for the purposes ofParts 5 and 6 of the Schedule, of determining the fair and equitable proportion of Service Charge and insurance premiums payable bythe Tenant, of preparation of accounts and certificates relating to the calculation of the Service Charge and of all other associatedpurposes (or if none is appointed, the Landlord itself acting reasonably through its accounts or service charge department);2.2"First Year" means the period from the Date of Entry to 31 December immediately succeeding;2.3"Last Year" means the period beginning 1 January (or such other date as may have been specified in accordance with sub-paragraph2.7 of Part 5 of this Schedule) immediately preceding the expiration or sooner determination of the Duration of the foregoing Lease andending on such expiration or sooner determination;2.4"Service Charge" means the sum calculated in the manner set out in paragraph 3 of this Part 5 of the Schedule and payable in themanner set out in paragraph 6 of this Part 5 of the Schedule;2.5"Service Expenditure" means the expenditure referred to in Part 6 of the Schedule under deduction of: 2.5.1any costs, which would otherwise form part of the Service Expenditure, relating to the making good of any damage ordestruction arising from an Insured Risk, save to the extent that:- 2.5.1.1such costs fall within any normal and reasonable commercial excess provision under the relevantpolicy of insurance, or 2.5.1.2the insurance monies are irrecoverable as a result of any act, neglect, default or omission on thepart of the Tenant, or those for whom the Tenant is responsible at law and the Tenant has not paidto the Landlord in full, cleared funds the shortfall to the extent attributable to such act, neglect,default or omission; and 2.5.2the Service Expenditure Exclusions;  50 2.6“Service Expenditure Exclusions” means the following exclusions which shall be deducted from the Service Expenditure for thepurposes of calculating the Tenant’s liability for Service Charge: 2.6.1any costs incurred in connection with rent reviews under the leases of any Lettable Units in the Development (includingthe Building) other than under this Lease and the cost of letting or attempting to let any unlet Lettable Units in theDevelopment (including the Building), 2.6.2any fees or costs attributable to the collection of rents from the other tenants of the Development (including theBuilding), 2.6.3any costs arising from the negligent act or default of the Landlord or those for whom the Landlord is responsible in lawor any of the tenants or occupiers of the Development (including the Building) (other than the Tenant or its permittedoccupiers), 2.6.4any costs which relate to any dealings or attempted dealings by the Landlord in or with their interest in theDevelopment (including the Building) or any part thereof or in the Lease, 2.6.5any costs relating to marketing and/or letting and/or attempting to let any of Lettable Units, 2.6.6any liability or expense for which the Tenant or other tenants or occupiers of the Development (including the Building)may individually be responsible under the terms of the tenancy or other arrangement by which they use or occupy theDevelopment (including the Building), including the costs of recovering the same, 2.6.7any expenditure incurred by the Landlord in enforcing any covenants or obligations of the Tenant or other tenants oroccupiers of the Development (including the Building) under the terms of the lease or other arrangement pursuant towhich they use or occupy the Development (including the Building) or any part of it, 2.6.8any costs received by the Landlord under the terms of a contractual claim, current warranty or guarantee against athird party (including costs received in respect of any works carried out under any defects maintenance periodapplicable to such works), 2.6.9any costs and expenses which relate to any unlet Lettable Unit, 2.6.10any costs relating to any reconfiguration, refurbishment, renovation or improvement of any lettable unit orredevelopment or refurbishment of the Common Parts, 2.6.11any costs attributable to innovation or improvement rather than repair or reinstatement except where innovation and/orimprovement is (i) the only viable option having regard  51 to materials then available and (ii) economically more prudent or viable than repair or reinstatement, 2.6.12any costs relating to the provision of a sinking fund or other provision for anticipated expenditure of a capital nature, 2.6.13any VAT to the extent that the Landlord is entitled to recover the same from HMRC, and 2.6.14any costs arising as a result of Uninsured Risk Damage.2.7"Year" (other than in relation to the First Year and the Last Year as herein defined) means each consecutive period of twelve monthsbeginning with the 1st day of January in any given year provided always that the Landlord may determine (acting reasonably and inaccordance with the principles of good estate management) that the Year may be a different period of twelve months and that duringthe transition period be greater or lesser than one year in which case "Year" shall mean the duration of such transition period.3Proportion of Service Charge3.1The Service Charge shall in relation to any Year other than the First Year and the Last Year consist of the Service Charge Percentageof the Service Expenditure (and pending determination of the Service Expenditure the Accountant’s estimate of the ServiceExpenditure in terms of paragraph 4 of this Part 5 of the Schedule) (provided always that if the Development (including the Building)shall be varied by reason of the alteration, extension or redevelopment of the Development (including the Building) or any part thereofthe Service Charge and/or the Service Charge Percentage may be adjusted in such manner as the Landlord determines (actingreasonably and in accordance with the principles of good estate management) to be a just and equitable share of the costs associatedwith the whole of the varied Development) and at the same time a further sum determined by the Landlord to be used to defray as faras possible such of said costs which are or are likely to be incurred at less frequent intervals than once during any year.3.2The Service Charge shall in relation to the First Year and the Last Year consist of the Service Charge Percentage of such reasonablepart of the Service Expenditure (subject to the proviso referred to in sub-paragraph 3.1 above) which is of a periodically recurring naturewhether occurring by regular or irregular periods whenever disbursed, incurred or made and whether prior to the date hereof or otherwiseincluding sums of money by way of reasonable provision for anticipated expenditure in respect thereof as the Accountant actingreasonably allocates as being fair and reasonable in the circumstances.4EstimatesThe Accountant acting reasonably and in the interests of good estate management shall within two months before or as soon aspracticable after the commencement of each Year (other than the First Year) (but the Tenant shall not be entitled to object to any delayon the part of the  52 Accountant) prepare an estimate of the Service Expenditure for that year and shall in respect of the First Year prepare an estimate ofthe Service Expenditure for the First Year.5CertificationAs soon as practicable after the calculation of the Service Expenditure shall have been completed in respect of any Year or partthereof (including the First Year and the Last Year) the Accountant shall certify the amount of the Service Expenditure for that Year(but so that any delay in or absence of such certification will not entitle the Tenant to withhold or delay payment of the Service Charge)and such certificate of the Accountant of the Service Expenditure for such Year (in the absence of manifest error) shall be binding onthe Tenant and the Landlord (except in the case of manifest or demonstrable error) and shall be deemed to be sufficient evidence that:5.1any estimate of future Service Expenditure is a fair and reasonable estimate; and5.2any item or class of past or future expenditure treated as Service Expenditure is correctly so treated.6Times of Payment6.1The Service Charge based upon the Accountant’s estimate of the Service Expenditure in respect of each Year excluding the First Yearbut including the Last Year shall be payable by equal quarterly instalments in advance on the Quarter Days.6.2The Service Charge for the First Year based upon the Accountant’s estimate of the Service Expenditure for the First Year shall bepayable upon a payment on the Date of Entry and a payment or payments (as the case may be) on the succeeding Quarter Day orDays (if one or more of such Quarter Days falls between the Date of Entry and the end of the First Year) apportioned pro rata.6.3As soon as the Accountant’s certificate shall have been completed under paragraph 5 of this Part 5 of the Schedule, any overpaymentby the Tenant based on the Accountant’s estimate shall be credited towards the Tenant's next payment or payments of Service Chargedue by the Tenant and any credit due to the Tenant at the end of the Last Year shall be paid to the Tenant within one month of theissue of such Accountant’s certificate. Any underestimate of Service Charge for any Year and/or the First Year and/or the Last Yearshall be payable by the Tenant to the Landlord within 20 Working Days of written demand.6.4If the Tenant has been given notice of the Accountant’s estimate of the amount of the Service Charge for any Year before the lastQuarter Day in that year the Tenant shall on that and any subsequent Quarter Day before such notice is given pay an amount equal tothe last quarterly payment of Service Charge in respect of the previous Year and the requisite adjustment by way of addition ofunderpayment or deduction of overpayment shall be made/given by adjusting the first quarterly payment after such notice has beengiven.  53 6.5The provisions of this Part 5 of the Schedule shall continue to apply notwithstanding the expiration or sooner determination of theDuration of the foregoing Lease but only in respect of the period down to such expiration or sooner determination of the Duration of theforegoing Lease.7Provision of InformationThe Landlord shall at the request of the Tenant once in respect of each Year provide the Tenant with a summary of the amountscomprising the Service Expenditure and all vouchers and accounts relative to the Service Expenditure but so that the Tenant shall notbe entitled to require any particular which could be ascertained by inspection of any statement prepared pursuant to paragraph 5 of thisPart 5 of the Schedule and so that any delay in providing or the non-provision of such summary and/or vouchers shall not be groundsupon which the Tenant shall be entitled to withhold or delay payment of the Service Charge.  54 PART 6Service Expenditure The Service Expenditure shall mean the reasonable costs and expenditure properly incurred or to be incurred by the Landlord acting reasonably(including proper and reasonable costs and expenses paid by the Landlord to a third party by virtue of any provisions in the Title Deeds and anyother title deeds) and whether alone or jointly with other persons and all expenditure directly or indirectly incurred or to be incurred by the Landlordacting reasonably, all in accordance with the principles of good estate management in relation to the following:1Performance of Landlord’s Obligations1.1Common Parts 1.1.1Throughout the Duration of the foregoing Lease to repair and maintain and, if necessary, renew, rebuild and reinstate inwhole or in part, the Common Parts regardless of the age or state of dilapidation of the Common Parts and irrespectiveof the cause of the damage, destruction or deterioration; 1.1.2subject to paragraph 1.15 of this Part 6 of the Schedule from time to time, and as often and in such manner as theLandlord shall consider reasonably necessary, to redecorate (to a scheme of colour and finish as determined by theLandlord) treat, light, cleanse and preserve the Common Parts; 1.1.3to keep the Common Parts including all corridors, entrance halls, stairs, roadways and footways, Car Parks, serviceyards, loading and unloading bays, service and escape corridors clean and tidy and properly lighted (when appropriate)and in good and substantial repair and condition and surfaced and free from obstruction; 1.1.4depending upon the ambient temperature to provide a supply of filtered partially heated air or ventilation to such of theCommon Parts as reasonably require the same and (if deemed desirable by the Landlord) cooling for such parts of theCommon Parts and for such hours and times of the year as shall be reasonable; 1.1.5to provide, maintain, repair and when necessary replace, adequate lighting for the appropriate parts of the CommonParts; and 1.1.6cleaning as often as the Landlord shall in its absolute discretion consider reasonably necessary the exterior of allwindows, doors and window/door frames in the Common Parts (and including the exterior of all windows serving theLettable Units) as well as the Common Parts themselves.  55 1.2repairs etc. of structureA fair and reasonable share of the costs of maintaining, repairing, decorating, lighting and cleansing and renewing and rebuilding all (ifany) ways, roads, pavements, sewers, drains, pipes, watercourses, walls, fences, passages or others which may be used by theowners, tenants or customers of the Development (including the Building) along or in common with other premises near or adjoining theDevelopment, including any amounts which the Landlord may be called upon to pay as a contribution towards such expenditure.1.3ratesAny existing or future taxes, rates, charges, community charges, duties, assessments, impositions and outgoings whatsoever inrespect of the Common Parts but specifically excluding taxes imposed upon the Landlord in respect of its capital interest in theDevelopment (including the Building) or any part thereof or in connection with any dealing or deemed dealing by the Landlord with itsinterest in the Development (including the Building) or any part thereof.1.4other outgoingsAll charges, assessments and outgoings for water, electricity, fuel, telephone and public or statutory utilities payable in respect of theCommon Parts.1.5management premisesCosts of providing and operating Management Premises and the Plant and Equipment for use in connection with the provision ofmanagement services for the Development (including the Building) (including the cost of office and cleaning equipment, furniture andother like costs) and together with any associated costs.1.6staff costsCosts of: 1.6.1providing and administering supervisory, administrative and service staff including wages, salaries, and the costs ofproviding special clothing and uniforms of and for all persons from time to time employed by the Landlord or anymanaging agents for purposes connected with the Development (including the Building), payments in respect ofnational insurance, graduated pensions, industrial training levies, redundancy and similar or ancillary paymentsrequired to be made by statute; and 1.6.2accommodation, heating, lighting, and Plant and Equipment and Conduits within the Development (including theBuilding) for use in connection with such supervisory, administrative and service personnel and the maintenance,repair and decoration of office or other accommodation and the provision, repair, maintenance and  56 replacement of equipment and furniture therein (including the cost of use of telephones).1.7refuse collectionsCosts of: 1.7.1provision (in so far as not provided by the local authority) and operation of communal containers and compactors atcollection points for the disposal of refuse; and 1.7.2periodic refuse collection services or arranging for such services together with any additional levy imposed by the localor other competent authority.1.8maintenance of equipment and servicesCosts incurred in respect of: 1.8.1the supply, inspection, maintenance, repair, overhaul, servicing, operation, alteration, renewal and replacement of anymachinery (including motor vehicles) articles and materials for the purpose of refuse collection; 1.8.2the inspection (by specialist contractors if thought necessary or desirable by the Landlord), maintenance, repair,overhaul, replacement, renewal, servicing and cleansing and treatment of the Common Parts or part thereof; 1.8.3the inspection, operation, maintenance, repair, overhaul, servicing, operation, alteration, renewal and replacement ofthe Plant and Equipment and the Conduits including without prejudice to the foregoing all lifts, lift shafts, standbygenerators and boilers and items relating to mechanical ventilation, heating, cooling, public address and closed circuittelevision; 1.8.4the replacement (where beyond economic repair) of the Plant and Equipment and Conduits; 1.8.5providing, maintaining, operating and administering a water supply for the Development (including the Building)including without prejudice the provision, maintenance and operation of all meters and related equipment and paying allcosts relative thereto; 1.8.6providing electricity and other utilities in connection with the provision of all the matters referred to in this Part 6 of theSchedule and a stand-by electricity generator, if any, to supply electricity in the Common Parts; 1.8.7supplying, providing, purchasing, hiring, maintaining, renewing, replacing, repairing, servicing, overhauling, and keepingin good and serviceable order and condition all appurtenances, appointments, fixtures and fittings, bins, receptacles,tools, appliances,  57 materials, equipment and other things which the Landlord may deem necessary for the maintenance, appearance,upkeep or cleanliness of the Development (including the Building) or any part thereof.1.9to keep accountsTo keep an account of the expenditure incurred by or for the Landlord in respect of the obligations and provisions of this Part of theSchedule.1.10titles 1.10.1A fair and reasonable share of the costs of upholding, maintaining (if necessary), renewing, rebuilding and reinstatingall roofs, main gables and mutual walls, entrances and stairways, sewers, drains, pipes and other subjects which arecommon to the Common Parts and other parts of the Development (including the Building) or any adjoining or adjacentsubjects and for which the Landlord may be liable exclusively or in common under its title. 1.10.2To perform and observe all the real liens, burdens, conditions, restrictions, servitudes, agreements or othershowsoever constituted, whether in the Title Deeds or otherwise which affect the Common Parts or any part thereoffrom time to time to the extent applicable to the Development (including the Building) and in so far as the same remainsubsisting and capable of taking effect and to take all actions, meet all costs, expenses, claims and demands whichmay arise or be occasioned in respect of any of the same.1.11costs of valuationThe obtaining of any independent professional valuation of the Development (including the Building) or any revisions thereof which shallbe required by the Landlord for the purpose inter alia of determining the Full Cost of Reinstatement (but no more frequently than once inany 3 year period).1.12managing agents’ feesProperly incurred and reasonable fees of any agents retained by the Landlord to manage the Development (including the Building) and ifno such agents are employed, a proper fee (including VAT thereon) for the provision of such management by the Landlord.1.13accountants’ feesProperly incurred and reasonable fees and other charges (including VAT thereon) for the Accountant appointed from time to time inproviding the services specified at paragraphs 4 and 5 of Part 5 of the Schedule.  58 1.14professional feesProperly incurred and reasonable fees and charges of any accountant, architect, engineer, surveyor or other professional adviseremployed to certify any matter or thing to be certified for the purpose of any provisions of this Part 6 of the Schedule or Part 5 of theSchedule.1.15external decorationWithout prejudice to the generality of the foregoing obligations, no more than once in every three years of the Duration of this Lease(and so long as not less than three years shall elapse between one complete redecoration of the Building and the next redecoration interms of this provision) in a good and proper and workmanlike manner to prepare and paint all the outside wood, metal, stucco, cementand other work of the Building and all other exterior parts as have previously been so painted with two coats at least of good qualitypaint or other suitable medium (in accordance with the requisite British Standards Specification at the time being subsisting in respectof the materials in question) and in like manner to prepare, wax and polish and otherwise maintain all the outside work now or whichought to be so treated with good quality materials and also in like manner as often as in the opinion of the Landlord shall be reasonablynecessary (but not more frequently than once in every three years of the foregoing Lease) to clean and treat in a suitable manner for itsmaintenance in good condition all the outside hardwood and metal and other work not required to be painted or polished and to clean alltiles, glazed bricks and similar washable surfaces.2public facilities etcExpenditure incurred in the provision, inspection, maintenance, repair, overhaul, replacement and renewal of such landscaping, trees,shrubs, flowers, grass and other plants and of such flags, flagpoles, decorative lights, moving displays, sculptures, showcases andother decorations and of such decorative or drinking fountains, public pay telephones, clocks, childminding information, first aid, leftluggage and lost property facilities or other like amenities as the Landlord is required by statute to provide or acting reasonably shallthink fit to provide or maintain on or in the Development (including the Building).3signsExpenditure incurred in the provision, inspection, maintenance, repair, overhaul, replacement and renewal of signs, signposts, locationmaps, direction boards and other informative signs, notices, displays or maps (whether or not illuminated and howsoever operated) inor upon the Common Parts or any other part of the Development (including the Building excluding the Lettable Units).4securityExpenditure in the provision of such security staff, contractors and equipment and apparatus as the Landlord shall acting reasonablythink fit and proper to employ and/or use and in the provision,  59 maintenance, replacement and renewal of such security equipment in the Development (including the Building excluding the LettableUnits) from time to time.5toiletsExpenditure incurred in or about the attendance, cleaning, inspection, maintenance, repair, overhaul, replacement and renewal and thestaffing of the common and public toilet facilities in the Development (including the Building excluding the Lettable Units).6VATThe applicable amount of VAT on any item of expenditure specified or referred to in this Part 6 of the Schedule.7orders, statutory requirements etcTaking all steps necessary for complying with or making representations against or otherwise contesting the incidence of theprovisions of any legislation or orders or statutory requirements thereunder concerning town planning, compulsory purchase, publichealth, highways, streets, drainage or other matters relating to or alleged to relate to the Development (including the Building) for whichthe Tenant is not directly liable hereunder or the tenants of other premises within the Development (including the Building excluding theLettable Units) or any one or more of them are not directly responsible under their leases including complying with all provisions andrequirements of any and every enactment or any public, local or other authority and executing all works and providing all arrangementswhich may be directed or required as aforesaid so far as the same relate to the Common Parts.8Car ParkThe cost of operating the Car Parks and of managing, repairing, maintaining (if necessary), rebuilding, renewing and cleaning the sameand keeping them clear of all rubbish and obstructions.9CCTV systemExpenditure incurred in the provision, maintenance and renewal of a closed circuit television system or the like for the Development(including the Building) and each and every part thereof.10fire fighting equipment etc.Expenditure incurred in providing fire prevention and fire fighting equipment appliances and apparatus (including fire alarm sprinklersystems, smoke detectors) and any other signs or other notices required by the local fire officer (other than such as are supplied in thePremises by the Tenant) and the cost of repair, maintenance and renewal of the same.  60 11Management Premises expensesThe rates, telephone charges, gas, electricity and all other incidental expenses of any accommodation provided in the Development(including the Building excluding the Lettable Units) for vehicles, parts, equipment and other things employed in connection with anyother matter the cost of which is covered in this Part 6 of the Schedule.12anticipated expenditureSuch part of all such expenditure hereinbefore mentioned which is of a periodically recurring nature (whether recurring by regular orirregular periods) whenever disbursed, incurred or made or to be disbursed, incurred or made and including a sum or sums of money byway of provision for anticipated expenditure in respect thereof as the Landlord may allocate as being fair and reasonable in thecircumstances to be credited against the Service Expenditure in the relevant Year.13reservesThe cost of establishing and maintaining financial reserves to meet the future costs (as from time to time estimated by the Landlord) ofrepair, maintenance, reconstruction, renewal, rebuilding and replacement in respect of the Common Parts or any part or parts thereofwhere such cost is not of a constant and annually recurring nature.14other mattersExpenditure on the properly incurred and reasonable cost of any other service or matter relative to the Development (including theBuilding) which the Landlord acting reasonably and in the interests of good estate management, considers necessary or desirable fromtime to time for the more efficient management and use of the Common Parts and/or the Development (including the Building).   61 PART 7Title Deeds Land Certificate Title Number MID70754.  62 PART 8Provisions of Rent Review 1In this Part 8 of the Schedule the following expressions shall have the following meanings:-1.1"the Rent Review Date" means 15 August 2022;1.2"Open Market Rent" means the yearly rent for which the Premises could reasonably be expected to be let as a whole with vacantpossession on the Rent Review Date in the open market by a willing landlord to a willing tenant for a duration equal to 5 years upon theterms and conditions (including the provisions for the review of rent at intervals of five years but excluding the amount of rent payableimmediately prior to Rent Review Date) as are herein contained and on the assumption (if not the fact) that:- 1.2.1all the Tenant's obligations hereunder shall have been complied with (but without prejudice to any rights of either partyin regard thereto); 1.2.2all parts of the Premises and the Building are fit and available for immediate use and occupation are ready to take theTenant’s fitting out works; 1.2.3if the Premises and/or the Common Parts or any part thereof or the means of access thereto or any services enjoyedshall have been destroyed or damaged, the same had before the Rent Review Date been fully reinstated; 1.2.4the Tenant and the willing tenant are able to reclaim/recover in full all (if any) VAT chargeable on the Rents and othermonies payable by the Tenant under this Lease; and 1.2.5that any reasonable rent free period then standard on the open market allowed for the purposes (and only for thepurposes) of the willing tenant’s fitting out has expired,But there being disregarded:- 1.2.6any effect on rent of the fact that the Tenant or a sub-tenant may have been in occupation of the Premises; 1.2.7any goodwill attached to the Premises by reason of any trade or business carried on therein by the Tenant or any sub-tenant; 1.2.8any effect on rent of any works carried out by the Tenant with the Landlord's consent (including any fitting out worksundertaken by the Tenant at the commencement of or at any time during the Duration of the Lease) otherwise than inpursuance of any obligation to the Landlord or under this Lease; and  63 1.2.9any effect on Rents of the inability of the Tenant to recover, whether in part or in full, any VAT chargeable on the Rentsand other monies payable by the Tenant under the foregoing Lease.2On and after the Rent Review Date the rent hereinbefore payable shall be the higher of:-2.1the rent then payable in terms of Clause 2.1 of the foregoing Lease (hereinafter referred to as the "Current Rent"); and2.2the Open Market Rent of the Premises (hereinafter called the "New Rent").3If 2 months before the Rent Review Date the Landlord and the Tenant shall not have agreed on the New Rent to commence on theRent Review Date the Landlord or the Tenant may at any time thereafter require an independent surveyor with not less than ten years'continuous experience immediately preceding the date of appointment in the valuation of premises comparable to the Premises(hereinafter called "the Surveyor") to determine the Open Market Rent.4The Surveyor may be agreed upon by the Landlord and the Tenant and in default of such agreement shall be appointed by thePresident or senior office holder for the time being of the Scottish Branch of the Royal Institution of Chartered Surveyors on theapplication of the Landlord or the Tenant.5On reference of the determination of the New Rent to the Surveyor:-5.1the Surveyor shall act as an arbiter;5.2if the Surveyor comes to the conclusion that the Open Market Rent of the Premises on the Rent Review Date is or was less than theCurrent Rent, the New Rent shall be the Current Rent;5.3the decision of the Surveyor shall be final on all matters hereby referred to him;5.4if the Surveyor shall fail to determine the Open Market Rent or if he shall relinquish his appointment or die or if it shall become apparentthat for any reason he will be unable to complete his duties hereunder the Landlord or the Tenant may apply to the said President for asubstitute to be appointed in his place in which case the foregoing procedure may be repeated as many times as necessary; and5.5the fees of the Surveyor shall follow his award and failing such an award shall be met equally by the parties.6In the event that by the Rent Review Date the Landlord and the Tenant shall not have reached agreement as provided for in this Part 8of the Schedule and the Surveyor shall not have given his award, then the Tenant shall continue to pay rent at the Current Rent inaccordance with this Lease until such agreement shall be reached or the Surveyor gives his award, whichever shall first occur. Within10 Working Days after such agreement shall have been reached or the said award shall have been made the Tenant shall pay to theLandlord an amount equal to the difference  64 between the New Rent and the Current Rent for the period commencing on the Rent Review Date together with Interest thereon for theperiod commencing on the Rent Review Date to the date of payment.7If the Landlord and the Tenant shall be able to agree on the amount of the New Rent or failing that once the New Rent is determined bythe Surveyor such agreement or determination shall be recorded in a memorandum to be signed by both the Landlord and the Tenantand each party shall be responsible for their own legal (and any other professional) fees incurred in entering into such memorandum.8If at the Rent Review Date there shall be in force any enactment (which expression includes any Act of Parliament now or hereafter inforce as well as any instrument, regulation or order made thereunder or deriving validity therefrom) which shall relate to the control ofrent and which shall restrict, interfere with or affect the Landlord's right to revise the rent hereby payable in accordance with the termshereof or to accept payment of the full amount of the New Rent then the Landlord shall be entitled once following each removal ormodification of such enactment to serve notice (hereinafter called "an interim notice") upon the Tenant and from and after the date ofservice of such interim notice until the Rent Review Date the rent shall be increased to whichever is higher of the Open Market Rent atthe date of service of the interim notice or the rent payable immediately prior thereto and the provisions of this Part 8 of the Scheduleshall apply accordingly with the substitution of the said date of service for the Rent Review Date.9Time shall not be of the essence in respect of any period of time referred to in this Part 8 of the Schedule except for the time forpayment of rent referred to in paragraph 6 hereof.  65 PART 9PART 9APremises Plan  66 PART 9BDevelopment Plan  67 PART 9CCar Park Plan Exhibit 12.1CERTIFICATION REQUIRED BY RULE 13A-14(A) OR 15D-14(A)UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Hugh S. Griffith, certify that:1. I have reviewed this annual report on Form 20-F of NuCana 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 thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the company as of, and for, the periods presented in this report;4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the companyand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the company, 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) [OMITTED](c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectivenessof 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 company’s internal control over financial reporting that occurred during the period covered by the annualreport that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; 5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to thecompany’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the company’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 company’s internal control overfinancial reporting. Date: March 22, 2018By:/s/ Hugh S. Griffith Hugh S. Griffith Chief Executive Officer (Principal Executive Officer) Exhibit 12.2CERTIFICATION REQUIRED BY RULE 13A-14(A) OR 15D-14(A)UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Donald Munoz, certify that:1. I have reviewed this annual report on Form 20-F of NuCana 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 thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the company as of, and for, the periods presented in this report;4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the companyand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the company, 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) [OMITTED](c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectivenessof 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 company’s internal control over financial reporting that occurred during the period covered by the annualreport that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting;5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to thecompany’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the company’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 company’s internal control overfinancial reporting. Date: March 22, 2018By:/s/ Donald Munoz Donald Munoz Chief Financial Officer (Principal Financial Officer) Exhibit 13.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Hugh Griffith, Chief Executive Officer of NuCana plc (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of theSarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1.The Annual Report on Form 20-F of the Company for the period ended December 31, 2017 (the “Report”) fully complies with the requirements ofSection 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 22, 2018 /s/ Hugh S. Griffith Hugh S. Griffith Chief Executive Officer (Principal Executive Officer) Exhibit 13.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Donald Munoz, Chief Financial Officer of NuCana plc (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of theSarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1.The Annual Report on Form 20-F of the Company for the period ended December 31, 2017 (the “Report”) fully complies with the requirements ofSection 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 22, 2018 /s/ Donald Munoz Donald Munoz Chief Financial Officer (Principal Financial Officer) Exhibit 15.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-223476) of NuCana plc of our report datedMarch 21, 2018, with respect to the Consolidated Financial Statements of NuCana plc, included in the Annual Report on Form 20-F for theyear ended December 31, 2017./s/ Ernst & Young LLPErnst & Young LLPEdinburgh, United KingdomMarch 21, 2018

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